EXECUTION COPY Exhibit 10.24
MANAGEMENT SERVICES AGREEMENT
THIS IS A MANAGEMENT SERVICES AGREEMENT, dated April 16, 2004 (the
"Agreement"), by and between XXXX Global Holdings, Inc., a Delaware corporation
("XXXX") and Westwood Computer Corporation, a New Jersey Corporation (the
"Company").
BACKGROUND
WHEREAS, the business of the Company is that of a value added
computer equipment and services provider (the "Business").
WHEREAS, the Company desires to have XXXX provide certain management
and advisory services with respect to the Business on the terms hereinafter set
forth. XXXX is willing to provide such management and advisory services.
NOW, THEREFORE, in consideration of the promises and agreements
hereinafter set forth and the mutual benefits to be derived herefrom and
intending to be legally bound hereby, the Company and XXXX hereby agree as
follows:
Terms
1. Engagement. The Company hereby engages XXXX, and XXXX hereby
agrees, to provide to the Company the management and advisory services described
in Section 2 below, on the terms and subject to the conditions herein.
2. Management Services of XXXX. XXXX shall provide management and
advisory services with respect to the business, operations and affairs of the
Company, which advisory services may include, without limitation, advice
regarding corporate, financial (including cash management), operating and
administrative functions, and any other services reasonably requested by the
Company (the "Services").
3. Term. The initial term of this Agreement shall commence on the
date hereof and shall continue in full force and effect until the fifth
anniversary of the date hereof (the "Initial Term"). The Initial Term shall
automatically be extended for one (1) additional year at the end of the Initial
Term, and again each successive year thereafter (any extensions together with
the Initial Term, the "Term"). However, either party hereto may terminate this
Agreement by giving written notice of such termination to the other party at
least 60 days prior to the date on which an extension to the Term of this
Agreement otherwise would occur.
4. Compensation.
4.1. The Company and XXXX agree that XXXX shall be entitled
to receive as compensation for the Services rendered during the Initial Term of
this Agreement: (i) $350,000 per year (the "Management Fee") plus (ii) the
yearly reimbursement of reasonable
expenses incurred by XXXX in providing the Services (the "Expenses"). The
Management Fee shall be paid in substantially equal monthly installments during
the Initial Term pursuant to the yearly totals as set forth on Schedule 4
attached hereto. The Management Fee during any year after the Initial Term shall
be agreed upon by XXXX and the Company in writing at least 90 days prior to the
end of the Initial Term; provided, however, that if the parties hereto cannot
agree upon an amount for the Management Fee after the expiration of the Initial
Term, the Management Fee shall not be less than $350,000 per year.
4.2. During the first year of the Term of this Agreement,
XXXX shall be entitled to receive reimbursement for Expenses up to $75,000 per
year without any approval on the part of the Company (the "Approved Expenses").
Any Expenses in excess of the Approved Expenses must be approved in writing by
Xxxxx Xxxxxx, such approval not to be unreasonably withheld. The amount of
Approved Expenses reimbursed by the Company for any years subsequent to the
first year of the Term may be adjusted upward as agreed upon in writing by XXXX
and the Company, but in no event shall such amount be less than $75,000.
5. Interest. Any overdue Management Fee shall bear interest at a
rate per annum equal to eight percent (8%), and shall be payable on demand.
6. Indemnification.
6.1. In the event that XXXX or any of its affiliates,
principals, partners, directors, shareholders, employees, agents,
representatives (collectively, the "Indemnified Parties") becomes involved in
any capacity in any action, proceeding or investigation in connection with the
performance by XXXX of services hereunder or as a result of being party to this
Agreement, the Company will indemnify and hold harmless the Indemnified Parties
from and against any actual or threatened claims, lawsuits, actions or
liabilities (including out-of-pocket expenses and the reasonable fees and
expenses of counsel and other litigation costs and the cost of any preparation
or investigation reasonably incurred) of any kind or nature, arising as a result
of or in connection with the performance by XXXX of services under this
Agreement or as a result of being party to this Agreement, and will periodically
upon request reimburse the Indemnified Party for its expenses as described
above, except that the Company will not be obligated to so indemnify any
Indemnified Party if, and to the extent that, such claims, lawsuits, actions or
liabilities against such Indemnified Party directly result from the gross
negligence or willful misconduct of such Indemnified Party as admitted in any
settlement by such Indemnified Party or held in any final, non-appealable
judicial or administrative decision. In connection with such indemnification,
the Company will promptly remit or pay to XXXX or any other Indemnified Party
any amounts which XXXX certifies to the Company in writing are payable to XXXX
or any other Indemnified Parties hereunder, provided that the Indemnified Party
undertakes in writing to repay such amounts if it is ultimately determined that
such Indemnified Party is not entitled to indemnification hereunder. The
reimbursement and indemnity obligations of the Company under this Section 6
shall be in addition to any liability which the Company may otherwise have,
shall extend upon the same terms and conditions to any Indemnified Party, as the
case may be, of XXXX and any such affiliate and shall be binding upon and inure
to the benefit of any successors, assigns, heirs and personal representatives of
the Company, XXXX, and any such Indemnified Party. The foregoing provisions
shall survive the termination of this Agreement.
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6.2. In the event any Indemnified Party seeks indemnification
hereunder in respect of a claim resulting from the assertion of liability by a
third party (i.e., a party other than the Company or one of its affiliates) (an
"Asserted Liability"), the Company may elect to compromise or defend, at its own
expense and by its own counsel, any action or proceeding in respect of such
claim if (i) the claim involves solely monetary damages, (ii) the Company
expressly agrees in writing to the Indemnified Party that, as between the two,
the Company is solely obligated to satisfy and discharge the claim, and (iii)
the Company makes reasonably adequate provision to satisfy the Indemnified Party
of the Company's ability to satisfy and discharge the claim (the foregoing
collectively, the "Litigation Conditions"); provided, however, that if the
parties in any action shall include both the Company and an Indemnified Party,
and the Indemnified Party shall have reasonably concluded that counsel selected
by Company has a conflict of interest because of the availability of different
or additional defenses to the Indemnified Party, the Indemnified Party shall
have the right to select separate counsel to participate in the defense of such
action on its behalf, at the expense of the Company. Subject to the foregoing,
if the Company elects to compromise or defend such Asserted Liability, it shall,
within thirty (30) days (or sooner, if the nature of the Asserted Liability so
requires) after notification of the Asserted Liability by the Indemnified Party,
notify the Indemnified Party of its intent to do so, and the Indemnified Party
shall cooperate, at the expense of the Company, in the compromise of, or defense
against, such Asserted Liability controlled by the Company. If the Company
elects not to compromise or defend the Asserted Liability, fails to notify the
Indemnified Party of its election as herein provided, or fails to satisfy the
Litigation Conditions, the Indemnified Party may pay, compromise or defend such
Asserted Liability; provided, however, the Indemnified Party shall not
compromise or settle any such Asserted Liability in a manner that would result
in any liability to the Company without the prior written consent of the Company
(which consent will not be unreasonably withheld or delayed). In the event the
Company elects to compromise or defend an Asserted Liability, the Indemnified
Party may participate, at its own expense, in the defense of such Asserted
Liability.
7. Entire Agreement; Parties Bound. This Agreement contains the
entire agreement between the parties concerning the management of the Business,
is subject to change only by a written agreement referring to this Agreement and
signed by the parties hereto, and will bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
8. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
9. XXXX as Independent Contractor. The Company and XXXX agree
that XXXX shall perform services hereunder as an independent contractor,
retaining control over and responsibility for its own operations and personnel.
Neither XXXX nor its employees shall be considered employees or agents of the
Company.
10. Notices. Any notice, report or payment required or permitted
to be given or made under this Agreement by one party to the other shall be
deemed to have been duly given or made if personally delivered or, if mailed,
when mailed by registered or certified mail, postage prepaid, to the other party
at the following addresses (or at such other address as shall be given in
writing by one party to the other):
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If to XXXX:
XXXX Global Holding, Inc.
000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Facsimile number: (000) 000-0000
Attention: Xxxxxx Xxxxx
If to the Company:
Westwood Computer Corporation
00 Xxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Facsimile number: (000) 000-0000
Attention: Xxxxx Xxxxxx
11. Waiver of Breach. The waiver by either party of a breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach of that provision or any other
provision hereof.
12. Governing Law. This Agreement shall be deemed to have been
made in and shall be construed and interpreted in accordance with the laws of
the State of New Jersey, without regard to conflicts of law principles.
[Signatures appear on following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.
XXXX GLOBAL HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
WESTWOOD COMPUTER CORPORATION
By: /s/ Xxxx Xxxxxxxx Xxxxxx
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
[SIGNATURE PAGE - MANAGEMENT AGREEMENT]
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SCHEDULE 4
Compensation Payment Schedule
Yearly
Totals Compensation
------------ ------------------
Year 1 $250,000
Year 2 $250,000
Year 3 $250,000
Year 4 $500,000
Year 5 $500,000
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Total $1,750,000
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