EXHIBIT 10.2
MANAGEMENT CONSULTING AGREEMENT
This Management Consulting Agreement (the "AGREEMENT") is made as of
the 5th day of June, 2002, by and among o2wireless Solutions, Inc., a Georgia
corporation (the "COMPANY"), Xxxxx Group, Ltd., a corporation organized under
the laws of Israel ("PARENT"), and Xxxxx Acquisition Sub, Inc., a Georgia
corporation and a direct wholly owned subsidiary of Parent ("MERGER SUB").
RECITALS
The Company, Parent and Xxxxx Acquisition Sub, Inc., a Georgia
corporation ("MERGER SUB"), have entered into an Agreement and Plan of Merger
(the "MERGER AGREEMENT") dated June 5, 2002 pursuant to which the Company will
merge with and into the Merger Sub. The parties also have entered into a Working
Capital Loan Agreement of even date herewith (the "LOAN AGREEMENT"), pursuant to
which Parent has agreed to lend certain sums to the Company to be used for
working capital purposes. A condition to the Parent's and Merger Sub's
obligations under the Merger Agreement is that the Company and Parent enter into
this Agreement. The Company desires to receive financial and management
consulting services from Parent and its Parent Personnel (as defined below), and
to obtain the benefit and experience of Parent in business and financial
management generally and its knowledge of the Company and the Company's industry
in general. Parent and its Parent Personnel are willing to provide the services
described herein for the compensation set forth herein. All defined terms not
otherwise defined herein shall have the same meanings given to them in the
Merger Agreement.
AGREEMENT
The parties agree as follows:
1. ENGAGEMENT. The Company hereby engages Parent as a financial
and management consultant, and Parent hereby agrees to provide financial and
management consulting services to the Company, directly through its Parent
Personnel, on the terms and conditions set forth herein.
2. SERVICES. Parent hereby agrees during the term of this
engagement to consult with the Company Board, the boards of directors of the
Company's subsidiaries and the management of the Company and its affiliates in
such manner and on such business and financial matters as may be reasonably
requested from time to time by the Company Board, including, but not limited to:
(1) implementation of the Recovery Plan, as specified in Section 5.5 of the
Merger Agreement; (2) corporate strategy; (3) budgeting of future corporate
investments; (4) acquisition and divestiture decisions; (5) operational matters,
including staffing, project management, location of Company operations, and
other matters affecting the operations of the Company; and (6) debt and equity
financings.
3. PERSONNEL; APPOINTMENT AND REPLACEMENT OF PARENT PERSONNEL.
Parent shall provide and devote to the performance of services under this
Agreement such employees and
agents of Parent as Parent shall deem appropriate (collectively, "Parent
Personnel"). Parent Personnel shall include those persons listed in APPENDIX A
hereto, as shall be amended from time to time. Parent may replace its Parent
Personnel at any time, for any reason and from time to time, with or without
cause, in its sole discretion, after providing written notice to the Company of
the new person who will replace such Parent Personnel. The time dedicated by
Parent Personnel in providing the services hereunder shall be determined in the
sole discretion of Parent. The Company shall provide Parent Personnel with
appropriate space, facilities access and office furniture and equipment at the
Company's principal headquarters in Atlanta, Georgia and any other facility of
the Company or its subsidiaries as such personnel shall reasonably request,
complete and unfettered access to Company books and records, personnel and
information (except as shall be limited or restricted by the provisions of a
non-disclosure agreement to be entered into with the Company and approved by
Parent) as such personnel shall reasonably request, and the full and complete
cooperation of the Company, its subsidiaries, and their respective directors,
officers, employees agents and representatives in any other manner, to enable
such personnel to render services hereunder. The Company shall use its best
efforts to assist Parent and Parent Personnel in obtaining the necessary visas
and other permits required in order to allow them to perform the services
hereunder.
4. MANAGEMENT FEES; EXPENSES.
4.1. In consideration for services rendered by Parent and
Parent Personnel under this Agreement, the Parent shall be entitled to receive a
monthly fee in U.S. Dollars of $400,000 for the remainder of June, 2002, and
commencing July, 2002, and continuing each calendar month thereafter that this
Agreement is in effect, an amount equal to six percent (6%) of the Company's
consolidated monthly revenues. If this Agreement terminates other than on the
last day of a calendar month, the management fee for such month shall be
pro-rated based upon the number of days in such month that this Agreement was in
effect. While this Agreement is in effect, $40,000 of the monthly fee which is
earned during any month will be paid by the fifteenth day of the succeeding
month. Any remaining fees due and payable hereunder to Parent (including amounts
payable under Section 4.4) shall be paid by the later of (i) the end of the
calendar month succeeding the month in which this Agreement terminated or (ii)
the date upon which the Company's and its subsidiaries' obligations to Wachovia
Bank, National Association, are paid in full. (For such purposes, a termination
under Section 5.6 shall be deemed a termination under Section 5.2.) In addition,
the Company shall promptly reimburse Parent for reasonable travel accommodation
and transportation expenses and other out-of-pocket costs as may be incurred by
Parent and/or Parent Personnel, in connection with services rendered under this
Agreement.
4.2. Other than any expenses that are to be reimbursed by
the Company and the fees payable under Sections 4.1 above, Parent shall be
responsible for compensating the Parent Personnel in all respects.
4.3. All fees and expenses payable by Company to Parent
under this Agreement shall be paid by wire transfer of immediately available
funds. If the Company fails to timely pay fees or expenses due under this
Agreement, Parent shall be entitled to charge interest to the Company at a rate
of 1.5% per month for any period in which such payment has not been made on a
timely basis.
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4.4. If this Agreement terminates under Section 5.6,
Parent shall be entitled to receive the lesser of all fees that it otherwise
would have received under this Agreement had this Agreement terminated under
Sections 5.2 or 5.3, it being understood, however, Parent shall not be obligated
to provide any management services following termination under Section 5.6. Such
fees shall be deemed to be liquidated damages and not in the nature of a
penalty.
5. TERM. This Agreement will continue from the date hereof until
the earliest of the following dates:
5.1. The Effective Time of the Merger.
5.2. Ninety (90) days following the date on which the
Company notifies the Parent in writing of the termination of this Agreement;
provided, however, no such notice shall be effective unless it is given after
June 30, 2002.
5.3. Six (6) months from the date of this Agreement.
5.4. The date on which the Company terminates this
Agreement for cause by providing at least ten (10) days' advance written notice
to Parent, during which time Parent has not cured the cause for termination. For
purposes hereof, "cause" shall be defined as (i) the filing of a petition in
bankruptcy by Parent in any jurisdiction, (ii) the date on which Parent becomes
insolvent or makes an assignment for the benefit of creditors, and (iii) the
date on which Parent Personnel and the Parent Personnel cease rendering services
to the Company for a continuous period of at least thirty (30) days without
first providing advance written notice to the Company of the reasons for not
providing the required services and then being given a reasonable opportunity to
commence to continue providing such services; provided, however, that in the
event this Agreement is terminated pursuant to clause (iii) of this Section 5.4,
this Agreement shall be deemed terminated as of the date Parent ceased providing
services hereunder and no fees shall be deemed earned under this Agreement
following such date.
5.5 Ten (10) days following the date upon which Parent
notifies the Company of a breach of any obligation of the Company hereunder that
the Company fails to cure within such ten (10) day period.
5.6 The date on which the Merger Agreement terminates as
a result of the Company obtaining a Superior Proposal (as defined in the Merger
Agreement).
6. MISCELLANEOUS.
6.1 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties hereto pertaining to the subject matter
hereof, and any and all other written or oral agreements relating to the subject
matter hereof existing between the parties hereto are expressly canceled.
6.2 SUCCESSORS AND ASSIGNS. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party
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other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. This Agreement may
not be assigned to any third party by any party hereto, without the prior
written consent of the other party.
6.3 AMENDMENTS AND WAIVERS. Any term hereof may be
amended or waived only with the written consent of the Company and Parent.
6.4 NOTICES. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient on the date of
delivery, when delivered personally or by overnight courier or sent by telegram
or fax, or 96 hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, and addressed to the party to be notified
at such party's address or fax number as set forth on the signature page or on
Exhibit A hereto, or as subsequently modified by written notice.
6.5 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, the parties agree
to renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, then (a) such provision shall be excluded from this Agreement, (b)
the balance of the Agreement shall be interpreted as if such provision were so
excluded and (c) the balance of the Agreement shall be enforceable in accordance
with its terms.
6.6 GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of Georgia, without giving effect to principles of conflicts of
law.
6.7 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
6.8 TITLES AND SUBTITLES. The titles and subtitles used
in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
6.9 LIABILITY AND INDEMNIFICATION. Neither Parent nor its
Parent Personnel nor any of their affiliates, officers, employees or agents
shall be liable to the Company or its subsidiaries or affiliates for any loss,
liability, damages or expense arising out of or in connection with the
performance of services under this Agreement, unless such loss, liability,
damages or expense shall be proven to result directly from the gross negligence
or willful misconduct of Parent or its Parent Personnel. The Company agrees to
indemnify and hold harmless Parent, the Parent Personnel, and Parent's officers,
directors, affiliates, employees, agents and representatives from and against
any and all loss, liability, suits, claims, costs, damages and expenses
(including attorney's fees) arising from their performance hereunder, except as
a result of their gross negligence or intentional wrongdoing.
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6.10. INDEPENDENT CONTRACTOR. Parent and its Parent
Personnel shall perform services hereunder as independent contractors, retaining
control over and responsibility for its own operations and personnel. Neither
Parent nor its Parent Personnel, directors, officers or employees shall be
considered employees or agents of the Company as a result of this Agreement, nor
shall any of them have authority to contract in the name of or bind the Company,
except as expressly agreed to in writing by the Company.
6.11. 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.
[Signature Page Follows]
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The parties hereto have executed this Management Consulting Agreement
as of the date first written above.
COMPANY: PARENT:
O2WIRELESS SOLUTIONS, INC. XXXXX GROUP, LTD.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxx
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Name: Xxxxxx X. Xxxxxx Name: Xxxx Xxx
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Title: President, Chairman & CEO Title: Chairman & CEO
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