EXHIBIT 10.9
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (the "Agreement") is made
effective the 1st day of January, 2003, by and between ORBIT/FR, Inc., a
Delaware corporation, ("Orbit") and Xxxx Xxxxx Properties, LTD (the "Management
Company"), an Israeli corporation wholly owned by Xxxx Xxxxx ("Xxxxx").
BACKGROUND
Xxxxx has provided management services (the "Management Services")
to Orbit since December 31, 1998 in the capacity as Chairman. Effective
September 5, 2001, Xxxxx and Orbit entered into an employment agreement (the
"Employment Agreement") providing for the continuing services of Xxxxx, in the
capacity as employee, under the terms of the Employment Agreement. The parties
desire to discontinue the direct employment relationship, and instead provide
for the delivery of the Management Services by Xxxxx as an employee of the
Management Company.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Engagement. Orbit hereby engages the Management Company to provide the
Management Services. The parties acknowledge that the scope of the Management
Services to be provided hereunder shall be consistent with the Management
Services provided by Xxxxx under the Employment Agreement.
2. Performance by Xxxxx. The Management Company shall not perform the
Management Services by any person other than Xxxxx without the prior approval of
Orbit.
3. Management Fees. In consideration for its delivery of the Management
Services, pursuant to this Agreement, Orbit shall pay the Management Company a
fee (the "Management Fees") at an annual rate of $133,000, plus applicable VAT.
The Management Fees shall be paid by Orbit during the term hereof in equal
monthly installments, against invoices, in the amount of $11,083.33 plus VAT
each.
4. Expense Reimbursement. Orbit shall further arrange for, or reimburse
the Management Company for, all normal items of travel (business class) and
entertainment and miscellaneous expenses reasonably incurred by Xxxxx or the
Management Company on behalf of Orbit in the course of performing the Management
Services, provided that such expenses are documented and submitted to Orbit.
5. Confidentiality. The Management Company recognizes and acknowledges
that it will obtain Proprietary Information (as hereinafter defined) of Orbit
and its affiliates in the course of the delivery of the Management Services. The
Management Company further recognizes and acknowledges that the Proprietary
Information is a valuable, special and unique
asset of Orbit. As a result, the Management Company shall not, and shall cause
Xxxxx not to, without the prior written consent of Orbit, for any reason either
directly or indirectly divulge to any third-party or use for its or his own
benefit, or for any purpose other than the exclusive benefit of Orbit, any
confidential, proprietary, business and technical information or trade secrets
(the "Proprietary Information") of Orbit revealed, obtained or developed in the
course of the delivery of the Management Services. Nothing contained herein
shall restrict the Management Company's or Xxxxx'x ability to make such
disclosures during the course of the delivery of the Management Services as may
be necessary or appropriate to the effective and efficient discharge of the
duties required by or appropriate for the Management Services or as such
disclosures may be required by law. Furthermore, nothing contained herein shall
restrict the Management Company or Xxxxx from divulging or using for his or its
own benefit or for any other purpose any Proprietary Information that is readily
available to the general public so long as such information did not become
available to the general public as a direct or indirect result of the Management
Company's or Xxxxx'x breach of this Section 5.
6. Non-Compete. To further induce Orbit to enter into this Agreement, the
Management Company covenants that it shall not, and it shall cause Xxxxx not to,
during the term hereof and for a period of six (6) months after termination
hereof for any reason whatsoever (the "Restricted Period"), do any of the
following directly or indirectly without the prior written consent of Orbit's
board of directors:
6.1. engage in any business activity competitive with the business
of Orbit (the "Business") as conducted during the term hereof; or
6.2. become interested (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) in any
person, firm, corporation, association or other entity engaged in any business
that is competitive with the Business as conducted during the term hereof
(notwithstanding the foregoing, the Management Company and Xxxxx may each hold
not more than five percent (5%) of the outstanding securities of any class of
any publicly-traded securities of a company that is engaged in activities
competitive with the Business as conducted during the term hereof). Provided,
that nothing set forth herein shall be deemed to restrict the right of the
Management Company or Xxxxx to own any interest whatsoever in Orbit or any of
its affiliates.
7. Termination.
7.1 Orbit may terminate this Agreement upon twelve (12) months prior
written notice to the Management Company. The Management Company may terminate
this Agreement upon six (6) months prior written notice to Orbit. (The period
following any such notice of termination and until the effective time of such
termination shall be referred to herein as the "Termination Period"). During the
Termination Period, the Management Company shall cause Xxxxx to assist Orbit in
good faith in the orderly transition of its duties hereunder to such person
designated by Orbit's board of directors.
7.2. Notwithstanding the provisions set forth in Section 7.1 above,
either party may terminate this Agreement without notice in the event of a
breach of this Agreement by the other party and the breaching party continues
such breach for a period of, or fails to cure the
results of such breach within, 30 days after written notice from the
non-breaching party to the breaching party.
7.3. Notwithstanding the provisions of Section 7.1 above, Orbit may,
at its discretion, discontinue the delivery of Management Services hereunder
during the Termination Period (or any part thereof), and pay the Management
Company, in a lump sum, within thirty (30) days thereafter, any remaining
Management Fees through the end of the Termination Period.
7.4. In further consideration for the Management Company's covenants
not to compete and confidentiality set forth in Sections 5 and 6 hereof, the
Management Company shall be entitled to continue receiving the Management Fees
applicable during the Termination Period, for an additional period of six (6)
months following the Termination Period; provided, that upon written request by
the Management Company, Orbit shall pay the Management Company in a lump sum,
within thirty (30) days of such request, any remaining Management Fees due the
Management Company under this Section 7.4.
8. No Employment Relationship. The parties hereto acknowledge that the
legal relation between Orbit, on the one hand, and the Management Company and
Xxxxx on the other hand, is limited in the manner expressly provided herein.
Notwithstanding anything contained herein to the contrary, the parties hereto
acknowledge and agree that neither shall be deemed to be an employee, partner or
a joint venturer of the other.
9. Tax Obligations. The Management Company acknowledges that it retains
full responsibility for complying with all income reporting and other
requirements arising out of the Management Services, including without
limitations, Xxxxx'x services contemplated herein, under any state, federal and
/or local tax laws. Orbit will not make deductions from the payments due to the
Management Company hereunder for income taxes, social security, unemployment
insurance, workers' compensation or other employment/payroll taxes, except as
otherwise mandated by applicable laws.
10. Successors and Assigns. This Agreement shall be binding upon and shall
operate for the benefit of the parties and their estates, successors and legal
representatives.
11. Counterpart. This Agreement may be executed in any number of
counterparts each of which when executed and delivered shall be an original, but
all counterparts shall together constitute one and the same instrument.
12. Governing Law. This Agreement and all rights and duties of the parties
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware (without regard to any conflict of laws rules of the State
of Delaware).
13. Termination of Employment Agreement. Upon the effective time of this
Agreement, the Employment Agreement shall be deemed terminated and neither party
thereto shall have any further rights thereunder, except that Orbit shall remain
obligated to pay Xxxxx all Compensation (as defined in the Employment Agreement)
due Xxxxx thereunder on account of his employment through the effective time of
this Agreement.
IN WITNESS WHEREOF, the parties hereto, intending to be bound, have
executed this Agreement on the date aforesaid.
Orbit/FR, Inc. [_______________]
By: _______________________ By: _________________________
Xxxx Xxxxx, President
Xxxx Xxxxx hereby confirms his consent to be bound by the terms of this
Management Services Agreement.
_______________________________
Xxxx Xxxxx
