EXHIBIT 10.8
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement") is made effective this 14th day
of December 2001, by and between [COMPANY], a [State] Corporation ("Company"),
and NET INTEGRATED SYSTEMS LTD., a Bermuda corporation ("Manager"). The Company
and/or Manager are sometimes herein referred to individually as a "party" and
collectively as the "parties."
R E C I T A L S
- - - - - - - -
WHEREAS, the Company desires to engage Manager to assist in the
management of the day-to-day operation of the business of the Company; and
WHEREAS, Manager desires to accept such engagement, Subject to all of
the terms and conditions set forth in this Agreement,
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows.
AGREEMENT
1. ENGAGEMENT. Manager is hereby engaged by the Company as its
general manager, with all the powers, authority and duties hereinafter set
forth, subject to the terms and conditions of this Agreement.
2. MANAGER'S DUTIES AND AUTHORITY. Manager shall, subject to
the approval of the Board of Directors of the Company ("Board of Directors") and
to the terms and conditions of this Agreement, have the exclusive authority to
manage the day-to-day operation of the business of the Company, including,
without limitation, the power to hire, discipline and terminate personnel on
behalf of the Company, enter into, modify and terminate agreements and contracts
(including leases, etc.) on behalf of the Company, deal with and manage all
aspects of the Company's finances, including, without limitation, acting as
signatory on such bank accounts as may be determined by the Board of Directors
of the Company from time to time (the Board of Directors may remove Manager as
signatory on any such bank accounts), deal with and manage credit matters
(including the extension of credit) on behalf of the Company, deal with, manage
and compromise debts and obligations of the Company, deal with, manage and
acquire assets on behalf of the Company, deal with, manage and make investments
on behalf of the Company, and exercise all related and other similar powers.
Manager acknowledges that the Company is a reporting company pursuant to the
provisions of the Securities Exchange Act of 1934, and the rules and regulations
promulgated thereunder by the United States Securities and Exchange Commission
("SEC"). Manager shall use its best efforts to cause the Company to timely file
all SEC reports and schedules when due. In addition to the foregoing, Manager
shall:
2.1 Devote Manager's best efforts and skills to the business
interests of the Company, take all reasonable steps to further enhance and
develop the interests and welfare of the Company, and devote such working time
and attention to the business of the Company as is reasonably indicated;
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2.2. Truthfully and accurately make, maintain and preserve all
records and reports that the Board of Directors may, from time to time, request
or require, and shall fully account for all money, records, equipment, materials
or other property belonging to the Company of which the Manger may have custody
and shall pay over and deliver same promptly whenever and however the Manager
may be directed to do so by the Board of Directors;
2.3. Obey all lawful rules, regulations, special instructions,
and directives of the Board of Directors and endeavor to improve Manager's
ability and knowledge of the business of the Company in an effort to increase
the value of Manger's services for the benefit of the Company; and
2.4. Make available to the Company any and all material information
of which the Manager has knowledge that is relevant to the Company's business,
and make all suggestions and recommendations to the Board of Directors, which
Manager believes will be of benefit to the Company.
3. DELEGATION OF DUTIES. The authority of Manager to manage the day-to-day
conduct of the business of the Company shall be deemed to constitute the
delegation of the management of the day-to-day operation of the business of the
Company to a management company or other person within the provisions of Section
300 of the California Corporation Code. Accordingly, notwithstanding anything
contained in this Agreement to the contrary, the business and affairs of the
Company shall be managed and all corporate powers shall be exercised only under
the ultimate direction of the Board of Directors. The Board of Directors shall,
and hereby does, retain all right, authority and power to approve, disapprove,
oversee and direct the activities of Manager in the fulfillment of its duties
under this Agreement.
4. CERTAIN ACTS AND EVENTS. The Manager shall have the powers and duties
described in Section 2 hereof and such other powers and duties as may be
prescribed in this Agreement, subject to the terms and conditions of this
Agreement and specifically subject to the ultimate direction of the Board of
Directors. In addition, and without limitation, the Manager shall not engage in
any management conduct on behalf of the Company which could have the effect of
or result in the occurrence of any of the following acts or events unless a
majority of members of the applicable Board of Directors shall have provided
their prior written consent to such management conduct:
4.1. Any conduct that would make it impossible to carry on the
ordinary business of the Company or cause the cessation or unreasonable
interruption of the business of the Company;
4.2. Any confession of a judgment against the Company;
4.3. The dissolution of the Company;
4.4. The making of any contract or agreement on behalf of the
Company not in the ordinary course of the business of the company;
4.5. The incurring of any debt not in the ordinary course of the
business of the Company;
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4.6. A change in the nature of the principal business of the
Company;
4.7. The filing of a petition in bankruptcy or the entering into
of an arrangement among creditors;
4.8. The entering into, on behalf of the Company,of any transaction
constituting a merger or reorganization; or
4.9. The sale,transfer or other disposition of all or substantially
all of the asset of the Company.
5. LIMITATIONS ON MANAGER'S AUTHORITY. Manager shall not commit any act of
fraud, malfeasance or misfeasance in the management of the Company, and shall at
all times use its best efforts to comply with all applicable laws, rules and
regulations. Manager shall use its best efforts to cause the Company to comply
with all applicable laws, rules and regulations, including, without limitation,
all applicable securities laws, rules and regulations (specifically including,
without limitation, all securities reporting rules and all shareholder voting
and proxy rules). Notwithstanding anything contained in this Agreement to the
contrary, this Agreement, and the rights granted in this Agreement to Manager,
are expressly subject to all applicable SEC and securities, laws, rules,
regulations and reporting and disclosure requirements, including, but not
limited to, shareholder voting and proxy solicitation rules.
6. MANAGER'S COMPENSATION. For Manager's services performed and to be
performed hereunder, Manager shall be paid a fee of Ten Thousand Dollars
($10,000) per month. The above fee shall accrue and only be payable to the
extent the Company shall have current operating profits reasonably sufficient to
pay such fee. Furthermore, Manager shall be entitled to the sums set forth at
Section 10 hereof pertaining to voluntary termination and the fee paid pursuant
to this Section 6 shall offset and be credited toward such sums.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to Manager, as of the date of execution of this Agreement, as
follows:
7.1. The Company has the full power and authority to execute,
deliver and perform this Agreement. The Company has the right, power,
legal capacity, and authority to enter into and perform its obligations
under this Agreement, and no approvals or consents of any persons other
than the Company are necessary in connection with it.
7.2. The execution and delivery of this Agreement by the Company
have been duly authorized by all necessary corporate action on the part
of the Company.
7.3. This Agreement is valid, binding, and enforceable against
the Company in accordance with its terms and no provision requiring the
performance of the Company is in conflict with Company's obligations
under any charter or any other agreement (of whatever form or subject)
to which the Company is a party or by which the Company is bound.
7.4 The Company is duly organized,authorized and in good standing
under the laws of the State of Nevada and is duly authorized and
qualified to conduct business in each jurisdiction in which the Company
is required to be so authorized or qualified.
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8. REPRESENTATIONS AND WARRANTIES OF THE MANAGER. The Manager represents
and warrants to the Company, as of the date of execution of this Agreement, as
follows:
8.1. The Manager has the full power and authority to execute,
deliver and perform this Agreement. The Manager has the right, power,
legal capacity, and authority to enter into and perform its obligations
under this Agreement, and no approvals or consents of any persons other
than the Manager are necessary in connection with it.
8.2. The execution and delivery of this Agreement by the Manager
have been duly authorized by all necessary corporate action on the part
of the Manager.
8.3. This Agreement is valid, binding, and enforceable against the
Manager in accordance with its terms and no provision requiring the
performance of the Manager is in conflict with Manager's obligations
under any charter or any other agreement (of whatever form or subject)
to which the Manger is a party or by which the Manager is bound.
8.4 The Manager is duly organized, authorized and in good standing
under the laws of Bermuda and is duly authorized and qualified to
conduct business in each jurisdiction in which the Manager is required
to be so authorized or qualified, including, without limitation the
state of California.
9. TERM. The term of this Agreement shall be for a period of five (5)
years, subject to earlier termination as set forth herein.
10. VOLUNTARY TERMINATION. Manager may, in its sole and exclusive
discretion, terminate this Agreement for any reason upon ten (10) days' prior
written notice to the Company. The Company may, in its sole and exclusive
discretion, terminate this Agreement for any reason (and other than for cause as
set forth below) upon ten (10) days' prior written notice to the Manager within
the first year following the execution of the Agreement, in which event the
Company shall pay to Manager the following: (i) all sums then owing to Manager,
including without limitation, all unpaid principal and interest on any loans or
credits extended by or on behalf of Manager for the benefit of the Company, and
all unreimbursed monies advanced by the Manager on behalf of or for the benefit
of the Company; and (ii) the sum of One Million and no/100 Dollars
($1,000,000.00).
11. TERMINATION FOR CAUSE. Notwithstanding anything in this Agreement to
the contrary, the Company may, at its option, terminate this Agreement for good
cause at any time without notice and without payment of the fee set forth above
at Section 10. Termination for good cause shall include, but not be limited to,
the following:
11.1 The conviction of Manager, or any principal, member,
shareholder, director or officer of Manager, or any employee or
representative of Manager involved in the management of the Company
hereunder, by a court of competent jurisdiction (and to which no
further appeal can be taken) of a felony or any other crime involving
moral turpitude;
11.2. The commission by Manager, or any principal, member,
shareholder, director or officer of Manager, or any representative of
Manager acting on behalf of Manger, of an act of fraud or other act
evidencing bad faith or dishonesty that materially affects the Company;
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11.3. The misappropriation by Manager, or any principal, member,
shareholder, director, officer of Manager, or any employee or
representative of Manager involved in the management of the Company
hereunder, without color of law, of any funds or property or other
rights of the Company;
11.4. The suspension or removal or termination of Manager, or any
principal, member, shareholder, director or officer of Manager, or any
employee or representative of Manager involved in the management of the
Company hereunder, by or at the request or requirement of any
governmental authority having jurisdiction over the Company;
11.5. The willful refusal to follow any lawful directive of the
Board of Directors of Company;
11.6. The breach by Manager of any material terms of this Agreement
or any other agreement between the Manager and the Company;
11.7. The filing by the Manager of any petition, or commencement by
Manager of any proceeding, under the Bankruptcy Act or any state
insolvency law;
11.8. The making by the Manager of any general assignment for the
benefit of creditors;
11.9. The filing of a voluntary or involuntary application for or
appointment of a receiver with regard to Manager;
11.10. The filing of any involuntary petition, or commencement of any
involuntary proceeding, under the Bankruptcy Act or any state
insolvency law, against Manager, or the appointment of any receiver or
trustee, which petition, proceeding or appointment is not fully and
completely discharged, dismissed or vacated within sixty (60) days;
11.11. The issuance of any cease or desist order or other similar
order against Manager, or any principal, member, shareholder, director
or officer of Manager, or any employee or representative of Manager
involved in the management of the Company hereunder;
11.12. The liquidation of Manager.
11.13. The substantial cessation of business by Manager for a
material amount of time;
11.14. The dissolution of Manager; or
11.15. The insolvency of Manager as evidenced by the inability of
Manager to meet its ordinary obligations as they become due.
12. MANAGER'S LIABILITY LIMITATION. Notwithstanding anything in this
Agreement to the contrary, in no event shall Manager, or its respective
affiliates or any of their respective directors, officers, employees, agents or
subcontractors, be liable for lost profits, lost revenues, lost business
opportunities, exemplary, punitive, general, incidental, indirect or
consequential damages under this Agreement, so long as Manager carries out its
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duties hereunder in good faith in a manner Manager believes to be in the best
interests of the Company and its shareholders with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position would use
under similar circumstances. In performing its duties hereunder, Manager shall
be entitled to rely on information, opinions, reports or statements, including
financial statements and other financial data, presented by the Board of
Directors, or prepared or presented by officers or employees of the Company whom
the Manager believes to be reliable and competent in the matters presented,
counsel, independent accountants or other persons as to matters which the
Manager believes to be within such person's professional or expert competence.
Subject to the foregoing, damages for lost profits, lost revenues, lost business
opportunities, exemplary, punitive, general, incidental, indirect or
consequential damages under this Agreement are hereby excluded as to Manager by
Agreement of the parties, to the fullest extent allowed by law, regardless of
whether such damages where foreseeable or whether any party or any entity has
been advised of the possibility of such damages.
13. CONFIDENTIALITY. Unless specified in writing otherwise by the party
providing the same, all information pertaining to any party hereto or to APC or
PSI, is and shall remain confidential. The above information shall include, but
not be limited to, all computer programs, software, source codes, computations,
data files, algorithms, techniques, processes, designs, specifications,
drawings, charts, plans, schematics, computer disks, magnetic tapes, books,
files, records, reports, documents, Instruments, agreements, contracts,
correspondence, letters, memoranda, financial, accounting, sales, purchase and
employment data, capital structure information, business organizational
information, and information pertaining to contractors, vendors, suppliers,
customers and clients. Notwithstanding the foregoing, confidential information
shall not include: (i) any information which is recorded in any county or filed
with any public body and available for public inspection or which may be
otherwise generally available to the public, through no unauthorized act of any
party or its agents or employees; and (ii) information that is required to be
disclosed pursuant to applicable law, including any court order or subpoena. all
confidential information and other items, whether or not directly furnished or
prepared by any party or its agents or employees, is and shall remain the
property of the party who originally produced the same. Each party and its
agents and employees shall:
13.1. Not directly or indirectly divulge, disclose, disseminate,
distribute, license, sell or otherwise make known any confidential
information to any third party or person or entity not expressly
authorized or permitted by the providing party to receive such
confidential information.
13.2. Use best efforts to prevent disclosure of any confidential
information to any third party and exercise the highest degree of care
and discretion in accordance with all express duties hereunder to
prevent the same.
13.3. Except as otherwise set forth herein above, and subject to the
provisions of this Agreement pertaining to software escrow and mirror
site facilities, not directly or indirectly make any use whatsoever of
the confidential information or of any feature, specification, detail
or other characteristic contained in or derived from, the confidential
information, except for purposes of performing services hereunder.
13.4. Return to the other parties all confidential information or
other items then in its possession or control, or that of its agents or
employees, including originals, reproductions, replications and
photocopies thereof, at any time upon request by any other party or
upon the termination of this Agreement for any reason.
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14. INJUNCTIVE RELIEF; SPECIFIC PERFORMANCE. Each party agrees that in the
event of any action by the other party that in the non-breaching party's
reasonable judgment will create an actual or threatened breach of this
Agreement, the non-breaching party's remedies shall include specific performance
or injunctive relief, or both, without the necessity of posting bond or other
security, in addition to any and all remedies at law or in equity and all such
rights shall be cumulative.
15. RELATIONSHIP OF PARTIES. The Company intends no contract of employment,
express or implied, with Manager and Manager shall make no representations to
the contrary. Without limitation, Manager has not obtained any right to
employment or compensation or any other benefits of an employee by way of this
Agreement. The parties agree that in performing their responsibilities pursuant
to this Agreement they are in the position of independent contractors. This
Agreement is not intended to create, nor does it create and shall not be
construed to create, a relationship of partnership or joint venture. Manager is
not authorized by this Agreement to make any representation or warranty, or
create any liability or potential liability on behalf of the Company without the
Company's written consent.
16. EFFECTIVE DATE. This Agreement shall have no force or effect until
and unless it is approved and ratified by unanimous consent of Company's Boards
of Directors.
17. ASSIGNMENT. Neither party shall assign, delegate, subcontract, license,
franchise, or in any manner attempt to extend to any third party any right or
obligation under this Agreement without the prior written consent of the other
party; provided, however, that Manager may assign no more than a fifty percent
(50%) interest in any of its rights or benefits hereunder to any party or
parties, so long as Manager remains fully responsible for the faithful
performance and accomplishment of its duties of its responsibilities hereunder.
18. AMENDMENTS. Except as otherwise provided in this Agreement, no
provision of this Agreement may be amended, modified or waived except by a
written agreement signed by both parties.
19. NOTICES. All notices and other communication required or permitted
under this Agreement shall be in writing and given by personal delivery,
telecopy (confirmed by a mailed copy) or first class mail, postage prepaid,
addressed as follows:
If to the Company:
[COMPANY NAME]
[COMPANY ADDRESS]
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If to the Manager:
NET INTEGRATED SYSTEMS LTD.
Sofia House
48 Church Street
Xxxxxxxx XX GX
BERMUDA
20. SEVERABILITY. If any provision of this agreement is determined to be
invalid or unenforceable by any court of final jurisdiction, it is the intent of
the parties that all other provisions of this agreement be construed to remain
fully valid, enforceable, and binding on the parties. The invalidity of any
Section or Subsection shall not affect the validity of any other Section or
Subsection.
21. SECTION HEADINGS. The Section headings contained in this Agreement
are for convenient reference only and shall not in any way affect the meaning or
interpretation of this Agreement.
22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of, which shall be deemed to be an original, and the
counterparts shall together constitute one and the same instrument.
23. ENTIRE AGREEMENT; BINDING EFFECT. This Agreement, including all
Schedules, Addendums, Exhibits and attachments, embodies the entire
understanding and agreement of the parties concerning the subject matter. This
Agreement shall be binding upon and shall inure only to the benefit of the
parties and their respective successors and assigns. Nothing in this Agreement,
express or implied, is intended to confer or shall be deemed to confer upon any
persons or entities (not parties to this Agreement) any rights or remedies under
or by reason of this Agreement.
24. RECOVERY OF LITIGATION COSTS. If any legal action or any arbitration
or other proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection with
any of the provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover as an element of their damages, reasonable
attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief to which they may be entitled.
25. SURVIVAL. All representations and warranties shall survive the
execution of this Agreement.
26. AUTHORITY. Each of the respective persons executing this Agreement
here covenants and warrants he has full legal power, right, and authority to
enter this transaction.
27. CONSTRUCTION. The parties agree that each party and its counsel have
received and revised this Agreement and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
apply in the interpretation of this Agreement or any amendments, Schedules,
Addendums or Exhibits thereto.
28. GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of California without regard to or
application of conflict of laws or choice of law rules.
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29. VENUE. Venue for any action brought regarding the interpretation or
enforcement of this Agreement shall lie exclusively in Los Angeles County,
California.
30. FORUM SELECTION. Any litigation shall be brought and litigated in the
state courts sitting in Los Angeles County, California, or in the United States
District Court(s) sitting in Los Angeles County, California. All parties hereto
consent to the personal jurisdiction of such courts and waive any defense of
forum non-conveniens.
IN WITNESS WHEREOF, this Agreement is made effective on the date first
set forth above.
Company:
[COMPANY]
By:/s/[NAME]
------------------------------------
[NAME],
[TITLE]
Manager:
NET INTEGRATED SYSTEMS LTD.,
a Bermuda corporation
By:/s/XXXXXXX X. XXXXXX
------------------------------------
Xxxxxxx X. Xxxxxx,
President
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