EXHIBIT 10.13
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of 1/1/2003, between ACS-TECH80 Ltd. (the
"COMPANY") on one hand, and Z.Z. ORAV LTD. of 00 Xxxxxx Xxxxxx, Xxxxxx Xxxxx,
Xxxxxx 00000 (hereinafter: "ORAV") on the other hand.
WHEREAS, Orav is a private company owned and controlled by Mr. Ze'ev
Kirshenboim, the Chief Executive Officer and President of the Company, and the
holder of approximately 22% of the Company's outstanding shares on the date
hereof; and
WHEREAS, the Company desires to engage Orav to provide certain management
services, as set forth herein and Orav agrees to the provision of such services;
NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. GENERAL
1.2 The preamble to this Agreement constitutes an integral part hereof.
1.3 The headings of the sections and subsections of this Agreement are for
convenience of reference only and are not to be considered in
interpreting this Agreement.
2. APPOINTMENT OF ORAV AND SCOPE OF SERVICES
2.1 Orav shall provide the Company with the Management Services, as
defined hereinbelow, all of which shall be provided on behalf of Orav
by Xx. Xxxxxxxxxxx and/or other employee/s who shall be appointed by
Orav, unless objected to by the Company (such persons hereinafter
jointly referred to as the "ORAV PERSON").
2.2 For the purpose of this Agreement, the "MANAGEMENT SERVICES" shall
consist of the performance of the function of Chief Executive Office
of the Company, until the Company resolves otherwise. In the event
that the Company resolves to appoint another CEO, then for the
duration of the term hereof (and any extended term, if applicable) the
Management Services shall consist of the performance of the function
of Chairman of the Company's board of directors.
2.3 In performance of the Management Services, Orav shall be subject to
the directives of the Board of Directors of the Company and shall
promptly convey such directives to the Orav Person and ensure he
carries them out. Notwithstanding any provision herein, all
interactions and negotiations on behalf of Orav with the Company
shall, to the extent possible, be done by the Orav Person and all
directives from the Company's board of directors shall, to the extent
possible, be given to the Orav Person directly.
2.4 Orav undertakes to immediately inform the Company of any issue or
matter related to the Company, in which it or any of its employees may
have a personal interest and/or which might cause a conflict of
interest between Orav and the Company.
2.5 The Company acknowledges and agrees that Orav and/or an Orav Person
(whether or not acting on behalf of Orav) provide and shall be
entitled to continue to provide services to other companies and
entities, that an Orav Person may be a member of the board of
directors of another company and that such services or memberships
will not be deemed a breach of this Agreement; provided however, that
such services may not be provided to entities competing with the
Company and that each Orav Person shall devote an adequate portion of
his time to the Company, as shall be required for the performance of
Orav's duties hereunder.
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3. REPRESENTATIONS AND WARRANTIES OF ORAV
Orav represents and warrants to the Company that it is under no contractual
or other restriction or obligation which is inconsistent with the execution
of this Agreement or the performance of the Management Services hereunder.
4. TERM AND TERMINATION
4.1 The term of this Agreement shall commence on January 1, 2003 (the
"EFFECTIVE DATE") and shall be in effect for a period of five (5)
years thereafter (the "TERM"). This Agreement shall automatically be
extended for consecutive one-year terms (each an "EXTENDED TERM"),
unless a party hereto notifies the other, no later than 90 days prior
to the end of the Term or each Extended Term, as the case may be, of
its desire that this Agreement shall not be extended, in which case
this Agreement shall lapse at the end of the Term or the applicable
Extended Term. Notwithstanding the foregoing, following the second
anniversary hereof, this Agreement may be terminated by either party,
by providing the other party six (6) months advance written notice of
its desire to terminate this Agreement, specifying the reason for the
requested termination (the "NOTICE PERIOD").
4.2 This Agreement shall remain in full force and effect during the Notice
Period and there shall be no change in Orav's position with the
Company or any obligations hereunder, unless otherwise determined by
the Company in a written notice to Orav. It is clarified that the
Company may choose not to receive any services from Orav during the
Notice Period.
4.3 Notwithstanding the foregoing, Orav shall be entitled to all
Management Fees and other consideration and benefits to which it is
entitled pursuant to this Agreement until the end of the applicable
Notice Period, whether or not its services were required by the
Company during the Notice Period. It is clarified that the end of the
Notice Period shall be deemed the termination date of this Agreement.
4.4 During the Notice Period, Orav shall cooperate with the Company and
use its best efforts to assist the integration into the Company's
organization of the person or persons who will assume Orav's
responsibilities.
4.5 Notwithstanding anything herein to the contrary, the Company shall
have the right to terminate this Agreement upon the dissolution of
Orav or at any time in the event of the death or "Disability" (as
hereinafter defined) of the Orav Person through which Orav is
supplying the Management Services at any given time, or for "cause"
(as hereinafter defined). In such events, this Agreement shall be
deemed effectively terminated as of the time of delivery of a notice
to such effect.
The term "Disability" shall mean any physical or mental illness or
injury as a result of which an Orav Person was not able to provide the
Management Services for an aggregate period of six (6) months in any
period of twelve (12) consecutive months, as determined by an approved
medical doctor, and provided Orav has not adequately supplied the
Management Services through an alternative Orav Person. For this
purpose, an approved medical doctor shall mean a medical doctor
selected by the Company and Orav. If parties cannot agree on a medical
doctor, each party shall select a medical doctor and the two doctors
shall select a third one who shall be the approved medical doctor for
this purpose.
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The term "cause" for the purpose hereof shall mean (a) a breach by
Orav or the Orav Person of its fiduciary duties or duties of care
toward the Company; (b) Orav or the Orav Person has performed fraud;
or (c) Orav or the Orav Person is convicted of a felony, that has an
adverse effect on the Company's business or reputation.
4.6 In any event of termination hereof, other than termination for a
material breach by Orav of this Agreement, Orav shall make the Orav
Person available to the Company, for a period of additional 24 months
following the termination hereof, for technical and managerial
support, assistance and consulting at reasonable working hours, to the
extent such support, assistance or consulting is required by the
Company; provided however, that such support, assistance or consulting
shall not preclude said Orav Person from holding positions in or
granting services to third parties.
4.7 In return for Orav's undertakings in Section 4.6 above and Sections 8
(confidentiality) and 9 (Non Competition) below, Orav shall be
entitled to receive from the Company payment of a monthly fee equal to
the higher of (i) the average monthly management fees it has received
from the Company during the term hereof, or (ii) the last Management
Fee it has received from the Company during the term hereof (the
"CONDITIONAL FEE"). Orav shall receive the Conditional Fee during the
24 consecutive months following the termination hereof, whether or not
it is required by the Company to provide any support, assistance or
consulting services pursuant to Section 4.6 above and without regard
to the scope of the services actually provided by Orav.
5. MANAGEMENT FEES
5.1 In consideration for rendering the Management Services Orav shall be
entitled to a monthly management fee ("MANAGEMENT FEE") of US$ 29,639.
5.2 The Management Fee shall be paid by the 6th day of each calendar month
for the current month. Applicable VAT shall be added to the Management
Fee. The payment shall be against an invoice to be issued to the
Company by Orav. It is clarified that the Management Fee is the entire
amount to which Orav shall be entitled for the management Services and
it shall not be entitled to any further benefits or payments for
additional hours, except as otherwise set forth herein.
5.3 The Management Fee and other benefits shall be increased annually,
every January, by the increase of the USA CPI since the date hereof.
6. EXPENSES AND LEAVE
6.1 Orav shall be entitled to reimbursement for reasonable out of pocket
incurred in connection with providing the Services or expended in the
furtherance of the Company's business, subject to the presentation to
the Company of invoices for such expenses. The Company shall pay all
of such reasonable expenses within thirty (30) calendar days of its
receipt of the invoices reflecting such expenses.
6.2 Orav shall be entitled to grant each Orav Person employed in the
provision of the Management Services to the Company up to 30 working
days per calendar year as vacation without it constituting a breach of
this Agreement ("Non-Service Days").
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6.3 In addition, the absence of an Orav Person from providing the Services
due to illness not exceeding the aggregate number of illness days to
which he is entitled under applicable law as an employee of Orav,
shall not constitute a breach of this Agreement and Orav shall be
entitled to full payment of the Management Fee for such days.
7. RELATIONSHIP OF PARTIES
7.1 Orav is an independent management company, and it or its employees,
agents and representatives (including without limitation, the Orav
Persons) are not and shall not be deemed agents or employees of the
Company. Therefore, Orav or its employees, agents and representatives
(including without limitation, the Orav Persons) shall not be entitled
to any rights, privileges or benefits, social or otherwise, awarded to
Company employees, except as otherwise expressly provided for herein,
and Orav hereby acknowledges that it shall not be entitled to any
further benefits or consideration in any form in addition to those
expressly set forth herein, and is hereby waiving any claims in this
regard.
7.2 Orav will use reasonable discretion in carrying out the Management
Services and in determining the manner and means by which the
Management Services are carried out, subject to compliance with all
applicable laws and the directives of the Company's board of
directors.
7.3 The Company acknowledges that Orav is not exclusively engaged by the
Company and may engage in any trade or business, which is not in
competition with the Company's business, and subject to the
fulfillment of all of its obligations hereunder.
7.4 Orav hereby expressly undertakes that, except as otherwise expressly
provided for herein, it shall be responsible for all compensation due
to persons acting on its behalf in the provision of the Management
Services, including without limitation Xx. Xxxxxxxxxxx and any other
Orav Person. Orav specifically warrants and undertakes that Xx.
Xxxxxxxxxxx shall be its employee and shall receive compensation for
the Management Services from Orav.
7.5 Furthermore, Orav undertakes to indemnify the Company for any and all
payments the Company shall be required to pay to an Orav Person in
connection with the Services (except as set forth herein), including,
without limitation, in the event of a claim by an Orav Person against
the Company.
8. CONFIDENTIALITY
Orav shall keep all information regarding the Company, including but not
limited to its business and technology, which is reasonably likely to be
deemed of a confidential or proprietary nature ("CONFIDENTIAL
INFORMATION"), in the strictest confidence. Orav shall return all tangible
evidence of such confidential information to the Company prior to or upon
the termination of this Agreement.
Following the termination of this agreement, Orav shall continue to keep
the Confidential Information in strict confidence.
9. NON COMPETITION
Orav undertakes that it or the Orav Person shall not compete with the
Company during the Term and for a period of 24 months after the termination
hereof.
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10. MISCELLANEOUS
10.1 This Agreement supersedes all prior oral or written agreements
pertaining to the subject matter hereof. No amendment, modification or
alteration of this Agreement shall be effective unless by a subsequent
written instrument duly signed by the parties hereto.
10.2 Orav's rights and obligations under this Agreement shall not be
transferable by assignment or otherwise, such rights shall not be
subject to any encumbrance or claims of orav's creditors, and any
attempt to do any of the foregoing shall be void. The provisions of
this Agreement shall be binding upon and inure to the benefit of Orav
and its successors and heirs and shall be binding upon and inure to
the benefit of the Company and its successors.
10.3 Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision
of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement on one or more occasions shall
not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other
term of this Agreement. Any waiver must be in writing.
10.4 Any notice hereunder shall be given to the parties at their respective
addresses set forth above until a different address shall be
established for a party by notice given by him or it to the other
party.
10.5 This Agreement shall be governed by and construed in accordance with
the laws of the State of Israel and shall be subject to the venue and
jurisdiction of the Courts in Haifa, Israel.
IN WITNESS THEREOF, the parties have executed this Agreement of the date set
forth hereinabove:
BY: /S/ ZE'EV KIRSHENBOIM BY: /S/ XXXXX RIGELSTEIN
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ZE'EV KIRSHENBOIM XXXXX XXXXXXXXXXX
Z.Z. ORAV LTD. ACS-TECH80 LTD.
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