MANAGEMENT AGREEMENT
THIS AGREEMENT is made as of September 27, 1999,
between Vertex Industries, Inc., a New Jersey corporation (the
"Company") and Edwardstone & Company, Incorporated, a Delaware
corporation ("EW").
WHEREAS, EW has initiated a series of transactions on
behalf of the Company including procuring adequate financing for
it to purchase certain assets; and
WHEREAS, the Company is engaged in the business of
producing and selling systems utilized in the collection and
processing of data, middleware, the identification of goods,
services and individuals, solutions for the automation of
warehouse operations and the integration of disparate computing
systems and applications, and EW is experienced in business and
organizational strategy, and financial and operational
management; and
WHEREAS, the Company desires to retain EW to procure the
ongoing services of Messrs. Xxxx Xxxxxxxx and Xxxxxxxx Xxxx to
provide investment banking, business and organizational strategy,
and financial and management services to the Company, upon the
terms and conditions hereinafter set forth, and EW is willing to
undertake such obligations;
NOW, THEREFORE, in consideration of the mutual
covenants hereinafter set forth, the parties hereto agree as
follows:
1. Appointment.
The Company hereby engages EW and EW hereby agrees
under the terms and conditions set forth herein to procure
certain services of Xxxx Xxxxxxxx and Xxxxxxxx Xxxx to the
Company as described in Section 2 hereof.
2. Duties of HHB and NT; Other Services.
(a) EW shall procure on behalf of the Company the
services of Xxxx Xxxxxxxx and Xxxxxxxx Xxxx to act as Co-Chairmen
and Chief Executive Officers of the Company during the term of
this agreement to provide the Company with business and
organizational strategy, and financial and investment management
and leadership services. HHB and NT shall perform such management
and other duties as reasonably requested from time to time by the
Board of Directors of the Company ("the Board of Directors"),
provided, however, that Xxxx Xxxxxxxx and Xxxxxxxx Xxxx each
agrees to devote no less than 90%of his professional time,
attention, skills, benefits and best efforts to the performance
of his duties hereunder and to the promotion of the business and
interests of the Company, and HHB agrees to take responsibilities
for the Company's operations in Europe.
(b) In addition, Xxxx Xxxxxxxx and Xxxxxxxx Xxxx shall
serve as members of the Board of Directors of the Company upon
nomination by EW and election pursuant to the terms of that
certain Shareholders Agreement dated as of the date hereof by and
among the Company and certain of its shareholders, and the
Management Fee provided for herein shall serve as full
compensation for such services, in lieu of any separate or
additional directors' fees.
3. Compensation of EW
(a) In exchange for the services rendered by HHB and
NT, during the term of this Agreement, the Company
agrees to pay EW a management fee (the "Management
Fee"), in cash, in the amount of $600,000 per year,
payable in approximately 24 equal bi-monthly
installments.
The Company shall reimburse each of HHB and NT for all
reasonable and necessary out-of-pocket travel and other expenses
incurred by either of them in rendering services required under
the terms of this Agreement, promptly and in no event more than
thirty (30) business days after submission, on a monthly basis,
of a detailed statement of such expenses and reasonable
documentation.
4. Benefits
During the term of this Agreement, HHB and NT shall be
entitled to participate in all of the benefit plans available to
senior executives of the Company including, but not limited to,
medical, dental and life insurance, and disability and other
benefits available to such senior executives from time to time.
5. Term and Termination of Agreement.
This Agreement shall be for an initial term of five
years commencing on the date hereof, and shall be automatically
renewed thereafter for successive one-year terms unless
terminated by either party upon written notice to the other party
given not less than thirty days prior to the end of either the
initial term or any subsequent one-year renewal term, as the case
may be.
6. Liability.
EW is not and never shall be liable to any creditor of
the Company and the Company agrees to indemnify and hold EW
harmless from and against any and all such claims of alleged
creditors and against all costs, charges and expenses (including
reasonable attorneys' fees and expenses) incurred or sustained by
it or the other party in connection with any action, suit or
proceeding to which it may be made a party by any alleged
creditor. The Company also agrees to indemnify and hold EW
harmless from and against any and all liabilities, losses or
damages suffered, paid or incurred by EW arising out of, or in
any way connected with, or as a result of, the execution and
delivery of this Agreement, or the performance by HHB and NT of
the Services hereunder, except for claims arising out of or
related to the gross negligence or willful misconduct of EW, HHB or NT.
7. Assignment.
This Agreement shall be binding upon and inure to the
benefit of the parties' successors and permitted assigns.
However, neither this Agreement nor any of the rights of the
parties hereunder may be transferred or assigned by either party
hereto without the express written consent of the other party.
Any attempted transfer or assignment in violation of this Section
6 shall be void.
8. Relationship of the Parties.
Nothing contained in this Agreement is intended or is
to be construed to constitute EW and the Company as partners or
joint venturers or either party as an employee of the other
party. Neither party hereto shall have any express or implied
right or authority to assume or create any obligations on behalf
of or in the name of the other party or to bind the other party
to any contract, agreement or undertaking with any third party.
9. Miscellaneous.
(a) Amendments and Waivers. This Agreement may
be amended, modified, superseded, canceled, renewed or extended,
and the terms and conditions hereof may be waived, only by a
written instrument signed by the parties hereto or, in the case
of waiver, by the party waiving compliance.
(b) Notices. Any notice or other communication
required or which may be given hereunder shall be in writing and
shall be delivered personally, telecopied, or sent by certified,
registered, or express mail, postage prepaid, to the parties at
the following addresses or at such other addresses as shall be
specified by the parties by like notice, and shall be deemed
given when so delivered personally or telecopies, or if mailed,
two days after the date of mailing, as follows:
(i) if to the Company, to:
Vertex Industries, Inc.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxx
Tel: 000-000-0000
Fax: 000-000-0000
(ii) if to EW, to:
Edwardstone & Company, Incorporated
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
(c) Entire Agreement. This Agreement contains
the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior contracts and
other agreements.
(d) Headings. The headings in this Agreement are
for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
(e) Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the
same instrument.
(f) Governing Law; Consent to Jurisdiction. This
Agreement shall be governed by, and construed and enforced in
accordance with and subject to, the laws of the State of New
Jersey applicable to agreements made and to be performed entirely
within such State. Each of the parties hereto consents and
agrees to the jurisdiction of any State or Federal court sitting
in the County of Xxxxxx, State of New Jersey, and waives any
objection based on venue or forum non conveniens with respect to
any action instituted therein, and agrees that any dispute
concerning the conduct of any part in connection with this
Agreement or otherwise shall be heard only in the courts
described above.
(g) Severability. If any term, provision,
covenant or restriction of this Agreement, or any part thereof,
is held by a court of competent jurisdiction or any foreign,
federal, state, county or local government or any other
governmental, regulatory or administrative agency or authority to
be invalid, void, unenforceable or against public policy for any
reason, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the date first above written.
VERTEX INDUSTRIES, INC.
By: s/Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: President
EDWARDSTONE & COMPANY, INCORPORATED
By: s/Xxxxxxxx X. Xxxx
Name: Xxxxxxxx X. Xxxx
Title: Chairman
Accepted and agreed to:
s/Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
s/Xxxxxxxx X. Xxxx
Xxxxxxxx X. Xxxx