Exhibit 10.23
MANAGEMENT AGREEMENT
This Management Agreement (this "Agreement"), dated as of January 1, 2002,
is by and between OAO Technology Solutions, Inc., a Delaware corporation (the
"Company"), and X.X. Xxxxxx & Company, Inc., a Delaware corporation (the
"Advisor").
WHEREAS, the Company desires to retain the Advisor to provide strategic and
organizational advisory services to the Company on the terms and conditions set
forth herein;
WHEREAS, the Advisor wishes to provide such services to the Company and the
Company wishes to compensate the Advisor for such services on the terms and
conditions set forth herein; and
WHEREAS, at a meeting held on December 10, 2001, the Board of Directors of
the Company unanimously approved the Company's entering into of this Agreement
with the Advisor on substantially the terms contained herein, which approval
included the unanimous approval of the members of the Independent Committee of
the Board of Directors, acting pursuant to Section 2.1 of that certain
Stockholders Agreement, dated as of October 22, 2001, among the Company,
Terrapin Partners Subsidiary LLC, a Delaware limited liability company and an
affiliate of the Advisor, and X.X. Xxxxxx Equity Investors I, L.P., a Delaware
limited partnership and an affiliate of the Advisor (the "Stockholders
Agreement").
NOW, THEREFORE, in consideration of the premises and the covenants and
conditions contained herein, the parties hereto agree as follows:
1. Compensation.
(a) Annual Fee. In consideration for the services to be rendered by the
Advisor to the Company hereunder, the Company shall pay to the Advisor a fee
(the "Annual Fee") in the amount of $375,000 per annum for each year during the
period commencing on the effective date of this Agreement, which the parties
agree is October 23, 2001 (the "Effective Date"), and ending on the date of the
termination of this Agreement. The Annual Fee shall be payable in quarterly
installments, payable in advance until the date of termination of this
Agreement, on the first business day of such quarterly period.
(b) Future Transaction Fees. Subject to the provisions of this Section 1(b)
and any required approvals of the Independent Committee under the Stockholders
Agreement, the Advisor shall be entitled to receive additional compensation
under this Agreement for services rendered in transactions such as mergers,
consolidations, sales or purchases of a significant amount of assets or capital
stock, and financings involving the public or private offering of the debt or
equity securities of the Company or the establishment of a new credit facility.
The compensation to be payable to the Advisor for services rendered in
connection with any such transaction shall be such compensation as is customary
for the type of services rendered in similar transactions and as may be agreed
upon by the Company and the Advisor at such time.
(c) Reimbursements for Out-of-Pocket Expenses. In addition to the fees set
forth above, the Company shall reimburse the Advisor for all reasonable
out-of-pocket expenses
75
incurred by the Advisor in rendering the services to the Company contemplated by
paragraphs (a) and (b) above. All reimbursements for out-of-pocket expenses
shall be made promptly upon or as soon as practicable, and in any event not
later than 30 days, after presentation by the Advisor to the Company of a
reasonably detailed statement of expenses in connection therewith.
2. Interest. In the event that the Company shall fail to pay all or any
part of the fees or out-of-pocket expenses described in Section 1 hereof within
10 days after the date when due, then the Advisor shall be entitled to interest
on the unpaid amount thereof at a rate equal to 10% per annum until paid.
3. Indemnification. The Company will indemnify and hold harmless the
Advisor, its affiliates and their respective partners (both general and
limited), officers, directors, employees, agents and representatives (each such
person being an "Indemnified Party") from and against any and all losses,
claims, damages and liabilities, whether joint or several (the "Liabilities"),
related to, arising out of or in connection with the services contemplated by
this Agreement or the engagement of the Advisor pursuant to, and the performance
by the Advisor of the services contemplated by, this Agreement. The Company will
reimburse any Indemnified Party for all reasonable costs and expenses (including
reasonable attorneys' fees and expenses) as are incurred in connection with
investigating, preparing, pursuing, defending or assisting in the defense of any
action, claim, suit, investigation or proceeding for which the Indemnified Party
would be entitled to indemnification under the terms of the previous sentence,
or any action or proceeding arising therefrom, whether or not such Indemnified
Party is a party hereto. The Company will not be liable under the foregoing
indemnification provision with respect to any Indemnified Party, to the extent
that any loss, claim, damage, liability, cost or expense is determined by a
court, in a final judgment from which no further appeal may be taken, to have
resulted primarily from the gross negligence or willful misconduct of the
Advisor.
4. Term. This Agreement shall be effective as of the date hereof and shall
continue in effect until the earliest to occur of (i) the second anniversary of
this Agreement (January 1, 2004); provided, however, that this Agreement shall
continue for successive two-year terms unless one party hereto notifies the
other party in writing, at least one year prior to the end of the initial
two-year term (on or before January 1, 2003) or such subsequent two-year term,
of its desire to terminate this Agreement; and (ii) the closing of a sale to an
entity which is not an "Affiliate" (as defined in Section 12b-2 of the
Securities Exchange Act of 1934) of the Company or any of its existing
shareholders on the date hereof of all or substantially all of the capital stock
or assets of the Company. The provisions of Sections 1(c), 2, 3 and otherwise as
the context so requires shall survive the termination of this Agreement.
5. Permissible Activities. Subject to applicable law, nothing herein shall
in any way preclude the Advisor, its affiliates or their respective partners
(both general and limited), officers, directors, employees, agents or
representatives from engaging in any business activities or from performing
services for its or their own account or for the account of others, including
for companies that may be in competition with the business conducted by the
Company.
76
6. Consulting Relationship. It is understood and agreed that the Advisor
shall for all purposes hereof be deemed to be an independent contractor and
shall not, unless otherwise expressly authorized by the Company, have any
authority to act for or represent the Company in any way, execute any
transaction on behalf of the Company or otherwise be deemed an agent of the
Company. No federal, state or local withholding deductions shall be withheld
from the fees and other amounts payable to the Advisor pursuant to this
Agreement unless otherwise required by law.
7. Miscellaneous.
(a) No amendment or waiver of any provision of this Agreement, or consent
to any departure by either party hereto from any such provision, shall be
effective unless the same shall be in writing and signed by each of the parties
hereto. Any amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) Any and all notices hereunder shall, in the absence of receipted hand
delivery, be deemed duly given when mailed, if the same shall be sent by
registered or certified mail, return receipt requested, and the mailing date
shall be deemed the date from which all time periods pertaining to a date of
notice shall run. Notices shall be addressed to the parties at the following
addresses:
If to the Advisor: X.X. Xxxxxx & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxx
If to the Company: OAO Technology Solutions, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Mr. J. Xxxxxxx Xxx
(c) This Agreement shall constitute the entire agreement between the
parties with respect to the subject matter hereof, and shall supersede all
previous oral and written (and all contemporaneous oral) negotiations,
commitments, agreements and understandings relating hereto.
(d) THIS AGREEMENT SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN THAT STATE. This Agreement shall inure to the benefit of, and be
binding upon, the Advisor, the Company, and their respective successors and
permitted assigns. None of the rights or obligations of the parties hereunder
may be assigned by either party without the prior written consent of the other
party hereto, provided that the Advisor may assign its rights and obligations
hereunder to any corporation or other entity controlled by or under common
control with the Advisor.
(e) This Agreement may be executed by one or more parties to this Agreement
on any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
77
(f) The waiver by any party of any breach of this Agreement shall not
operate as or be construed to be a waiver by such party of any subsequent
breach.
(g) Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers or agents as of the date first
above written.
OAO TECHNOLOGY SOLUTIONS, INC.
By:_____________________________________
Name:
Title:
X.X. XXXXXX & CO., INC.
By:_____________________________________
Xxxxxx Xxxxxxxx
Managing Principal
78
