Exhibit 10.1
 
MANAGEMENT SERVICES AGREEMENT
 
AGREEMENT, effective as of September 1, 2009, by and between SP Corporate
Services LLC (“SP Corporate”), a Delaware limited liability company, having an
office at 590 Madison Avenue, 32nd Floor, New York, New York 10022, and Point
Blank Solutions, Inc., a Delaware corporation (the “Company”), having an office
at 2102 S.W. 2nd Street, Pompano Beach, FL 33069.
 
W I T N E S S E T H:
 
WHEREAS, the Company desires to have SP Corporate furnish certain services to
the Company, as set forth on Exhibit A attached hereto as it may be amended from
time to time pursuant to the terms hereof (the “Services”), and SP Corporate has
agreed to furnish Services, pursuant to the terms and conditions hereinafter set
forth; and
 
WHEREAS, this Agreement has been approved by the Audit Committee of the Board of
Directors of the Company (the “Board”) and recommended Board approval, and the
disinterested directors of the Company unanimously approved this Agreement.
 
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
 
Section 1.     Engagement of SP Corporate.
 
1.01.     During the term of this Agreement, SP Corporate shall provide to the
Company such Services, as more fully described and defined on Exhibit A, as may
be necessary or desirable or as may be reasonably requested or required, in
connection with the business, operations and affairs, both ordinary and
extraordinary, of the Company and its subsidiaries and affiliates.
 
1.02.     In performing Services, SP Corporate shall be subject to the
supervision and control of the disinterested directors of the Company.  In no
event shall SP Corporate incur an obligation or enter into any transaction on
behalf of the Company involving in excess of $50,000 without the prior approval
of the disinterested directors of the Company, except that such restriction
shall not apply to James R. Henderson (“Henderson”) acting in his capacity as an
officer of the Company or any of its subsidiaries.
 
1.03.     While the amount of time and personnel required for performance by SP
Corporate hereunder will necessarily vary depending upon the nature and type of
Services, SP Corporate shall devote such time and effort and make available such
personnel as may from time to time reasonably be required for the performance of
Services hereunder.  Notwithstanding the foregoing, SP Corporate shall make
Henderson available to act as, and he shall devote such time and effort as is
necessary to fulfill the statutory and fiduciary duties of, the Chief Executive
Officer of the Company until such time as otherwise instructed or removed by the
Board or the resignation of Henderson.
 
 
 

--------------------------------------------------------------------------------

 
 
1.04.     Exhibit A may be amended from time to time to provide for additional
Services, the elimination of certain Services, increases or decreases to the
compensation paid hereunder, or other changes, upon the mutual agreement of the
parties hereto.
 
Section 2.     Term.  This Agreement shall commence effective as of September 1,
2009, and shall terminate immediately upon written notice given to the other
party or immediately upon the death of Henderson.  The Company shall have the
right during (but not after) the term of this Agreement, but not the obligation,
to obtain and maintain one or more policies of life insurance on the life of
Henderson at the Company’s sole cost and expense, and Henderson agrees to
cooperate fully and execute such reasonable documents as the Company shall
request in connection with such insurance.
 
Section 3.     Payments to SP Corporate.
 
3.01.     In consideration of Services furnished by SP Corporate hereunder, the
Company shall pay to SP Corporate a fixed monthly fee as set forth in Section
3.02, which shall be adjustable annually upon mutual agreement by the parties or
at other times upon the amendment of Exhibit A pursuant to Section 1.04, and the
Company may pay SP Corporate an annual cash bonus pursuant to the Company’s
annual incentive plan, subject to the sole and complete discretion of the
Compensation Committee of the Board.  In addition, the Company shall promptly
reimburse SP Corporate and Henderson for reasonable legal expenses incurred in
connection with this Agreement, shall promptly reimburse SP Corporate for
certain of Henderson’s reasonable living expenses, including but not limited to
his relocation, housing and automobile expenses and SP Corporate hereby directs
the Company to make such reimbursement payments with respect to Henderson’s
reasonable living expenses directly to Henderson.
 
3.02.     The Company shall pay SP Corporate a fixed monthly fee in cash in
amount set forth on Exhibit A in advance on the first day of each month.
 
Section 4.     Limitation on Liability.  To the fullest extent permitted by law
and as consistent with the Company’s Second Amended and Restated By-Laws and
Certificate of Incorporation, as may be amended from time to time (the
“Company’s Charter Documents”), SP Corporate shall not be liable to the Company,
any affiliate thereof or any third party for any losses, claims, damages,
liabilities, penalties, obligations or expenses, including reasonable legal fees
and expenses, of any kind or nature whatsoever due to any act or omission in
connection with the rendering of Services hereunder, unless that act or omission
constitutes gross negligence, willful misconduct or fraud.  Further, SP
Corporate shall reasonably rely on information provided to it about the Company,
if any, that is provided by the Company or the Company’s affiliates, employees
or agents.  In no event shall SP Corporate be liable for any error or inaccuracy
of any report, computation or other information or document produced in
accordance with this Agreement, for whose accuracy the Company assumes all
responsibility, unless resulting from the gross negligence, willful misconduct
or fraud of SP Corporate or SP Corporate’s officers, directors, employees or
agents.
 
 
2

--------------------------------------------------------------------------------

 
 
Section 5.     Indemnity and D&O Insurance.  To the fullest extent permitted by
law and as consistent with the Company’s Charter Documents, the Company shall
defend, indemnify, save and hold harmless SP Corporate and Henderson from and
against any claims, liabilities, damages, losses, costs or expenses, including
amounts paid in satisfaction of judgments, in compromises and settlements, as
fines and penalties and legal or other costs and reasonable expenses of
investigating or defending against any claim or alleged claim of any nature
whatsoever resulting from SP Corporate’s or Henderson’s activities or services
under this Agreement (a “Claim”), except to the extent occasioned by the gross
negligence, willful misconduct or fraud of SP Corporate, Henderson or SP
Corporate’s officers, directors, employees or agents.  At the request of SP
Corporate and/or Henderson, the Company will advance to them the legal or other
costs and reasonable expenses of investigating or defending against any Claim in
advance of the final disposition of such Claim.  To the fullest extent permitted
by law and as consistent with the Company’s Charter Documents, the Company’s
obligation to indemnify SP Corporate hereunder shall extend to and inure to the
benefit of SP Corporate’s officers, directors, members, employees, affiliates
and consultants.  If SP Corporate should reasonably determine its interests are
or may be adverse to the interests of the Company, SP Corporate may retain its
own counsel in connection with such claim or alleged claim or action, in which
case the Company shall be liable, to the extent permitted under this Section 5,
to SP Corporate for any reasonable and documented legal, accounting or other
directly related fees and expenses incurred by SP Corporate in connection with
its investigating or defending such claim or alleged claim or action.  In
addition, at all times during which Henderson is acting as the Company’s
non-employee Chief Executive Officer pursuant to this Agreement, the Company
shall cause Henderson to be covered by a D&O insurance policy issued by a
reputable D&O insurance carrier with coverages and terms no less favorable than
those contained in the Company’s current D&O insurance policy.  In addition,
neither SP Corporate nor any of its officers, directors, members, employees,
affiliates or consultants (including Henderson) shall be liable to the Company
or any third party for any special, consequential or exemplary damages
(including lost or anticipated revenues or profits relating to the same) arising
from any claim relating to this Agreement or any of the services provided
hereunder, whether such claim is based on warranty, contract, tort (including
negligence or strict liability) or otherwise, even if an authorized
representative of SP Corporate is advised of the possibility or likelihood of
the same.
 
Section 6.     Confidential Information.  SP Corporate shall not at any time
during or following the termination or expiration for any reason of this
Agreement, directly or indirectly, disclose, publish or divulge to any person
(except where necessary in connection with the furnishing of Services under this
Agreement), appropriate or use, or cause or permit any other person to
appropriate or use, any of the Company’s inventions, discoveries, improvements,
trade secrets, copyrights or other proprietary, secret or confidential
information not then publicly available.
 
Section 7.     Non-Exclusive Arrangement; Conflicts of Interest.
 
7.01.     The Company acknowledges that SP Corporate and its Affiliated
Companies (as defined below) may from time to time enter into agreements similar
to this Agreement with other companies pursuant to which SP Corporate may agree
to provide services similar in nature to the Services being provided
hereunder.  The Company understands that the person or persons providing the
Services hereunder may also provide similar or additional services to other
companies, including as officers and directors of such companies.  In addition,
to the extent business opportunities arise, the Company acknowledges that SP
Corporate will be under no obligation to present such opportunity to the
Company, and SP Corporate may, in its sole discretion, present any such
opportunity to whatever company it so chooses, or to none at all; provided,
however, nothing contained herein shall affect or otherwise limit the fiduciary
obligations of the officers and directors of the Company.
 
 
3

--------------------------------------------------------------------------------

 
 
7.02.     The Company, SP Corporate and their respective Affiliated Companies
recognize and acknowledge that as a result of SP Corporate providing the
Services pursuant to this Agreement the potential for conflicts of interest
exist between and/or among SP Corporate, the Company, Affiliated Companies of SP
Corporate and the Company and the respective officers and directors of SP
Corporate and the Company, including but not limited to (i) that an Affiliated
Company of SP Corporate may be a majority or significant stockholder of the
Company, (ii) that directors, officers, members and/or employees of SP Corporate
or of Affiliated Companies of SP Corporate may serve as directors and/or
officers of the Company, (iii) that SP Corporate and Affiliated Companies
thereof may engage and are expected to continue to engage in the same, similar
or related lines of business as those in which the Company, directly or
indirectly, may engage and/or other business activities that overlap with or
compete with those in which the Company, directly or indirectly, may engage,
(iv) that SP Corporate and Affiliated Companies thereof may have an interest in
the same areas of corporate opportunity as the Company and Affiliated Companies
thereof, and (v) that SP Corporate and Affiliated Companies thereof may engage
in material business transactions with the Company and Affiliated Companies
thereof, including (without limitation) providing Services to or being a
significant supplier of the Company and Affiliated Companies thereof.  The
Company further recognizes, acknowledges and agrees that any such conflicts of
interest shall be resolved by SP Corporate in its sole discretion.
 
7.03.     For purposes of this Agreement, “Affiliated Companies” shall mean in
respect of SP Corporate any entity which is controlled by SP Corporate, controls
SP Corporate or is under common control with SP Corporate (other than the
Company and any entity that is controlled by the Company), and in respect of the
Company shall mean any entity controlled by the Company.
 
7.04.     The Company represents and warrants that the Audit Committee of the
Board has approved this Agreement and recommended Board approval, and the
disinterested directors of the Company unanimously approved this Agreement.
 
Section 8.     General.
 
8.01.     This Agreement constitutes the entire agreement between the parties
hereto pertaining to the subject matter hereof and supersedes all prior
representations and agreements, whether oral or written, and cannot be modified,
changed, waived or terminated except by a writing signed by both of the parties
hereto.  No course of conduct or trade custom or usage shall in any way be used
to explain, modify, amend or otherwise construe this Agreement.
 
8.02.     The waiver by a party of a breach of any provision of this Agreement
shall not be construed as a waiver of any subsequent breach.  The failure of a
party to insist upon strict adherence to any provision 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 provision or any other
provision of this Agreement.  Any waiver must be in a writing signed by the
party against which the waiver is sought to be enforced.
 
 
4

--------------------------------------------------------------------------------

 
 
8.03.     All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given if personally delivered, sent by nationally recognized overnight
carrier, one day after being sent, or mailed by first class registered or
certified mail, return receipt requested, five days after being sent.
 
8.04.     This Agreement shall be construed under the laws of the State of New
York and the parties hereby submit to the personal jurisdiction of any federal
or state court located therein, and agree that jurisdiction shall rest
exclusively therein, without giving effect to the principles of conflict of
laws.
 
8.05.     This Agreement may not be assigned by any party without the prior
written consent of the other parties to this Agreement.
 
8.06.     This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
 
8.07.     Sections 4, 5 and 6 shall survive any expiration or termination of
this Agreement.
 
8.07.     Except as specifically provided herein, none of the parties shall act
or represent or hold itself out as having authority to act as an agent or
partner of any other party, or in any way bind or commit any other party to any
obligations.  Nothing contained in this Agreement shall be construed as creating
a partnership, joint venture, agency, trust or other association of any kind,
each party being individually responsible for its obligations set forth in this
Agreement.  Neither party shall be responsible for the compensation, the
withholding of taxes, workers compensation, or any other employer liability for
the employees and agents of the other party.  Without limiting the generality of
the foregoing, the parties acknowledge and agree that SP Corporate is an
independent contractor and that neither Henderson nor SP Corporate is an
employee of the Company.  SP Corporate or an Affiliated Company of SP Corporate
shall timely withhold and pay all taxes and file all reports required by
applicable law to be withheld, paid and filed for Henderson.
 
8.08.     Henderson joins herein solely to acknowledge and agree to the terms
hereof relating specifically to him and to specifically acknowledge and agree
that he is not an employee of the Company and is not eligible for and has no
right to receive any compensation or benefits from the Company or to participate
in any employee benefit plans or programs available to the employees of the
Company, including welfare and retirement benefits.
 
[Signature Page Follows]
 
 
5

--------------------------------------------------------------------------------

 
 
[Signature Page to Management Services Agreement]
 
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
 

 
SP CORPORATE SERVICES LLC
     
By:
/s/ Sanford Antignas    
Name:
Sanford Antignas
   
Title:
Chief Operating Officer
     
POINT BLANK SOLUTIONS, INC.
     
By:
/s/ Michelle Doery    
Name:
Michelle Doery
   
Title:
Chief Financial Officer
          /s/ James R. Henderson   
James R. Henderson, individually and solely for the purposes specified in
Section 8.08 above

 
6

--------------------------------------------------------------------------------

 
 
EXHIBIT A
 
 
1.
The “Services” shall consist of the non-exclusive services of James R. Henderson
to serve as the Company’s Chief Executive Officer.  Such person, in his capacity
as Chief Executive Officer, will perform all duties normally associated with
that of the Company’s Chief Executive Officer, including without limitation:

 
 
·
Provide effective overall leadership to the Company.

 
 
·
Provide effective leadership in the Company’s efforts to meet required SEC
filing requirements.

 
 
·
Serve as an effective member of the Company’s executive management team.

 
 
·
Perform all other duties of the Company’s Chief Executive Officer as set forth
in the Company’s Charter Documents and corporate governance policies as they may
be amended from time to time.

 

 
 
2.
The monthly fee for providing the Services shall be $37,500.

 

 
7

--------------------------------------------------------------------------------