Exhibit 10.2
FORM OF MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (this "Agreement") is entered
into as of January 1, 1997 by and between Xxxxxxx International Group Inc., a
Delaware corporation ("Xxxxxxx"), and Hay Island Holding Corporation, a
Delaware corporation ("Hay Island").
RECITALS
WHEREAS, Xxxxxxx is issuing shares of Class A Common Stock, $0.01
par value per share ("Class A Common Stock"), to the public in an offering (the
"Initial Public Offering") registered under the Securities Act of 1933, as
amended;
WHEREAS, Hay Island beneficially owns all of the issued and
outstanding Xxxxxxx Class B Common Stock, par value $0.01 per share ("Class B
Common Stock") of Xxxxxxx;
WHEREAS, on the terms and subject to the conditions set forth
herein, Xxxxxxx desires to retain Hay Island as an independent contractor to
provide certain administrative, financial, management and other services
to Xxxxxxx and its Subsidiaries (as defined below) after the Closing Date (as
defined below); and
WHEREAS, on the terms and subject to the conditions set forth
herein, Hay Island desires to provide such services to Xxxxxxx and its
Subsidiaries.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Hay Island and Xxxxxxx, for
themselves, their successors and assigns, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, the following
terms will have the following meanings, applicable both to the singular and the
plural forms of the terms described:
"Agreement" has the meaning ascribed thereto in the preamble hereto,
as such agreement may be amended and supplemented from time to time in
accordance with its terms.
"Class A Common Stock" has the meaning ascribed thereto in the
recitals to this Agreement.
"Class B Common Stock" has the meaning ascribed thereto in the
recitals to this Agreement.
"Closing Date" means the date of the closing of the initial sale of
Class A Common Stock in the Initial Public Offering.
"Common Stock" means the Class B Common Stock, the Class A Common
Stock and any other class of Xxxxxxx capital stock representing the right to
vote generally for the election of directors.
"Initial Public Offering" has the meaning ascribed thereto in the
recitals to this Agreement.
"Hay Indemnified Person" has the meaning ascribed thereto in Section
4.2.
"Hay Island" has the meaning ascribed thereto in the preamble
hereto.
"Payment Date" has the meaning ascribed thereto in Section 3.2.
"Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization,
government (and any department or agency thereof) or other entity.
"Schedule A" means the schedule hereto that lists the Services to be
provided by Hay Island to Xxxxxxx.
"Xxxxxxx" has the meaning ascribed thereto in the preamble hereto.
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"Xxxxxxx Entities" means Xxxxxxx and its Subsidiaries and "Xxxxxxx
Entity" shall mean any of the Xxxxxxx Entities.
"Xxxxxxx Indemnified Person" has the meaning ascribed thereto in
Section 4.4.
"Services Cost" has the meaning ascribed thereto in Section 3.1.
"Services" has the meaning ascribed thereto in Section 2.1.
"Subsidiary" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting capital stock or other voting ownership interests is owned or
controlled directly or indirectly by such Person or by one or more of the
Subsidiaries of such Person or by a combination thereof.
Section 1.2. Internal References. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement and references
to the parties shall mean the parties to this Agreement.
ARTICLE II
PURCHASE AND SALE OF SERVICES
Section 2.1. Purchase and Sale of Services.
(a) On the terms and subject to the conditions of this Agreement
and in consideration of the Services Cost described below, Hay Island agrees
to provide, or cause to provide, to Xxxxxxx, or procure the provision to
Xxxxxxx of, and Xxxxxxx agrees to purchase from Hay Island, the services
described in Schedule A, as such schedule is amended from time to time (the
"Services").
(b) It is understood that Services to be provided to Xxxxxxx under
this Agreement will, at Xxxxxxx'x request, be provided to Subsidiaries of
Xxxxxxx.
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ARTICLE III
SERVICES COST; OTHER CHARGES
Section 3.1. Services Cost Generally.
(a) Xxxxxxx agrees to pay a fee (the "Services Cost") to Hay
Island for the services that Hay is providing to Xxxxxxx (plus any and all
applicable sales tax) pursuant to this Agreement. The Services Cost for the
year ended December 31, 1997 is $925,000. On each annual anniversary date of
this Agreement, the Services Cost shall be reviewed and increased or
decreased to reflect an agreed upon allocation of Hay Island's costs for the
services to be performed for the next calendar year, provided that any
increase in the annual amount payable hereunder will be limited to a
percentage increase based on the percentage increase in the Consumer Price
Index for All Urban Consumers, Northeast for the preceding calendar year.
Section 3.2. Invoicing and Settlement of Costs.
(a) Hay Island will invoice Xxxxxxx on a monthly basis (not later
than the fifth day of each month) an amount equal to one-twelfth of Services
Cost due under Section 3.1 (a).
(b) Xxxxxxx agrees to pay each invoice on or before 30 days after
the date on which it receives Hay Island's invoices of the Services Cost
(each, a "Payment Date"), by check to the order of Hay Island, or, at the
direction of Hay Island, by wire transfer to a bank account located in the
United States, in each case without set off. If Xxxxxxx fails to pay any
monthly payment within 90 days of the relevant Payment Date, Xxxxxxx shall be
obligated to pay, in addition to the amount due on such Payment Date,
interest on such amount at the Prime Rate as published in the Wall Street
Journal on the date of the Hay Island invoice for the unpaid amount.
ARTICLE IV
THE SERVICES
Section 4.1. General Standard of Service. Except as otherwise
agreed with Xxxxxxx or described in this Agreement, and provided that Hay
Island is not restricted by contract with third parties or applicable law,
Hay Island agrees that the nature, quality, and standard of care applicable
to the delivery of the Services hereunder will be substantially the same as
that of the Services which Hay Island provides from time to time throughout
its businesses and as would be obtainable from unrelated third parties.
Section 4.2. Limitation of Liability. Xxxxxxx agrees that none of
Hay Island and its Subsidiaries and their respective directors, officers,
agents, and employees (each, a "Hay Indemnified Person") shall have any
liability, whether direct or indirect, in contract or tort or otherwise, to
Xxxxxxx or any of its Subsidiaries for or in connection with the Services
rendered or to be rendered by any Hay Indemnified Person pursuant to this
Agreement, the transactions contemplated hereby or any Hay Indemnified
Person's actions or inactions in connection with
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any such Services or transactions, except for damages which have resulted from
such Hay Indemnified Person's gross negligence or willful misconduct in
connection with any such Services, actions or inactions.
Section 4.3. Indemnification of Hay Island by Xxxxxxx. Xxxxxxx
agrees to indemnify and hold harmless each Hay Indemnified Person from and
against any damages, and to reimburse each Hay Indemnified Person for all
reasonable expenses as they are incurred in investigating, preparing, pursuing,
or defending any claim, action, proceeding, or investigation (collectively,
"Actions"), whether or not in connection with pending or threatened litigation
and whether or not any Hay indemnified Person is a party, arising out of or in
connection with Services rendered or to be rendered by any Hay Indemnified
Person pursuant to this Agreement, the transactions contemplated hereby or any
Hay Indemnified Person's actions or inactions in connection with any such
Services or transactions; provided that Xxxxxxx will not be responsible for any
damages of any Hay Indemnified Person that have resulted from such Hay
Indemnified Person's gross negligence or willful misconduct in connection with
any of the advice, actions, inactions, or Services referred to above.
Section 4.4. Indemnification of Xxxxxxx by Hay Island. Hay Island
agrees to indemnity and hold harmless Xxxxxxx and its Subsidiaries and their
respective directors, officers agents, and employees (each, a "Xxxxxxx
Indemnified Person") from and against any damages, and to reimburse each Xxxxxxx
Indemnified Person for all reasonable expenses as they are incurred in
investigating, preparing, or defending any Action , whether or not in connection
with pending or threatened litigation and whether or not any Xxxxxxx Indemnified
Person is a party, arising out of the gross negligence or willful misconduct of
any Hay Indemnified Person in connection with the Services rendered or to be
rendered pursuant to this Agreement.
ARTICLE V
TERM AND TERMINATION
Section 5.1. Term. Except as otherwise provided in this Article V or
in Section 6.4 or as otherwise agreed in writing by the parties, this Agreement
shall have an initial term of five years from the Closing Date, and will be
renewed automatically thereafter for successive one-year terms unless either
Xxxxxxx or Hay Island elects not to renew this Agreement upon not less than
six-months' prior written notice.
Section 5.2. Termination.
(a) This Agreement will be subject to early termination by either
Xxxxxxx or Hay Island upon six months' written notice if Hay Island ceases to
own shares of Common Stock representing more than 50% of the combined voting
power of the Common Stock of Xxxxxxx.
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(b) Hay Island may terminate any affected Service at any time if
Xxxxxxx shall have failed to perform any of its material obligations under this
Agreement relating to such Service, Hay Island has notified Xxxxxxx in writing
of such failure, and such failure shall have continued for a period of 60 days
after receipt of Xxxxxxx of notice of such failure.
(c) Xxxxxxx may terminate any affected Service at any time if Hay
Island shall have failed to perform any of its material obligations under this
Agreement relating to any such Service, Xxxxxxx has notified Hay Island in
writing of such failure and such failure shall have continued for a period of 60
days after receipt by Hay Island of notice of such failure.
(d) Each of Xxxxxxx and Hay Island agrees that prior to exercising
its rights under this Section it will consult for a reasonable period with the
other party in advance of such termination as to its implementation.
Section 5.3. Effect of Termination.
(a) Other than as required by law, upon termination of any Service
pursuant to Section 5.1 or Section 5.2, and upon termination of this Agreement
in accordance with its terms, Hay Island will have no further obligation to
provide the terminated Service (or any Service, in the case of termination of
this Agreement) and Xxxxxxx will have no obligation to pay any fees relating to
such Services or make any other payments hereunder; provided that
notwithstanding such termination, (i) Xxxxxxx shall remain liable to Hay Island
for fees owed and payable in respect of Services provided prior to the effective
date of the termination; (ii) Hay Island shall continue to charge Xxxxxxx for
administrative and program costs incurred prior to the termination of any
Service and other Services required to be provided after the termination of such
Service and Xxxxxxx shall be obligated to pay such expenses in accordance with
the terms of this Agreement, and (iii) the provisions of Articles IV, V and VI
shall survive any such termination.
(b) Following termination of this Agreement with respect to any
Service, Hay Island and Xxxxxxx agree to cooperate in providing for an orderly
transition of such Service to Xxxxxxx or to a successor service provider.
ARTICLE VI
MISCELLANEOUS
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Section 6.1. Future Litigation and other Proceedings. In the event
that Xxxxxxx (or any of its officers or directors) or Hay Island (or any of its
officers or directors) at any time after the date hereof initiates or becomes
subject to any litigation or other proceedings before any governmental authority
or arbitration panel with respect to which the parties have no prior agreements
(as to indemnification or otherwise), the party (and its officers and directors)
that has not initiated and is not subject to such litigation or other
proceedings shall comply, at the other party's expense, with any reasonable
requests by the other party for assistance in connection with such litigation or
other proceedings (including by way of provision of information and making
available of employees as witnesses). In the event that Xxxxxxx (or any of its
officers or directors) and Hay Island (or any of its officers or directors) at
any time after the date hereof initiate or become subject to any litigation or
other proceedings before any governmental authority or arbitration panel with
respect to which the parties have no prior agreements (as to indemnification or
otherwise), each party (and its officers and directors) shall, at their own
expense, coordinate their strategies and actions with respect to such litigation
or other proceedings to the extent such coordination would not be detrimental to
their respective interests and shall comply, at the expense of the requesting
party, with any reasonable requests of the other party for assistance in
connection therewith (including by way of provision a information and making
available of employees as witnesses).
Section 6.2. No Agency. Nothing in this Agreement shall constitute
or be deemed to constitute a partnership or joint venture between the parties
hereto or constitute or be deemed to constitute any party the agent or employee
of the other party for any purpose whatsoever and neither party shall have
authority or power to bind the other or to contract in the name of, or create a
liability against, the other in any way or for any purpose.
Section 6.3. Force Majeure.
(a) For purposes of this Section, "force majeure" means an event
beyond the control of either party, which by its nature could not have been
foreseen by such party, or if it could have been foreseen, was unavoidable, and
includes without limitation acts of God, storms, floods, riots, fires, sabotage,
civil commotion or civil unrest, interference by civil or military authorities,
acts of war (declared or undeclared) and failure of energy sources.
(b) Neither party shall be under any liability for failure to
fulfill any obligation under this Agreement, so long as and to the extent to
which the fulfillment of such obligation is prevented, frustrated, hindered, or
delayed as a consequence of circumstances of force majeure, provided always that
such party shall have exercised all due diligence to minimize to the greatest
extent possible the effect of force majeure on its obligations hereunder.
(c) Promptly on becoming aware of force majeure causing a delay in
performance or preventing performance of any obligations imposed by this
Agreement (and termination of such delay), the party affected shall give written
notice to the other party giving details of the same, including particulars of
the actual, and it applicable, estimated continuing effects of such force
majeure on the obligations of the party whose performance is prevented or
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delayed. If such notice shall have been duly given and actual delay resulting
from such force majeure shall be deemed not to be a breach of this Agreement,
and the period for performance of the obligation, to which it relates shall be
extended accordingly, provided that if force majeure results in the performance
of a party being delayed by more than 60 days, the other party shall have the
right to terminate this Agreement with respect to any Service effected by such
delay forthwith by written notice.
Section 6.4. Entire Agreement. This Agreement (including Schedule A
constituting a part of this Agreement) and any other writing signed by the
parties that specifically references this Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral between the parties with respect to the subject matter hereof. This
Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 6.5. Information. Subject to applicable law and privileges,
each party hereto covenants and agrees to provide the other party with all
information regarding itself and transactions under this Agreement that the
other party reasonably believes are required to comply with all applicable
federal, state, county and local laws, ordinances, regulations and codes,
including, but not limited to, securities laws and regulations.
Section 6.6. Notices. Any notice, instruction, direction or demand
under the terms of this Agreement required to be in writing will be duly given
upon delivery, if delivered by hand, facsimile transmission, intercompany mail,
or mail, to the following, addresses:
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(a) If to Xxxxxxx, to;
Xxxxxxx International Group Inc.
000 Xxxx 00xx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, XX.
Attention:
Phone: 000-000-0000
Fax: 000-000-0000
(b) If to Hay Island, to
Hay Island Holding Corporation
00 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention:
Phone: 000-000-0000
Fax: 000-000-0000
or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties.
Section 6.7. Governing Law. This Agreement shall be construed in
accordance with and governed by the substantive internal laws of the State of
Delaware.
Section 6.8. Should any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall not render
the entire Agreement invalid. Rather, the Agreement shall be construed as if not
containing the particular invalid or unenforceable provision, and the rights and
obligations of each party shall be construed and enforced accordingly.
Section 6.9. Amendment. This Agreement may only be amended by a
written agreement executed by both parties hereto.
Section 6.10. Counterparts. This Agreement may be executed in
separate counterparts, each of which shall be deemed an original and all of
which, when taken together, shall constitute one agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their duly authorized representatives.
XXXXXXX INTERNATIONAL GROUP INC.
By:____________________________________
Name:
Title:
HAY ISLAND HOLDING CORPORATION
By:____________________________________
Name:
Title:
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Services Agreement - Schedule A
Service
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Treasury and Cash Management
(including loans and investments)
Corporate Finance
Corporate Development
Risk Management
(including liability, property, casualty
and fiduciary insurance)
Corporate Secretarial Services
Marketing Data Services
Governmental Affairs and Regulation
Human Resources, Executive Compensation,
General Compensation and Benefit Programs
Investor and Public Relations
General Real Estate Services
International Expansion Services
Transportation Services
Corporate, Administrative
and General Services
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