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Exhibit 10.13
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement"), is made this ______ day of
November, 1999, by and among J.R. CAPITAL, CORP. ("J.R. Capital"), a Florida
corporation, with offices located at 0000 X. Xxxxxxxxx Xxxx, Xxxxxxx Xxxxx,
Xxxxxxx 00000, Florida and its wholly owned subsidiaries; Atlas-Homestead, Inc.;
Atlas Naples, Inc.; Atlas-Lox Road, Inc.; Atlas Riviera, Inc.; Atlas Transoil,
Inc.; Atlas-Davie, Inc.; and Atlas- Royal Crown, Inc. (collectively, the
"Subsidiaries" and collectively with J.R. Capital, the "Owner"), and DELTA
RECYCLING, INC., a Florida corporation, with offices located at 0000 X.
Xxxxxxxxx Xxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000 ("Manager").
R E C I T A L S :
A. Owner currently owns or has the right to possession of certain
properties and facilities more specifically described on Exhibit A
below (the "Facilities"). Owner desires to retain Manager as an
independent contractor to provide professional, operational and
administrative management services of the Facilities in order to
maintain continuing operations of the Facilities and to assist Owner
with its efforts to maximize its income from the Facilities.
B. Manager desires to provide such services for Owner as an independent
contractor and not as Owner's employee.
A G R E E M E N T S :
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and intending to be legally bound, the parties
agree as follows:
ARTICLE I
ESTABLISHMENT OF INDEPENDENT CONTRACTOR AND TERM
Owner retains the Manager as an independent contractor and Manager
agrees to provide professional operational and administrative management
services to the Owner in connection with the operation of the Facilities upon
the terms, covenants and conditions contained in this Agreement.
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The term of this Agreement shall be effective as of November __, 1999,
and be effective until October 31, 2004, unless terminated earlier or extended
pursuant to Article IV of this Agreement.
ARTICLE II
PROCEDURES
2.1 OWNER'S DELIVERY OF DOCUMENTS. As soon as possible after the
execution of this Agreement, Owner shall endeavor to provide to the Manager such
of the following documents and information related to the Facilities as are in
its possession and control:
(a) copies of all documents under which Owner holds title
or the right to possession of the Facilities;
(b) copies of all permits, licenses, environmental
studies and reports, maps and other similar
information relating to each Facility;
(c) copies of all local zoning and local permits held by
Owner in connection with each Facility;
(d) copies of insurance policies and related
correspondence with insurance carriers or brokers;
(e) copies of such other documents which Owner may deem
pertinent to continuing operations or which Manager
may request, and
(f) copies of all recent operating statements, budgets,
and reports in Owner's possession.
2.2 MANAGER'S DUTIES. Manager shall do the following:
(a) provide all administrative and managerial functions
for the Owner including, but not limited to,
accounting services, environmental oversight,
environmental reporting to all necessary governmental
agencies and to Owner's lender, GMAC Commercial
Credit LLC ("GMACCC") to the extent required in any
loan documentation between Owner and GMACCC, as the
same may be amended from time to time (the "GMACCC
Credit Facility"), sales and general administrative
services and employ such personnel, at its own
expense, necessary to accomplish such functions,
except for non-administrative
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or managerial personnel located at each Facility who
shall be employed by Owner;
(b) Manager shall maintain separate books and records,
for, and in the name of, each Owner which will not be
consolidated or commingled with the books and records
of the Manager or any of its affiliates. The Owner
shall continue to collect its accounts receivable
with the assistance of the Manager and maintain its
blocked account arrangement with ________. All bank
accounts shall continue to be maintained in the name
of the Owner and the Owner shall continue to be
responsible for the timely payment of all expenses
and obligations. In the event the Manager shall come
into possession of any property of the Owner, such
property shall be held by the Manager, in trust for
the Owner, and shall be immediately remitted to the
Owner. The Manager shall not have the right to enter
into contracts which obligate the Owner, or incur
indebtedness in the name of the Owner, unless the
Manager has received the Owner's written consent to
enter into such contract or incur such obligation.
(c) Manager or any of its Affiliates will allow each of
the Facilities to dispose of residue at any of the
Facilities owned or operated by Manager or any of its
Affiliates at a rate equal to the lesser of (i) fair
market value or (ii) the same rate which Manager
charges itself on an internal basis for disposal of
its own residue. Manager will allow, but not require,
each Facility to share in the benefit obtained by
Manager or any of its Affiliates from any waste
disposal contracts between Manager or any of its
Affiliates and any third party, to the extent
permissible under any such agreement.
(d) review all documents and information supplied to
Manager pursuant to Section 2.1 and advise Owner of
any discrepancies, problems or matters which may
require immediate attention;
(e) consult with Owner regarding appropriate types and
amounts of insurance, under policies and from
carriers acceptable to Owner and GMACCC, in order to
comply with the GMACCC Credit Facility and the normal
customs and practices and applicable laws and
agreements relating to the ownership, use, operation
and occupancy of the Facilities, including special
policies required since these are waste facilities;
all policies shall name Owner and GMACCC as insureds,
as their interests may appear;
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(f) provide in accordance with Owner's requirements, a
financial accounting and control system to provide
periodic financial operating reports;
(g) report to Owner and GMACCC on such other matters as
Manager, Owner and/or GMACCC deem pertinent to
operations or Owner's efforts to sell the Facilities;
(h) prepare all projections, financial accounting and
other reports required under the GMACCC Credit
Facility; and
(i) furnish copies to Owner, and to GMACCC to the extent
required by the GMACCC Credit Facility, as and when
received, of (i) any notices of governmental
violations, (ii) notices, inspection and other
reports from any other regulatory authority, (iii)
insured or uninsured claims and (iv) any other
information materially affecting the ownership, use,
operation or occupancy of the Facilities.
ARTICLE III
MANAGER'S COMPENSATION
3.1 MANAGEMENT FEE. During the period that this Agreement is in full
force and effect, Manager shall receive as payment for services rendered under
this Agreement a fee in an amount equal to the total amount on Exhibit B
attached hereto (as amended from time to time) plus 10% (the "Management Fee")
provided, however, that at no time shall the Management Fee exceed the amount
set forth by the Owner in any projections provided to, and approved by GMACCC,
pursuant to the GMACCC Credit Facility. The Management Fee shall be paid in
monthly installments in advance on the first day of each month, provided,
however, that the Management Fee for any fractional month at the beginning or
end of the term of this Agreement shall be prorated. Manager, any affiliate of
Manager, or any principal of Manager is expressly prohibited from receiving any
other fees, charges or other income whatsoever from any service related to the
Manager's operation of the Facilities, without the express written consent of
the Owner and GMACCC.
3.2 ADDITIONAL BENEFITS TO MANAGER AND OWNER. Owner and Manager will
allow each other, and any of their Affiliates, to utilize any of Owner's
Facilities or Manager's facilities for a price equal to ninety (90%) percent of
the fair market value for such services charged to non-affiliate third parties.
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ARTICLE IV
TERMINATION
4.1 TERMINATION. The Owner may terminate this Agreement at any time
without cause with such termination to be effective thirty (30) days after
written notice has been received by the Manager from the Owner. The Owner may
terminate this Agreement at any time for cause immediately upon written notice
to Manager. The Manager can terminate this Agreement and such termination shall
be effective ninety (90) days after written notice of such termination has been
received by the Owner from the Manager. Any notice of termination sent by either
Owner or Manager shall also be sent by such party to GMACCC. In the event the
Owner terminates for cause, the Owner shall be entitled to offset its damages
against any theretofore earned but unpaid compensation otherwise due to Manager.
Nothing herein shall preclude Owner from recovering such damages from any other
assets of the Manager.
4.2 TERMINATION UPON SALE OR CHANGE OF CONTROL OF MANAGER. Unless
sooner terminated, this Agreement shall terminate (i) as to any individual
Owner, upon the transfer of title of such Owner's Facility or (ii) as to all
entities comprising the Owner, upon the transfer of title to all of the
Facilities. Unless sooner terminated, this Agreement shall terminate upon the
change of control of the ownership of Manager or if Messrs. Xxxxxxx X. Xxxxxxx
shall no longer act as an employee of Manager responsible for Manager's
performance of this Agreement or Xxxx X. Xxxxxxxxxx shall no longer be a
shareholder of Manager's parent, Star Services, Inc.
4.3 SURVIVAL OF COVENANTS. Termination of this Agreement under any of
the provisions herein shall not release Manager for liability for failure to
perform any of the duties or obligations of Manager as expressed herein and
required to be performed prior to such termination. Upon termination, Manager
shall forthwith, at the instruction of Owner, (a) cease to continue to collect
all obligations owed to the Facilities on behalf and in the name of the Owner
and otherwise proceed with an orderly conclusion of Manager's obligations under
this Agreement, (b) surrender and deliver to Owner or its designee (i)
possession of the Facilities, (ii) all rents and income of the Facilities, and
(iii) other monies of Owner on hand and in any bank account; (c) deliver to
Owner as received any monies due Owner under this Agreement but received after
such termination; (d) deliver to Owner or its designee all materials and
supplies, keys and documents, and such other accounting, papers and records
pertaining to the Facilities or this Agreement; and (e) with Owner's prior
approval, assign and deliver to Owner or its designee such existing contracts,
permits and licenses relating to the operations and maintenance of the
Facilities to the extent such contracts, permits and licenses, if any, were not
initially applied for or granted in the name of the Owner.
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4.4 TERMINATION END OF TERM. Unless previously terminated earlier as
provided herein, this Agreement shall also terminate at the end of the term
hereof as set forth in Article I herein.
ARTICLE V
COVENANTS OF MANAGER
The Manager covenants and agrees with the Owner as follows:
5.1 MANAGEMENT AND MARKETING OF THE FACILITIES. Manager shall manage
and market the business and services of the Facilities so that the Facilities
will be operated and maintained with maximum profit in a first class manner and
in accordance with sound facilities management practice.
5.2 REQUIRED RETURNS AND REPORTS. Manager shall execute and file
punctually when due all forms, reports and returns and pay when due all amounts
required by law relating to the employment of personnel and to the operation of
the Facilities.
5.3 COMPLIANCE WITH LEGAL REQUIREMENTS. Manager shall take such action
as may be necessary to obtain and maintain in the name of the Owner, in full
force and effect, all necessary licenses, and permits and to comply with any and
all laws, regulations, orders or requirements necessary for full operation, use,
possession and occupancy of the Facilities from any federal, state, county or
municipal authority having jurisdiction thereover, and to comply with all
insurance policies.
5.4 QUALIFICATION TO DO BUSINESS. The Manager hereby represents to the
Owner that Manager is qualified to do business and is in good standing in the
State where the Facilities are located and the Manager hereby covenants that
Manager shall maintain such qualification to do business throughout the term of
this Agreement. Manager has full right and authority to enter into this
Agreement and the Agreement is valid and enforceable.
5.5 OWNER'S ACCESS TO FACILITIES AND ITS OPERATIONS. The Owner and
GMACCC shall at all times have the right of access to the Facilities and the
right to inspect the Facilities. Manager shall maintain at the Facilities or
such other places as may be approved by Owner, upon notice to GMACCC, a
comprehensive system of office records, books and accounts in a manner
satisfactory to Owner. Owner, GMACCC and others designated by the Owner or
GMACCC shall have access at all times to such records, accounts and books and to
all vouchers, files and all other material pertaining to the Facilities and this
Agreement, all of which Manager agrees to keep safe, available and separate from
any records not having to do with the Facilities.
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5.6 LITIGATION. Manager shall promptly upon receipt of any and all
Notices, Summons, Complaints, Petitions, Orders or any other form of process,
served or otherwise received at the Facilities, whether as a result of service
by mail, personal delivery, or otherwise, and whether as a result of the
assertion of federal, state, county or municipal jurisdiction, and in no event
later than twenty-four (24) hours from the time of receipt, forward, or cause to
be forwarded, same to Owner and to GMACCC, to the extent required by the GMACCC
Credit Facility and proceed as directed by the Owner, consistent with the terms
of the GMACCC Credit Facility.
ARTICLE VI
MISCELLANEOUS
6.1 INDEMNIFICATION. Manager shall indemnify, defend, and hold Owner
harmless from and against any and all claims, damages, liabilities, costs,
expenses, actions, or suits of any kind resulting directly or indirectly from
fraud, negligence or wilful tort perpetrated by or on the part of Manager's
officers, employees, agents or representatives.
6.2 ASSIGNMENT. This Agreement shall not be assigned by either party
without the prior written consent of the other party and GMACCC.
6.3 ADDITIONAL INFORMATION. From time to time the Owner may request
from the Manager and the Manager shall provide such other and additional
information as Owner desires.
6.4 SUBORDINATION. This Agreement is subject and subordinate to all
notes, mortgages, security interests, liens, claims, and encumbrances now
affecting the Facilities.
6.5 NO JOINT VENTURE. Owner and Manager shall not be construed as
partners, joint venturers or as members of a joint enterprise and neither shall
have the power to bind or obligate the other except as set forth in this
Agreement.
6.6 NOTICES. All notices required or permitted by this Agreement shall
be in writing and shall be sent by (i) registered or certified mail, (ii)
personal delivery, (iii) telecopier, or (iv) reputable overnight delivery
service, addressed in the case of Owner to:
J.R. CAPITAL, CORP.
0000 X. Xxxxxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx
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and in the case of Manager to:
DELTA RECYCLING, INC.
0000 X. Xxxxxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
and in the case of GMACCC to:
GMAC Commercial Credit LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
or to such other address or addressee as shall, from time to time, have been
designated by written notice by either party to the other party as herein
provided. All notices, demands and requests which shall be served upon either
party addressed in the manner aforesaid shall be deemed sufficiently served or
given for all purposes hereunder (a) upon the Owner if mailed, at the time such
notice, demand or request shall be received by the Owner addresses or, if
personally delivered, sent by telecopier or sent by overnight delivery, upon
receipt or (b) upon the Manager, if mailed three (3) days after such notice,
demand or request shall be mailed by Owner or, if personally delivered, sent by
overnight delivery, upon receipt.
6.7 Each Subsidiary hereby irrevocably designates J.R. Capital to be
its attorney-in-fact and agent, and in such capacity to execute and deliver all
instruments, documents and writings or to take such other actions on behalf of
the Subsidiaries as may be necessary or appropriate to be taken on behalf of the
Owner pursuant to this Agreement.
6.8 SEVERABILITY. The invalidity or unenforceability of any particular
paragraph or provision of this Agreement shall not affect the validity of the
remaining provisions of this Agreement. This Agreement shall be construed in all
respects as if such invalid or unenforceable provisions were omitted.
6.9 TERMINATION SURVIVAL. The covenants of the Manager in this
Agreement including but not limited to the "indemnification" provision herein
and the provisions of Section 4.3 shall survive and remain enforceable after
termination by either party to this Agreement.
6.10 GOVERNING LAW. This Agreement shall be governed and construed
under the law of the State of Florida, and the parties hereto consent to the
jurisdiction of said State.
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6.11 HEADINGS. The headings used herein are for purposes of convenience
only and should not be used in construing the provisions hereof.
6.12 ENTIRE AGREEMENT. This document represents the entire agreement
between the parties with respect to the subject matter hereof, and to the extent
inconsistent therewith, supersedes all other prior agreements, representations,
and covenants, oral or written provided, however, that in the event of any
inconsistency between this Agreement and the terms of the GMACCC Credit
Facility, the terms of the GMACCC Credit Facility shall control. This Agreement
cannot be amended, modified, waived or changed at any time or in any respect
except by an instrument in writing executed by Owner and Manager and consented
to, in writing, by GMACCC.
6.13 SUCCESSOR AND ASSIGNS. Except as limited in Section 6.1 hereof,
this Agreement shall be binding upon and inure to the benefit of the parties,
legal representatives, successors and assigns.
6.14 PRE-EXISTING CONDITION. Owner specifically agrees that manager has
not assumed any responsibilities or liability for pre-existing environmental or
other conditions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
OWNER:
J.R. CAPITAL, CORP.
By: /s/ Xxxx X. Xxxxxxxxxx
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XXXX X. XXXXXXXXXX, President
ATLAS-HOMESTEAD, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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XXXX X. XXXXXXXXXX, President
[SIGNATURES CONTINUED ON NEXT PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
ATLAS NAPLES, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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XXXX X. XXXXXXXXXX, President
ATLAS-LOX ROAD, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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XXXX X. XXXXXXXXXX, President
ATLAS RIVIERA, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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XXXX X. XXXXXXXXXX, President
ATLAS-DAVIE, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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XXXX X. XXXXXXXXXX, President
ATLAS-ROYAL CROWN, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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XXXX X. XXXXXXXXXX, President
MANAGER:
DELTA RECYCLING, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX, President
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EXHIBIT A
FACILITIES
Name:
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Atlas-Riviera
Atlas-Lox Road
Atlas-Davie
Atlas-Homestead
Atlas-Naples
Transoil - Manatee
Transoil - Dade City
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EXHIBIT B
MANAGEMENT FEE
Management Fee to be paid to Delta Recycling will consist of:
Site Management as per attached schedule: 608,589
Executive management & Administration 638,950
Office expenses, rent, phone, electric, etc. 150,000
Total 1,397,539
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