EXHIBIT 10.10
MANAGEMENT AND SUPPORT SERVICES AGREEMENT
This Management and Support Services Agreement ("Agreement') is entered
into this ____ day of June, 2002 (the "Effective Date"), by and between Xxxxxxx
& Xxxxx, a Texas General partnership ("MC"), and Xxxxx Systems, Inc., a Texas
corporation (the "Company").
RECITALS
The Company, through its subsidiaries, distributes motor fuels and
lubricants to branded retail accounts and commercial users, operates convenience
stores, and provides environmental remediation services in southern Texas (the
"Business").
MC has the expertise, resources and personnel to provide management and
support services for ESI's business and ESI desires to utilize such services in
connection with its operations.
NOW THEREFORE, in consideration of the covenants contained herein, the parties,
intending to be legally bound have agreed as follows:
1. Services. Subject to the terms and conditions of this Agreement, MC
hereby agrees to perform and provide to ESI the management and support
services listed and described in Exhibit A attached hereto
("Services"). MC agrees to perform the Services in a professional
manner and to make available to ESI competent and experienced
personnel to perform such Services. The scope, nature and timing of
the performance of the Services shall be determined and established
from time to time by the mutual agreement of the parties.
2. Term. The term of this Agreement shall commence on the Effective Date
and continue through June ____, 200___, unless sooner terminated by
the mutual consent of the parties or pursuant to the terms of this
Agreement. Thereafter, the Agreement shall automatically renew for
successive one year terms unless either party notifies the other party
in writing at least 90 days prior to the end of the initial term or
the then-current renewal term of its desire to terminate the Agreement
at the end of the initial term or the then-current renewal term.
3. Fees and Charges. Commencing on the Effective Date of this Agreement
through the term (whether the original term or any one year renewal
term), ESI hereby agrees to pay MC the fees and charges set forth in
Exhibit B attached hereto and incorporated herein by this reference.
The parties may amend Exhibit B from time to time upon their mutual
written consent. Such fees and charges shall be paid monthly by ESI no
later than 30 days after the calculation and billing of such fees and
charges by MC.
4. Reports and Records. MC hereby agrees to maintain financial records in
accordance with generally accepted accounting principles. All expenses
shall at all times be recorded on a current basis. Upon request of
ESI, MC agrees to promptly provide reasonable documentation supporting
the calculation of the fees and charges.
5. Transfer. Except as otherwise provided herein, neither party may
transfer any right or interest under this Agreement, in whole or in
part (whether voluntarily or by operation of law), directly or
indirectly or contingently, without the prior written consent of the
other party.
6. Termination. This agreement may be terminated prior to the expiration
of the term in paragraph 2 hereof, in the event that one party is in
material breach of this agreement and such breach remains
substantially uncured for a period of thirty (30) days after receipt
of written notice by the non-breaching party to the breaching party,
specifying in reasonable detail, the nature of the alleged breach. For
purpose of this Agreement, a material breach shall include (not by way
of limitation) the following:
(a) the failure or refusal to make payment of any amount due
hereunder;
(b) the attempt to transfer any interest in this agreement without
the consent of the other party;
(c) the submission of any materially false report or data,
information or supporting records required hereunder;
(d) the insolvency or inability of a party to pay its debts as they
mature or the assignment by a party for the benefit of its
creditors or any admission of inability to pay obligations as
they become due; or
(e) the failure or refusal to comply with any other material
provision of this Agreement.
Upon termination of this Agreement, each of the parties shall
perform all obligations and pay all amounts that accrue prior to
the effective date of termination, and the parties shall
cooperate with one another in effecting an orderly transition of
their respective businesses and affairs.
7. Miscellaneous.
(a) Nothing in this agreement, in and of itself, shall be construed
or deemed to create a joint venture, partnership or agency
relationship among the parties.
(b) Any notices, request, consent or communication (collectively,
"Notice") under this Agreement shall be effective, only if in
writing and if delivered by courier with evidence of receipt,
addressed as follows:
If to MC: Xxxxxxx & Xxxxx
000 Xxxxx Xxxxxxxx
X.X. Xxx 000
Xx Xxxxx, Xxxxx 00000--0000
Attn: Xxxxx Xxxxx
If to ESI: Xxxxx Systems, Inc.
X.X. Xxx 0000
Xxxxxxx 00 Xxxxx
Xxx Xxxx, Xxxxx 00000--0000
Attn: ___________________
Or to such other address or addresses as shall be furnished in writing
by either party to the other. A Notice shall be deemed to be given
when delivered to the proper address with evidence of receipt.
(c) Notwithstanding paragraph 5 hereof, either party may assign this
agreement, but only to (i) any successor assignee of such party
that may result from any merger, consolidation or similar
business combination, or (ii) to another entity that acquires all
or substantially all of such party's assets, liabilities,
goodwill and business.
(d) Section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(e) This Agreement contains the entire and complete expression of the
agreement between the parties with respect to the matters
addressed herein and there are no promises, representations or
inducements, except as herein provided. The terms and provisions
of this Agreement may not be modified, supplemented or amended,
except in writing signed by both parties hereto. All terms and
provisions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties respective
successors and permitted assigns.
(f) Failure by either party hereto to enforce at any time or for any
period of time any provision or right hereunder shall not
constitute a waiver of such provision or of the right of such
party thereafter to enforce each and every such provision.
(g) This Agreement shall be governed by and construed and enforced in
accordance with the laws of Texas. The prevailing party in any
litigation concerning this Agreement shall be entitled to
reimbursement of its reasonable costs, including legal and
accounting fees, incurred in connection with any such matter.
(h) This Agreement may be executed in any number of counterparts, all
of which together shall constitute one agreement binding on the
parties hereto.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date as first above written.
XXXXX SYSTEMS, INC. XXXXXXX & XXXXX
By__________________________ BY_______________________________
EXHIBIT A
Description of Services
1. Management Services
a. Executive Management
i. Corporate Structure
ii. Planning and Budgeting
iii. Provision of Capital
iv. Financing and Borrowing
v. Working capital and Cash Flow Management
vi. Insurance and Risk Management
b. Human Resources
i. Payroll Services
ii. Compensation and benefit policies and practices
iii. Personnel policies and practices
iv. Recruitment
v. Training
c. Management Information and Computer Support
i. Maintain central computer system
i. Select and coordinate acquisition of hardware for new facilities
ii. Training and support services
d. Accounting
i. Establish and maintain financial reporting systems
i. Maintain accounting records
ii. Prepare tax returns
iii. Coordinate auditors with independent auditors
iv. Manage payroll functions with withholdings and filings
v. Maintain accounts payable systems
vi. Provide credit and collection services for customer accounts
vii. Establish cost accounting standards and calculate variances
e. Legal Services
i. Engage outside legal counsel.
ii. Monitor and manage litigation.
iii. Maintain corporate records including minute books.
iv. Provide drafting and negotiation of acquisitions and other
transactions.
f. Compliance and Regulatory Affairs
i. Establish compliance systems.
ii. Assist in establishing governmental authorization for new products.
iii. Minimize property tax assessment.
g. Asset Maintenance and Management
i. Maintenance of equipment for safety, effectiveness and long-life.
ii. Acquisition of new equipment needed for operations.
iii. Deposition of equipment no longer needed.
iv. Maintenance of property for safety and use.
v. Acquisition of new property for expansion.
vi. Deposition of property no longer needed.
vii. Leasing of Equipment and Property.
h. Sales and Delivery
i. Sale Force Training.
ii. Market Plan Development.
iii. Market and Analysis.
iv. Product Mix Analysis and Development.
v. Sales of Petroleum Products and Environmental Services.
vi. Delivery of Petroleum Products and Environmental Services.
EXHIBIT B
MC will charge ESI at a rate of 20% over staff costs, which include (salary,
taxes & insurance) necessary for performing the functions of this contract.
MC shall receive as a bonus, 25% of the quarterly Earnings Before Interest and
Taxes (EBIT) of ESI so long as ESI's:
Debt/Equity is less than 2 Stockholders
Equity of $3,000,000 Current Ratio of
Current Assets to Current Liabilities of 1.07
Trailing three quarters positive revenue growth
