MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT ("Agreement") is made this 1st day of
January, 2002 by and between INDIGINET, INC., a Florida corporation
("Indiginet") and FOX TELECOMMUNICATIONS, INC., a Colorado corporation ("FTI").
RECITALS
A. Indiginet and FTI have entered into a Stock Purchase Agreement dated
January 1, 2002 ("Stock Purchase Agreement") whereby Indiginet will
acquire all of the issued and outstanding shares of no par value
common stock of FTI;
B. FTI desires that Indiginet provide management services to FTI until
the Closing of the Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:
1. Management Committee.
1.1 Indiginet agrees to, and hereby does, appoint and designate Xxxxxxx X.
Xxxxxx and Xxx Xxxxxxx and FTI agrees to, and hereby does, appoint and
designate Xxxxxxx X. Xxx as a management committee ("Management
Committee"), which shall authorize all material actions required of
Indiginet pursuant to this Agreement.
1.2 Three members of the Management Committee shall constitute a quorum.
The affirmative vote of a majority of the members present shall be
required to take action.
1.3 The Management Committee may also delegate authority to individual
members of the Management Committee to take actions required of FTI
pursuant to this Agreement, subject to such guidelines, limitations
and review requirements as the Management Committee shall deem
appropriate.
2. Duties and Responsibilities of Indiginet.
2.1 Except as may be provided for elsewhere in this Agreement, Indiginet's
duties and obligations under this Agreement shall include, but not be
limited to, management services that relate to FTI and the following
operations conducted by FTI:
2.1.1The provision of management services for FTI; provided, however,
Indiginet shall not be responsible for accounting and
administrative services, including, without limitation,
maintaining proper books and records for the operation of FTI
which shall be provided by FTI, and subject to review and
approval by the Management Committee. In addition, FTI agrees to
keep its books on an accrual accounting basis during the Term of
this Agreement.
2.1.2Except as set forth in section 7 of this Agreement, the
compliance with, and performance of all covenants, obligations
and limitations imposed by law, or by any contract, agreement or
instrument to which FTI shall be subject with respect to the
operation of FTI during the term hereof.
2.1.3The hiring and supervision of all independent contractors as may
be necessary and prudent for the efficient day-to-day operation
of FTI and the purchasing of all products, goods or services
necessary and prudent for the efficient day-to-day operation of
FTI; provided, however, that nothing in this section or any other
section of this Agreement shall preclude Indiginet or an
affiliate from providing to FTI any such products, goods or
services on commercially reasonable terms, subject, in any case,
to the approval of Indiginet's Board of Directors.
2.1.4Marketing plan and operational plans for FTI related to FTI,
which the Management Committee may approve or disapprove in its
sole discretion. Upon approval of such marketing plan and
operational plan by the Management Committee, Indiginet may cause
FTI to disburse funds for payment of expenses pursuant to such
plans. Indiginet shall not cause FTI to make any disbursements
for marketing expenses, however, until and unless the Management
Committee has approved the plans.
2.1.5Monthly operating budget planning for FTI related to FTI
("Budget") which includes anticipated expenses. The Management
Committee may approve or disapprove the Budget in its sole
discretion. Indiginet may cause FTI to disburse funds for payment
of the operating expenses (i) as provided in the Budget, and (ii)
as approved by FTI and the Management Committee and supported by
invoice and other documentation as may be requested by FTI.
2.1.6Such other duties as may be reasonably requested by the
Management Committee or FTI related to FTI.
3. Term. The term of this Agreement shall commence as of the date first
written above and shall continue for a period of twelve (12) months, unless
earlier terminated as herein provided ("Term").
4. Termination. This Agreement shall terminate: (i) in the event that there is
a material breach or default by Indiginet under any of the terms of this
Agreement; (ii) upon consummation of the Stock Purchase Agreement; (iii)
upon termination of the Stock Purchase Agreement, or (iv) upon thirty (30)
days written notice by Indiginet.
5. Effect of Termination. In the event that this Agreement is terminated for
any other reason other than the consummation of the Stock Purchase
Agreement, Indiginet shall be entitled to retain all revenues received and
accounts receivable generated during the Term of this Agreement; provided,
however, that Indiginet shall be responsible for any expenses associated
with the revenues and accounts receivable retained.
6. Indemnification. Each party shall indemnify and hold the other, its
employees, agents, officers, directors, affiliates and assigns harmless
from and on account of any and all loss or damage, including reasonable
attorneys' fees, sustained or incurred as a consequence of a party's fraud
or gross negligence in the performance of its obligations under this
Agreement; provided, that, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER, INCLUDING
LOST PROFITS OR REVENUES, REGARDLESS OF THE FORESEEABILITY THEREOF,
OCCASIONED BY THE PARTY'S FAILURE TO PERFORM ITS OBLIGATIONS HEREUNDER.
7. Relationships of Parties. The parties agree that Indiginet will act as an
independent contractor in the performance of its duties under this
Agreement. Accordingly, Indiginet shall be responsible for payment of all
taxes, including, but not limited to, federal, state and local taxes,
social security tax, unemployment insurance taxes or business license fees
incurred by Indiginet in connection with Indiginet's activities in
accordance with this Agreement, and for all benefits and compensation of
Indiginet's employees. FTI shall not be held liable, and Indiginet shall
indemnify FTI, for any and all assessments or claims by taxing authorities
or employees of Indiginet for monies contemplated by this section.
8. Confidential Information. Each party agrees that any information received
by the other party or any of their directors, officers or employees during
any furtherance of each parties' obligations in accordance with this
Agreement, which concerns the personal, financial, or other affairs of the
other party will be treated by each party in full confidence and will not
be disclosed to any other persons, firms, or organizations, without the
express written consent of the disclosing party. Each party shall take
reasonable steps necessary, and all steps reasonable requested by the
disclosing party, to insure that all such confidential and secret
information is kept secret and confidential for the sole use and benefit of
the disclosing party. Each party shall take effective precautions,
contractual and otherwise, reasonably calculated to prevent unauthorized
disclosure or misuse of such information. The provisions of this Section
shall remain in full force and effect beyond the Term of this Agreement.
9. Subsequent Agreements. No subsequent agreement between FTI and Indiginet
shall be effective or binding unless it is made in writing and signed by
both of the parties hereto.
10. Final Agreement. This Agreement sets forth the entire understanding of the
parties and supersedes any and all prior agreements, arrangements or
understandings related to the subject matter described herein, and no
representation, promise, inducement or statement of intention has been made
by either party which is not embodied herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives on the day and year first above
written.
INDIGINET, INC. FOX TELECOMMUNICATIONS, INC.
By __________________________________ By ______________________________
Xxxxxxx X. Xxxxxx, President Xxxxxxx X. Xxx, President
