Exhibit 10.1
MANAGEMENT AGREEMENT
THIS AGREEMENT, made as of the first day of May, 1998, between Oceanic
International Properties Corporation, a corporation with offices at 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 ("Oceanic"), and San
Xxxxxx Valley Corporation, a corporation with offices at 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 ("San Xxxxxx"),
WITNESSETH:
WHEREAS, Oceanic and San Xxxxxx each require the employment of several
personnel; and
WHEREAS, Oceanic has sufficient personnel to provide support services to
both Oceanic and San Xxxxxx; and
WHEREAS, duplication of functions and costs can be avoided, for the
economic benefit of both companies if Oceanic is the employer of the
personnel for both Oceanic and San Xxxxxx and performs support services on
behalf of San Xxxxxx; and
WHEREAS, Oceanic is willing to be the employer and perform such services
under the terms of this Agreement;
NOW, THEREFORE, in consideration of their respective covenants, the
parties agree as follows:
I. SERVICES TO BE PERFORMED.
Subject to the provisions of this Agreement, Oceanic shall provide the
personnel to perform the following services for the account of San Xxxxxx:
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a. Complete management and supervisory services, including local
management personnel, necessary to operate San Xxxxxx as a continuing
and active real estate investment company.
b. Complete accounting services necessary to maintain complete and
accurate records on behalf of San Xxxxxx.
c. Administrative services as necessary to facilitate the orderly
performance of the general office.
d. Performance of such other services, at the option of Oceanic, as
may be requested from time to time by San Xxxxxx.
Oceanic shall also provide office space and facilities necessary for the
employees located in Denver to perform the services described herein. Use of
facilities shall include use of office space and use of telephone equipment.
II. COMPENSATION AND REIMBURSEMENT.
For the performance of services described in Article I, San Xxxxxx shall
compensate and reimburse Oceanic as follows:
a. On May 1, 1998, a monthly management fee shall be calculated
based upon experience during the previous twelve-month period. This
calculation is to include reimbursement for any new employment
services being provided to San Xxxxxx by Oceanic pursuant to this
Agreement. The fee will be based on actual time spent on San Xxxxxx
activities using current pay rates and benefit schedules. On April 1
of every year thereafter, this fee will be subject to recalculation
based upon experience during the previous twelve-month period. This
payment will be due and payable on
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the last day of each month. If payment is not made by the fifteenth
day of the following month, the unpaid balance shall bear interest
monthly at the rate of 10% per annum.
b. Reimbursement of any direct charges incurred by Oceanic for the
account of San Xxxxxx, exclusive of personnel costs included in Item
a. These reimbursements will be due and payable upon receipt of
invoice from Oceanic to San Xxxxxx.
III. COVENANTS OF EACH PARTICIPATING COMPANY.
In consideration for Oceanic's agreement to perform the services
described in Article I, as an accommodation to San Xxxxxx, San Xxxxxx
covenants and agrees to indemnify and hold Oceanic harmless from any loss or
liability resulting from the performance of services contracted by this
Agreement excepting only losses or liabilities resulting from Oceanic's gross
negligence or wanton misconduct.
In consideration for San Miguel's payment of the monthly management fee,
Oceanic covenants and agrees to provide their employees with adequate salary
and benefits to ensure the retention of personnel capable of performing the
services specified in Article I. Benefits are to include:
a. Health, life and disability insurance.
b. Employer taxes including social security, unemployment, and other
taxes.
c. Pension and other retirement plans as employee eligibility
requires.
d. Any other benefits Oceanic sees as necessary and appropriate.
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IV. TERM.
This Agreement shall continue from year to year until the same is
terminated by not less than 60 days written notice from either party. On
termination, each party shall be released from all obligations accruing under
the Agreement from and after the termination date but San Xxxxxx shall remain
obligated for all direct charges incurred by Oceanic prior to said date,
whether or not known, asserted or invoiced prior to said date.
V. STATUS OF EMPLOYER.
It is understood and agreed that Oceanic is acting as an independent
contractor and not as an employee or agent of any party. All personnel
provided by Oceanic for performance of its duties under this Agreement shall
be and remain the employees of Oceanic, and the selection of such employees,
their hours of labor, and the compensation to be paid to them shall be
determined by Oceanic except as required under Article III.
VI. NOTICES.
All notices required or permitted by this Agreement shall be in writing
and shall be deemed to have been delivered to the other party when delivered
in person or transmitted by mail, postage and charges prepaid, addressed to
Oceanic at the address set out above, or by facsimile.
VII. GENERAL.
a. This Agreement shall be governed by the laws of the State of Colorado,
United States of America.
b. The provisions hereof inure to the benefit of and are binding upon the
successors in interest of each party.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
OCEANIC INTERNATIONAL PROPERTIES
CORPORATION
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Vice President
SAN XXXXXX VALLEY CORPORATION
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
President
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