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EXHIBIT 10.4
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is made as
of the 1st day of October, 1998 by and between KEYSTONE FOODS CORPORATION, a
Delaware corporation having an address at 000 Xxxx Xxxxxx, Xxxxx 000, Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000 ("Keystone"), and CRYSTAL MEDICAL PRODUCTS, INC., an
Illinois corporation having an address at 000 Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxxxx 00000 ("Crystal").
RECITALS:
WHEREAS, Keystone operates a food processing facility and laboratory
at 000 X Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxxx 00000 (the "Facility") under a
lease dated December 1990 and amended on July 31, 1995 (the "Lease") with
Xxxxxxxxx-Columbia Corp. ("Landlord"); and
WHEREAS, Keystone has provided space at the Facility for use by
Crystal in the testing of an instrument developed by Crystal and has also
permitted Crystal to utilize certain Keystone employees at the Facility for
Crystal's business purposes; and
WHEREAS, Crystal desires to continue to sublease from Keystone
approximately Twelve Hundred (1,200) square feet of laboratory space and
utilities at the Facility (the "Leased Premises") until Crystal occupies its own
facilities and to enjoy the benefit of the utilities servicing the Leased
Premises; and
WHEREAS, Crystal desires to continue to use certain of Keystone's
administrative, accounting, human resources, benefits, scientific, laboratory
and insurance personnel (the "Personnel") to assist Crystal in operating its
business until Crystal increases its own staff; and
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WHEREAS, Keystone is willing to sublease the Leased Premises to
Crystal and to provide Personnel to assist Crystal in operating its business
upon the terms and subject to the conditions set forth herein,
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and intending to be legally bound, the parties hereto agree as follows:
(1) Leased Premises. Subject to the rights of the Landlord under the
Lease, Crystal shall be entitled to the exclusive use, occupancy and quiet
enjoyment of the Leased Premises and shall be entitled to use of the utilities
as reasonably required by Crystal. Keystone, at its sole cost and expense, shall
maintain the Leased Premises in good condition and repair and shall provide all
janitorial services; provided that Crystal shall be responsible for the cost of
any repairs or renovations to the Leased Premises, and to the restoration of the
same following the cessation of its occupancy thereof, necessitated by Crystal's
business requirements or by the negligence or misconduct of Crystal, its
employees, agents or contractors (other than Keystone). Following the cessation
of its occupancy hereunder, Crystal shall return the Leased Premises to Keystone
in broom clean condition, reasonable wear and tear excepted. Keystone shall at
all times, at its sole expense, maintain property and liability insurance
coverage for the Leased Premises; provided, however, that Crystal shall
reimburse Keystone for any portion of an insurance premium incurred solely on
account of, or arising out of, Crystal's occupancy of, or the activities of
Crystal at, the Leased Premises. Crystal shall be obligated to obtain and
maintain both property damage and liability insurance coverage for the contents
of the Leased Premises and acts or events occurring thereon or elsewhere at the
Facility.
(2) Personnel.
(a) During the term of this Agreement, Keystone shall use
reasonable efforts to provide Crystal with the Personnel which Crystal
reasonably requires in order to conduct and operate its business at the Leased
Premises in the ordinary course. Keystone
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shall have no duty or responsibility to hire or retain any individual or any
group of persons solely to fulfill the employment needs of Crystal, nor shall it
be obligated to employ any individual not otherwise required for, or useful in,
the conduct of Keystone's own business to satisfy a request of Crystal. Keystone
shall, however, wherever practicable and upon reasonable notice from Crystal,
make available to Crystal such of its Personnel, on a full or part-time basis,
as Crystal may determine. Crystal may, for any lawful reason, reject any person
referred to it by Keystone hereunder or ask Keystone to replace any person
provided by it with another similarly qualified Keystone employee.
(b) Crystal acknowledges that all of the Personnel assigned by
Keystone to perform services for Crystal shall, unless the parties otherwise
specifically agree in writing, remain employees of Keystone and that Keystone
shall have the sole and exclusive right and authority to control the Personnel
including, but not limited to, training, scheduling, discipline and discharge.
All Personnel policies shall be established and administered solely by Keystone.
At no time shall Crystal claim, state, suggest or permit a perception to persist
that any of the Personnel are employees of Crystal.
(c) Keystone shall be solely responsible for all wages,
salaries, bonuses, benefits and other compensation, taxes and tax withholding,
workers' compensation and other insurance for and with respect to Personnel and
shall obtain and maintain during the term hereof, life, accident, disability and
errors and omissions insurance for its employees. Keystone shall submit to
Crystal, and shall update the same promptly after any change is made therein, a
list of all insurance coverages, including the name of the person or entity
covered, the carrier, policy number and the nature and extent of the coverage.
Crystal may, at its own expense, obtain additional coverage for employees or
property. To the extent that Crystal's coverage is an add-on to the Keystone
policy, the cost shall be shared by the parties on an equitable basis.
(3) Compliance with Laws; Lease. Each of the parties, in connection
with their performance of this Agreement and the occupancy of the Leased
Premises, shall
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comply with all laws, statutes, ordinances, rules, regulations, governmental
orders or other legal requirements affecting such party's business including,
without limitation, environmental laws and regulations, the employment of
Personnel or the use and occupancy of any real or personal property. Neither
party shall take any action in breach or violation of, or that would cause
another to breach or violate, any applicable Federal, state or local law, rule,
regulation or order relating to labor or employment, the ownership, use,
maintenance or handling of equipment or toxic substances or the occupancy of the
Leased Premises. Neither party shall engage in or permit any conduct at the
Leased Premises or the Facility that would constitute unlawful discrimination.
Both parties shall take all actions required to comply with the terms of the
Lease and retain the same in full force and effect. Crystal acknowledges that it
has received and reviewed the Lease and will not take, or omit to take, any
action which, if taken or omitted by Keystone, would constitute a breach or
default under the Lease.
(4) Fee for Leased Premises and Personnel. In consideration for use
of the Leased Premises and the Personnel as contemplated by this Agreement,
Crystal shall pay Keystone initially a fee of Twenty Thousand Dollars
($20,000.00) per month for the Personnel and One Thousand Two Hundred Dollars
($1,200.00) per month for the Leased Premises. All payments shall be made on the
first day of each month, commencing October 1, 1998. Crystal may elect, from
time to time, upon at least thirty (30) days' written notice to Keystone, to
reduce its use of Keystone's Personnel as Crystal increases its own staff. Any
such reduction in Personnel shall reduce the monthly fee payable to Keystone by
an amount to be mutually agreed upon by the parties, depending upon the persons
affected.
(5) Prior Use of Leased Premises and Personnel. The parties
acknowledge that Keystone has, during 1997 and 1998 prior to the date of this
Agreement, permitted Crystal to use the Leased Premises and certain Keystone
Personnel in the conduct of Crystal's business activities. In consideration for
such prior use, Crystal shall pay Keystone Three Hundred Eighty-Nine Thousand
Dollars ($389,000.00), which amount has been reviewed and approved by both
parties. Such payment shall be made immediately following
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the closing of an equity offering by Crystal of its common stock, or, if the
equity offering is not consummated by March 31, 1999, in accordance with a
payment schedule which the parties shall mutually agree upon.
(6) Relationship of the Parties. The parties acknowledge, confirm
and agree that this Agreement is not intended to create a joint venture,
association, partnership, franchise or other form of business or relationship.
The parties acknowledge, however, that Keystone is currently a shareholder of
Crystal. This Agreement shall not affect Keystone's rights or privileges as a
shareholder or create any fiduciary or other duty owing by Keystone to Crystal
or any other person or entity, except as specifically set forth herein.
(7) Term. The term of this Agreement shall begin on October 1, 1998
and shall continue on a month-to-month basis until terminated, in whole or in
part, by either party upon at least thirty (30) days' prior written notice to
the other. In the event of a partial termination (as to the Leased Premises or
to any particular Personnel), this Agreement shall remain in full force and
effect as to all portions not so terminated.
(8) Indemnification. Each party (an "Indemnitor") shall indemnify
the other (an "Indemnitee") from and against any and all claims, liabilities,
expenses, costs, damages and losses, including reasonable attorneys' fees,
arising out of any act or omission by the Indemnitor, its employees, agents or
contractors in connection with, or relating to, the Indemnitor's performance of
this Agreement, provided, however, that an Indemnitor shall not be liable to an
Indemnitee for loss of business, goodwill, profits or other consequential or
special damages.
(9) Default. If either party fails to make any payment or perform
any agreement, covenant or provision hereunder within ten (10) days after
receipt of written notice of such failure from the other party, such party shall
be in default under this Agreement. Upon a default by Crystal, Keystone shall
have the right to withhold Personnel or use of the Leased Premises until the
default is cured or to terminate this Agreement
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forthwith by written notice to Crystal, in which case all amounts due and owing
to Keystone shall be immediately due and payable. Upon a default by Keystone,
Crystal shall have the right to withhold payments required to be made hereunder
until the default is cured or to terminate this Agreement forthwith by written
notice to Keystone, in which case all amounts due and owing to Keystone prior to
such default shall be immediately due and payable.
(10) Miscellaneous Provisions.
(a) Entire Agreement; Amendment. This Agreement contains the
entire agreement between the parties and may not be modified or amended except
by written instrument signed by both parties.
(b) Governing Law. This Agreement shall be governed by the
laws of the Commonwealth of Pennsylvania without regard to its principles of
conflicts of law.
(c) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns. The rights and privileges of Crystal and its duties and
responsibilities under this Agreement may not be assigned by it or assumed by
any third party without the express prior written consent of Keystone.
(d) Notices. Any notice required by this Agreement shall be in
writing and sent to the other party by hand delivery, United States certified
mail or by nationally recognized overnight courier service to the addresses of
the parties set forth on the first page of this Agreement. All notices shall be
deemed given or delivered when actually received.
(e) Third-Party Beneficiaries. Nothing set forth in this
Agreement shall be for the benefit of, and no provision of this Agreement may be
enforced by, any person or entity other than the parties, their successors and
permitted assigns.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above.
CRYSTAL MEDICAL PRODUCTS, INC.
By: /s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX,
Chief Executive Officer
KEYSTONE FOODS CORPORATION
By: /s/ Xxxx Xxxxxxx
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XXXX XXXXXXX, Vice President
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