EXHIBIT 10.40
MANAGEMENT SERVICES AGREEMENT
Management Services Agreement made October 27, 1999 ("Effective Date") by and
between Ashton Technology Group ("ATG") and Universal Trading Technologies
Corporation ("UTTC(TM)") (hereinafter referred to as "Parties");
WHEREAS ATG(TM) wishes to make available to UTTC(TM) certain management
services;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises,
the mutual covenants and agreements hereinafter set forth and for good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the Parties have agreed as follows:
ARTICLE 1
1. DEFINITIONS
For the purpose of this Agreement the following terms shall have the
following meanings:
(a) "AFFILIATE" means, as to any person, any other person, which directly
or indirectly, Controls, is Controlled by or is under common Control
with such person;
(b) "CONTROL" means:
(i) when applied to a relationship between a person and a
corporation, the beneficial ownership by such person at the
relevant time of shares of such corporation carrying more than
the greater of 50% of the voting rights ordinarily exercisable at
meetings of shareholders of such corporation and the percentage
of voting rights ordinarily exercisable at meetings of
shareholders of such corporation that are sufficient to elect a
majority of the directors of such corporation; and
(ii) when applied to a relationship between a person and a partnership
or joint venture, the beneficial ownership by such person at the
relevant time of more than 50% of the ownership interest of the
partnership or such joint venture in circumstances where it can
reasonably be expected that such person directs the affairs of
the partnership or joint venture;
(c) "CONTROLLED BY", "CONTROLLING" and similar words have corresponding
meanings; provided that a person (the "first-mentioned person") who
Controls a corporation, partnership or joint venture (the "second-
mentioned person") shall be deemed to Control (i) a corporation,
partnership or joint venture (the "third-mentioned person") which is
Controlled by the second-mentioned person, (ii) a corporation,
partnership or joint venture which is Controlled by the third-
mentioned person, and (iii) so on;
(d) "GROUP" shall mean either ATG or UTTC(TM) and its officers, directors,
employees and affiliates;
(e) "LOSSES" shall mean any losses, liabilities, claims, damages, costs
and expenses, including counsel's and accountant's fees, disbursements
and court costs, judgements, fines and other amounts paid in
settlement;
(f) "SUBSIDIARY" shall mean UTTC(TM)
(g) "THIRD PARTY" shall mean any business entity or persons other than
ATG(TM) and its Affiliates or Subsidiary and its Affiliates.
ARTICLE 2
2. SERVICES AND COMPENSATION
2.1 SERVICES PROVIDED
Upon the terms and subject to the conditions set forth in this
Agreement, ATG(TM) ("Service Provider") will provide or cause to
be provided to UTTC(TM) ("Service Receiver") the services
(collectively, the "Services" and individually, a "Service") set
forth in Exhibit A (including any schedules to such exhibits or
other exhibits as may be added to this Agreement by amendment
from time to time) attached hereto and incorporated herein by
reference (collectively, the "Exhibits" and individually, an
"Exhibit"). Each Service shall be subject to the terms identified
in the Exhibit A related thereto. In the event any Service is
terminated, this management services agreement (the "Agreement")
shall remain in effect, unless otherwise terminated as provided
in Article 6 hereof. In the event of any conflict between the
terms of this Agreement and any Exhibit, the terms of this
Agreement shall govern, unless the terms of such Exhibit are
expressly stated to override the terms of this Agreement.
2.2 PERFORMANCE OF SERVICES
2.2.1 Service Provider shall perform Services with the same
degree of care, skill and prudence customarily exercised by it
for its own operations. In the event Service Provider changes the
degree of care, skill and prudence customarily exercised for its
own operations, the Services performed by it hereunder may be
modified by Service Provider to meet its revised internal
performance standards for the Services it provides hereunder.
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2.2.2 Any input or information reasonably required by Service
Provider to perform Services pursuant to the provisions of this
Agreement shall be provided by the Service Receiver in a manner
consistent with the practices employed by the Parties during the
normal course of business. Should the failure to provide such
input or information render the performance of the Services
impossible or unreasonably difficult, the Service Provider may,
upon written notice to the Service Receiver, refuse to provide
such Services until such input or information is provided. To the
extent reasonably required for the Service Provider's personnel
to perform the Services, the Service Receiver shall provide the
Service Provider's personnel with access to its equipment, office
space and any other areas and equipment necessary for the
provision of Services; provided that such access shall not
unreasonably interfere with the Service Receiver's conduct of its
business.
2.2.3 In providing Services, a Service Provider may, as it in
its sole discretion deems necessary or appropriate, (i) use its
personnel or that of other members of its Group, and (ii) employ
the services of third Parties to the extent such third Party
services are routinely utilized to provide similar services to
other Service Provider businesses or are reasonably necessary for
the efficient performance of any Services.
2.2.4 Nothing in this Agreement shall require a Service Provider
to favor a Service Receiver over a business of the Service
Provider or those of any member of its Group.
2.3 COMPENSATION
2.3.1 Service Provider shall be compensated for the Services
rendered by it under this Agreement as set forth in the
applicable Exhibit hereto. Payments shall be made by the Service
Receiver following the end of each quarter in which such Services
were performed either by check, wire transfer, intra-company
netting or at such other times or by such other method(s) agreed
to by the Parties. The fees and charges to be set out in the
Exhibit will be determined as follows:
(a) charges for Services performed by a third Party shall
be based upon the incremental costs charged by such third
Party to the Service Provider to perform those Services
for the Service Receiver;
(b) fees for Services provided by a Service Provider
shall be based upon the estimated or actual costs of
providing such Services to the applicable Service
Receiver, which shall include a reasonable allocation of
Service Provider's direct and indirect overhead costs
(including, without limitation, employee salaries,
benefits and other costs) which Service Provider estimates
will be incurred or which are incurred in connection
therewith;
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(c) such other charges, fees, or commissions for Services
provided shall be based on the methodology as set forth in
the Exhibit or Exhibits for such Services.
ARTICLE 3
3. CONFIDENTIALITY OF INFORMATION
3.1 All Confidential Information (as hereinafter defined) disclosed by
either of the Parties to the other Party hereunder is confidential and
proprietary to such disclosing Party. Each Party, its affiliates, and
subsidiaries and its or their officers, directors, employees, agents,
consultants and contractors shall not use any of the Confidential
Information for any purpose other than as expressly permitted
hereunder. Confidential Information furnished by either of the Parties
to the other Party in connection with this Agreement (or previously
disclosed prior to execution of this Agreement) and the transactions
contemplated hereby will be kept in confidence by such other Party,
including its affiliates and subsidiaries and its or their officers,
directors, employees, agents, consultants and contractors, in
accordance with the policies of ATG(TM) and UTTC(TM), as applicable,
for maintaining the confidence of its own information of similar
content.
3.2 The term "Confidential Information" shall mean and include:
(a) All trade secrets, other confidential business information
and other confidential information learned in the course of
performance by either Party of its obligations hereunder; and
(b) Any information, data, software or computer programs and all
technology which are disclosed by either Party to the other Party
under or in contemplation of this Agreement.
Confidential Information may be either the property of the disclosing
Party or information provided to the disclosing Party by a corporate
affiliate of the disclosing Party or by a third Party.
3.3 Notwithstanding the foregoing, the term "Confidential Information"
shall not include information which:
(a) is contained in SEC filings and/or federal, state, and local
tax filings of any Party;
(b) is or becomes part of the public domain other than by way of
a breach of this Agreement or through the fault of the receiving
Party;
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(c) is or becomes available to the receiving Party from a source
other than the disclosing Party, which source has no obligation
of confidentiality to the disclosing Party in respect thereof;
(d) is required by law, regulation or court order to be
disclosed by such Party, in the opinion of its counsel, provided
that prior notice of such disclosure has been given to the other
Party when legally permissible, upon sufficient notice in order
to permit the other Party to take such legal action to prevent
the disclosure as it deems reasonable, appropriate or necessary;
or
(e) the Parties have mutually agreed the Confidential
Information may be disclosed by amendment under Section 7.10.
3.4 This Section 2 shall survive any termination of this Agreement, in
whole or in part, for five (5) years from the date of termination.
3.5 Upon the discovery of any inadvertent disclosure or unauthorized use
of Confidential Information, or upon receiving notice of a prohibited
disclosure or unauthorized use from the other Party to this Agreement,
the receiving Party shall take all necessary actions to prevent any
further inadvertent or prohibited disclosure or unauthorized use and,
subject to Article 4, the disclosing Party shall be entitled to pursue
any remedy which may be available to it.
ARTICLE 4
4. CONFLICT RESOLUTION
4.1 Any dispute, controversy or claim relating to this Agreement (a
"Dispute") shall initially be referred to the executive management of
the Parties to the Dispute who shall attempt to resolve such Dispute
in good faith.
ARTICLE 5
5. LIMITATION OF LIABILITY AND WARRANTY
5.1 LIMITATION
5.1.1 In the absence of gross negligence or reckless or willful
misconduct on Service Provider's part, and whether or not it is
negligent, such Service Provider shall not be liable for any Losses
arising out of any actual or alleged injury, loss or damage of any
nature whatsoever in providing or failing to provide Services to
Service Receiver. Notwithstanding anything to the contrary contained
herein, in the event a Service Provider commits an error with respect
to or incorrectly performs or fails to perform any Service, at Service
Receiver's request, Service
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Provider shall use reasonable efforts to correct such error, re-
perform or perform such Service; provided that Service Provider shall
have no obligation to recreate any lost or destroyed data to the
extent the same cannot be cured by the re-performance of the Service
in question.
5.1.2 Service Provider's liability for damages to Service Receiver
for any cause whatsoever, and regardless of the form of action,
whether in contract or in tort, including negligence, gross negligence
or willful misconduct, shall be limited to the payments made hereunder
for the specified Service that allegedly caused the damage during the
period in which the alleged damage was incurred by Service Receiver.
In no event shall Service Provider be liable for any damages caused by
Service Receiver's failure to perform the Service Receiver's
responsibilities hereunder. Service Provider will not be liable to a
Service Receiver for any act or omission of any other entity (other
than due to a default by Service Provider in any agreement between
Service Provider and such other entity) furnishing any Service.
5.1.3 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR AT
LAW OR IN EQUITY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS,
BUSINESS INTERRUPTION OR ANY OTHER LOSS) ARISING FROM OR RELATING TO
ANY CLAIM MADE UNDER THIS AGREEMENT OR REGARDING THE PROVISION OF OR
THE FAILURE TO PROVIDE THE SERVICES.
ARTICLE 6
6. TERM AND TERMINATION
6.1 Unless earlier terminated as provided below, this Agreement shall take
effect upon the date first written above and shall remain in effect
until the date specified by Service Provider for the termination of
this Agreement in a notice given by Service Provider as applicable, to
Service Receiver.
6.2 In addition, this Agreement may be terminated, in whole or in part,
upon the following conditions (but reserving all other remedies and
rights hereunder, in whole or in part, and otherwise available in law
or in equity) immediately by Service Provider by the giving of written
notice to Service Receiver, without any prior notice, upon the
occurrence of one or more of the following events:
(a) the other entering into proceedings in bankruptcy or
insolvency;
(b) the other making an assignment for the benefit of creditors;
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(c) a petition being filed in respect of the other under a
bankruptcy law, a corporate reorganization law, or any other law
for relief as a debtor or having a similar purpose or effect and
such petition is not vacated within thirty (30) business days
from the date of filing; or
(d) the other enters into liquidation, dissolution or other
similar proceedings.
ARTICLE 7
7. MISCELLANEOUS
7.1 FURTHER ASSURANCES
Each Party will, from time to time and at all times after the
Effective Date, without further consideration, do such further acts
and deliver all such further assurances, deeds and documents as shall
be reasonably required in order to fully perform and carry out the
terms of this Agreement.
7.2 ENTIRE AGREEMENT
The provisions contained in any and all documents and agreements
collateral hereto shall at all times be read subject to the provisions
of this Agreement and, in the event of conflict, the provisions of
this Agreement shall prevail.
7.3 GOVERNING LAW
This Agreement shall be subject to and interpreted, construed and
enforced in accordance with the laws of the Commonwealth of
Pennsylvania.
7.4 ASSIGNMENT
No Party to this Agreement shall have the right to assign or otherwise
transfer its rights or obligations under this Agreement, except with
the prior written consent of the other Party hereto.
7.5 TIME OF ESSENCE
Time shall be of the essence in this Agreement.
7.6 NOTICES
The addresses and fax number of each Party for notices shall be as
follows:
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ATG(TM)
Attention: Xxxxxx X. Xxxxx
UTTC(TM)
Attention: Xxxx X. Xxxxxxxx
Any notice, communication or statement (a "Notice") required,
permitted or contemplated hereunder shall be in writing and shall be
delivered as follows:
(a) by delivery to a Party between 9:00 a.m. and 5:00 p.m. local
time on a Business Day at the address of such Party for notices,
in which case the notice shall be deemed to have been received by
that Party when it is delivered; or
(b) by telecopier to a Party to the telecopier number of such
Party for notices, in which case, if the notice was telecopied
prior to 5:00 p.m. local time on a Business Day the notice shall
be deemed to have been received by that Party when it was
telecopied and if it was faxed on a day which is not a Business
Day or is faxed after 5:00 p.m. local time on a Business Day, it
shall be deemed to have been received on the next following
Business Day.
A Party may from time to time change its address for Notice or its fax
number for Notice by giving written notice of such change to the other
Party.
7.7 INVALIDITY OF PROVISIONS
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, that shall not affect or impair:
(a) the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement; or
(b) the legality, validity or enforceability under the law
of any other jurisdiction of that or any other provision of this
Agreement.
7.8 WAIVER
No waiver by any Party of any breach (whether actual or anticipated)
of any of the provisions contained herein shall take effect or be
binding upon that Party unless the waiver is expressed in writing by a
duly authorized representative of that Party. Any waiver so given
shall extend only to the particular breach so
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waived and shall not limit or affect any rights with respect to any
other or future breach.
7.9 REMEDIES GENERALLY
No failure on the part of any Party in exercising any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy
hereunder or in law or in equity or by statute or otherwise conferred.
7.10 AMENDMENT
This Agreement including any Exhibits hereto, shall not be varied in
its terms or amended by oral agreement or by representations or
otherwise other than by an instrument in writing dated subsequent to
the date hereof, executed by a duly authorized representative of each
Party.
7.11 COUNTERPART EXECUTION
This Agreement may be executed in counterpart and all executed
counterparts together shall constitute one agreement.
7.12 FORCE MAJEURE
No Party shall be liable for any failure of or delay in the
performance of this Agreement or any Services hereunder for the period
that such failure or delay is due to acts of God, public enemy, war,
strikes or labor disputes, or any other cause beyond the Parties'
reasonable control.
7.13 SERVICES NOT TRANSFER
For the avoidance of all doubt, the Parties hereto acknowledge and
agree that this Agreement is for the provision of services and no
transfer or conveyance of property of one Party to another arises
hereunder.
IN WITNESS WHEREOF, the Parties have executed this Agreement.
For ATG(TM) For UTTC(TM)
/s/ Xxxxxx X. Xxxxx /s/ Xxxx X. Xxxxxxxx
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By: Xxxxxx X. Xxxxx By: Xxxx X. Xxxxxxxx
Title: President/CFO Title: President
Date: Date:
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