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EXHIBIT 10.75
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (this "Agreement"), dated as of
February 18, 1998, made by and between A.M.G. Medical Inc., a Quebec corporation
("AMG") and Can-Am Care Corporation, a New York corporation ("Can-Am"),
W I T N E S S E T H T H A T:
WHEREAS, Can-Am is in the business of distributing home health care
products for care of diabetes ("Products") and owning and operating assets
associated therewith;
WHEREAS, AMG has heretofore provided purchasing, marketing, shipping,
billing and other general management and administrative services to Can-Am;
WHEREAS, certain individuals, including certain stockholders of AMG,
have contemporaneously herewith sold all of the capital stock of Can-Am to
Selfcare, Inc. ("Selfcare") or its wholly-owned subsidiary Selfcare Consumer
Products, Inc.;
WHEREAS, Can-Am desires to contract with a professional and dependable
organization to obtain the services described below on the terms and subject to
the conditions set forth herein; and
WHEREAS, AMG is capable of providing such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained, the parties hereto covenant and agree as
follows:
SECTION 1. Services to be Provided by AMG. Subject to and in accordance
with the terms of this Agreement, Can-Am hereby retains AMG to provide the
services set forth on Schedule A (the "Services") and AMG accepts such retention
and agrees to provide the Services at substantially the same quality as provided
prior to the date hereof.
SECTION 2. Financial Arrangement.
(a) Subject to Section 3, as compensation to AMG for the
Services provided hereunder, Can-Am shall pay to AMG (i) a fixed annual fee, as
described on Schedule B (the "Fixed Annual Fee"), subject to adjustment as
described in Section 3(a), (ii) a variable fee, as described on Schedule B
("Variable Fee"), subject to adjustment as described in Section 3(b), and (iii)
all direct expenses of Can-Am, as described on Schedule B (the "Direct
Expenses").
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(b) An amount representing a portion of the Fixed Annual Fee
and the Variable Fee shall be paid by Can-Am within thirty (30) days of receipt
of the respective invoice corresponding to such item. The Direct Expenses shall
be paid by Can-Am within sixty (60) days of receipt of the invoice for such
Direct Expenses. Invoices covering expenses incurred by AMG during the preceding
month shall be sent by AMG on a monthly basis. Any amounts not paid within such
thirty (30) or sixty (60) day period, as the case may be, shall accrue interest
at a rate of twelve percent (12%) per annum.
SECTION 3. Changes to Fee and Services.
(a) Fixed Annual Fee.
(i) In the event that Can-Am provides written notice
to AMG requesting an increase, decrease, modification, addition, deletion or
other change (a "Change") in the scope, nature or type of Fixed Services, AMG
shall use commercially reasonable efforts to provide for such Change, and the
parties shall renegotiate the Fixed Annual Fee to reflect such Changes. If the
parties cannot agree on an adjusted Fixed Annual Fee within 30 days after the
receipt of the written notice by AMG (during which time the then existing Fixed
Annual Fee shall apply), Xxxxxx Xxxxxxxx LLP will review the scope of the
Changes and determine the adjusted Fixed Annual Fee to apply from the date of
such Changes, which determination will be binding on the parties.
(ii) Beginning on January 1, 1999, the Fixed Annual
Fee shall be increased by five percent (5%) at the start of each calendar year,
effective January 1.
(b) Variable Fee.
(i) In the event that Can-Am provides written notice
requesting a Change in the scope, nature or type of Variable Services, the
parties shall review such request, AMG shall inform Can-Am whether in the
reasonable good faith opinion of AMG such Change will require AMG to hire
additional Full-Time Allocated Personnel or to terminate any Full-Time Allocated
Personnel, and AMG shall in good faith determine an adjusted Variable Fee which
reflects the corresponding changes in its expenses, including any increase or
decrease in expenses attributable to the hiring or termination of Full-Time
Allocated Personnel. AMG shall use commercially reasonable efforts to provide
for the requested Change, provided that the President of Can-Am or his designee,
which designee shall be reasonably acceptable to AMG (the "Can-Am Designee"),
approves of any fee adjustment and additional hiring of Full-Time Allocated
Personnel prior to such Change.
(ii) In the event that AMG decides to increase the
salary or other cash compensation of any Full-Time Allocated Personnel or
Part-Time Allocated Personnel, AMG shall adjust the Variable Fee to reflect such
increase; provided, however, that prior to any such increase that would result
in a member of the Full-Time Allocated personnel or Part-Time Allocated
Personnel receiving a greater than 5% increase over such person's total annual
cash compensation from the previous year, the Can-Am Designee must approve such
increase.
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SECTION 4. Management of Business. Selfcare and Can-Am shall be
responsible for the management of Can-Am and AMG shall have no right to
participate in the management or control of the business of Can-Am, other than
the hiring of Full-Time Allocated Personnel or Part-Time Allocated Personnel as
provided herein. All managerial and business decisions, including those
involving marketing, advertising and distribution strategies relating to Can-Am
products shall be made by Can-Am. The parties hereby agree that AMG's Services
under this Agreement are provided at the request of, and for the benefit of,
Can-Am in furtherance of Can-Am's business plans. In addition, the hiring or
termination of Full-Time Allocated Personnel and Part-Time Allocated Personnel
who devote fifty percent (50%) or more of their time to Can-Am matters shall be
approved in advance in writing by the Can-Am Designee, which approval shall not
be unreasonably withheld or delayed.
SECTION 5. Indemnity.
(a) AMG agrees to indemnify and hold Can-Am harmless against
any claims, losses, liabilities, damages, or expenses (including, without
limitation, all interest and penalties accruing thereon and all reasonable
attorney's fees) ("Losses") resulting from or arising in connection with (i) any
breach by AMG of any of its obligations under this Agreement or (ii) any claim
made by a third party based upon any act, omission, or neglect by AMG or its
employees or other agents in connection with its activities within the scope of
this Agreement; provided, that AMG shall not be obligated to indemnify Can-Am
for any Losses in excess of an amount equal to the sum of (A) the Fixed Annual
Fee for the year such Losses were incurred and (B) that portion of the Variable
Fee for the year such Losses were incurred which is attributable to the salaries
of the Part-Time Allocated Personnel; and provided, further, that AMG shall have
no liability to Can-Am for Losses incurred by Can-Am as a result of any act,
omission or neglect by Full-Time Allocated Personnel or Part-Time Allocated
Personnel while performing services requested by Can-Am.
(b) Can-Am agrees to indemnify and hold AMG harmless against
any Losses resulting from or arising in connection with (i) any breach by Can-Am
of any of Can-Am's obligations under this Agreement or (ii) any claim made by a
third party based upon any act, omission, or neglect by Can-Am or its employees
or other agents in connection with their activities within the scope of this
Agreement, or by the employees or other agents of AMG acting under the direction
of Can-Am.
SECTION 6. Confidentiality. AMG and Can-Am agree that all information
made available to the other party in connection with this Agreement that is not
generally ascertainable from public or published information or trade sources
will be maintained in the strictest confidence by the party receiving such
information and that none of the information that is provided to the other party
will be disclosed to persons other than Can-Am or its employees or the employees
of AMG, without first obtaining written permission for said disclosure from the
other party; provided, however, that the party receiving such information and
its respective representatives may provide such documents and other papers and
information in response to legal, judicial or administrative process or
applicable
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governmental, regulatory or administrative statutes, laws, ordinances, codes,
rules, regulations or orders, but only that portion of the documents and other
papers and information which is legally required to be furnished, and provided,
further, that such party notifies the other party of any such obligation to
provide any such document or other papers or information prior to such
disclosure and fully cooperates with such other party to protect the
confidentiality of such documents and other papers and information under
applicable law.
SECTION 7. Access to Records. AMG and Can-Am shall provide each other
with access to records relating to all services provided. Upon termination of
this Agreement, AMG and Can-Am agree to maintain the originals of all records
intact for at least five (5) years, and any longer period required by applicable
law, and that same shall be available to the other party for such reasonable
purposes as may arise during the five (5) years or longer period referred to
herein.
SECTION 8. Insurance. AMG shall maintain general liability insurance in
the manner and to the extent necessary for businesses of like nature to maintain
against such risks and pursuant to such terms (including deductible items) as
are customary for such businesses.
SECTION 9. Term and Termination.
(a) Initial and Renewal Terms. This Agreement shall remain in
force for an initial term of five (5) years from the date hereof and shall be
automatically renewed, without any further action by AMG or Can-Am, for
successive one (1) year terms following the expiration of the original five (5)
year period; subject, however, to earlier termination pursuant to Section 9(b)
hereof.
(b) Termination. This Agreement may be terminated on the first
to occur of the following:
(i) Termination by Agreement. In the event Can-Am and
AMG shall mutually agree in writing, this Agreement may be terminated on the
terms and date stipulated therein.
(ii) Termination on Notice of Default. In the event
either party shall give written notice to the other that such other party has
substantially defaulted in the performance of any obligation under this
Agreement, and such default shall not have been cured within forty-five (45)
days following of such notice by certified mail, the party giving such notice
shall have the right to immediately terminate this Agreement.
(iii) Termination by Notice. In the event that after
four (4) years, AMG or Can-Am shall give at least one year's prior written
notice to the other that it has elected to terminate this Agreement.
(iv) Termination Due to Termination of Supply
Agreement. In the event that the Supply Agreement dated as of even date
herewith, made by and between AMG and Can-Am shall be terminated for any reason,
AMG and Can-Am shall each have the right to terminate this Agreement.
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(c) Effects of Termination. Upon termination of this
Agreement, pursuant to Section 9(b), neither party shall have any further
obligation hereunder except for (i) obligations accruing prior to the date of
termination and (ii) obligations, promises, or covenants contained herein which
by their nature extend beyond the term of this Agreement, including
confidentiality of information, indemnities, and the obligations of the parties
under Section 7 hereof.
SECTION 10. Miscellaneous.
(a) Agreement. This Agreement supercedes all other prior or
contemporaneous agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof.
(b) Amendments and Supplements. This Agreement may not be
amended, supplemented or discharged, and no provision hereof may be modified or
waived, except by an instrument in writing signed by both parties.
(c) No Waiver. No provision hereof may be waived, except by an
instrument in writing signed by the party waiving compliance. The failure of any
party hereto to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
such party thereafter to enforce each and every such provision. No waiver of any
breach of or non-compliance with this Agreement shall be held to be a waiver of
any other or subsequent breach or non-compliance. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies that any
party may otherwise have at law or in equity.
(d) Successors and Assigns. Neither this Agreement nor any
rights or obligations hereunder are assignable by either party without the prior
written consent of the other party; provided, that either party may assign this
Agreement and the rights and obligations hereunder to any third party who merges
or consolidates with such party or purchases or otherwise acquires all or
substantially all of such party's assets.
(e) Notices. All notices, consents, approvals, directions and
instructions required or permitted under this Agreement shall be effective when
received and shall be given in writing and delivered either by hand or by
registered or certified mail, postage prepaid, or by telecopier, and addressed
as follows:
If to AMG:
A.M.G. Medical, Inc.
0000 Xxxxxx
Xxxxxxxx, Xxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxxxx Xxxxx
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Can-Am:
c/o Selfcare, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxx, Chairman and Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Xx., Esq.
Facsimile: (000) 000-0000
(f) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the law (other than the law governing
conflict of law questions) of the state of New York except to the extent the
laws of any other jurisdiction are mandatorily applicable.
(g) Severability. Any provision hereof which may prove invalid
or unenforceable under any law shall not affect the validity or enforceability
of any other provision hereof.
(h) Construction of Agreement. A reference to a Section shall
mean a Section in this Agreement unless otherwise expressly stated. The titles
and headings herein are for reference purposes only and shall not in any manner
limit the construction of this Agreement which shall be considered as a whole.
The words "include," "includes" and "including" when used herein shall be deemed
in each case to be followed by the words "without limitation".
(i) Relationship of Parties. The relationship between the
parties established by this Agreement is solely that of seller and buyer. AMG is
an independent contractor with respect to Can-Am and not a servant, or employee
thereof or joint venturer therewith.
(j) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Services Agreement to
be duly executed as a sealed instrument as of the day and year first above
written.
A.M.G. MEDICAL INC.
By: ________________________________
Name: Xxxxxxxx Xxxxx
Title: Vice President
CAN-AM CARE CORPORATION
By: ________________________________
Name: Xxxxxx Xxxxxxx
Title: President
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