SUPPORT SERVICES AGREEMENT
Exhibit
10.2
Support
Services
Agreement (this "Agreement") dated as of May 11, 2007 (the "Effective
Date") between Monarch Bay Management Company, LLC, a California limited
liability company ("MBMC") and Monarch Staffing, Inc., a Nevada corporation
(“MSTF”).
WHEREAS,
MSTF
wishes
to engage MBMC to provide the Services (as defined below) on the terms and
conditions set forth herein and MBMC wishes to be so retained;
NOW
THEREFORE, in
consideration of the premises and of the mutual covenants, conditions and
agreements contained herein, the parties agree as follows:
ARTICLE
ONE
SERVICES
1.1 Management
Services. MSTF hereby engages MBMC to
perform the Management Services set forth in Schedule 1 hereto for the benefit
of MSTF, and MBMC agrees to perform such Management Services, on the terms
and
conditions set forth herein.
1.2 Facility
and Administrative Services. MSTF
hereby engages MBMC to perform the Facility and Administrative Services set
forth in Schedule 1 hereto for the benefit of MSTF, and MBMC agrees to perform
such Facility and Administrative Services, on the terms and conditions set
forth
herein.
1.3 Business
Development Services. MSTF hereby engages MBMC, on
a non-exclusive basis, to identify and introduce to MSTF potential parties
to
product development relationships, licensing relationships, customer or
distribution relationships and other similar transactions or relationships
with
MSTF (each, a “BD Transaction”).
1.4 Creditor
Resolution Services. MSTF hereby engages MBMC, on
a non-exclusive basis, to resolve on behalf of MSTF certain claims of MSTF’s
creditors (the “Creditor Claims”). MSTF will advise MBMC in writing
of the Creditor Claims and the confirmed debt of each Creditor Claim (“Confirmed
Debt”) for which, it requires MBMC’s services. MBMC will, use its reasonable
efforts to negotiate the Creditor Claims and to attempt to effect a reasonable
and fair settlement, discharge, or release of Creditor Claims (the “Creditor
Resolution Services”). MBMC will consult with MSTF on a regular basis
with respect to the Creditor Claims assigned to it and prior to presenting
any
final agreement to a creditor will consult with MSTF and MSTF will specifically
approve any such proposed final agreement.
1.5 Other
Services. MSTF may, from time to time,
engage MBMC to perform other services for the benefit of MSTF (“Other
Services”). The scope of, the applicable fee for, and any
additional terms and conditions relating to any such other services shall be
reflected in a Services Addendum to this Agreement in the form of Exhibit A
hereto.
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1.6 Reporting. MSTF
shall have the right to request written reports at any time during the term
of
this Agreement, which shall be furnished within 30 days after such request,
describing the progress, status of, and other matters pertaining to the
Management Services, the Facility and Administrative Services, the Creditor
Resolution Services and any Other Services provided pursuant to Section 1.5
(collectively, the “Services”) as MSTF shall request. MSTF may freely utilize
all such information arising out of the performance of the Services under this
Agreement in any manner desired.
ARTICLE
TWO
COMPENSATION
2.1 Compensation.
(a)
Retainer. Upon execution of this Agreement, MSTF will
issue to MBMC 5,000 shares of its Series A Preferred Stock, par value $.001
per
share, as a non-refundable retainer fee for the Services provided by MBMC
hereunder.
(b)
Management
Services. For each month during the term of this Agreement,
MSTF will pay to MBMC a fee in respect of the Management Services (the “MS Fee”)
equal to $20,000 in cash. The MS Fee will be due and payable on the
first business day of such month and is non-refundable.
(c) Facility
and
Administrative Services. For each month during the term of
this Agreement, MSTF will pay to MBMC a fee in respect of the Facility and
Administrative Services (the “FAS Fee”) equal to 10% of the MS Fee in
cash. The FAS Fee will be due and payable on the first business day
of such month and is non-refundable.
(d) Business
Development
Services. MSTF will pay to MBMC a fee (the “BD Fee”) equal to 6%
of MSTF’s total revenue from any BD Transaction involving MSTF and a partner or
customer introduced to MSTF by MBMC (each, a “BD Transaction”) that is entered
into during the term of this Agreement or any Tail Period (as defined
below)). The BD Fee will be due and payable in cash, when and as the
associated revenue from the BD Transaction is collected by MSTF. Notwithstanding
the foregoing, the BD Fee payable with respect to any BD Transaction will be
reduced by the amount of any fees paid by MSTF to any investment banker or
finder engaged by MSTF to represent it in such BD Transaction.
(e) Creditor
Resolution
Services. For Creditor Claim which MBMC successfully resolves,
MSTF will pay to MBMC a fee (the “CR Fee”) equal to 20% of the Effected Savings
(as defined below) in respect of such Creditor Claim. “Effected
Savings” means the amount of the Confirmed Debt less the amount which is
actually paid by MSTF to settle the Creditor Claim. At the MSTF’s option (if
MSTF’s common stock is then quoted on the OTCBB), CR Fees may be paid in the
form of shares of MSTF’s common stock (registered under Form S-8 or other form
to permit the free and immediate resale by MBMC’s designated principals and
otherwise unlegended and unrestricted), with the number of shares payable
determined based on a valuation of the common stock equal to 80% of the closing
bid price of the common stock on the OTCBB on the trading day immediately
preceding the date of delivery of such shares to MBMC’s designated
principals. Payment of each CR Fee shall be made as part of and
contemporaneous with the settlement date of the Creditor Claim to which it
relates.
(f) Other
Services. IF MSTF has engaged to perform any Other
Services, MSTF will pay to MBMC the fee specified for such Other Services in
the
applicable Services Addendum (the “Other Services Fee”). Unless
otherwise specified in the applicable Services Addendum, the Other Services
Fee
will be due and payable in cash on the first business day of each month during
which the Other Services are provided and will be non-refundable.
2.2 Reimbursement. MSTF
will reimburse MBMC for any and all reasonable expenses incurred by MBMC in
connection with MBMC's performance of the Management Services and any Other
Services; provided, however, that any such expenses must be pre-approved
by MSTF and otherwise adhere to control procedures implemented by MSTF. All
requests for reimbursement for expenses must be accompanied by documentation
in
form and detail satisfactory to MSTF. MSTF will reimburse MBMC for
expenses incurred in compliance with this Section 2.2 within fifteen days
following MSTF’s receipt of MBMC’s invoice therefore.
ARTICLE
THREE
REPRESENTATIONS,
WARRANTIES AND COVENANTS
3.1 Representations
and Warranties. Each party represents
and warrants to the other that:
(a)
It has not entered into any
agreement, whether written or oral, in conflict with this Agreement;
and
(b)
It has the full power and authority
to enter into this Agreement.
3.2 MBMC’s
Covenants. MBMC:
(a)
shall act as an independent
contractor with no authority to obligate MSTF by contract or
otherwise;
(b)
shall exercise only such powers and
perform such duties as may from time to time be vested in MBMC or assigned
to
MBMC by MSTF;
(c)
shall devote such time and effort
as is reasonably necessary to provide the Services;
(d)
shall comply with all applicable
laws in the performance of the Services; and
(e)
shall not assign or subcontract
performance of this Agreement or any of the Services to any person, firm,
company or organization without MSTF’s prior written consent;
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ARTICLE
FOUR
CONFIDENTIAL
INFORMATION
4.1 Confidentiality. MBMC
shall, during the term of this Agreement and for a period of five years
thereafter, keep all MSTF Confidential Information confidential and use such
information only for the purposes expressly set forth herein. MSTF
Confidential Information shall mean all information concerning MSTF or its
current or planned business, which is disclosed to MBMC by MSTF or which results
from, or in connection with, any Services performed pursuant to this
Agreement.
4.2 Access. MBMC
agrees to limit the access to MSTF Confidential Information to only those
persons under MBMC's direct control who, with MSTF’s knowledge and consent, are
responsible for performing the Services set forth in Article One.
4.3 Authorized
Disclosure. MBMC shall have no obligation of
confidentiality and non-use with respect to any portion of MSTF Confidential
Information which (i) is or later becomes generally available to the public
by
use, publication or the like, through no act or omission of MBMC; (ii) is
obtained from a third party who had the legal right to disclose the information
to MBMC; or (iii) MBMC already possesses as evidenced by MBMC’s written records
predating receipt thereof from MSTF.
4.4 Return
of Information. Upon the termination of
this Agreement, MBMC will promptly return to MSTF all materials, records,
documents, and other MSTF Confidential Information in tangible
form. MBMC shall retain no copies except as required by law of such
materials and information and, if requested by MSTF, will delete all MSTF
Confidential Information stored in any magnetic or optical disc or
memory.
4.5 Third
Party Information. MBMC shall not, in connection with
the Services to be performed under this Agreement, disclose to MSTF any
information, which is confidential or proprietary to MBMC, or any third
party.
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ARTICLE
FIVE
INDEMNITY;
LIMITATION OF LIABILITY
5.1 Indemnity.
(a) MSTF
will indemnify and
hold harmless MBMC against any and all losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, costs, expenses and disbursements
(and any and all actions, suits, proceedings and investigations in respect
thereof and any and all legal and other costs, expenses and disbursements in
giving testimony or furnishing documents in response to a subpoena or
otherwise), including, without limitation, the costs, expenses and
disbursements, reasonably incurred, as and when incurred, of investigating,
preparing or defending any such action, suit, proceeding or investigation
(whether or not in connection with litigation in which MBMC is a party),
directly or indirectly, caused by, relating to, based upon, arising out of,
or
in connection with this Agreement or MBMC's performance hereunder, except to
the
extent primarily caused by the gross negligence or willful misconduct of
MBMC.
(b) The
indemnification
provisions shall be in addition to any liability which MSTF may otherwise have
to MBMC or the persons indemnified below in this sentence and shall extend
to
the following: MBMC, its affiliated entities, members, employees, legal counsel,
agents and controlling persons (within the meaning of the federal securities
laws), and the officers, directors, employees, legal counsel, agents and
controlling persons of any of them. All references to MBMC in this Article
Five
shall be understood to include any and all of the foregoing.
5.2 Limitation
of Liability. MBMC shall not have any liability (whether
direct or indirect, in contract or tort or otherwise) to MSTF for or in
connection with this Agreement or MBMC’s performance hereunder, except to the
extent that any such liability is found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) to have resulted
primarily from MBMC's gross negligence or willful misconduct. In no
case shall MBMC’s liability (whether direct or indirect, in contract or tort or
otherwise) to MSTF for or in connection with this letter agreement or MBMC’s
performance hereunder exceed the aggregate fees paid by MSTF to MBMC
hereunder.
ARTICLE
SIX
TERM
AND TERMINATION
6.1 Term.
The initial term of this Agreement shall be from the Effective Date
through the first anniversary thereof (the “Initial Term”). After the
Initial Term, the term of this Agreement will automatically be extended for
an
additional successive one-year periods unless either party provides written
notice to the other party of its intent not to so extend the term at least
30
days before the expiration of the then current term.
6.2 Termination. This
Agreement may be terminated by either party upon the breach of a material term
hereof by the other party, which breach remains uncured for 30 days after the
date that the non-breaching party has served written notice on the other party,
which notice will set forth the basis of such breach and the non-breaching
party's intent to terminate the Agreement.
6.3 Effect
of Termination. Upon the expiration or
termination of this Agreement, each party shall be released from all obligations
and liabilities hereunder except those arising under Articles Four, Five and
Eight; provided that, following such termination, MBMC shall be entitled to
receive (a) all amounts payable by MSTF to MBMC through the date of expiration
or termination and (b) 100% of the BD Fees with respect to any BD Transactions
consummated within a period of twelve months following the termination of this
Agreement (the “Tail Period”) with any party identified or introduced by MBMC to
MSTF.
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ARTICLE
SEVEN
MISCELLANEOUS
7.1 Relationship
of the Parties.
(a) MSTF
is a sophisticated
business enterprise that has retained MBMC for the limited purposes set forth
in
this letter agreement, and the parties acknowledge and agree that their
respective rights and obligations are contractual in nature. MSTF recognizes
that the relationship contemplated hereby is not an exclusive relationship
for
MBMC or any of its personnel. Each party disclaims an intention to
impose fiduciary obligations on the other by virtue of the engagement
contemplated by this Agreement.
(b) The
Services do not
include requiring MBMC to engage in any activities for which an investment
advisor's registration or license is required under the U.S. Investment Advisors
Act of 1940, or under any other applicable federal or state law; or for which
a
"broker's" or "dealer's" registration or license is required under the U.S.
Securities Exchange Act of 1934, or under any other applicable federal or state
law. MBMC's work on this engagement shall not constitute the
rendering of legal advice, or the providing of legal services, to
MSTF. Accordingly, MBMC shall not express any legal opinions with
respect to any matters affecting MSTF.
(c) MBMC
will be responsible
for making appropriate filings and payments to the federal, state and local
taxing authorities, including payments of all withholding and payroll taxes
due
on compensation received hereunder, estimated income payments, employment and
self-employment taxes, if applicable.
7.2 Waiver.
None of the terms of this Agreement may be waived except by an express
agreement in writing signed by the party against whom enforcement of such waiver
is sought. The failure or delay of either party in enforcing any of
its rights under this Agreement shall not be deemed a continuing waiver of
such
right.
7.3 Entire
Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings among the parties (whether
written or oral) relating to said subject matter, including without limitation
the letter agreement, dated March 21, 2006, between MSTF (formerly MT Ultimate
Healthcare Corp.) and MBMC, which is hereby terminated.
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7.4 Amendments. This
Agreement may not be released, discharged, amended or modified in any manner
except by an instrument in writing signed by a duly authorized officer of MSTF
and MBMC.
7.5 Assignment. MSTF
has specifically contracted for the Services of MBMC and, therefore, MBMC may
not assign or delegate MBMC's obligations under this Agreement, either in whole
or in part, without the prior written consent of MSTF.
7.6 Severability. If
any provision of this Agreement is, becomes, or is deemed invalid, illegal
or
unenforceable in any jurisdiction, such provision shall be deemed amended to
conform to the applicable laws so as to be valid and enforceable, or, if it
can
not be so amended without materially altering the intention of the parties
hereto, it shall be stricken and the remainder of this Agreement shall remain
in
full force and effect.
7.7 Headings.
Article and Section headings contained in the Agreement are included
for convenience only and are not to be used in construing or interpreting this
Agreement.
7.8 Notices. All
notices provided for in this Agreement shall be in writing and shall be deemed
effective when either served by personal delivery or sent by express, registered
or certified mail, postage prepaid, return receipt requested, to the other
party
at the corresponding mailing address set forth below or at such other address
as
such other party may hereafter designate by written notice in the manner
aforesaid.
7.9 Force
Majeure. MBMC shall be excused for
failure to provide the Services hereunder to the extent that such failure is
directly or indirectly caused by an occurrence commonly known as force majeure,
including, without limitation, delays arising out of acts of God, acts or orders
of a government, agency or instrumentality thereof (whether of fact or law),
acts of public enemy, riots, embargoes, strikes or other concerted acts of
workers (whether of MBMC or other persons), casualties or accidents, delivery
of
materials, transportation or shortage of cars, trucks, fuel, power, labor or
materials or any other causes, circumstances or contingencies that are beyond
the control of MBMC; provided, however, that MBMC shall use its best
efforts to resume provision of the Services as soon as possible. Notwithstanding
any events operating to excuse performance by MBMC, this Agreement shall
continue in full force for the remainder of its term and any renewals
thereof.
7.10 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall
be
an original and all of which together shall constitute one and the same
document, binding on all parties notwithstanding that each of the parties may
have signed different counterparts.
7.11 Governing
Law. This Agreement shall be governed by and construed
in accordance with the laws of the state of California and the parties to this
Agreement hereby submit to the exclusive jurisdiction of the courts, both state
and federal, in the County of Orange, State of California.
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IN
WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
MONARCH
BAY MANAGEMENT COMPANY, LLC
____________________________________
By:
Xxxxx
Xxxxx
Title:
Managing Member
Address:
00000 Xxxxxx Xxxxx Xx #000
Xxx
Xxxx
Xxxxxxxxxx, XX 00000
____________________________________
By:
Xxxx
Xxxxxxxx
Title:
Chief Executive Officer
Address: 00000
Xxxxxx Xxxxx Xx #000
Xxx
Xxxx
Xxxxxxxxxx, XX 00000
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Schedule
1
Management
Services
|
·
|
Make
available an individual acceptable to MSTF in its sole discretion
to serve
as Chief Financial Officer of MSTF.
|
|
·
|
Perform
all principal accounting and financial officer
duties.
|
|
·
|
Direct
all finance, accounting and treasury functions including cash forecasting,
cash management, operational budgeting, month-end closing, and ensure
accuracy and compliance in accounting/financial
reporting.
|
|
·
|
Re-engineer
the Finance Department - transform finance operations through improved
processes, advising on financial performance, evaluation of outsourcing
options, best management practices, evaluating/appraising strategic
partnerships.
|
|
·
|
Support
fundraising activities.
|
|
·
|
Analyze
financial and operating information for management to facilitate
decision-making and provide input for corrective action, where
applicable.
|
|
·
|
Recommend/implement
improvements to ensure the integrity of the company’s financial
information and systems.
|
|
·
|
Forecast
and monitor financial information against goals and operating
strategy.
|
|
·
|
Manage/oversee
relationships with independent auditors, banks and investment banking
community.
|
|
·
|
Handle
financial negotiations with other third party
relationships.
|
|
·
|
Prepare
quarterly updates to the financial
forecast.
|
|
·
|
Lead
the financial due diligence
efforts.
|
|
·
|
Lead
the integration of accounting and finance systems for
mergers.
|
Facility
and Administrative Services
|
·
|
Provision
of corporate headquarters office
space.
|
|
·
|
Provision
of utilities, telecommunications, cleaning and other services related
to
maintaining corporate headquarters office
space.
|
|
·
|
Shipping
and postage related to corporate headquarters
functions
|
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Attachment
A
Services
Addendum
|
Scope
of Other Services:
|
|
|
Other
Services Fee:
|
|
|
Other
Terms and Conditions:
|
Acknowledged
and agreed by:
|
|
By:
______________________
|
|
|
Date:
|
MONARCH
BAY MANAGEMENT COMPANY, LLC
|
|
By:
______________________
|
Date:
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