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Exhibit 10.1
XXXXXX XXXXXXX
June 30, 1999
Calyx & Corolla, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Re: MANAGEMENT SERVICES
Ladies and Gentlemen:
We have signed a definitive agreement for the acquisition
("Acquisition") of Calyx & Corolla, Inc. ("Calyx") by merger of Calcor
Acquisition, a wholly owned subsidiary of Xxxxxx Xxxxxxx, Inc. ("GSI"), with and
into Calyx. We expect to close the Acquisition as soon as possible after
receiving formal approval by the shareholders of Calyx; such approval is
expected as a result of voting agreements already signed by holders of a
majority of the outstanding common stock of Calyx. This letter shall set forth
our understanding with respect to the operations of Calyx from the date of this
management services agreement until the closing of the Acquisition ("Interim
Period").
Calyx & Corolla shall be operated for the account of Xxxxxx Xxxxxxx
such that all revenue and profits of Calyx & Corolla shall accrue to the benefit
of Xxxxxx Xxxxxxx, and all liabilities of Calyx & Corolla shall be incurred for
the account of Xxxxxx Xxxxxxx. No distributions of cash or other assets of Calyx
& Corolla shall be made from Calyx & Corolla to its shareholders, and Calyx &
Corolla shareholders shall make no contributions of cash or other assets to
Calyx.
Xxxx Xxxxxx, President of Calyx, shall be responsible for the
day-to-day operations of Calyx and shall report to Xxxxx Xxxxxx, President of
GSI. Xxxxx Xxxxxx shall review and approve all material decisions concerning the
business of Calyx, including (a) entering into, amending or terminating material
agreements, (b) granting or making any material changes in the employment terms
or benefits of any officer or employee (other than in the ordinary course of
business), (c) hiring or terminating any key management employees; (d) making
any loans or subjecting any of Calyx's assets to any lien, or (e) making any
capital expenditures, other than those currently budgeted and reviewed by GSI in
its due diligence process, and (f) any other material changes in the business of
Calyx. In all other respects, the business of Calyx shall be operated in the
ordinary course of business in accordance with past practice.
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All obligations of Calyx under this letter agreement shall terminate
and be of no further force and effect immediately upon the closing of the
Acquisition. Upon the closing of the Acquisition, GSI and Calyx acknowledge and
agree that Calyx shall be released, automatically and without any further action
by any party, of any liability or obligation under this letter agreement.
Sincerely,
XXXXXX XXXXXXX, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Its: Vice President
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Acknowledged and Agreed
to this 30th day of June, 1999
CALYX & COROLLA, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Its: President
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