MANAGEMENT AGREEMENT
This Management Agreement (the "Agreement") is made and
entered into as of August 31, 1997 by and between Embryo
Development Corporation, a Delaware corporation ("Embryo"), and
Hydrogel Design Systems, Inc., a Delaware corporation
("Hydrogel").
W I T N E S S E T H:
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WHEREAS, Embryo maintains an experienced bookkeeping, order
processing and computer facility at its headquarters; and
WHEREAS, Hydrogel is a corporation engaged in the business
of manufacturing and distributing certain hydrogel and related
products; and
WHEREAS, Embryo and Hydrogel desire that Embryo provide
Hydrogel with certain management services in consideration for
the fees described herein.
NOW, THEREFORE, the parties for good and valuable
consideration the receipt and sufficiency of which is hereby
acknowledged, agree as follows:
1. Management Services. Embryo shall provide to Hydrogel
management services (the "Services"), including
(i) bookkeeping;
(ii) order processing;
(iii) general administrative services;
(iv) computer services; and
(v) telephone sales representatives.
2. Cooperation by the Parties. Hydrogel shall cooperate
fully with Embryo so that Embryo may render the services in a
timely and professional manner. Hydrogel shall at all times
provide Embryo with access to (i) the books and records of
Hydrogel, (ii) the employees of Hydrogel and its outside advisors
or consultants and (iii) any other materials Embryo may
reasonably request in order to render the services. If at any
time the services to be rendered by Embryo shall in any way
conflict with a current or proposed policy, practice or approach
conducted or proposed to be conducted by Hydrogel, Embryo shall
have the right to pursue and implement its service in lieu of
such policy, practice or approach of Hydrogel. Embryo agrees to
periodically provide Hydrogel with information regarding the
services rendered by Embryo.
3. Fees and Disbursements. In full consideration for the
Services, for each calendar year of this Agreement (pro-rated for
each part thereof), Hydrogel shall pay Embryo the greater of
Seventy Five Thousand Dollars ($75,000) per annum or Ten (10%)
percent of the gross sales generated by Embryo's sales
representatives; provided that, if Embryo is required to provide
additional services in connection with special projects or
unanticipated services, Embryo shall be entitled to charge an
additional fee. All payments made hereunder shall be made,
within thirty (30) days of receipt by Hydrogel of an invoice from
Embryo.
4. Representations and Warranties of Hydrogel. Hydrogel
represents and warrants to Embryo as follows:
4.1 Organization and Qualification. Hydrogel is a
corporation validly existing and in good standing under the laws
of the State of Delaware, and has all requisite corporate power
and authority to (a) own, lease and operate its properties and
assets as they are now owned, leased and operated and (b) carry
on its business as now presently conducted. Hydrogel is duly
qualified to do business in each jurisdiction in which the nature
of its business or properties makes such qualification necessary,
except where the failure to do so would not have a material
adverse effect on the business of Hydrogel.
4.2 Subsidiaries. Hydrogel has no subsidiaries.
4.3 Validity and Execution of Agreement. Hydrogel has the
full legal right, capacity and power and all requisite corporate
authority and approval required to enter into, execute and
deliver this Agreement and any other agreement or instrument
contemplated hereby, and to perform fully its obligations
hereunder and thereunder. The board of directors of Hydrogel has
approved the transactions contemplated pursuant to this
Agreement. This Agreement has been duly executed and delivered
by Hydrogel and constitutes the valid and binding obligation of
Hydrogel enforceable against it in accordance with its terms.
4.4 No Conflict. Neither the execution and delivery of
this Agreement nor the performance by Hydrogel of the
transactions contemplated hereby will violate or conflict with:
(a) any of the provisions of the Articles of Incorporation or By-laws or
other organizational documents of Hydrogel; (b) or result
in the acceleration of, or entitle any party to accelerate the
maturity or the cancellation of the performance of any obligation
under, or result in the creation or imposition of any lien in or
upon their respective assets or constitute a default (or an event
which might, with the passage of time or the giving of notice, or
both, constitute a default) under any contract, (c) any order,
judgment, regulation or ruling of any governmental or regulatory
body to which Hydrogel is a party or by which any of its property
or assets may be bound or affected or with any provision of any
law, rule, regulation, order, judgment, or ruling of any
governmental or regulatory body applicable to Hydrogel.
4.5 Licenses and Permits. Hydrogel maintains all
governmental permits, licenses, registrations and other
governmental consents (federal, state and local) which are
necessary in connection with its operations and properties, and
no others are required. All such permits, licenses,
registrations and consents are in full force and effect and in
good standing and shall continue to be in full force and effect
and in good standing following the consummation of the
transactions contemplated by this Agreement.
4.6 Compliance with Laws. Hydrogel has complied in all
respects with all applicable federal, state and local laws,
regulations and ordinances or any requirement of any governmental
or regulatory body, court or arbitrator affecting the business or
the assets the failure to comply with which could have a material
adverse effect on the business of Hydrogel.
4.7 Products. There are no statements, citations or
decisions by any governmental or regulatory body that any product
marketed or distributed at any time by Hydrogel ("Product") is
defective or fails to meet in any material respect any standards
promulgated by any such governmental or regulatory body. There
have been no recalls ordered by any such governmental or
regulatory body with respect to any product. To the best
knowledge of Hydrogel, there is no (a) fact relating to any
product that may impose upon Hydrogel a duty to recall any
product or a duty to warn customers of a defect in any product,
other than defects about which Hydrogel has issued appropriate
and adequate warnings or (b) latent or overt design,
manufacturing or other defect in any product.
4.8 Survival. All of the representations and warranties of
Hydrogel contained herein shall survive the date hereof until the
date upon which the liability to which any claim relating to any
such representation or warranty is barred by all applicable
statutes of limitations.
5. Representations and Warranties of Embryo. Embryo
represents and warrants to Hydrogel as follows:
5.1 Organization and Qualification. Embryo is a
corporation validly existing and in good standing under the laws
of the State of Delaware, and has all requisite corporate power
and authority to (a) own, lease and operate its properties and
assets as they are now owned, leased and operated and (b) carry
on its business as now presently conducted. Embryo is duly
qualified to do business in each jurisdiction in which the nature
of its business or properties makes such qualification necessary,
except where the failure to do so would not have a material
adverse effect on the business of Embryo.
5.2 Validity and Execution of Agreement. Embryo has the
full legal right, capacity and power and all requisite corporate
authority and approval required to enter into, execute and
deliver this Agreement and any other agreement or instrument
contemplated hereby, and to perform fully its obligations
hereunder and thereunder. The board of directors of Embryo has
approved the transactions contemplated pursuant to this
Agreement. This Agreement has been duly executed and delivered
by Embryo and constitutes the valid and binding obligation of
Embryo enforceable against it in accordance with its terms.
5.3 No Conflict. Neither the execution and delivery of
this Agreement nor the performance by Embryo of the transactions
contemplated hereby will violate or conflict with: (a) any of
the provisions of the Articles of Incorporation or By-laws or
other organizational documents of Embryo; (b) or result in the
acceleration of, or entitle any party to accelerate the maturity
or the cancellation of the performance of any obligation under,
or result in the creation or imposition of any lien in or upon
their respective assets or constitute a default (or an event
which might, with the passage of time or the giving of notice, or
both, constitute a default) under any contract, (c) any order,
judgment, regulation or ruling of any governmental or regulatory
body to which Embryo is a party or by which any of its property
or assets may be bound or affected or with any provision of any
law, rule, regulation, order, judgment, or ruling of any
governmental or regulatory body applicable to Embryo.
5.4 Licenses and Permits. Embryo maintains all
governmental permits, licenses, registrations and other
governmental consents (federal, state and local) which are
necessary in connection with its operations and properties, and
no others are required. All such permits, licenses,
registrations and consents are in full force and effect and in
good standing and shall continue to be in full force and effect
and in good standing following the consummation of the
transactions contemplated by this Agreement.
5.5 Compliance with Laws. Embryo has complied in all
respects with all applicable federal, state and local laws,
regulations and ordinances or any requirement of any governmental
or regulatory body, court or arbitrator affecting the business or
the assets the failure to comply with which could have a material
adverse effect on the business of Embryo.
5.6 Survival. All of the representations and warranties of
Embryo contained herein shall survive the date hereof until the
date upon which the liability to which any claim relating to any
such representation or warranty is barred by all applicable
statutes of limitations.
6. Term of Agreement. The term of this Agreement shall
commence on the date hereof and shall continue for a period of
one (1) year and thereafter will be automatically renewed for
successive one (1) year terms unless either party provides
written notice of intent to terminate the Agreement of at least
ninety (90) days.
7. Miscellaneous. This Agreement shall be governed by
and construed in accordance with the internal laws of the State
of New York, without regard to principles of conflicts of law,
and the parties irrevocably agree to submit any controversy or
claim arising out of or relating to this Agreement to a court of
competent jurisdiction located in the State of New York. This
Agreement may be executed simultaneously in counterparts, each of
which will be deemed to be an original but all of which together
will constitute one and the same instrument. The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of
this Agreement, which shall remain in full force and effect. This
Agreement contains the entire understanding of the parties hereto
with respect to its subject matter. This Agreement may be
amended only by a written instrument duly executed by the
parties.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the first date written above.
EMBRYO DEVELOPMENT CORPORATION
By:/s/Xxxxxxx Xxxxxx
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Name:Xxxxxxx Xxxxxx
Its: Chairman
HYDROGEL DESIGN SYSTEMS, INC.
By:/s/ Xxxxxxx Xxxxxxxx
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Name:Xxxxxxx Xxxxxxxx
Its: President
