AMENDED AND RESTATED
MANAGEMENT AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT ("Agreement") is
made and entered into as of the 11th day of September, 1998, by
and between DEVELOPED TECHNOLOGY RESOURCE, INC., a corporation
organized under the laws of the State of Minnesota (hereinafter
the "Manager"), and FOODMASTER INTERNATIONAL L.L.C., a limited
liability company organized under the laws of the State of
Delaware (hereinafter the "Company").
WITNESSETH:
WHEREAS, the Company has been formed by the Manager and
certain other parties (collectively the "Members") for the
purpose of producing, packaging and distributing high-quality,
branded dairy products and fruit juice, and other products as
agreed to by the Members, in the former Soviet Union;
WHEREAS, the Members have entered into that certain
Amended and Restated Limited Liability Company Agreement, as of
the date hereof (the "Operating Agreement"), with respect to the
operation of the Company;
WHEREAS, as an inducement to the Members to form the
Company, Manager agreed to manage the business of the Company
pursuant to the terms of that certain Management Agreement, made
and entered into as of March 3, 1997, by the Manager and the
Company (the "Original Agreement"); and
WHEREAS, Manager and the Company desire to amend and
restate the Original Agreement as set forth herein."
NOW, THEREFORE, for and in consideration of the
foregoing and the premises and mutual covenants hereinafter
contained, the parties hereto hereby agree as follows:
1. Engagement of Manager. The Company hereby engages
the Manager to develop, manage and operate all business
activities of the Company and to do and perform any and all
things in the management of those business activities customarily
performed by managers of similar businesses, subject to the terms
and conditions imposed by this Agreement.
2. Acceptance by Manager/Priority of Resources.
Manager hereby agrees to manage the business of the Company on
the terms and conditions provided herein. In addition to the
provisions of Section 5(a) of this Agreement, it is understood
and agreed that the Manager will devote all resources necessary
to the performance of its obligations under this Agreement and
shall not undertake any other projects or commitments which may
adversely affect its ability to perform its obligations under
this Agreement.
3. Control by the Company. Notwithstanding any other
provision of this Agreement, the Manager shall be subject to the
direction and control of the Company with respect to all aspects
of the performance of its obligations under this Agreement
4. Duties of Manager. Subject to the provisions of
Section 3, Manager agrees to perform all actions reasonably
necessary to develop, manage and operate the business activities
of the Company, including without limitation the following:
a. Manage all business activities of the Company.
b. Conduct all business activities of the Company's
operations in Kazakstan, Moldova and the Ukraine,
and in any other location in which the Company
undertakes operations.
c. Investigate other dairy, juice and related
products operations in the former Soviet Union for
possible investment by the Company.
d. Establish and maintain bank accounts for the
Company, provided that such accounts shall be
approved by the Company prior to being
established, and keep the books and records of all
business activities of the Company, to pay all
debts and obligations, to execute contracts as
authorized by the Company.
e. Engage accountants for the Company and for the
businesses owned and controlled by the Company,
provided that such accountants shall be approved
by the Company prior to engagement. Select,
employ, supervise, direct, pay and discharge all
employees or independent contractors necessary, in
Manager's opinion, for the development,
management, and operation of the Company's
businesses in the former Soviet Union, and all
such persons shall be employees or agents of
Manager and not of the Company. Manager shall
carry workers' compensation insurance, written in
such manner as also to protect the Company in an
appropriate amount, covering all such employees,
and shall withhold for tax purposes and make all
deductions and file all reports required under all
applicable laws and regulations.
f. Such other duties and responsibilities reasonably
requested from time to time by the Company.
5. Exclusivity/Employee Non-Competes.
(a) The Manager shall cause Xxxx X. Xxxx, Erlan
Sagadiev, Xxxxx Xxxxxxxx, Xxxxx X. Xxxxx, Xxxxx Xxxxxxx, and
XxXxx Xxxxx, and all other persons employed by the Manager during
the term of this Agreement to perform duties or functions similar
to those performed by the foregoing (collectively "Senior
Management"), to work exclusively on behalf of the Company to the
exclusion of all other projects or business during the terms of
this Agreement. Without limiting the foregoing, Senior
Management shall not participate or be involved, in any manner or
capacity, in the management or operations of SXD, Inc., a
subsidiary of the Manager. Notwithstanding the foregoing, Xxxx
Xxxx may serve as President, Chief Executive Officer and a
Director of the Manager and devote such time as is necessary to
fulfill his fiduciary duties as an officer and director of the
Manager and XxXxx Xxxxx may serve as chief financial officer and
secretary of the Manager.
(b) The Manager shall cause each member of Senior
Management to enter into non-competition agreements pursuant to
which such person agrees that during their employment with the
Manager and for a period of one year after termination thereof
(whether voluntary or involuntary), such employee shall not (i)
directly or indirectly maintain an ownership interest in,
operate, or work for any entity which produces, packages or
distributes dairy, juice or other food products in any of the
Republics of the former Soviet Union in which the Company
engages, or proposes to engage, in such activities, (ii) solicit,
do business with, or deliver products or services to any person
or entity who was a client or customer of the Company, or (iii)
employ or offer to employ any individual who was employed by the
Manager or the Company or in any way associated with the Manager
or the Company. Manager shall provide copies of all agreements
entered into pursuant to this Section 5(b) to the Company upon
request.
6. Independent Contractor. The Manager shall operate
as an independent contractor and neither Manager nor its
employees shall be considered employees of the Company.
7. Property of the Company. It is understood and
agreed that all books, records, files, reports, business
products, discoveries, improvements, know-how or techniques made,
developed or created by the Manager (or its agents or employees)
in connection with the performance of the Manager's obligations
under this Agreement, shall be the property of the Company and
shall be assigned to the Company upon request. Nothing in this
Agreement is intended to preclude the Manager from using (i) any
products, discoveries, improvements, know-how or techniques in
connection with projects which the Manager is not precluded from
undertaking under the terms of the Operating Agreement, or (ii)
products, discoveries, improvements, know-how or techniques
unrelated to the production, packaging or distribution of dairy,
juice or other food related products in the former Soviet Union.
8. Insurance. The Company shall provide liability
insurance in an amount satisfactory to the Manager. The Manager
shall be named insured on such liability insurance policies and
certificates of insurance shall be provided to the Manager.
9. Reports. The Manager will submit to the Company
monthly financial statements for all businesses in which the
Company has an investment and will provide such other information
and reports as may be requested from time to time by the Company.
10. Preparation of Annual Budget. Manager shall
prepare a preliminary annual budget forty-five (45) days prior to
the end of each fiscal year. The Company shall provide the
Manager with an approved budget for each fiscal year prior to the
beginning of that fiscal year. The Company must approve any
expenses incurred by the Manager in excess of amounts specified
in the approved budget.
11. Indemnification.
(a) The Company shall indemnify and hold harmless the
Manager from and against any and all claims or liabilities for
damage or injury to property or persons or death of persons
occurring on or about the premises of any businesses owned or
controlled by the Company and managed by the Manager, except for
such claims as arise due to the negligent act or omission of
Manager, its agents or employees.
(b) The Manager shall indemnify and hold harmless the
Company against any and all claims or liabilities for damage or
injury to property or persons or death of persons resulting or
arising from the negligent acts or omissions of the Manager, its
agents or employees, except for such claims as arise due to the
negligent acts or omissions of the Company which do not involve
any negligent acts or omissions of the Manager, its agents or
employees.
12. Compensation and Expense Reimbursement. As
consideration for performing the services identified in this
Agreement, the Company shall reimburse the Manager for all
expenses reasonably incurred by the Manager in connection with
the performance of services under this Agreement provided that
such expenses are specified in the budget approved pursuant to
Section 10 or have been pre-approved by the Company. The Manager
shall provide the Company with monthly invoices (in form and
detail as reasonably acceptable to the Company) of expenses to be
reimbursed under this Agreement. The Company shall pay the
Manager for expenses identified in such invoice within thirty
(30) days of the receipt of an invoice.
13. Option Plans. During the term of this
Agreement, the Manager shall not, without the prior approval of
the Company which shall not be unreasonably withheld, alter or
amend any of the plans or programs in existence as of the date of
this Agreement, pursuant to which options to purchase stock of
the Manager ("Options") are granted to Senior Management. The
foregoing prohibition shall include, without limitation, the
issuance of any Options subsequent to the date of this Agreement.
14. Shareholder Agreements. The obligations of the
Company under this Agreement are conditioned upon each of Xxxx X.
Xxxx and Erlan Sagadiev having entered into an agreement with the
Manager (a "Shareholder Agreement") pursuant to which Messrs.
Xxxx and Sagadiev each agree that, until and unless
(a) API (as defined in the Operating Agreement) sells,
transfers or liquidates its interest in the Company,
(b) API exercises its rights set forth in either
Section 6.3 or Section 6.4 of the Operating Agreement,
(c) he is involuntarily terminated from the Manager,
(d) one year after API becomes entitled to exercise
the put right provided for in Section 6.4 of the
Operating Agreement, or
(e) the termination of this Agreement pursuant to
Section 15 other than termination by the Company for
cause,
he will not, without the prior consent of the Company, sell,
pledge or transfer any shares of stock of the Manager in excess
of that number of shares equal to thirty-five percent (35%) of
the number of shares of stock of the Manager subject to all
vested Options, whether exercised or unexercised, owned by
Messrs. Xxxx or Sagadiev, as the case may be, at the time of such
sale, pledge or transfer, provided that neither Messrs. Xxxx or
Sagadiev shall be permitted to sell any shares of stock of the
Manager unless written notice thereof has been provided to the
Company at least thirty (30) days prior to such sale. Manager
shall not give effect to any attempted transfers of shares of its
stock in violation of the Shareholder Agreements.
Notwithstanding the other provisions of this Section 14, the
Shareholders Agreement shall not prohibit either Messrs. Xxxx or
Sagadiev from selling, pledging or transferring any shares of
stock of the Manager to the extent that such shares are acquired
other than through the exercise of the Options.
15. Contracts. Contracts and agreements entered into
in accordance with Section 4 of this Agreement in connection with
the development, management or operation of the businesses owned
or controlled by the Company and managed by the Manager shall be
executed by the Manager as agent of the Company, and the Company
agrees to indemnify and hold harmless the Manager from and
against all existing and future liabilities under such contracts
and agreements, provided that the Manager shall have no authority
to incur any obligation on behalf of the Company that exceeds
[U.S.]$25,000 unless (i) the amount of such obligation, the
identity of the party to whom the obligation is to be incurred,
and the purpose for which the obligation is to be incurred is
specified in a budget approved by the Company, or (ii) such
obligation is otherwise specifically approved by the Company.
16. Term. This Agreement shall be effective as of the
date of the Original Agreement and shall remain in effect until
terminated in accordance with the following sentence. This
Agreement shall not terminate except (i) by mutual consent of the
parties hereto, (ii) by either party for cause, (iii) by the
Company upon sixty (60) day prior written notice, or (iv) upon
the liquidation of the Company. For purposes of this Agreement,
"cause" shall mean the breach of any term hereof which breach is
not cured within thirty (30) days of the delivery of notice of
such breach by the party seeking termination.
17. Cooperation Between Parties. The parties agree to
give each other full cooperation and assistance to the end that
both parties may discharge their responsibilities hereunder.
Without limiting the foregoing or any other provision of this
Agreement, the Manager shall provide the Company, upon request
with copies of all agreements, contracts and other documents
entered into in connection with, or pursuant to the terms of this
Agreement.
18. Notices. Wherever in this Agreement it shall be
required or permitted that notice or demand be given or served by
either party to this Agreement to or on the other, such notice or
demand shall be given or served either personally or forwarded by
registered or certified mail, postage prepaid, and a copy sent by
telex or facsimile. Any notice so given shall be deemed to have
been received as of the date the original is received, or as of
the date on which a copy was sent by telex or facsimile and a
confirmation of receipt indicated on the sending telex or
facsimile machine, whichever is earlier. The addresses for the
parties are as follows:
To the Manager: Developed Technology Resource, Inc.
0000 Xxxxx Xxxx., Xxxxx 000
Xxxxx, XX 00000
Telecopy: 000-000-0000
To the Company: c/o Agribusiness Management Co.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Telecopy: 000-000-0000
Such addresses may be changed from time to time by either party
by serving notice as above provided.
19. Assignment. This Agreement shall be binding upon
the successors and assigns of the parties hereto and may not be
assigned by Manager, except to an entity controlled by Manager,
without the prior written consent of the Company.
20. Amendment or Modification. This Agreement
constitutes the entire agreement between the parties hereto, and
no variance or modification hereof shall be valid or enforceable,
except by an amendment or supplemental agreement in writing
executed by the parties hereto.
21. Choice of Law. This Agreement shall be construed
in accordance with and governed by the laws of the State of
Delaware, without giving effect to principles of conflicts of
laws.
22. Counterparts. This Agreement may be executed in
one or more counterparts, each of which is an original but all of
which shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereof have caused this
instrument to be duly executed as of the day and year first above
written.
FOODMASTER INTERNATIONAL L.L.C.
By API Dairy Partners L.P.,
Member
By Agribusiness Holding
Company L.L.C., its
general partner
By__________________________
Xxxxxx X. Xxxxxx, President
DEVELOPED TECHNOLOGY RESOURCE, INC.
By_________________________________
Xxxx X. Xxxx, President
