EXHIBIT 10.2
MANAGEMENT AND ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT is made and entered into as of the 8th day of
September, 1997, by and between Datatrend, Inc., a Massachusetts corporation
("Datatrend"), and Genco Management Company, a Pennsylvania corporation ("GMC").
WHEREAS, Datatrend has requested GMC to provide certain
management, administrative and support services to Datatrend in connection with
its operations; and
WHEREAS, GMC has agreed to provide Datatrend with such
management, administrative and support services upon the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements herein, and intending to be legally bound hereby, the
parties agree as follows:
1. Services to be Performed.
(a) GMC agrees to provide to Datatrend during the term of this
Agreement management of the day-to-day business operations of Datatrend,
including but not limited to those management, administrative and support
services set forth on Exhibit A of this Agreement (collectively, the
"Services"). In no event, however, shall GMC have any responsibility or
liability with respect to environmental or occupational health and safety
matters under any federal, state or local laws, rules or regulations, arising
prior to the commencement of the Services. Datatrend agrees that, in the
performance of the Services, GMC shall have no fiduciary responsibilities to
Datatrend but shall have the right to take , and shall take, such actions as
GMC, in a commercially reasonable manner, deems to be appropriate with respect
to the management of Datatrend's operations, including but not limited to the
liquidation of Datatrend's inventory or other assets, the collection of accounts
receivable (including any discounting of the same), the compromise or settlement
of accounts payable, and the hiring or termination of employees of Datatrend
(subject, in the case of termination of employees, to the prior approval of Xxxx
X. Xxxxxx).
(b) The parties understand and agree that, subject to the
authority of the Board of Directors of Datatrend. Datatrend through Xxxx Xxxxxx
and its other officers shall cooperate with GMC in the performance of GMCAEs
duties hereunder during the term of this Agreement. Datatrend acknowledges and
agrees that any acts or actions of Xx. Xxxxxx during the term of this Agreement
pursuant to the preceding sentence shall not be deemed to breach or conflict
with the obligations of Xx. Xxxxxx under the employment agreement, dated January
30, 1995, by and between Xx. Xxxxxx and Datatrend (the "Employment Agreement"),
including specifically Section 5 of the Employment Agreement.
2. Term of Agreement; Termination. (a) The term of this Agreement shall
commence on September 8, 1997 and shall continue until terminated as follows:
(i) by GMC by giving to Datatrend at least twenty (20) days' prior
written notice of its intent to terminate (A) within 90 days after GMC has paid
the sum of at least $500,000 to Datatrend pursuant to Section 4 hereof or within
30 days after GMC has paid at least $50,000 of additional funds pursuant to such
Section, or (B) in the event that the Board of Directors of Datatrend overrules
or countermands any decision made by GMC or policy implemented by GMC in the
performance of the Services hereunder, or (c) in the event that GMC becomes
aware of any potential liability under any federal, state or local law,
regulation, order, decree or ordinance regulating environmental or occupational
health and safety matters, which liability is believed by GMC to have a
potential material adverse effect on the Business; or
(ii) by either party immediately upon the termination of the Purchase
Agreement, dated as of September 8, 1997, by and between GMC and Datatrend and
Datatrend Services, Inc. (the "Purchase Agreement").
(b) In addition, GMC shall have the right to terminate this
Agreement immediately if (i) Datatrend or Datatrend Services, Inc.
("DSI") shall commence any cause, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
them, or seeking to adjudicate them a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to their debts,
or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for Datatrend or DSI or for all or any substantial
part of the assets of Datatrend or DSI; or (ii) Datatrend or DSI shall
make a general assignment for the benefit of creditors; or (iii) there
shall be commenced against Datatrend or DSI any case, proceeding or
other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of sixty (60) days; or (iv) there shall be commenced against
Datatrend or DSI any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets, which results in the
entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within thirty
(30) days from the entry thereof; or (v) Datatrend or DSI shall take
any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clauses (i), (ii),
(iii) or (iv) above.
3. Management Fee and Expenses. As consideration for providing the
Services, Datatrend shall pay to GMC for each month, without setoff,
counterclaim or deduction, the sum of $2,500.00 (such amount is hereinafter
referred to as the "Management Fee"), which fee shall be prorated in the case of
a partial month. In addition, Datatrend shall pay to GMC an amount equal to the
actual out of pocket costs of Direct Services (as hereinafter defined) provided
to Datatrend by or through GMC (the "Direct Services Fee"). For purposes of this
Agreement, the term "Direct Services" shall mean any products and
non-administrative services performed by non-executive personnel of GMC or
purchased by GMC from a third party, including an affiliate of GMC, on
commercially reasonable terms and provided to Datatrend, including but not
limited to those described on Exhibit B attached hereto. Direct Services shall
not include any allocation of general and administrative expenses or overhead
expenses of GMC or its affiliates. Within ten (10) days following the end of
each month, GMC shall provide Datatrend with an invoice for the Management Fee
and also showing in reasonable detail the manner in which the Direct Services
Fee was determined, and the Management Fee and Direct Services Fee shall be paid
by Datatrend within ten (10) days after the receipt of such invoice. A late fee
of 1% shall be payable with respect to any fees not paid when due as provided
herein.
In addition, GMC shall be entitled to receive any net
operating income of Datatrend during the term of this Agreement and shall
promptly reimburse Datatrend for any losses from the operations of Datatrend
during the term of this Agreement. All income or losses generated from the
liquidation of assets of Datatrend as of the date hereof or the discharge,
settlement or compromise of Datatrend's liabilities as of the date hereof shall
be excluded from the calculation of net operating income or losses under this
paragraph. For purposes of this
Section 3, "net operating income" of Datatrend shall mean all net earnings
attributable to the Business, before taxes and interest, using the accrual
method of accounting in accordance with generally accepted accounting
principles, consistently applied with the principles heretofore used by
Datatrend.
4. Payments by GMC. GMC agrees that it will pay to Datatrend up to
$500,000 in the aggregate for the term of this Agreement (collectively, the
"Payments") in installments as needed to fund operating losses arising from the
ordinary course of Datatrend's business operations during the term of this
Agreement or for working capital; however, no portion of the Payments shall be
applied to any extraordinary items, including but not limited to costs
associated with litigation. GMC may, but shall not be obligated to, pay to
Datatrend additional sums in excess of $500,000. In the event of the termination
of this Agreement, Datatrend shall not be obligated to repay any Payments made
under this Section 4.
5. Access. Datatrend shall grant to GMC and its employees, officers,
agents, designees and representatives who are participating in the provision of
the Services full and complete access to the facilities, books, records, assets
and personnel of Datatrend in order to permit GMC to perform the Services in
accordance with this Agreement.
6. Release from Liability. Datatrend hereby remises, releases and
forever discharges, and for its successors and assigns, does hereby remise,
release and forever discharge, GMC and its successors, assigns, directors,
officers and employees from any and all liabilities, claims, demands, rights and
causes of action of whatever kind or nature arising out of or resulting from the
provision of Services hereunder, except to the extent that said liabilities
arise out of or result solely from the breach by GMC of its obligations
hereunder.
In addition, Datatrend agrees to indemnify, defend and hold harmless
GMC (and its directors, officers, employees, affiliates and assigns), to the
extent that Datatrend has insurance to cover such losses, from and against any
and all losses, damages (including incidental and consequential damages),
expenses (including court costs, reasonable attorney's fees, interest expenses
and amounts paid in compromise or settlement), suits, actions, claims,
penalties, liabilities or obligations, related to, caused by arising or on
account of the business of Datatrend, including but not limited to any claims
asserted against GMC relating in any way to the provision of Services hereunder
in conformity with the provisions hereof, or the failure of Datatrend to comply
with any covenant, provision or agreement of Datatrend contained herein.
Datatrend agrees to maintain in effect during the term of this
Agreement policies of insurance covering the assets and business of Datatrend in
such amounts and such types of coverage as GMC, in its sole discretion, deems to
be adequate. Datatrend shall, upon the execution of this Agreement, take all
actions necessary to ensure that GMC is named as an additional insured on all
policies of insurance covering the business or assets of Datatrend. Datatrend
shall promptly provide GMC with certificates of insurance showing that GMC has
been named as an additional insured and also stating that any notice of
non-renewal or cancellation or such policies shall be sent to GMC at least
thirty (30) days prior to such non-renewal or cancellation.
7. Limitation of Damages. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL,
INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF THE PROVISION OF SERVICES OR
OTHERWISE UNDER THIS AGREEMENT. GMC ASSUMES NO OBLIGATION OR LIABILITY FOR ANY
ADVICE GIVEN IN
CONFORMITY WITH THE PROVISIONS HEREOF WITH RESPECT TO THE PROVISION OF SERVICES
HEREUNDER; ALL SUCH ADVICE IS PROVIDED AND ACCEPTED AT DATATREND'S SOLE RISK.
GMC HAS MADE SUCH INVESTIGATION OF DATATREND'S AFFAIRS AS GMC DEEMED
APPROPRIATE, AND DATATREND HAS MADE NO REPRESENTATION OR WARRANTY WITH RESPECT
TO ITS FINANCIAL CONDITION, ASSETS, PROSPECTS OR ANY OTHER MATTER EXCEPT AS
PROVIDED HEREIN AND IN THE PURCHASE AGREEMENT.
8. Confidentiality and Non-Compete. GMC agrees that, during the term of
this Agreement and for six months thereafter except in connection with the
performance of Services hereunder, neither GMC nor any of its affiliates will
directly or indirectly (i) disclose or use any confidential or proprietary
information regarding Buyers of the products and services offered by the
Business or (ii) conduct any business whatsoever with any Buyer or (iii) hire or
otherwise retain any person who was at any time during the one-year period
preceding the date of this Agreement an employee or consultant to Datatrend;
provided, however, that this clause (iii) shall be void and have no further
force or effect in the event that this Agreement is terminated by GMC pursuant
to Section 2(b) hereof. For purposes of this Section 8, "Buyer" shall mean an
entity that was an existing buyer of the products and services offered by the
Business or conduct prior to the date of this Agreement and that was not, at
that date, an existing buyer of the products and services offered by GMC or its
affiliates. Except as set forth in this Section 8, GMC and its affiliates shall
have no other obligations to Datatrend with respect to confidentiality and
non-competition.
9. Force Majeure. Neither party shall be liable for any delay in the
performance of its obligations hereunder due to any cause beyond its reasonable
control, including, but not limited to, fires, floods, strikes, or other labor
disputes, accidents to machinery, delay in performing the Services because of
the installation or removal of data processing equipment, production shutdowns,
shortages of fuel, acts of sabotage, riots, precedence or priorities granted at
the request or for the benefit, directly or indirectly, of the federal or any
state government or any subdivision or agency thereof, delay in transportation
or lack of transportation facilities, or restrictions imposed by federal, state
or other governmental legislation or rules or regulations thereof.
10. Independent Relationship. GMC and Datatrend acknowledge and agree
that the relationship created by this Agreement is that of owner and independent
contractor, and this Agreement is not intended to create any other relationship
between the parties, including, without limitation, a partnership or joint
venture, nor shall GMC be deemed to be in control of Datatrend in any way.
11. Authority; Authorizations. Datatrend represents and warrants to GMC
that Datatrend has the power and authority to enter into this Agreement and to
perform its obligations hereunder, and that it has taken all necessary corporate
action required to be taken to authorize the execution, delivery and performance
of this Agreement by Datatrend. GMC represents and warrants to Datatrend that
GMC has the power and authority to enter into this Agreement and to perform its
obligations hereunder, and that it has taken all necessary corporate action
required to be taken to authorize the execution, delivery and performance of
this Agreement by GMC.
12. Assignment. Neither party shall assign its rights under this
Agreement or its interest herein without the other party's prior written
consent.
13. Non-Waiver. Failure of either party hereto to enforce any of the
terms and provisions herein or to exercise any right accruing through the
default of the other party shall not constitute a waiver of other or
future defaults of the defaulting party.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
principles of conflicts of law thereof.
15. Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement, or a breach hereof, shall be settled by arbitration
in Pittsburgh, Pennsylvania, before a panel of arbitrators selected by the
American Arbitration Association ("AAA") and in accordance with the Commercial
Arbitration Rules of the AAA. and judgment upon the award rendered may be
enforced in any court having jurisdiction thereof. The fees and costs of such
arbitration, including the fees and costs of the attorneys for the parties,
shall be apportioned between the parties by the arbitrators.
16. Guaranty. Genco I, Inc. owns all of the outstanding shares of
capital stock of GMC. By countersigning this Agreement, Genco I, Inc. guarantees
the obligations of GMC hereunder. This is a guaranty of payment, not of
collection. Datatrend shall not be required to proceed first against GMC before
proceeding against Genco I, Inc. on this guaranty.
17. Entire Agreement. This Agreement constitutes the entire agreement
between the parties relative to the subject matter of this Agreement. This
Agreement expressly supersedes all prior negotiations, representations, offers,
letters, contracts, writings or other agreements or understandings with respect
hereto. No change, amendment or modification hereof shall be valid unless it is
made in writing and signed by both GMC and Datatrend.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
Attest: Genco Management Company
___________________________ By: /s/ Xxxxxxx X. Xxxxxx
__________________________________
Title: President
________________________________
Attest: Genco I, Inc.
___________________________ By: /s/ Xxxxxxx X. Xxxxxx
__________________________________
Title: President
_______________________________
Attest: Datatrend, Inc.
__________________________ By: /s/ Xxxx Xxxxxx
___________________________________
Title: President
________________________________
Xxxx X. Xxxxxx executes this Agreement for the sole purpose of
acknowledging and agreeing to the provisions of Section 1(b) hereof.
/s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
Date: September 8, 1997
-----------------------------
Datatrend Services, Inc., the holder of all of the issued and
outstanding shares of common stock of Datatrend, Inc., acknowledges and agrees
to the foregoing Management and Administrative Services Agreement.
Datatrend Services, Inc.
By: /s/ Xxxx X. Xxxxxx
_________________________________
Title: President
______________________________
Date: September 8, 1977
_______________________________
