EXHIBIT 10.21
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SERVICES AGREEMENT
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THIS AGREEMENT, dated as of January __, 2000, is by and between ISOLYSER
COMPANY, INC., a Georgia corporation ("Isolyser"), and MINDHARBOR, INC., a
Georgia corporation which is wholly owned by Isolyser ("MindHarbor").
R E C I T A L S :
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R-1. Isolyser has organized MindHarbor with the current plan and intention
to out source to MindHarbor, as an independent company, certain services
previously provided within Isolyser related to technology and investor
relations.
R-2. Recognizing that MindHarbor is currently a wholly owned subsidiary of
Isolyser, Isolyser desires to enter into this Agreement for purposes of
expressing its current intentions to accomplish the aforesaid objects and
purposes, but without any intent of creating any obligation which cannot be
modified solely upon the approval of Isolyser and MindHarbor. For these
purposes, because Isolyser currently controls MindHarbor, Isolyser may currently
modify this Agreement at any time in its discretion and no third party shall
have any legally protected rights by virtue of this Agreement.
NOW, THEREFORE, with due regard to the foregoing recitals, Isolyser and
MindHarbor agree as follows:
1. Scope of Services. MindHarbor will provide Isolyser telecommunication
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management, computer support and maintenance, network support and management,
internet service and development as previously provided to Isolyser internally
through its employees and facilities.
2. Fees for Services. (a) The fees payable by Isolyser for services
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provided by MindHarbor under this Agreement shall include the salary and
benefits of employees transferred from Isolyser to MindHarbor. Such salary and
benefits are more particularly set forth on Exhibit A attached hereto and
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incorporated herein by reference. In addition, Isolyser shall provide to
MindHarbor accounting/bookkeeping services, human resources consulting and
general office services at no cost so long as Isolyser and MindHarbor share
common office facilities.
(b) MindHarbor will on a periodic basis issue reports to Isolyser
detailing costs incurred by Isolyser for the services. MindHarbor shall
cooperate with all reasonable requests of Isolyser in order that Isolyser may
verify the contents of such report and the actual amount of costs incurred by
Isolyser for the services.
(c) Unless and until otherwise determined by Isolyser, Isolyser shall
pay fees under this Agreement by payment directly to the third party vendor
issuing the invoice or accruing the expense for the various line item component
of the fees set forth in this paragraph.
3. Limitation on Authority. MindHarbor hereby acknowledges and confirms
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that it shall not have authority to incur any costs or expenses without
complying with such policies and procedures as may from time to time be in
effect at Isolyser to approve such costs and expenses.
4. Term.
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(a) Isolyser expects that the term of this Agreement shall be for two
years, namely 2000 and 2001. Isolyser and MindHarbor may agree to extend the
term of this Agreement. This Agreement may be earlier terminated as set forth in
this paragraph.
(b) Isolyser may terminate this Agreement upon notice to MindHarbor
(i) in the event that the quality of services provided by MindHarbor to Isolyser
are not reasonably satisfactory and MindHarbor fails to satisfy the reasonable
requests of Isolyser to improve the quality of such services within thirty days
after notifying MindHarbor of any issues with respect to such services, and (ii)
in the event of the occurrence of any event which Isolyser reasonably determines
constitutes a change of control of Isolyser, Isolyser may terminate this
Agreement upon notice to MindHarbor. In the event of such a termination of this
Agreement following a change of control, the Promissory Note (as defined below)
shall be cancelled and management of MindHarbor shall acquire 75% of the shares
of MindHarbor on a fully diluted basis as contemplated by Section 5 below.
(c) Isolyser may terminate this Agreement for convenience. In the
event of such termination for convenience, Isolyser will pay a termination fee
equal to 50% of the total salary and benefits set forth on Exhibit A for the
remaining balance of the term of this Agreement as if this Agreement was to
expire on December 31, 2001.
5. Incentive Terms. Isolyser desires to create an incentive for
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management of MindHarbor to pay the Promissory Note described below; such
management of MindHarbor acknowledges that Isolyser may modify these incentive
provisions at any time in its discretion and these incentives are not vested or
legally enforceable rights of management. For purposes of this Agreement,
management of MindHarbor means Michael Mabry, Craig Smith and Mike Blasdell.
Isolyser's current intention is that management will acquire up to 75% of the
shares of MindHarbor on a fully diluted basis based on the following formula:
The amount by which MindHarbor shall reduce prior to its maturity
date the principal indebtedness outstanding under that certain
Promissory Note (the "Promissory Note") in the principal face
amount of $150,000 dated of even date with this Agreement made by
MindHarbor and payable to the order of Isolyser.
Following the end of each calendar year during the term of this Agreement,
Isolyser will review appropriate data to determine the amount, if any, of shares
management may have acquired in MindHarbor under the foregoing clause. In the
event any such shares are to be issued to
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management, such shares will be issued in the following percentages: Michael
Mabry 23%, Craig Smith 26% and Mike Blasdell 26%. Fractional shares will be
disregarded and not issued. To illustrate such potential share acquisition by
management, assume that MindHarbor had paid $64,500 of principal, in addition to
interest payments, under the Promissory Note during 2000 (which would represent
43% of the indebtedness evidenced by the Promissory Note). In such event,
Isolyser would issue 47 shares in total to Messrs. Mabry, Smith and Blasdell,
determined as follows:
. $64,500 principal payment against $150,000 principal is 43%
. 43% of 75% is 32.25%
. Number of shares to be issued to represent 32.25% of fully diluted
stock is 47.6
All shares issued to management will be pledged as security for the Promissory
Note so that if the indebtedness evidenced by the Promissory Note is not paid on
or before maturity, such shares issued to management will be forfeited to
Isolyser.
6. Miscellaneous. This Agreement shall be governed by Georgia law. This
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Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same agreement.
Any notice required by this Agreement shall be given to Isolyser at its
principal place of business to the attention of its president, and to MindHarbor
at the principal place of business of Isolyser to the attention of its
president. Any such notice shall be effective upon delivery to such offices.
This Agreement may not be transferred or assigned by either party without the
consent of the other party hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the first date first above written.
ISOLYSER COMPANY, INC.
By:____________________________
Name:__________________________
Title:_________________________
By:_____________________________
Name:___________________________
Title:__________________________
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