EXHIBIT 10.6

 

MANAGEMENT SERVICES AGREEMENT

 

THIS MANAGEMENT SERVICES AGREEMENT (the “Agreement”) is entered into as of the
1st day of October, 2008 (the “Effective Date”), by and between BRAND BUILDERS
RX, LLC, a Delaware limited liability company (“Company”), and BRAND BUILDERS
INTERNATIONAL, LLC, a Delaware limited liability company (“Brand Builders”). The
Company and Brand Builders are hereunder also referred to collectively as the
“Parties” and individually as a “Party”. All capitalized terms used herein
without definition shall have the meanings set forth in the Operating Agreement
of the Company, dated as of October 1, 2008.

 

W I T N E S S E T H:

 

WHEREAS, Brand Builders is in the business of providing administrative and
marketing services; and

 

WHEREAS, Company desires to contract with Brand Builders, upon the terms and
conditions hereafter set forth, to render such services to and on behalf of
Company.

 

NOW, THEREFORE, in consideration of the mutual promises contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby mutually acknowledged, the Parties agree as follows:

 

1.         Management Services. On the terms and subject to the conditions set
forth herein, Company hereby retains Brand Builders, and Brand Builders hereby
agrees to be retained, for the purpose of providing the marketing,
administrative and marketing services (“Management Services”) described in
Schedule 1 hereto. Brand Builders will provide Management Services through its
officers, employees and agents which shall, in any event, include Ilonka Harezi
and/or Courtland Reeves. In addition to the Management Services, Brand Builders
shall make Ms. Harezi and/or Mr. Reeves available to serve as officers and
members of the Board of Managers of the Company and in such other capacities as
the Board of Managers shall direct, and Brand Builders and its employees and
agents shall report directly to the Board of Managers of the Company. Generally,
Management Services shall be provided at the direction of the Board of Managers
of the Company.

 

2.         Nature of Engagement. It is intended that Brand Builders shall
provide Management Services consistent with the terms of the Operating
Agreement, the terms of which are incorporated herein and made a part hereof to
the extent relevant. Brand Builders, its members, managers, officers, employees
and agents (collectively and individually unless otherwise required by the
context, “Brand Builders”) shall serve as agents of the Company with such
authority and responsibilities as may be delegated to them from time to time by
the Board of Managers and consistent with any office to which they are elected
or appointed. Nothing herein shall be construed to prohibit Brand Builders, its
members, managers, officers, employees or agents from engaging in other services
for themselves or third parties provided that such services

 

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are not inconsistent with or in opposition to the services and duties that such
parties have under this Agreement, the Operating Agreement or applicable law.

 

3.         Management Fee. As compensation for rendering the Management
Services, Company shall pay Brand Builders an amount equal to ten percent (10%)
(“Fee”) of the total amount of Distributable Cash distributed to the Members,
other than the Tax Allowance Amount (as such terms are defined in the Operating
Agreement). The Fee shall be payable to Brand Builders at such times as the
Company makes distributions to its Members in accordance with the Operating
Agreement, other than in the case of a distribution solely of the Tax Allowance
Amount. In addition, Brand Builders shall be reimbursed for all reasonable
expenses incurred in connection with the performance of is duties under this
Agreement, subject to provision of receipts and other documentation reasonably
necessary for the Company’s tax and business records. Neither Brand Builders,
nor its members, managers, officers, employees or agents shall be paid any other
compensation for Management Services, except as expressly agreed between the
Company and Brand Builders or the relevant person, and except for any
distributions to which Brand Builders is entitled as a member under the terms of
the Operating Agreement. Brand Builders acknowledges its sole responsibility for
all federal and state withholding taxes, Federal Insurance Contribution Act
taxes, workers’ compensation and unemployment taxes and like obligations with
respect to the Fee. At the end of each calendar year during the term of this
Agreement, the Company shall issue a Form 1099 to Brand Builders with respect to
the Fee.

 

4.         Representations and Warranties of the Parties. Each Party hereby
represents and warrants to the other Party that, as of the date hereof, the
following statements are true and correct:

 

(a)    Organization. Such Party is a limited liability company validly existing
under the laws of the state of Delaware, and has the power and authority as a
limited liability company to enter into and perform this Agreement.

 

(b)    Authorization. All action as a limited liability company on the part of
such Party necessary for the authorization, execution and delivery of this
Agreement and for the performance of its respective obligations hereunder has
been taken, and this Agreement when fully executed and delivered, shall
constitute a valid, legally binding and enforceable obligation of such Party.

 

(c)    Effect of this Agreement. Such Party’s execution, delivery and
performance of this Agreement will not violate any agreement, including but not
limited to its respective operating agreements, to which such Party is bound.

 

5.         Term. The term of this Agreement shall commence on the Effective Date
hereof and shall continue in full force and effect until and unless terminated
by the mutual consent of the Parties or otherwise terminated pursuant to this
Section 5. Company may terminate this Agreement at its option in the event Brand
Builders fails to perform, in any material respect, any of its obligations
hereunder, after reasonable notice and an opportunity to cure, and Brand
Builders may terminate this Agreement at its option in the event that Company
fails to perform, in any material respect any of its obligations hereunder,
after reasonable notice and an

 

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opportunity to cure. In addition, this Agreement shall automatically terminate
without notice in the event that Brand Builders, Ilonka Harezi or Courtland
Reeves cease to own equity interests totaling not less than ten percent (10%) of
the Company’s equity interests, or Ilonka Harezi and Courtland Reeves are unable
to participate in the performance of the Management Services as provided herein,
whether because of death or disability (hereinafter referred to as “totally
disabled” or under “total disability”) and such total disability continues for
longer than ninety (90) days in any 365 day period, or otherwise is unable to
perform under this Agreement for a period of ninety (90) days or more in any 365
day period. In addition, this Agreement may be terminated by the Company for
“Cause.” As used herein, “Cause” means:

 

(a)       the intentional breach by Brand Builders of any duty of loyalty owed
to the Company in the capacity as an officer or member of the Board of Managers
of the Company that results in a material adverse effect on the Company; or

 

(b)

an act of fraud relating to the Company.

 

6.         Relationship of the Parties. Nothing herein shall be construed to
create an employer-employee relationship between the Company and Brand Builders.
Brand Builders is an independent contractor and not an employee of the Company
or any of its subsidiaries or affiliates. The Fee set forth in Section 2 shall
be the sole consideration due to Brand Builders for the services rendered
hereunder. It is understood that Brand Builders as an independent contractor is
solely responsible for all taxes, withholdings and other statutory or
contractual obligations of any sort. Brand Builders will not represent to be or
hold itself out as an employee of the Company. Brand Builders will ensure that
its employees and agents are bound to and comply with Brand Builders’
obligations under this Agreement.

 

7.

Miscellaneous

 

(a)       Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective legal representatives,
successors and assigns.

 

(b)       Notices. Any notice, payment, or communication required are permitted
to be given by any provision of this Agreement shall be deemed delivered,
whether actually received or not (i) when hand delivered, (ii) on the third
(3rd) day after being deposited in United States Postal Service depository,
first class postage prepaid, registered or certified mail, return receipt
requested or (iii) on the next day after being sent by a nationally recognized
overnight courier (e.g. Federal Express), in any case addressed to such party to
the address as set forth below:

 

If to the Company:

 

Hydron Technologies, Inc.

82 Verissimo Drive

Novato, CA 94947

Attention: Richard Banakus, Chairman and Interim President

 

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If to Brand Builders:

 

Brand Builders International, LLC

645 East Atlantic Avenue

Delray Beach, Florida

 

Attention:

Ilonka Harezi, Manager

 

(c)       Headings. The article and section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

(d)       Assignment. This Agreement and the services contemplated hereunder are
personal to Brand Builders and Brand Builders shall not have the right or
ability to assign, transfer, or subcontract any obligations under this Agreement
without the prior written consent of the Company. Any attempt to so shall be
void.

 

(e)       Counterparts; Facsimile and PDF Signatures. This Agreement and any
amendments hereto may be executed in one or more counterparts, or PDF each of
which shall be deemed an original and all of which together will constitute one
and the same instrument. Electronic facsimile transmission of the signature of a
Party, any amendment to this Agreement or notice required or contemplated by
this Agreement shall be deemed to be an original signature and binding for
purposes of the document for which it relates.

 

(f)        Further Assurances. The Parties hereto will execute and deliver such
further instruments and do such further acts and things as may be reasonably
required to carry out the intent and purposes of this Agreement.

 

(g)       No Third-Party Beneficiary. This Agreement is made solely and
specifically between and for the benefit of the parties hereto, and their
respective successors and assigns subject to the express provisions hereof
relating to successors and assigns, and no other person shall have any rights,
interest or claims hereunder or be entitled to any benefits under or on account
of this Agreement as a third-party beneficiary or otherwise.

 

(h)       Amendment. The Company and Brand Builders hereby irrevocably agree
that no attempted amendment, modification, termination, discharge or change of
this Agreement shall be valid and effective unless the Parties shall agree in
writing to such amendment.

 

(i)        Entire Agreement. This Agreement, the Operating Agreement and the
Related Agreements contains the entire agreement between the parties and
supersedes all prior negotiations or agreements, whether written or oral,
between them with respect to the matters set forth herein.

 

(j)        Venue and Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Florida, without regard
to its conflict of laws principles, and, to the extent permitted by law venue in
any action arising hereunder in connection herewith shall be exclusively Broward
County, Florida.

 

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(k)       Attorney Fees. If any Party hereto is required to engage in litigation
or other legal proceeding against any other party hereto, either as plaintiff or
as defendant, in order to enforce or defend any of its or his rights under this
Agreement, and such litigation or proceeding results in a final judgment or
ruling in favor of such party (“Prevailing Party”), then the party or parties
against whom said final judgment or ruling is obtained shall reimburse the
Prevailing Party for all direct, indirect or incidental expenses incurred,
including, but not limited to, all reasonable attorneys’ fees (including
paralegal fees), court costs, and other expenses incurred throughout all
negotiations, proceedings, trials or appeals undertaken in order to enforce the
Prevailing Party’s rights hereunder.

 

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IN WITNESS WHEREOF, the Parties hereunto have executed this Agreement to be
executed the day and year first above written.

 

COMPANY

 

BRAND BUILDERS RX, LLC

 

 

By:

/s/s David Pollock

 

Name:

David Pollock

 

Title:

Vice President

 

 

BRAND BUILDERS

 

BRAND BUILDERS INTERNATIONAL, LLC

 

 

By:

/s/s Ilonka Harezi

 

Name:

Ilonka Harezi

 

Title:

Manager

 

Signature Page to

Management Services Agreement

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SCHEDULE 1

 

MANAGEMENT SERVICES

 

Management

 

Provide personnel to serve on the Board of Managers and as officers of the
Company with such duties as may be assigned to them from time to time by the
Board of Managers, including primary responsibility for the management and
administration of the Company’s existing business, and planning for business
expansion, including without limitation, the following:

 

 

•

development of budgets and projections for future operations,

 

•

development and oversight of internal controls,

 

•

recruiting and oversight of personnel, including all human resource related
issues such as:

 

o

compensation

 

o

benefits

 

o

work relations

 

o

compliance with federal and state requirement

 

•

product production and quality control

 

o

vendor and customer relations

 

•

product distribution

 

•

cash management

 

•

insurance and other risk management services

 

•

financing, including:

 

o

vendor terms

 

o

customer terms

 

o

bank financing for working capital purposes including inventory purchases

 

o

equity and debt financing for growth and acquisitions

 

o

equipment leasing and other leasing transactions

 

•

information services

 

•

technology services including

 

o

product development

 

o

intellectual property protection and compliance

 

Marketing

 

Develop and implement, including by contracting with qualified third parties, a
marketing plan and strategy for the company’s current and future products,
including through use of print and electronic media; oversight over company
websites, catalogues, and other marketing materials and initiatives, packaging
and containers and labeling; review and oversight of internal and independent
sales representatives; review and oversight of branding of products and company

 

Schedule 1-1

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