Exhibit 10.1

 

MANAGEMENT SERVICES AGREEMENT

 

This Management Services Agreement (the “Agreement”) is entered into as of this
12th day of August, 2005, by and between Devcon International Corp., a Florida
corporation (the “Company”), and Royal Palm Capital Management, LLLP, a Florida
limited liability limited partnership (the “Manager”).

 

W I T N E S S E T H

 

WHEREAS, Manager has provided, and in the future will provide, Management
Services to the Company as defined herein below.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, the
parties hereby agree as follows:

 

1. Management Services. Subject to the oversight and review by the Company’s
Board of Directors and its Chief Executive Officer, the Manager hereby agrees to
provide the Company with the following management services (the “Management
Services”):

 

  (a) assisting the Company in establishing certain office, accounting and
administrative procedures;

 

  (b) assisting the Company in trying to obtain financing relating to business
operations and acquisitions;

 

  (c) helping the Company in developing and implementing advertising,
promotional and marketing programs;

 

  (d) advising the Company with respect to securities matters as well as future
acquisitions and dispositions;

 

  (e) assisting the Company in developing tax planning strategies;

 

  (f) assisting the Company in formulating risk management policies; and

 

  (g) providing and assisting in such other services as may be reasonably
requested by the Company and may be agreed to by the Manager.

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2. Standard of Care. Manager hereby covenants with the Company to:

 

  (a) perform or take (or cause to be performed or taken) its functions,
responsibilities and duties hereunder in a professional, competent and efficient
manner;

 

  (b) carry out its duties as Manager fairly, honestly, in good faith and in the
best interests of the Company;

 

  (c) exercise the degree of care, diligence and skill that a reasonably prudent
manager would exercise in comparable circumstances; and

 

  (d) perform the Management Services to the satisfaction of the Company and
give the Company full and prompt cooperation in the performance of all aspects
of the Management Services.

 

3. Management Fee and Reimbursement of Costs.

 

  (a) Management Fee. Retroactive to April 18, 2005 and for the term hereof, the
Company shall pay the Manager a management fee in the aggregate amount of
$30,000 per month (the “Monthly Management Fee”). The Company shall pay the
Monthly Management Fee within ten (10) business days following each monthly
period during the Term.

 

  (b) Reimbursement of Costs. The Manager shall be reimbursed for all reasonable
out-of-pocket costs, fees or expenses incurred, or expenditures made in
connection with the performance by the Manager of its duties hereunder. Except
for the management fee and the reimbursement of such costs, fees and expenses
pursuant to this Section 3, there shall be no fees or other sums paid to Manager
for the services provided by Manager during the term hereof.

 

4. Other Interests and Conflicts. The parties recognize that certain officers
and directors of the Manager will also serve as directors of the Company. The
Manager is engaged directly and through its affiliates in various
investment-related businesses. Nothing in this Agreement is intended to preclude
the Manager and its affiliates from engaging in or possessing an interest in
other business ventures of any nature or description, independently or with
others, whether currently existing or hereafter created, including the
acquisition, management, operation and sale of businesses similar to the
business of the Company.

 

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5. Term and Termination.

 

  (a) Term. This Agreement shall commence as of the date hereof and shall
continue for an initial term of one (1) year. At the end of the initial one-year
period, this Agreement shall be automatically renewed on a month to month basis
thereafter unless terminated by either party upon thirty (30) days notice.

 

  (b) Termination. This Agreement may be terminated at any time, upon the mutual
written agreement of the parties hereto. In addition, either party may terminate
this Agreement for cause in the event the other party materially breaches its
duties and obligations under the terms of this Agreement or is in default of any
of its obligations hereunder, which breach or default is incapable of cure, or
if capable of being cured, has not been cured within thirty (30) days after
receipt of written notice from the non-defaulting party or within such
additional period of time as the non-defaulting party may authorize in writing.
In order to determine whether the Manager has materially breached or is in
default of any of its duties and obligations hereunder, vote of the Audit
Committee of the Board of Directors of the Company shall be required.

 

6. Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been given if sent by
registered or certified mail, first class postage prepaid, return receipt
requested, to the address of such parties set forth below or such other future
address as may be specified by any party by notice to all of the other parties.
Such communications may also be given by personal delivery, by facsimile or by
regular mail, but shall be effective only if and when actually received.

 

If to the Company, at:

 

Devcon International Corp.

Attn: CEO

1350 E. Newport Center Drive

Suite 201

Deerfield Beach, Florida 33442

 

If to Manager, at:

 

Royal Palm Capital Management, LLLP

595 South Federal Highway

Suite 600

Boca Raton, Florida 33432

 

7. Amendment. This Agreement may not be modified, amended, altered or
supplemented except upon execution and delivery of a written agreement executed
by the parties hereto.

 

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8. Miscellaneous.

 

  (a) Disputes. Any dispute, controversy or claim arising between the Manager
and the Company arising out of or relating to this Agreement, including, without
limitation, any question regarding the Monthly Management Fee, or the existence,
validity, termination, interpretation of any term hereof or either party’s
performance obligations hereunder shall be finally settled by arbitration in
accordance with the International Arbitration Rules of the American Arbitration
Association (“AAA”) in effect at the time of the arbitration (the “Arbitration
Rules”). The AAA shall be the appointing authority and responsible for
administering any arbitration hereunder in accordance with the Arbitration
Rules. The place of arbitration shall be in Broward County, Florida. The
language of the arbitration shall be English. The arbitration shall be conducted
by a single arbitrator who shall be a professional, legal or otherwise but shall
not be, or have previously been, associated with any party to this Agreement
(the “Arbitrator”). The arbitral award shall be final, binding and
non-appealable. Any award rendered by the Arbitrator may be confirmed, judgment
upon any award rendered may be entered and such award or the judgment thereon
may be enforced or executed upon, by any court having jurisdiction over any of
the parties or their respective assets. The Arbitrator’s award must be reasoned
and issued in writing within thirty (30) days of the hearing, unless otherwise
agreed to by the Manager and the Company.

 

  (b) Binding Effect and Assignment. The provisions hereof shall be binding
upon, inure to the benefit of and shall be enforceable by the parties and their
respective heirs, personal representatives, successors and permitted assigns.
This Agreement may not be assigned without the prior written consent of the
parties hereto.

 

  (c) Entire Agreement. This Agreement and the additional documents referenced
herein merge all prior negotiations and agreements between the parties relating
to the subject matter hereof and constitute the entire agreement between the
parties relating to such subject matter. No prior or contemporaneous agreements,
except as specified herein, written or oral, relating to such subject matter
shall be binding.

 

  (d) Further Assurances. Each party hereto specifically covenants and agrees
that it will execute such other and further instruments and documents as are or
may become necessary or convenient to effectuate and carry out the provisions of
this Agreement.

 

  (e) Counterparts. This Agreement may be executed simultaneously in multiple
counterparts, all of which together shall constitute one and the same
instrument.

 

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  (f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Management
Services Agreement to be signed by it’s duly authorized officer as of the date
first written above.

 

DEVCON INTERNATIONAL CORP. By:  

/s/ Stephen J. Ruzika

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Name:   Stephen J. Ruzika Title:   President ROYAL PALM CAPITAL MANAGEMENT, LLLP
By:  

/s/ Robert Farenhem

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Name:   Robert Farenhem Title:   Principal

 

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