Management Service Agreement
SportsStar Marketing, Inc. and Chartwell International, Inc. are hereby
entering into a Management Service Agreement to provide SportsStar with the
following services:
1. Raising capital for SSMK as required.
2. Accounting and financial services, including:
a. implementing financial controls and procedures;
b. financial advice and direction;
c. oversee preparation of financial statements;
d. management of cash and trade credit resources;
e. establishing effective banking relationships;
f. interface to Chartwell's financial issues;
g. maintaining financial and business relationships with CRG and
related entities;
h. establishing and maintaining investment banking relationships.
3. Provide acquisition services as follows:
a. prospecting;
b. investigation of potential targets;
c. consultation on acquisition strategies;
d. negotiation of acquisitions;
e. monitor and advise on the integration of acquired companies with SSMK.
4. Communicate with major outside investors, business partners, legal counsel
as it relates to the structure and arrangement of important ongoing
business issues.
5. Assist in effective utilization of trade credits, including search for
uses, negotiation of terms, etc.
6. Include SSMK in external promotional announcements such as radio, T.V.,
and press releases where appropriate.
7. Other advisory services as required.
8. Assist and consult with SSMK in preparation of business plans and revisions
thereof and other related activities.
It should be noted many of the above services were provided to SSMK gratis
until it received funding on January 2, 1998. SSMK agrees to pay $7,500 per
month beginning February 1, 1998 until the revenue of SSMK exceeds $4,000,000
per annum, at which time the fee would be paid monthly at a rate of 2.5% of
the revenues. Potential acquisitions where separate management fees to
Chartwell are negotiated would be excluded from the SSMK revenue base for
purpose of the 2.5% test.
It is understood that Chartwell will provide these services on an as needed
basis and the time committed of Chartwell personnel will vary significantly
from time to time as the needs of SSMK fluctuate. For example, Chartwell will
assign Xx. Xxxxxx Xxxxx to be temporary financial manager for an estimated
six months, until SSMK needs a full time CFO. The management fee, however,
will not be adjusted as changes in Chartwell's efforts on behalf of SSMK
occur.
Chartwell will not charge any other fees to SSMK while this agreement remains
in effect. Finders' fees paid to outsiders in connection with raising capital
and acquisitions will be born by SSMK, including fees payable for such
circumstances under formal agreements with Xxxxxxx Xxxxxx, Xxxxxx Xxxxx, and
Xxxxxxx Xxxxxxx.
SSMK will pay Chartwell a fee of 10% of the purchase price of Lessonware, if
purchased by SSMK, as such transaction was found and negotiated by Chartwell
prior to the commencement of this Agreement.
All out of pocket expenses in connection with Chartwell's activities on
behalf of SSMK under this Agreement will be reimbursed to Chartwell upon
presentment of appropriate documentation. When at all possible, these
expenses will be acknowledged to SSMK in advance.
While Xx. Xxxxx is on direct assignment to SSMK as business and finance
manager he will commit whatever time is necessary in conjunction with his
responsibilities with Chartwell to adequately perform his responsibilities
with Chartwell to adequately perform his duties, such time is expected to
vary widely as tasks are started and completed.
During the first year of this Agreement Chartwell agrees to advance back to
SSMK up to
the amount of fees received by Chartwell International, Inc. if SSMK has
depleted its funds before receiving additional financing. These funds are
reimbursable back to Chartwell after sufficient funds are received by SSMK.
The above provisions are hereby noted and agreed to:
/s/ Xxxxxxx Xxxxxx 2/25/98
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Xx. Xxxxxxx Xxxxxx Date
President
SportsStar Marketing, Inc.
/s/ Xxxxxx X. Xxxxx 2/26/98
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Xx. Xxxxxx X. Xxxxx Date
Chair of the Board
Chartwell International, Inc.
