EXHIBIT 10.7
PRINCIPAL PARTICIPATION AGREEMENT
THIS AGREEMENT is made as of the 1st day of June, 2003
BETWEEN:
CANONLINE GLOBAL MEDIA INC., a Company incorporated under the laws of the
Province of British Columbia, having its registered office at 200 - 0000
Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0
(hereinafter called the "Company")
OF THE FIRST PART
AND:
XXXXXXX X. XXXXX, Businessman, of 0000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxxxx,
Xxxxxxxxx, XXX
(hereinafter called "Xxxxx")
OF THE SECOND PART
WHEREAS:
A. Pursuant to a certain Principal Participation Agreement dated March 10,
2000 (the "First Participation Agreement") the Company and Xxxxx agreed to
certain terms regarding Xxxxx providing certain services to the Company. Due to
other commitments, Xxxxx has not been providing his services to the Company as
contemplated by the First Participation Agreement. However, Xxxxx now wishes to
provide his services to the Company on a full-time basis and the Company now
wishes to engage his services on a full time basis according to the terms of
this agreement.
B. The Company and Xxxxx wish to formally document the terms and conditions
of their relationship. Accordingly, the Company and Xxxxx have mutually agreed
to enter into this agreement (the "Agreement") for the purposes stated herein
upon the terms and conditions set forth below and with the intent that this
Agreement will completely supercede the First Participation Agreement and the
terms and provisions thereof which are herein mutually deemed to be void ab
initio.
NOW THEREFORE in consideration of the mutual covenants, premises and conditions
herein contained the parties hereto have agreed each with the other as follows:
1. Engagement of Services
The Company hereby engages Xxxxx on a full-time basis to perform the following
services for the Company: introducing venture capital and financing firms to the
Company for the purpose of financing its business; facilitating the introduction
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of the Company's services and products to other companies, businesses and
governmental organizations for the purpose of generating potential sales; and
promoting inventory listings; and performing such other services that might
reasonably relate thereto (collectively called the "Services") as may be
designated by the Board of Directors (the "Board") of the Company including
acting as the Company's Vice-President of Global Sales and Marketing at the
pleasure of the Board. Xxxxx agrees to perform the Services for the Company
pursuant to the terms of this Agreement and as may be directed by the Board or
its designated senior officers.
2. Term of Engagement
The term (the "Term") of engagement of Xxxxx pursuant to this Agreement will
initially be for a period of two (2) years extending from June 1, 2003 to and
including May 31, 2005 and may be extended thereafter on the anniversary date of
this Agreement for consecutive Terms of two (2) year each.
3. Compensation
3.1 Subject to the successful completion of the financing proposed by the
Company (the "Financing"), during the Term of this Agreement Xxxxx will receive
a commission (the "Commission") as and when the Commission is determined and
declared by the Board. The Commission, if any, will be equal to percentage (to
be determined by the Board) of the base inventory value of all products listed
and sold on the Company's Reelindie Global Network and other sites (the "Sites")
by companies or businesses that have been exclusively registered by Xxxxx with
the Company.
3.2 Subject to the successful Financing, during the Term of this Agreement
Xxxxx will receive a base salary of $78,000 USD per annum (the "Base Salary")
that will be subject to annual review by the Board or any committee appointed by
the Board to whom that function has been delegated.
3.3 Xxxxx will be eligible to receive Common Shares of the Company in the
form stock options (the "Stock Options") exercisable at a price per Share as and
when the Stock Options may be determined by the Board in its sole absolute
discretion. All Stock Options are subject to the terms and conditions of the
Company's Vesting and Lock-up Agreement at the time the Stock Options are
exercised. Subject to the approval of the Board, the Company may, in its sole
discretion, exercise the Stock Options for Xxxxx at any time as a form of
compensation or Xxxxx will have up to the close of business on the dates
specified in the Option Contract to exercise the Stock Options. If the Company
does not exercise the Stock Options or if Xxxxx does not exercise the Stock
Options on or before the expiration dates specified in the Option Contract, then
the Stock Options will be cancelled and the Option Contract terminated.
3.4 Subject to the successful Financing, during the Term of this Agreement
Xxxxx will be provided with extended medical and dental insurance coverage that
will include all family members of Xxxxx that are "dependants" of Xxxxx as that
term is defined in accordance with the applicable IRS rules and regulations.
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4. Sales and Service Office and Ancillary Equipment
Subject to the successful Financing of the Company:
4.1 Xxxxx will be authorized and enabled by the Company to establish a sale
and service office ("Sales and Service Office") in the State of Minnesota for
and on behalf of the Company. The Sales and Service Office will be utilized and
maintained exclusively for the purpose of carrying out necessary sales, service
and marketing activities of the Company. Initially the Sales and Service Office
will have a limited number of personnel including certain budget restrictions
with respect to initial operating costs. Subsequently, the budget for the Sales
and Service Office will be re-evaluated and established by the Board in
consultation with Xxxxx from time to time.
4.2 The Company agrees to supply Xxxxx with a motor vehicle that is to be
used in connection with the sales and service functions of the Sales and Service
Office. The Board will determine the make, model and type of vehicle.
Maintenance, leasing costs, insurance and fuel costs for the vehicle will be
paid for by the Company.
4.3 The Company agrees to supply Xxxxx with a cell phone and a lap-top
computer that will be paid for by the Company and are to be used in connection
with the sales and service functions of the Sales and Service Office.
4.4 The Company agrees to pay for the cost of all travel, ground
transportation, lodging, food and other necessary costs of Xxxxx in connection
with performing his functions described in this Agreement.
5. Further Acts and Agreements
Xxxxx agrees to perform such further acts and execute such other agreements and
documents as might be reasonably necessary to fully implement the intent and
purpose of this Agreement.
6. Severability
If any provision or part of this Agreement is declared to be void or otherwise
invalid by a court of competent jurisdiction, the remaining provisions or parts
of this Agreement will remain in full force and effect.
7. Entire Agreement
This Agreement constitutes the entire agreement between the parties hereto with
respect to the engagement of Xxxxx to provide the Services and perform the
duties and obligations as contemplated by the parties. Any other previous
agreements, written or oral, express or implied, between the parties or on their
behalf, relating to these matters are terminated and cancelled unless the
parties hereto have expressly confirmed in writing that any such agreements will
survive this Agreement. Each of the parties release and forever discharges the
other of and from all manner of actions, causes of action, claims and demands
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whatsoever, under or in respect of any prior agreement including, without
limitation, the First Participation Agreement.
8. Confidentiality
Xxxxx understands and hereby agrees that any information or documentation
provided to him by or on behalf of the Company or for submission or presentation
to prospective investors or customers is confidential and privileged. Any
information or documentation provided to Xxxxx must not be duplicated in any
form or medium or presented or submitted to any other party other than direct
recipients of documents and information as permitted for the purposes of
performing the Services. Xxxxx understands and agrees that prior to the
submission of any offering circulars, memorandum, prospectus, business plan,
proprietary information or other intellectual property ("Confidential
Documents") to any prospective investors or customers, that a non-circumvention
and confidentiality agreement must first be executed by the recipient and
registered with the Company. Any prospective investors or customers not
participating in the financing of the Company's business or concluding
agreements with the Company must return any and all Confidential Documents to
the Company. All of the foregoing provisions of this Section 8 will survive the
termination of this Agreement.
9. Modification of Agreement
Any modification to this Agreement must be in writing and signed by the parties
hereto or it will have no effect and will be void.
10. Headings
The headings used in this Agreement are for convenience only and are not to be
construed in any way as additions to or limitations of the covenants and
agreements contained herein.
11. Governing Law
This Agreement shall be construed in accordance with the laws of the State of
Washington, USA.
12. Use of Grammar
In this Agreement words importing the masculine gender include the feminine or
neuter gender and words importing the singular include the plural and vice
versa.
13. Enurement
This Agreement shall enure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto and the heirs, executors,
administrators and other legal representatives of Xxxxx.
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IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the date first written above.
EXECUTED BY CANONLINE GLOBAL )
MEDIA INC. in the presence of its )
duly Authorized Signatories in that be half )
)
)
)
Per: ) [CORPORATE SEAL OF
----------------------------- ) CANONLINE MEDIA
Xxxxx Xxxxxxxxxx, Director ) CORPORATION]
)
)
Per: )
----------------------------- )
Xxxxxx X. Xxxx, Director )
SIGNED, SEALED AND DELIVERED )
By XXXXXXX X. XXXXX in the presence of: )
)
)
)
----------------------------- ) -----------------
Signature of Witness ) XXXXXXX X. XXXXX
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