EXHIBIT 4.19
THIS MANAGEMENT AGREEMENT dated as of the 1st day of May, 2001.
BETWEEN:
XXXXXXXX.XXX INC., a Canadian corporation, having its head
office at 900 - 1199 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
("X.xxx")
OF THE FIRST PART
AND:
COBALT REAL ESTATE CORPORATION, a Washington
corporation, having an office at Suite 900 - 1199 West Xxxxxx
Street, Vancouver, British Columbia, V6E 2R1
("Cobalt")
OF THE SECOND PART
WHEREAS:
A. X.xxx is in the business of offering travel information, retail and
wholesale products and merchandise to the online consumer by way of a World Wide
Web site on the Internet throughout Canada, the United States of America and
other countries throughout the world;
B. Cobalt employs from time to time such employees as are possessed of the
management and business experience to effectively participate in the management
of X.xxx (collectively, the "Cobalt Employees" and, individually, a "Cobalt
Employee"); and
C. X.xxx wishes to retain Cobalt to provide executive and management services
to X.xxx, and the parties wish to enter into this Agreement to record their
agreement in writing with respect to the provision of such services.
IN CONSIDERATION of the covenants and agreements hereinafter set forth, the
parties agree as follows:
1. X.xxx hereby retains Cobalt to provide executive and management services to
X.xxx commencing May 1, 2001. This Agreement shall remain in force until either
X.xxx or Cobalt provides not less than one month's written notice to the other
that the party providing the notice is terminating this Agreement as of a
specified date.
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2. Cobalt agrees to provide executive and management services to X.xxx as
hereinafter provided.
3. During the term of this Agreement, Cobalt will employ such Cobalt Employees
as are required from time to time to provide certain executive and management
services to X.xxx, and will initially cause R. Xxxxxxxxxxx Xxxxxxxxx ("RCC") to
provide such services and to devote substantially all of his business time,
energies and efforts to the effective operation of the X.xxx business, and will
also cause RCC or such other Cobalt Employees, acceptable to X.xxx, to perform
such services as may be assigned to Cobalt from time to time by the board of
directors of X.xxx (the "Board") and which are consistent with the engagement of
Cobalt hereunder.
4. During the term of this Agreement, Cobalt agrees that it will not engage in
any activity competitive with or adverse to the welfare of X.xxx, and Cobalt
will use its best efforts to prevent any Cobalt Employee from engaging in any
activity competitive with or adverse to the welfare of X.xxx in any material
way, whether alone, as a partner, officer, director, employee or shareholder of
another company or otherwise.
5. Notwithstanding paragraph 4 hereof, nothing contained in this Agreement
shall be construed to prevent any Cobalt Employee from:
(a) acting as a member of the board of directors of any other corporation
and from receiving compensation therefrom;
(b) making investments of any character in any business; or
(c) otherwise engaging in other business activities;
provided only that such investments or other business activities do not
interfere materially with the performance of the services to be rendered by such
Cobalt Employee to Cobalt and by Cobalt to X.xxx under this Agreement. Without
limiting the generality of the foregoing, a Cobalt Employee may participate in
the ownership and management of Charlwood International Corporation, Charlwood
Pacific Holdings Corp., Charlwood Pacific Properties Ltd., Charlwood Pacific
Group Ltd. and Cobalt, and a Cobalt Employee may also participate in the
ownership and management of Uniglobe Travel (International) Inc., Century 21
Real Estate Canada Inc., or any of their present or future subsidiaries or
associated companies (as defined in the Canada Business Corporations Act).
6. All confidential or proprietary information or know-how of X.xxx disclosed
to or developed by or learned by Cobalt or a Cobalt Employee, during the term of
this Agreement, whether the subject matter of trade xxxx or not, pertaining to
the business and affairs of X.xxx, as well as all information, data, inventions,
discoveries, improvements, modifications or developments relating to the
business activities of X.xxx or acquired by Cobalt or a Cobalt Employee during
the term of this Agreement shall be retained in confidence, unless required to
be disclosed by law, and
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Cobalt will use its best efforts to prevent the use, disclosure or publication
of the same by its agents and employees to others during or after the term of
this Agreement, without the prior written consent of X.xxx, unless required to
be disclosed by law. Cobalt agrees that, upon the termination of this Agreement
for any reason, it will deliver to X.xxx all data, reports, communications or
the like and all other materials, visual or conceptual presentations of any type
and copies and duplicates thereof relating to all matters contemplated by this
paragraph.
7. In consideration of the services to be performed by Cobalt hereunder, X.xxx
will pay to Cobalt an aggregate annual management fee of Cdn.$72,000 (the
"Management Fee"), payable in equal monthly instalments on the last day of each
month during the term of this Agreement, with a pro rata payment to be made for
any portion of the month for which services are provided prior to termination.
In addition, Cobalt or a Cobalt Employee may participate in any stock option,
bonus or profit sharing programs adopted by X.xxx for its executives. The
criteria which the Board shall take into consideration in providing for
participation in any stock option, bonus or profit sharing programs are the
performance of the management and operating personnel of Cobalt, any increase in
the difficulties involved in the services rendered and responsibility assumed by
Cobalt, the success achieved by X.xxx as a result of the services rendered by
Cobalt, the matters and amounts under the jurisdiction of Cobalt, the earnings
and profits of X.xxx, the increase in volume and quality of business of X.xxx
and such other criteria as the Board may deem relevant.
8. X.xxx shall also pay or reimburse Cobalt for all reasonable travelling,
entertainment and other expenses incurred or paid by Cobalt or any Cobalt
Employee in connection with the performance of the services contemplated under
this Agreement and in accordance with policies established by the Board from
time to time, upon presentation of expense statements or vouchers and such other
supporting information as the Board may from time to time request.
9. During the term of this Agreement, each Cobalt Employee providing services
contemplated hereunder shall be entitled to a vacation or vacations totalling
four weeks duration, to be taken at such times as shall be most convenient in
relation to the demands of the business of X.xxx and Cobalt and the personal
plans of a Cobalt Employee and shall not affect the right of Cobalt to the
Management Fee.
10. In the event of the death of any Cobalt Employee providing services
contemplated hereunder during the term of this Agreement, Cobalt shall be
entitled to receive that portion of the Management Fee attributable to the
services provided by such deceased Cobalt Employee to the last day of the sixth
calendar month next following the month in which the death of such Cobalt
Employee shall have occurred.
11. If X.xxx shall determine that a Cobalt Employee providing services
hereunder has become disabled by reason of illness or other incapacity, except
as provided in paragraph12(a), such that Cobalt is unable to render services of
a character contemplated by this Agreement to Cobalt for six successive months,
or for shorter periods aggregating six months or more in any one year, then
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X.xxx may terminate this Agreement upon not less than 180 days' written notice
to Cobalt, unless, prior to such termination, Cobalt provides another Cobalt
Employee, acceptable to X.xxx, to provide such services. Cobalt shall, in any
event, receive its full Management Fee for the period of such notice.
12. X.xxx may terminate this Agreement at any time, by and effective upon the
giving of written notice to Cobalt of such termination, in the event of the
occurrence of any of the following events, namely:
(a) if a Cobalt Employee providing services contemplated hereunder,
becomes mentally incompetent as determined by a duly licensed doctor
in the Province of British Columbia acceptable to X.xxx and to Cobalt;
(b) if Cobalt is petitioned into bankruptcy;
(c) if Cobalt itself, or through a Cobalt Employee providing services
contemplated hereunder, neglects to give adequate time and personal
attention to the business of X.xxx (except in case of illness or
accident);
(d) if Cobalt itself, or through a Cobalt Employee providing services
contemplated hereunder, is guilty of negligence in the performance of
such services;
(e) if Cobalt itself, or through a Cobalt Employee providing services
contemplated hereunder, fails to perform or observe any lawful orders
or directions of the Board or infringes any of the provisions of this
Agreement;
(f) in the event of any material breach by Cobalt of any of the material
provisions of this Agreement;
(g) in the event that RCC's services as president and chief operating
officer of X.xxx are terminated because the Board appoints a president
of X.xxx who is not one of RCC, Xxxxxx X. Xxxxxxxxx and Uwe Xxxx
Xxxxxxxxx; or
(h) in the event that RCC ceases, directly or indirectly, to be the
controlling shareholder of Cobalt;
provided however, except in the case of clause (g):
(y) termination shall only be effective upon receipt of notice from X.xxx
which specifies all grounds for such termination; and
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(z) a notice of termination shall not be given unless, at least 30 days
prior thereto, Cobalt shall have received notice from X.xxx specifying
all alleged grounds upon which X.xxx intends to terminate this
Agreement and those grounds shall be continuing when such notice of
termination is given.
13. Except as herein provided, Cobalt shall be responsible for all expenses
relating to its own administration and management.
14. Cobalt agrees to diligently and properly carry out the management services
to be rendered hereunder to X.xxx and to cause each of the Cobalt Employees
providing services contemplated hereunder, to provide such services to the best
of his abilities.
15. X.xxx shall have the right from time to time to apply for and take out in
its name and at its own expense, life, health or other insurance upon any Cobalt
Employee and in any amount or amounts which may be deemed necessary by X.xxx to
protect its interest under this Agreement, and Cobalt shall do all such things
as may be necessary to assist in the procuring of such insurance by causing such
Cobalt Employee to make a proper application therefor as may be required by the
insurance company and to submit to the usual and customary medical examinations.
Neither Cobalt nor any of the Cobalt Employees shall have any right, title or
interest in or to such insurance but the same shall be solely for the benefit of
X.xxx and any amount payable thereunder shall be solely payable to X.xxx. X.xxx
shall pay all premiums on the said policies during the continuance in force of
this Agreement as they come due. If any premium is not paid within 20 days after
its due date, either Cobalt or such Cobalt Employee, in respect of the policy on
his life only, may pay such premium and be reimbursed therefor by X.xxx. The
insurer is hereby authorized and directed to give to a Cobalt Employee, upon his
written request, any information with respect to the status of the policy on his
life only. In the event of the expiry or termination of this Agreement prior to
the death of a Cobalt Employee, Cobalt may purchase from X.xxx the policies on
the life of a Cobalt Employee by payment of the cash value thereof at the date
of purchase, or, if there is not any cash value, for the sum of $1.00. If Cobalt
does not purchase from X.xxx the policies on the life of a Cobalt Employee, then
such Cobalt Employee, should he so desire, may purchase from X.xxx the policy on
his specific life by payment of the cash value thereof at the date of purchase,
or, if there is not any cash value, for the sum of $1.00. Any such offer to
purchase shall be made within 60 days of the date of expiry or termination of
this Agreement and no such offer shall be refused.
16. X.xxx, Cobalt and any of the Cobalt Employees may, from time to time, agree
that Cobalt will suspend its obligation to provide the services of such Cobalt
Employee to X.xxx for a specified period of time and that such Cobalt Employee
will become an employee of X.xxx for such period of time. During the time that
any of the Cobalt Employees is an employee of X.xxx, X.xxx will pay or provide
to such Cobalt Employee a salary and other benefits equivalent to those to be
provided to Cobalt hereunder for the services of such Cobalt Employee and X.xxx
will not pay the Management Fee to Cobalt attributable to the services provided
by such Cobalt Employee. Upon expiry of the specified period of time for the
suspension of such services to X.xxx, such Cobalt
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Employee will cease to be an employee of X.xxx, such services will be resumed by
Cobalt and the Management Fee attributable to such Cobalt Employee will be
re-instated.
17. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be given by facsimile, other means of
electronic communication or by hand- delivery. Any such notice or other
communication, if sent by facsimile or other means of electronic communication,
shall be deemed to have been received on the business day next following the
sending, or if delivered by hand shall be deemed to have been received at the
time it is delivered to the applicable address noted below either to the
individual designated below or to an individual at such address having apparent
authority to accept deliveries on behalf of the addressee. Notice of change of
address shall also be governed by this section. Notices and other communications
shall be addressed as follows:
XXXXXXXX.XXX INC.
000 - 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attention: Chairman, Compensation Committee
Telecopier Xx. 000-0000
XXXXXX XXXX XXXXXX CORPORATION
900 - 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attention: R. Xxxxxxxxxxx Xxxxxxxxx
Telecopier No. 718-2678
18. Neither the waiver or indulgence by X.xxx or Cobalt of any of its rights
under this Agreement, nor the invalidity of any provision herein contained shall
prevent either party from enforcing any other provision or right created by this
Agreement.
19. No modification of this Agreement shall be valid unless made in writing and
signed by the parties hereto.
20. Any provision of this Agreement which is, or becomes illegal, invalid or
unenforceable shall be severed from this Agreement and be ineffective to the
extent of such illegality, invalidity or unenforceability and shall not affect
or impair the remaining provisions hereof, which provisions shall remain in full
force and effect.
21. This Agreement shall be governed by the laws of the Province of British
Columbia and the laws of Canada applicable therein.
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22. Any suit, action or proceeding arising out of or relating to this Agreement
against any party shall only be brought in the courts of the Province of British
Columbia and each party hereby irrevocably and unconditionally attorns and
submits to the jurisdiction of such courts over the subject matter of any such
suit, action or proceeding. Each party irrevocably waives and agrees not to
raise any objection it might now or hereafter have to any such suit, action or
proceeding in any such court including, without limitation, any objection that
the place where such court is located is an inconvenient forum or that there is
any other suit, action or proceeding in any other place relating in whole or in
part to the same subject matter. Any judgment or order in any such suit, action
or proceeding brought in such a court shall be conclusive and binding upon all
parties hereto, and each party consents to any such judgment or order being
recognized and enforced in the courts of its jurisdiction of incorporation or
other courts, by registration or homologation of such judgment or order, by a
suit, action or proceeding upon such judgment or order, or any other means
available for enforcement of judgments or orders, provided that service of any
required process is effected upon it in the manner provided by the laws of the
Province of British Columbia.
23. This Agreement, and the services of Cobalt hereunder, is personal and said
Agreement may not be assigned or otherwise transferred by Cobalt without the
prior written consent of X.xxx.
24. The parties acknowledge that any breach by them of the terms of this
Agreement will result in harm to the other parties that cannot be calculated or
fully or adequately compensated by recovery of damages alone. Accordingly, in
addition to any other relief to which the other parties may be entitled, any
party shall be entitled to interim and permanent injunctive relief, specific
performance and other equitable remedies.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto
as of the date first above written.
XXXXXXXX.XXX INC. COBALT REAL ESTATE CORPORATION
Per: /s/ Illegible Per: /s/ R. Xxxxxxxxxxx Xxxxxxxxx
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Authorized Signatory Authorized Signatory
