EXHIBIT 4.20
THIS MANAGEMENT AGREEMENT dated as of the 1st day of May, 2001.
BETWEEN:
XXXXXXXX.XXX INC., a Canadian corporation, having its head
office at 000 - 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx X0X 0X0;
(herein called "X.xxx")
OF THE FIRST PART
AND:
CHARLWOOD INTERNATIONAL CORPORATION, a British
Columbia company, having its registered office at Suite 2300 -
0000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0;
(herein called "Charlwood International")
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;
X. Xxxxxxxxx International 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 "Charlwood International Employees"
and, individually, a "Charlwood International Employee"); and
C. X.xxx wishes to retain Charlwood International 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 Charlwood International to provide executive and
management services to X.xxx commencing May 1, 2001. This Agreement shall remain
in force until either
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X.xxx or Cobalt provides not less than 12 months' written notice to the other
party that the party providing the notice is terminating this Agreement as of a
specific date.
2. Charlwood International agrees to provide executive and management services
to X.xxx as hereinafter provided.
3. During the term of this Agreement, Charlwood International will employ such
Charlwood International Employees as are required from time to time to provide
certain executive and management services to X.xxx, and, in connection
therewith, will initially cause R. Xxxxxxxxxxx Xxxxxxxxx ("RCC") to serve as
president and chief operating officer of X.xxx and Xxxxxx X. Xxxxxxxxx ("MHC")
to serve as vice-chairman and member of the board of directors of X.xxx (the
"Board"), or any variation thereof that the Board considers appropriate, and to
devote such of their business time, energies and efforts as X.xxx shall
determine are reasonably necessary to the interests of X.xxx and the effective
operation of the X.xxx business, and will also cause RCC, MHC or such other
Charlwood International Employees, acceptable to X.xxx, to perform such services
as may be assigned to Charlwood International from time to time by the Board,
and which are consistent with the engagement of Charlwood International
hereunder.
4. During the term of this Agreement, Charlwood International agrees that it
will not engage in any activity competitive with or adverse to the welfare of
X.xxx, and Charlwood International will use its best efforts to prevent RCC 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 Fconstrued to prevent a Charlwood International 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 a
Charlwood International Employee to Charlwood International and by Charlwood
International to X.xxx under this Agreement. Without limiting the generality of
the foregoing, a Charlwood International Employee may participate in the
ownership and management of Charlwood Pacific Properties Ltd., Charlwood Pacific
Holdings Corp., Charlwood International, Charlwood Pacific Group Ltd. and Cobalt
Real Estate Corporation, and may also participate in the ownership and
management of Uniglobe Travel (International) Inc.,
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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 Charlwood International or a Charlwood
International 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 Charlwood International or a Charlwood International Employee during
the term of this Agreement shall be retained in confidence, unless required to
be disclosed by law, and Charlwood International 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.
Charlwood International 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 Charlwood International
hereunder, X.xxx will pay to Charlwood International an annual management fee of
Cdn.$297,000 (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, Charlwood International 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
Charlwood International, any increase in the difficulties involved in the
services rendered and responsibility assumed by Charlwood International, the
success achieved by X.xxx as a result of the services rendered by Charlwood
International, the matters and amounts under the jurisdiction of Charlwood
International, 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 Charlwood International for all
reasonable travelling, entertainment and other expenses incurred or paid by
Charlwood International in connection with the performance of its services 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 Charlwood International 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
Charlwood International and the personal plans of the Charlwood
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International Employee, and shall not affect the right of Charlwood
International to the Management Fee.
10. In the event of the death of any Charlwood International Employee during
the term of this Agreement, Charlwood International shall be entitled to receive
the portion of the Management Fee attributable to the services provided by such
deceased Charlwood International Employees to the last day of the sixth calendar
month next following the month in which the death of such Charlwood
International Employee shall have occurred, unless, prior to such termination,
Charlwood International provided another Charlwood International Employee,
acceptable to X.xxx, to provide such services.
11. If X.xxx shall determine that any Charlwood International Employee
providing services contemplated hereunder has become disabled by reason of
illness or other incapacity, except as provided in paragraph 12(a), such that
the Charlwood International Employee is unable to render services of a character
contemplated by this Agreement for six successive months, or for shorter periods
aggregating six months or more in any one year, then X.xxx may terminate payment
of such portion of the Management Fee attributable to the services provided by
such disabled Charlwood International Employee upon not less than 180 days'
written notice given to Charlwood International, unless, prior to such
termination, Charlwood International provides another Charlwood International
Employee, acceptable to X.xxx to perform such services. Charlwood International
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 Charlwood International of such termination, in the
event of the occurrence of any of the following events, namely:
(a) if a Charlwood International 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 Charlwood International;
(b) if Charlwood International is petitioned into bankruptcy;
(c) if Charlwood International itself, or through a Charlwood
International Employee, neglects to give adequate time and attention
to the business of X.xxx (except in case of illness or accident);
(d) if Charlwood International itself, or a Charlwood International
Employee providing services contemplated hereunder, is guilty of
negligence in the performance such services;
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(e) if Charlwood International itself, or through a Charlwood
International 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 Charlwood International 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, MHC and U. Xxxx Xxxxxxxxx; or
(h) in the event UGC ceases directly or indirectly to be the controlling
shareholder of Charlwood International;
provided, however, that except in the case of subparagraph (g):
(y) termination shall only be effective upon receipt by Charlwood
International of notice from X.xxx which specifies all grounds for
such termination, and
(z) a notice of termination shall not be given unless, at least 30 days
prior thereto, Charlwood International 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, Charlwood International shall be responsible for
all expenses relating to its own administration and management.
14. Charlwood International agrees to diligently and properly carry out the
management services to be rendered hereunder to X.xxx and to cause each of the
Charlwood International Employees providing services contemplated hereunder to
provide such services to X.xxx 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 of the
Charlwood International Employees and in any amount or amounts which may be
deemed necessary by X.xxx to protect its interest under this Agreement, and
Charlwood International shall do all such things as may be necessary to assist
in the procuring of such insurance by causing such Charlwood International
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 Charlwood International nor any of the Charlwood International 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
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continuance in force of this Agreement as they come due. If any premium is not
paid within 20 days after its due date, either Charlwood International or such
Charlwood International 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 such Charlwood International 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 such Charlwood International Employee, Charlwood International
may purchase from X.xxx the policies on the life of such Charlwood International
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 Charlwood International
does not purchase from X.xxx the policies on the life of a Charlwood
International Employee, then such Charlwood International 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, Charlwood International and any of the Charlwood International
Employees may, from time to time, agree that Charlwood International will
suspend its obligation to provide the services of such Charlwood International
Employee to X.xxx for a specified period of time and that such Charlwood
International Employee will become an employee of X.xxx for such period of time.
During the time that any of the Charlwood International Employees is an employee
of X.xxx, X.xxx will pay or provide to such Charlwood International Employee a
salary and other benefits equivalent to those to be provided to Charlwood
International hereunder for the services of such Charlwood International
Employee and X.xxx will not pay to Charlwood International the Management Fee
attributable to the services provided by such Charlwood International Employee.
Upon expiry of the specified period of time for the suspension of such services,
such Charlwood International Employee will cease to become an employee of X.xxx,
such services will be resumed by Charlwood International and the Management Fee
attributable to the services provided by such Charlwood International 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:
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XXXXXXXX.XXX INC.
000 - 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attention: Chairman, Compensation Committee
Telecopier No. 718-2678
CHARLWOOD INTERNATIONAL CORPORATION
000 - 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 Charlwood International 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.
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.
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23. This Agreement, and the services of Charlwood International hereunder, is
personal and said Agreement may not be assigned or otherwise transferred by
Charlwood International 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. CHARLWOOD INTERNATIONAL
CORPORATION
Per: /s/ R. Xxxxxxxxxxx Xxxxxxxxx Per: /s/ Illegible
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Authorized Signatory Authorized Signatory
