MANAGEMENT AGREEMENT
AGREEMENT made as of August 10, 1998 by and between FRONTEER DEVELOPMENT
FINANCE INC., a Delaware corporation (the "Corporation"), and FRONTEER FINANCIAL
HOLDINGS, LTD., a Colorado corporation ("Manager").
WHEREAS, the Corporation operates as a finance company, taking advantage of
high-yield and other lending opportunities; and
WHEREAS, the Corporation desires to retain Manager directly to render
management services to it, and its subsidiaries and affiliates (if any), with
regard to its operations as a finance company, and Manager is willing to provide
such services on the terms and conditions hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged by the parties, it is hereby mutually agreed as follows:
1.(a) The Corporation hereby retains Manager to render Management
Services (as defined below) to the Corporation and its subsidiaries, and Manager
hereby agrees to render such services as requested from time to time by the
board of Directors of the Corporation, for the period commencing on the date
hereof and continuing until termination of this Agreement in accordance with the
terms hereof. Management Services shall include assistance to the management of
the Corporation with respect to the business and operations of the Corporation
or any of its subsidiaries (and affiliated companies), including, without
limitation, assistance in (i) the identification of lending opportunities, (ii)
credit analysis of potential borrowers, (iii) structure of loans, including
yield-enhancing equity participation and collateral arrangements, and (iv)
administration of loans.
(b) The Manager shall at all times be and conduct itself as an
independent contractor in respect of the Corporation, and shall not, under any
circumstances, create or purport to create any obligation on behalf of the
Corporation except as otherwise expressly directed by the Board of Directors of
the Corporation.
2.(a) As compensation for Management Services, the Corporation will
pay, so long as this Agreement continues in effect, an annual fee in an amount
equal to 10% of the Corporation's pre-tax profits (pro-rated for partial years)
as determined from the Company's annual audited financial statements for the
applicable year, which amount shall be paid for each year (or portion thereof)
during the term hereof, within 30 days after the receipt of the Corporation's
annual audited financial statements for such year.
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(b) In addition to the aforementioned fees, the Corporation shall
reimburse Manager for its reasonable out-of-pocket costs and expenses incurred
in connection with the performance of its advisory and consulting service
hereunder.
3. It is understood that the Manager may from time to time act as manager
to, or enter into similar agreements, or conduct any other business, or engage
in any other business transaction, with, any other person or entity whether or
not such person or entity competes with the Corporation, without the necessity
of obtaining approval from the Corporation.
4. The Manager shall and shall cause its employees, officers, directors,
agents and representatives to keep all information, material and data of any
kind (written and oral) with respect to the Corporation, its business and
affairs, including, but not limited to, the contents of this Agreement
(collectively, the "Information"), confidential. The Manager shall not disclose
and shall prohibit its employees, officers, directors, agents and
representatives from disclosing any Information to any party, other than the
Corporation or the Corporation's authorized representative without the
Corporation's prior written consent, except with respect to Information which is
publicly available (other than as a result of disclosure by the Manager, its
employees, officers, directors, agents or representatives) or as required by
law.
5. The Corporation agrees to indemnify the Manager, and all officers,
directors, shareholders, affiliates or controlling persons thereof ("Indemnified
Parties"), and to save and hold them harmless from and in respect of, any and
all (a) liabilities, fees, costs and expenses paid in connection with, resulting
from or relating to any claim, action or demand against any and all such
Indemnified Parties that arise out of or in any way relate to the Corporation,
its properties, business, or affairs and (b) such claims, actions and demands
and any losses or damages resulting from such claims, actions and demands,
including amounts paid in settlement or compromise of any such claim, action or
demand; provided however, that this indemnity shall not extend to conduct of
such Indemnified Party not undertaken in good faith to promote the best
interests of the Corporation, nor to any gross negligence or wilful misconduct
of an Indemnified Party. If an Indemnified Party seeks indemnification under
this Agreement and the Corporation challenges such party's right to
indemnification, the Corporation shall advance the amounts claimed hereunder to
the indemnified party until a court of competent jurisdiction determines that
the party receiving such advanced amounts shall return such amounts to the
Corporation to the extent specified in such judgment.
6. This Agreement may be terminated by either the Corporation or the
Manager for any reason on 30 days prior written notice of termination by the
terminating party delivered to the other party.
7. Any notice required to be given hereunder shall be in writing and shall
be deemed sufficient if delivered in person or mailed by certified mail as
follows: if to the Corporation, to it at its office at One Norwest Center, 0000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxx 00000, Attention: President, or
such address as the Corporation may hereafter designate for that purpose; and if
to Manager, to it at its office at One Norwest Center, 0000 Xxxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxx, Xxxxxxxx 00000, Attention: President, or such other address as
Manager may hereafter designate for that purpose.
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8. This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, both written and oral, with
respect to the subject matter hereof. this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, including any corporation into which the Corporation shall consolidate
or merge or to which it shall transfer substantially all of its assets. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Colorado applicable to contracts made and to be performed entirely
within such state.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date and year first above written.
FRONTEER DEVELOPMENT FINANCE, INC.
By: /s/Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Treasurer
FRONTEER FINANCIAL HOLDINGS, LTD.
By: /s/Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
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