Exhibit 10.1
Management Agreement between Cool Entertainment, Inc., and Cool Management Inc.
dated March 1, 1999
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MANAGEMENT AGREEMENT
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THIS AGREEMENT (the "Agreement") is made as of the 1st day of March, 1999,
BETWEEN
COOL ENTERTAINMENT, INC. , a corporation incorporated under
the laws of Washington having its registered office at 0000
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx, 00000-0000
("Cool Entertainment");
AND
COOL MANAGEMENT INC., a corporation incorporated under the
laws of British Columbia having its registered office at 1000
- 840 Xxxx Street, Vancouver, British Columbia, V6Z 2M1
("Cool Management").
WHEREAS:
A. Cool Entertainment wishes to contract with Cool Management for
the provision of management services by Cool Management to Cool Entertainment,
and Cool Management has agreed to contract with Cool Entertainment to provide
those services to Cool Entertainment.
NOW THEREFORE this Agreement witnesses that in consideration of the premises and
the mutual covenants and agreements contained in this Agreement, the parties
hereto (the "Parties") hereby agree as follows:
1. MANAGEMENT SERVICES
1.1 Cool Management shall provide management services (the
"Services") to Cool Entertainment on the terms and subject to the conditions
contained in this Agreement.
1.2 The Services to be provided by Cool Management shall, without
limitation, include:
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(a) management of Cool Entertainment's business of internet
distribution of audio and visual products;
(b) design and maintenance of the Web site through which Cool
Entertainment will carry on such business;
(c) provision of operational and strategic leadership to Cool
Entertainment;
(d) keeping the directors of Cool Entertainment informed about
major policy issues facing Cool Entertainment;
(e) reporting of results of operating activities of Cool
Entertainment to the directors of Cool Entertainment in
timely, accurate and clear fashion, so that the directors of
Cool Entertainment can fulfil their fiduciary duties to Cool
Entertainment;
(f) provision of recommendations for financial budgeting to Cool
Entertainment, and preparation of budgets and forecasts for
Cool Entertainment for consideration by the directors of Cool
Entertainment; and
(g) provision of advice to the directors of Cool Entertainment
concerning possible acquisitions and divestitures by Cool
Entertainment.
2. CARE, SKILL AND DILIGENCE
Cool Management represents and warrants to Cool Entertainment that:
(a) Cool Management will enter into employment or consulting
agreements with parties who have the qualifications,
experience and capabilities necessary to perform the Services,
including Xxxxxxx Kar Man Xxx, Xxxxxxx Xxxxx Xxxxxxx, Xxxxxxx
Xxxxx Xxxx and Marc Xxxxxxx Xxxxxxxx (Lau, Hadcock, Xxxx and
Belcourt are collectively referred to herein as the
"Vendors"); and
(b) the Services shall be performed by Cool Management according
to the standard of care, skill and diligence which would be
exercised by a prudent and competent person in similar
circumstances.
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3. CONTROL OF PROVISION OF SERVICES
Cool Entertainment acknowledges that as Cool Management is an independent
contractor. Cool Management shall have control over the provision of the
Services to Cool Entertainment, and will determine the manner, methods,
techniques and procedures for the provision by Cool Management of the Services
to Cool Entertainment.
4. TERM
4.1 Subject to Section 10 of this Agreement, Cool Management shall
provide the Services to Cool Entertainment for a term (the "Term"), commencing
on the day Chelsea Pacific Financial Corp. ("Chelsea") meets the First Financing
Milestone, as that term is defined in Section 7.1(a) of the Escrow Agreement
between Pacific Corporate Trust Company, Cool Entertainment, Chelsea, Minas
Novas Gold Corp. (the "U.S. Company") and the Vendors of even date herewith (the
"Escrow Agreement"), and ending on that day (the "Expiry Date") which is the
earlier of:
(a) one year from the day on which Chelsea meets the Fourth
Financing Milestone (as defined in Section 7.1(d) of the
Escrow Agreement); and
(b) the day the Vendors become entitled to terminate Chelsea's
right of first refusal provided in Section 7 of the Amendment
and Restatement between Chelsea, the Vendors, Cool
Entertainment and the U.S. Company of even date herewith (the
"Amendment and Restatement") pursuant to Section 7.4(h)(i) of
the Escrow Agreement.
Cool Entertainment and Cool Management may extend the term of this Agreement for
a further term of one year from the Expiry Date, in which case "Term" shall also
refer to that extended time period. It is expressly understood and agreed that
neither Cool Entertainment nor Cool Management shall be obligated to agree to
any extension of the Term.
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4.2 For greater certainty, it is acknowledged that if the Term
does not commence as a result of the failure of Chelsea to meet the First
Financing Milestone, Cool Entertainment shall have no liability to pay any fee
to Cool Management under Section 6.1 hereof.
5. PERFORMANCE OF SERVICES
5.1 Cool Management shall provide the Services to Cool
Entertainment in accordance with the terms of this Agreement.
5.2 During the Term, Cool Management shall not carry on or engage
in, directly or indirectly, any work or business contrary to, or which detracts
from or is not in the best interests of Cool Entertainment or the performance of
Cool Management's obligations under this Agreement.
6. PAYMENT
6.1 It is acknowledged and agreed that Cool Management shall
contract with each of the Vendors for the provision of their services to Cool
Management. It is further acknowledged and agreed that, as the business of Cool
Entertainment expands, Cool Management may contract for the services of other
parties to aid in performance of the Services. The Vendors, together with such
other parties with whom Cool Management may contract to aid in the provision of
the services, are hereinafter referred to as the "Personnel". The Personnel will
be primarily responsible for performance of the Services on behalf of Cool
Management.
6.2 During the Term, Cool Management shall provide Cool
Entertainment with an invoice in respect of the aggregate monthly amounts
payable to the Personnel pursuant to their contracts with Cool Management, on
the first business day following the end of each month.
6.3 In consideration of the performance of the Services in
accordance with this Agreement, Cool Entertainment shall pay to Cool Management
a fee equal to the aggregate monthly amounts payable to the Personnel, pursuant
to their respective contracts with Cool Management as reflected in such invoice,
plus 10% of such amount (the "Fee"). The Fee shall be payable forthwith upon
receipt of such invoice.
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7. EXPENSES
7.1 Cool Management shall prepare budgets for monthly expenditures
to be made in pursuance of Cool Entertainment's business for review by the
directors of Cool Entertainment. All items in such budgets which are not
referred to in the Business Plan dated September 1, 1998 previously provided by
Cool Entertainment to Chelsea shall be subject to the approval of the directors
of Cool Entertainment.
7.2 It is the intent of the parties hereto that Cool Entertainment
shall be solely responsible for supplying Cool Management with the funds
necessary for Cool Management to provide the Services and for paying on Cool
Entertainment's behalf all expenses which are referred to in the Business Plan
or are Approved Expenses. Accordingly, Cool Management shall be under no
obligation whatsoever to extend any of its own funds in the course of providing
the Services hereunder. Cool Entertainment shall be responsible for advancing
all funds for payment of expenses referred to in the Business Plan and Approved
Expenses to Cool Management before they are expended.
7.3 Within 30 days of the end of each month for which a budget is
prepared by Cool Management , Cool Management shall provide the directors of
Cool Entertainment with invoices in respect of funds advanced by Cool
Entertainment showing expenditure of such funds in accordance with such budgets.
7.4 Cool Management may elect, but shall not be obliged, to pay
expenses referred to in the Business Plan and Approved Expenses from its own
funds. If Cool Management does so, then Cool Entertainment shall reimburse Cool
Management for all such expenses incurred by Cool Management provided that such
expenses are supported by receipts given to Cool Entertainment within 45 days of
end of the month during which such expenses were incurred.
8. NO AGENCY RELATIONSHIP
Cool Management is not the agent of Cool Entertainment and, accordingly, shall
not purport to enter into any contract or subcontract on behalf of Cool
Entertainment, or otherwise act on behalf of Cool Entertainment, other than to
provide the Services.
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9. EXPIRY
9.1 The provisions of Section 10 shall remain in force for one
year from the date this agreement expires.
9.2 Cool Entertainment and Cool Management acknowledge that the
expiry of this Agreement in accordance with its terms or its failure to be
renewed or extended may result in loss or damage to Cool Entertainment or Cool
Management, or both, but that neither Cool Entertainment nor Cool Management
shall be liable to the other for any loss or damage resulting from that expiry
or the failure of this Agreement to be renewed or extended (including, without
limitation, any loss of prospective profits, or any damage caused by loss of
goodwill) or by reason of any expenditures, investments, leases or commitments
made in anticipation of the continuance of this Agreement. This paragraph shall
not relieve Cool Entertainment or Cool Management from liability for damages
arising out of any violation or breach of this Agreement.
9.3 Any amounts due by Cool Entertainment to Cool Management as
part of the Fee shall be paid within 30 days of expiry .
10. CONFIDENTIAL INFORMATION
Cool Management acknowledges that during the Term:
(a) it will have access to and will be entrusted with detailed
confidential information, know-how and trade secrets relating
to the business and affairs of Cool Entertainment including,
without limitation, finances, products, services, dealings and
transactions of Cool Entertainment, and the names, addresses,
preferences or other particular business requirements of Cool
Entertainment's customers ("Confidential Information"), and
that the disclosure of Confidential Information to competitors
of Cool Entertainment or to the public would be highly
detrimental to the best interests of Cool Entertainment;
(b) in the course of performing the Services hereunder, Cool
Management will be one of the principal representatives of
Cool Entertainment and as such will be
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significantly responsible for maintaining or
enhancing the goodwill of Cool Entertainment; and
(c) the rights of Cool Entertainment to maintain the
confidentiality of Confidential Information, and to preserve
its goodwill, constitute proprietary rights of Cool
Entertainment which Cool Entertainment is entitled to protect;
and Cool Management will not, during the Term and for one year after the expiry
of the Term, disclose to any person, firm or corporation any Confidential
Information for any purpose other than the purposes of Cool Entertainment and
Cool Management will not disclose or use for any purpose other than for those of
Cool Entertainment any Confidential Information, provided that the foregoing
covenant shall not extend to Confidential Information which:
(d) disclosure of which is specifically consented to in writing by
Cool Entertainment;
(e) Cool Management is required by applicable law or by an order
of a court of competent jurisdiction to disclose;
(f) now or subsequently becomes available to the public through no
fault of Cool Management;
(g) Cool Management can demonstrate to have had rightfully in its
possession prior to the disclosure;
(h) is independently developed by Cool Management without the use
of any Confidential Information; or
(i) Cool Management rightfully obtains from a third party who has
the right to transfer or disclose it.
Cool Management acknowledges that the foregoing covenant is necessary and
fundamental for the protection of the business of Cool entertainment and that a
breach by Cool Management of such covenant would result in damage to Cool
Entertainment which would not be adequately compensated by an award of damages
to Cool Entertainment and that, in addition to all other
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remedies available to Cool Management, Cool Management shall be entitled to the
immediate remedy of a restraining order, injunction or other form of relief as
may be decreed or issued by any court of competent jurisdiction to restrain or
enjoin Cool Management from breaching such covenant.
11. INDEMNITY
Cool Management shall protect, indemnify and hold Cool Entertainment harmless
from and against any and all liabilities, costs, damages, and expenses
(including legal fees and disbursements) resulting from or attributable to any
and all acts and omissions of Cool Management. Similarly, Cool Entertainment
shall protect, indemnify and hold Cool Management harmless from and against any
and all liabilities, costs, damages and expenses (including legal fees and
disbursements) resulting from or attributable to any and all acts and omissions
of Cool Entertainment
12. MISCELLANEOUS
12.1 ASSIGNMENT
This Agreement may not be assigned by any Party without the prior written
consent of the other Party and any attempt to assign the rights, duties or
obligations under this Agreement without those consents shall have no effect.
12.2 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties with respect
to the matters referred to herein and there are no representations or
warranties, express or implied, statutory or otherwise and no agreements
collateral hereto other than as expressly set forth or referred to herein.
12.3 FURTHER ASSURANCES
The Parties shall execute all other documents and do all further things as may
be necessary to carry out and give effect to the intent of this Agreement.
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12.4 SEVERABILITY
Should any part of this Agreement be declared or held invalid for any reason,
that invalidity shall not affect the validity of the remainder which shall
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion.
12.5 AMENDMENTS
This Agreement may be amended by an agreement in writing signed by the Parties.
12.6 TIME
Time shall be of the essence of this Agreement.
12.7 GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the laws
of British Columbia.
12.8 HEADINGS
The headings appearing in this Agreement are inserted for convenience of
reference only and shall not affect the interpretation of this Agreement.
12.9 NOTICES
All notices required or permitted to be given under this Agreement shall be in
writing and may be delivered personally or by facsimile transmission to the
addresses set forth on page 1 or at any other addresses as may from time to time
be notified in writing by the Parties. Any notice delivered personally or by
facsimile transmission shall be deemed to have been given and received at the
time of delivery.
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12.10 ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the Parties and
their respective heirs, personal representatives, successors and permitted
assigns.
IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first
above written.
COOL ENTERTAINMENT, INC. (a Washington corporation)
Per:
/s/ Xxxxxxx X.X. Xxx
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Xxxxxxx X.X. Xxx:
Authorized Signatory
COOL MANAGEMENT INC. (a British Columbia company)
Per:
/s/ Xxxxxxx X.X. Xxx
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Xxxxxxx X.X. Xxx:
Authorized Signatory
