MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT made as of the 24th day of August, 1995.
B E T W E E N:
BROOKLINE MINERALS INC.,
a corporation incorporated under the laws of Canada
(hereinafter referred to as the "Corporation")
OF THE FIRST PART
- and -
INTEK DIVERSIFIED CORPORATION,
a corporation incorporated under the laws of the State of
Delaware
(hereinafter referred to as "Intek")
OF THE SECOND PART
RECITALS:
1. The Corporation and Xxxxxxxx Communications Ltd., Intek and Xxxxxx Travel,
Limited (collectively, the "Vendors") have entered into an agreement of
purchase and sale made as of the 24th day of August, 1995 (the "Share
Purchase Agreement"), pursuant to which the Corporation has agreed to
purchase from the Vendors all of the issued and outstanding shares of Brook
SIG Corp. ("BSIG"), a company whose primary business objective is to
provide financing to management companies who construct, manage and operate
wireless specialized mobile radio systems on behalf of United States 220
MHz narrowband licensees.
2. In conjunction with the share purchase transaction, Intek has agreed to
provide certain management services to the Corporation.
3. Pursuant to the Share Purchase Agreement, the execution and delivery by the
Corporation and Intek of a management services agreement which obliges
Intek to provide the services described herein in exchange for the common
shares of the Corporation which are issuable to Intek hereunder, is a
condition precedent to the completion of the share purchase transaction
contemplated thereby.
-2-
NOW THEREFORE, in consideration of the mutual covenants and agreements set
out herein and other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties agree as follows:
1.. DEFINITIONS. For the purpose of this Agreement, in addition to the
definitions set out above:
(i) "AFFILIATE" means, with respect to any corporation, any other
corporation which directly or indirectly controls or is controlled by or is
under direct or indirect common control with such first mentioned corporation,
and for the purpose of this definition "control" means, with respect to any
corporation, the ownership of voting securities to which are attached 20 per
cent or more of the voting rights attached to all outstanding voting securities
of the corporation;
(ii) "AGREEMENT" means this management services agreement, as the same may
be amended and supplemented from time to time;
(iii) "BROOKLINE COMMON SHARES" means common shares in the capital of
the Corporation as constituted at the date hereof;
(iv) "BROOKLINE MANAGEMENT CONTRACT COMMON SHARES" has the meaning ascribed
thereto in section 4;
(v) "CLOSING DATE" has the meaning ascribed to that term in the Share
Purchase Agreement; and
(vi) "TERM" means the term of this Agreement.
2.. RETAINER TO PROVIDE MANAGEMENT SERVICES. The Corporation hereby retains
Intek to provide it and its subsidiary, BSIG, with various management services
as specified in section 7, during the Term.
3.. TERM. The Term shall commence on the date hereof and terminate on the
first anniversary of such date. The Corporation shall be entitled to terminate
this Agreement at any time upon thirty (30) days prior written notice to Intek,
but in that event, except where the termination is for "just cause", the
Corporation shall immediately issue to Intek all of the Brookline Management
Contract Common Shares which remain unissued, whether or not accrued. For the
purposes of this section 3, "just cause" shall mean a fundamental breach of this
Agreement by Intek which, under common law, entitles the Corporation to
terminate all of its obligations under this Agreement.
-3-
4.. MANAGEMENT SERVICES FEES.
(a) In consideration of the management services to be provided by Intek to the
Corporation and BSIG hereunder, Intek shall be entitled to receive one million
(1,000,000) Brookline Common Shares (the "Brookline Management Contract Common
Shares"). Subject to section 4.2, two hundred and fifty thousand (250,000)
Brookline Management Contract Common Shares shall be issued to Intek on each of
the following dates:
(i) the Closing Date;
(ii) the date which is three (3) months after the Closing Date;
(iii) the date which is six (6) months after the Closing Date; and
(iv) the date which is nine (9) months after the Closing Date.
(b) If Brookline, at any time during which any Brookline Management Contract
Common Shares remain unissued, shall take any of the actions contemplated by the
provisions of section 2.7 of the Share Purchase Agreement, then the procedure
set out in that section shall be followed and the appropriate equitable and
proportionate adjustment determined pursuant to the provisions of section 2.7,
if any, shall be made to the number of unissued Brookline Management Contract
Common Shares.
(c) Intek agrees that, without the prior written consent of the Corporation, it
will not sell, assign or otherwise transfer any of the Brookline Management
Contract Common Shares for a period of three (3) years from the Closing Date,
except that this restriction shall not apply to the following transactions in
such shares:
(a) pledges to secure bona fide debts or other obligations; or
(b) sales or transfers to Affiliates of Intek who agree to be bound
by the provisions of this section 4.3.
5.. EXPENSES. The Corporation shall, or shall cause BSIG to, reimburse
Intek for all of its reasonable expenses incurred in connection with the
provision of management services to either the Corporation or BSIG within thirty
(30) days following submission of applicable receipts or other supporting
documentation. For greater certainty, the expenses of Intek shall be deemed not
to include salaries or other compensation paid or payable by Intek to its
employees, or any amounts paid to consultants or independent contractors who
have been hired to perform any portion of the services described in section 7.
6.. ACCESS TO INFORMATION. During the Term, the Corporation shall, or shall
cause BSIG to, ensure that Intek and its representatives have access to all
financial statements and other records
-4-
and information of the Corporation and
BSIG which are available to the shareholders and directors of those corporations
generally. In addition, the Corporation agrees to provide Intek and its
representatives with access to its management information systems and to cause
BSIG to do the same.
7.. RESPONSIBILITIES OF INTEK. During the Term, both directly and through its
subsidiary Roamer One, Inc. ("Roamer One"), Intek shall provide the Corporation
and BSIG with certain administrative and management services including, INTER
ALIA, the following services:
(i) Site Selection. Representatives of Intek and/or Roamer One will be
available to the Corporation and BSIG for consultation regarding the
selection of sites to be financed.
(ii) Infrastructure Equipment and System Compatibility. Intek shall
provide advice and assistance to the Corporation and BSIG, from time
to time, on the evaluation of infrastructure equipment and system
capability.
(iii) FCC Matters. Intek shall assist the Corporation and BSIG, from
time to time, in matters regarding the United States Federal
Communications Commission (the "FCC"), including providing
notification to the FCC, as required.
(iv) Contract Management. Intek and/or Roamer One shall provide advice
and assistance to the Corporation and BSIG, from time to time, on
the management of contracts for 220 MHz and site licenses, as
required.
(v) Negotiation of Financing Contracts. Intek shall assist the
Corporation and BSIG, from time to time, in the negotiation of
contracts to provide financing in various forms for management
companies who construct, manage and operate wireless specialized
mobile radio systems on behalf of United States 220 MHz narrowband
licensees, including consulting on the business assessment and
technical review of the 220 MHz systems to be constructed.
8.. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The Corporation
represents and warrants to Intek that:
(i) the Corporation has the corporate power and authority to enter into
this Agreement and to perform its obligations hereunder;
(ii) the Corporation has taken all necessary corporate action to
authorize the execution and delivery of this Agreement and
the performance of its obligations hereunder;
-5-
(iii) this Agreement has been duly executed and delivered by the
Corporation and constitutes a valid and binding obligation of the
Corporation, enforceable against it in accordance with its terms;
(iv) the Corporation has duly authorized the issuance of such number of
Brookline Common Shares as shall be necessary to issue the Brookline
Management Contract Common Shares as contemplated herein and such
shares, when issued, will be validly issued as fully paid shares of
the Corporation; and
(v) other than any required stock exchange approvals, no consent is
required of, or notice required to be given to, any person by the
Corporation in respect of any of the transactions contemplated
herein or any part thereof.
9.. MISCELLANEOUS.
9.1 In this Agreement, unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders.
9.2 The headings in this Agreement are for convenience of reference only and
shall not be given any effect in the interpretation of this Agreement.
9.3 This Agreement and all amendments hereof and waivers and consents
hereunder shall be governed by and construed in accordance with the law of
the Province of British Columbia and the laws of Canada applicable therein
and the parties hereby irrevocably attorn to the jurisdiction of the courts
of British Columbia.
9.4 Time shall be of the essence of this Agreement.
9.5 The provisions of this Agreement are intended to be and shall be deemed
severable. The invalidity or unenforceability of any particular provision of
this Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
9.6 All notices, consents and other communications required or permitted to
be given under or by reason of this Agreement shall be in writing, shall be
delivered personally or by facsimile as described below, and shall be deemed
given on the date on which such delivery is made. Any such delivery shall be
addressed to the intended recipient at the following addresses (or at such
other address for a party as shall be specified by such party by like notice
to the other parties):
-6-
(a) if to the Corporation:
000-000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: The President
Facsimile: (000) 000-0000
(b) if to Intek:
000 Xxxx 000xx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx
00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
9.7 Subject to Intek's right to assign its rights and obligations hereunder
to an Affiliate capable of performing Intek's obligations hereunder, neither
party may assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of the other party.
9.8 The failure of a party to insist upon strict adherence to a term of this
Agreement on an occasion shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Agreement. No purported waiver shall be effective
unless in writing. The waiver by any party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any
subsequent or other breach.
9.9 This Agreement supersedes any other agreement, whether written or oral
(including a letter of intent between the Corporation and Xxxxxxxx
Communications Ltd. dated July 12, 1995), that may have been made or entered
into by the parties relating to the matters contemplated hereby and
constitutes the entire agreement between the parties with respect to such
matters.
9.10 This Agreement may be executed in counterparts, each of which shall be
considered an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto, all as of the date first above written.
BROOKLINE MINERALS INC.
-7-
By: /s/
_________________________________
By: /s/
_________________________________
INTEK DIVERSIFIED CORPORATION
By: /s/
_________________________________
By: /s/
_________________________________
