MANAGEMENT AND OPERATING SERVICES AGREEMENT
This Agreement dated as of January 31, 2002 between Xxxxx000.xxx, Inc.,
a Delaware corporation having offices at Suite 000 - 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, XX, Xxxxxx X0X 0X0, (hereinafter referred to as "Suite101") and
Creative Marketeam Canada Ltd., a British Columbia corporation, having offices
at 0000 Xx Xxxxx Xxxxxx, Xxxxxxxxxx, XX, Xxxxxx X0X 0X0 (hereinafter referred to
as "Marketeam");
W I T N E S S E T H:
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WHEREAS, Suite101 currently owns a World Wide Web-based directory and
on-line publishing community (herein such activities as currently conducted are
referred to as "Suite101's Web-based Business"); and
WHEREAS, in conjunction with Suite101's Web-based Business and in view
of its recent expenses and very limited revenues, Suite101 is seeking to curtail
its expenditures relating to Suite101's Web-based Business, limit its
operations, and desires to obtain the services of Marketeam to provide certain
management and operating services related to the ongoing operation of Suite101's
Web-based Business in accordance with the terms of this Agreement; and
WHEREAS, Marketeam is willing to provide such continuing management and
operating services for Suite101's Web-based Business on the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, Suite101 and Marketeam agree as follows:
1. Management and Operations Services; Excluded Responsibilities.
(a) Marketeam shall at its expense provide management and operating
services for Suite101's Web-based Business including the day-to-day over-site of
the Suite101 Web site, known as Xxxxx000.xxx, including, without limitation, the
following duties: accounting and bookkeeping, making payments to Senior and
Managing Editors, providing administration, oversight and fulfillment of
Suite101's duties and responsibilities under its agreements with
XxxxxxxxxXxxxx.Xxx, LLC, including collection and prompt deposit in the account
of Suite101 of all receipts from XxxxxxxxxXxxxx.Xxx, LLC, providing Internet
access to the Web site, hosting email, property maintenance, providing postage,
implementing software upgrades, arranging for necessary software and other
intellectual property licensing, and paying the electric charges and long
distance telephone charges. In addition, Marketeam shall make available at its
expense such other managerial, technical, general and clerical personnel
assistance as it deems necessary to support Suite101's Web-based Business.
(b) To the extent of the services to be provided hereunder, Marketeam
shall be responsible to the Board of Directors of Suite101 for all phases of the
day-to-day management and operation of Suite101's Web-based Business, including
the implementation, management and operation of the Suite101 web site and links,
interfacing with Contributing Editors, Managing Editors and Senior Managing
Editors, and such other aspects of the planning, operation, management and
control of the Xxxxx000.xxx Web site as are necessary to the continuing
uninterrupted operation of Suite101's Web-based Business.
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(c) Except as specifically authorized in writing in advance by the
Suite101 Board of Directors, Marketeam shall not, and shall have no authority to
act on behalf of Suite101 with respect to, any of the following activities:
(i) Marketeam shall not negotiate on behalf of or enter into any
agreements regarding the issuance of any capital stock of
Suite101, the sale of any assets, tangible or intangible, or
involving any intellectual property of Suite101 or any
transaction involving any merger, consolidation or business
combination involving Suite101.
(ii) Marketeam shall not negotiate on behalf of or enter into any
employment agreements relating to the employment of any
person as an employee, consultant or other provider of
services to Suite101.
(iii) Marketeam shall not negotiate on behalf of or enter into
any agreement relating to any purchase or lease of personal
or real property by Suite101.
(iv) Marketeam shall not negotiate on behalf of or enter into any
agreements relating to the expenditure of any money by
Suite101.
(v) Marketeam shall not represent to any person that it or any
of its officers or employees are authorized to enter into
any agreement on behalf of Suite101 or make any commitment
involving Suite101.
(d) Suite101, through its officers or consultants, shall perform the
following at the expense of Suite101:
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(i) prepare and file all periodic and other reports required to
be filed with any governmental agency or stock exchange,
including the U.S. Securities and Exchange Commission;
(ii) prepare and cause to be audited the 2001 year-end financial
statements and prepare any required quarterly unaudited
financial statements;
(iii) prepare for and hold an annual meeting of shareholders;
(iv) prepare and file all required tax returns and reports;
(v) pay the following expenses:
(A) copier and telephone lease rental, and
(B) office rent
2. Compensation.
(a) In consideration of the services to be performed by Marketeam
pursuant to Paragraph 1 hereof, Suite101 will pay Marketeam during the term of
this Agreement a management fee of (i) U.S. $26,000 per month, payable on the
first day of each month and (ii) upon collection by Suite101, a sum equal to all
receipts of Suite101 from its contracts with XxxxxxxxxXxxxx.Xxx, LLC. Upon
termination of this Agreement, for any reason other than a default by Marketeam
hereunder, all amounts accrued on account of the monthly management fee shall
immediately become due and payable.
(b) All business expenses, including but not limited to travel
expenses, entertainment expenses and telephone tolls, relating to Suite101's
Web-based Business and incurred by personnel furnished by Marketeam pursuant to
this Agreement in the course of performing duties under this Agreement shall be
billed directly to Marketeam
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by such personnel, who shall be promptly reimbursed by Marketeam. None of such
expenses relating to Suite101's Web-based Business shall be borne by Suite101.
(c) All revenues of Suite101 and other monies received by Suite101
during the term of this Agreement shall be accounted for by Marketeam and paid
over and credited to the account of Suite101.
3. Term.
The term of this Agreement shall be for a period of one (1) month from
the date hereof and shall continue from month to month thereafter until
terminated as provided for in Paragraph 4 hereof.
4. Termination.
Either party to this Agreement shall have the right to terminate this
Agreement on giving ten (10) days' written notice prior to the end of any
monthly termination hereof. Notwithstanding the above, this Agreement shall
automatically terminate in the event of the sale of those assets constituting
Suite101's Web-based Business.
5. Representations and Warranties.
(a) Suite101 represents and warrants that this Agreement has been
duly authorized for execution and delivery by action of the Board of Directors
of Suite101 and that Suite101 is duly authorized under all applicable provisions
of law to make and perform this Agreement. Suite101 further represents and
warrants that the execution and delivery of this Agreement will not conflict
with or result in a breach of any of the terms, conditions or provisions of
Suite101's Certificate of Incorporation, or of its By-Laws, or of any corporate
restriction or of any agreement or instrument to which Suite101 is now a party
or by which it is bound, or constitute a default under any of the foregoing, or
result
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in the creation or imposition of any lien, encumbrance, or charge of any nature
whatsoever upon any of the properties or assets of Suite101 under the terms of
any such agreement or instrument.
(b) Marketeam represents and warrants that this agreement has been
duly authorized for execution and delivery by action of the Board of Directors
of Marketeam and that Marketeam is duly authorized under all applicable
provisions of law to make and perform this Agreement. Marketeam further
represents and warrants that the execution and delivery of this Agreement will
not conflict with or result in a breach of any of the terms, conditions or
provisions of Marketeam's Certificate of Incorporation, or of its By-Laws, or of
any corporate restriction or of any agreement or instrument to which Marketeam
is now a party or by which it is bound, or constitute a default under any of the
foregoing, or result in the creation or imposition of any lien, encumbrance, or
charge of any nature whatsoever upon any of the properties or assets of
Marketeam under the terms of any such agreement or instrument.
6. Covenants and Agreements of Marketeam.
(a) Marketeam agrees that it will not, during the term of this
Agreement and for a period of three (3) years thereafter, directly or
indirectly, disclose, publish or divulge (except in connection with the
performance of its duties under this Agreement) to any firm, person or
corporation any of the confidential information of Suite101 or its subsidiaries
learned in connection with the performance of the duties hereunder; and agrees
not to use in competition with Suite101 any of such confidential information,
including, without limitation, knowledge or information relating to sources of
data, trade
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secrets, computer systems and programs, business methods, the names and
requirements of its members or subscribers, or its finances.
(b) Except as expressly previously authorized in writing by Suite101,
which authorization will not be unreasonably withheld, Marketeam agrees that it
will not, during the term of this Agreement and for a period of three (3) years
thereafter, within the United States or Canada, directly or indirectly, either
as principal, agent, contractor, subcontractor, consultant, stockholder,
partner, co-venturer or in any other individual or representative capacity
whatsoever, engage or become interested in the business of the operation of an
Internet community Web site offering content substantially similar to that
offered on the Xxxxx000.xxx Web site during the term of this Agreement within
the United States or Canada or any business or activity of the type then engaged
in or conducted by Suite101 during the term of this Agreement throughout the
United States or Canada.
(c) Any process, method, discovery, improvement or computer program
devised, conceived or developed by Marketeam, alone or with others, during the
term of this Agreement in connection with the performance of its duties
hereunder and related to the operation of an Internet community Web site
offering content substantially similar to that offered on the Xxxxx000.xxx Web
site during the term of this Agreement within the United States or Canada shall
be the exclusive property of Suite101 and shall be promptly disclosed to it.
Marketeam shall, both during and after expiration or termination of this
agreement (regardless of the reason therefore), at the request and expense of
Suite101, forthwith execute and deliver all instruments and take all such other
action as Suite101 may reasonably request to transfer to and confirm and vest
all rights, title and interest
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therein in Suite101 and to enable it to apply for and obtain domestic and
foreign patents and copyrights therein. All expenses of filing and prosecuting
any such patent and copyright applications shall be borne by Suite101, but
Marketeam shall cooperate in filing and prosecuting such applications.
(d) Marketeam agrees to enter into an agreement with (for the benefit
of, and enforceable by, Suite101) with each of its employees acting pursuant to
this Agreement to the effect that each such employee, individually, shall abide,
and be bound by, the terms of this Paragraph 6.
(e) The provisions of this Paragraph 6 shall survive the termination
of this agreement.
(f) The covenants contained in this Paragraph 6 shall be deemed to be
a series of separate covenants; and if, in any judicial proceedings, a court
shall refuse to enforce all of such separate covenants, then those so held to be
unenforceable shall be deemed deleted to the extent necessary to permit the
remaining separate covenants to be enforced in such proceeding.
(g) Marketeam understands and agrees that Suite101 intends to engage
in negotiations with others, including, possibly, Marketeam, to sell its assets
related to Suite101's Web-based Business, and including, possibly, the shares
and/or assets of i5ive Communications, Inc. ("i5ive"), a wholly-owned subsidiary
of Suite101. Marketeam agrees that at all times during the term of this
agreement it shall keep segregated and apart the assets and properties of both
Suite101 and i5ive and shall take such steps as are reasonably necessary to
preserve Suite101's Web-based Business for the purpose of facilitating and
enhancing the sale of those assets.
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7. Personnel
All personnel furnished by Marketeam and performing services for
Suite101 pursuant to this Agreement shall be and remain the employees of
Marketeam and shall not represent themselves as being the employees or under the
supervision and control of Suite101. All such personnel shall agree in writing
to the restrictions set forth in paragraph 1(c) hereof as restricting their
authority to act on behalf of or represent Xxxxx000.xxx.
8. Indemnification.
It is understood that Suite101 shall have no liability for any debts or
other obligations of Marketeam whether or not incurred on behalf of Suite101;
and Marketeam hereby agrees to indemnify Suite101 and hold Suite101 harmless
against any and all actions, suits, proceedings, demands, assessments, or
judgments, costs and expenses of any nature whatsoever arising out of any
services performed under this Agreement or any actions taken on behalf of
Suite101 by personnel furnished by Marketeam pursuant to this Agreement that
violate any of the terms of this Agreement.
9. Assignment and Amendment.
This Agreement shall not be assigned or amended without the written
consent of the other party.
10. Governing Law.
This Agreement is governed by the laws of the State of Delaware.
11. Notices.
All notices and other communications under this Agreement shall be in
writing and shall be delivered, by hand delivery, facsimile or by email to the
following addresses:
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(a) if to Suite101, at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
XX, Xxxxxx X0X 0X0, Fax # 000-000-0000 and email c/o
xxxxxxxx@xxx.xxx.
(b) if to Marketeam, at 0000 Xx Xxxxx Xxxxxx, Xxxxxxxxxx, XX, Xxxxxx
X0X 0X0.
Any notice given in accordance with the foregoing shall be deemed to be
given when personally delivered or transmitted for delivery.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
XXXXX000.XXX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, President
CREATIVE MARKETEAM CANADA LTD.
By: /s/ Xxxxxxx Loblaw
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Xxxxxxx Loblaw, President
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