MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement") is entered into on this ______
day of January, 2000, by and between COACH AND CAMPERS OF KNOXVILLE, LLC, a
Tennessee limited liability company ("C&C"), and xXX - KNOXVILLE, INC., a
Colorado corporation ("xXX").
WHEREAS, C&C, xXX and iRV's parent corporation, xXX Dealerships, Inc, a
Colorado corporation ("xXX Dealerships"), have entered into an Asset Purchase
and Sale Agreement, which contemplates the purchase by xXX from C&C of all of
C&C's operational assets (the "Purchase");
NOW THEREFORE, for valuable consideration, the parties do covenant and
agree as follows:
1. Management Services.
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Under the direction and control of Xxxxxx X. Xxxxxx XX ("Xxxxxx") of
C&C, as hereinafter described, C&C retains xXX as Business Manager of C&C
operations during the term of this Agreement, all in accordance with the
provisions hereof. xXX agrees to become the Business Manager of C&C, and to
perform the services on behalf of C&C, under the direction of C&C's Board of
Directors, as hereinafter set forth. In performing its services and
responsibilities hereunder, xXX shall take instruction and direction from
Xxxxxx, or such other person as Xxxxxx shall appoint or authorize in writing.
2. Services Provided.
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xXX shall, subject to the general supervision of Xxxxxx, perform, at
C&C's expense, all desirable or necessary business functions for and on behalf
of C&C in substantially the manner previously conducted, including
specifically, but not limited to, the following (collectively, the
"Services"):
(a) enter into contracts, leases and other agreements in the normal
course of business;
(b) open bank accounts, sign, accept, endorse and receive notes,
drafts, checks, bills of exchange and commercial papers;
(c) take out insurance;
(d) perform all accounting and disbursing services;
(e) implement and supervise C&C's performance under existing
contracts, and procure and perform new contracts in the ordinary course of
business;
(f) accept and receive notes, drafts, checks, bills of exchange and
commercial papers; purchase insurance; and supervise accounting, disbursing,
and payroll services;
(g) pay and discharge out of funds available therefor the accounts
payable, notes, and other obligations and liabilities of C&C;
(h) furnish Xxxxxx all pertinent reports and information with
respect to the progress of C&C's business on a bi-weekly basis;
(i) employ personnel required for C&C operations, planning and
administration pertaining to labor relations, salaries, wages, working
conditions, hours of work, termination of employment, employee benefits,
safety, recruiting, housing and related matters pertaining to such employees;
(j) purchase, rent or otherwise acquire machinery, equipment and
facilities for the conduct of the business of C&C and sell, abandon or
otherwise dispose of items of machinery, equipment or fixtures that are worn
out, obsolete or no longer useful in the conduct of the business of C&C.
(k) purchase such materials, supplies and services as may be needed
or required in connection with the operations of C&C;
(l) prepare and file with all appropriate governmental authorities
any tax and other reports concerning operations of C&C required by law;
(m) disburse funds, to the extent available, for any taxes imposed
on C&C by virtue of its conduct of its business;
(n) secure and maintain insurance covering insurable risks of C&C,
including risks growing out of personal injuries to or against its employees
or others, risks of fire, and other risks ordinarily insured against in
similar operations, and adjusting losses and claims pertaining to or rising
out of such insurance;
(o) comply with all laws applicable to C&C by virtue of the
operation of the business of C&C, including particularly laws relating to
safety requirements, working conditions, and compensation and benefits to
employees;
(p) apply to appropriate governmental bodies for permits, licenses
and approvals necessary to accomplish the powers and duties of C&C herein set
forth and the filing of all reports and notices with such governmental bodies
as are required by law;
(q) keep full and accurate accounts of all business transactions
entered into on behalf of C&C;
(r) prosecute and defend lawsuits, as necessary, to establish and
protect the rights of C&C or to establish or protect the validity of title to
C&C's real or personal property; and
(s) negotiate loans to or from any other corporation or partnership
with or without security.
3. Clients.
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(a) During the term hereof, any and all new client engagements
obtained or procured shall be deemed xXX clients and contracts or agreements
for services shall be executed in the name of and inure to the benefit of xXX.
(b) Should this Agreement terminate prior to the consummation of
the Purchase, then and in such event (i) all contracts signed during the term
under the xXX name for existing C&C services shall revert to C&C, free of any
claim of xXX, and (ii) all contracts signed under the xXX name for existing
xXX services or services developed by xXX during the term shall remain the
sole and separate property of xXX, free of any claim of C&C. xXX and C&C each
shall indemnify, defend and hold harmless the other from any future liability
under client contracts which inure to each following the termination hereof.
4. Bank Account.
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(a) xXX shall establish a new C&C bank account(s) (the "Bank
Account") in which all revenues received from the operations of C&C shall be
deposited. xXX shall not commingle any of the above described revenues with
any funds or other property of C&C. From the revenues deposited into the Bank
Account, xXX shall (i) reimburse itself twice monthly for all expenses
incurred or paid by xXX in connection with performing the Services hereunder
including, without limitation, expense for salaries, wages, taxes, travel,
lodging and other expenses, (ii) pay itself the management fee provided for in
paragraph 8(a) hereof subject to the terms and conditions thereof, and (iii)
pay appropriate operating expenses with respect to the business. Pending
closing of the Purchase, all funds deposited into the Bank Account shall be
deemed as sole and separate property of C&C, free of any claim, lien or
entitlement of xXX or Discovery. Upon closing and consummation of the
Purchase Agreement, all funds remaining in the Bank Account on the closing
date shall be included in the assets transferred to Discovery pursuant to the
Purchase.
5. Working Capital.
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The parties recognize and agree that pending closing and
consummation of the Purchase, operation of C&C's business may require the
infusion of additional working capital in order to satisfy short term
obligations, trade payables and other liabilities necessary for continued
operations. To the extent that revenues received from operations and
deposited into the Bank Account pursuant to paragraph 3 hereof are
insufficient to meet such working capital requirements, xXX may advance
sufficient funds to C&C to satisfy its immediate working capital requirements
(the "Advances"). All such Advances shall be deemed loans from xXX to C&C,
subject to the following: Should the parties fail to close the Purchase
Agreement prior to the termination of this Agreement, then C&C agrees to repay
to xXX all such Advances, together with interest at the rate of ten percent
(10.0%) per annum, within sixty (60) days of the date of termination of this
agreement. The obligation of C&C to repay the Advances, together with
interest thereon, shall be secured by a security interest in all tangible and
intangible assets of C&C.
6. Key Employees.
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In the performance of the Services assigned to xXX in this
Agreement, xXX shall assign and make available such management and employees
as are necessary in its judgement to perform the services required under this
Agreement. xXX shall determine the authority and duties of the xXX Employees,
and may discharge, suspend, or dismiss any of the xXX Employees. xXX shall
plan and administer all matters pertaining to labor relations, salaries,
wages, working conditions, hours of work, termination of employment, employee
benefits, safety, recruiting, housing, and related matters pertaining to the
xXX Employees, at iRV's own expense and responsibility. xXX Employees
assigned to C&C pursuant to this Agreement shall at all time remain employees
of xXX during their assignment to C&C. xXX shall be solely responsible for
withholding and the payment of all xXX Employees' taxes, including, without
limitation, Federal, State, and local income taxes, FICA contributions, and
unemployment and Workers Compensation payments. Each xXX employee assigned to
C&C shall be advised of, and consent to be bound by, the terms of this
Agreement. However, C&C, through Board Consent, shall have the right to
reject the assignment to C&C of any individual xXX Employee at any time and
for any reason.
7. Compensation.
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(a) In consideration of the Services to be rendered by xXX pursuant
to this Agreement, xXX shall be entitled to receive the net income, if any,
generated by the operations of C&C during the term hereof (the
"Compensation"). Such net income shall be calculated after allowance for
depreciation, amortization and income taxes, and shall be calculated in
accordance with generally accepted accounting principles consistently applied.
(b) Discovery shall have the right and option to utilize any and
all amounts outstanding as Compensation hereunder as a credit against the
purchase price of C&C assets which xXX shall have the right to purchase from
C&C following termination hereof.
8. Costs and Expenses.
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xXX shall be entitled to reimbursement for any and all costs or
expenses incurred by it in connection with performing the Services hereunder,
including, without limitation, expenses for wages and salary, payroll taxes,
workers' compensation premiums, fringe benefits, travel, lodging,
entertainment and other costs or expenses incurred in connection with its
performance hereunder. Such expenses shall be reimbursed twice monthly from
the Bank Account in accordance with the provisions of paragraph 4 above.
9. Termination.
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(a) The term of this Agreement shall be six (6) months, commencing
upon the execution hereof, or until the closing of the Purchase, whichever
occurs first (the "Term"), or unless terminated pursuant to Section 10(b) or
10(c) below ("Termination").
(b) C&C may terminate this Agreement at any time for cause, which
shall include, but not be limited to, the following:
(i) xXX or any assigned employee engaging in fraud,
misappropriation of funds, embezzlement, or other like conduct committed
against C&C;
(ii) any xXX Employee being convicted of a felony;
(iii) iRV's or any xXX Employee's material breach of this
Agreement; or
(iv) the filing for protection, voluntarily or involuntarily,
under the bankruptcy laws by xXX or the dissolution of
xXX.
In addition to, and not in lieu of terminating this Agreement, C&C may
exercise any alternative remedy for the breach at law or in equity including,
without limitation, recovering its reasonable attorney's fees and costs of
litigation.
(c) xXX may terminate this Agreement for cause, which shall
include, but not be limited to, the following:
(i) C&C or any of C&C's employees materially breach this
Agreement; or
(ii) the dissolution of C&C.
Upon Termination of this Agreement pursuant to this Section 10(c), all of
iRV's obligations hereunder, including those of xXX Employees shall cease,
provided, however, iRV's sole remedy for breach shall be the Compensation or
expenses due it under Section 6 for Services performed to the date of
Termination, plus its reasonable attorney's fees and costs of litigation.
10. Indemnification.
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(a) C&C agrees to indemnify, defend and hold harmless xXX, its
agents and employees, from and against any claims, demands, obligations,
liabilities or causes of action, of whatsoever kind or description, based upon
any act or omission alleged to have been performed or omitted in connection
with or arising out of the services to be performed under this Agreement.
(b) xXX agrees to indemnify, defend and hold harmless C&C, its
agents and employees, from and against any claims, demands, obligations,
liabilities or causes of action, of whatsoever kind or description, based upon
any act or omission alleged to have been performed or omitted in connection
with or arising out of the services to be performed under this Agreement.
11. Miscellaneous.
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(a) This Agreement constitutes the entire understanding between the
parties with respect to the subject matter hereof, superseding all previous
communications and negotiations, whether written or oral.
(b) Any amendment or modification or this Agreement shall be in
writing and shall be signed by the parties.
(c) If, for any reason, any provision of this Agreement is held
invalid, such invalidity shall not affect any other provision of this
Agreement, and each such other provision shall to the full extent consistent
with law continue in full force and effect. If any provision of this
Agreement should be invalid in part, such invalidity shall in no way affect
the rest of such provision, which shall, together with all other provisions of
this Agreement, to the full extent consistent with law, continue in full force
and effect.
(d) All notices, requests, demands, and other communications
hereunder in writing and shall be delivered personally or sent by first class
registered or certified mail, overnight courier service, or telecopy as
follows:
If to C&C, to: Xxxxxx Xxxxxx XX
00000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
with a copy to: _______________________________
_______________________________
_______________________________
If to xXX: Xxxx Xxxxxx, President
xXX - Knoxville, Inc.
0000 Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
with copy to: Xxxxxxxx X. Xxxxxx, Esq.
0000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
or such other address or telecopy number as may be designated in writing by
any party to the other parties hereto. Any notice or other communication so
transmitted shall be deemed to have been given on the day of delivery, if
delivered personally, on the business day following receipt of telecopy
confirmation, if sent by telecopy, one business day after delivery to an
overnight courier service, or five days after mailing if sent by mail.
(e) This Agreement shall be binding upon and shall inure to the
benefit of, the parties hereto and their permitted successors and assigns.
This Agreement is a personal services contract, and it is expressly agreed
that the rights and interests of xXX and Discovery hereunder may not be sold,
transferred, assigned, pledged, or hypothecated.
(f) This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall be deemed
to be one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on
the day and year first above written.
COACH AND CAMPERS, INC., a
Tennessee corporation
By:
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Xxxxxx X. Xxxxxx XX, President
By: Its Board of Directors
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Xxxxxx X. Xxxxxx XX
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xXX - KNOXVILLE, INC., a Colorado corporation
By:
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Xxxx Xxxxxx, President
