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 -
XXXXXXXX COMMUNICATIONS LTD.,
a corporation incorporated under the laws of the Province of
Ontario
(hereinafter referred to as "SCL")
OF THE SECOND PART
- and -
MIDLAND INTERNATIONAL CORPORATION,
a corporation incorporated under the laws of the State of
Delaware
(hereinafter referred to as "Midland")
OF THE THIRD PART
RECITALS:
1. The Corporation and SCL, Intek Diversified Corporation 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, SCL has agreed to
provide certain management services to the Corporation.
3. Midland is a wholly-owned subsidiary of SCL.
4. Pursuant to the Share Purchase Agreement, the execution and delivery by the
Corporation, SCL and Midland of a management services agreement which
obliges SCL
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to provide the services described herein in exchange for the
common shares of the Corporation which are issuable to SCL hereunder, is a
condition precedent to the completion of the share purchase transaction
contemplated thereby.
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:
(a) "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 (or, for the purpose of section 9.1 only, 50 per cent or more) of
the voting rights attached to all outstanding voting securities of the
corporation;
(b) "AGREEMENT" means this management services agreement, as the same may
be amended and supplemented from time to time;
(c) "BROOKLINE COMMON SHARES" means common shares in the capital of the
Corporation as constituted at the date hereof;
(d) "BROOKLINE MANAGEMENT CONTRACT COMMON SHARES" has the meaning ascribed
thereto in section 4;
(e) "CLOSING DATE" has the meaning ascribed to that term in the Share
Purchase Agreement; and
(f) "TERM" means the term of this Agreement.
2. RETAINER TO PROVIDE MANAGEMENT SERVICES. The Corporation hereby retains
SCL 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 SCL,
but in that event, except where the termination is for "just cause", the
Corporation shall immediately issue to SCL 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 SCL which, under common law, entitles the Corporation to terminate
all of its obligations under this Agreement.
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4. MANAGEMENT SERVICES FEES.
4.1 In consideration of the management services to be provided by SCL to the
Corporation and BSIG hereunder, SCL 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 SCL on each of
the following dates:
(a) the Closing Date;
(b) the date which is three (3) months after the Closing Date;
(c) the date which is six (6) months after the Closing Date; and
(d) the date which is nine (9) months after the Closing Date.
4.2 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.
4.3 SCL 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 SCL who agree to be bound by
the provisions of this section 4.3.
5. EXPENSES. The Corporation shall, or shall cause BSIG to, reimburse SCL
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 SCL shall be deemed not to include
salaries or other compensation paid or payable by SCL 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 SCL and its representatives have access to all
financial statements and other records 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 SCL and its
representatives with access to its management information systems and to cause
BSIG to do the same.
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7. RESPONSIBILITIES OF SCL. During the Term, SCL shall provide the
Corporation and BSIG with certain administrative and management services
including, INTER ALIA, the following services:
(a) STRATEGIC PLANNING. By making its Chairman and Chief Executive
Officer and its Executive Vice-President available to the Corporation
on a part time basis, SCL shall provide the Corporation with advice
and assistance on the formulation and implementation of its strategic
planning initiatives.
(b) FIELD ASSESSMENT AND MARKETING ASSISTANCE. Both directly and through
Midland, SCL shall provide advice and assistance to the Corporation
and BSIG, from time to time, on their field assessment and marketing
activities.
(c) ACCOUNTING AND FINANCIAL MANAGEMENT. SCL shall provide advice and
assistance to the Corporation, from time to time, on the management of
its accounting function and corporate finance activities.
(d) NEGOTIATION OF FINANCING CONTRACTS. SCL 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.
(e) NEGOTIATIONS WITH EQUIPMENT SUPPLIERS. SCL, either directly or
through Midland, shall assist the Corporation and BSIG, from time to
time, in the negotiation of purchasing terms with suppliers of radio
equipment and in the selection of such equipment.
(f) PUBLIC RELATIONS. SCL may assist the corporation, upon request, with
the management of its corporate public relations function, including
advising it on handling its relations with its shareholders.
(g) COMPUTER SERVICES. SCL shall, to the extent feasible, provide the
Corporation with computer-related services.
8. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The Corporation
represents and warrants to SCL that:
(a) the Corporation has the corporate power and authority to enter into
this Agreement and to perform its obligations hereunder;
(b) the Corporation has taken all necessary corporate action to authorize
the execution and delivery of this Agreement and the performance of
its obligations hereunder;
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(c) 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;
(d) 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
(e) 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 Midland shall pay (or shall cause its Affiliates to pay, as applicable),
the Corporation semi-annually within 30 days of June 30 and December 31 an
amount equal to 5% of the net selling price paid for radio equipment by
management companies who purchase such equipment from Midland or any of its
Affiliates for use in the construction or operation of Qualifying Systems (as
that term is defined in the Share Purchase Agreement).
9.2 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.
9.3 The headings in this Agreement are for convenience of reference only and
shall not be given any effect in the interpretation of this Agreement.
9.4 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.
9.5 Time shall be of the essence of this Agreement.
9.6 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.
9.7 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):
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(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 SCL:
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X. X'Xxxx
Facsimile: (000) 000-0000
(c) if to Midland:
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
9.8 Subject to SCL's right to assign its rights and obligations hereunder to an
Affiliate capable of performing SCL'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.
9.9 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.
9.10 This Agreement supersedes any other agreement, whether written or oral
(including a letter of intent between the Corporation and SCL 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.
9.11 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.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto, all as of the date first above written.
BROOKLINE MINERALS INC.
By: /s/
_________________________________
By: /s/
_________________________________
XXXXXXXX COMMUNICATIONS LTD.
By: /s/
_________________________________
By: /s/
_________________________________
MIDLAND INTERNATIONAL CORPORATION
By: /s/
_________________________________
By: /s/
_________________________________
