Management and Administration Agreement - JBM Entertainment Inc. and Visual Bible International Inc.
MANAGEMENT AND ADMINISTRATION AGREEMENT
THIS AGREEMENT made as of the 1st day of June, 2002, BETWEEN: JBM
ENTERTAINMENT INC., a corporation incorporated under the laws of
Nova Scotia,
(hereinafter called "JBM") OF THE FIRST PART; and VISUAL BIBLE
INTERNATIONAL, INC., a corporation incorporated under the laws of
Florida, (hereinafter called "Visual")
OF THE SECOND PART.
WHEREAS Visual desires to retain JBM to provide certain management
and administrative services to Visual as more particularly provided
for herein.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
mutual covenants hereinafter contained and other good and valuable
consideration (the receipt and adequacy of which are hereby
acknowledged by each of the parties hereto), the parties hereto
covenant and agree as follows:
1. For the purposes of this Agreement the following defined terms
shall have the following meanings:
"Fee" shall have the meaning ascribed thereto in paragraph 7(a) hereof
"Marketing Period" means each successive fifteen month period during
the Term of this Agreement commencing on the first day of the Term
of this Agreement;
"Material Non-Performance by JBM" means the failure by JBM and the
consultants retained by JBM on behalf of Visual to market at least
one new film during each Marketing Period;
"Services" shall have the meaning ascribed thereto in paragraph 2
hereof and "Term" shall have the meaning ascribed thereto in
paragraph 7 hereof
2. Visual hereby retains JBM on a sole and exclusive basis, and JBM
hereby agrees to provide to Visual and its subsidiaries, the
following management and administration services (collectively, the
"Services"):
(a) the supervision of and responsibility on behalf of Visual for
all aspects of the creative development, production and marketing
process for all of Visual's filmed productions;
(b) the recruitment, on behalf of Visual, of candidates to serve
Visual as the President and Chief Executive Officer, Chief Financial
Officer and the heads of production, marketing and distribution for
films for Visual; and
(c) the retention, on behalf of Visual, of consultants to provide to
Visual creative, production, marketing, distribution and business
development services.
3. While JBM remains obligated under this Agreement:
(a) except as approved by JBM, Visual shall not enter into any
agreement or undertake any obligation binding on it
(i) relating to creative development, production and/or marketing
(including distribution and business development) for any filmed or
other audio/visual or audio productions, or the appointment of the
President and Chief Executive Officer, Chief Financial Officer and
the heads of production, marketing and distribution for films for
Visual; or
(ii) whereby Visual becomes bound to make payments, whether
absolutely or contingently, exceeding $1,000,000; or
(iii) that is part of a group of agreements or obligations relating
to the same subject matter under which Visual will be bound to make
payments, for such agreements and obligations, whether absolutely or
contingently, exceeding $1,000,000 in the aggregate; or
(iv) that would or might reasonably be expected to impair the
ability of Visual to meet its obligations under this Agreement;
(b) Visual shall enter into all agreements and undertake all
obligations as are reasonably
necessary to permit and/or facilitate the provision of the Services
by IBM
hereunder.
4. JBM agrees that in the course of rendering the Services to Visual
hereunder, neither it nor any of its employees, agents or
representatives will commit any act of bad faith or willful or
reckless misconduct that causes material losses to Visual nor will
it or any of its employees, agents or representatives engage in any
material self-dealing unless all material aspects of such self
dealing have been disclosed in writing by JBM to Visual prior to
Visual becoming bound or incurring any expense in relation to any
matter relating to such self-dealing.
5. (a) Visual agrees to provide JBM as requested by JBM but not
less frequently than
monthly, accounting reports concerning its affairs in a form, and
containing
information as to such matters, as is specified by JBM acting
reasonably from time
to time.
(b) JBM agrees to provide periodic reports to Visual with respect
to its activities
hereunder.
6. For the purposes of providing the Services to Visual, JBM shall
make available the services of such officers, employees, agents,
consultants and/or directors of JBM as may be necessary in the
reasonable determination of JBM to carry out and perform the
Services as herein contemplated.
7. The initial term of this Agreement shall be for the period of
seven (7) years commencing on the date hereof. Thereinafter, unless
terminated in accordance with the provisions hereof, this Agreement
shall be automatically renewed for additional two year periods. The
period during which this Agreement continues, including any and all
renewal periods is hereinafter referred to as the "Term". This
Agreement may only be terminated:
(a) by Visual if Visual gives written notice of termination to JBM
within seven days
following the end of any Marketing Period in which there has
occurred a Material
Non-Performance by JBM, any such termination to be effective as at
the end of the
initial term hereof or the end of any renewal term, whichever shall
next occur after
Visual has given such notice of termination;
(b) forthwith upon written notice given by JBM to Visual, if Visual
is in breach of this
Agreement and such breach has not been rectified to the satisfaction
of IBM within:
(i) in the case of Visual's obligation to make any payment
hereunder, ten days after the giving of written notice of such
breach by JBM to Visual; and
(ii) in the case of any other breach, thirty days after the giving
of written notice of such breach by JBM to Visual;
(c) forthwith upon written notice given by one party to the other if
the party receiving such notice has made an assignment for the
benefit of its creditors, has been declared bankrupt, has made a
proposal to creditors or a custodian, receiver or manager or an
officer with similar powers has been appointed in respect of such
receiving party's business or any substantial part thereof; and
(d) forthwith upon written notice given by one party to the other if
the party receiving such notice has ceased to carry on business in
the ordinary course.
8. In consideration of the provision of the Services hereunder,
Visual covenants and agrees to pay to JBM during the Term of this
Agreement the following sums:
(a) during the initial twelve (12) months of this Agreement, the sum
of US$600,000 (the "Fee") in equal monthly installments in advance,
plus applicable GST; and
(b) during each subsequent twelve month period, conditional upon the
commencement of principal photography on at least one new film
during each Marketing Period, the Fee shall be increased by
US$100,000. Such increased Fee in effect in each twelve month period
shall be paid by Visual in equal monthly installments in advance
plus applicable GST.
In addition to such fees, Visual shall reimburse JBM monthly for all
reasonable properly supported out-of-pocket expenses incurred during
the Term by or on behalf of IBM in connection with the provision of
the Services hereunder. JBM shall provide a monthly report of all of
such expenses to Visual and Visual shall reimburse IBM for all such
expenses within fifteen (15) days following receipt of such monthly
report from JBM. IBM shall also prepare and submit to Visual during
the Term annual budgets for such expenses and if such expenses are
budgeted to exceed US$100,000 in any rolling period of twelve (12)
months, IBM shall only be entitled to reimbursement for such
expenses in excess of US$100,000 if the budget or budgets therefor
have been approved by the Board of Directors of Visual.
Any and all fees and expenses payable by Visual to JBM shall be
exclusive of all fees and expenses payable by Visual to any
consultants referred to in paragraph 2(C)) hereof.
9. During the Term and at all times thereafter each of JBM and
Visual agree that they shall not, and they shall cause their
respective officers, directors, agents, consultants and employees
not to disclose to any other person any confidential and/or
proprietary information of or pertaining to the business or affairs
of the other party or of any of its affiliates other than to their
respective officers directors, agents, consultants or employees in
the ordinary course of the fulfilment of the obligations
contemplated by this Agreement. Further, IBM and Visual agree that
they shall, and they shall cause their respective officers,
directors, agents, consultants and employees to, use their
respective reasonable commercial efforts to prevent the publication
or disclosure of any such information during the term of this
Agreement and thereafter.
10. If any covenant or provision of this Agreement is determined to
be invalid, void or unenforceable in whole or in part, it shall not
be deemed to effect or impair the validity of any other covenant or
provision hereof and each of such covenants and provisions is hereby
declared to be separate and distinct and severable from each of the
others for the purpose of this Agreement.
11. Visual hereby indemnifies and saves JBM, its officers,
directors, agents, consultants, shareholders and employees, harmless
from and against all claims, liabilities, damages, expenses, losses
and costs which it or they may suffer as a result of the performance
by JBM of its obligations under this Agreement whether or not the
act or acts giving rise to any such claims, liabilities, damages,
expenses, losses and costs are negligent unless such claim,
liability, damage, expense, loss or costs is contemplated hereby or
arises from a breach by JBM of its obligations under Section 4
hereof. JBM hereby indemnifies and saves Visual, its officers,
directors, agents, shareholders and employees harmless from and
against all claims, liabilities, damages, expenses, losses and costs
which they may suffer as a result of any breach by IBM of its
obligations under Section 5 hereof.
12. Any notices, requests, demands or other communications required
or permitted to be given pursuant to or concerning this Agreement
shall be in writing and shall be sufficiently given if personally
delivered or sent by registered letter, postage prepaid, or
transmitted by telecopy or other form of recorded communication
addressed as follows:
if to JBM, at:
Suite 900
Purdy's Wharf Tower One
1959 Upper Water Street
P.O. Box 997
Halifax, Nova Scotia
B3J 2X2
Telecopy No. (902) 420-1417
Attention: Charles S. Reagh
with a copy to:
Lang Michener
BCE Place
Suite 2500, 181 Bay Street
Toronto, Ontario
M5J 2T7
Telecopy No. (416) 365-1719
Attention: Howard M. Drabinsky
if to Visual, at:
1235 Bay Street
Suite 300
Toronto, Ontario
M5R3K4
Telecopy No. ___________________
Attention: Chief Financial Officer
or to such other address as the party to whom such notice is to be
given shall have last notified the party giving the same in the
manner provided in this paragraph. Any notice, request, demand or
communication delivered to the party to whom it is addressed as
hereinbefore provided shall be deemed to have been given and
received on the date it is so delivered to such address, provided
that if such day is not a business day, then such notice, request,
demand or communication shall be deemed to have been given and
received on the next business day following such day. Any notice,
request, demand or communication mailed as hereinbefore provided
shall be deemed to have been given and received on the fifth
business day next following the date of its mailing. Any notice,
request, demand or communication transmitted as hereinbefore
provided shall be deemed to have been given and received on the
first business day after its transmission. For the purposes of this
paragraph, "business day" means a day on which banks in Toronto,
Canada are open for business.
13. This Agreement constitutes the entire agreement of the parties
and supercedes all prior agreements and understandings whether
written or oral relative to the subject matter hereof This Agreement
may not be amended or modified except by a written instrument
executed by the parties hereto.
14. The rights and obligations of the parties hereto shall enure to
the benefit of and be binding upon the parties hereto and their
respective heirs, successors, permitted assigns or other
legal representatives. This Agreement may not be assigned by either
party without the prior written consent of the other party.
15. This Agreement shall be governed by and construed in accordance
with the laws of the Province of Ontario in any dispute arising
hereunder or related hereto shall be adjudicated upon by the courts
of the Province of Ontario and the parties for such purpose hereby
attom to the jurisdiction of such courts.
16. The parties hereto agree to execute such further and other
assurances and documents and to do all such things and actions which
are reasonably required to carry out the purpose and intent of this
Agreement.
17. In performing the Services hereunder, JBM and its employees,
officers, directors, consultants and agents are acting as
independent contractors and not as partners of Visual. For greater
certainty, none of the employees of JBM shall be deemed to be or the
employees of Visual and its subsidiaries.
18. Each of Visual and JBM shall cause all notices which it shall
receive and which may in any way affect the obligations and
responsibilities of the other to be directed or forwarded to the
other forthwith.
19. No provision of this Agreement shall be deemed to be waived as a
result of the failure of either party to require the performance of
any term or condition of this Agreement or failure of either party
to require the performance of any term or condition of this
Agreement or by other course of conduct. To be effective, a waiver
must be in writing, signed by each of the parties hereto and state
specifically that it is intended to constitute a waiver of a term or
breach of this Agreement. The waiver by either party of any term or
breach of this Agreement shall not prevent a subsequent enforcement
of such term or any other term and shall not be deemed to be a
waiver of any subsequent breach.
20. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same
instrument. Counterparts may be executed either in original or faxed
form and the parties adopt any signatures received by a receiving
fax machine as original signatures of the parties; provided,
however, that any party providing its signature in such manner shall
promptly forward to the other party an original of the signed copy
of this Agreement which was so faxed.
IN WITNESS WHEREOF the parties have executed this Agreement.
JBM ENTERTAINMENT INC.
By: /s/ Joel B. Michaels
Name: Joel B. Michaels
Title: President
VISUAL BIBLE INTERNATIONAL, INC.
By: /s/ Harold Kramer
Name: Harold Kramer
Title: