Consulting Agreement - 1080409 Ontario Ltd. and Visual Bible International Inc.
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT made as of the 1st day of April, 2004,
B E T W E E N:
1080409 ONTARIO LIMITED, corporation incorporated under the laws of
Ontario, (hereinafter called the "Consultant") 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 the Consultant to provide
certain consulting 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:
"A Unit Debentures" means the debentures issued by Visual dated
December 24, 2002, January 23, 2003, February 6, 2003, March 4,
2003, March 6, 2003 and March 20, 2003, as the same may be amended,
modified or supplemented from time to time;
"B Unit Debentures" means the debentures issued by Visual dated
August 28, 2003, as the same may be amended, modified or
supplemented from time to time;
"Film Production" means a film production of a book or books of the
Bible on a word-for-word basis based upon Visual's current or future
licensed rights and ancillary exploitation of the same;
"GHD" means Garth H. Drabinsky;
"Senior Management" means the President and Chief Executive Officer
of Visual or if that person is unavailable, such other senior
officer or director of Visual as that person may designate in
advance by notice in writing to the Consultant as "Senior
Management" for the purposes of this Agreement;
"Services" shall have the meaning ascribed thereto in paragraph 2
hereof; and
"Term" means the "Initial Term" and all "Renewal Terms" as defined
in paragraph 4 hereof.
2. Visual hereby retains the Consultant to provide marketing and
production consulting services (collectively, the "Services") to
Visual as required by Visual from time to time. Throughout the Term
of this Agreement, the Consultant shall make available the services
of GHD for the purpose of providing the Services and shall cause GHD
to devote all reasonably necessary time and attention to providing
the Services. If, at any time, GHD notifies Visual in writing that
he will no longer provide the Services, this Agreement will
terminate automatically on the date of such written notice.
Further, if, at any time, GHD is unable or unwilling to devote all
such reasonably necessary time and attention to providing the
Services for more than fifteen (15) consecutive business days or, in
the case of accident or illness, more than thirty (30) consecutive
business days, this Agreement shall automatically terminate on
either the sixteenth (16th) day or the thirty-first (31st) day
thereafter, as the case may be.
3. (a) Visual agrees to provide the Consultant from time to time
with copies of all Visual approved budgets and schedules thereto as
approved from time to time by the Board of Directors of Visual
pertaining to the activities of the Consultant pursuant hereto.
(b) The Consultant agrees to provide reports regularly to the Board
of Directors of Visual with respect to its activities hereunder.
(c) The Consultant shall upon reasonable notice be available for
direct discussions and/or meetings with Senior Management regarding
the activities of the Consultant and Visual pursuant to this
Agreement.
(d) As requested from time to time by Visual, the Consultant shall
hold senior personnel briefing meetings and shall provide prior
notice of time and place of all such meetings to Senior Management
and shall invite senior marketing personnel and Senior Management to
such briefing meetings.
(e) The Board of Directors of Visual may invite the Consultant to
attend its regularly scheduled meetings to review and discuss the
aforesaid periodic reports to the Board of Directors of Visual and
other matters pertaining to the Film Productions of Visual and the
marketing hereof.
(f) Visual hereby grants GHD the right, during the first eighteen
(18) months following execution of this Agreement, to have the first
exclusive opportunity to negotiate in good faith with Visual to be
engaged by Visual as the producer of the next motion picture
produced by Visual or any subsidiary of, or entity controlled by,
Visual subject to the following terms and conditions:
(i) The negotiations shall commence after:
(A) approval of the board of directors of Visual to undertake the
development of the particular motion picture,
(B) Visual having the necessary funds or having received from a
third party or parties a commitment, for financing of production and
marketing consistent with the preliminary budget referred to below; and
(C) the completion of the screenplay for the next motion picture
and the completion of the preliminary budget prepared therefrom;
(ii) GHD shall supervise the development of the screenplay for the
next motion picture and advise Visual with respect to the
preparation of the preliminary budget based upon such screenplay;
(iii) In the event that Visual and GHD fail to reach agreement in
writing on the terms to govern GHD's engagement as producer
(including, but not limited to, the producer fee to be payable to
GHD) within thirty (30) calendar days following the commencement of
negotiations, Visual shall have the right to commence negotiations
to engage another person as the producer of such motion picture
provided that in no event shall Visual engage another person as
producer of such motion picture on terms more favourable to such
person (including any increase in the aforesaid preliminary budget)
than as last offered to GHD in the course of negotiations with GHD
pursuant to this paragraph 3(f) without GHD first having the
opportunity to accept the engagement as producer on such improved
terms, as offered to such other person, upon signifying his
acceptance thereto within five (5) business days following receipt
from Visual of the revised offer in writing, failing which Visual
shall be entitled to proceed and offer such improved terms to such
other person; and
(iv) This right of first negotiation of GHD as producer is subject
to GHD's availability during the production schedule approved by the
board of directors of Visual.
4. Subject to earlier termination in accordance with the provisions
hereof, the initial term (the "Initial Term") of this Agreement
shall commence on the date hereof and shall continue until December
31, 2004. Following the Initial Term, unless terminated in
accordance with the provisions hereof, this Agreement shall be
automatically renewed for one (1) month renewal terms (individually,
a "Renewal Term" and collectively, the "Renewal Terms").
5. This Agreement may be terminated upon the expiry of the Initial
Term for any reason whatsoever by Visual in its sole and absolute
discretion, upon providing thirty (30) days advance written notice
to the Consultant. This Agreement may be terminated upon the expiry
of any Renewal Term for any reason whatsoever by Visual in its sole
and absolute discretion, upon providing fifteen (15) days advance
written notice to the Consultant. The obligations of Visual
pursuant to paragraphs 3(f) and 6(b) hereof shall survive the
termination of this Agreement, unless this Agreement is terminated
pursuant to paragraph 2 hereof.
6. (a) In consideration of the provision of the Services
hereunder, Visual covenants and agrees to pay to the Consultant
during the Term of this Agreement the sum of US$25,000 per month,
plus applicable GST, payable in advance on the first day of each month.
During the Term of this Agreement, the Consultant shall be
reimbursed by Visual for all reasonable travel and other
travel-related out-of-pocket expenses pre-approved by Senior
Management and actually and properly incurred by the Consultant in
connection with its duties hereunder. For all such expenses, the
Consultant shall furnish to Visual statements and vouchers as and
when required by it and otherwise shall comply with the expense
policies of Visual in force from time to time.
(b) Upon the repayment of the aggregate principal (that is, as of
the date hereof, US$15,033,645) and any interest thereon owing by
Visual to holders of the A Unit Debentures and the B Unit
Debentures, whether occurring during or after the Term of this
Agreement, Visual covenants and agrees to pay (within ten (10)
business days following such repayment) the Consultant the amount of
US$450,000.
7. Subject to disclosure required by applicable laws, during the
Term and at all times thereafter each of the Consultant 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. Subject to disclosure required by applicable laws, the
Consultant 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.
8. 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 affect 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.
9. 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 the Consultant, at:
185 Davenport Road
Suite 300
Toronto, Ontario
M5R 1J1
Telecopy No. (416) 323-2334
Attention: Garth H. Drabinsky
if to Visual, at:
1235 Bay Street
Suite 300
Toronto, Ontario
M5R 3K4
Telecopy No. (416) 921-9951
Attention: President and Chief Executive Officer
with a copy to:
Lang Michener LLP
BCE Place
Suite 2500, 181 Bay Street
Toronto, Ontario M5J 2T7
Telecopy No. (416) 365-1719
Attention: Howard M. Drabinsky
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.
10. 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 and any other
consulting or other arrangements pertaining thereto, including
without limitation the letter agreement dated March 19, 2004 between
JBM Entertainment Inc. and Visual, all such prior agreements and
understandings being null and void. This Agreement may not be
amended or modified except by a written instrument executed by the
parties hereto.
11. 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.
12. 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
attorn to the jurisdiction of such courts.
13. 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.
14. In performing the Services hereunder, the Consultant 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 the Consultant shall be deemed
to be or the employees of Visual and its subsidiaries.
15. Each of Visual and the Consultant 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.
16. 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.
17. 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.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF the parties have executed this Agreement.
1080409 ONTARIO LIMITED
By:
Name:
Title:
VISUAL BIBLE INTERNATIONAL, INC.
By:
Name:
Title: