Exhibit 10.8
FACILITIES MANAGEMENT AGREEMENT
THIS AGREEMENT is made as of December 31, 0000
X X X X X X X:
PURCHASER, Businessman, of the City of Vancouver in the Province of
British Columbia
("Owner")
- and -
PRAIRIE ON-LINE MANAGEMENT SERVICES INC. (formerly known as 000000
Xxxxxxx Ltd.), a corporation formed under the laws of Alberta having
an office at Metronet 600 - 000 0xx Xxxxxx XX, Xxxxxxx, Xxxxxxx, X0X
0X0 ("Manager")
WHEREAS pursuant to an agreement (the "Asset Purchase Agreement")
dated as of the date hereof between Owner and On-Line Film Services Inc.
("On-Line"), an affiliate of Manager, Owner purchased all rights, title and
interest in and to a computer software program commercially developed by or
for On-Line and known as "Casting Workbook" and Derivatives related thereto
for the entertainment industry Field of Use, in the Ownership Territory, as
those terms are defined in the Asset Purchase Agreement, a detailed
description of which program is attached hereto as Schedule "A" (all such
purchased rights, title and interest in Casting Workbook and all such
Derivatives being referred to collectively herein as the "Casting
Workbook");
AND WHEREAS Manager and its affiliates have the expertise, facilities
and resources to provide computer and Internet based services for the
entertainment industry;
AND WHEREAS Owner desires to retain Manager to operate, promote and
manage on Owner's behalf, computer facilities incorporating data generated
by the Casting Workbook ("Casting Network"), for the purpose of providing
talent agencies, their actors, casting directors and others in the film and
television industries in the Service Territory with access to casting
requirements, talent information and related services, by means of the
Internet;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
mutual representations and covenants herein, the parties agree as follows:
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1. DEFINITIONS
1.1 In this Agreement the following terms shall have the following meanings:
"Annual Exclusivity Payment" means the annual amount payable by Manager to
Owner in each calendar year in which the Annual Gross Operating Revenues
have not attained the applicable Annual Minimum for the exclusive right to
provide the Management Services, calculated as the amount by which 51% of
the Annual Minimum for such year exceeds the Owner's Gross Operating
Revenues for such year.
"Annual Gross Operating Revenues" means Gross Operating Revenues generated
in any calendar year during the Term.
"Annual Excess Gross Operating Revenues" means for any calendar year during
the Term, the amount by which the Owner's Gross Operating Revenues for such
year exceed 51% of the corresponding Annual Minimum.
"Annual Minimum" means for each calendar year of the Term or part thereof
prior to the Cumulative Excess Gross Operating Revenues reaching the Term
Minimum, the target minimum amount of Annual Gross Operating Revenues to be
achieved by Manager, calculated as set forth in the attached Schedule "C".
"Asset Purchase Agreement" means the agreement dated December 31, 1997
between Owner and On-Line pursuant to which Owner purchased all rights,
title and interest in and to the Casting Workbook.
"Bonds" means mutually acceptable bonds forming part of the Guarantee
Collateral.
"Business Plan" means the annual business plan, and operations and
marketing budget to be prepared by Manager for the Casting Workbook
Services, by the 31st day of January in each year of the Term, and in
respect of the year ended December 31, 1998 Business Plan shall mean the
initial business plan previously submitted to Owner by Manager.
"Casting Network" means the computer and telecommunications facilities to
be provided to Owner by Manager as part of the Management Services in order
to supply the Casting Workbook Services.
"Casting Workbook" means the computer software program commercially
developed by or for On-Line for use in the entertainment industry, the data
from which will be used with the Casting Network to provide Casting
Workbook Services to End Users.
"Casting Workbook Services" means services provided to End Users, through
the Casting Network, with respect to casting requirements, talent
information and related services, as described in the Business Plan and in
the talent agent's Casting Workbook manual and casting director's Casting
Workbook manual developed by On-Line for End Users.
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"Cumulative Excess Gross Operating Revenues" means the aggregate of the
Annual Excess Gross Operating Revenues actually generated during the Term.
"Cumulative Exclusivity Payment" means the amount payable at the
termination of this Agreement by the Manager to Owner, in addition to the
Annual Exclusivity Payments, for the exclusive right to provide the
Management Services over the whole of the Term, if on the date of such
termination the Term Minimum exceeds the Cumulative Excess Gross Operating
Revenues, and calculated as .42 of the amount by which the Term Minimum
exceeds the Cumulative Excess Gross Operating Revenues received by the
Owner during the Term.
"End Users" means talent agencies, actors, casting directors and other
persons in the film and television industry who subscribe to Casting
Workbook Services.
"Excess Revenue Direction" means the written irrevocable direction in the
form attached as Schedule "D" from On-Line authorizing the Owner to apply
towards the tendering and payment of the Owner's Gross Operating Revenues
pursuant to section 8.1, Guarantee Collateral having a principal value
equal to the portion of the Annual Excess Gross Operating Revenues proposed
to be paid in that manner, which amount shall be as close to 42% of the
Annual Excess Gross Operating Revenues as possible taking into account the
denominations of the principal amount of the Bonds or other Guarantee
Collateral but which shall not, in any event, exceed 42% of the Annual
Excess Gross Operating Revenues.
"Gross Operating Revenues" means the total revenues generated by the
provision of the Casting Workbook Services to End Users in the Service
Territory, including without limitation, actors listing revenues, extras
listing revenues and ancillary business revenues.
"Guarantee" means the guarantee given on December 31, 1997 to Owner by
On-Line of all of the financial obligations of Manager hereunder with
respect to payment of the Annual Exclusivity Payment, the Cumulative
Exclusivity Payment, and the Instalments, together with the Guarantee
Collateral in respect thereof.
"Guarantee Collateral" means bonds in a form acceptable to the Owner, or
other securities mutually acceptable to the parties, in the face amount of
$1,838,000, maturing on December 31, 2007, held in accordance with the
Security and any interest accrued thereon which has not otherwise been paid
to On-Line in accordance with the terms of the Guarantee and the Security.
"Instalments" means the two prepayments by Manager of the Owner's portion
of the Annual Minimum for a particular calendar year, the first Instalment
to be made in an amount equal to 25.5% of the Annual Minimum on the first
Instalment Date, and the second Instalment of 25.5% of the Annual Minimum
on the second Instalment Date, except where otherwise specified herein.
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"Instalment Dates" means two dates with respect to each calendar year, the
last day of June being the first Instalment Date, and the last day of
December being the second Instalment Date.
"Instalment Direction" means the written irrevocable direction in the form
attached as Schedule "E" from On-Line authorizing Owner to apply towards
the tendering of an Instalment, Guarantee Collateral interest having a
value equal to the Instalment proposed to be paid in that manner.
"Management Fee" means the fee payable on a commission basis by Owner to
Manager for the Management Services provided by Manager in each calendar
year of the Term, equal to 49% of the Annual Gross Operating Revenues,
until such time as the Cumulative Excess Gross Operating Revenues equal the
Term Minimum, on which date the Management Fee will become 97.5% of all
Annual Gross Operating Revenues .
"Management Services" means the services to be provided by Manager to Owner
during the Term to operate and manage the Casting Network as further
described in section 3.
"On-Line" means On-Line Film Services Inc., the original owner of the
Casting Workbook, and an affiliate of Manager.
"On-Line Business Plan" means the business plan originally developed by
On-Line for the exploitation and commercialization of the Casting Workbook.
"Owner's Gross Operating Revenues" means the Gross Operating Revenues
received by Owner in a calendar year during the Term less the applicable
Management Fees.
"Security" shall have the same meaning as that term is defined in the Asset
Purchase Agreement.
"Service Territory" means the geographic area described in Exhibit "B"
attached hereto.
"Subcontractor Agreement" means the agreement to be entered into between
Manager and On-Line, retaining On-Line to supply certain of the Management
Services to or on behalf of Manager.
"Term" means the term of this Agreement as set out in Section 16.
"Term Minimum" means the target minimum of the Cumulative Excess Gross
Operating Revenues during the Term, being the amount of $4,376,000.
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2. APPOINTMENT OF MANAGER
2.1 Upon and subject to the terms and conditions of this Agreement, Owner
hereby appoints Manager during the term of this Agreement as its sole and
exclusive manager and operator of the Casting Workbook, to provide
Management Services to Owner and Casting Workbook Services to End Users
within the Service Territory, and Manager hereby accepts such appointment.
3. MANAGEMENT SERVICES
3.1 Manager shall during the Term, provide the following Management Services to
Owner:
(a) supply, develop, coordinate, maintain and upgrade the computer,
telecommunication and Internet facilities, and all other equipment and
services reasonably necessary, to provide the Casting Workbook
Services;
(b) provide sufficient personnel with the appropriate qualifications
necessary to utilize the data from the Casting Workbook, to operate
and manage the Casting Network;
(c) determine sales and marketing strategies for Casting Workbook
Services;
(d) develop, solicit and promote sales of Casting Workbook Services, and
invoice, collect and enforce payment of listing fees, charges and
other ancillary revenues therefrom ;
(e) maintain commercial acceptability for Casting Workbook Services,
write, update and maintain all End User manuals and provide facilities
to answer questions and provide assistance to End Users regarding
Casting Workbook Services;
(f) enter into the Subcontractor Agreement with On-Line;
(g) prepare sales promotional materials in order to facilitate advertising
of Casting Workbook Services; and
(h) operate the Casting Network on computer facilities located in Calgary,
Alberta or such other location as agreed to by the Parties.
3.2 Manager agrees to use all reasonable efforts to comply with all applicable
laws in the provision of Management Services and Casting Workbook Services.
Manager represents, warrants and covenants with Owner that Manager and
On-Line collectively have, and will continue to have, sufficient technical,
financial and other resources to fulfil Manager's obligations hereunder.
3.3 Manager shall not perform any services by, for or on behalf of any other
person to maintain, enhance or update the Casting Workbook with respect to
the Service Territory.
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4. SUBCONTRACTOR
4.1 Manager will retain On-Line as a subcontractor to provide certain of the
Management Services and Casting Workbook Services pursuant to the
Subcontractor Agreement to be entered into between Manager and On-Line on
terms reasonably satisfactory to Owner within 30 days of the date hereof.
Manager hereby agrees that the Subcontractor Agreement shall be subject to
and will not conflict with the terms and conditions hereof, and that there
shall be no material amendment to the Subcontractor Agreement without the
prior written consent of Owner, which consent will not be unreasonably
withheld.
5. GROSS OPERATING REVENUES
5.1 Manager shall provide the facilities of the Casting Network to Owner, and
on behalf of Owner, using the data provided from the Casting Workbook,
provide the Casting Workbook Services to End Users, using all reasonable
efforts to maximize Gross Operating Revenues in order that the Annual Gross
Operating Revenues exceed the Annual Minimum in each calendar year, and the
Cumulative Excess Gross Operating Revenues exceed the Term Minimum during
the Term.
5.2 All Gross Operating Revenues collected by Manager shall be received and
held in trust on behalf of and shall accrue to the account of Owner, except
as otherwise provided in this Agreement.
6. MANAGEMENT FEES
6.1 The consideration for all Management Services provided by Manager to Owner
for any calendar year during the Term shall be the Management Fee, which
Manager shall be entitled to deduct proportionately from the Annual Gross
Operating Revenues during such year as they are received.
6.2 The Manager shall not charge Owner for any expenses incurred by Manager in
using the data from the Casting Workbook to operate the Casting Network or
in providing the Casting Workbook Services. Such expenses shall be for
Manager's account.
7. ANNUAL EXCLUSIVITY PAYMENT
7.1 If by the end of any calendar year of the Term, the Annual Gross Operating
Revenues are less than the applicable Annual Minimum for such year, then
Manager shall be liable for and pay the corresponding Annual Exclusivity
Payment for the exclusive right to provide the Management Services in such
year.
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8. YEAR END PAYMENTS
8.1 Manager shall within 30 days of the end of each calendar year during the
Term, tender and pay to Owner the sum of:
(a) Owner's Gross Operating Revenues; and
(b) the Annual Exclusivity Payment for such year, if any, due in
accordance with section 7.1.
8.2 Manager shall be entitled to set off and credit against any amount due
under section 8.1 the full amount of all Instalments paid to Owner pursuant
to section 9.1 or 10.1 hereof in respect of such year.
8.3 The payment to be made pursuant to section 8.1 shall be made in cash or by
certified cheque, except as otherwise provided in section 10.2.
9. INSTALMENT PAYMENTS
9.1 On each Instalment Date, Manager shall pay the corresponding Instalment to
Owner or Owner's nominee, as an advance against the payment of the amounts
due under section 8.1.
10. PAYMENT BY DIRECTION
10.1 If Manager does not pay an Instalment on or before the relevant Instalment
Date, then such Instalment shall be deemed to have been paid on the
Instalment Date by the Owner applying Guarantee Collateral interest equal
in value to the amount of the Instalment, pursuant to the Instalment
Direction, which Instalment Direction and delivery of the Guarantee
Collateral interest shall be accepted by Owner as full satisfaction of
Manager's obligation to Owner with respect to tendering the Instalment
under section 9, and in such circumstances Owner and any assignee of the
Owner shall be deemed to have consented to the release of such Guarantee
Collateral interest from that Securities Pledge Agreement entered into
between the Owner and On-Line on December 31, 1997. Manager covenants with
Owner that it will, and will cause On-Line to, do all things necessary to
facilitate the transfer of Guarantee Collateral interest to Owner.
10.2 In the event that in any calendar year during the Term the Annual Gross
Operating Revenues exceed the applicable Annual Minimum, then Manager shall
tender the Annual Excess Gross Operating Revenues to Owner within thirty
days after the end of the year by a combination of:
(a) delivery to Owner of the Excess Revenue Direction, and
(b) cash or certified cheque for the balance of the Owner's Gross
Operating Revenues
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(having credited Instalments made for such year),
which combination of cash, Directions and delivery of the Guarantee
Collateral and Guarantee Collateral interest shall be accepted by Owner as
full satisfaction of Manager's obligation to Owner with respect to the
tender of the Owner's Gross Operating Revenues under section 8.1, and in
such circumstances the Owner and any assignee of the Owner shall be deemed
to have consented to the release of such Guarantee Collateral from that
Securities Pledge Agreement entered into between the Owner and On-Line on
December 31, 1997. Manager covenants with Owner that it will, and will
cause On-Line to, do all things necessary to facilitate the transfer of
Guarantee Collateral to Owner.
11. NON-COMPETITION
11.1 Manager shall not, and shall obtain the written agreement of any other
subcontractors appointed hereunder that they shall not, provide, market in
any manner, develop or sell any services which are competitive with the
Casting Workbook Services for End Users in the Service Territory.
12. REPORTING
12.1 Manager shall furnish to Owner semi-annual reports containing a statement
in reasonable detail setting forth all gross receipts from Manager's and
any subcontractor's sales of Casting Workbook Services within the Service
Territory, the number and kind of End Users and the revenues therefrom. The
report shall be provided by Manager not later than July 30 and January 30
of each year with the first such report due July 30, 1998. Each report to
be delivered on July 30 each year may be in summary form. If Manager or any
subcontractor have no sales during such period, Manager shall so state in
such report.
13. OBLIGATION TO PROTECT COPYRIGHT AND TRADEMARKS
13.1 Manager hereby acknowledges and will require all subcontractors to
acknowledge that Owner owns the Casting Workbook at all times including all
intellectual property rights and copyrights associated therewith, and that
Manager and End Users are not acquiring any proprietary rights, title,
license or interest in the Casting Workbook, all of which shall remain with
Owner. Manager is appointed to provide Management Services on condition
that Manager shall at all times protect the interests of Owner in the
Casting Workbook. Owner shall have the right to review all standard form
contracts to be entered into between Manager, each subcontractor and the
End Users with respect to Casting Workbook Services and to require such
changes as Owner may reasonably request so as to protect the ownership
interests of Owner in the Casting Workbook.
13.2 Owner shall have the right to take any action it deems necessary to protect
its intellectual property rights in the Casting Workbook, including filing
lawsuits in the event of infringement and filing for copyright and
trademark registrations. If Owner fails to take any action regarding any
alleged infringement of the rights of Owner in the Casting
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Workbook, Manager may, at its own expense, take such action after having
obtained the written consent of Owner, which consent shall not be
unreasonably withheld.
14. USE OF INDEPENDENT CONTRACTORS
14.1 Manager shall, at its expense, have the right to use independent
contractors to perform such work as in its reasonable opinion may be
convenient or necessary for the support, maintenance, marketing, promoting
and supply of Casting Workbook Services and Management Services, including
computer programmers, technicians, systems consultants, marketing
consultants and business consultants.
15. BUSINESS PLAN
15.1 Manager agrees to provide Owner with the annual Business Plan by the 31st
day of January in each year. In respect of the year ended December 31,
1998, the Business Plan will be the business plan previously submitted to
Owner. Each Business Plan shall set forth, among other things, the
anticipated sales of Casting Workbook Services (broken down by End User
category) including the prices at which such Casting Workbook Services
shall be sold or provided by Manager or any subcontractor to End-Users.
Each Business Plan (other than the Initial Business Plan) shall
specifically indicate and describe changes from the previous Business Plan
including, without limiting the generality of the foregoing, planned or
anticipated changes in the price of Casting Workbook Services and a
comparison of the results achieved in the year just completed with the
results that had been anticipated for that year in the Business Plan for
that year. Within 30 days of receipt of a Business Plan, Owner, acting
reasonably, may suggest revisions to the Business Plan and Manager will use
its reasonable best efforts to accommodate such suggested revisions. At the
request of Owner, acting reasonably, a representative of management for
Manager will attend at Owner's offices to discuss the Business Plan.
16. TERM
16.1 This Agreement shall become effective upon its execution by the parties
hereto and, unless terminated earlier in accordance with the provisions of
paragraph 17, shall remain in effect for an initial Term until December 28,
2007. Manager shall have the right to renew this Agreement for an
additional 10 years upon the terms and conditions in existence at the end
of the initial Term of this Agreement, such right of renewal to be
exercised by giving Owner at least 60 days' prior written notice.
17. EARLY TERMINATION
17.1 Owner may terminate this Agreement upon 30 days' prior written notice to
Manager in the event that:
(a) Manager or On-Line is declared bankrupt or becomes an insolvent
person, makes an assignment for the benefit of its creditors or
attempts to avail itself of any applicable statute relating to
insolvent debtors;
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(b) Manager or On-Line takes steps to wind-up, dissolve or liquidate,
except for internal corporate reorganizations, mergers or shareholder
reorganizations, or otherwise ceases to function as a going concern or
is prevented from performing its duties hereunder for a period greater
than 30 days;
(c) a trustee, receiver, receiver and manager or other custodian (interim
or permanent) of any of the assets of Manager or On-Line is appointed
by private instrument or by court order or if any execution,
sequestration, or other analogous process of any court becomes
enforceable against Manager or On-Line or the assets of either or if
distress or process is made against the assets or any part thereof of
Manager or On-Line, unless within 30 days of such occurrence such
process has been discharged;
(d) Manager or On-Line ceases to carry on the business carried on by it
pursuant to this Agreement at the date hereof for a period of four
months;
(e) Manager does not comply with section 12 within the time prescribed
therein for reasons other than events or occurrences beyond the
reasonable control of the Manager which have not been caused by
Manager's negligence and which Manager was unable to prevent or
provide against by the exercise of reasonable diligence (including,
for example, an act of God, war, insurrection, industrial disturbance,
government restraint or unusually severe weather), provided that no
termination shall occur as the result of such failure if such failure
is cured before the 30th day following the date of notification by
Owner to Manager of the failure to comply with section 12; or
(f) Manager fails to pay the amounts due under section 10.2 within 30 days
after the end of the applicable calendar year, provided that no
termination shall occur as the result of such failure if such failure
is cured before the 30th day following the date of notification by
Owner to Manager of the failure to comply with section 10.2.
17.2 Upon any such early termination pursuant to section 17.1:
(a) the Cumulative Exclusivity Payment, if any, shall be paid by Manager
to Owner forthwith;
(b) Manager shall, if directed by Owner, assign all of its rights under
the Subcontractor Agreement to Owner and shall execute and deliver
such further and other assurances and do or cause to be done all such
acts and things as may be necessary to give effect to such assignment;
and
(c) Owner shall have the right to assume or to direct any affiliate of
Owner to assume any of the obligations of Manager under the
Subcontractor Agreement.
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18. FAILURE TO MEET MINIMUMS
18.1 If the Annual Gross Operating Revenues do not reach the Annual Minimum and
Manager does not otherwise tender the applicable Annual Exclusivity Payment
within 30 days of the end of any calendar year during the Term as provided
by section 8, then payment for same shall be effected by Owner applying
Guarantee Collateral equal in value to the amount of the Owner's Annual
Exclusivity Payment which remains unpaid, provided that in such instance
Owner shall only apply interest monies forming part of the Guarantee
Collateral to such payment.
18.2 If Manager does not tender the applicable Cumulative Exclusivity Payment,
if any, within 30 days of the earlier of the end of the initial Term or
December 31, 2007 (whether arising upon early termination or otherwise),
then payment for same shall be effected by Owner applying Guarantee
Collateral equal in value to the amount of the Cumulative Exclusivity
Payment which remains unpaid.
18.3 Deemed payment by Manager in the manner provided in sections 18.1 and 18.2
shall be accepted by Owner in full payment and satisfaction of Manager's
obligations to Owner in respect of such untendered payments to the extent
of the amount of Guarantee Collateral so applied.
18.4 Failure of Manager to attain any Annual Minimum or to pay an Instalment on
or before the relevant Instalment Date shall not result in the termination
of this Agreement or the loss of the exclusive Management Services rights
of Manager.
19. APPOINTMENT OF OTHER MANAGERS
19.1 Owner shall not have the right to appoint additional managers in the
Service Territory in respect of the Casting Workbook Services during the
Term.
20. RIGHT TO INSPECT
20.1 Owner may at any time, at its own expense, inspect and audit Manager's
financial and other records solely in respect of activities contemplated
hereby. Such inspection shall be made at Manager's offices, unless
otherwise agreed by Manager. A maximum of one such inspection may be made
quarterly upon reasonable notice at a mutually agreed time.
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21. DISCLAIMER
21.1 EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH HEREIN, OWNER MAKES NO FURTHER
REPRESENTATIONS OR WARRANTIES, EITHER EXPRESSED OR IMPLIED, AS TO ANY MATTER
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY CONDITION OR WARRANTY OF
MERCHANTABLE QUALITY OF THE DATA CREATED BY THE CASTING WORKBOOK OR ITS FITNESS
FOR ANY PARTICULAR PURPOSE AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR
FROM A COURSE OF DEALING OR USAGE OF TRADE. IN NO EVENT WILL OWNER BE LIABLE FOR
(I) DAMAGES CAUSED BY MANAGER'S OR ANY SUBCONTRACTOR'S FAILURE TO PERFORM ITS
COVENANTS AND RESPONSIBILITIES TO THIRD PARTIES, UNLESS CAUSED BY REASON OF
OWNER'S NEGLIGENCE OR DELIBERATE ACT; (II) LOST DATA; OR (III) ANY SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES. MANAGER SHALL INDEMNIFY OWNER AGAINST ALL
SUCH CLAIMS ASSERTED BY THIRD PARTIES AS A RESULT OF MANAGER'S OR ANY
SUBCONTRACTOR'S ACTS OR OMISSIONS. MANAGER WILL CO-OPERATE WITH OWNER AND
UNDERTAKE NECESSARY ACTION (INCLUDING ACTION WITH RESPECT TO SUBCONTRACTORS, IF
APPROPRIATE) REQUIRED BY APPLICABLE LAWS AND REGULATIONS TO ENSURE THAT OWNER'S
LIMITS OF RESPONSIBILITY AS SET FORTH ABOVE ARE VALID AND ENFORCEABLE AGAINST
WHOMEVER THEY ARE APPLICABLE. MANAGER WILL IMMEDIATELY INFORM OWNER AS SOON AS
MANAGER BECOMES AWARE OF LIABILITY CLAIMS BY A THIRD PARTY WITH RESPECT TO
CASTING WORKBOOK SERVICES. OWNER'S LIABILITY FOR DAMAGES TO MANAGER FOR ANY
CAUSE, REGARDLESS OF THE FORM OF ACTION, SHALL NOT EXCEED THE AGGREGATE PRICE
PAID FOR CASTING WORKBOOK SERVICES UNDER THIS AGREEMENT WHICH CAUSED THE DAMAGES
OR ARE THE SUBJECT OF THE CLAIM.
22. NOTICES
22.1 The addresses for delivery of notices to each party are as follows:
to Owner:
Purchaser
.................................
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
to Manager:
Prairie On-Line Management Services Inc.
Metronet 000 - 000 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx
X0X 0X0
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Attention: Mr. Aerock Fox
22.2 Unless otherwise expressly provided in this Agreement, any notice, request,
direction, consent, waiver, extension, agreement or other communication
that is or may be given or made hereunder shall be in writing and either
personally delivered to the addressee or to a responsible officer of the
addressee or sent by courier or facsimile transmission. The parties hereto
may change their respective address for notice given in the manner
aforesaid. Any notice given by facsimile transmission shall be deemed to
have been received on the next business day after transmission. Any notice
given by personal delivery shall be deemed to have been received on the
business day on which it is delivered and left with the recipient or a
responsible officer of the recipient at the recipient's address for notice.
23. GOVERNING LAW
23.1 Notwithstanding paragraph 3.1(f), this Agreement shall be governed by and
interpreted in accordance with the laws of British Columbia without regard
to conflict of laws provisions, and a non-exclusive venue for any action or
proceeding shall be in Vancouver, British Columbia. The parties hereto
agree to be subject to the non-exclusive jurisdiction of such British
Columbia courts as to the enforcement of the provisions of this Agreement.
The prevailing party in any action brought to enforce the provisions of
this Agreement shall be entitled to recover its reasonable attorneys fees
and costs.
24. RELATIONSHIP OF PARTIES
24.1 Nothing in this Agreement shall constitute any of the parties the partner
or joint venturer of another. The relationship of Manager to Owner shall be
that of an independent contractor.
25. ASSIGNMENT
25.1 Manager may not assign this Agreement or any of its interests herein
without the written consent of Owner, such consent not to be unreasonably
withheld. Any amalgamation, other than one which does not result in a
change of control of Manager, shall be considered an assignment for the
purposes of this Section 25.1.
25.2 Owner may assign this Agreement to any person who purchases the Casting
Workbook from Owner and agrees to be bound by the obligations of Owner
hereunder and under the Asset Purchase Agreement without the consent of
Manager.
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26. CURRENCY
26.1 All dollar amounts noted herein are represented in Canadian currency.
27. SEVERABILITY
27.1 If any provision of this Agreement is determined to be invalid or
unenforceable in whole or in part, such invalidity or unenforceability will
attach only to such provision or part thereof and the remaining part of
such provision and all other provisions hereof will continue in full force
and effect.
28. BENEFIT OF AGREEMENT
28.1 This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators and other
legal representatives, successors and assigns.
29. ENTIRE AGREEMENT
29.1 This Agreement constitutes the entire agreement between the parties with
respect to its subject matter and cancels and supersedes any prior
understandings and agreements between the parties with respect thereto.
30. AMENDMENTS
30.1 No amendments to this agreement will be valid or binding unless set forth
in writing and duly executed by both of the parties hereto.
31. WAIVER
31.1 No waiver of any breach of any provision of this agreement will be
effective or binding unless made in writing and signed by the party
purporting to give the same and, unless otherwise provided in writing in
the written waiver, will be limited to the specific breach waived.
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32. ARBITRATION PROCEDURE
32.1 The parties shall attempt to settle all disputes arising out of this
Agreement through consultation and negotiation in good faith and in a spirit of
mutual co-operation. If those attempts fail to resolve a dispute within a
reasonable time, then such dispute shall be referred to and finally resolved by
binding arbitration. The place of any arbitration conducted hereunder shall be
Vancouver, British Columbia. The number of arbitrators shall be one. Manager and
Owner shall use their reasonable best efforts to agree promptly, in light of the
time periods provided in sections 8 and 10, on the appointment of the
arbitrator, failing which Manager and Owner shall arrange jointly for an
arbitrator to be appointed by The British Columbia International Commercial
Arbitration Centre. Any arbitration hereunder shall be conducted in accordance
with the laws of the Province of British Columbia and Canada applicable therein.
The costs of any arbitration hereunder shall be borne equally by the parties
hereto.
33. EXECUTION
33.1 This Agreement may be executed in counterparts and delivered by facsimile
copy by any of the parties. Each executed counterpart shall be deemed to be an
original and such counterparts shall together constitute one and the same
agreement.
IN WITNESS WHEREOF the parties hereto have executed this agreement.
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PURCHASER PRAIRIE ON-LINE
MANAGEMENT SERVICES INC.
Per:
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Authorized Signatory
SCHEDULES
A. Program Description
B. Service Territory
C. Annual Minimum and Cumulative Exclusivity Payment
D. Excess Revenue Direction
E. Instalment Direction
SCHEDULE "A"
PROGRAM DESCRIPTION
The Casting Workbook is a client/server software application. The core of the
server side of the software is a Windows NT-based Structured Query Language
(SQL) Relational Database administered through the User Interface and Relational
Database Management Systems. Comprised of 25 Tables and 3 Views, the relational
database is accessible through an Open Database Connectivity (ODBC)
configuration. Data is stored in the SQL Database and in thousands of data files
in the Windows NT File System (NTFS). Currently the data files include Hyper
Text Markup Language (HTML) text files, JPEG images, Real Audio, Real Video and
up to 360 various word processor document formats. Programmed Tables in Fulcrum
Knowledge Network Search Server 2.0, index the data in both the SQL Database and
the NTFS-based data files to provide a layer for distributed searches of all
data stored in the Casting Workbook.
Additional specific custom configurations of the Servers and software provide an
environment for the Client side User Interface (UI) files to reside and complete
the Server side of the application. These configurations are specific Security
Limits on files and folders in the NTFS, Security Rights assigned to User Groups
and Users, and Home and Virtual Folders defined in Internet Information Server
in Windows NT. Also at the server side are the Domain Name System configuration
files stored on a Domain Name Server, in this case a Linux server, and the SMTP
and POP Servers and their corresponding configurations files also on the Linux
server. The Client side User Interface is stored in files within the NTFS.
Clients use a Web Browser on their own Personal Computer to create a Hyper Text
Transfer Protocol (HTTP) connection to access the public portion of the UI. The
remaining UI is provided to the User after Security has been met. The UI is
comprised of hundreds of HTML, Active Server Pages (ASP), Perl scripts, JPEG
images, Graphic Interchange Format (GIF) images, Animated GIF image, audio and
video files.
These files contain two basic components. First, programming in Microsoft Visual
Basic Script (VB Script) or Perl that is compiled at run-time and second, HTML
templates. During the run time phase the UI script programming interacts with
the SQL database and the Fulcrum tables to return data - unique by time and user
- that is inserted into the HTML templates and returned to the User through the
HTTP connection. Through the UI, data is viewed, added, changed or deleted.
SCHEDULE "B"
SERVICE TERRITORY
Canada:
British Columbia
Yukon
USA:
Arkansas
Colorado
Kansas
Louisiana
Missouri
Montana
Nebraska
New Mexico
North Dakota
Oklahoma
South Dakota
Texas
Utah
Wyoming
SCHEDULE "C"
ANNUAL MINIMUM PAYMENT
ANNUAL MINIMUM- shall be calculated for each calendar year as follows:
1997: $xxx
1998: $xxx,xxx
1999 and each subsequent year of the Term until the Cumulative Excess Gross
Operating Revenues equal the Term Minimum:
the Annual Minimum for the immediate preceding year less the product
of .0494 and the Annual Excess Gross Operating Revenues received by
the Owner for the preceding year
SCHEDULE "D"
IRREVOCABLE DIRECTION (EXCESS REVENUE)
TO: PURCHASER
You are hereby irrevocably authorized and directed to release bonds
having a face value of $________ (the "Bonds") from the Securities Pledge
Agreement entered into between the undersigned and you dated December 31,
1997 and to apply the Bonds to your account no.________ at the Canadian
Imperial Bank of Commerce, or another account designated by you, in full
satisfaction of the obligations of Prairie On-Line Management Services Inc.
(formerly known as 000000 Xxxxxxx Ltd.) existing as of the date hereof to
otherwise pay to you a portion of the Annual Excess Gross Operating
Revenues in an amount equal to cash equivalent of the face value of the
Bonds pursuant to the Facilities Management Agreement dated December 31,
1997 between Prairie On-Line Management Services Inc. (formerly known as
000000 Xxxxxxx Ltd.) and you.
DATED this ____ day of ____________ , 19__.
ON-LINE FILM SERVICES INC.
Per: (c/s)
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Authorized Signatory
SCHEDULE "E"
IRREVOCABLE DIRECTION (INSTALMENT)
TO: PURCHASER
You are hereby irrevocably authorized and directed to release accrued
interest (the "Security") from the Securities Pledge Agreement entered into
between the undersigned and you dated December 31, 1997 and to apply the
Security to your account no.________ at the Canadian Imperial Bank of Commerce,
or another account designated by you, in full satisfaction of the obligations of
Prairie On-Line Management Services Inc. (formerly known as 000000 Xxxxxxx Ltd.)
to otherwise pay to you an Instalment in an amount equal to the interest monies
forming part of the Guarantee Collateral of the Security pursuant to the
Facilities Management Agreement dated December 31, 1997 between Prairie On-Line
Management Services Inc. (formerly known as 000000 Xxxxxxx Ltd.) and you.
DATED this _____ day of December, 19__.
ON-LINE FILM SERVICES INC.
Per: (c/s)
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