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Exhibit 2.4
SUBSIDIARY
ASSET PURCHASE AGREEMENT
BETWEEN
WORD COMMUNICATIONS LTD., A BRITISH COLUMBIA COMPANY
AND
WORD ENTERTAINMENT (CANADA), INC., A YUKON CORPORATION
DATED AS OF NOVEMBER 21, 1996
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TABLE OF CONTENTS
PAGE
ARTICLE 1
CERTAIN DEFINITIONS
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . 4
1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2
PURCHASE AND SALE OF ASSETS
2.1 Purchase and Sale of Assets . . . . . . . . . . . . . . . 6
2.2 Assumption of Liabilities . . . . . . . . . . . . . . . . 6
ARTICLE 3
CONSIDERATION
3.1 Word Canada Purchase Price . . . . . . . . . . . . . . . 7
ARTICLE 4
WORD CANADA CLOSING; OBLIGATIONS OF THE PARTIES
4.1 Closing Date . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Obligations of the Parties at the Word Canada Closing . . 7
ARTICLE 5
REPRESENTATIONS AND WARRANTIES BY WORD CANADA
5.1 Confirmation of Representations and Warranties Pursuant
to the Comprehensive Agreement . . . . . . . . . . . . . 9
5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . 10
5.3 Organization, Good Standing and Qualification . . . . . . 10
5.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 10
5.5 Records and Books of Account . . . . . . . . . . . . . . 10
5.6 Contracts and Commitments . . . . . . . . . . . . . . . . 10
5.7 Fixed Assets: Leased Premises . . . . . . . . . . . . . . 11
5.8 Employees . . . . . . . . . . . . . . . . . . . . . . . . 11
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5.9 Employment Agreements . . . . . . . . . . . . . . . . . . 11
5.10 Labour Matters and Employment Standards . . . . . . . . . 12
5.11 Employee Benefit and Pension Plans . . . . . . . . . . . 12
5.12 Government Assistance . . . . . . . . . . . . . . . . . . 13
5.13 Vendor's Residency . . . . . . . . . . . . . . . . . . . 14
5.14 No Omissions . . . . . . . . . . . . . . . . . . . . . . 14
5.15 Word Canada's Representations and Warranties . . . . . . 14
ARTICLE 6
REPRESENTATIONS AND WARRANTIES BY ENTERTAINMENT
6.1 Confirmation of Representations and Warranties Pursuant
to the Comprehensive Agreement . . . . . . . . . . . . . 14
6.2 Authorization . . . . . . . . . . . . . . . . . . . . . . 15
6.3 Organization and Good Standing . . . . . . . . . . . . . 15
6.4 No Violation . . . . . . . . . . . . . . . . . . . . . . 15
6.5 Sufficient Funds . . . . . . . . . . . . . . . . . . . . 15
6.6 Certain Proceedings . . . . . . . . . . . . . . . . . . . 15
ARTICLE 7
COVENANTS AND AGREEMENTS OF WORD CANADA
7.1 Confirmation of Covenants and Agreements Pursuant to the
Comprehensive Agreement . . . . . . . . . . . . . . . . . 16
7.2 Modification . . . . . . . . . . . . . . . . . . . . . . 16
7.3 Supplemental Disclosure . . . . . . . . . . . . . . . . . 16
ARTICLE 8
COVENANTS AND AGREEMENTS OF ENTERTAINMENT
8.1 Confirmation of Covenants and Agreements Pursuant to the
Comprehensive Agreement . . . . . . . . . . . . . . . . . 17
8.2 Consents and Approvals . . . . . . . . . . . . . . . . . 17
8.3 Employee Matters . . . . . . . . . . . . . . . . . . . . 17
8.4 Agreements Regarding Pension Plan . . . . . . . . . . . . 17
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ARTICLE 9
CONDITIONS TO ENTERTAINMENT'S OBLIGATIONS
9.1 Representations and Warranties . . . . . . . . . . . . . 18
9.2 Performance by Word Canada . . . . . . . . . . . . . . . 18
9.3 Certificates of Word Canada . . . . . . . . . . . . . . . 18
9.4 Opinion of Counsel for Word Canada . . . . . . . . . . . 18
9.5 Distribution Agreement . . . . . . . . . . . . . . . . . 18
9.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . 19
9.7 Comprehensive Agreement Closing . . . . . . . . . . . . . 19
ARTICLE 10
CONDITIONS TO WORD CANADA'S OBLIGATIONS
10.1 Representations and Warranties . . . . . . . . . . . . . 19
10.2 Performance by Entertainment . . . . . . . . . . . . . . 19
10.3 Certificates of Entertainment . . . . . . . . . . . . . . 19
10.4 Opinion of Counsel for Entertainment . . . . . . . . . . 19
10.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . 19
10.6 Comprehensive Agreement Closing . . . . . . . . . . . . . 20
ARTICLE 11
INDEMNIFICATION
11.1 Indemnification . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 12
TERMINATION OF AGREEMENT
12.1 Termination Events . . . . . . . . . . . . . . . . . . . 20
12.2 Effect of Termination . . . . . . . . . . . . . . . . . . 21
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ARTICLE 13
COLLECTION OF RECEIVABLES AND INVENTORY RETURNS
13.1 Collection of Word Canada Receivables . . . . . . . . . . 21
13.2 Inventory Returns . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 14
MISCELLANEOUS
14.1 Survival of Representations . . . . . . . . . . . . . 22
14.2 Expenses . . . . . . . . . . . . . . . . . . . . . . 22
14.3 Assignability: Parties in Interest . . . . . . . . . 22
14.4 Allocation of Word Canada Purchase Price . . . . . . 23
14.5 Payment of Taxes . . . . . . . . . . . . . . . . . . 23
14.6 Goods and Services Tax Exemption . . . . . . . . . . 23
14.7 Entire Agreement: Amendments . . . . . . . . . . . . 24
14.8 Headings . . . . . . . . . . . . . . . . . . . . . . 24
14.9 Severability . . . . . . . . . . . . . . . . . . . . 24
14.10 Notices . . . . . . . . . . . . . . . . . . . . . . 24
14.11 Governing Law . . . . . . . . . . . . . . . . . . . 26
14.12 Public Announcements . . . . . . . . . . . . . . . . 26
14.13 No Third Party Beneficiaries . . . . . . . . . . . . 27
14.14 Interpretive Provisions . . . . . . . . . . . . . . 27
14.15 Counterparts . . . . . . . . . . . . . . . . . . . . 27
14.16 Best Efforts to Resolve Discrepancies . . . . . . . 27
14.17 Reference Date . . . . . . . . . . . . . . . . . . . 27
Schedule A - Word Canada Leased Real Estate
Schedule B - Contracts
Schedule C - Assets
Schedule D - Employees
Schedule E - Employment Agreements
Schedule F - Employee Benefit and Pension Plans
Schedule G - Government Assistance
Schedule H - Allocation of Word Canada Purchase Price
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SUBSIDIARY
ASSET PURCHASE AGREEMENT
This ASSET SUBSIDIARY PURCHASE AGREEMENT (this "AGREEMENT") is made and
entered into as of the 21st day of November, 1996 between WORD COMMUNICATIONS
LTD., a British Columbia company ("WORD CANADA") and WORD ENTERTAINMENT
(CANADA), INC., a Yukon corporation ("ENTERTAINMENT").
RECITALS
WHEREAS, certain of the assets of Xxxxxx Xxxxxx, Inc., a Tennessee
corporation ("XXXXXX"), Word, Incorporated, a Delaware corporation ("WORD") and
Word Direct Partners, L.P., a Texas limited partnership ("WORD DIRECT"), wholly
owned direct and indirect subsidiaries of Xxxxxx, and substantially all of the
assets of the music business of Word Canada and certain of the assets of Xxxxxx
Word, Ltd., a United Kingdom corporation ("WORD U.K."), wholly owned
subsidiaries of Word, together comprise the music division of Xxxxxx;
WHEREAS, Xxxxxx, Word and Word Direct (the "SELLERS") desire to sell
to Xxxxxxx Entertainment Company ("XXXXXXX") at the Closing (as hereinafter
defined) and Xxxxxxx desires to purchase from Sellers substantially all of the
assets and to assume certain of the liabilities associated with the Word Canada
Music Business (as hereinafter defined), and for that purpose have entered into
an asset purchase agreement dated as of the 21st day of November, 1996 which
was amended on January 6, 1997 (as amended, the "COMPREHENSIVE AGREEMENT"); and
WHEREAS, Word Canada and Entertainment have entered into this Agreement
pursuant to Section 7.5(b) of the Comprehensive Agreement.
NOW, THEREFORE, IN CONSIDERATION of the premises and of the mutual
representations, warranties and covenants which are made and to be performed by
the respective parties, it is agreed as follows:
ARTICLE 1
CERTAIN DEFINITIONS
1.1 DEFINED TERMS. In this Agreement:
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(a) Unless otherwise defined herein or unless there is something
in the subject matter or context inconsistent therewith, the
terms defined in the Comprehensive Agreement shall have the
same meanings in this Agreement.
(b) Unless otherwise indicated, all dollar amounts referred to in
this Agreement are in lawful money of the United States of
America.
1.2 DEFINITIONS. For purposes of this Agreement, certain defined terms
shall have the respective meanings set forth below:
(a) "CANADIAN GAAP" means the accounting principles so described
and promulgated by the Canadian Institute of Chartered
Accountants which are applicable as at the date on which any
calculation made hereunder is to be effective or as at the
date of any financial statements referred to herein, as the
case may be.
(b) "DISTRIBUTION AGREEMENT" means the agreement to be made by and
between Xxxxxx, Word and Entertainment relating to the
distribution by Entertainment of books and print publications.
(c) "ITA" means the Income Tax Act (Canada), as amended.
(d) "XXXXXX NOTE" means the promissory note of Xxxxxx as maker
payable on the Word Canada Closing Date to the order of Word
Canada in an amount equal to US$10 plus the amount by which
the Word Canada Assumed Liabilities exceed the Word Canada
Assets as determined for purposes of the Estimated Closing
Statement.
(e) "WORD CANADA ASSETS" means the Xxxxxx Note and all Assets,
other than the Word Canada Excluded Assets, owned in whole or
in part by Word Canada on the date hereof, or at Closing, as
the case may be, or in which Word Canada has any interest on
the date hereof, or at Closing, as the case may be, and
directly related to the Word Canada Music Business. To the
extent that any assets, property, rights or business of Word
Canada are intended to be transferred to Entertainment
pursuant to the general language of this Agreement but do not
appear on the applicable Schedules or Exhibits to this
Agreement, the general language shall govern and such assets,
property, rights and business shall nonetheless be deemed
transferred to Entertainment. Any reference to
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specifically defined property comprising Assets shall mean the
interest of Word Canada in those Assets.
(f) "WORD CANADA ASSUMED LIABILITIES" means those Assumed
Liabilities of Word Canada which directly relate to the Word
Canada Music Business.
(g) "WORD CANADA EXCLUDED ASSETS" means those Excluded Assets
relating to the Word Canada Music Business described in the
Comprehensive Agreement and the Word Canada Receivables as
herein defined.
(h) "WORD CANADA LEASED REAL ESTATE" means the Leased Real Estate
listed on Schedule A and all fixed assets, including fixtures,
furniture, furnishings, office equipment and other tangible
property attached or relating thereto.
(i) "WORD CANADA MUSIC BUSINESS" means that part of the Music
Business conducted by Word Canada.
(j) "WORD CANADA RECEIVABLES" means all accounts and notes
receivable, the right to receive royalties and other income
payable to Word Canada as of the Closing Date and related
reserves.
ARTICLE 2
PURCHASE AND SALE OF ASSETS
2.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of
this Agreement and the Comprehensive Purchase Agreement, at the Word Canada
Closing, Word Canada shall sell, transfer, convey, assign and deliver the Word
Canada Assets to Entertainment and Entertainment shall purchase, acquire and
accept the Word Canada Assets from Word Canada.
2.2 ASSUMPTION OF LIABILITIES. As additional consideration hereunder, from
and after the Closing Date, Entertainment shall assume and discharge the Word
Canada Assumed Liabilities. Except as provided in the preceding sentence, and
notwithstanding anything else to the contrary contained herein, Entertainment is
not assuming and shall not be liable for any Liabilities of Word Canada other
than the Word Canada Assumed Liabilities, including, without limitation, any
Liabilities (a) for indebtedness for borrowed money or overdrafts; (b) relating
to or in any way arising out of the Word Canada Excluded Assets; (c) for fees
and disbursements referred to in Section 14.2 hereof; (d) to any shareholder or
Affiliate of Word Canada or to any current or former employee, officer or
director of Word Canada, including,
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without limitation, any severance pay, post retirement medical benefits, pension
plans or pension compensation or benefits whether by operation of Law or
otherwise, other than with respect to employees of the Word Canada Music
Business actually engaged by Entertainment after the Closing as expressly
provided in Section 8.2, and only in respect of Liabilities to such employees
arising after the Closing Date or accrued on the Closing Statement; (e) relating
to the execution, delivery and consummation of this Agreement by the Word Canada
and the transactions contemplated hereby, including, without limitation, any and
all Taxes incurred as a result of the sale contemplated by this Agreement other
than as set out in Sections 14.5 and 14.6; (f) for any Taxes accrued or incurred
prior to the Closing Date or relating to any period (or portion of a period)
prior thereto; (g) relating to or arising out of any environmental matter,
including, without limitation, any violation of any Environmental Law or any
other Law relating to health and safety of the public or the employees of Word
Canada attributable to the period prior to the Word Canada Closing Date; (h)
relating to vacations, sick days and similar benefits accrued prior to the
Closing Date in respect of employees of the Word Canada Music Business who
become employees of Entertainment after the Closing and not reflected on the
Closing Statement; and (i) of Word Canada arising under or pursuant to this
Agreement. Entertainment shall not assume or be bound by any Liabilities of
Word Canada, except as expressly assumed by it pursuant to this Agreement.
ARTICLE 3
CONSIDERATION
3.1 WORD CANADA PURCHASE PRICE. The purchase price for the Word Canada
Assets shall be US$10 plus the Word Canada Assumed Liabilities (such price, as
adjusted pursuant to Article 3 of the Comprehensive Purchase Agreement being
herein referred to as the "WORD CANADA PURCHASE PRICE"). Such Word Canada
Purchase Price is to be paid and satisfied pursuant to the provisions of the
Comprehensive Agreement.
ARTICLE 4
WORD CANADA CLOSING; OBLIGATIONS OF THE PARTIES
4.1 CLOSING DATE. The closing relating to the sale and transfer of Word
Canada Assets (the "WORD CANADA CLOSING") shall occur simultaneously with the
Closing (namely at 8:00 a.m., local time on January 6, 1997) at the offices of
Farris, Vaughan, Xxxxx & Xxxxxx, Box 10026 Pacific Centre S, 000 X. Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0, or at such other time and place
as the parties hereto mutually agree.
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4.2 OBLIGATIONS OF THE PARTIES AT THE WORD CANADA CLOSING.
(a) At the Word Canada Closing, Entertainment shall deliver to
Word Canada:
(i) a Certificate of a duly authorized officer of Xxxxxxx
certifying that Sellers had made all deliveries and
fulfilled all obligations at the Closing pursuant to
Section 4.2(b) of the Comprehensive Agreement or, to
the extent that such deliveries were not made or
obligations not fulfilled, that they had been waived
by Xxxxxxx;
(ii) a copy of resolutions of the Board of Directors of
Entertainment, certified by Entertainment's
Secretary, authorizing the execution, delivery and
performance of this Agreement and the other documents
referred to herein to be executed by Entertainment,
and the consummation of the transactions contemplated
hereby;
(iii) a certificate of a duly authorized officer of
Entertainment certifying as to the accuracy in all
material respects of Entertainment's representations
and warranties at and as of the Word Canada Closing
and that Entertainment has performed or complied in
all material respects with all of the covenants,
agreements, terms, provisions and conditions to be
performed or complied with by Entertainment at or
before the Word Canada Closing;
(iv) the Distribution Agreement, duly executed by Xxxxxxx
and Entertainment;
(v) the opinion of Stikeman, Elliott, British Columbia
legal counsel for Entertainment, in accordance with
Section 10.4;
(vi) such instruments of assumption, in form and substance
reasonably satisfactory to Word Canada, as shall be
necessary for Entertainment to assume as of the
Closing Date and agree to pay, perform and discharge
the Word Canada Assumed Liabilities.
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(b) At the Word Canada Closing, Word Canada will deliver to
Entertainment:
(i) a Certificate of a duly authorized officer of Sellers
certifying that Xxxxxxx made all deliveries and
fulfilled all obligations at the Closing pursuant to
Section 4.2(a) of the Comprehensive Agreement or, to
the extent that such deliveries were not made or
obligations not fulfilled, that they had been waived
by Sellers;
(ii) such bills of sale, endorsements, assignments, and
other good and sufficient instruments of conveyance
and transfer, in form and substance reasonably
satisfactory to Entertainment, as shall be effective
to vest in Entertainment all of Word Canada's title
to and interest in the Word Canada Assets;
(iii) copy of resolutions of the Board of Directors and the
shareholder of Word Canada, certified by Word
Canada's Secretary, authorizing the execution,
delivery and performance of this Agreement and the
other documents referred to herein to be executed by
Word Canada, and the consummation of the transactions
contemplated hereby;
(iv) a certificate of the duly authorized officer of Word
Canada certifying as to the accuracy in all material
respects of Word Canada's representations and
warranties at and as of the Word Canada Closing, and
that it has performed or complied in all material
respects with all of the covenants, agreements,
terms, provisions and conditions to be performed or
complied with by Word Canada at or before the Word
Canada Closing;
(v) the opinion of Farris, Vaughan, Xxxxx & Xxxxxx, Box
10026 Pacific Centre S, 000 X. Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0, British
Columbia legal counsel for Word Canada, in accordance
with Section 9.4;
(vi) a duly executed change of name certificate for Word
Canada in form suitable for filing in the Province of
British Columbia, changing the name to a name not
containing and not confusingly similar to the word
"WORD";
(vii) all consents required in connection with the execution
and delivery of this Agreement and the transactions
contemplated hereby;
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(viii) the Distribution Agreement, duly executed by Xxxxxx;
and
(ix) appropriate instruments authorizing Entertainment to
endorse in the name of Word Canada on all checks,
drafts, notes and other instruments for the payment
of money and to receive for the account of
Entertainment the Word Canada Receivables and all
proceeds thereof to which Entertainment is entitled
or is required to collect on behalf of Word Canada
under this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES BY WORD CANADA
Word Canada hereby represents and warrants as follows:
5.1 CONFIRMATION OF REPRESENTATIONS AND WARRANTIES PURSUANT TO THE
COMPREHENSIVE AGREEMENT.
(a) Insofar as the representations and warranties of the Sellers
contained in Article 5 of the Comprehensive Agreement are
applicable to Word Canada they are confirmed, represented and
warranted by Word Canada as if herein set forth seriatim; and
(b) The representations and warranties of Word Canada set out in
Sections 5.2 to 5.15 inclusive of this Agreement are in
addition to and not in substitution for those contained in
Article 5 of the Comprehensive Agreement.
5.2 AUTHORIZATION. Word Canada has full corporate power and authority to
enter into this Agreement and perform its obligations hereunder and carry out
the transactions contemplated hereby. The board of directors and shareholder of
Word Canada have taken all action required by law, Word Canada's memorandum and
articles and otherwise to authorize the execution and delivery by Word Canada of
this Agreement and the consummation by Word Canada of the transactions
contemplated hereby. Assuming the due execution and delivery by Entertainment,
this Agreement constitutes the valid and binding agreement of Word Canada,
enforceable against Word Canada in accordance with its terms.
5.3 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Word Canada is a
company duly organized, validly existing and in good standing under the laws of
the Province of British Columbia. Word Canada has full corporate power and
authority to carry on its business as now conducted and, possesses all
governmental and other permits, licenses and other
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authorizations to own, lease or operate the Word Canada Assets and to carry on
the Word Canada Music Business as presently conducted.
5.4 SUBSIDIARIES. Word Canada has no subsidiaries within the meaning of
that word under the Company Act (British Columbia).
5.5 RECORDS AND BOOKS OF ACCOUNT. Since the Balance Sheet Date, the
records and books of account of Word Canada have been regularly kept and
maintained in conformity with Canadian GAAP.
5.6 CONTRACTS AND COMMITMENTS. Schedule B sets forth a complete and
accurate list of all material contracts to which Word Canada is a party
relating to the Word Canada Music Business. Other than with respect to such
matters which, alone or in the aggregate, would not have a material adverse
effect, (i) each of such Contracts is a valid and subsisting contract of all
the parties thereto in full force and effect without modification, (ii) Word
Canada is not in default under any of such Contracts and has performed all
obligations required to be performed by it thereunder, and (iii) all of such
Contracts are legal, valid and binding obligations and are in full force and
effect as of the date hereof and enforceable in accordance with their terms
(except that such enforcement may be subject to bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium (whether general or specific)
or other laws now or hereafter in effect relating to creditor's rights
generally and the remedy of specific enforcement and injunctive or other forms
of equitable relief may be subject to equitable defense and to the discretion
of the court before which any proceeding therefor may be brought). The
Contracts listed in Schedule B include every contract, written or, other than
in the ordinary course of business, oral, to which Word Canada is a party, that
is directly related to the Word Canada Music Business. Word Canada has
disclosed and delivered, prior to the date hereof, copies of all Contracts
listed on Schedule B.
5.7 FIXED ASSETS: LEASED PREMISES.
(a) Schedule C hereto sets forth a list and description as at
October 31, 1996 of all equipment, machinery, motor vehicles,
fixtures and other assets relating to the Word Canada Music
Business owned or used by Word Canada, indicating the legal
owner and location thereof.
(b) Schedule A sets forth a list of each lease of premises used in
relation to the Word Canada Music Business executed by or
binding upon Word Canada as lessee, sublessee, tenant or
assignee (the "WORD CANADA LEASED REAL ESTATE") setting forth
in each case a brief description of the premises covered
thereby, the rental payable thereunder and the term (including
any extensions available)
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thereunder. Each such lease is in full force and effect
without any default or breach thereof by Word Canada or any
other party thereto. Except as set forth on Schedule A, no
consent of any landlord or any other party is required under
any such lease in order to assign each such lease to
Entertainment and to keep such lease in full force and effect
after the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. True and
complete copies of all leases required to be listed on
Schedule A, including all amendments, addenda, waivers and all
other binding documents affecting the tenant's rights
thereunder, have heretofore been delivered to Entertainment.
5.8 EMPLOYEES. Schedule D attached hereto sets forth the name, job title,
duration of employment, vacation entitlement, employee benefit entitlement and
rate of remuneration (including bonus and commission entitlement) of each
employee of Word Canada to which Entertainment shall offer employment on
Closing. Schedule D also sets forth the names of all employees of Word Canada
who are now on disability, maternity or other authorized leave or who are
receiving workers' compensation or short-terms or long-term disability
benefits.
5.9 EMPLOYMENT AGREEMENTS. Except as listed in Schedule E, Word Canada is
not a party to any written or oral employment, service or consulting agreement
relating to any one or more persons working in the Word Canada Music Business,
except for oral employment agreements which are of indefinite term and without
any special arrangements or commitments with respect to the continuation of
employment or payment of any particular amount upon termination of employment.
There are no employees of the Word Canada Music Business who cannot be
dismissed upon such period of notice as is required by law in respect of a
contract of hire for an indefinite term. Complete and correct copies of all
documentation relevant to those agreements listed in Schedule E are annexed
hereto as Exhibits to Schedule E.
5.10 LABOUR MATTERS AND EMPLOYMENT STANDARDS.
(a) Word Canada is not subject to any agreement with any labour
union or employee association and has not made any commitment
to or conducted negotiations with any labour union or employee
association with respect to any future agreement and, to the
best of the knowledge of Word Canada, there is no current
attempt to organize, certify or establish any labour union or
employee association, in relation to any of the employees of
Word Canada.
(b) There are no existing or, to the best of the knowledge of Word
Canada, threatened, labour strikes or labour disputes,
grievances, controversies or other labour troubles affecting
the Word Canada Music Business.
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(c) Word Canada has complied with all applicable laws, rules,
regulations and orders relating to employment in the Word
Canada Music Business, including those relating to wages,
hours, collective bargaining, occupational health and safety,
workers' hazardous materials, employment standards, pay equity
and workers' compensation. There are no outstanding charges
or complaints against Word Canada relating to unfair labour
practices or discrimination or under any legislation relating
to employees. Word Canada has paid in full all amounts owing
under the Workers' Compensation Act (British Columbia) and the
workers' compensation claims experience of Word Canada would
not permit a penalty reassessment under such legislation.
5.11 EMPLOYEE BENEFIT AND PENSION PLANS.
(a) Except as listed in Schedule F attached hereto, Word Canada
does not have, and is not subject to any present or future
obligation or liability under, any pension plan, deferred
compensation plan, retirement income plan, stock option or
stock purchase plan, profit sharing plan, bonus plan or
policy, employee group insurance plan, hospitalization plan,
disability plan or other employee benefit plan, program,
policy or practice, formal or informal, with respect to any of
the employees of Word Canada, other than the Canada Pension
Plan (Canada) and the Medical Services Plan (British Columbia)
and other similar health plans established pursuant to
statute. Schedule F also lists the general policies,
procedures and work-related rules in effect with respect to
employees of Word Canada, whether written or oral, including
but not limited to policies regarding holidays, sick leave,
vacation, disability and death benefits, termination and
severance pay, automobile allowances and rights to
company-provided automobiles and expense reimbursements. (The
plans, programs, policies, practices and procedures listed in
Schedule F are hereinafter collectively called the "BENEFIT
PLANS"). Complete and correct copies of all documentation
establishing or relating to the Benefit Plans listed in
Schedule F or, where such Benefit Plans are oral commitments,
written summaries of the terms thereof are annexed hereto as
Exhibits to Schedule F.
(b) The pension plans included in the Benefit Plans are registered
under and are in compliance with all applicable federal and
provincial legislation and all reports, returns and filings
required to be made thereunder have been made. Such pension
plans and all other Benefit Plans have been administered in
accordance with their terms and the provisions of applicable
law. Each pension plan has been funded in accordance with the
requirements of such plans. There is no unfunded liability on
either a going concern or termination basis under any such
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pension plan. Word Canada has not made or granted or
committed to make or grant any benefit improvements to which
members of the pension plans or other Benefit Plans are or may
become entitled which are not disclosed in the Exhibits to
Schedule F. No funds have been withdrawn by Word Canada from
any such pension plan or other Benefit Plans.
(c) There are no pending claims by any employee or by any other
person with regard to any Benefit Plan (other than routine
benefit claims) which may result in liability to the employer
and, to the best of the knowledge of the Word Canada Music
Business and the Shareholder, there is no basis for such a
claim. There are no employees or former employees of the Word
Canada Music Business who are receiving from Word Canada any
pension or retirement payments or who are entitled to receive
any such payments not covered by a pension plan to which Word
Canada is a party.
5.12 GOVERNMENT ASSISTANCE. Schedule G attached hereto describes all
agreements, loans, other funding arrangements and assistance programs
(collectively called "GOVERNMENT ASSISTANCE PROGRAMS") (i) which are being
provided to Word Canada from any federal, provincial, municipal or other
government or governmental agency, board, commission or authority, domestic or
foreign (collectively called "GOVERNMENT AGENCIES"), or (ii) under which Word
Canada is obligated to any Government Agencies. Complete and correct copies of
all documents relating to the Government Assistance Programs are annexed hereto
as Exhibits to Schedule G. Word Canada has performed all of its obligations
under the Government Agencies to seek payment or repayment of any amount or
benefit provided under any of the Government Assistance Programs.
5.13 VENDOR'S RESIDENCY. Word Canada is not a non-resident of Canada
within the meaning of the ITA.
5.14 NO OMISSIONS. Word Canada does not know of any facts or circumstances
not disclosed to Entertainment which indicate that the Word Canada Assets or
the operations or prospects of Word Canada relating to the Word Canada Music
Business may be adversely affected or which otherwise should be disclosed to
Entertainment in order to make any of the representations or warranties made
herein on the part of the Word Canada not misleading. To the best knowledge of
Word Canada, no representation or warranty by Word Canada contained in this
Agreement, and no statement contained in any Schedule, Exhibit, or any
certificate required to be furnished to Entertainment under this Agreement or
the Comprehensive Agreement, contains any untrue statement of any material
fact, or omits to
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state any material fact necessary in order to make the statements contained
herein or therein not misleading.
5.15 WORD CANADA'S REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Word Canada contained in this Agreement and in the Comprehensive
Agreement, or otherwise made in writing in connection with the transactions
contemplated hereby, will be true and correct on and as of the Closing Date
with the same force and effect as though such representations and warranties
had been made on and as of the Closing Date.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES BY ENTERTAINMENT
Entertainment hereby represents and warrants to Word Canada as
follows:
6.1 CONFIRMATION OF REPRESENTATIONS AND WARRANTIES PURSUANT TO THE
COMPREHENSIVE AGREEMENT.
(a) Insofar as the representations and warranties of the Buyer
contained in Article 6 of the Comprehensive Agreement are
applicable to Entertainment they are confirmed, represented
and warranted by Entertainment as if herein set forth
seriatim; and
(b) The representations and warranties of Entertainment set out in
Sections 6.2 to 6.6 inclusive of this Agreement are in addition
to and not in substitution for those contained in Article 6 of
the Comprehensive Agreement.
6.2 AUTHORIZATION. Entertainment has full corporate power and authority to
enter into this Agreement and perform its obligations hereunder and carry out
the transactions contemplated hereby. The Board of Directors of Entertainment
has taken all action required by law, its memorandum and articles and otherwise
to authorize the execution and delivery by Entertainment of this Agreement and
the consummation by Entertainment of the transactions contemplated hereby.
Assuming the due execution and delivery by Word Canada, this Agreement
constitutes the valid and binding agreement of Entertainment, enforceable
against Entertainment in accordance with its terms.
6.3 ORGANIZATION AND GOOD STANDING. Entertainment is a company duly
organized, validly existing and in good standing under the laws of the Yukon
Territory and is registered as an extra-provincial company in the Province of
British Columbia and has full corporate
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power and authority to own, operate and lease its properties and carry on its
business as now conducted. Entertainment is duly qualified to transact
business as a foreign corporation and is in good standing in all jurisdictions
where the failure to so qualify would have an adverse impact on Entertainment's
operations in such jurisdiction.
6.4 NO VIOLATION. The execution and delivery of this Agreement by
Entertainment does not, and the consummation of the transactions contemplated
hereby will not, (a) violate, conflict with or require the consent thereunder
of any provision of any agreement, indenture, instrument, lease, security
agreement, mortgage or lien to which Entertainment is a party or by which it is
bound; (b) violate or conflict with any provision of Entertainment's memorandum
or articles; (c) violate any order, arbitration award, judgment, writ,
injunction, decree, statute, rule or regulation applicable to Entertainment; or
(d) violate any other contractual or legal obligation or restriction to which
Entertainment is subject.
6.5 SUFFICIENT FUNDS. Entertainment has and will continue to have
sufficient funds to consummate the transactions contemplated hereby, including,
without limitation, to pay the consideration set forth in Section 3.1 hereof in
accordance with the terms of this Agreement, and has all requisite power and
authority to make payment of such funds in the manner described herein and such
funds are and will be at the Closing Date free and clear of all Liens.
6.6 CERTAIN PROCEEDINGS. There is no pending, or to the knowledge of
Entertainment, threatened Actions at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
agency, instrumentality or authority that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with the
consummation of the transactions contemplated hereby.
ARTICLE 7
COVENANTS AND AGREEMENTS OF WORD CANADA
Word Canada agrees that, from the date hereof until the Word Canada
Closing, and thereafter if so specified, it will fulfil the following covenants
and agreements unless otherwise consented to by Entertainment in writing:
7.1 CONFIRMATION OF COVENANTS AND AGREEMENTS PURSUANT TO THE COMPREHENSIVE
AGREEMENT.
(a) Insofar as the covenants and agreement of Sellers contained in
Article 7 of the Comprehensive Agreement are applicable to
Word Canada they are confirmed, covenanted and agreed by Word
Canada as if herein set forth seriatim; and
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(b) The covenants and agreement of Word Canada set out in this
Agreement are in addition to and not in substitution for those
contained in Article 7 of the Comprehensive Agreement.
7.2 MODIFICATION. Word Canada shall give Entertainment prompt written
notice of (i) the existence of any fact or the occurrence of any event which
constitutes, or with the giving of notice or the passage of time or both would
constitute, a breach of any representation or warranty by Word Canada made
herein or pursuant hereto and (ii) the taking of any action by Word Canada that
would breach or violate, or constitute a default under, any agreements or
covenants of Word Canada made herein or pursuant hereto. The giving of any
such notice shall not affect, modify or limit in any way any representation,
warranty, agreement or covenant of Word Canada made herein or pursuant hereto
or Entertainment's right to rely thereon.
7.3 SUPPLEMENTAL DISCLOSURE. Word Canada agrees that, with respect to its
representations and warranties made in this Agreement, it will have a
continuing obligation to supplement or amend the Schedules hereto with respect
to any matter hereafter arising or discovered which, if existing or known at
the date of this Agreement, would have been required to be set forth or
described in the Schedules hereto; provided, however, that neither the
supplementing or amending of any Schedules by Word Canada, nor the availability
or other actual delivery of information to, or the discovery of any matters by
Entertainment in the course of its investigations, shall affect any covenants
or be deemed to cure any breach of any representation or warranty made in this
Agreement or to have been disclosed as of the date of this Agreement.
ARTICLE 8
COVENANTS AND AGREEMENTS OF ENTERTAINMENT
Entertainment agrees that from the date hereof until the Word Canada
Closing, and thereafter if so specified, it will fulfil the following covenants
and agreements unless otherwise consented to by Word Canada in writing:
8.1 CONFIRMATION OF COVENANTS AND AGREEMENTS PURSUANT TO THE COMPREHENSIVE
AGREEMENT.
(a) Insofar as the covenants and agreement of Buyer contained in
Article 8 of the Comprehensive Agreement are applicable to
Entertainment they are confirmed, covenanted and agreed by
Entertainment as if herein set forth seriatim; and
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(b) The covenants and agreement of Entertainment set out in this
Agreement are in addition to and not in substitution for those
contained in Article 8 of the Comprehensive Agreement.
8.2 CONSENTS AND APPROVALS. From the date hereof and prior to the Word
Canada Closing, Entertainment shall take all necessary corporate and other
action and use all reasonable efforts to obtain promptly all consents,
approvals, permits, licenses, authorizations, exemptions, waivers from third
parties and amendments of agreements required of Entertainment (including
pursuant to the Investment Canada Act (Canada) and the Competition Act
(Canada)) to carry out the transactions contemplated in this Agreement and
shall provide to Word Canada such information as Word Canada shall reasonably
require to make such filings and prepare such applications as may be required
for the consummation by Word Canada of the transactions contemplated by this
Agreement.
8.3 EMPLOYEE MATTERS. Entertainment will, on the Closing Date, offer
employment to each employee of Word Canada listed on Schedule D hereto and
assume any termination liability related thereto.
8.4 AGREEMENTS REGARDING PENSION PLAN. Effective as of the Word Canada
Closing Date, Word Canada will assign to Entertainment, and Entertainment will
adopt and assume and will thereafter be entitled to and bound by, all of Word
Canada's rights, duties, liabilities and obligations under the London Life
Insurance Company pension plan for employees of Word Canada listed in Schedule
F (the "WORD CANADA PENSION PLAN"). To the extent that (i) any assets of the
Word Canada Pension Plan are not vested in the employees, Word Canada agrees to
transfer and assign its interest therein to or for the benefit of such
employees after Closing, and (ii) if any Liability exists or arises in respect
of the Word Canada Pension Plan which has accrued prior to the Word Canada
Closing Date, Word Canada will promptly pay or satisfy such Liability. The
parties agree to make all required amendments and obtain any required third
party consents to effect the transfer of the Word Canada Pension Plan as soon
as practicable.
ARTICLE 9
CONDITIONS TO ENTERTAINMENT'S OBLIGATIONS
All obligations of Entertainment hereunder are subject to the
fulfilment or the waiver in writing thereof, prior to or at the Word Canada
Closing, of each of the following conditions:
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9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Word Canada in this Agreement and the Comprehensive Agreement and the
statements contained in the Schedules attached hereto as supplemented through
the Closing Date shall be true in all material respects when made and at and as
of the time of the Word Canada Closing as though such representations and
warranties were made at and as of such date.
9.2 PERFORMANCE BY WORD CANADA. Word Canada shall have performed and
complied in all material respects with all covenants, agreements, obligations
and conditions required by this Agreement and the Comprehensive Agreement to be
so complied with or performed.
9.3 CERTIFICATES OF WORD CANADA. Word Canada shall have delivered to
Entertainment a Certificate of Word Canada, dated the Closing Date, certifying
as to the fulfilment of the conditions specified in Sections 9.1 and 9.2
hereof.
9.4 OPINION OF COUNSEL FOR WORD CANADA. Entertainment shall have received
a written opinion of Word Canada's counsel, Farris, Vaughan, Xxxxx & Xxxxxx,
Box 10026 Pacific Centre S, 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
X0X 0X0, dated the Closing Date, in form and substance reasonably satisfactory
to it, as to certain matters agreed upon by legal counsel of Word Canada and
Entertainment. Such opinion may rely upon the opinion of the Vice President
and General Counsel of Xxxxxx as to such questions of fact and law as Word
Canada's counsel deems appropriate.
9.5 DISTRIBUTION AGREEMENT. The parties will have concluded negotiation
of the Distribution Agreement and Xxxxxx shall have executed it for delivery at
the Word Canada Closing.
9.6 LITIGATION. On the date of the Word Canada Closing, Word Canada shall
not be a party to, nor will there otherwise be pending or threatened in writing
any judicial, administrative, or other action, proceeding or investigation
seeking to enjoin, prohibit, restrain or otherwise prevent the transactions
contemplated hereby.
9.7 COMPREHENSIVE AGREEMENT CLOSING. Consummation of the transactions
contemplated by the Comprehensive Agreement shall occur simultaneously with the
Word Canada Closing.
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ARTICLE 10
CONDITIONS TO WORD CANADA'S OBLIGATIONS
All obligations of Word Canada under this Agreement are subject to the
fulfilment or the waiver in writing thereof, prior to or at the Word Canada
Closing, of each of the following conditions:
10.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Entertainment in this Agreement shall be true in all material respects
when made and at and as of the time of the Word Canada Closing as though such
representations and warranties were made at and as of such date.
10.2 PERFORMANCE BY ENTERTAINMENT. Entertainment shall have performed and
complied in all material respects with all covenants agreements, obligations
and conditions required by this Agreement to be so complied with or performed.
10.3 CERTIFICATES OF ENTERTAINMENT. Entertainment shall have delivered to
Word Canada a Certificate of Entertainment, dated the Closing Date, certifying
as to the fulfilment of the conditions specified in Sections 10.1 and 10.2
hereof.
10.4 OPINION OF COUNSEL FOR ENTERTAINMENT. Word Canada shall have received
a written opinion of Entertainment's counsel, Stikeman, Elliott, dated the
Closing Date, in form and substance reasonably satisfactory to them, as to
certain matters agreed upon by legal counsel of Word Canada and Entertainment.
Such opinion may rely upon the opinion of the Senior Vice President, Legal
Counsel and Secretary of Xxxxxxx as to such questions of fact and law as
Entertainment's counsel deems appropriate.
10.5 LITIGATION. On the date of the Word Canada Closing, Entertainment
shall not be a party to, nor will there otherwise be pending or threatened in
writing, any judicial, administrative, or other action, proceeding or
investigation seeking to enjoin, prohibit, restrain or otherwise prevent the
transactions contemplated hereby.
10.6 COMPREHENSIVE AGREEMENT CLOSING. Consummation of the transactions
contemplated by the Comprehensive Agreement shall occur simultaneously with the
Word Canada Closing.
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ARTICLE 11
INDEMNIFICATION
11.1 INDEMNIFICATION. The parties hereby mutually agree that the terms and
conditions of Article 11 of the Comprehensive Agreement shall apply to this
Agreement and for that purpose Word Canada is deemed to be a Seller and
Entertainment is deemed to be a Buyer. The rights and obligations of the
parties in respect of matters contained in Article 11 of the Comprehensive
Agreement shall be exclusively governed by the Comprehensive Agreement.
ARTICLE 12
TERMINATION OF AGREEMENT
12.1 TERMINATION EVENTS. This Agreement may be terminated at any time
prior to the Word Canada Closing:
(a) By mutual agreement of Word Canada and Entertainment.
(b) If the Comprehensive Agreement is terminated on the occurrence
of any those events listed in Sections 12.1(b) to (e),
inclusive, of the Comprehensive Agreement.
(c) By Entertainment, (i) if Word Canada has violated or breached
in any material respect any of the agreements, representations
or warranties contained in this Agreement or the Comprehensive
Agreement which has not been waived in writing and Word Canada
has not cured such violation or breach within thirty business
days after Entertainment delivers written notice thereof, or
(ii) if any of the conditions set forth in Article 9 hereof
have not been satisfied in all material respects by the Word
Canada Closing or have not been waived in writing by
Entertainment.
(d) By Word Canada, (i) if Entertainment has violated or breached
in any material respect any of the agreements, representations
or warranties contained in this Agreement which has not been
waived in writing and Entertainment has not cured such
violation or breach within thirty business days after Word
Canada delivers written notice thereof, or (ii) if any of the
conditions set forth in Article 10 hereof have not been
satisfied in all material respects by the BC Closing or have
not been waived in writing by Word Canada.
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(e) By either Entertainment or Word Canada if the other makes an
assignment for the benefit of creditors, files a voluntary
petition in bankruptcy or seeks or consents to any
reorganization or similar relief under any present or future
bankruptcy act or similar law,or is adjudicated a bankrupt or
insolvent, or if a third party commences any bankruptcy,
insolvency, reorganization or similar proceeding involving the
other.
12.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 12.1, all further obligations of the parties
under this Agreement will terminate, except that the obligations in Sections
14.2 and 14.11 will survive. Nothing in this Section 12.2 shall relieve any
party to this Agreement of Liability for breach of this Agreement or for breach
of the Confidentiality Agreement.
ARTICLE 13
COLLECTION OF RECEIVABLES AND INVENTORY RETURNS
13.1 COLLECTION OF WORD CANADA RECEIVABLES. Entertainment hereby agrees to
act as Word Canada's agent to collect the Word Canada Receivables. Such
collections shall be made in the normal and ordinary course or Entertainment's
business. In connection therewith, Entertainment shall be entitled to issue
credits to customers and otherwise engage in ordinary and customary collection
practices. On or before the tenth day of each of the first four full months
following the Word Canada Closing Date, Entertainment shall pay to Word Canada
by cheque of immediately available funds an amount equal to one-fourth of the
Word Canada Receivables less (i) in the case of the first such payment, the
amount of actual returns of products credited to customer's accounts applicable
to the Word Canada Receivables between the Word Canada Closing Date and the end
of the calendar month immediately preceding such payment and (ii) in the case
of the second, third and fourth such payments, the amount of actual returns of
products credited to customer's accounts applicable to the Word Canada
Receivables during the calendar month immediately preceding such payment until
120 days of returns credits have been issued. For its collection services
under this Section 13.1, Word Canada agrees to pay Entertainment a servicing
fee equal to 0.5% of funds remitted by Entertainment in respect of Word Canada
Receivables. The parties hereto acknowledge that Entertainment shall remit the
foregoing amounts notwithstanding actual collections on Word Canada Receivables
as a matter of administrative convenience only and, pursuant to adjustments
made under the Comprehensive Agreement, Word Canada and its affiliates shall
bear the entire risk of non-collectibility.
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13.2 INVENTORY RETURNS.
(a) Entertainment will purchase from Word Canada any inventory of
the Word Canada Music Business sold to and then returned by
customers of Word Canada, provided such returned inventory is
not damaged or obsolete and is capable of being sold in the
ordinary course of business at normal profit margins. The
price payable by Entertainment to Word Canada for the returned
inventory that Entertainment is obligated to purchase
hereunder shall be its cost.
(b) In respect of any returns of inventory other than as set out
in Section 13.2(b) above, Entertainment shall not be obligated
to purchase same and shall, unless otherwise instructed by
Xxxxxx in writing, ship such inventory to Xxxxxx at Xxxxxx'x
address shown in Section 14.10 hereof or such other address as
Xxxxxx shall provide to Entertainment in writing, at Xxxxxx'x
sole cost.
ARTICLE 14
MISCELLANEOUS
14.1 SURVIVAL OF REPRESENTATIONS. The parties hereto agree that, all
representations, warranties, covenants, conditions and agreements contained
herein or in any instrument or other document delivered pursuant to this
Agreement or in connection with the transactions contemplated hereby shall
survive the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and any investigation or audit made by any
party hereto and that such representations and warranties shall expire on the
third anniversary of the Closing Date.
14.2 EXPENSES. All fees and expenses incurred by Word Canada, without
limitation, legal fees and expenses, in connection with this Agreement, will be
borne by Word Canada and all fees and expenses incurred by Entertainment,
including without limitation legal fees and expenses in connection with this
Agreement, will be borne by Entertainment.
14.3 ASSIGNABILITY: PARTIES IN INTEREST.
(a) This Agreement may not be assigned by Word Canada without the
prior written consent of Entertainment. Entertainment may
assign any or all of their respective rights hereunder to any
of direct or indirect majority-owned subsidiaries of Xxxxxxx
provided that Entertainment shall continue to remain obligated
for the performance of its obligations hereunder and Xxxxxxx
shall
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remain liable for its obligations under the Comprehensive
Agreement. Entertainment shall advise Xxxxxx of any such
assignment and shall designate the assignee and transferee of
the assets purchased. Any such assignee shall assume all
duties, obligations and undertakings of its assignor
hereunder, but the assignor shall remain liable thereunder.
(b) All the terms and provisions of this Agreement shall be
binding upon, shall inure to the benefit of and shall be
enforceable by the respective successors, assigns and legal
representatives of the parties hereto.
14.4 ALLOCATION OF WORD CANADA PURCHASE PRICE. The Word Canada Purchase
Price shall be allocated among the Word Canada Assets in the manner provided by
Schedule H attached hereto. Word Canada and Entertainment shall file their
respective tax returns prepared in accordance with such allocation.
14.5 PAYMENT OF TAXES. Entertainment shall be liable for and shall pay all
applicable federal and provincial sales taxes, land transfer taxes, goods and
services taxes, excise taxes and all other taxes (other than income taxes of
Word Canada), duties and other like charges properly payable upon and in
connection with the conveyance and transfer of the Word Canada Assets to
Entertainment. Word Canada will do and cause to be done such things as are
reasonably requested to enable Entertainment to comply with such obligation in
an efficient manner.
14.6 GOODS AND SERVICES TAX EXEMPTION.
(a) Word Canada hereby represents and warrants to Entertainment
that:
(i) Word Canada is registered for purposes of Part IX of
the Excise Tax Act (Canada) (hereinafter, in this
section, called the "GST LEGISLATION"); and
(ii) the Word Canada Assets comprise all or substantially
all of the property used by Word Canada in the Word
Canada Music Business.
(b) Entertainment hereby represents and warrants to Word Canada
that Entertainment is registered for purposes of the GST
Legislation.
(c) Word Canada and Entertainment will jointly execute in
prescribed form, and Entertainment will file within the
required time, an election under s.167(1) of the Excise Tax
Act (Canada) that no tax be payable pursuant to the GST
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Legislation with respect to the purchase and sale of the Word
Canada Assets hereunder.
14.7 ENTIRE AGREEMENT: AMENDMENTS. This Agreement and the Comprehensive
Agreement, including the Exhibits, Schedules referred to herein or therein or
delivered pursuant hereto or thereto, together with the Confidentiality
Agreement, contain the entire understanding of the parties with respect to
their subject matter. There are no restrictions, agreements, promises,
warranties, covenants or undertakings other than those expressly set forth
herein or therein. Except for the Comprehensive Agreement and as otherwise
specifically provided herein, this Agreement supersedes all prior agreements
and understandings between the parties with respect to its subject matter.
This Agreement may be amended only by a written instrument, duly executed by
Word Canada and Entertainment or their respective successors, assigns or legal
representatives. Any condition to a party's obligations hereunder may be
waived but only by a written instrument signed by the party entitled to the
benefits thereof. The failure or delay of any party at any time or times to
require performance of any provision or to exercise its rights with respect to
any provision hereof, shall in no manner operate as a waiver of or affect such
party's right at a later time to enforce the same.
14.8 HEADINGS. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretations of this Agreement.
14.9 SEVERABILITY. The invalidity of any term or terms of this Agreement
shall not affect any other term of this Agreement, which shall remain in full
force and effect.
14.10 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed (registered or certified mail, postage
prepaid, return receipt requested) or if sent by telecopy as follows:
If to Word Canada:
c/o Xxxxxx Xxxxxx, Inc.
Xxxxxx Place at Xxx Xxxx Xxxx
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxx X. Xxxxxx, Executive Vice President and
Chief Financial Officer
Telecopy Number: (000) 000-0000
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with a copy to:
Xxxxxx Xxxxxx, Inc.
Xxxxxx Place at Xxx Xxxx Xxxx
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telecopy Number: (000) 000-0000
and
Bass, Xxxxx & Xxxx PLC
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, III, Esq.
Telecopy Number: (000) 000-0000
and
Farris, Vaughan, Xxxxx & Xxxxxx
Barristers and Solicitors
Xxx 00000 Xxxxxxx Xxxxxx X
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attn: Xxxxxxxxx X. Xxxxxxxx, Q.C.
Telecopy Number: (000) 000-0000
If to Entertainment:
c/o Gaylord Entertainment Company
Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: X. X. Xxxxxxxxx, Xx., Esq.
Telecopy Number: (000) 000-0000
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with a copy to:
Loeb & Loeb LLP
00 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Xx., Esq.
Telecopy Number: (000) 000-0000
and
Stikeman, Xxxxxxx
Xxxxxxxxxx & Xxxxxxxxxx
Xxxxx 0000, Xxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attn: Xxxxxxxx X. Xxxxxx
Telecopy Number: (000) 000-0000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
14.11 GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the Province of British Columbia applicable to
agreements made and to be performed wholly within that jurisdiction. Each of
the parties hereto hereby irrevocably and unconditionally consents to submit to
the non-exclusive jurisdiction of the courts of the Province of British
Columbia, for any litigation arising out of or relating to this Agreement and
the transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in such courts), and further agrees that service of any
process, summons, notice, or document by registered mail to its respective
address set forth in Section 14.11 shall be effective service of process for
any litigation brought against it in any court.
14.12 PUBLIC ANNOUNCEMENTS. Neither Word Canada nor Entertainment shall
make any public statements, including, without limitation, any press releases,
with respect to this Agreement or the Comprehensive Agreement and the
transactions contemplated hereby without the prior written consent of the other
party (which consent shall not be unreasonably withheld) except as may be
required by law. If a public statement is required to be made by law, the
parties shall consult with each other in advance as to the contents and timing
thereof.
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14.13 NO THIRD PARTY BENEFICIARIES. This Agreement is intended and agreed
to be for the benefit of the parties hereto, Sellers and Xxxxxxx and no other
party shall accrue any benefit, claim or right of any kind whatsoever pursuant
to, under, by or through this Agreement.
14.14 INTERPRETIVE PROVISIONS. Whenever used in this Agreement, "to Word
Canada's knowledge" or "to the knowledge of Word Canada" shall mean the actual
knowledge of the corporate officers of Word Canada.
14.15 COUNTERPARTS. This Agreement may be executed simultaneously in one or
more counterparts, with the same effect as if the signatories executing the
several counterparts had executed one counterpart. All such executed
counterparts shall together constitute one and the same instrument. Either of
the parties hereto may deliver this Agreement by telecopy transmission to the
other of them in the manner specified in Section 14.10 hereof.
14.16 BEST EFFORTS TO RESOLVE DISCREPANCIES. The parties agree that, in the
event that any event or condition occurs under this Agreement which would give
rise to a failure of Word Canada to meet Entertainment's conditions to closing
pursuant to Article 8 or, in the event of a Word Canada Closing, a right of
indemnification by Entertainment against Sellers pursuant to Article 11 hereto
or Article 11 of the Comprehensive Agreement, the parties hereto agree to
negotiate in good faith to find a mutually satisfactory basis for proceeding
with the transactions contemplated hereby, in order that the Word Canada
Closing may occur prior to the occurrence of a termination event in Article
12.1(e).
14.17 REFERENCE DATE. This Agreement is dated for purposes of reference
only as November 21, 1996 but was actually executed on January 6, 1997.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers, of Buyer and by each of Sellers on the date first
above written.
WORD COMMUNICATIONS LTD.
By:/s/ Xxx X. Xxxxxx
---------------------------------
Title: Secretary
WORD ENTERTAINMENT (CANADA), INC.
By:/s/ Xxxxx X. London
----------------------------------
Title: President
