Exhibit 4.4
XXXXXXXXX INC.
NON-COMPETITION, NON-SOLICITATION
AND CONFIDENTIALITY AGREEMENT
THIS AGREEMENT is made as of the 15th day of November, 2000
BETWEEN:
CANWEST GLOBAL COMMUNICATIONS CORPORATION, a
corporation governed by the laws of Canada
("CanWest")
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3815668 CANADA INC., a corporation governed by the
laws of Canada ("CanWest Subco")
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XXXXXXXXX INC., a corporation governed by the laws
of Canada ("Xxxxxxxxx")
BACKGROUND:
A. Pursuant to an agreement (the "Transaction Agreement") dated July 30,
2000 between CanWest and certain of the affiliates of Xxxxxxxxx (the "Vendors"),
CanWest has agreed to purchase and the Vendors have agreed to sell certain of
the businesses and assets of the Vendors to CanWest as a going concern (the
"Acquired Business").
B. CanWest Subco is a subsidiary of CanWest through which CanWest is
purchasing the Acquired Business.
C. The Acquired Business currently carries on the business of owning and
operating newspapers, magazines, specialty publications, internet content
providers, a web-site portal and related businesses in Canada.
X. Xxxxxxxxx and its affiliates have knowledge of proprietary and
confidential information and trade secrets of the Acquired Business of a
competitively sensitive nature which constitute substantial assets of the
Acquired Business, the value of which would be lost or impaired if Xxxxxxxxx or
its affiliates were to compete with the Acquired Business or use or disclose
such information.
E. The consideration to be paid by CanWest Subco to the Vendors pursuant to
the Transaction Agreement includes a substantial amount which is attributable to
the goodwill of the Acquired Business, and it is a condition of the completion
of the transactions under the Transaction Agreement that Xxxxxxxxx, its
affiliates and certain of its or its affiliates' senior
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executives, execute and deliver to CanWest and its affiliates agreements
respecting non-competition, non-solicitation and confidentiality.
NOW THEREFORE in consideration of the foregoing, the parties hereto covenant,
acknowledge and agree as follows:
1. DEFINITIONS - In this Agreement and the recitals hereto and any amendments
to this Agreement, unless the context otherwise requires, the following
words and phrases shall have the meaning set forth after them:
"ACQUIRED BUSINESS" has the meaning given it in Recital A;
"AFFILIATE" has the meaning given in the Canada Business Corporations Act;
"COMPETING BUSINESS" means any business engaged in:
(a) the ownership, operation or publishing of Publications which are
distributed within any postal code in which any Publication acquired
by CanWest and/or its Affiliates pursuant to the Transaction
Agreement, other than the interest in the National Post (an "INITIAL
PUBLICATION") is distributed on the Effective Date (the "RESTRICTED
AREA") other than any incidental distribution within the Restricted
Area of any such Publication which is intended to be distributed
primarily outside the Restricted Area; provided, however, that if
CanWest or its Affiliates discontinues the operations of any Initial
Publication, the Restricted Area with respect to CanWest and its
Affiliates will no longer consist of those postal codes in which
that Initial Publication was distributed as of the Effective Date,
unless another Initial Publication was distributed in those same
postal codes on the Effective Date;
(b) the provision of news content and advertising through the internet
which is primarily directed at Persons residing within the
Restricted Area;
(c) the ownership or operation of a generalized web-site portal or
specialized web-sites that offer content, services and links
comparable to that offered by Xxxxxx.xxx, Xxxxxxxx.xxx,
Xxxxxxxxx.xxx, Xxxxxxxxxxxx.xxx, and other forms of classified
advertising and web-sites providing local or nature news and
informative content and Xxxx-xxx.xxx, which web-sites are targeted
primarily at users comparable to those targeted by such web-sites
but, for greater certainty, excluding businesses in which Xxxxxxxxx
or its Affiliates hold portfolio investments immediately after the
Effective Date and web-sites related to the Publications owned and
operated by Xxxxxxxxx or its Affiliates; and
(d) the operation of a nationally distributed newspaper.
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"EFFECTIVE DATE" means the date of closing of the transaction contemplated
by the Transaction Agreement;
"PERSON" means any individual, legal or personal representative,
partnership, company, corporation, incorporated syndicate, unincorporated
association, trust, governmental body or department agency or division of a
government, association, joint venture or other business or governmental
entity;
"PUBLICATION" means daily, weekly or specialty newspapers, shopping guides,
magazines or specialty publications;
"TRANSACTION AGREEMENT" has the meaning given it in Recital A;
2. NON-COMPETITION - Except for or on behalf of CanWest and its Affiliates or
the Acquired Business or as provided in Sections 3 and 4, Xxxxxxxxx, on its
own behalf and on behalf of its Affiliates, covenants and agrees with
CanWest, that neither it nor any of its Affiliates shall directly or
indirectly, at any time during the five (5) year period from the date
hereof, either alone or in conjunction with any Person, whether as
principal, agent, shareholder, consultant, manager, owner, partner, limited
partner, joint venturer, trustee, or in any other capacity whatsoever,
invest in, undertake, carry on, be engaged in, be concerned with, have a
financial interest in, advise, lend money to, guarantee the debts or
obligations of or permit its name or any part thereof to be used or
employed by or associated with any Person engaged in, concerned with or
interested in, directly or indirectly, an undertaking or business in Canada
which is engaged in a Competing Business.
3. EXCEPTIONS - Nothing in this Agreement shall:
(a) restrict or prevent Xxxxxxxxx or any of its Affiliates from holding
or purchasing the publicly-traded securities of a Person (a
"Competitor") engaged in a Competing Business in Canada, provided
that the securities of the Competitor held by Xxxxxxxxx and its
Affiliates collectively do not exceed 5% of the outstanding
securities of the Competitor, or 5% of the outstanding voting shares
of the Competitor;
(b) restrict Xxxxxxxxx or any of its Affiliates from continuing to own
and operate in the normal course the balance of their newspaper
businesses and interests remaining after the completion of the sale
to CanWest of the Acquired Business, including the interest in The
National Post Company; or
(c) subject to Section 4, restrict Xxxxxxxxx or any of its Affiliates
from acquiring a Competing Business as part of the acquisition of,
or merger with another business where: (i) the value of such
Competing Business at the time of the acquisition by Xxxxxxxxx
represented less than 5% of the total value of the transaction or
group of related transactions in which Xxxxxxxxx acquired the
Competing Business; or (ii)
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the revenues of the Competing Business represent less than 5% of the
consolidated annual revenues of the acquired or merged business as a
whole (each an "Incidental Acquisition").
4. ACQUISITION OF A COMPETING BUSINESS - Xxxxxxxxx shall not be in default of
this Section 4 if it owns and operates a Competing Business following the
completion of an acquisition or merger resulting in an Incidental
Acquisition (in this Section 4, the "Closing") provided that:
(a) immediately following the Closing, Xxxxxxxxx provides Notice (as
defined in the Transaction Agreement) to CanWest of the Closing and
offers to sell the Incidental Acquisition to CanWest, such offer to
set out the price in cash and the principal terms of the proposed
sale, and provides CanWest with sufficient information respecting
the Incidental Acquisition which would permit a reasonable
prospective purchaser of such business to assess the merits of an
acquisition;
(b) CanWest shall have thirty (30) business days from the date of the
Notice from Xxxxxxxxx of the acquisition of the Incidental
Acquisition to accept or reject the offer, during which time it may
conduct standard due diligence investigations in respect of which
Xxxxxxxxx shall provide all customary cooperation and additional
information;
(c) if CanWest does not advise Xxxxxxxxx within such thirty (30)
business day period that it wishes to accept the offer, then
Xxxxxxxxx'x offer shall be deemed to have been rejected. Subject to
Section 4(e), if the offer is or is deemed rejected, Xxxxxxxxx shall
have a period of twelve (12) months after the date of Closing to
complete a sale of the Incidental Acquisition to any other person;
(d) if Xxxxxxxxx is unable to complete a sale of the Incidental
Acquisition to a third party as provided herein within twelve (12)
months after the date of Closing, Xxxxxxxxx shall not operate it or
any part thereof following such twelve (12) month period and shall
close the operations of the Incidental Acquisition; and
(e) during the period following the Closing and prior to the sale to a
third party, Xxxxxxxxx shall not make (i) any material changes to
the Incidental Acquisition; or (ii) any capital investment in the
Incidental Acquisition; except as may be required to enable such
business to operate in the normal and ordinary course.
5. NON-SOLICITATION
(a) Xxxxxxxxx, on its own behalf and on behalf of its Affiliates,
covenants and agrees with CanWest and CanWest Subco that except for
or on behalf of the Acquired Business or with the written consent of
CanWest, neither it nor any of its
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Affiliates shall directly or indirectly, at any time within a period
of five (5) years from the date hereof:
(i) induce or attempt to induce any of the employees of the
Acquired Business to leave his or her employment; or
(ii) employ or attempt to employ any senior executive or
management employees, publishers, journalists or senior
editorial personnel of any of the individual business units
comprising the Acquired Business, unless the employee has
been dismissed by CanWest or its Affiliates or resigned his
or her employment at least three (3) months prior to the
employment of such individual by Xxxxxxxxx or its Affiliate.
(b) Section 5(a)(i) will not apply in respect of any employees of the
Acquired Business who apply to Xxxxxxxxx for a position (i) on an
unsolicited basis, (ii) in response to an advertisement, or (iii)
through an arm's length executive recruitment process normally
carried on by Xxxxxxxxx, provided Xxxxxxxxx, directly or indirectly,
has not initiated the contact with the employee.
6. CONFIDENTIALITY - Xxxxxxxxx acknowledges that it and its Affiliates have
had access to confidential and proprietary information and trade secrets of
the Acquired Business, the disclosure of any of which confidential and
proprietary information and trade secrets to competitors of the Acquired
Business or to the general public would be detrimental to the best
interests of the Acquired Business and Xxxxxxxxx acknowledges and agrees
with CanWest and CanWest Subco that the right to maintain the
confidentiality of such confidential and proprietary information and trade
secrets, and the right to preserve the goodwill of the Acquired Business,
constitute proprietary rights which each of CanWest and CanWest Subco is
entitled to protect. Accordingly, Xxxxxxxxx covenants and agrees with
CanWest and CanWest Subco that neither it nor any of its Affiliates will at
any time hereafter disclose any of such confidential and proprietary
information except to its employees, consultants or other representatives
to the extent required to discharge its obligations under the Management
Services Agreement between Xxxxxxxxx and an Affiliate of CanWest dated the
date hereof, provided that no liability shall attach to any disclosure of
information which:
(a) was already in the public domain or comes into the public domain or
becomes available to Xxxxxxxxx from a third party, without any
breach of this Agreement or any other obligation of confidentiality
to CanWest or CanWest Subco;
(b) is required to be disclosed pursuant to applicable laws or pursuant
to policies or regulations of any regulatory authority or public
body having jurisdiction over a party; or
(c) is required to be disclosed in any arbitration or legal proceeding.
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7. RESTRICTIONS REASONABLE - Xxxxxxxxx acknowledges that the time, scope,
geographic area and other provisions of this Agreement are reasonable in
the circumstances of the transactions contemplated by the Transaction
Agreement and are given as an integral and essential part of the
transactions contemplated by the Transaction Agreement and are necessary in
order to protect and maintain the business and assets and goodwill acquired
by CanWest and CanWest Subco in connection with the transactions
contemplated by the Transaction Agreement.
8. ADDITIONAL REMEDIES - Xxxxxxxxx acknowledges and understands that breach or
threatened breach by it or any of its Affiliates, or non-performance by it
of any of the covenants or promises contained herein may cause irreparable
damage to CanWest, its Affiliates or the Acquired Business but not result
in any readily quantifiable damages or that the remedy at law may be
inadequate. Accordingly, Xxxxxxxxx agrees and accepts that CanWest and/or
CanWest Subco may, in addition to any other claim for relief, enforce the
performance of any covenant of this Agreement by injunction or other
equitable relief upon application to a court of competent jurisdiction
without requirement to prove the inadequacy of available remedies, and
agrees not to plead sufficiency of damages as a defence in any proceeding
for injunctive or other equitable relief brought by CanWest or CanWest
Subco to enforce the provisions of this Agreement. Xxxxxxxxx agrees that
since all of the restrictions in this Agreement are reasonable, all
defences to the strict enforcement thereof by CanWest or CanWest Subco are
hereby waived. Furthermore, the existence of any claim or cause of action
which Xxxxxxxxx or any of its Affiliates may have against CanWest or
CanWest Subco shall not constitute a defence or bar to the enforcement of
any of the provisions of this Agreement and shall be pursued by separate
action by Xxxxxxxxx.
9. GOVERNING LAW AND ATTORNMENT - This Agreement shall be construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein and shall be treated in all respects as an Ontario
contract and in such proceeding the parties shall attorn to the laws of
Ontario and the non-exclusive jurisdiction of the Ontario courts and agree
not to dispute the competence or jurisdiction of such court.
10. ASSIGNMENT - Neither this Agreement nor any rights or obligations hereunder
may be assigned by any of the parties hereto, except;
(a) CanWest or CanWest Subco may assign the benefit of this Agreement to
a purchaser of an Initial Publication as it applies to the
Restricted Area applying to such publication and the solicitation
and employment of the employees of such Initial Publication and in
the event of a sale of an Initial Publication by CanWest or an
Affiliate of CanWest in a circumstance where the purchaser wishes
the benefit of this Agreement, Xxxxxxxxx will and will cause its
Affiliates to enter into an agreement or agreements with the
purchaser of the Initial Publication on terms and conditions which
are comparable to those in this Agreement for the remaining portion
of the Agreement to the effect contemplated in this subsection (a)
and in such events the definition of "Restricted Business" in this
Agreement shall be
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amended such that it will no longer include those postal codes in
which that Initial Publication was distributed as of the Effective
Date, unless another Initial Publication was distributed in those
same postal codes on the Effective Date;
(b) CanWest and CanWest Subco may assign this Agreement and the benefit
thereof to an Affiliate as part of an internal reorganization.
11. SUCCESSORS AND ASSIGNS - The provisions of this Agreement shall enure to
the benefit of and be binding upon the parties hereto and their respective
heirs, executors, administrators, successors and permitted assigns.
12. NON-WAIVER - The failure of any party to this Agreement to require the
performance of any term or condition of this Agreement or the waiver by any
party of any breach of this Agreement, shall not prevent a subsequent
enforcement of such term or any other term and shall not be deemed to be a
waiver of any subsequent breach.
13. AFFILIATES - At the written request of CanWest, Xxxxxxxxx shall cause its
Affiliates to execute an agreement with CanWest or any of its Affiliates
substantially in the form of this Agreement.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto of the
date first above written.
CANWEST GLOBAL COMMUNICATIONS
CORPORATION
By:
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3815668 CANADA INC.
By:
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XXXXXXXXX INC.
By: /s/ Xxxxx X. Xxxxxxxx
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