MANAGEMENT AND ADMINISTRATIVE SERVICES AGREEMENT August 15, 2007 CANWEST MEDIAWORKS INC. AND CW MEDIA INC.
AND
CW
MEDIA INC.
TABLE
OF
CONTENTS
Page
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ARTICLE
1
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2 | |
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1.1
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Definitions
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2
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1.2
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Certain
Rules of Interpretation
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6
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1.3
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Entire
Agreement
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7
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1.4
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Accounting
Principles
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7
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1.5
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Schedules
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7
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ARTICLE
2
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REPORTING
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7 |
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2.1
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Reporting
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7
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2.2
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Programming
Decisions
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8
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ARTICLE
3
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SERVICES
|
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8 |
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3.1
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Appointment
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8
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3.2
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Voting
Trust Agreement
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8
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3.3
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Powers
of the Manager
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8
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3.4
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Personnel
of CanWest
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9
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3.5
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Third
Party Service Providers
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9
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3.6
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Exclusivity
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9
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3.7
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Services
Between CW Media and the Contributed Business
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9
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ARTICLE
4
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FEES
AND COSTS
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10 |
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4.1
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Fees
and Expenses
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10
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4.2
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Sales
Taxes
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10
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4.3
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Failure
to Pay when Due
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10
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4.4
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Tax
Status of Payments
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11
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4.5
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Goods
and Services Tax and Harmonized Sales Tax Registration
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11
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ARTICLE
5
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||
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5.1
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Standard
of Care and Delegation
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11
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5.2
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Reliance
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12
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5.3
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No
Liability
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12
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ARTICLE
6
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ACCESS
RIGHTS AND AUDIT RIGHTS
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13 |
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6.1
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Access
Rights and Audit Rights
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13
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ARTICLE
7
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INDEMNIFICATION
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13 |
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7.1
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Indemnification
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13
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ARTICLE
8
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DISPUTE
RESOLUTION
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14 |
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8.1
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Dispute
Resolution
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14
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8.2
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Arbitration
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14
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ARTICLE
9
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TERM
AND TERMINATION
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15 |
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9.1
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Term
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15
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9.2
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Termination
by CanWest
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15
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9.3
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Termination
by CW Media
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16
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9.4
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Survival
of Certain Obligations
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16
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TABLE
OF
CONTENTS
(continued)
Page
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ARTICLE
10
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16 | |
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10.1
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Force
Majeure
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16
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10.2
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Notices
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16
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10.3
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Non-Solicit/No-Hire
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17
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10.4
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Assignment,
Successor and Assigns
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18
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10.5
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Amendments
and Waivers
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18
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10.6
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Further
Assurances
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18
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10.7
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Relationship
of Parties
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19
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10.8
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Third
Party Beneficiaries
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19
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10.9
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Assignment
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19
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10.10
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Osler,
Xxxxxx & Harcourt LLP Acting for More than One Party
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19
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10.11
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Enurement
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19
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10.12
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Execution
and Delivery
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19
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THIS
AGREEMENT is made as of August 15, 0000
X
X X XX X X:
CANWEST
MEDIAWORKS INC., a corporation governed by the laws of
Manitoba,
(“CanWest”)
-
and
-
CW
MEDIA INC., a corporation governed by the laws of Canada,
(“CW
Media”)
RECITALS:
|
A.
|
CanWest
and GS Capital Partners AA Investment LLC are parties to a Joint
Venture
Term Sheet entered into on January 10, 2007 (the “JV Term
Sheet”) pursuant to which CanWest and GSCP agreed, among other
things, to acquire Alliance Atlantis Communications Inc.
(“AA”) and to reorganize the business divisions of
AA and
its subsidiaries, such that all of the assets and operations of
the
broadcasting division of AA and its subsidiaries are held by CW
Media.
|
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B.
|
Pursuant
to the JV Term Sheet, CW Investments Co. (the
“Corporation”), CanWest and Affiliates of GSCP and
CanWest have entered into a shareholders agreement dated as of
the date of
this Agreement (the “Shareholders Agreement”) governing
their interests in and the operation of the Corporation and its
Subsidiaries.
|
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C.
|
CW
Media is an indirect wholly-owned Subsidiary of the
Corporation.
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D.
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Also
pursuant to the JV Term Sheet, CanWest and GSCP agreed that CanWest
would
have exclusive day-to-day management of the business, affairs and
operations of CW Media and its Subsidiaries, in addition to and
in
combination with those of the Contributed
Business.
|
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E.
|
In
connection with such management of the business, affairs and operations
of
CW Media and its Subsidiaries in combination with those of the
Contributed
Business or the Contributed Entity, CW Media and its Subsidiaries
may
provide certain services to the Contributed Business and the Contributed
Business or the Contributed Entity may provide certain services
to CW
Media and its Subsidiaries.
|
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F.
|
As
contemplated by Schedule 5.1 to the Shareholders Agreement, CanWest
shall
transfer the Contributed Business to a new entity (the
“Contributed Entity”) prior to the combination of the
Contributed Business with the business of the Corporation and its
Subsidiaries.
|
1
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G.
|
The
JV Term Sheet has been superseded by the Shareholders Agreement
and this
Agreement.
|
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H.
|
CW
Media and CanWest are entering into this Agreement to set out the
terms
upon which CanWest and its Affiliates (including the Contributed
Entity)
will provide such management and other services to CW Media and
its
Subsidiaries and to provide for certain reimbursement of expenses
in
connection with the provision of services between CW Media and
its
Subsidiaries and the Contributed Business or the Contributed
Entity.
|
THEREFORE,
the parties agree as follows:
ARTICLE
1
DEFINITIONS
AND PRINCIPLES OF INTERPRETATION
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1.1
|
Definitions
|
Unless
otherwise defined in this Agreement, capitalized terms used in this Agreement,
including the recitals to this Agreement, have the meanings assigned to them
in
the Shareholders Agreement. Wherever used in this Agreement, the
following words and terms will have the meanings set out below:
“Affiliate”
and “Affiliates” has the meaning set out in Section 1.1 of the
Shareholders Agreement;
“Agreement”
means this Management and Administrative Services Agreement, including all
amendments or restatements as permitted, and references to
“Article” or “Section” mean the specified
article or section of this Agreement;
“Ancillary
Agreements” has the meaning set out in the Separation and Distribution
Agreement dated as of the date of this Agreement among CW Media and certain
other parties;
“Appeal
Arbitrator” has the meaning set out in Section 8.2(c);
“Appeal
Respondent” has the meaning set out in Section 8.2(c);
“Appellant”
has the meaning set out in Section 8.2(c);
“Arbitration
Act” has the meaning set out in Section 8.2(a);
“Business”
has the meaning set out in Section 1.1 of the Shareholders
Agreement;
“Business
Day” means any day, other than a Saturday or Sunday, on which the
principal commercial banks in Toronto, Winnipeg and New York are open for
commercial banking business during normal banking hours;
“Claims”
has the meaning set out in Section 7.1;
“Confidential
Arbitration Information” has the meaning set out in Section 8.2(e);
2
“Contributed
Business” has the meaning set out in Section 1.1 of the Shareholders
Agreement;
“Contributed
Entity” has the meaning set out in the sixth Recital;
“Costs”
means all direct and actual costs and expenses incurred in providing Services
pursuant to this Agreement, but not including taxes in respect of which the
Person incurring the Costs is entitled to claim a full credit, refund or
rebate;
“CRTC
Regulations” has the meaning set out in Section 1.1 of the Shareholders
Agreement;
“Dispute”
has the meaning set out in Section 8.1;
“Expenses”
means all reasonable, direct, out-of-pocket costs and expenses and third
party
fees, costs and expenses incurred in connection with carrying out Services
pursuant to this Agreement, including travel, accommodation and courier expenses
and the fees, costs and expenses of third parties retained by CanWest in
accordance with Section 3.5 or Section 5.1(b), but not including
taxes in respect of which
the Person incurring the Expenses is entitled to claim a full credit, refund
or
rebate;
“Expert”
has the meaning set out in Section 5.2;
“Force
Majeure” means any cause beyond the reasonable control of a Party
including acts of God, acts of nature, acts of Governmental Entities, including
the enactment of Laws, fire, flood, storm, war, insurrection, riot or other
civil unrest, strikes, lockouts or other labour or industrial disturbances
and
accidents, nuclear or other explosion, radioactive or biological or chemical
contamination, disease, epidemic, quarantine restriction, electrical or power
outages or shortages, blockade, sabotage, seizure, computer failure, equipment
breakdowns or inability to obtain sufficient labour, raw materials, fuel,
transportation or utilities. A Force Majeure event or cause shall not
include any event or cause that:
|
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(i)
|
is
a reasonably foreseeable consequence of the negligence or deliberate
act
of the Party in breach;
|
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(ii)
|
could
have been avoided through the exercise of reasonable diligence
on the part
of the Party in breach or any Person engaged by such Party;
or
|
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(iii)
|
results
from a lack of financial resources;
|
“Governmental
Entity” means any (i) multinational, federal, provincial, state,
regional, municipal, local or other government, governmental or public
department, central bank, court, tribunal, arbitral body, commission, board,
bureau or agency, domestic or foreign; (ii) any subdivision, agent, commission,
board or authority of any of the foregoing; or (iii) any quasi-governmental
or
private body exercising any regulatory, expropriation or taxing authority
under
or for the account of any of the foregoing, including the Toronto Stock Exchange
or any other stock exchange;
3
“GSCP”
means GS Capital Partners VI Fund, L.P., a limited partnership governed by
the
laws of Delaware;
“GS
Team” means Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx and Xxxx Xxxx or such
replacements of any of them, as representatives of the Xxxxxxx Sachs Principal
Investment Area (or any successor to that area of Xxxxxxx Xxxxx) who are
responsible for GSCP’s indirect investment in CW Media, as GSCP may in good
faith from time to time appoint by Notice to CanWest;
“Indemnified
Party” has the meaning set out in Section 7.1;
“Insolvency
Event” means in respect of a Person:
|
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(i)
|
the
commencement by the Person of any proceedings under any bankruptcy,
arrangement, reorganization, dissolution, liquidation, insolvency,
winding-up or similar law of any jurisdiction for the relief from
or
otherwise primarily affecting the rights of creditors of the Person,
including under the Bankruptcy and Insolvency Act (Canada) (the
“BIA”), the Companies’ Creditors Arrangement Act
(Canada), the Winding-up and Restructuring Act (Canada) or
the United States Bankruptcy Code (each an “Insolvency
Proceeding”);
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(ii)
|
the
commencement of an Insolvency Proceeding against or in respect
of the
Person which is not contested and dismissed within 120 days of
such
commencement;
|
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(iii)
|
the
Person (i) making a general assignment for the benefit of its creditors,
including any assignment made pursuant to the BIA, (ii) acknowledging
its
insolvency in writing or (iii) being declared bankrupt or
insolvent;
|
|
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(iv)
|
any
receiver, receiver-manager, interim receiver, monitor, liquidator,
assignee, custodian, trustee, sequestrator or other similar entity
being
lawfully appointed in respect of the Person or all or substantially
all of
the Person’s property, assets or undertaking following proper notice to
the Person where the Person is not contesting such appointment
in good
faith; and
|
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(v)
|
any
holder of any security interest, mortgage, lien, charge, claim
or
encumbrance lawfully taking possession, management or control of
all or
substantially all of the Person’s property, assets or undertaking
following proper notice to the Person where the Person is not contesting
such action in good faith;
|
“JV
Term Sheet” has the meaning set out in the first Recital;
“Laws”
means all applicable laws, including common law, by-laws, rules, statutes,
regulations and legally binding decisions, orders, ordinances, protocols,
codes,
guidelines, policies, notices, directions, instructions and authorizations
and
judgements or other legally binding requirements of any Governmental
Entity;
4
“Management
Services” means the management Services to be provided by CanWest and
its Affiliates (including the Contributed Entity) as described in Article 3;
“Notice”
has the meaning set out in Section 10.2;
“Notice
of Appeal” has the meaning set out in Section 8.2(c);
“Parties”
means, collectively, CW Media and CanWest and “Party” means
either one of them;
“Person”
has the meaning set out in Section 1.1 of the Shareholders
Agreement;
“Prime
Rate” means a rate of interest per annum equal to the rate quoted from
time to time by the Bank of Nova Scotia as the reference rate of interest
it
uses for determining interest rates on Canadian dollar commercial loans in
Canada and designated by such Bank as its “prime rate”;
“Regulated
Assets” has the meaning set out in Section 3.2;
“Reporting
Committee” means the reporting committee appointed pursuant to Section
4.8 of the Shareholders Agreement, which is intended as a committee through
which CW Media will report to its ultimate shareholders;
“Services”
means corporate and other similar services (including general management
and
operating services; legal services; tax, treasury, finance and accounting
services; personnel, labour relations and human resources services; information
technology services; interactive media services; corporate development services;
and regulatory support services) provided pursuant to this Agreement (including
the services described in Schedule A), including services to be provided
by
CanWest to CW Media and its Subsidiaries and to the Contributed Business
or the
Contributed Entity, services to be provided by the Contributed Business or
the
Contributed Entity to CW Media and its Subsidiaries and services to be provided
by CW Media and its Subsidiaries to the Contributed Business or the Contributed
Entity;
“Service
Provider” means (i) CanWest, to the extent that it provides Services to
any or all of CW Media and its Subsidiaries and the Contributed Business
or the
Contributed Entity, (ii) the Contributed Business or the Contributed Entity,
to
the extent that it provides Services to CW Media and its Subsidiaries and
(iii)
CW Media and its Subsidiaries, to the extent that they provide Services to
the
Contributed Business or the Contributed Entity;
“Service
Recipient” means (i) CW Media and its Subsidiaries, to the extent that
they receive Services from any or all of CanWest or its Affiliates, the
Contributed Business or the Contributed Entity or (ii) the Contributed Business
or the Contributed Entity, to the extent that it receives Services from CW
Media
or its Subsidiaries or from CanWest or its Affiliates;
“Shareholders
Agreement” has the meaning set out in the second Recital;
“Subsidiary”
has the meaning set out in Section 1.1 of the Shareholders Agreement;
and
5
“Voting
Trust Agreement” means the voting trust agreement dated as of the date
of this Agreement between CW Media and Xxxxx X. Xxxxxxxxx.
|
1.2
|
Certain
Rules of Interpretation
|
In
this
Agreement:
|
|
(a)
|
Time
- Time is of the essence in the performance of the Parties’ respective
obligations.
|
|
|
(b)
|
Currency
- Unless otherwise specified, all references to money amounts are
to the
lawful currency of Canada.
|
|
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(c)
|
Headings
- Headings of Articles and Sections are inserted for convenience
of
reference only and shall not affect the construction or interpretation
of
this Agreement.
|
|
|
(d)
|
Consent
- Whenever a provision of this Agreement requires an approval or
consent
and such approval or consent is not delivered within the applicable
time
period, then, unless otherwise specified, the Party whose consent
or
approval is required shall be conclusively deemed to have withheld
its
consent or approval.
|
|
|
(e)
|
Time
Periods - Unless otherwise specified, time periods within or
following which any payment is to be made or act is to be done
shall be
calculated by excluding the day on which the period commences and
including the day which the period ends and by extending the period
to the
next Business Day following if the last day of the period is not
a
Business Day.
|
|
|
(f)
|
Business
Day - Whenever any payment to be made or action to be taken
under
this Agreement is required to be made or taken on a day other than
a
Business Day, such payment shall be made or action taken on the
next
Business Day following.
|
|
|
(g)
|
|
|
(h)
|
Including
- Where the word “including” or “includes” is used in this Agreement, it
means “including (or includes) without
limitation”.
|
|
|
(i)
|
No
Strict Construction - The language used in this Agreement is the
language chosen by the Parties to express their mutual intent,
and no rule
of strict construction shall be applied against any
Party.
|
|
|
(j)
|
Number
and Gender - Unless the context otherwise requires, words
importing the singular include the plural and vice versa and words
importing gender include all
genders.
|
|
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(k)
|
Severability
- If, in any jurisdiction, any provision of this Agreement or its
application to any Party or circumstance is restricted, prohibited
or
unenforceable,
|
6
|
|
such
provision shall, as to such jurisdiction, be ineffective only to
the
extent of such restriction, prohibition or unenforceability without
invalidating the remaining provisions of this Agreement and without
affecting the validity or enforceability of such provision in any
other
jurisdiction or without affecting its application to other Parties
or
circumstances.
|
|
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(l)
|
Statutory
References - A reference to a statute includes all regulations
made pursuant to such statute and, unless otherwise specified,
the
provisions of any statute or regulation that amends, supplements
or
supersedes any such statute or any such
regulation.
|
|
1.3
|
Entire
Agreement
|
This
Agreement, the Ancillary Agreements and the agreements and other documents
required to be delivered pursuant to this Agreement constitute the entire
agreement between the Parties and set out all the covenants, promises,
warranties, representations, conditions and agreements between the Parties,
in
connection with the subject matter of this Agreement and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, pre-contractual or otherwise, including the JV Term
Sheet. There are no covenants, promises, warranties, representations,
conditions or other agreements, whether oral or written, pre-contractual
or
otherwise, express, implied or collateral, whether statutory or otherwise,
between the Parties in connection with the subject matter of this Agreement
except as specifically set forth in this Agreement and the Ancillary Agreements
and any document required to be delivered pursuant to this
Agreement.
|
1.4
|
Accounting
Principles
|
Unless
otherwise specified, wherever in this Agreement reference is made to generally
accepted accounting principles (“GAAP”), such reference shall
be deemed to be to the generally accepted accounting principles as defined
as at
the date of this Agreement by the Accounting Standards Board of the Canadian
Institute of Chartered Accountants in the Handbook of the Canadian Institute
of
Chartered Accountants.
|
1.5
|
Schedules
|
The
following Schedule to this Agreement is an integral part of this
Agreement:
Schedule
A - Methodology for Determining Costs and
Expenses
ARTICLE
2
REPORTING
|
2.1
|
Reporting
|
CanWest
will report to the Reporting Committee from time to time as reasonably requested
by any member of the Reporting Committee, including in respect of the business
of CW Media and its Subsidiaries and in respect of the Contributed Business
or
the Contributed Entity.
7
2.2 Programming
Decisions
Decisions
of CanWest in respect of programming by CW Media and its Subsidiaries shall
not
be subject to any review or revision by the Reporting Committee.
ARTICLE
3
SERVICES
|
3.1
|
Appointment
|
CW
Media,
on its own behalf and on behalf of each of its Subsidiaries, hereby engages
CanWest on its own behalf and on behalf of its Affiliates (including the
Contributed Entity) to manage and control the day-to-day business, affairs
and
operations of CW Media and each of its Subsidiaries (subject in all cases
to
Section 4.7(b) of the Shareholders Agreement) and CanWest hereby accepts
such
engagement on its own behalf and on behalf of its Affiliates (including the
Contributed Entity) upon and subject to the terms and conditions of this
Agreement. CanWest and its Affiliates (including the Contributed
Entity) shall be the exclusive provider of such services to CW Media,
subject to the terms of the Voting Trust Agreement and
any existing
management agreements entered into by CW Media or its Subsidiaries.
|
3.2
|
Voting
Trust Agreement
|
Certain
of the assets and employees of CW Media and its Subsidiaries will be subject
to
the Voting Trust Agreement until such time as the approval of the Canadian
Radio-television and Telecommunications Commission has been obtained under
the
CRTC Regulations in connection with the acquisition of those portions of
the
business of AA that are subject to the CRTC Regulations (the “Regulated
Assets”). For the avoidance of doubt, the engagement under
Section 3.1 and the power and authority granted
under Section 3.3 will not apply in respect of the
Regulated Assets while they are subject to the Voting Trust
Agreement.
|
3.3
|
Powers
of the Manager
|
CanWest
shall have full power and authority to supervise, manage and administer the
day-to-day business, affairs and operations of CW Media and each of its
Subsidiaries in accordance with the terms and conditions of this Agreement,
subject to the provisions of the Shareholders Agreement and the Voting Trust
Agreement. Without limiting the foregoing, CanWest shall, subject to
the provisions of the Shareholders Agreement, this Agreement and the Voting
Trust Agreement, have the full unrestricted power and sole and exclusive
authority to do as follows for and on behalf of CW Media and each of its
Subsidiaries:
|
|
(a)
|
administer
the day-to-day operations of CW Media and its Subsidiaries, including
the
maintenance of proper and complete books and records in connection
with
the management and administration of the affairs of CW Media and
each of
its Subsidiaries;
|
|
|
(b)
|
exercise
sole and exclusive control and influence over all programming decisions
relating to the business of CW Media and each of its Subsidiaries,
including the selection of programs to be distributed and the terms
of
their distribution;
|
8
|
|
(c)
|
prepare
reports for the use of CW Media and each of its Subsidiaries and
its
direct and indirect shareholders, as and when required by the Reporting
Committee;
|
|
|
(d)
|
conduct
and coordinate relations on behalf of CW Media and each of its
Subsidiaries with other Persons, including customers, suppliers,
lawyers,
auditors, technical consultants and other
experts;
|
|
|
(e)
|
obtain
or assist in obtaining any regulatory approvals that may be required
by CW
Media and each of its Subsidiaries;
|
|
|
(f)
|
manage,
administer, conserve, develop, operate and dispose of any and all
properties or assets of CW Media and each of its
Subsidiaries;
|
|
|
(g)
|
arrange
for necessary financing for CW Media and its Subsidiaries, including
term
and operating lines of credit and other debt
financing;
|
|
|
(h)
|
provide
for and arrange payment of all debts, expenses, liabilities and
other
obligations of CW Media and each of its Subsidiaries;
and
|
|
|
(i)
|
execute
any and all other deeds, documents and instruments and to do all
acts as
may be necessary or desirable to carry out the intent and purpose
of this
Agreement.
|
|
3.4
|
Personnel
of CanWest
|
CanWest
and its Affiliates (including the Contributed Entity) will make available
to CW
Media and its Subsidiaries, on a full-time, part-time or seconded basis,
such
personnel of CanWest and its Affiliates (including the Contributed Entity)
as
may be necessary, in the sole determination of CanWest, to deliver the
Management Services. Such personnel will at all times remain
employees of CanWest or its Affiliates, as the case may be, and under the
direction of CanWest.
|
3.5
|
Third
Party Service Providers
|
CanWest
may, subject to Section 5.1, retain such other
Persons, including Experts, as it in good faith considers necessary or desirable
to provide or assist in the provision of the Services. CW Media shall
reimburse CanWest for the fees, costs and expenses of such third parties,
or
shall cause one or more of its Subsidiaries to so reimburse CanWest, in
accordance with Section 4.1.
|
3.6
|
Exclusivity
|
None
of
CW Media or its Subsidiaries shall engage any third party to provide Management
Services, or any services similar to the Management Services, without the
prior
written consent of CanWest.
|
3.7
|
Services
Between CW Media and the Contributed
Business
|
In
the
course of exercising its powers under this Agreement, CanWest may cause CW
Media
and its Subsidiaries to provide certain Services to the Contributed Business
or
the Contributed Entity and may cause the Contributed Business or the Contributed
Entity to provide certain Services to CW Media and its
Subsidiaries.
9
Article
4
|
4.1
|
Fees
and Expenses
|
|
|
(a)
|
Each
Service Recipient shall reimburse, or to cause one or more of its
Subsidiaries to reimburse, each of its Service Providers for all
Costs and
Expenses, without duplication.
|
|
|
(b)
|
Each
Service Provider shall invoice each of its Service Recipients or
the
applicable Subsidiaries monthly in arrears for any Costs and any
Expenses
incurred by such Service Provider, and, subject to Section 4.1(a),
each
such Service Recipient shall pay, or cause one or more of its Subsidiaries
to pay, such invoices within 15 days of its receipt of such
invoices.
|
|
|
(c)
|
At
CanWest’s discretion, the invoices provided under Section 4.1(b) may be prepared based upon an annual
good
faith estimate of such Costs and Expenses prepared by CanWest and
approved
by the board of directors of CW Media rather than actual Costs
and
Expenses for the applicable month, provided that no less frequently
than
annually such estimated Costs and Expenses shall be reconciled
against
actual Costs and Expenses for the applicable period and any net
difference
adjusted either by payment by the Service Recipient to the Service
Provider or by set off against future invoices, as
applicable.
|
|
|
(d)
|
Costs
and Expenses to be charged by CanWest and its Affiliates, other
than the
Contributed Business or the Contributed Entity, to CW Media and
its
Subsidiaries or to the Contributed Business or the Contributed
Entity
shall be determined in accordance with the methodologies set out
in
Schedule A.
|
|
|
(e)
|
For
the avoidance of doubt, any Costs or Expenses incurred in respect
of
Services provided by the Contributed Business or the Contributed
Entity
shall be charged by and paid to the Contributed Business or the
Contributed Entity, as the case may be, rather than
CanWest.
|
|
4.2
|
Sales
Taxes
|
Each
Service Recipient will pay, or cause one or more of its Subsidiaries to pay,
all
federal and provincial sales tax, goods and services tax, and all other like
taxes payable in respect of the provision of the Services provided pursuant
to
this Agreement in addition to the applicable Costs and Expenses (except to
the
extent that such Costs and Expenses already reflect such taxes).
|
4.3
|
Failure
to Pay when Due
|
Any
amount payable to a Service Provider under this Agreement and which is not
remitted to such Service Provider when so due will remain due (whether on
demand
or otherwise) and interest will accrue on such overdue amounts (both before
and
after judgment), at a rate equal to the Prime Rate per annum from the date
payment is due until the date payment is made.
10
4.4 Tax
Status of Payments
If
any
payment made by a Service Recipient pursuant to this Agreement, including
any
amounts payable pursuant to Section 8.1, is deemed
by the Excise Tax Act (Canada) to include goods and services tax or
harmonized sales tax, or is deemed by any applicable provincial or territorial
legislation to include a similar value added or multi-staged tax, the amount
of
such payment shall be increased accordingly.
|
4.5
|
Goods
and Services Tax and Harmonized Sales Tax
Registration
|
|
|
(a)
|
CanWest
is duly registered under Subdivision (d) of Division V of Part
IX of the
Excise Tax Act (Canada) with respect to the goods and services
tax and harmonized sales tax.
|
|
|
(b)
|
CW
Media and its Subsidiaries are duly registered under Subdivision
(d) of
Division V of Part IX of the Excise Tax Act (Canada) with respect
to the goods and services tax.
|
ARTICLE
5
|
5.1
|
Standard
of Care and Delegation
|
|
|
(a)
|
In
exercising its powers and discharging its duties under this Agreement,
each Service Provider will exercise that degree of care, diligence
and
skill that a reasonably prudent supplier having responsibilities
of a
similar nature would exercise in comparable
circumstances.
|
|
|
(b)
|
A
Service Provider may delegate specific obligations under this Agreement
to
any of its Affiliates (including, in the case of CanWest, the Contributed
Entity) or retain any other Person to provide the Services, provided
that
such delegation or third party retainer will not relieve such Service
Provider of any of its obligations under this
Agreement.
|
|
|
(c)
|
Notwithstanding
Section 5.1(b), a Service Provider will not
in any manner, directly or indirectly, be liable or held to account
for
the activities or inactivity of any third party that has been retained
to
provide or assist in providing a Service (except as set forth in
Section
5.1(d)), provided that in retaining the third party, such Service
Provider
acted in accordance with Section 5.1(a). Where possible, each Service
Provider will structure its retainer of a third party in a manner
that
will permit the Service Recipient or one or more of its Subsidiaries
to
bring an action directly against the third
party.
|
|
|
(d)
|
Each
Service Provider shall indemnify and save harmless each of its
Service
Recipient and such Service Recipient’s Affiliates and direct or indirect
equity holders (other than such Service Provider or its Affiliates)
and
any Person who is serving or shall have served as a director, officer,
agent, contractor or employee of such Service Recipient or its
Affiliates
from and against all losses, claims, damages, liabilities, obligations,
costs and expenses (including judgements,
fines,
|
11
|
|
penalties,
amounts paid in settlement and counsel and accountants’ fees) incurred by,
borne by or asserted against any of such indemnified parties in
any way
arising from or related in any manner to the gross negligence or
fraud of
any third party that has been retained to provide or assist in
providing
any Services. The foregoing right of indemnification shall not
be exclusive of any other rights to which any indemnified party
may be
entitled as a matter of law or equity or which may be lawfully
granted to
such indemnified party.
|
|
5.2
|
Reliance
|
In
carrying out its duties under this Agreement, provided a Service Provider
has
acted in accordance with the standard of care set out in Section 5.1(a), such Service Provider and its Affiliates
(including, in the case of CanWest, the Contributed Business and the Contributed
Entity) and any other Persons retained by such Service Provider to provide
Services shall be entitled to rely upon:
|
|
(a)
|
statements
of fact of other Persons (any of which may be Affiliates of such
Service
Provider) that are considered by such Service Provider, acting
reasonably,
to be knowledgeable of such facts;
and
|
|
|
(b)
|
statements,
the opinion or advice of or information from any solicitor, auditor,
valuer, engineer, surveyor, appraiser or other expert (each, an
“Expert”) selected by such Service Provider, provided
that:
|
|
|
(i)
|
such
Service Provider exercised reasonable care and diligence in selecting
such
Expert; and
|
|
|
(ii)
|
the
statements, opinion, advice or information relate to matters within
the
scope of the Expert’s field of
expertise.
|
Each
Service Provider may reasonably rely, and will be protected in acting, upon
any
instruments or other documents believed by it to be genuine and in
force.
|
5.3
|
No
Liability
|
Subject
to Section 5.1(d), a Service Provider and its Affiliates (including, in the
case
of CanWest, the Contributed Business and the Contributed Entity) shall not
be
liable, answerable or accountable to its Service Recipient, any of such Service
Recipient’s Subsidiaries or any direct or indirect shareholder of such Service
Recipient or any of its Subsidiaries for any loss or damage resulting from,
incidental to or relating to the provision of Services, including any exercise
or refusal to exercise a discretion, any mistake or error of judgment or
any act
or omission believed by such Service Provider to be within the scope of
authority conferred on it by this Agreement, unless such loss or damage resulted
from the fraud, wilful breach or gross negligence of such Service Provider
or
its Affiliates (including, in the case of CanWest, the Contributed Business
or
the Contributed Entity) in performing its obligations under this
Agreement.
12
Article
6
|
6.1
|
Access
Rights and Audit Rights
|
|
|
(a)
|
Each
Service Recipient shall provide and shall cause its Subsidiaries
to
provide to its Service Provider and its Affiliates (including,
in the case
of CanWest, the Contributed Business or the Contributed Entity)
and their
employees, agents and contractors with continued and uninterrupted
access
during normal business hours to the property, assets and personnel
of such
Service Recipient and its Subsidiaries, including documents and
records,
as is necessary to permit such Service Provider, its Affiliates
(including, in the case of CanWest, the Contributed Business or
the
Contributed Entity) and any Persons retained by such Service Provider
to
provide or assist in the provision of Services and generally to
be able to
perform its obligations under this
Agreement.
|
|
|
(b)
|
Upon
request of either CW Media or GSCP, and at the expense of GSCP,
CanWest
and its Affiliates (including, in the case of CanWest, the Contributed
Business or the Contributed Entity) shall provide one or more members
of
the GS Team or, at the request of any member of the GS Team, an
independent auditing firm acting on behalf of CW Media or GSCP
with
access, during normal business hours, to the property, assets and
personnel of CanWest and its Affiliates (including the Contributed
Business or the Contributed Entity), including documents and records,
as
is necessary to substantiate the amount of Costs and Expenses that
is to
be reimbursed hereunder, provided that the members of the GS Team
and such
independent auditing firm, as applicable, agree to maintain the
confidentiality of information relating to CanWest and its Affiliates
(except to the extent required to report the results of their enquiries
to
CW Media or GSCP or in connection with any dispute resolution procedures
with respect to any disputes arising as a result of such
audit).
|
ARTICLE
7
|
7.1
|
Each
Service Recipient shall, and shall cause each of its Subsidiaries to, indemnify
and save harmless each of its Service Providers and their Affiliates (including,
in the case of CanWest, the Contributed Business and the Contributed Entity)
and
any Person who is serving or shall have served as a director, officer, agent,
contractor or employee of such Service Provider or its Affiliates (including,
in
the case of CanWest, the Contributed Business or the Contributed Entity)
(each
an “Indemnified Party”) from and against all losses, claims,
damages, liabilities, obligations, costs and expenses (including judgements,
fines, penalties, amounts paid in settlement and counsel and accountants’ fees)
in respect of any proceedings brought by a third party of any kind or nature
whatsoever (collectively, “Claims”) incurred by, borne by or
asserted against any of the Indemnified Parties in any way arising from or
related in any manner to this Agreement or the provision of Services, except
to
the extent such Claims arise from the fraud or gross negligence of such
Indemnified Party. The foregoing right of indemnification shall not
be
13
exclusive
of any other rights to which any Indemnified Party may be entitled as a matter
of law or equity or which may be lawfully granted to such Indemnified
Party.
ARTICLE
8
The
Parties will in good faith attempt to resolve any controversy or dispute
arising
out of or relating to this Agreement, its negotiation, validity, existence,
breach, termination, construction or application, or the rights, duties or
obligations of any party to this Agreement (a “Dispute”), as
expeditiously as possible without disrupting the provision of Services pursuant
to this Agreement, including by escalating the discussions or negotiations
with
respect to any such Dispute within their respective organizations, prior
to
referring any such Dispute to arbitration pursuant to Section 8.2. Notwithstanding any unresolved
Dispute, including any such Dispute referred to arbitration pursuant to Section
8.2, each Service Provider shall continue to
provide Services in accordance with this Agreement, and each Service Recipient
shall continue to make payments in accordance with this Agreement so as to
facilitate the continued operation of the respective businesses of the Parties
pending the resolution of such Dispute.
|
8.2
|
Arbitration
|
|
|
(a)
|
|
|
(b)
|
The
seat of the arbitration shall be Ontario and hearings shall be
conducted
in the City of Toronto.
|
|
|
(c)
|
A
Party to the arbitration (the “Appellant”) may appeal an
award on a question of law or a question of mixed fact and law
by
delivering a written notice of appeal (“Notice of
Appeal”) to the party opposite (the “Appeal
Respondent”) within 10 days of receipt of the
award. With the Notice of Appeal, the Appellant shall name
three persons whom the Appellant is prepared to nominate as appeal
arbitrators, each of such persons to be a former appellate judge
of the
Ontario Court of Appeal or the Supreme Court of Canada (an “Appeal
Arbitrator”). Within seven days of the receipt of the
Notice of Appeal, the Appeal Respondent shall by written notice
to the
Appellant select one or more of the three persons named by the
Appellant
or provide the Appellant with a list of three persons who are Appeal
Arbitrators. Within seven days of receipt of the Appeal
Respondent’s list, by written notice to the Appeal Respondent, the
Appellant shall select one or more of such persons and/or provide
a
further list of three Appeal Arbitrators. The Parties shall
continue to exchange lists of three Appeal Arbitrators in this
fashion
until three Appeal Arbitrators are selected. If the parties are
unable to agree upon three Appeal Arbitrators within 20 days of
the
receipt by the Appeal Respondent of the Notice of Appeal, each
party shall
appoint one Appeal Arbitrator, and the two Appeal Arbitrators thus
appointed shall appoint a third Appeal Arbitrator. Where the
two Appeal Arbitrators fail to agree on the third Appeal Arbitrator
within
10
|
14
|
|
days
of their appointment, either Party may provide copies of the exchanged
lists to ADR Xxxxxxxx Inc. which shall appoint the third Appeal
Arbitrator. Where an appeal is taken, the award of the Appeal
Arbitrators shall be final and binding upon the Parties and there
shall be
no further right of appeal. The award of the Appeal Arbitrators
shall be an arbitral award under the Arbitration
Act.
|
|
|
(d)
|
Arbitration
in accordance with the provisions of this Section 8.1 shall be the sole dispute resolution
mechanism in respect of any Dispute except it is not incompatible
with
this arbitration agreement for any Party to request, before or
during the
arbitral proceedings, from a competent court any interim, provisional
or
conservatory relief and for the court to grant such
relief.
|
|
|
(e)
|
The
Parties undertake as a general principle to keep confidential all
information concerning the existence of the arbitration, all awards
or
appeals in the arbitration, all materials in the proceedings created
or
used for the purpose of the arbitration, and all materials and
information
produced during the arbitration and not in the public domain
(“Confidential Arbitration Information”) save and to the
extent that disclosure may be required of a Party by legal duty,
to
protect or pursue a legal right or to enforce or set aside an award
in
bona fide Proceedings before a competent court. Each Party shall
obtain
and deposit with the arbitrator a signed confidentiality undertaking
from
its legal counsel, independent experts and consultants regarding
the
Confidential Arbitration
Information.
|
ARTICLE
9
|
9.1
|
Term
|
Unless
CanWest receives a written notice from GSCP no later than September 30, 2010
expressing its desire to extend the term of this Agreement (on terms to be
negotiated by CanWest and GSCP at such time), this Agreement shall terminate
on
the Combination Date (as defined in the Shareholders Agreement), unless earlier
terminated in accordance with Section 9.2 or
Section 9.3.
|
9.2
|
Termination
by CanWest
|
CanWest
may terminate this Agreement:
|
|
(a)
|
without
cause, at any time when CanWest is no longer a shareholder, directly
or
indirectly, in CW Media;
|
|
|
(b)
|
in
the event of a material breach by CW Media of its obligations under
this
Agreement which is not cured within 30 days of receipt of Notice
of that
breach from CanWest; or
|
|
|
(c)
|
immediately,
without prior Notice, if an Insolvency Event occurs with respect
to CW
Media.
|
15
|
|
9.3
|
Termination
by CW Media
|
CW
Media
may terminate this Agreement:
|
|
(a)
|
without
cause, at any time when CanWest is no longer a shareholder, directly
or
indirectly, in CW Media;
|
|
|
(b)
|
in
the event of a material breach by CanWest of its obligations under
this
Agreement which is not cured within 30 days of receipt of Notice
of that
breach from CW Media; or
|
|
|
(c)
|
immediately,
without prior Notice, if an Insolvency Event occurs with respect
to
CanWest.
|
|
9.4
|
Survival
of Certain Obligations
|
The
provisions of Article 7, Article 8 and Section
10.3
shall survive the termination of this
Agreement.
ARTICLE
10
|
10.1
|
Force
Majeure
|
Notwithstanding
any other provision of this Agreement, if by reason of Force Majeure any
Party
is unable, wholly or in part, to perform or comply with its obligations under
this Agreement, that Party shall be relieved of liability and will suffer
no
prejudice for failing to perform or comply or for delaying performance or
compliance during the continuance and to the extent of the inability so caused
by the Force Majeure, provided that the Party claiming Force Majeure gives
the
other Party prompt Notice and reasonably full particulars of that Force Majeure,
including, where possible, advance notice of such event. The Party
claiming Force Majeure:
|
|
(a)
|
will
only be relieved from performance or compliance after receipt of
Notice by
the other Party;
|
|
|
(b)
|
will
use all commercially reasonable efforts to remedy the situation
and
remove, so far as possible and with reasonable dispatch, the cause
of its
inability to perform or comply, provided that there will be no
obligation
on it to settle labour disputes or refrain from taking steps to
lock out
employees if legally entitled to do so;
and
|
|
|
(c)
|
will
give prompt Notice to the other Party of the cessation of the event
of
Force Majeure.
|
|
10.2
|
Notices
|
Any
notice, consent or approval required or permitted to be given in connection
with
this Agreement (in this Section referred to as a “Notice”)
shall be in writing and shall be sufficiently given if delivered (whether
in
person, by courier service or other personal method of delivery), or if
transmitted by facsimile or e-mail:
16
(a) in
the case of a Notice to CanWest at:
0000,
XxxXxxx Xxxxxx Xxxxx
000
Xxxxxxx Xxxxxx
Xxxxxxxx,
XX X0X 0X0
Xxxxxx
Attention: General
Counsel
Fax: (000)
000-0000
E-mail: xxxxxxxx@xxxxxxx.xxx
with
a
copy to (which shall not constitute notice):
Osler,
Xxxxxx & Harcourt LLP
Box
50,
One First Canadian Place
Toronto,
ON M5X 1B8
Attention: Xxxxx
Xxxxxxxx
Fax: (000)
000-0000
E-mail: xxxxxxxxx@xxxxx.xxx
|
|
(b)
|
in
the case of a Notice to CW Media, by Notice to CanWest at the address
in
clause (a) of this Section 10.2 and to GSCP
at:
|
GS
Capital Partners VI Fund, L.P.
00
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
X.X.X.
Attention: Xxxxx
Xxxxxxxxx
Fax
No.: (000)
000-0000
E-mail: xxxxx.xxxxxxxxx@xx.xxx
Any
Notice delivered or transmitted to a Party as provided above shall be deemed
to
have been given and received on the day it is delivered or transmitted, provided
that it is delivered or transmitted on a Business Day prior to 5:00 p.m.
local
time in the place of delivery or receipt. However, if the Notice is
delivered or transmitted after 5:00 p.m. local time or if such day is not
a
Business Day then the Notice shall be deemed to have been given and received
on
the next Business Day.
Any
Party
may, from time to time, change its address by giving Notice to the other
Parties
in accordance with the provisions of this Section.
|
10.3
|
Non-Solicit/No-Hire
|
For
so
long as GSCP or any of its Affiliates is a direct or indirect shareholder
of CW
Media or its Affiliates, CanWest agrees that neither it nor its Affiliates
will
solicit to hire or hire any employees of the Corporation or any of its
Subsidiaries; provided, however, that (a) the non-solicit and no-hire
restrictions shall not apply with respect to any Person who has resigned
from
17
employment
with the Corporation or its Subsidiaries (provided that none of CanWest,
its
Affiliates or its or their respective employees or representatives discussed
(prior to such resignation) with such Person the prospect of future employment
opportunities with CanWest or its Affiliates), (b) the non-solicit restriction
shall not apply to general advertisements or other similar employment searches
that are not specifically targeted towards a particular employee or employees
of
the Corporation or any of its Subsidiaries, and (c) the non-solicit and no-hire
restrictions shall not apply to the extent any such Person is solicited or
hired
to work in the Contributed Business or by the Contributed Entity.
|
10.4
|
Assignment,
Successor and Assigns
|
|
|
(a)
|
No
Party shall transfer or assign this Agreement or any of its rights
or
obligations under this Agreement except with the written consent
of the
other Party or as provided in this Section 10.4.
|
|
|
(b)
|
Each
Party may assign this Agreement as security for any secured obligation
of
such Party.
|
|
|
(c)
|
Each
Party shall be required to transfer or assign this Agreement to
a
successor to all or substantially all of the
Business.
|
|
|
(d)
|
CanWest
may, at any time, upon prior written Notice to CW Media, transfer
or
assign this Agreement in whole or in part to an Affiliate (including
the
Contributed Entity), provided that such transfer or assignment
shall not
release CanWest from its obligations under this
Agreement.
|
|
|
(e)
|
CanWest
will not sell or permit the sale of the shares of any Affiliate
to whom it
has assigned this Agreement except as part of a sale of all or
substantially all of its business.
|
|
|
(f)
|
This
Agreement will enure to the benefit of and be binding upon the
Parties and
their respective successors (including any successor by reason
of the
amalgamation of any Party) and permitted
assigns.
|
|
10.5
|
Amendments
and Waivers
|
No
amendment to or supplement of this Agreement shall be valid or binding unless
set forth in writing and duly executed by each Party and GSCP. No
waiver of any breach of any provision of this Agreement shall be effective
or
binding unless made in writing and signed by the Party purporting to give
such
waiver and GSCP and, unless otherwise provided in the written waiver, shall
be
limited to the specific breach waived.
|
10.6
|
Further
Assurances
|
The
Parties will, with reasonable diligence, do all reasonable things and provide
all reasonable assurances as may be required to facilitate the transactions
contemplated by this Agreement, and each Party will provide all further
documents or instruments required by the other Party as may be reasonably
necessary or desirable to effect the purpose of this Agreement and carry
out its
provisions.
18
10.7 Relationship
of Parties
Nothing
in this Agreement shall be construed to constitute a partnership, trust,
association or fiduciary relationship between the Parties or to impose any
trust
or fiduciary duties, obligations or liabilities between the
Parties.
|
10.8
|
Third
Party Beneficiaries
|
For
so
long as GSCP or its Affiliates is a direct or indirect shareholder of CW
Media
or its Affiliates, GSCP shall be a third-party beneficiary of this
Agreement.
|
10.9
|
Assignment
|
Except
as
may be expressly provided in this Agreement, no Party may assign this Agreement
or any of the benefits, rights or obligations under this Agreement or enter
into
any participation agreement with respect to the benefits under this Agreement
without the prior written consent of the other Parties.
|
10.10
|
Osler,
Xxxxxx & Harcourt LLP Acting for More than One
Party
|
Each
of
the Parties to this Agreement has been advised and acknowledges to each other
and to Osler, Xxxxxx & Harcourt LLP (“Osler”) that (a)
Osler is acting in connection with this Agreement (and all other agreements
between the Parties being entered into as at the date of this Agreement)
as
counsel to and jointly representing CW Media and CanWest (each a
“Client” and, collectively, the “Clients”),
(b) in this role, information disclosed to Osler by one Client will not be
kept
confidential and will be disclosed to each of the Clients and each of the
Parties consents to Osler so acting, and (c) should a conflict arise between
the
Clients, Osler may not be able to continue to act for either of the
Clients.
|
10.11
|
Enurement
|
This
Agreement shall enure to the benefit of and be binding upon the Parties and
their respective successors (including any successor by reason of amalgamation
of any Party) and permitted assigns.
|
10.12
|
Execution
and Delivery
|
This
Agreement may be executed by the Parties in counterparts and may be executed
and
delivered by facsimile and all such counterparts and facsimiles shall together
constitute one and the same agreement.
[The
remainder of this page has intentionally been left blank.]
19
IN
WITNESS OF WHICH the Parties have duly executed this
Agreement.
|
By:
|
"Xxxx Xxxxxxx" | ||
|
Name:
Xxxx Xxxxxxx
Title:
Assistant Secretary
|
|||
|
By:
|
"Xxxxxxx Xxxxxxx" | ||
|
Name:
Xxxxxxx Xxxxxxx
Title:
Senior Vice President
|
|||
|
CW
MEDIA INC.
|
|||
|
By:
|
"Xxxx Xxxxxxx" | ||
|
Name:
Xxxx Xxxxxxx
Title:
Secretary
|
|||
|
By:
|
|||
|
Name:
"Xxxxxxx Xxxxxxx"
Title:
Vice President
|
|||
20
SCHEDULE
A
(For
the
avoidance of doubt, all references to “Costs” and “Expenses” in this Schedule
are to those terms as they are defined in Section 1.1 of this Agreement,
and in
case of any inconsistency between this Schedule and the remainder of this
Agreement, the remainder of this Agreement shall govern except with respect
to
the last sentence of this Schedule, which shall control in case of any
inconsistency with the remainder of this Agreement.)
To
the
extent not otherwise available from within CW Media’s or its Subsidiaries’
internal resources, CanWest shall provide or perform, or cause its Affiliates
(including the Contributed Business and the Contributed Entity) to provide
or
perform, such management and advisory services as are necessary or desirable to
ensure the efficient and effective day-to-day operation of CW Media, its
Subsidiaries and of each of the specialty television channels (each, a
“Channel”) that are owned and/or operated by CW Media and its Subsidiaries and
such management and advisory services shall include the following tasks and
functions relating to:
|
|
(a)
|
general
management, including assistance and advice concerning management
decisions for CW Media, its Subsidiaries and
Channels;
|
|
|
(b)
|
assistance
and advice regarding capital asset management, including the acquisition
of broadcasting equipment, and management of owned and leased
premises;
|
|
|
(c)
|
assistance
and advice regarding financial reporting, including guidance related
to
accounting policies and practices, financial disclosure, financial
reporting, regulatory filing requirements (as may be applicable)
and
preparation of interim and annual financial statements and Management
Discussion and Analysis;
|
|
|
(d)
|
assistance
and advice regarding accounting matters, including accounts payable
and
receivable management, program rights accounting and management
and fixed
asset accounting;
|
|
|
(e)
|
assistance
and advice regarding treasury matters, including banking, pension
fund
management and administration (as may be applicable), cash flow
management
and forecasting, debt financing and
hedging;
|
|
|
(f)
|
assistance
and advice regarding tax planning and compliance matters relating
to
Canadian and foreign taxes and duties, including advice and assistance
in
preparation of tax filings and sales tax
administration;
|
|
|
(g)
|
assistance
and advice regarding legal, regulatory and compliance matters,
including
(as may be applicable): (i) securities laws compliance, (ii)
corporate secretarial services, (iii) maintenance of corporate
records,
(iv) intellectual property compliance, maintenance of intellectual
property, prosecution of existing
|
21
|
|
and
new trade-marks, (v) professional development and evaluation of
the
personnel in the legal department of CW Media and its Subsidiaries,
(vi)
any legal service not otherwise available from within CW Media’s and its
Subsidiaries’ internal resources which CW Media or its Subsidiaries
requests in writing that CanWest provide and which CanWest agrees
to
provide, and (vii) any legal service which CanWest directs in writing
is
to be referred to CanWest for
service;
|
|
|
(h)
|
assistance
and advice regarding internal audit matters (as may be applicable),
including the documentation and testing of internal control
procedures;
|
|
|
(i)
|
assistance
and advice regarding the development of the image and/or brand
of CW
Media, its Subsidiaries and each
Channel;
|
|
|
(j)
|
assistance
and advice regarding the planning and organization of the programming
of
each Channel, incluidng the production/post-production of each
Channel’s
own programming and of all interstitials and
graphics;
|
|
|
(k)
|
assistance
and advice regarding broadcasting and technical services, including
the
operation of the network operations
centre;
|
|
|
(l)
|
assistance
and advice regarding marketing, sales planning, research and advertising
sales;
|
|
|
(m)
|
assistance
and advice regarding human resources and payroll services, including
management and related filings (eg., T4s, ROEs) and disability
and other
employee benefits administration, and labour relations
services;
|
|
|
(n)
|
assistance
and advice regarding information technology support services,
including: (i) maintenance of internal LANs and data and voice
connections to the WAN, (ii) information technology consulting
services,
(iii) software and hardware procurement, customization, development
and
configuration services, (iv) service bureau, back-up, help lines,
and
nightly operations services, and (v)hosting, development and maintenance
of the websites;
|
|
|
(o)
|
assistance
and advice regarding on-line technology, web hosting and content
development;
|
|
|
(p)
|
assistance
and advice regarding on-air and other promotions, advertising and
public
relations;
|
|
|
(q)
|
assistance
and advice regarding viewer, subscriber and distributor relations,
including the negotiation and management of affiliate agreements
regarding
the distribution of each Channel;
|
|
|
(r)
|
assistance
and advice regarding corporate development matters, including merger
and
acquisition advisory and corporate finance matters;
and
|
|
|
(s)
|
assistance
and advice regarding all other day-to-day operations, as may be
required.
|
22
Costs
and
Expenses associated with the provision of Services by a Service Provider
or by
any third party engaged by a Service Provider, shall be determined in accordance
with the following methodology:
|
|
(a)
|
Except
as specifically provided below, Costs and Expenses shall be allocated
based on an analysis, to be performed annually, of the effort or
resources
expended to provide such Services in relation to the total effort
or
resources expended by the relevant resource during the relevant
period (an
“efforts analysis”).
|
|
|
(b)
|
Costs
and Expenses incurred by CanWest or its Affiliates (other than
the
Contributed Entity or the Contributed Business) in respect of the
following Services shall be determined using the following
approach:
|
Information
Technology Support Services:
|
(i)
|
System
Management Services
·Includes
server management services in respect of Windows, Unix and storage
management
|
Allocated
based upon efforts analysis, server allocations and number of
mailboxes
|
|
(ii)
|
Telecom
Management Services
·Includes
PBX
administration
|
Allocated
based upon anticipated usage
|
|
(iii)
|
Network
Management Services
·Includes
firewalls, internet, outlook web access, dial-up services, virtual
private
network, wide area network and wireless technologies
|
Allocated
based upon bandwidth requirements and efforts analysis
|
|
(iv)
|
Architecture
Management Services
·Includes
application architecture, enterprise architecture, research and
development and technology planning
|
Allocated
based upon efforts analysis
|
|
(v)
|
Co-location
Site
·Includes
rent
and networking
|
Allocated
based upon number of servers on site and network connectivity
requirements
|
|
(vi)
|
Security
·Includes
crisis response; disaster recovery and business resumption; and
IT
investigations
|
Allocated
based upon number of mailboxes
|
|
(vii)
|
Applications
|
Allocated
based upon number of transactions
|
|
(viii)
|
Service
Desk
|
Allocated
based upon headcount
|
|
(ix)
|
Project
Management
|
Allocated
based upon efforts analysis
|
|
(x)
|
IT
Business Management Services
|
Allocated
based upon headcount and efforts
analysis
|
23
|
(i)
|
Accounts
Payable
|
Allocated
based upon transaction volume (number of invoices
processed)
|
|
(ii)
|
Accounts
Receivable
|
Allocated
based upon efforts analysis
|
|
(iii)
|
Payroll
|
Allocated
based upon transaction volume (number of employees
paid)
|
|
(iv)
|
Accounting
|
Allocated
based upon efforts analysis
|
The
reimbursement of Costs and Expenses is not intended to provide a Service
Provider with any financial gain or loss.
Costs
and
Expenses payable by CW Media and its Subsidiaries to CanWest or its Affiliates
(other than to the Contributed Business or the Contributed Entity) in respect
of
Services, other than Services provided by a third party engaged by CanWest
or
its Affiliates, shall in the aggregate not exceed an amount of $8 million
per
annum.
24