Portions herein identified by [***] have been omitted pursuant to a request for
confidential treatment under Rule 406 of the Securities Act of 1933, as amended.
A complete copy of this document has been filed separately with the Securities
and Exchange Commission.
AIRCRAFT TRAFFIC REPORT SUPPLY AGREEMENT
THIS AGREEMENT is dated October 21, 2005
CANADIAN TRAFFIC NETWORK ULC, an unlimited liability corporation
incorporated under the laws of Alberta
- AND -
CORUS ENTERTAINMENT INC., a corporation incorporated under the
laws of Canada
CONTEXT OF THIS AGREEMENT
A. Corus, through its wholly-owned subsidiaries, is the licensee of the radio
broadcasting stations listed in Schedule 1.
B. CTN and Corus wish to set out their agreement regarding the supply by CTN of
traffic reports to Corus for broadcast by the stations, all on the terms and
conditions set out in this Agreement
DEFINITIONS AND INTERPRETATION
Whenever used in this Agreement the following terms have the following meanings:
"AGREEMENT" means this agreement and all amendments made by written
agreement between the CTN and Corus.
"BA" means the Broadcasting Act, 1991, as amended from time to time and the
"BUSINESS DAY" means a day other than a Saturday, Sunday or statutory
holiday in the Province of Ontario.
"CBSC CODES" means the Canadian Association of Broadcasters Codes of
Practice, any commercial radio policies and standards endorsed or applied
by the Canadian Broadcasting Standards Council and the Canadian
Radio-Television and Telecommunications Commission pursuant to the BA.
"CLAIM" means any claim, demand, action, cause of action, damage, loss,
cost, liability or expense including, without limitation, all professional
fees and disbursements, all reasonable costs incurred, directly or
indirectly, in investigating or pursuing any of the foregoing, any
proceeding relating to any of the foregoing and all interest, penalties and
amounts paid in settlement of any of the foregoing but does not include a
claim for indirect or consequential damages,
"COMMENCEMENT DATE" means the start date for each city as more fully
described in Schedule 5.
"CONFIDENTIAL INFORMATION" means, with respect to either party, information
that is nonpublic, confidential or proprietary in nature that relates to
the business and affairs of a party.
"FORCE MAJEURE" means fire, explosion, power failure, acts of God, acts of
war (declared or undeclared), terrorism, revolution, civil commotion, acts
of public enemies, unavoidable accident, Laws, emergency broadcast or
other broadcast requirements under the 13A or the CBSC Codes or as a
result of Government Authority requirements, strikes, walkouts, lockouts
and other disturbances, delays in transportation, floods, storms and other
natural disturbances, the failure or destruction of any technical
equipment, weather or flying conditions, and other matters beyond the
control of, or not reasonably foreseeable to the party concerned (other
than the ability of the party for whatever reason, to pay money it is
obliged to pay).
"ENVIRONMENTAL AUTHORITY" means any government, regulatory authority,
governmental department, agency, commission, board, tribunal, crown
corporation, court or other law, rule or regulation making entity having or
purporting to have jurisdiction on behalf of any nation, or province or
state or other subdivision thereof or any municipality, district or other
"LAWS" means all applicable laws, by laws, rules, regulation, orders,
ordinances, protocols, codes, notices, directions and judgments or other
requirements of any Governmental Authority.
"NOTICE" is defined in Section 6.7.
"PERSON" means any individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate, Governmental Authority, and a natural
person in such person's capacity as trustee, executor, administrator or
other legal representative.
"STATIONS" means the radio stations listed in Schedule 1.
"TAG" means a commercial announcement not to exceed ten (10) seconds that
is read live by a CTN reporter at the beginning, during or end of each
Traffic Report which complies with Corus's standard policies for content
and style for tags or credit lines permitted to other sponsors on Stations.
"TRAFFIC REPORT" a report on road traffic conditions in a defined market.
1.2 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties pertaining
to the subject matter of this Agreement and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties and there are no representations or other agreements between the parties
in connection with the subject matter of this Agreement except as specifically
set forth in this Agreement. No supplement, modification, waiver or termination
of this Agreement shall be binding unless executed in writing by the party to be
1.3 SECTIONS AND HEADINGS
The division of this Agreement into parts and sections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. The terms "this Agreement",
"hereof", "hereunder" and similar expressions refer to this Agreement and not to
any particular article, section or other portion hereof and include any
agreement or instrument supplemental or ancillary hereto. Unless something in
the subject matter or context is inconsistent herewith, references herein to
articles and sections are to articles and sections of this Agreement.
1.4 NUMBER & GENDER
Words importing the singular number only shall include the plural and vice versa
and words importing the masculine gender shall include the feminine and neuter
genders and vice versa.
1.5 APPLICABLE LAW
This Agreement shall be construed and enforced in accordance with the laws of
Ontario and the laws of Canada applicable therein.
1.6 CALCULATION OF TIME
When calculating the period of time within which or following which any act is
to be done or step taken pursuant to this Agreement, the date which is the
reference date in calculating such period shall be excluded. If the last day of
such period is not a Business Day, the period in question shall end on the next
The following schedules are incorporated by reference into the terms of this
Schedule 1 Radio Broadcasting Stations
Schedule 2 Traffic Report Schedules
Schedule 3 Aircraft hours of flight
Schedule 4 Corus Talent Compensation and miscellaneous.
Schedule 5 Commencement Dates by City
BROADCAST OF TRAFFIC DEPORTS AND TAGS
2.1 TRAFFIC REPORTS
(a) Beginning on the Commencement Date, CTN will provide, at its sole
expense, and Corus will, subject to Section 2.3, broadcast on the
Stations, a minimum number of Traffic Reports per day, Monday to
Friday inclusive, 52 weeks per year, as set out in Schedule 2. Any
additions, deletions, or changes to Schedule 2 must be agreed to by
both parties at least 30 days in advance of any anticipated change.
(b) CTN will provide helicopter or fixed wing aircraft traffic
surveillance as set out in Schedule 3. Notwithstanding Schedules 2 and
3, times of flights and number of hours flown per day to be reasonably
determined by CTN and Corus based on traffic conditions and times of
the traffic reports, it being understood there will be times when
traffic reports are provided outside of normal flight hours.
(c) In the event that the number of hours flown in each city as set out in
Schedule 3 is not achieved, these unused hours will be placed in a
bank of hours for that city. This bank of time will be made available
for use by Corus for Special Promotional Events as described in
Section 2.5. This bank of time shall not be transferable between
cities. Any unused portion of the time bank will expire quarterly on
March 31, June 30, September 30 and December 31 of each year.
2.2 NON-EXCLUSIVE ARRANGEMENT
Nothing in this Agreement will prohibit CTN from providing the same Traffic
Reports or other reports containing the same or similar information to radio or
television stations other than the Stations but CTN agrees that it may not,
without Corus's prior written consent, use the voicing or personalities used in
the Traffic Reports provided to the Stations in its reports to other radio
stations if, in Corus's sole discretion acting reasonably, such other radio
stations are competitive with the Stations. Notwithstanding the foregoing, ***.
Corus acknowledges that the information gathered from the aircraft will be used
as part of the data gathering for all CTN affiliated stations.
2.3 CONTENT AND QUALITY OF TRAFFIC REPORTS
CTN warrants and agrees that:
(a) all Traffic Reports will be prepared in accordance with the
programming guidelines and specifications established by Corus and
provided to CTN;
(b) no Traffic Report will contain any matter which is in breach of the
BA, the CBSC Codes or which is otherwise contrary to Law;
(c) all Traffic Reports will be broadcast from CTN aircraft, CTN
premises, or other places of broadcast as set out in Schedule 3 and
delivered to Corus stations via appropriate communication technology
as mutually agreed from time to time;
(d) all Traffic Reports will be of high quality, containing relevant and
timely information so as to be of maximum benefit to the Stations'
respective audiences; and
(e) all personalities engaged by CTN to present the Traffic Reports will
be approved by Corus as being suitable for the Stations' respective
audiences. CTN and Corus have agreed that some Corus talent will
provide services to CTN. The particulars of the use of this talent is
set out in Schedule 4. These will be subject to revision and
re-negotiation on annual basis and as circumstances require.
(f) In the event that a video camera is installed in the aircraft, Corus
shall have the right to take a feed of the video stream and use this
in both still and full motion video on its branded station web sites.
Corus shall have the exclusive radio Internet rights to this video.
(g) CTN will dress each aircraft at its expense in a manner that includes
the logos and brands of Corus stations. Corus will have approval
rights to said dress.
Immediately before, during or after each Traffic Report provided by CTN, Corus
agrees to broadcast a Tag. Corus reserves the right to edit the Tags if, in
Corus's opinion acting reasonably, they do not meet its programming guidelines
or regulatory requirements. Any editing will be done with the prior knowledge
and co-operation of the advertiser and CTN to the extent that this is reasonably
possible in the circumstances.
2.5 SPECIAL PROMOTIONAL EVENTS
At Corus's request, CTN will supply reports for special promotional events,
sporting events, beach reports or weekend reports. These reports will be
scheduled and agreed upon at least 14 business days in advance. These reports
will carry a Tag.
2.6 EMERGENCY OR DISASTER REPORTS
CTN will use reasonable commercial efforts to provide timely emergency or
disaster reports to Corus. These reports will not carry a Tag. Corus and CTN
agree to establish an emergency procedure in each city.
2.7 RECORDED OR DELAYED BROADCASTS
If the broadcast of a Traffic Report is recorded or delayed, Corus agrees to
broadcast such Traffic Report within 5 minutes of the times set out to Schedule
2 and agrees to verify in writing to CTN that such Traffic Report was broadcast.
2.8 VERIFICATION OF BROADCAST
If CTN so requests, Corus agrees to provide written verification of the times
the Traffic Reports were broadcast and, in the absence of obvious and material
error, such written verification will be conclusive evidence that the Traffic
Reports were broadcast as required under this Agreement. CTN requests for
verification shall be made within 60 days of broadcast date.
2.9 NO REQUIREMENT TO BROADCAST
Corus is not required to broadcast any Traffic Report that, in its opinion
acting reasonably, is unreliable, not of broadcast quality, is in breach of the
BA, the CBSC Codes or is otherwise contrary to Law. Corus is not required to
broadcast any Tag that is in breach of the BA, the CBSC Codes or is otherwise
contrary to Law, or that names or promotes sponsors or products if such
promotion or association would, in its opinion acting reasonably, diminish its
reputation or that of the Stations with their respective target audiences, the
financial market or clients, is otherwise controversial or might detrimentally
impact Corus's business or brands, including but not limited to the advertising
of alcoholic beverages.
CTN acknowledges that Corus is the licensee of the Stations and nothing in this
Agreement requires that Corus broadcast any Traffic Report and that Corus will
be in compliance of this Agreement as long as it broadcasts the Tag as outline
in this Agreement.
2.10 FORCE MAJEURE
Neither CTN nor Corus will incur any liability under this Agreement because of
any failure to provide or failure to broadest any Traffic Report due to a Force
CONFIDENTIALITY AND COPYRIGHT
The parties acknowledge that during the term of this Agreement, each will
acquire Confidential Information concerning the other. Each party agrees to
treat and maintain the Confidential Information of the other as confidential and
will not disclose the Confidential Information to any other party for any
purpose (other than professional advisors), except as required by Law. This
confidentiality obligation will survive the termination of this Agreement for
any reason whatsoever.
3.2 GRANT OF LICENSE
During the term of this Agreement, CTN grants to Corus a license to:
(a) broadcast the Traffic Reports on the Stations;
(b) make taped copies of the Traffic Reports solely for the purpose of
making a delayed broadcast on the Stations in accordance with Section
2.7 and, if necessary, to edit the Traffic Report for such delayed
broadcast, provided always that the Tag is incorporated in full.
(c) make logger tapes to meet regulatory or other legal obligations; and
(d) use the content for creation of promotional materials of the Traffic
Corus acknowledges that it has no other rights in the Traffic Reports and,
without limiting the generality of the foregoing, Corus agrees that, without
CTN's prior written consent, it may not broadcast the Traffic Reports on any
stations other than the Stations, sell the Traffic Reports or the information
contained therein, provide copies of the Traffic Reports to any other
broadcaster or authorize any other broadcaster to broadcast the Traffic Reports
or use the Traffic Reports or information in any other medium other than over
the air broadcast radio.
OTHER AGREEMENTS OF THE PARTIES
4.1 NON-SOLICITATION OF EMPLOYEES
During the term of this Agreement and for a period of one year after the
termination of this Agreement for any reason whatsoever, Corus agrees that it
will not hire, attempt to hire or otherwise solicit any employee or service
provider employed by or retained by CTN.
4.2 CORUS EMPLOYEES
Should any existing Corus employees be utilized by CTN in its fulfillment of
this Agreement, and said employees prefer to remain Corus employees, CTN agrees
to reimburse Corus for the cost of such employees as set out in Schedule 4.
Corus will invoice CTN monthly for any employee costs, which will be due and
payable within thirty (30) days of receipt by CTN.
4.3 SOLICITATION OF ADVERTISER
Corus understands that CTN must sell advertising to support the traffic service
and, agrees that CTN will be free to solicit advertising from any advertiser.
However it is the intention of CTN not to interfere in the successful
procurement of advertising sale of any Corus Station. CTN will provide Corus
weekly, in advance; a written list of advertisers CTN plans to approach. If
Corus believes, acting reasonably, that any Corus Station is at the same time in
negotiations or scheduling negotiations with such advertiser, it will notify CTN
in writing and CTN will discontinue its approach until the Corus Station has
concluded its negotiations with such advertiser. CTN will make commercially
reasonable efforts to sell national or multi-market business. Should a CTN sale
cause a decrease in revenue to a Corus Station that can be reasonably
demonstrated, Corus does not have to air such client and the pre-empting of said
advertising shall not be considered a breach of this Agreement. Both Corus and
CTN agree to use their best efforts to cooperate in avoiding conflicts with
advertisers. CTN will not engage third party representatives to sell advertising
on the Corus Stations. Corus acknowledges that Westwood One, Inc, Metro
Networks, Inc., their parent and affiliated companies are not third party
representatives for the purposes of this Agreement.
4.4 BROADCAST LICENSE IN GOOD STANDING
Corus represents and warrants to CTN that it holds all requisite licenses and
approvals pursuant to the requirements of the BA, the CRTC and Industry Canada
authorizing it to be a radio broadcaster in Canada.
Each party agrees to indemnify and save harmless the other from and against all
Claims which may be made or brought against a party or which a party may suffer
or incur, directly or indirectly, as a result of the breach of any term of this
Agreement by such party.
4.6 INJUNCTIVE RELIEF
In addition to any other relief available to a party at law, each party agrees
that a breach of a material term of this Agreement will entitle the other to
injunctive relief and each party consents to the granting of such relief.
4.7 NO PARTNERSHIP
Nothing in this Agreement will constitute the parties as partners or joint
TERM AND TERMINATION
(a) This Agreement will commence on the Commencement Date and will
continue for a term of three (3) years. After the passage of eighteen
(18) months, either of CTN or Corus may provide written notice of
their intention to terminate the agreement in six (6) months. Should
neither CTN nor Corus terminate the Agreement after eighteen (18)
months, the Agreement shall continue for the ordinary term.
(b) From the date that is six months before the ordinary termination date
to the date that is three months before the ordinary termination date,
each party will have an exclusive right to renegotiate a renewal of
5.2 TERMINATION BY CTN
CTN may terminate this Agreement immediately upon written notice to Corus if
Corus's broadcast license is terminated or revoked for any reason whatsoever.
5.3 TERMINATION BY EITHER PARTY
Either party may terminate this Agreement as follows
(a) on thirty (30) days written notice if the other party is in breach or
default of any material term of this Agreement which has not been
remedied within fourteen
(14) days of written notice of such breach or default being given by
one party to the other, provided, however, that should the defaulting
party be making a good faith effort to cure the breach or default,
said cure period will be extended to encompass said period of time; or
(b) immediately on written notice if the other party becomes insolvent,
makes an assignment for the benefit of creditors or becomes subject to
any proceeding under any bankruptcy or insolvency law,
(c) Corus may take over performance of the CTN obligations under this
agreement in the event that CTN becomes insolvent, makes an assignment
for the benefit of creditors or becomes subject to any proceeding
under any bankruptcy or insolvency law, or otherwise fails to meet its
obligations pursuant to this Agreement.
5.4 RIGHT OF FIRST REFUSAL
If a trustee has been appointed pursuant to the Bankruptcy and Insolvency Act to
liquidate the assets of CTN, Corus shall have a right of first refusal to
purchase the assets of CTN at fair market value and upon other terms and
conditions as may be agreed to between Trustee and Corus.
6.1 BENEFIT BINDING
This Agreement shall enure to the benefit of and be binding upon the successors
and permitted assigns of the parties hereto.
6.2 AMENDMENTS WAIVERS
No amendment to this Agreement shall be valid or binding unless set forth in
writing and duly executed by all of the parties hereto. 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 the same and, unless
otherwise provided in the written waiver, shall be limited to the specific
Time shall be of the essence of this Agreement.
This Agreement may be assigned by CTN to any successor in interest or purchaser
of substantially all the assets of CTN. Corus agrees that it will require any
acquirer of the broadcast licenses listed in Schedule 1 to accept assignment of
this agreement as if Corus was still the licensee. Corus may, without the prior
written consent of, but only after prior notice to,
CTN, assign Corus's rights and obligation under this Agreement to an affiliate
(as that term is defined in the Canada Business Corporations Act) of Corus, or
to a purchaser of all or substantially all the assets of Licensee or the shares
in the capital of Licensee; provided that any proposed assignee shall covenant
in writing to observe and perform Corus's obligations under this Agreement."
If any provision of this Agreement is determined to be invalid or unenforceable
in whole or in part such invalidity or unenforceability shall attach only to
such provision and all other provisions hereof shall continue in full force and
For the purposes of all legal proceedings this Agreement shall be deemed to have
been performed in the Province of Ontario and the courts of the Province of
Ontario shall have jurisdiction to entertain any action arising under this
Any notice or other communication required or permitted to be given in
connection with this Agreement (a "Notice") may be given in writing on a
Business Day and may be given by personal delivery. Any Notice, if given by
personal delivery, will be deemed to have been received on the day of actual
delivery, if transmitted by facsimile or other means of electronic communication
before 3:00 pm (EST) on a Business Day, will be deemed to have been received on
that Business Day and if transmitted by facsimile or other means of electronic
communication after 3:00 pm (EST) on a Business Day, will be deemed to have been
received on the next Business Day.
Notices will be addressed as follows:
To CTN: Canada Traffic Network ULC
2225 Sheppard Avenue East Suite 1201
North York, ON M2J 5C2
Attention: Ken Casseri
With a copy to: Global Traffic Network Inc
7521 West Lake Mead Boulevard
Las Vegas, NV 89128
Attention: William Yde
Facsimile: (702) 562-4001
With a copy to: Gowling Lafleur Henderson LLP
Suite 5800, Scotia Plaza
Attention: Stephen R. Clarke
Facsimile: (416) 862-7661
To Corus: Corus Entertainment Inc
Attention: The President and CEO
Address: Suite 1630
181 Bay Street
With a copy to: Corus Radio
Attention: The President
1 Dundas Street West, Suite 2504
Toronto, ON M5G 1Z3
or such other address as may be designated by notice by any party to the offers.
6.8 FURTHER ASSURANCES
Each party shall from time to time execute and deliver all such further
documents and do all acts and things as the other parties may reasonably require
to effectively carry out or better evidence or perfect the full intent and
meaning of this Agreement.
6.9 FAX SIGNATURES
This Agreement may be signed either by original signature or by facsimile
This Agreement may be executed by the parties in one or more counterparts, each
of which when so executed and delivered shall be an original and such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF the parties have duly executed this Agreement.
CANADIAN TRAFFIC NETWORK ULC CORUS ENTERTAINMENT INC.
Per: /s/ Kenneth A. Casseri Per: /s/ John P. Hayes, Jr.
Name: Kenneth A. Casseri Name: John P. Hayes, Jr.
Title: President CTN Title: President, Radio
CANADIAN TRAFFIC NETWORK ULC CORUS ENTERTAINMENT INC.
Per: /s/ Scott E. Cody Per: /s/ Gary [illegible]
Name: Scott E. Cody Name: Gary [illegible]
Title: Treasurer Title: General Counsel
RADIO BROADCASTING STATIONS
CITY CALL LETTERS DIAL POSITION
---- ------------------------- -------------
Vancouver CFOXFM (The Fox) 99.3
CFMIFM (Rock 101) 101.1
CKNW (AM 980) 980
Calgary CKRYFM (Country 105) 105
CHQR (CJQR 770) 770
CFQFM (Q107.3) 107.3
Edmonton CHQT (880 Cool) 880
CISNFM (CISN Country) 103.9
CHED (630 CHED) 630
CKNG (Joe FM) 92.5
Winnipeg CJOB (CJOB 680) 680
CJKRFM (Power 97) 97.5
Hamilton CHML (AM 900) 900
CJXYFM (Y108) 107.9
Toronto CFNYFM (The Edge) 102.1
CINGFM (Country 95.3) 95.3
CILQFM (Q107) 107.1
CFMJ (AM 640) 640
Montreal CKOIFM (F) (CKOI 96.9) 96.9
CHMPFM (F) 98.5
CINF(F) (Info 690) 690
CKAC Talk 730
CFQRFM (E) Lite Rock Q92) 92.5
CINW (E) (940 News) 940
TRAFFIC REPORT SCHEDULES
MONDAY TO FRIDAY
5:00 AM 10:00 AM 3:00 PM Day Week
10:00 AM 3:00 PM 8:00 PM Total Total
-------- -------- ------- --------- -----
CKNW 23 10 26 59 295
CFOX 12 12 60
CFMI 12 12 60
CISN 12 12 60
CHQT 12 12 24 120
CKNG 12 12 60
CHED 18 12 19 49 245
CKRY 10 10 50
CFGQ 6 6 30
CHQR 22 10 18 50 250
CJOB 16 6 10 32 160
CJKR 6 6 30
CHML 26 10 24 60 300
CJXY 12 12 60
CILQ 12 16 28 140
CING 12 12 24 120
CFMJ 29 30 30 89 445
CFNY 14 12 26 130
CINF 30 30 30 90 450
CKAC 19 17 18 54 270
CFQR 12 12 24 120
CINW 30 30 30 90 450
Totals: 384 155 291 830 4150
Daily Hours Helicopter is in the Air, doing Traffic Reports by city. This is a
Monday to Friday schedule.
CITY DAILY HOURS ANNUAL HOURS
---- ----------- ------------
Toronto 6.0 1530.0
Montreal (English & French) 5.5 1402.5
Vancouver 4.5 1147.5
Calgary 4.0 1020.0
Edmonton 4.0 1020.0
Winnipeg 3.5 892.5
Hamilton 4.0 1020.0
1. Annual hours are calculated using the number of weekdays in a given year of
2. Daily hours can be divided into Breakfast and Drive time periods, at each
3. Hamilton is for "Fixed wing" aircraft.
4. The numbers of annual hours in this schedule includes "Breaking News
Events" and "Promotional Events" where the helicopter is used. The hours
are "banked" over the course of the calendar quarter against the number of
hours not used daily.
TALENT COMPENSATION AND MISCELLANEOUS
CTN will reimburse Corus for talent and other costs as follows:
Montreal: $50,000 per annum each for two French service reporters as well as the
costs payable, if any, to the Quebec Ministry of Transport for access to traffic
Vancouver: $42,000 for an afternoon traffic reporter.
Edmonton: CTN will reimburse the costs of two new hires by Corus.
Toronto: CTN will reimburse the costs of two new hires by Corus.
TIMETABLE FOR HELICOPTER DELIVERY
Calgary November 1, 2005
Toronto November 15, 2005
Montreal January 1, 2006
Vancouver January 1, 2006
Edmonton January 1, 2006
Winnipeg January 1, 2006
Hamilton January 1, 2006
* Hamilton is a "Fixed Wing" aircraft.