Exhibit
4.12
CONVERSION RIGHT ASSUMPTION
AGREEMENT
Assignment and Assumption Agreement (this
“Agreement”) among FREMANTLEMEDIA ENTERPRISES LTD.
(“Fremantle”), PEACE ARCH ENTERTAINMENT GROUP INC.
(“PAE”), PEACE ARCH PROJECT DEVELOPMENT CORP.
(“PAPDC”), CPC COMMUNICATIONS INC. ("CPC"), and
GREENLIGHT FILM & TELEVISION INC. (“GFT" together with
Fremantle, PAE, and PAPDC (each as defined herein), the
“Parties”).
WHEREAS:
A.
Fremantle, GFT and PAE entered into a term sheet (the “Term
Sheet”) dated December 17, 2002, and pursuant to such
Term Sheet, Fremantle, PAE, First Wave Productions Inc., GFT and
the Production Companies (as defined in the Debt Repayment
Agreement) entered into a Debt Repayment Agreement dated as of
January 30, 2003 (the “Debt Repayment
Agreement”);
B.
Pursuant to the Debt Repayment Agreement, PAE issued in favour of
Fremantle a Conversion Rights Certificate (the “Conversion
Rights Certificate”) dated January 30, 2003 by which PAE
gives the right to Fremantle to convert certain of the Debt into
shares of PAE;
C.
Fremantle, PAE, PAPDC, GFT, Peace Arch Project Development Corp.,
First Wave Productions Inc., and certain Production Companies set
out therein entered into an assignment and assumption agreement
(the “Debt Assumption Agreement”) with effect as of
August 22, 2003, and in support thereof PAE issued certain
non-recourse guarantees (collectively, the "Guarantee") in favour
of Fremantle;
D.
Except as expressly provided herein, PAPDC has agreed to assume any
and all indebtedness, obligations and liabilities of any nature or
kind of PAE to Fremantle as of the date hereof, whether under the
Debt Repayment Agreement, the Conversion Rights Certificate, or the
Guarantee, (collectively the "PAE Obligations"), and
Fremantle has agreed to accept PAPDC as obligor in place of and
instead of PAE in respect of the PAE Obligations and to release PAE
from the PAE Obligations;
E.
The parties have agreed that there shall be excluded from the PAE
Obligations and the operation of this agreement: the Sales Agency
Agreement dated August 1, 2003 between PAE, PAPDC (for itself and
its subsidiaries) and Renegade Motion Picture Corporation, and any
rights or obligations of PAE with respect thereto now existing or
hereafter arising; and any liability of obligation of PAE with
respect to any matter or thing accrued or arising prior to the date
hereof under or in respect of the Debt Repayment Agreement,
including without limitation any obligation to account with respect
to its activities in connection with the Pre-Existing Peace Arch
Business;
F.
The authorized capital of PAE previously included Class B
Subordinate Voting Shares, but PAE has amended its charter to
reclassify them as Common Shares, so that in this
agreement the term "Shares" means Common Shares of PAE
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G.
The Parties wish to set out the terms of their
agreement;
NOW THEREFORE THIS AGREEMENT WITNESSETH
that, in consideration of the foregoing premises, the further
advance of the said credit facilities, the sum of $10.00 in lawful
money of Canada now paid by each party to the others and other good
and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged by each of the Parties), the Parties hereby
agree as follows:
Section
1.
Definitions.
All terms not
otherwise defined herein and defined in the Debt Repayment
Agreement as amended and supplemented by the Debt Assumption
Agreement shall have the same meaning herein as in the Debt
Repayment Agreement as so amended and supplemented.
Section
2.
Covenants
Fremantle shall receive,
all in form and substance satisfactory to it:
(a)
certified copies of any
documentation in respect of the transactions contemplated hereby
evidencing the steps in respect thereof, as are requested by
it;
(b)
a legal opinion in
respect of the valid existence, due authorization, execution and
delivery, corporate power and authority and enforceability in
respect of the agreements evidencing these transactions and the
parties thereto;
(c)
a legal opinion in
respect of the valid existence, due authorization, execution and
delivery, corporate power and authority in respect of this
Agreement, the Escrow Agreement as defined below, the Guarantee as
defined below, and all parties other than Fremantle;
(d)
an escrow agreement
("Escrow Agreement"), a share pledge agreement (the "Pledge
Agreement"), and a Guarantee from PAPDC (the "PAPDC Guarantee"),
each in form and substance considered by Fremantle necessary
or desirable to preserve, protect or perfect Fremantle’s
rights with respect to the Shares and such agreement and any
security constituted thereby shall be in form and substance
satisfactory to it and filed, tendered for filing or registration
or registered in all jurisdictions and public offices considered
necessary or desirable by it;
(e)
such other documents,
agreements, certificates and opinions in respect of the
transactions contemplated herein as may be reasonably requested by
it, all in form and substance
