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As filed with the Securities and Exchange Commission on February 28, 1997
Registration No. 333-17113
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HOLLINGER INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
95-3518892
(I.R.S. employer identification number)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
HOLLINGER INTERNATIONAL PUBLISHING INC.
(Exact name of registrant as specified in its charter)
51-0370603
(I.R.S. employer identification number)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
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401 NORTH WABASH AVENUE
CHICAGO, ILLINOIS 60611
(312) 321-2299
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
KENNETH L. SEROTA, ESQ.
VICE PRESIDENT--LAW AND FINANCE AND SECRETARY
HOLLINGER INTERNATIONAL INC.
401 NORTH WABASH AVENUE
CHICAGO, ILLINOIS 60611
(312) 321-2299
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
MICHAEL C. MCLEAN
KIRKPATRICK & LOCKHART LLP
1500 OLIVER BUILDING
PITTSBURGH, PENNSYLVANIA 15222-2312
(412) 355-6458
WILLIAM P. ROGERS, JR.
CRAVATH, SWAINE & MOORE
WORLDWIDE PLAZA
825 8TH AVENUE
NEW YORK, NEW YORK 10019
(212) 474-1270
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Approximate date of commencement of proposed sale to public: FROM TIME TO
TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 28, 1997
PROSPECTUS
HOLLINGER INTERNATIONAL PUBLISHING INC.
SECURITIES
UNCONDITIONALLY GUARANTEED BY
[LOGO]
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This Prospectus relates to the offering of securities described herein of
Hollinger International Publishing Inc. ("Publishing"), a wholly owned
subsidiary of Hollinger International Inc. (the "Company"). Publishing may offer
from time to time (i) debt securities ("Debt Securities"), which may be any of
senior debt securities ("Senior Debt Securities"), senior subordinated debt
securities ("Senior Subordinated Debt Securities") or subordinated debt
securities ("Subordinated Debt Securities"), in each case consisting of
debentures, notes and/or other secured or unsecured evidences of indebtedness,
and (ii) convertible securities ("Convertible Securities"), which are
exchangeable or convertible into shares of or other securities of the Company or
its affiliates. The Debt Securities and the Convertible Securities are
collectively referred to as the "Securities" and will have an aggregate initial
offering price of up to $500.0 million. The Securities will be unconditionally
guaranteed by the Company. The Securities may be offered separately or together
(in any combination) and as separate series, in any case in amounts, at prices
and on terms to be determined at the time of sale.
The form in which the Securities are to be issued, their specific
designation, aggregate principal amount or aggregate initial offering price,
maturity, if any, rate and times of payment of interest or dividends, if any,
redemption, conversion, exchange and sinking fund terms, if any, voting or other
rights, if any, exercise price and detachability, if any, and other specific
terms will be set forth in a Prospectus Supplement (including any related term
sheet) relating to such Securities (the "Prospectus Supplement"), together with
the terms of offering of such Securities. If so specified in the applicable
Prospectus Supplement, Debt Securities of a series may be issued in whole or in
part in the form of one or more temporary or permanent global securities. The
Prospectus Supplement will also contain information, where applicable, about
certain material United States Federal income tax considerations relating to the
particular Securities offered hereby. The Prospectus Supplement will also
contain information, where applicable, as to any listing on a national
securities exchange of the Securities covered by such Prospectus Supplement.
FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED IN
CONNECTION WITH AN INVESTMENT IN THE SECURITIES OFFERED HEREBY, SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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The Securities may be sold directly, through agents designated from time to
time or to or through underwriters or dealers. See "Plan of Distribution." If
any agents of the issuer or any underwriters are involved in the sale of any
Securities in respect of which this Prospectus is being delivered, the names of
such agents or underwriters and applicable commissions or discounts will be set
forth in a Prospectus Supplement. The net proceeds to the issuer from such sale
also will be set forth in a Prospectus Supplement.
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The date of this Prospectus is , 1997.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMPANY'S CLASS
A COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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As used in this Prospectus, unless the context otherwise requires, (i) the
"Company" refers to Hollinger International Inc. and, where the context so
requires, its consolidated subsidiaries and affiliated companies; (ii)
"Publishing" refers to Hollinger International Publishing Inc. and its
consolidated subsidiaries and affiliated companies; (iii) "Chicago Sun-Times"
refers to The Sun-Times Company and its consolidated subsidiaries; (iv)
"Jerusalem Post" refers to the subsidiaries of the Company which publish The
Jerusalem Post; (v) "The Telegraph" refers to Telegraph Group Limited (formerly
The Telegraph plc) and its consolidated subsidiaries and affiliated companies;
(vi) "DTH" refers to DT Holdings Limited; (vii) "FDTH" refers to First DT
Holdings Limited; (viii) "HTH" refers to Hollinger-Telegraph Holdings Inc.; (ix)
"Hollinger Inc." refers to Hollinger Inc. and its consolidated subsidiaries; (x)
"Southam" refers to Southam Inc. and its consolidated subsidiaries; and (xi)
"Fairfax" refers to John Fairfax Holdings Limited and its consolidated
subsidiaries.
All dollar references in this Prospectus are to United States dollars
unless otherwise specifically indicated. Except as otherwise indicated, the
financial information in this Prospectus relating to The Telegraph has been
translated into United States dollars ("$") from British pounds sterling ("L")
and British pence ("p"), financial information relating to Fairfax has been
translated into United States dollars from Australian dollars ("A$"), and
financial information relating to Southam and the Canadian newspapers owned by
Hollinger Inc. to be transferred to the Company has been translated into United
States dollars from Canadian dollars ("Cdn.$"), using exchange rates at the end
of the period for which the relevant statements are prepared for assets,
liabilities and minority interest and the weighted average exchange rates for
the relevant period for items in the statements of operations.
Unless otherwise indicated, all circulation information contained in this
Prospectus represents average daily or non-daily circulation as of September 30,
1996, as the case may be (after giving effect to the subsequent disposition of
the Company's interest in Fairfax), derived from the following sources: (a) for
the Company's United States community newspapers, Chicago-area suburban
newspapers and Jerusalem Post, from the Company's unaudited internal records for
the month of September 1996 and after giving effect to the exchange of community
newspapers in December 1996; (b) for the Chicago Sun-Times, the Daily Southtown
and the Tribune-Democrat in Johnstown, Pennsylvania, from unaudited circulation
statements furnished to the Audit Bureau of Circulations ("ABC") in the United
States for the six month period April to September 1996; (c) for The Daily
Telegraph and The Sunday Telegraph, from unaudited circulation reports furnished
to ABC in the United Kingdom for the six month period April to September 1996;
and (d) for Southam, from unaudited internal records.
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THE COMPANY
OVERVIEW
The Company is a leading publisher of English-language newspapers in the
United States, the United Kingdom, Canada and Israel. Included among the 142
paid daily newspapers which the Company owns or has an interest in are the
Chicago Sun-Times and The Daily Telegraph. These 142 newspapers have a
world-wide daily combined circulation of approximately 4,021,000. In addition,
the Company owns or has an interest in 358 non-daily newspapers as well as
magazines and other publications. The Company's strategy is to achieve growth
through acquisitions and improvements in the cash flow and profitability of its
newspapers, principally through cost reductions. Since the Company's formation
in 1986, the existing senior management team has acquired over 404 newspapers
and related publications (net of dispositions) in the United States, The
Telegraph in the United Kingdom and Jerusalem Post in Israel, and, together with
Hollinger Inc., in Canada (including a majority interest in Southam). Recently,
the Company substantially completed the sale of its 24.7% interest in Fairfax, a
publicly held Australian newspaper publisher.
UNITED STATES NEWSPAPER GROUP. The Company is the largest newspaper
publishing group in the United States, as measured by paid daily newspapers
owned and operated, and one of the twelve largest in terms of daily circulation.
The Company's United States operations consist of its Chicago Group, led by the
Chicago Sun-Times, the eighth largest circulation metropolitan daily newspaper
in the United States, and its Community Newspaper Group, consisting of 320
newspapers and related publications. As of December 31, 1996, the Company
published a total of 401 newspapers and related publications in the United
States consisting of 103 daily newspapers with a total paid circulation of
approximately 1,244,000, 139 paid non-daily newspapers with a combined paid
circulation of approximately 1,205,000, and 153 free circulation publications
with a combined circulation of approximately 2,183,000, and a total combined
circulation of approximately 4,632,000. The Community Newspaper Group also
includes, for accounting and management purposes, the Company's wholly-owned
subsidiary which publishes The Jerusalem Post, Israel's only English-language
daily newspaper, with a paid daily circulation of approximately 18,000. The
related weekend edition of The Jerusalem Post and English and French-language
international weekly editions have paid circulations of approximately 37,200,
47,000 and 4,300, respectively.
INTERNATIONAL NEWSPAPER GROUP. The Company's international operations
consist of its wholly owned subsidiary, The Telegraph, and a majority equity
interest in Southam, a publicly traded Canadian newspaper publisher.
The Telegraph. The Telegraph publishes The Daily Telegraph, the leading
quality (or broadsheet) newspaper in the United Kingdom. The Telegraph also
publishes The Sunday Telegraph, The Weekly Telegraph, the Electronic Telegraph
and The Spectator magazine. The Daily Telegraph is the largest circulation
quality daily newspaper in the United Kingdom with an average daily circulation
of approximately 1,057,000 representing a 38.4% share of the quality daily
newspaper market. The Daily Telegraph's Saturday edition has the highest average
daily circulation (approximately 1,212,000) among quality daily newspapers in
the United Kingdom. The Sunday Telegraph is the second largest circulation
quality Sunday newspaper in the United Kingdom with an average Sunday
circulation of approximately 697,000.
On August 8, 1996, the Company completed the acquisition of all of the
outstanding ordinary shares of The Telegraph (approximately 36%) not previously
controlled by the Company (the "Telegraph Minority Shares"). The acquisition was
effected by means of a "scheme of arrangement" under Section 425 of the
Companies Act 1985 of Great Britain (the "Scheme"). As a result, The Telegraph
became an indirect wholly owned subsidiary of the Company. The total
consideration paid by the Company was approximately $455.1 million.
Southam. Southam is a publicly held Canadian corporation with operations
in two principal business segments: newspaper publishing and business
communications. Southam publishes 30 daily newspapers and 59 non-daily
newspapers with a total daily circulation of approximately 1,572,000. Its
principal publications include The Gazette (Montreal), The Ottawa Citizen, the
Calgary Herald, The Vancouver Sun, The Province (Vancouver) and The Edmonton
Journal. In addition, the Southam Magazine and Information Group publishes
Canadian and United States business magazines and tabloids for the automotive,
trucking, construction, natural resources, manufacturing and other industries.
Recently, Southam has sold or announced
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the sale of various non-newspaper assets and has announced that it intends to
sell the balance of its business communications division.
On May 24, 1996, a wholly owned Canadian subsidiary of Hollinger Inc.
purchased from a subsidiary of Power Corporation of Canada ("Power") 16,349,743
common shares of Southam held by Power (the "Power Shares"), representing
approximately 21.2% of Southam's then outstanding common shares, for an
aggregate consideration of Cdn.$294.3 million. The acquisition of the Power
Shares provided the Company and Hollinger Inc. with combined holdings of
approximately 40.9% of Southam's then outstanding common shares. On December 11,
1996, the Company purchased, through a wholly owned subsidiary of FDTH,
8,000,300 common shares of Southam for an aggregate consideration of Cdn.$160.0
million, which increased the combined holdings of the Company and Hollinger Inc.
to 50.7% of Southam's outstanding common shares. The Company intends to complete
an internal reorganization of its interests in Southam as soon as practicable
during the first quarter of 1997 in order to consolidate, for financial
reporting purposes, its Southam interests in Publishing.
GENERAL. The Company was incorporated in the State of Delaware on December
28, 1990 and Publishing was incorporated in the State of Delaware on December
12, 1995. Each of the Company and Publishing has its executive offices at 401
North Wabash Avenue, Chicago, Illinois 60611, telephone number (312) 321-2299.
OWNERSHIP BY HOLLINGER INC.
Hollinger Inc. directly and indirectly owns 51.21% of the combined equity
interest and 77.75% of the combined voting power of the outstanding Class A
Common Stock, par value $.01 per share ("Class A Common Stock"), Class B Common
Stock, par value $.01 per share ("Class B Common Stock", and together with Class
A Common Stock, "Common Stock"), and Series B Convertible Preferred Stock, par
value $.01 per share ("Series B Preferred Stock"), of the Company (without
giving effect to the future issuance of Class A Common Stock in connection with
the Company's Preferred Redeemable Increased Dividend Equity Securities
("PRIDES") or the Company's Series A Convertible Redeemable Preferred Stock, par
value $.01 per share ("Series A Preferred Stock"), or the proposed issuance to
Hollinger Inc. of Series C Preferred Stock and Class A Common Stock in
connection with the Hollinger Inc. Transaction (as defined below)). As a result,
Hollinger Inc. will continue to be able to control the outcome of any election
of directors and to direct management policy, strategic direction and financial
decisions of the Company and its subsidiaries. Hollinger Inc. owns all of the
outstanding Series A Preferred Stock of the Company, which is convertible at any
time into shares of Class A Common Stock at the initial conversion price of the
Canadian dollar equivalent of $14 per share. Based on the initial conversion
price, 5,684,361 shares of Class A Common Stock would have been issuable as of
February 21, 1997.
Hollinger Inc. is effectively controlled by The Hon. Conrad M. Black,
Chairman of the Board and Chief Executive Officer of Hollinger Inc. and the
Company, through his direct and indirect ownership and control of Hollinger
Inc.'s securities. Mr. Black has advised the Company that Hollinger Inc. does
not presently intend to reduce its voting power in the Company's outstanding
Common Stock to less than 50%. Furthermore, Mr. Black has advised the Company
that he does not presently intend to reduce his voting control over Hollinger
Inc. such that a third party would be able to exercise effective control over
it.
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RISK FACTORS
Prior to making an investment decision, prospective investors should
consider carefully the following factors, in addition to the other information
and financial data included or incorporated by reference in this Prospectus or
any Prospectus Supplement.
INTERNATIONAL HOLDING COMPANY STRUCTURE
Each of Publishing and the Company is an international holding company the
assets of which consist solely of investments in subsidiaries and affiliated
companies. As a result, the ability of Publishing or the Company to meet its
future financial obligations is dependent upon the availability of cash flows
from their United States and foreign subsidiaries and affiliated companies
(subject to applicable withholding taxes) through dividends, intercompany
advances, management fees and other payments. Publishing's and the Company's
subsidiaries and affiliated companies are under no obligation to pay dividends
and, in the case of Publishing and its principal United States and foreign
subsidiaries, are or will be subject to statutory restrictions and restrictions
in debt agreements that may limit their ability to pay dividends. See
"Restrictions in Debt Agreements" below. Substantially all of the shares of the
subsidiaries of the Company are currently pledged to lenders of the Company and
Publishing. The Company expects that when the existing facility is amended and
restated, borrowings by Publishing, The Telegraph and Hollinger Eastern will be
secured by a pledge of the shares of its principal United States and foreign
subsidiaries and cross-guarantees. In addition, following the completion of the
reorganization of the Company's and Hollinger Inc.'s Southam interests,
approximately 8% of the common shares of Southam owned indirectly by Publishing
will be pledged to secure Hollinger Inc.'s indebtedness under certain debentures
currently secured by shares of HTH owned by the Company. Publishing's and the
Company's right to participate in the distribution of assets of any subsidiary
or affiliated company upon its liquidation or reorganization will be subject to
the prior claims of their creditors of such subsidiary or affiliated company,
including trade creditors, except to the extent that Publishing or the Company
may itself be a creditor with recognized claims against such subsidiary or
affiliated company.
SUBSTANTIAL LEVERAGE
The Company and its subsidiaries have substantial leverage and have
substantial debt service obligations, as well as obligations under the Series A
Preferred Stock, the PRIDES, and the redeemable preferred shares of its
subsidiaries. The instruments governing the terms of the principal indebtedness
and redeemable preferred stock of the Company and its principal United States
and foreign subsidiaries contain various covenants, events of default and other
provisions that could limit the financial flexibility of the Company, including
the payment of dividends with respect to outstanding Common Stock and Preferred
Stock and the implementation of its growth strategy. A substantial portion of
the bank indebtedness of the Company and its subsidiaries becomes due during the
first half of 1997, which the Company intends to repay from the sale of the
Securities.
The substantial leveraged position of the Company could make it vulnerable
to a downturn in the operating performance of its business or a downturn in
economic conditions and could have the following consequences: (i) the Company's
ability to obtain additional debt financing on attractive terms for corporate or
other purposes, including the financing of future acquisitions, may be limited;
(ii) the funds available to the Company for its operations and for dividends on
its Common Stock, its Preferred Stock and its PRIDES may be reduced as a result
of the use of an increased portion of available cash flow to pay debt service;
(iii) certain of the Company's borrowings are and will continue to be at
variable rates of interest, which could result in higher interest expenses in
the event of increases in interest rates; and (iv) such indebtedness and
outstanding redeemable preferred stock contain financial and restrictive
covenants (including certain change of control provisions related to Hollinger
Inc.'s control of the Company), the failure to comply with which may result in
an event of default which, if not cured or waived, could have a material adverse
effect on the Company.
In addition, the instruments governing the terms of the principal
indebtedness of the Company and its principal United States and foreign
subsidiaries contain customary events of default, including, without limitation,
certain "change of control" provisions. Generally, a "change of control" is
defined in the instruments governing the terms of the principal indebtedness of
the Company and its principal United States and foreign subsidiaries to include,
without limitation, any person other than The Hon. Conrad M. Black
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beneficially owning voting stock representing more than 50% of the total voting
power of the Company. See "Control by Hollinger Inc. and Disproportionate Voting
Rights" below.
RISK OF PRINCIPAL REPAYMENT
Publishing's ability to pay principal when due on the Securities and its
other indebtedness or to refinance such obligations, and the ability of its
subsidiaries to make scheduled principal payments or to refinance their
respective indebtedness, depends on the financial and operating performance of
its subsidiaries as well as, with respect to the Securities and other
indebtedness of Publishing, its subsidiaries' ability to make dividend and other
payments to Publishing. There can be no assurance that Publishing's consolidated
operating results will continue to be sufficient or that future borrowing
facilities will be available for the payment or refinancing of such indebtedness
prior to maturity.
In the event Publishing is unable to make required payments or otherwise
comply with the terms of its indebtedness, including the Securities, the holders
of such indebtedness could accelerate the maturity thereof, which could result
in Publishing and the Company being forced to seek protection under applicable
bankruptcy laws or in an involuntary bankruptcy proceeding being brought against
Publishing or the Company. Under such circumstances, the holders of the
Securities may be adversely affected. See "Subordination of Securities and
Guarantee" below.
Following the planned reorganization of the Company's and Hollinger Inc.'s
interest in certain Canadian newspapers, it is expected that the Company's only
material assets will be its ownership of the capital stock of Publishing.
Accordingly, in the event that Publishing is unable to make payments of
principal or interest on any indebtedness, it is unlikely that the Company will
be able to do so.
SUBORDINATION OF SECURITIES AND GUARANTEE
The payment of principal of, premium, if any, and interest on, and any
other amounts owing in respect of, the Senior Subordinated Debt Securities or
Subordinated Debt Securities and the Company's guarantee of such Securities (the
"guarantee") will be subordinated to the prior payment in full of all existing
and future Senior Debt Securities or Senior Indebtedness (as defined in the
applicable Indenture) of Publishing and the Company. Therefore, in the event of
the bankruptcy, liquidation, dissolution, reorganization or other winding up of
Publishing or the Company, the assets of Publishing and the Company will be
available to pay obligations on such Securities and the Guarantee only after all
Senior Indebtedness of Publishing or the Company, as applicable, including the
Senior Debt Securities, has been paid in full, and there may not be sufficient
assets remaining to pay amounts due on any or all of the Senior Subordinated
Debt Securities or Subordinated Debt Securities. In addition, Publishing and the
Company may not pay principal of, premium, if any, or interest on, or any other
amounts owing in respect of, such Securities, or purchase, redeem or otherwise
retire such Securities or make any deposit pursuant to defeasance provisions for
the Securities, if any Senior Debt Securities or Senior Indebtedness is not paid
when due, unless such default is cured or waived or has ceased to exist or such
Senior Indebtedness has been repaid in full. Under certain circumstances, no
payments may be made for a specified period with respect to the principal of,
premium, if any, and interest on, and any other amounts owing in respect of, the
Securities if a non-payment default exists with respect to certain Senior
Indebtedness, unless such default is cured, waived or has ceased to exist or
such indebtedness has been repaid in full. The Securities will also be
effectively subordinated to all existing and future liabilities of Publishing's
subsidiaries.
In addition, because the Company's Subsidiaries may guarantee the senior
bank indebtedness of Publishing or its Subsidiaries and the stock of such
Subsidiaries may be pledged to secure such Indebtedness, the Company expects
that the holders of the Senior Securities, which initially will not be entitled
to any such guarantees or security, will be effectively subordinated to the
claims of the Lenders under the New Bank Credit Facility or other creditors of
Publishing that are entitled to the benefits of such guarantees and security.
RESTRICTIONS IN DEBT AGREEMENTS
The instruments governing the terms of the principal indebtedness and
redeemable preferred stock of the Company and its principal subsidiaries contain
various covenants, events of default and other provisions that could limit the
flexibility of the Company. Such provisions include requirements to maintain
compliance with
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certain financial ratios, limitations on the ability of the Company and certain
of its subsidiaries to make acquisitions or investments without the consent of
the lenders and limitations on the ability of the Company's principal
subsidiaries to incur indebtedness, make dividend and other payments to the
Company and take certain other actions. In addition, such indebtedness is
secured by, among other things, pledges of the stock of the Company's principal
subsidiaries.
The amount available for the payment of dividends by the Company at any
time is a function of (i) restrictions in agreements binding the Company
limiting its ability to pay dividends and (ii) restrictions in agreements
binding the Company's subsidiaries limiting their ability to pay dividends to
the Company. Currently, the Company's bank credit facility used to finance the
acquisition of the Power Shares (the "Southam Facility"), among other things,
limits dividends on the Company's Class A Common Stock and Class B Common Stock,
to their current levels and on the Company's Series A Preferred Stock and PRIDES
in accordance with their existing terms. In addition, certain agreements binding
subsidiaries of the Company, including Publishing, American Publishing (1991)
Inc. and FDTH, contain provisions that limit their respective abilities to pay
dividends to the Company.
OTHER RESTRICTIVE ARRANGEMENTS
The Company's equity interests in The Telegraph are held through
intermediate English holding companies, DTH and FDTH, and the Company's and
Hollinger Inc.'s combined equity interests in Southam are currently held through
Hollinger Eastern Publishing Inc. ("Hollinger Eastern"), a newly formed Canadian
holding company, HTH, a Canadian corporation which is jointly owned by two
wholly owned subsidiaries of the Company and also through such subsidiaries, and
through a wholly owned subsidiary of FDTH.
DTH and FDTH have outstanding preference shares held by persons other than
the Company and its affiliates (the "DTH Preference Shares," the "FDTH
Preference Shares," and, collectively, the "DTH and FDTH Preference Shares")
which require the payment of quarterly dividends with a current effective
dividend cost of 5.5% per annum (after giving effect to certain interest rate
and currency exchange agreements). In addition, DTH owns all 165,000,000
non-cumulative redeemable preference shares of L1 per share issued by FDTH and
23,801,420 non-cumulative redeemable preference shares of Cdn.$1 per share
issued by FDTH which were transferred by Hollinger Inc. to DTH pursuant to the
HTH/FDTH Share Exchange Agreement dated July 19, 1995 (the "HTH/FDTH Share
Exchange Agreement"). All of the outstanding DTH Preference Shares are held by
unrelated parties and a portion of the outstanding FDTH Preference Shares are
held by unrelated third parties, with an aggregate redemption price of
approximately $125.0 million.
On December 29, 1995, DTH transferred all outstanding FDTH Preference
Shares which it then held (with an aggregate redemption amount of Cdn.$140
million ($102.6 million)) to a wholly owned English subsidiary ("Argsub") of
Argus Corporation Limited ("Argus"), a Canadian corporation all the voting stock
of which is indirectly owned or controlled by Mr. Black, in exchange for newly
issued preference shares (with an aggregate redemption amount of Cdn.$140
million ($102.6 million)) of such English subsidiary. On September 30, 1996,
FDTH issued 600 fourth preference shares, Series 1996 of FDTH (with an aggregate
redemption amount of $300.0 million) to Argsub in exchange for 600 newly issued
second preference shares, Series 1996 of Argsub (with an aggregate redemption
amount of $300.0 million). The preference shares of Argsub have terms
substantially identical to those of the FDTH Preference Shares for which they
were exchanged and constitute the entire issued and outstanding preference share
capital of Argsub. These transactions were structured to eliminate economic gain
or loss to Argus and Argsub on the preference shares. The issuance of additional
preference shares by FDTH to Argsub may occur prior to the redemption or
repayment of outstanding FDTH Preference Shares, which is expected to occur in
the second quarter of 1997. Argus owns directly and indirectly approximately
31.3% of the common shares of Hollinger Inc.
The DTH Preference Shares are redeemable at the option of the holder at any
time on four days' notice at a redemption price discounted in accordance with an
agreed formula, and the FDTH Preference Shares and the DTH Preference Shares are
redeemable by the issuer or the holders on the fifth anniversary of their
issuance (May and June 1997, respectively), each five year anniversary
thereafter and at other prescribed
7
<PAGE> 9
times and in prescribed circumstances, including where the consolidated debt of
Hollinger Inc. is more than two times its consolidated equity (the "Debt to
Equity Ratio"). Hollinger Inc. has informed the Company that as of September 30,
1996 it was in compliance with the Debt to Equity Ratio. The Debt to Equity
Ratio is affected by, among other things, Hollinger Inc.'s consolidated results
of operations, as well as changes in the levels of consolidated debt of
Hollinger Inc. and its subsidiaries, including the Company. Accordingly, there
can be no assurance that Hollinger Inc. will remain in compliance with the Debt
to Equity Ratio or that in the event of non-compliance, that holders of the DTH
or FDTH Preference Shares will not exercise their retraction rights against DTH
or FDTH or Hollinger Inc. pursuant to contractual arrangements with the holders
under which Hollinger Inc. has agreed to purchase the DTH and FDTH Preference
Shares. In the event Hollinger Inc. is required to purchase any DTH and FDTH
Preference Shares under these circumstances, Hollinger Inc. shall have the
right, following written notice, to require the Company to purchase such shares
at the then retraction price.
Hollinger Inc. has indemnified the holders of the DTH and FDTH Preference
Shares and agreed to purchase these preference shares if DTH or FDTH fails to
pay the full amount of dividends or redemption prices on such shares and in
certain other events. The Company has entered into an agreement to compensate
Hollinger Inc. for any payments made by Hollinger Inc. to holders of the DTH and
FDTH Preference Shares and to purchase any DTH and FDTH Preference Shares which
Hollinger Inc. is required to purchase in accordance with the terms thereof. The
timing of any such payments by the Company to Hollinger Inc. will be determined
by Hollinger Inc.
As indicated above, it is expected that the DTH and FDTH Preference Shares
will be redeemed in May and June 1997.
GROWTH STRATEGY
The Company's strategy is to achieve growth through acquisitions and
improvements in the cash flow and profitability of its newspapers, principally
through cost reductions. The Company's strategy presents risks inherent in
assessing the value, strengths and weaknesses of acquisition opportunities, in
evaluating the costs of new growth opportunities at existing operations and in
managing the numerous publications it has acquired and improving their operating
efficiency. While the Company believes that there are significant numbers of
potential acquisition candidates, the Company is unable to predict the number or
timing of future acquisition opportunities or whether any such opportunities
will meet the Company's acquisition criteria or, if such acquisitions occur,
whether the Company will be able to achieve improved operating efficiencies or
enhanced profitability. In addition, the Company's acquisition strategy is
largely dependent on the Company's ability to obtain additional debt or other
financing on acceptable terms. See "Substantial Leverage," "Restrictions in Debt
Agreements" and "Other Restrictive Arrangements" below.
NEWSPAPER INDUSTRY COMPETITION
Revenues in the newspaper industry are dependant primarily upon advertising
revenues and paid circulation. Competition for advertising and circulation
revenues comes from local and regional newspapers, radio, broadcast and cable
television, direct mail, and other communications and advertising media that
operate in the Company's markets. The extent and nature of such competition is,
in large part, determined by the location and demographics of the markets and
the number of media alternatives in those markets. Some of the Company's
competitors are larger and have greater financial resources than the Company.
For example, in the Chicago metropolitan area, the Chicago Sun-Times competes
with a large established metropolitan daily and Sunday newspaper that is the
fifth largest metropolitan daily and Sunday newspaper in the United States. In
the United Kingdom, The Daily Telegraph competes with other national newspapers,
principally The Times, which over the past two years substantially reduced its
cover price in an effort to then increase its circulation. This strategy led The
Daily Telegraph to reduce its weekday cover prices in June 1994 in order to
maintain its circulation levels, although its circulation revenues were
adversely affected. In July 1995 and November 1995, The Daily Telegraph,
following the lead of its principal competitor, increased its weekday cover
price by a total of 10p per copy, or 33%, with limited effect on circulation
levels to date. In June 1996, The Times reduced its cover price to 10p on
Mondays only, as part of its "summer sport promotion." To promote its "summer of
sport," The Daily Telegraph launched a 12-week voucher promotion beginning
Saturday, June 8, 1996, enabling readers
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<PAGE> 10
to redeem vouchers to purchase The Daily Telegraph on Mondays for 10p. Beginning
in the fall of 1996, The Telegraph undertook promotional programs which, while
increasing circulation, have also significantly increased costs which had an
adverse effect on results of operations during the fourth quarter of 1996.
Operating costs in the first quarter of 1997 are also expected to be adversely
affected.
CYCLICALITY OF REVENUES
Advertising and, to a lesser extent, circulation revenues of the Company,
as well as those of the newspaper industry in general, are cyclical and
dependent upon general economic conditions. Historically, increases in
advertising revenues have corresponded with economic recoveries while decreases,
as well as changes in the mix of advertising, have corresponded with general
economic downturns and regional and local economic recessions. The Company
believes, however, that the geographic diversity of its global operations may
mitigate, to some degree, the effects of an economic downturn in any particular
market served by the Company.
NEWSPRINT COSTS
Newsprint represents the single largest raw material expense of the
Company's newspapers throughout the world and is one of its most significant
operating costs. Newsprint costs are cyclical and vary widely period to period.
Newsprint cost increased approximately 40% per metric ton in 1995 on an
industry-wide basis, and the average cost per metric ton of newsprint was
substantially higher in the first half of 1996 than in the first half of 1995.
Newsprint costs decreased significantly in the second half of 1996 but are
expected to increase during 1997. Although the Company has implemented measures
in an attempt to offset the rise in newsprint prices, such as reducing page
width and managing its return policy, price increases have had an adverse effect
on the Company's results of operations. The Company has no effective ability to
use long term fixed price newsprint supply contracts to hedge its exposure to
price fluctuations.
FOREIGN OPERATIONS AND CURRENT EXCHANGE RATES
Operations outside of the United States accounted for approximately 67% of
the Company's operating revenues and approximately 50% of the Company's
operating income for the year ended December 31, 1996. In addition, equity in
earnings of Fairfax is in a foreign currency. In general, the Company does not
hedge against foreign currency exchange rate risks. As a result, the Company may
experience economic loss and a negative impact on earnings with respect to its
investments and on dividends from its foreign subsidiaries, solely as a result
of currency exchange rate fluctuations.
CONTROL BY HOLLINGER INC. AND DISPROPORTIONATE VOTING RIGHTS
Hollinger Inc. owns 33,610,754 shares of the Class A Common Stock and all
of the outstanding shares of the Class B Common Stock, constituting (as of
February 21, 1997) approximately 51.21% of the combined equity interest in the
Company and approximately 77.75% of the combined voting power of the Common
Stock and Series B Preferred Stock (without giving effect to any conversion of
Series A Preferred Stock into shares of Class A Common Stock or any issuance of
shares of Class A Common Stock in connection with the PRIDES). As a result,
Hollinger Inc. is in a position to control the outcome of substantially all
actions requiring stockholder approval, including the election of the entire
Board of Directors. The retention by Hollinger Inc. of securities representing
more than 50% of the voting power of the Company's outstanding Common Stock will
preclude any acquisition of control of the Company not favored by Hollinger Inc.
Subject to the fiduciary responsibilities of the directors of the Company to all
stockholders and the terms of agreements defining the ongoing relationships
between Hollinger Inc. and the Company, Hollinger Inc., through its ability to
control the outcome of any election of directors, will continue to be able to
direct management policy, strategic direction and financial decisions of the
Company. Hollinger Inc. is effectively controlled by The Hon. Conrad M. Black,
Chairman of the Board and Chief Executive Officer of Hollinger Inc. and the
Company, through his direct and indirect ownership and control of Hollinger
Inc.'s securities. Mr. Black has advised the Company that Hollinger Inc. does
not presently intend to reduce its voting power in the Company's outstanding
Common Stock to less than 50%. Furthermore, Mr. Black has advised the Company
that he does not presently intend to reduce his voting control over Hollinger
Inc. such that a third party would be able to exercise effective control over
it.
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<PAGE> 11
Hollinger Inc. may sell or transfer shares of Class B Common Stock, and
thus potentially voting control of the Company, to an unaffiliated third person
provided such purchaser or transferee offers to purchase all shares of Class A
Common Stock from the holders thereof for an amount per share equal to the
amount per share received by Hollinger Inc. for the Class B Common Stock, as
provided in the Company's certificate of incorporation. Hollinger Inc. has
pledged all shares of Common Stock and Series A Preferred Stock owned by it to
Canadian chartered banks as collateral for outstanding indebtedness of Hollinger
Inc. and the Southam Facility. A default under such indebtedness could result in
a change of control of the Company.
POTENTIAL CONFLICTS OF INTEREST
The Company and Hollinger Inc. have entered into agreements for the purpose
of defining their ongoing relationships, including a Services Agreement (to
which Publishing is also a party) and a Business Opportunities Agreement. These
agreements were developed in the context of a parent-subsidiary relationship
and, therefore, were not the result of arms-length negotiations between
independent parties.
Services Agreement. The Services Agreement governs the provision by
Hollinger Inc. of certain advisory, consultative, procurement and administrative
services to the Company. The Services Agreement also contemplates that the
Company may provide services to Hollinger Inc. The services to be provided
pursuant to the Services Agreement include, among other things, strategic advice
and planning and financial services (including advice and assistance with
respect to acquisitions); assistance in operational matters; participation in
group insurance programs; and guarantees of indebtedness of the Company or other
forms of credit enhancements. The party receiving the services will reimburse
the party rendering the services for its allocable costs in providing those
services, as determined by the provider thereof or, in the case of a guarantee,
for an amount equal to the cost to the party of obtaining a bank letter of
credit in the amount of such guarantee. The party allocating its costs will
consider the salaries or other compensation payable to directors, officers and
employees actually providing services, out-of-pocket costs, the cost of
obtaining substantially equivalent services from a third party and other factors
as may be deemed appropriate. The Services Agreement will be in effect for so
long as Hollinger Inc. holds at least 50% of the voting power of the Company,
subject to termination by either party under certain specified circumstances.
Payments made pursuant to the Services Agreement are subject to the review and
approval of the Audit Committee of the Board of Directors of the Company.
In addition, Hollinger Inc. and The Telegraph are parties to a separate
services agreement under which The Telegraph bears two-thirds of the cost of the
office of the Chairman incurred by Hollinger Inc. as long as Mr. Black remains
Chairman of the Board of The Telegraph, and requires that other services will be
provided at cost, including the arrangement of insurance, assistance in the
arrangement of financing and assistance and advice on acquisitions, dispositions
and joint venture arrangements. Hollinger Inc. has assigned its rights and
obligations under The Telegraph services agreement to the Company and Publishing
on May 9, 1996 with the consent of The Telegraph.
Business Opportunities. The Business Opportunities Agreement provides that
the Company will be Hollinger Inc.'s principal vehicle for engaging in and
effecting acquisitions in newspaper businesses and in related media businesses
in the United States, Israel and, through The Telegraph, the European Community,
Australia and New Zealand (the "Telegraph Territory"). Hollinger Inc. has
reserved to itself the ability to pursue newspaper and all media acquisition
opportunities outside the United States, Israel and the Telegraph Territory, and
media acquisition opportunities unrelated to the newspaper business in the
United States, Israel and the Telegraph Territory, except that the Company is
permitted to increase its indirect investment in Southam. As part of the
Hollinger Inc. Transaction (as defined below) involving the purchase by the
Company of Canadian newspapers, Hollinger Inc. will waive the foregoing
limitation. The Business Opportunities Agreement does not restrict newspaper
companies in which Hollinger Inc. has a minority investment from acquiring
newspaper or media businesses in the United States, Israel or the Telegraph
Territory, nor does it restrict subsidiaries of Hollinger Inc. from acquiring up
to 20% interests in publicly held newspaper businesses in the United States. The
Business Opportunities Agreement will be in effect for so long as Hollinger Inc.
holds at least 50% of the voting power of the Company, subject to termination by
either party under specified circumstances.
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<PAGE> 12
In addition, the Company and Hollinger Inc. have entered into business
transactions involving the reorganization or transfer of newspaper assets owned
indirectly by Hollinger Inc. In October 1995 the Company and Hollinger Inc.
consummated the transfer of Hollinger Inc.'s indirect majority interest in The
Telegraph through the Share Exchange Agreement dated July 19, 1995 (the
"Telegraph Reorganization"). On January 7, 1997, the Company and Hollinger Inc.
entered into a letter of intent relating to the transfer by Hollinger Inc. of
certain of its owned Canadian publishing interests, directly or indirectly, to
Hollinger Eastern (the "Hollinger Inc. Transaction"). These transactions have
been negotiated and approved by independent directors of the Company.
Continuing Agreements Relating to the Telegraph Reorganization. In
connection with the October 1995 Telegraph Reorganization, pursuant to which the
Company acquired Hollinger Inc.'s indirect majority interest in The Telegraph,
Hollinger Inc. and the Company entered into the Share Exchange Agreement (the
"Share Exchange Agreement"). Under the Share Exchange Agreement, Hollinger Inc.
and the Company have agreed that if the Company proposes to effect a public
offering of its equity or equity-linked securities for cash, or to issue
equity-linked securities in any acquisition by the Company of the stock or
assets of an unrelated corporation or entity, at any time during the 24 months
following the closing date of such agreement, (or prior to October 1997), the
Company's efforts to raise capital through such offering shall have priority
over any proposal by Hollinger Inc. to effect a public offering or sale of the
Company's equity securities by Hollinger Inc., unless a majority of the
disinterested members of an Independent Committee of the Company's Board of
Directors shall otherwise agree. For these purposes, an "Independent Committee"
means a committee of the Company's Board the majority of the members of which
are not employees or directors of Hollinger Inc. or employees of the Company, or
another committee of the Company's Board whose membership satisfies any more
restrictive requirements of independence of any securities exchange or market in
which the Company's equity securities are traded or listed. If during such
period Hollinger Inc. proposes to sell or otherwise dispose of any shares of
Series A Preferred Stock (other than certain transfers to Hollinger Inc.
subsidiaries or affiliates and pledges) or to offer or sell publicly any shares
of Class A Common Stock held by it or its affiliates, it shall first consult
with the Independent Committee so as not to interfere with any planned capital
market activities of the Company to be undertaken within this period.
The Share Exchange Agreement also includes a covenant by Hollinger Inc. to
limit the exercise of its redemption rights as a holder of shares of Series A
Preferred Stock to a number of shares proportionate to the number of HTH shares
or Southam common shares that at the time of such exercise have been delivered
to FDTH free and clear of encumbrances. The Company also agreed that so long as
any of the HTH shares are subject to the pledge under the Southam-Linked
Debentures, the Company will use reasonable commercial efforts not to take any
action, without the consent of Hollinger Inc., which itself would constitute an
event of default by Hollinger Inc. under the trust indenture relating to the
Southam-Linked Debentures. Hollinger Inc. has agreed to deliver to FDTH legal
title to the HTH shares free and clear of pledges, liens or encumbrances other
than certain permitted encumbrances. In connection with the reorganization of
the Company's and Hollinger Inc.'s interests in Southam, the Company will
substitute a portion of its interest in Southam common shares (approximately 8%)
for HTH shares now subject to such pledge which are owned by Publishing. Upon
such substitution, the HTH shares will be free and clear of the pledge under the
Southam-Linked Debentures. The Share Exchange Agreement will be modified
accordingly. Also, Hollinger Inc. would then be entitled to exercise its
redemption rights under the Series A Preferred Stock proportionate to the number
of such Southam common shares that become free of the pledge under the
Southam-Linked Debentures.
Under the agreement between the Company and Hollinger Inc. with respect to
the DTH and FDTH Preference Shares (the "DTH/FDTH Preference Share Agreement"),
the Company has agreed to compensate Hollinger Inc. for any payments made by
Hollinger Inc. to holders of the DTH and FDTH Preference Shares and to purchase
any DTH and FDTH Preference Shares which Hollinger Inc. is required to purchase
in accordance with the terms thereof. The timing of any such payments by the
Company to Hollinger Inc. will be determined by Hollinger Inc.
Reorganization of Canadian Newspaper Interests. On January 7, 1997, the
Boards of Directors of the Company and Hollinger Inc. announced that they had
reached an agreement in principle for the transfer by
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<PAGE> 13
Hollinger Inc. of certain of its owned Canadian publishing interests, directly
or indirectly, to Hollinger Eastern, a subsidiary of Publishing, (the "Hollinger
Inc. Transaction"), including all of Hollinger Inc.'s interests in (a) certain
newspaper assets located mainly in Ontario, including 12 daily and seven
non-daily newspapers, (b) certain newspaper assets located mainly in
Saskatchewan, including two daily and eight non-daily newspapers, (c) certain
newspaper assets located mainly in British Columbia, including nine daily and 19
non-daily newspapers and (d) UniMedia Inc., for an aggregate consideration of
approximately $382.0 million (Cdn.$523.0 million), subject to working capital
and currency exchange adjustments. The purchase price, all of which will be
payable to Hollinger Inc., is proposed to be satisfied in cash in the amount of
$250.0 million, by the issuance of a new series of mandatorily convertible
preferred stock of the Company similar to the PRIDES issued by the Company in
August 1996 having a face amount of approximately $90.0 million, and by the
issuance of Class A Common Stock of the Company to Hollinger Inc. having a
nominal amount of approximately $42.0 million. The transaction is expected to be
consummated no later than the second quarter of 1997 but will be effective for
financial and accounting purposes as of January 7, 1997 and will be accounted
for on an "as if pooling" basis.
The Hollinger Inc. Transaction will not be completed until a definitive
acquisition agreement has been negotiated and executed, approval by the
Company's stockholders of the issuance of the mandatorily convertible preferred
stock and Class A Common Stock has been obtained, other terms and conditions
have been satisfied and regulatory approvals obtained. It is intended that
holders of the Company's Class A and Class B Common Stock and Series B Preferred
Stock will vote as a single class at a meeting of the Company's stockholders.
Hollinger Inc. has sufficient voting power to approve the Hollinger Inc.
Transaction.
ABSENCE OF PUBLIC MARKET FOR THE SECURITIES AND LACK OF LIQUIDITY
There currently is no public market for the Securities. Although
application may be made to list the Securities on the New York Stock Exchange,
there can be no assurance as to the liquidity of the trading market for the
Securities or that an active public market for the Securities will develop. If
an active market for the Securities does not develop, the market price and
liquidity of the Securities may be adversely affected.
USE OF PROCEEDS
Except as otherwise indicated in the accompanying Prospectus Supplement,
Publishing and the Company intend to use the net proceeds from the sale of the
Securities for general corporate purposes, including working capital, the
repayment or reduction of indebtedness or other obligations and possible future
acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's and Publishing's consolidated
ratio of earnings to fixed charges for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------- --------------
1991 1992 1993 1994 1995 1995 1996
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges
(the Company)........................... 3.67x 5.09x 3.64x 4.76x 1.82x 1.68x 1.29x
Ratio of Earnings to Fixed Charges
(Publishing)............................ N/A N/A N/A N/A 1.84x N/A 1.44x
</TABLE>
The ratio of earnings to fixed charges is the sum of earnings before taxes
and minority interest (excluding undistributed earnings of affiliates) plus
interest expense, amortization of deferred financing charges and preferred stock
dividends divided by the sum of interest expense, amortization of deferred
financing charges and preferred stock dividends. No ratio is available for
Publishing for the four years ended December 31, 1994 and the nine months ended
September 30, 1995 as Publishing was not incorporated until the fourth quarter
of 1995.
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<PAGE> 14
DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be issued, from time to time, in one or more series
and will constitute either Senior Debt Securities, Senior Subordinated Debt
Securities or Subordinated Debt Securities. The following description of the
Senior Securities and Senior Subordinated Securities sets forth certain general
terms and provisions of such Securities and the Guarantees to which any
Prospectus Supplement may relate. The general terms of any Subordinated
Securities or any Convertible Securities will be set forth in an amendment or
supplement to this Prospectus. In addition, the particular terms of the
Securities offered by any Prospectus Supplement (the "Offered Securities"),
including the nature of any variation from the following general provisions
applicable to the Offered Securities, will be described in the Prospectus
Supplement relating to the Offered Securities.
The Senior Securities offered will be issued in one or more series under an
Indenture dated as of , 1997 (the "Senior Indenture"), among
Publishing, the Company, as Guarantor, Fleet National Bank, as trustee (the
"Trustee"). The Senior Subordinated Securities offered hereby will be issued in
one or more series under an Indenture dated as of , 1997 (the "Senior
Subordinated Indenture" and, together with the Senior Indenture, the
"Indentures"), among Publishing, the Company, as Guarantor, and Fleet National
Bank, as trustee (the "Trustee"). The Indentures are subject to and governed by
the Trust Indenture Act. The following summary of the material provisions of the
Indentures does not purport to be complete and, where reference is made to
particular provisions of the Indentures, such provisions, including the
definitions of certain terms, are qualified in their entirety by reference to
all of the provisions of the Indentures and those terms made a part of the
Indentures by the Trust Indenture Act. For definitions of certain capitalized
terms used in the following summary, see "Certain Definitions" below. Other
capitalized terms used without definition are defined in the Indentures.
RANKING OF SENIOR SECURITIES
The Senior Securities of each series will be unsecured and will rank pari
passu in right of payment with all other existing and future senior Indebtedness
of Publishing, including Publishing's Indebtedness under the New Bank Credit
Facility, and senior in right of payment to all existing and future Subordinated
Indebtedness of Publishing.
RANKING OF SENIOR SUBORDINATED SECURITIES
The payment of the principal of, premium, if any, and interest on the
Senior Subordinated Securities will be subordinated and subject in right of
payment, to the extent and in the manner set forth in the Senior Subordinated
Indenture, to the prior payment in full of all Senior Indebtedness of
Publishing. The Senior Subordinated Securities will be senior subordinated
indebtedness of Publishing ranking pari passu with all other future senior
subordinated indebtedness of Publishing and senior to all existing and future
Subordinated Indebtedness of Publishing.
Upon the occurrence and continuation of any default in the payment of any
Designated Senior Indebtedness beyond the applicable grace period, no payment or
distribution of any assets of Publishing of any kind or character (excluding
certain permitted equity or subordinated securities) shall be made on account of
the principal of, premium, if any, or interest on, the Senior Subordinated
Securities or on account of the purchase, redemption, defeasance or other
acquisition of or in respect of the Senior Subordinated Securities unless and
until such default has been cured, waived or has ceased to exist or such
Designated Senior Indebtedness shall have been discharged or paid in full in
cash or Cash Equivalents, or in any other manner acceptable to the requisite
holders of such Designated Senior Indebtedness.
Upon the occurrence and continuation of any nonpayment default with respect
to any Designated Senior Indebtedness pursuant to which the maturity thereof may
be accelerated (a "Non-payment Default") and after the receipt by the Trustee
from the Agent under the New Bank Credit Facility or, if none, from any other
representative of holders of any Designated Senior Indebtedness of a written
notice of such default, no payment or distribution of any assets of Publishing
of any kind or character (excluding certain permitted equity or subordinated
securities) shall be made by Publishing on account of any principal of, premium,
if any, or interest on, the Senior Subordinated Securities or on account of the
purchase, redemption, defeasance or
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<PAGE> 15
other acquisition of or in respect of the Senior Subordinated Securities for the
period specified below (the "Payment Blockage Period").
The Payment Blockage Period shall commence upon the date of receipt by the
Trustee of such notice of the Non-payment Default by the Trustee from a
representative of the holders of any Designated Senior Indebtedness and (subject
to any blockage then or thereafter in effect as a result of a payment default)
shall end on the earliest to occur of (i) 179 days having elapsed since the
receipt of such written notice by the Trustee (provided that any Designated
Senior Indebtedness as to which notice was given shall not theretofore have been
accelerated), (ii) the date such Non-payment Default and all Non-payment
Defaults as to which notice is given after such Payment Blockage Period is
initiated is cured or waived or ceases to exist or the Designated Senior
Indebtedness related thereto is discharged or paid in full or (iii) the date on
which such Payment Blockage Period (and all Non-payment Defaults as to which
notice is given after such Payment Blockage Period is initiated) shall have been
terminated by written notice to Publishing or the Trustee from the Agent under
the Credit Agreement or such other representative of holders of Designated
Senior Indebtedness, after which, in each such case, Publishing shall resume
making any and all required payments in respect of the Senior Subordinated
Securities, including any missed payments and accrued interest thereon. In no
event will a Payment Blockage Period extend beyond 179 days from the date of the
receipt by the Trustee of the notice initiating such Payment Blockage Period
(such 179-day period referred to as the "Initial Blockage Period"). Any number
of notices of Non-payment Defaults may be given during the Initial Blockage
Period; provided that during any 365-consecutive-day period only one Payment
Blockage Period during which payment of principal of, premium, if any, or
interest on, the Securities may not be made may commence and the duration of
such period may not exceed 179 days. No Nonpayment Default with respect to
Designated Senior Indebtedness that existed or was continuing on the date of the
commencement of any Payment Blockage Period will be, or can be, made the basis
for the commencement of a second Payment Blockage Period, whether or not within
a period of 365 consecutive days, unless such Non-payment Default has been cured
or waived for a period of not less than 90 consecutive days.
If Publishing fails to make any payment on the Senior Subordinated
Securities when due or within any applicable grace period, whether or not on
account of the payment blockage provisions referred to above, such failure would
constitute an Event of Default under the Senior Subordinated Indenture and would
enable the holders of the Senior Subordinated Securities to accelerate the
maturity thereof. See "Events of Default" below.
The Senior Subordinated Indenture provides that, in the event of (a) any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relative to Publishing or its assets, or (b) any liquidation, dissolution or
other winding up of Publishing, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or other marshaling of assets or liabilities of Publishing (except a
distribution in connection with a consolidation of Publishing with, or the
merger of Publishing into, another corporation or the liquidation or dissolution
of Publishing following conveyance, transfer or lease of its properties and
assets substantially as an entirety to another corporation upon the terms and
subject to the conditions of the provisions described in "Consolidation, Merger,
Sale of Assets" below), then and in any such event the holders of Senior
Indebtedness shall be entitled to receive payment in full in cash or Cash
Equivalents or in any other manner acceptable to the requisite holders of
Designated Senior Indebtedness before any payment or distribution (excluding
distributions of certain permitted equity or subordinated securities) is made on
account of the principal of, premium, if any, or interest on the Senior
Subordinated Securities or on account of the purchase, redemption, defeasance or
other acquisition of or in respect of the Senior Subordinated Securities
(including any payment or other distribution which may be received from the
holders of Subordinated Indebtedness as a result of any payment on such
Subordinated Indebtedness). Accordingly, the holders of the Senior Subordinated
Securities may recover nothing in the event of such a liquidation, dissolution
or other winding up of Publishing.
"Senior Indebtedness" means, with respect to Publishing, the principal of,
premium, if any, and interest in respect of the New Bank Credit Facility and any
other Indebtedness of Publishing (other than as otherwise provided in this
definition), whether outstanding on the date of the Senior Subordinated
Indenture or
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<PAGE> 16
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Senior Subordinated Securities. Without
limiting the generality of the foregoing, "Senior Indebtedness" shall include
the principal of, premium, if any, interest and all other obligations owing to
the lenders under (a) the New Bank Credit Facility and (b) the holders under the
Senior Securities. Notwithstanding the foregoing, "Senior Indebtedness" shall
not include (i) Indebtedness evidenced by the Senior Subordinated Securities and
the 9 1/4% Senior Subordinated Notes of Publishing due 2006 governed by the
Indenture dated as of February 1, 1996 among Publishing, the Company, as
Guarantor, and the Trustee (the "9 1/4% Notes"); (ii) Indebtedness of Publishing
that is subordinate or junior in right of payment to any other Indebtedness of
Publishing; (iii) Indebtedness of Publishing which, when incurred and without
respect to any other election under Section 1111(b) of Title 11, United States
Code, is without recourse to Publishing; (iv) Indebtedness which is represented
by Redeemable Capital Stock; (v) any liability for foreign, federal, state,
local or other taxes owed or owing by Publishing; (vi) Indebtedness of
Publishing to a Restricted Subsidiary or any other Affiliate of Publishing or
any of such Affiliate's subsidiaries; (vii) that portion of any Indebtedness
which at the time of Incurrence is issued in violation of the Senior
Subordinated Indenture; and (viii) trade payables owed or owing by Publishing.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness under
the New Bank Credit Facility and (ii) any other Senior Indebtedness which, at
the time of determination, has an aggregate principal amount outstanding of at
least $50,000,000 and is specifically designated by Publishing in the instrument
evidencing such Senior Indebtedness or the agreement under which such Senior
Indebtedness arises as "Designated Senior Indebtedness."
The Senior Securities and the Senior Subordinated Securities will be
effectively subordinated to all existing and future liabilities of subsidiaries,
including in the case of the Restricted Subsidiaries, such subsidiaries'
guarantees of Publishing's obligations under the New Bank Credit Facility,
except to the extent the Restricted Subsidiaries may be required to provide
guarantees of the Senior Securities and the Senior Subordinated Securities, as
described herein, in which case such guarantees will be effectively subordinated
in right of payment to such subsidiaries' guarantees of Publishing's obligations
under the New Bank Credit Facility.
SECURITIES GUARANTEES
The Company will irrevocably and unconditionally Guarantee, on an unsecured
senior basis, in the case of the Senior Securities, and on an unsecured senior
subordinated basis to the same extent as the Senior Subordinated Securities are
subordinated to Senior Indebtedness, in the case of the Senior Subordinated
Securities, the performance and punctual payment when due, whether at Stated
Maturity, by acceleration or otherwise, of all the obligations of Publishing
under the Indentures and the Securities. Payments on the Company's Senior
Subordinated Guarantee will be subordinated, as set forth in the Senior
Subordinated Indenture, in right of payment to the prior payment in full of all
Senior Guarantor Indebtedness. See "Guarantees" below.
"Senior Guarantor Indebtedness" means, with respect to the Company or any
Restricted Subsidiary Guarantor (for the purposes of this definition, each a
"Guarantor"), (i) such Guarantor's guarantee of Publishing's payment obligations
in respect of the New Bank Credit Facility, (ii) such Guarantor's guarantee of
Publishing's payment obligations in respect of the FDTH Credit Agreement, (iii)
such Guarantor's guarantee of Publishing's obligations under the Senior
Securities and (iv) any other Indebtedness of such Guarantor (other than as
otherwise provided in this definition), whether outstanding on the date of the
Senior Subordinated Indenture or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Guarantees. Notwithstanding the foregoing, "Senior Guarantor Indebtedness" will
not include (i) Indebtedness evidenced by such Guarantor's Guarantee of the
Senior Subordinated Securities; (ii) Indebtedness of such Guarantor that is
subordinate or junior in right of payment to any other Indebtedness of such
Guarantor; (iii) Indebtedness of such Guarantor which, when incurred and without
respect to any other election under Section 1111(b) of Title 11, United States
Code, is without recourse to such Guarantor; (iv) Indebtedness
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which is represented by Redeemable Capital Stock of such Guarantor; (v) any
liability for foreign, federal, state, local or other taxes owed or owing by
such Guarantor; (vi) Indebtedness of such Guarantor to a Restricted Subsidiary
or any other Affiliate of such Guarantor or any of such Affiliate's
subsidiaries; (vii) that portion of any Indebtedness which at the time of
incurrence is issued in violation of the Senior Subordinated Indenture; and
(viii) trade payables owed or owing by such Guarantor.
GENERAL
Reference is made to the Prospectus Supplement for the following terms of
the Offered Securities: (1) the title of the Offered Securities; (2) the price
(expressed as a percentage of the aggregate principal amount thereof) at which
the Offered Securities will be issued; (3) any limit on the aggregate principal
amount of the Offered Securities or the series of which the Offered Securities
are a part; (4) the date or dates (or manner of determining the same) on which
the Offered Securities will mature; (5) the rate or rates (which may be fixed or
variable) per annum (or the method or methods by which such rate or rates will
be determined) at which the Offered Securities will bear interest, if any, and
the date or dates from which such interest will accrue; (6) the date or dates on
which interest, if any, will be payable and the record dates for such interest
payment dates; (7) if the trustee in respect of the Offered Securities is other
than the Trustee (or any successor thereto), the identity of the trustee; (8)
the place or places where the principal of (and premium, if any) and interest,
if any, on the Offered Securities will be payable and each office or agency
where the Offered Securities may be presented for transfer or exchange; (9) any
mandatory or optional sinking fund or purchase fund or similar provision and the
terms and conditions thereof; (10) any provisions relating to the date after
which, the circumstances under which, the price or prices at which, and the
currency or currency unit in which, the Offered Securities may, pursuant to any
optional or mandatory redemption or conversion provisions, be redeemed or
converted at the option of the Publishing or of the holder and certain other
terms and provisions of such optional or mandatory redemption or conversion;
(11) any terms applicable to the Offered Securities issued at an issue price
below their stated principal amount, including the issue price thereof and the
rate or rates at which such original issue discount will occur; (12) if the
Offered Securities are denominated in other than United States dollars, the
currency or currencies (including composite currencies) in which the Offered
Securities are denominated; (13) the index, if any, used to determine the amount
of payments of principal of (and premium, if any) or interest, if any, on the
Offered Securities; (14) if payments of principal (and premium, if any) or
interest, if any, in respect of the Offered Securities are to be made in a
currency other than United States dollars or the amount of such payments are to
be determined with reference to an index based on a currency or currencies other
than that in which the Offered Securities are denominated, the currency or
currencies (including composite currencies) in which such payments are to be
made, or the manner in which such amounts are to be determined, respectively;
(15) if the amount payable upon acceleration of the Offered Securities is other
than the full principal amount, the portion of the principal amount payable upon
acceleration; (16) any provisions relating to the conversion of Offered
Securities into Securities of another series; (17) any provisions restricting
defeasance of the Offered Securities; (18) if any additional or special events
of default are applicable to the Offered Securities, the terms and conditions of
such events of default; (19) if the Offered Securities will be issued, in whole
or in part, in the form of one or more temporary or permanent Global Securities,
the identity of the depositary for such Global Securities and certain other
terms and conditions relating to the Global Securities; and (20) any other terms
of the Offered Securities and the Guarantees not inconsistent with the
provisions of the Indentures.
Unless otherwise indicated in the Prospectus Supplement in respect of which
this Prospectus is being delivered, principal of, premium, if any, and interest
on the Offered Securities (other than Offered Securities issued as Global
Securities) will be payable, and the Offered Securities (other than Offered
Securities issued as Global Securities) will be exchangeable and transferable at
the office or agency of Publishing in the City of New York maintained for such
purposes; provided, however, that payment of interest may be made at the option
of Publishing by check mailed to the Person entitled thereto as shown on the
security register.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Securities will be issued only in fully registered form without
coupons, in denominations of $1,000 or any integral multiple thereof. For
certain information about Offered Securities in global form, see "Global
Securities" below. No service charge will be made for any registration of
transfer, exchange or redemption of Offered Securities,
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except in certain circumstances for any tax or other governmental charge that
may be imposed in connection therewith.
GLOBAL SECURITIES
Offered Securities of any series may be issued, in whole or in part, in the
form of one or more Global Securities that will be deposited with a depositary
(the "Depositary") or with a nominee for a Depositary identified in the
Prospectus Supplement relating to such series. Unless and until it is exchanged
in whole or in part for Offered Securities in definitive registered form, a
Global Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any nominee to a
successor Depositary or a nominee of any successor.
The specific terms of the depositary arrangement with respect to any series
of Offered Securities to be represented by a Global Security will be described
in the Prospectus Supplement relating to such series. Publishing, however,
anticipates that the provisions set forth below generally will apply to such
depositary arrangements.
Upon the issuance of a Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Offered Securities represented by such Global Security to the accounts of
persons that have accounts with such Depositary ("participants"). The accounts
to be credited shall be designated by any underwriters or agents participating
in the distribution of such Offered Securities or by Publishing if the
Securities are offered and sold directly by Publishing. Ownership of beneficial
interest in a Global Security will be limited to participants or persons that
hold interests through participants, but Publishing has no obligation to any
persons that hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary
for such Global Security (with respect to interests of participants) or by
participants or persons that hold through participants (with respect to
interests of persons other than participants). The laws of some states require
that certain purchasers of securities take physical delivery of the securities
to definitive form. Such limits and laws may impair the ability to transfer
beneficial interest in a Global Security.
As long as the Depositary or its nominee is the registered owner of such
Global Security, the Depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the Offered Securities represented by the
Global Security for all purposes under the Indentures. Except as set forth
below, owners of beneficial interests in a Global Security will not be entitled
to have the Security represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such
Securities in definitive form and will not be considered the owners or holders
thereof under the Indentures.
Payments of principal (and premium, if any) and interest, if any, on
Offered Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to such Depositary or its nominee, as the
case may be, as the registered owner of such Global Security. Neither
Publishing, the Guarantor, the Trustee, any Paying Agent nor the Security
Registrar for such Security will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Publishing expects that the Depositary for any Offered Securities
represented by a Global Security, upon receipt of any payment of principal (and
premium, if any) or interest, if any, in respect of a permanent Global Security
will, except as provided below, immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security as shown on the records of the
Depositary. Publishing also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with the securities held for the accounts of customers registered in "street
names" and will be the responsibility of such participants.
If the Depositary for any Offered Securities represented by a Global
Security is at any time unwilling or unable to continue as Depositary and a
successor Depositary is not appointed by Publishing within 90 days,
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Publishing will issue Offered Securities in definitive form in exchange for such
Global Security. In addition, Publishing may at any time and in its sole
discretion determine not to have any of the Offered Securities of a series
represented by one or more Global Securities and, in such event, will issue in
exchange therefor Offered Securities of such a series. Further, if Publishing so
specifies with respect to Offered Securities of a series, an owner of a
beneficial interest in a Global Security representing Securities Offered
Securities of that series may, on terms acceptable to Publishing and the
Depositary for such Global Security receive Offered Securities of such series in
a definitive form. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in definitive form of
Offered Securities of the series represented by the Global Security equal in
principal amount to such beneficial interest and to have such Offered Securities
registered in its name. Securities of such series so issued in definitive form
will be issued in denominations, unless otherwise specified by Publishing, of
$1,000 and integral multiples thereof if the Offered Securities of such series
are denominated in United States dollars.
The Indentures will contain, among others, the following covenants, which
will apply to Publishing, the Restricted Subsidiaries and, in certain cases, the
Company. As set forth below the effect of many of the covenants will change once
both of The Telegraph and Southam are Restricted Subsidiaries.
CERTAIN COVENANTS WITH RESPECT TO THE SENIOR SECURITIES
Limitation on Indebtedness. (a) Publishing will not, and will not permit
any of its Restricted Subsidiaries to, Incur any Indebtedness (including any
Acquired Indebtedness but excluding any Permitted Indebtedness) except for (x)
Indebtedness of Publishing or (y) Indebtedness of a Restricted Subsidiary
constituting Acquired Indebtedness, Permitted Subsidiary Indebtedness or Foreign
Subsidiary Indebtedness, provided that, in the case of the foregoing clauses (x)
and (y), the Consolidated Cash Flow Ratio for Publishing and the Restricted
Subsidiaries for the four full fiscal quarters immediately preceding the
Incurrence of such Indebtedness taken as one period is not greater than 6.0:1.0.
In addition (and without limiting the foregoing requirement), unless both of The
Telegraph and Southam are Restricted Subsidiaries, Publishing shall not permit
any Restricted Subsidiary to Incur any Indebtedness other than Acquired
Indebtedness or Permitted Subsidiary Indebtedness. For purposes of determining
the Consolidated Cash Flow Ratio for any period, pro forma effect shall be given
to (i) the Incurrence of such Indebtedness and (if applicable) the application
of the net proceeds therefrom, including to refinance other Indebtedness, as if
such Indebtedness was Incurred, and the application of such proceeds occurred,
at the beginning of such four-quarter period; (ii) the Incurrence, repayment or
retirement of any other Indebtedness by Publishing and its Restricted
Subsidiaries since the first day of such four-quarter period as if such
Indebtedness was Incurred, repaid or retired at the beginning of such
four-quarter period; (iii) in the case of Acquired Indebtedness, the related
acquisition (as if such acquisition had been consummated on the first day of
such four-quarter period); and (iv) any acquisition or disposition by Publishing
and its Restricted Subsidiaries of any company or any business or any assets out
of the ordinary course of business, whether by merger, stock purchase or sale or
asset purchase or sale or any related repayment of Indebtedness, in each case
since the first day of such four-quarter period (as if such acquisition or
disposition had been consummated on the first day of such four-quarter period).
(b) Prior to September 1, 1997, neither Publishing nor any Restricted
Subsidiary will issue any Public Debt unless the aggregate principal amount (or
initial proceeds in the case of Public Debt sold with "original issue discount"
(within the meaning of Section 1273(a) of the Internal Revenue Code of 1986, as
amended)) of Public Debt so issued from the date of the Senior Indenture that is
pari passu with any Senior Securities does not exceed the aggregate principal
amount (or initial proceeds in the case of Public Debt sold with "original issue
discount") of Public Debt so issued from the date of the Senior Indenture that
is pari passu with or subordinated to the Senior Subordinated Securities.
(Section 10.08)
Limitation on Restricted Payments. (a) Publishing will not, and will not
permit any Restricted Subsidiary to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution or
payment on or in respect of Publishing's Capital Stock (including dividends
or distributions of the Capital Stock of any Subsidiary), or make any other
payment to the direct or indirect holders (in their capacities as such) of
Publishing's Capital Stock (other than (x) dividends or distributions
payable in shares of Publishing's Qualified
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Capital Stock or in options, warrants or other rights to acquire such
Qualified Capital Stock and (y) a dividend or distribution of up to $175
million payable to the Company, provided that, simultaneously or in
connection with such dividend or distribution, the Company contributes or
transfers, directly or indirectly, to Publishing all of the Capital Stock
of Hollinger Eastern then held by the Company; and provided further that
Hollinger Eastern then holds not less than 42% of the voting interest of
Southam);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any Capital Stock of Publishing or any Capital
Stock of any Affiliate of Publishing (other than Capital Stock of any
Wholly Owned Restricted Subsidiary (or, provided that both of The Telegraph
and Southam are Restricted Subsidiaries, Capital Stock of a Restricted
Subsidiary) or Capital Stock of a Person that is, or immediately following
such repurchase will become, a Wholly Owned Restricted Subsidiary (or,
provided that both of The Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary) or options, warrants or other rights
to acquire such Capital Stock;
(iii) make any principal payment on, or repurchase, redeem, defease,
retire or otherwise acquire for value, prior to any scheduled principal
payment, sinking fund payment or maturity, any Subordinated Indebtedness
(other than pursuant to clause (c) of the "Limitation on Sale of Assets"
covenant);
(iv) declare or pay any dividend or distribution on any Capital Stock
of any Restricted Subsidiary to any Person (other than (x) dividends and
distributions on Preferred Stock of Restricted Subsidiaries or Mirror
Preferred or (y) dividends and distributions made to any Person (other than
a controlling Affiliate of Publishing or an Affiliate of such Affiliate
(other than Publishing and any Restricted Subsidiary)) on a pro rata basis
consistent with the ownership interests in such Capital Stock to the owners
of such Capital Stock, except that, in the case of the Capital Stock of a
Restricted Subsidiary that is a Guarantor, (i) no Default or Event of
Default shall have occurred and be continuing; and (ii) no holders of any
other Indebtedness of Publishing or any Restricted Subsidiary shall have an
Acceleration Right);
(v) Incur, create or assume any guarantee of Indebtedness of any
Affiliate of Publishing (other than a Wholly Owned Restricted Subsidiary of
Publishing (or, provided that both of The Telegraph and Southam are
Restricted Subsidiaries, a Restricted Subsidiary of Publishing) except as
permitted by the "Limitation on Issuances of Guarantees of Indebtedness"
covenant;
(vi) make any Investment in any Person (other than any Permitted
Investments); or
(vii) designate any Restricted Subsidiary as an Unrestricted
Subsidiary;
(any of the payments described in paragraphs (i) through (vii) above, other than
any such action that is a Permitted Payment (as defined below), collectively,
"Restricted Payments") unless at the time of and after giving effect to the
proposed Restricted Payment (the amount of any such Restricted Payment, if other
than cash, as determined by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution), (1) no Default or Event of
Default shall have occurred and be continuing; (2) no holders of any other
Indebtedness of Publishing or any Restricted Subsidiary shall have an
Acceleration Right; (3) immediately before and immediately after giving effect
to such transaction on a pro forma basis, Publishing could Incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) under the provisions
described above under "Limitation on Indebtedness"; and (4) the aggregate amount
of all such Restricted Payments declared or made after the date of the Indenture
(provided that, in the case of a Restricted Payment by a Restricted Subsidiary,
such Restricted Payment is calculated for the purposes of this paragraph (4) by
multiplying the amount of the Restricted Payment by the percentage of
Publishing's common equity in such Restricted Subsidiary at the time of such
Restricted Payment but disregarding, in the case of Southam, common equity
interests which are pledged to secure the Southam-Linked Debentures) does not
exceed the sum of:
(A) 50% of the sum of (i) the aggregate cumulative Consolidated Net
Income of Publishing and its Restricted Subsidiaries accrued during the
period (treated as a single accounting period) beginning on the first day
of Publishing's fiscal quarter commencing prior to the date of the Senior
Indenture and ending on the last day of Publishing's last fiscal quarter
ending prior to the date of the Restricted Payment (or, if such aggregate
cumulative Consolidated Net Income shall be a loss, 100% of such loss
(treating a loss as a negative number)) and (ii) the aggregate cumulative
Amortization Expense of Publishing and
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its Restricted Subsidiaries accrued during the period (treated as a single
accounting period) beginning on the first day of Publishing's fiscal
quarter commencing prior to the date of the Indenture and ending on the
last day of Publishing's last fiscal quarter ending prior to the date of
the Restricted Payment;
(B) 50% of the aggregate cumulative cash dividends or distributions
received by Publishing and its Consolidated Restricted Subsidiaries from
any of Publishing's Unrestricted Subsidiaries during the period (treated as
a single accounting period) beginning on the first day of Publishing's
fiscal quarter commencing prior to the date of the Senior Indenture and
ending on the last day of Publishing's last fiscal quarter ending prior to
the date of the Restricted Payment; provided, however, that for purposes of
this clause (B), cash dividends and distributions shall not include,
without duplication, (x), prior to the time that Southam shall be a
Restricted Subsidiary, cash dividends received by Publishing from
Publishing's Unrestricted Subsidiaries not in excess of the Southam
Dividend Amount, (y) cash dividends or distributions received by Publishing
or any Wholly Owned Restricted Subsidiary in accordance with clause (vii)
of paragraph (b) of this "Limitation on Restricted Payments" covenant or
(z) dividends or distributions on any Argsub Preferred received by FDTH or
DTH;
(C) the aggregate Net Cash Proceeds received after the date of the
Senior Indenture by Publishing from the issuance or sale (other than to any
of its Restricted Subsidiaries) of its Qualified Capital Stock or any
options, warrants or rights to purchase such Qualified Capital Stock
(except, in each case, to the extent such proceeds are used to purchase,
redeem or otherwise retire Capital Stock, Subordinated Indebtedness or Pari
Passu Indebtedness as set forth below);
(D) the aggregate Net Cash Proceeds received after the date of the
Senior Indenture by Publishing (other than from any of its Restricted
Subsidiaries) upon the exercise of any options or warrants to purchase
Qualified Capital Stock of Publishing;
(E) the aggregate Net Cash Proceeds received after the date of the
Senior Indenture by Publishing (other than from any of its Subsidiaries)
from cash capital contributions made to Publishing (other than from the
proceeds of the Common Stock Offering);
(F) the aggregate amount by which any Indebtedness (other than
Permitted Indebtedness) of Publishing or any Restricted Subsidiary is
reduced after the date of the Senior Indenture as a result of the
conversion or exchange of debt securities or Redeemable Capital Stock of
Publishing that has been converted into or exchanged for Qualified Capital
Stock of Publishing to the extent such debt securities or Redeemable
Capital Stock were originally sold for cash plus the aggregate Net Cash
Proceeds received by Publishing at the time of any such conversion or
exchange; and
(G) $25,000,000.
(b) Notwithstanding the foregoing, and, in the case of clauses (ii)
through (viii) below, so long as (1) there is no Default or Event of Default
continuing and (2) no holders of any other Indebtedness of Publishing or any
Restricted Subsidiary have an Acceleration Right, the foregoing provisions will
not prohibit the following actions (clauses (i) through (x) being referred to as
"Permitted Payments"):
(i) the payment of any dividend or distribution within 60 days after
the date of declaration thereof, if at such date of declaration such
payment would be permitted by the provisions of paragraph (a) of this
section and such payment will be deemed to have been paid on such date of
declaration for purposes of the calculation required by paragraph (a) of
this covenant;
(ii) any repurchase, redemption or other acquisition or retirement of
any shares of Capital Stock of Publishing in exchange for (including any
such exchange pursuant to the exercise of a conversion right or privilege
in connection with which cash is paid in lieu of the issuance of fractional
shares or scrip), or out of the Net Cash Proceeds of a substantially
concurrent issue and sale for cash (other than to a Restricted Subsidiary)
of other Qualified Capital Stock of Publishing; provided that the Net Cash
Proceeds from the issuance of such shares of Qualified Capital Stock are
excluded from clauses 4(D) and (4)(E) of paragraph (a) of this covenant;
(iii) any repurchase, redemption, defeasance, retirement or
acquisition for value or payment of principal of any Subordinated
Indebtedness in exchange for, or out of the net proceeds of, a
substantially
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concurrent issuance and sale for cash (other than to any Restricted
Subsidiary of Publishing) of any Qualified Capital Stock of Publishing;
provided that the Net Cash Proceeds from the issuance of such Qualified
Capital Stock are excluded from clauses 4(D) and (4)(E) of paragraph (a) of
this section; and
(iv) the repurchase, redemption, defeasance, retirement, refinancing,
acquisition for value or payment of principal of any Subordinated
Indebtedness (other than Redeemable Capital Stock) (a "refinancing")
through the issuance of new Subordinated Indebtedness of Publishing;
provided that any such new Subordinated Indebtedness (1) shall be in a
principal amount that does not exceed the principal amount so refinanced
(or, if the subordinated Indebtedness so refinanced provides for an amount
less than the principal amount thereof to be due and payable upon a
declaration or acceleration thereof, then such lesser amount as of the date
of determination), plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of such refinanced
Indebtedness and any reasonable out-of-pocket expenses of Publishing
Incurred in connection with such refinancing; (2) has an Average Life to
Stated Maturity greater than the remaining Average Life to Stated Maturity
of the Securities; (3) has a Stated Maturity for its final scheduled
principal payment later than the Stated Maturity for the final scheduled
principal payment of the Securities; and (4) is expressly subordinated in
right of payment to the Securities at least to the same extent as the
Indebtedness to be refinanced;
(v) dividends paid to the Company after the date of the Senior
Indenture to the extent not in excess of the Southam Dividend Amount;
(vi) loans, advances, dividends or distributions by any Restricted
Subsidiary to Publishing or any Wholly Owned Restricted Subsidiary and by
FDTH or, to the extent it has received such funds, directly or indirectly
from FDTH, DTH or Publishing to the Company for the purpose of redeeming
shares of Series A Preferred Stock not exceeding in the aggregate any
payments made by Hollinger Inc. to FDTH pursuant to the provisions of the
HTH/FDTH Share Exchange Agreement;
(vii) loans, advances, dividends or distributions to the Company in
amounts not to exceed $1 million per year to permit the Company to
repurchase, redeem or otherwise acquire or retire any shares of its Capital
Stock from employees, former employees or their estates upon disability,
death, retirement or termination of employment;
(viii) tax payments pursuant to a Tax Sharing Agreement to the extent
that the aggregate amount of such payments do not exceed the aggregate
amount of the tax payments that Publishing and the Restricted Subsidiaries
would have been required to make if they alone constituted a single
consolidated tax group;
(ix) payments by Publishing or a Restricted Subsidiary in accordance
with the Scheme of Arrangement; and
(x) the issuance or redemption of or payment of distributions on
Mirror Preferred, but only to the extent Argsub Preferred is simultaneously
issued, redeemed or pays (or is deemed to pay) dividends, respectively, and
only so long as no cash is transferred in any such transaction, except for
cash payments in respect of certain Mirror Preferred made directly from
FDTH to DTH at the direction of Argsub.
For purposes of this "Limitation on Restricted Payments" covenant, if
the Board of Directors designates a Restricted Subsidiary as an Unrestricted
Subsidiary, or a Restricted Subsidiary is deemed to be so designated, a
"Restricted Payment" shall be deemed to have been made in an amount equal to the
fair value of the Investment of Publishing and its other Restricted Subsidiaries
in such Restricted Subsidiary as determined by the Board of Directors with the
concurrence of a majority of the Independent Directors (there being at least one
Independent Director), whose good faith determination shall be conclusive. If a
particular Restricted Payment involves a non-cash payment, including a
distribution of assets, then such Restricted Payment shall be deemed to be in an
amount equal to the fair market value of the non-cash portion of such Restricted
Payment as determined by the Board of Directors, whose good faith determination
shall be conclusive. (Section 10.09)
Limitation on Transactions with Affiliates. (a) Publishing will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or suffer to exist any transaction or series of related
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transactions (including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with any Affiliate of Publishing (other
than Publishing or a Wholly Owned Restricted Subsidiary or, if both of the
Telegraph and Southam are Restricted Subsidiaries, a Restricted Subsidiary)
unless (a) such transaction or series of related transactions is on terms that
are no less favorable to Publishing or such Restricted Subsidiary, as the case
may be, than would be available in a comparable transaction in arm's-length
dealings with an unrelated third party and (b) with respect to any transaction
or series of related transactions involving aggregate payments in excess of
$5,000,000, Publishing delivers an Officers' Certificate to the Trustee
certifying that such transaction or series of related transactions complies with
clause (a) above and such transaction or series of related transactions has been
approved by a majority of the Independent Directors of the Board of Directors;
provided that any transaction or series of related transactions otherwise
permitted under this paragraph (other than any transaction or series of related
transactions with respect to the making of any Permitted Investment pursuant to
clause (ix) of the definition of "Permitted Investment" or any Restricted
Payment permitted pursuant to the "Limitation on Restricted Payments" covenant
described above (other than those referred to in clause (vi) of paragraph (b)
thereof) pursuant to which Publishing or any Restricted Subsidiary shall receive
or render value exceeding $15,000,000 shall not be permitted unless, prior to
the consummation of any such transaction or series of related transactions,
Publishing shall have received an opinion, from an independent nationally
recognized investment banking firm or firm experienced in the appraisal or
similar review of similar types of transactions, that such transaction is fair
to Publishing from a financial point of view; provided further, that this
covenant shall not apply to (i) transactions or agreements as in effect or
securities outstanding on the date of the Senior Indenture (provided that any
amendment to any existing agreement (including the Services Agreement and the
Business Opportunities Agreement), and any transaction pursuant to the Business
Opportunities Agreement, shall require approval pursuant to this covenant;
notwithstanding the foregoing, any amendment to the Services Agreement or the
Business Opportunities Agreement shall require the approval of a majority of the
Independent Directors); (ii) directors' fees approved by the Board of Directors;
(iii) any employee benefit plan or arrangement entered into or made available to
officers or other employees of Publishing or the Restricted Subsidiaries in the
ordinary course of business; (iv) sales by Publishing and its Restricted
Subsidiaries of their products in the ordinary course of business on
arm's-length terms; (v) tax payments pursuant to a Tax Sharing Agreement to the
extent that the aggregate amount of such payments do not exceed the aggregate
amount of the tax payments that Publishing and the Restricted Subsidiaries would
have been required to make if they alone constituted a single consolidated tax
group; (vi) loans, advances, dividends or distributions by FDTH, DTH or
Publishing to the Company in amounts and for the purpose permitted by clauses
(v) and (vii) of paragraph (b) of the "Limitation on Restricted Payments"
covenant described above; (vii) payments made to Hollinger Inc. pursuant to the
Services Agreement that constitute the reimbursement for the fair value (as
determined by a majority of the Independent Directors serving on an Independent
Committee) of services received by Publishing or a Restricted Subsidiary
consistent with past practices, and (viii) the issuance or redemption,
retraction or transfer of or payment of dividends, distributions or other
amounts on Mirror Preferred by DTH or FDTH to an Argsub, but only to the extent
that such Argsub simultaneously, as the case may be, issues or redeems or pays
dividends, distributions or other amounts (or is deemed to have taken any such
action) to DTH or FDTH, in each case in equivalent amounts. (Section 10.10)
Limitation on Liens. (a) Publishing will not, and will not permit any
Restricted Subsidiary to Incur, affirm or suffer to exist any Lien of any kind
securing any pari passu Public Debt or any Subordinated Indebtedness of
Publishing (including any assumption, guarantee or other liability with respect
thereto by any Restricted Subsidiary) upon any property or assets (including any
intercompany notes) of Publishing or any Restricted Subsidiary owned on the date
of the Indenture or acquired after the date of the Indenture, or any income or
profits therefrom, unless (i) in the case of any Lien securing pari passu Public
Debt, the Senior Securities are secured by a Lien on such property, assets or
proceeds that is senior in priority to or pari passu with such Lien and (ii) in
the case of any Lien securing Subordinated Indebtedness of Publishing, the
Securities are secured by a Lien on such property, assets or proceeds that is
senior in priority to such Lien, except for (x) any Lien securing Acquired
Indebtedness created prior to (and not created in connection with, or in
contemplation of) the Issuance of such pari passu Public Debt or the Incurrence
of such Subordinated Indebtedness by Publishing or any Restricted Subsidiary, in
each case which Indebtedness is permitted under
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the provisions of the "Limitation on Indebtedness" covenant described above
(provided that any such Lien only extends to the assets that were subject to
such Lien securing such Acquired Indebtedness prior to the related acquisition
by Publishing or its Restricted Subsidiaries) and (y) any Lien securing
Indebtedness owing to Publishing or a Wholly Owned Restricted Subsidiary by a
Restricted Subsidiary.
(b) Notwithstanding the foregoing, any security interest granted by
Publishing or any Restricted Subsidiary to secure the Senior Securities created
pursuant to paragraph (a) above shall provide by its terms that such security
interest shall be automatically and unconditionally released and discharged upon
the release by the holders of the Indebtedness of Publishing or any Restricted
Subsidiary described in paragraph (a) above of their security interest
(including any deemed release upon payment in full of all obligations under such
Indebtedness), at a time when (A) no pari passu Public Debt or Subordinated
Indebtedness of Publishing or any Restricted Subsidiary has been secured by such
property or assets of Publishing or any such Restricted Subsidiary or (B) the
holders of all such pari passu Public Debt and Subordinated Indebtedness which
is secured by such property or assets of Publishing or any such Restricted
Subsidiary also release their security interest in such property or assets
(including any deemed release upon payment in full of all obligations under such
Indebtedness). (Section 10.11)
Limitation on Issuances of Guarantees of Indebtedness. (a) Publishing will
not permit any Restricted Subsidiary, directly or indirectly, to guarantee,
assume or in any other manner become liable with respect to any Indebtedness of
Publishing (other than pursuant to the New Bank Credit Facility) unless such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to the Senior Indenture providing for a senior guarantee of the Senior
Securities and if such Indebtedness of Publishing is by its terms expressly
subordinated to the Senior Securities, any such assumption, guarantee or other
liability of such Restricted Subsidiary with respect to such Indebtedness shall
be subordinated to such Restricted Subsidiary's guarantee to the same extent as
such Indebtedness is subordinated to the Senior Securities.
(b) Notwithstanding the foregoing, any guarantee by a Restricted Subsidiary
of the Senior Securities that is provided pursuant to the foregoing paragraph or
under the provisions of the "Limitation on Issuance and Sale of Capital Stock of
Restricted Subsidiaries" covenant described below may provide by its terms that
it shall be automatically and unconditionally released and discharged (i) upon
any sale, exchange or transfer, to any Person not an Affiliate of Publishing, of
all of Publishing's Capital Stock in, or all or substantially all the assets of,
such Restricted Subsidiary, which sale, exchange or transfer is in compliance
with the Indenture, (ii) if the Restricted Subsidiary issuing such guarantee
ceases to be a Restricted Subsidiary or (iii) upon the release by the holders of
the Indebtedness of Publishing described in paragraph (a) above of their
Guarantee by such Restricted Subsidiary (including any deemed release upon
payment in full of all obligations under such Indebtedness), at a time when (A)
no Indebtedness of Publishing or any Restricted Subsidiary has been guaranteed
by such Restricted Subsidiary or (B) the holders of all such other Indebtedness
which is guaranteed by such Restricted Subsidiary also release their Guarantee
by such Restricted Subsidiary (including any deemed release upon payment in full
of all obligations under such Indebtedness). (Section 10.12)
Limitation on Sale of Assets. (a) Publishing will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, consummate an
Asset Sale unless (i) at least 80% of the proceeds from such Asset Sale are
received in cash (provided that the amount of (A) any Pari Passu Indebtedness or
Indebtedness of such Restricted Subsidiary that is pari passu with any guarantee
of the Senior Securities (as shown on Publishing's or such Restricted
Subsidiaries' most recent balance sheet or in the notes thereto) of Publishing
or any such Restricted Subsidiary that is assumed by the transferee of any asset
in connection with any Asset Sale and (B) any deferred payment obligations
received by Publishing or any such Restricted Subsidiary as proceeds of an Asset
Sale that are concurrently with the Asset Sale converted into cash without
recourse to Publishing or any of its Restricted Subsidiaries shall be deemed to
be cash for purposes of this provision; provided further that, for purposes of
this clause (i), "cash" shall include any cash proceeds received from the sale
of securities received in an Asset Sale as long as at the time of such Asset
Sale, Publishing or its Restricted Subsidiary, as applicable, has entered into a
legally binding agreement for the sale of such securities and such securities
are sold within 90 days of such Asset Sale; and provided further that this
clause (i) shall not apply to (x) Newspapers Businesses received by Publishing
or a Restricted Subsidiary
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from the transferee as consideration for an Asset Sale (an "Asset Swap") so long
as, immediately before and immediately after giving effect to such transaction
on a pro forma basis, Publishing could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under the provisions described above under
"Limitation on Indebtedness," (y) a CST Real Estate Transaction or (z) a
Permitted Real Estate Sale) and (ii) Publishing or such Restricted Subsidiary
receives consideration at the time of such Asset Sale at least equal to the fair
market value of the shares or assets sold (as determined by the Board of
Directors of Publishing and evidenced by a board resolution). The value of any
properties or assets (other than cash) received pursuant to an Asset Sale shall
be determined by the Board of Directors of Publishing and evidenced by a Board
Resolution; provided that if the value of the asset which is the subject of the
Asset Sale is in excess of $25,000,000, the value of the properties or assets
received shall be determined by an independent nationally recognized investment
banking firm or firm experienced in the appraisal or similar review of similar
types of assets (provided that for purposes of this sentence, any CST Real
Estate Transaction shall be deemed to involve an asset whose value exceeds
$25,000,000).
(b) If all or a portion of the Net Cash Proceeds of any Asset Sale is not
applied to permanently repay or otherwise permanently retire any Pari Passu
Indebtedness then outstanding as permitted or required by the terms thereof, or
if no such Pari Passu Indebtedness is then outstanding, Publishing or a
Restricted Subsidiary, as the case may be, may, within 12 months of the Asset
Sale, invest the Net Cash Proceeds in properties and assets that (as determined
by the Board of Directors) replace the properties and assets that were the
subject of the Asset Sale or in properties and assets that will be used in the
businesses of Publishing or its Restricted Subsidiaries existing on the date of
the Senior Indenture or in businesses reasonably related thereto. The amount of
such Net Cash Proceeds neither used to permanently repay or prepay Pari Passu
Indebtedness nor used or invested as set forth in this paragraph constitutes
"Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$20,000,000, Publishing will apply the Excess Proceeds to the repayment of the
Senior Securities and any Pari Passu Indebtedness required to be repurchased
under the instrument governing such Pari Passu Indebtedness as follows: (i)
Publishing will make an offer to purchase (an "Offer") from all holders of the
Senior Securities in accordance with the procedures set forth in the Senior
Indenture in the maximum principal amount (expressed as a multiple of $1,000) of
Senior Securities that may be purchased out of an amount (the "Securities
Amount") equal to the product of such Excess Proceeds multiplied by a fraction,
the numerator of which is the outstanding principal amount of the Senior
Securities, and the denominator of which is the sum of the outstanding principal
amount of the Senior Securities and such Pari Passu Indebtedness (subject to
proration in the event such amount is less than the aggregate Offered Price (as
defined herein) of all Securities tendered) and (ii) to the extent required by
such Pari Passu Indebtedness to permanently reduce the principal amount of such
Pari Passu Indebtedness, Publishing will make an offer to purchase or otherwise
repurchase or redeem Pari Passu Indebtedness (a "Pari Passu Offer") in an amount
(the "Pari Passu Debt Amount") equal to the excess of the Excess Proceeds over
the Securities Amount; provided that in no event will the Pari Passu Debt Amount
exceed the principal amount of such Pari Passu Indebtedness plus the amount of
any premium required to be paid to repurchase such Pari Passu Indebtedness. The
offer price shall be payable in cash in an amount equal to 100% of the principal
amount of the Senior Securities plus accrued and unpaid interest, if any, to the
date (the "Purchase Date") such Offer is consummated (the "Offered Price"), in
accordance with the procedures set forth in the Senior Indenture. To the extent
that the aggregate Offered Price of the Senior Securities tendered pursuant to
the Offer is less than the Securities Amount relating thereto or the aggregate
amount of Pari Passu Indebtedness that is purchased is less than the Pari Passu
Debt Amount (the amount of such shortfall, if any, constituting a "Deficiency"),
Publishing may then (i)(a) to the extent required by the Senior Subordinated
Securities Indenture, purchase Senior Subordinated Securities tendered pursuant
to an offer by Publishing for the Senior Subordinated Securities (the "Senior
Subordinated Securities Offer") at a purchase price of 100% of their principal
amount plus accrued interest to the date of purchase in accordance with the
procedures set forth in the Senior Subordinated Securities Indenture and (b) to
the extent required by the terms of any other senior subordinated Indebtedness
(other than the Senior Subordinated Securities) to permanently reduce the
principal amount of such other senior subordinated Indebtedness, make an offer
to purchase or otherwise repurchase or redeem such other senior subordinated
Indebtedness, or (ii) use such Deficiency in the business of Publishing and its
Restricted Subsidiaries. Upon completion of the purchase of
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all Securities tendered pursuant to an Offer and repurchase of the Pari Passu
Indebtedness pursuant to a Pari Passu Offer, the amount of Excess Proceeds, if
any, shall be reset at zero.
(d) Whenever the aggregate amount of Excess Proceeds received by Publishing
exceeds $20,000,000, such Excess Proceeds will, prior to the purchase of Senior
Securities, Pari Passu Indebtedness or Senior Subordinated Securities or
Indebtedness described in paragraph (c) above, be set aside by Publishing in a
separate account pending (i) deposit with the depository or a paying agent of
the amount required to purchase the Senior Securities or Pari Passu Indebtedness
tendered in an offer or Pari Passu Offer, (ii) delivery by Publishing of the
Offered Price to the holders of the Senior Securities or Pari Passu Indebtedness
tendered in an Offer or a Pari Passu Offer and (iii) application, as set forth
above, of Excess Proceeds in the business of Publishing and its Restricted
Subsidiaries. Such Excess Proceeds may be invested in Temporary Cash
Investments; provided that the maturity date of any such investment made after
the amount of Excess Proceeds equals or exceeds $20,000,000 shall not be later
than the Purchase Date. Publishing shall be entitled to any interest or
dividends accrued, earned or paid on such Temporary Cash Investments; provided
that Publishing will not be entitled to such interest and will not withdraw such
interest from the separate account if an Event of Default has occurred and is
continuing.
(e) If Publishing becomes obligated to make an Offer pursuant to paragraph
(c) above, the Senior Securities will be purchased by Publishing, at the option
of the holder thereof, in whole or in part in integral multiples of $1,000, on a
date that is not earlier than 30 days and not later than 60 days from the date
the notice is given to holders, or such later date as may be necessary for
Publishing to comply with the requirements under the Exchange Act, subject to
proration in the event the Securities Amount is less than the aggregate Offered
Price of all Senior Securities tendered.
(f) Publishing will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer.
(g) Publishing will not, and will not permit any Subsidiary to, create or
permit to exist or become effective any restriction (other than restrictions
existing under (i) Indebtedness as in effect on the date of the Indenture as
such Indebtedness may be refinanced form time to time or (ii) any Pari Passu
Indebtedness existing on the date of the Senior Indenture or thereafter;
provided, in each case, that such restrictions are no less favorable to the
holders of Senior Securities than those existing on the date of the Indenture)
that would expressly impair the ability of Publishing to make an Offer to
purchase the Senior Securities or, if such Offer is made, to pay for the Senior
Securities tendered for purchase. (Section 10.15)
Purchase of Senior Securities upon a Change of Control. If a Change of
Control occurs at any time, then each holder with respect to Senior Securities
of any Series will have the right to require that Publishing purchase such
holder's Senior Securities in whole or in part in integral multiples of $1,000,
at a purchase price (the "Change of Control Purchase Price") in cash in an
amount equal to 101% of the principal amount of such Senior Securities, plus
accrued and unpaid interest, if any, to the date of purchase (the "Change of
Control Purchase Date"), pursuant to the offer described below (the "Change of
Control Offer") and the other procedures set forth in the Senior Indenture.
Within 30 days following any Change of Control, Publishing shall notify the
Trustee thereof and give written notice of such Change of Control to each holder
with respect to Senior Securities of any Series, by first-class mail, postage
prepaid, at his address appearing in the security register, stating, among other
things, (i) the purchase price, (ii) the Change of Control Purchase Date, which
shall be a Business Day no earlier than 30 days nor later than 60 days from the
date such notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act, (iii) that any Senior Security not tendered
will continue to accrue interest, (iv) that, unless Publishing defaults in the
payment of the purchase price, any Senior Securities accepted for payment
pursuant to the Change of Control Offer will cease to accrue interest after the
Change of Control Purchase Date and (v) certain other procedures that a holder
of Senior Securities must follow to accept a Change of Control Offer or to
withdraw such acceptance.
If a Change of Control Offer is made, there can be no assurance that
Publishing will have available funds sufficient to pay the Change of Control
Purchase Price for any or all of the Senior Securities that might be delivered
by holders of the Senior Securities seeking to accept the Change of Control
Offer and, accordingly,
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none of the holders of the Senior Securities may receive the Change of Control
Purchase Price for their Senior Securities in the event of a Change of Control.
The failure of Publishing to make or consummate the Change of Control Offer or
pay the Change of Control Purchase Price when due will give the Trustee and the
holders of the Senior Securities the rights described below under "Events of
Default."
The existence of a holder's right to require Publishing to repurchase such
holder's Senior Securities upon a Change of Control may deter a third party from
acquiring Publishing in a transaction which constitutes a Change of Control.
The provisions of the Senior Indenture may not afford holders of Senior
Securities the right to require Publishing to repurchase the Senior Securities
in the event of a highly leveraged transaction or certain transactions with
Publishing's management or its Affiliates or the management of the Company or
Hollinger Inc. or their Affiliates, including a reorganization, restructuring,
merger or similar transaction (including, in certain circumstances, an
acquisition of Publishing by its management or affiliates) involving Publishing
that may adversely affect holders of the Senior Securities, if such transaction
is not a transaction defined as a Change of Control. Reference is made to
"Certain Definitions" for the definition of "Change of Control." A transaction
involving Publishing's management or its Affiliates or the management of the
Company or Hollinger Inc. or their Affiliates, or a transaction involving a
recapitalization of Publishing, may result in a Change of Control if it is the
type of transaction specified by such definition.
Publishing will comply with the applicable tender offer rules, including
Rule 14e-1 under the Exchange Act, and any other applicable securities laws or
regulations in connection with a Change of Control Offer.
Publishing shall not, and shall not permit any Subsidiary to, create or
permit to exist or become effective any restriction (other than restrictions
existing under (i) Indebtedness as in effect on the date of the Senior Indenture
as such Indebtedness may be refinanced from time to time, provided that such
restrictions are no less favorable to the Holders than those existing on the
date of the Senior Indenture) that would expressly impair the ability of
Publishing to make a Change of Control Offer to purchase the Senior Securities
or, if such Change of Control Offer is made, to pay for the Senior Securities
tendered for purchase. (Section 10.14)
Limitation on Issuance and Sale of Capital Stock of Restricted
Subsidiaries. (a) Until such time as both of The Telegraph and Southam are
Restricted Subsidiaries, Publishing will not permit (i) any Restricted
subsidiary to issue any Capital Stock (other than to Publishing or any Wholly
Owned Restricted Subsidiary) or (ii) any Person (other than Publishing or a
Wholly Owned Restricted Subsidiary) to acquire any Capital Stock of any
Restricted Subsidiary form Publishing or any Restricted Subsidiary, except upon
the sale of all of the outstanding Capital Stock of such Restricted Subsidiary
owned by Publishing and the designation of such Subsidiary as an Unrestricted
Subsidiary; provided, however, that Publishing or a Restricted Subsidiary may
issue or sell common stock of a Restricted Subsidiary to a Person that is not an
Affiliate of Publishing so long as, on or prior to the consummation of such
issuance or sale, such Restricted Subsidiary issues and delivers a supplemental
indenture to the Senior Indenture providing for the guarantee of the Senior
Securities, which guarantee shall be senior to any Subordinated Indebtedness of
such Restricted Subsidiary (and in the case of any Indebtedness of such
Restricted Subsidiary that constitutes a guarantee of Subordinated Indebtedness
of Publishing, the terms of such subordination shall be at least as favorable to
the holders of the Senior Securities as the terms under which the related
Subordinated Indebtedness of Publishing is subordinated to the Senior
Securities); and
(b) On or after the time that both Southam and The Telegraph are Restricted
Subsidiaries, (i) without limiting the requirements of the "Limitation on Sale
of Assets" covenant described above, in the event that (x) Publishing or a
Restricted Subsidiary issues or sells (other than to a Restricted Subsidiary)
Capital Stock of a Restricted Subsidiary (1) that was a Subsidiary on February
1, 1997 (which, for the purposes of this clause (1), is deemed to include
Southam and Hollinger Eastern), (2) any substantial portion of the operating
assets of which were held by a Subsidiary on February 1, 1997 and were
generating material revenue and cash flows on such date, or (3) any substantial
portion of the operating assets of which consist of assets that are acquired by
Publishing or a Restricted Subsidiary pursuant to the Hollinger Inc. Transaction
and (y) such issuance or sale involves less than 100% of the Capital Stock of
such Restricted Subsidiary held by Publishing and the Restricted Subsidiaries at
the time of such issuance or sale, then (1) the Net Cash Proceeds of such
issuance or sale shall be applied to permanently repay or otherwise permanently
retire any Senior Securities or
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Pari Passu Indebtedness then outstanding, as permitted or required by the terms
thereof, and (2) to the extent not so applied, may be applied to repay or retire
other Indebtedness or otherwise used in the Company's business; provided that
the foregoing clause (i) shall not apply to any new issuance of Capital Stock by
Southam as long as (a) Southam is a Public Entity at the time of such issuance;
(b) neither Publishing nor any other Restricted Subsidiary has at any time after
February 1, 1997 sold any assets and contributed, directly or indirectly, the
proceeds therefrom to Southam; and (c) neither Publishing nor any other
Restricted Subsidiary has at any time after February 1, 1997 contributed,
directly or indirectly, any Newspaper Businesses to Southam other than those
Newspaper Businesses acquired in the Hollinger Inc. Transaction; and (ii) if any
issuance of Capital Stock by a Restricted Subsidiary or sale or disposition of
Capital Stock of a Restricted Subsidiary results in a Restricted Subsidiary
ceasing to qualify as a Subsidiary, such transaction would be deemed, for
purposes of the "Limitation on Restricted Payments" covenant described above, to
constitute the designation of such former Restricted Subsidiary as an
Unrestricted Subsidiary. (Section 10.15)
Limitation on Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries. Publishing will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distribution on its
Capital Stock to Publishing or any other Restricted Subsidiary, (b) pay any
Indebtedness owed to Publishing or any Restricted Subsidiary, (c) make any
Investment in Publishing or (d) transfer any of its properties or assets to
Publishing or any Restricted Subsidiary, except (i) any encumbrance or
restriction pursuant to or in connection with the New Bank Credit Facility or
the FDTH Credit Facility, each as in effect on the date such Subsidiary becomes
a Restricted Subsidiary or any other agreement in effect on the date of the
Senior Indenture (including the AP-91 Senior Notes), (ii) any encumbrance or
restriction, with respect to a Restricted Subsidiary that is not a Restricted
Subsidiary of Publishing on the date of the Senior Indenture, in existence at
the time such Person becomes a Restricted Subsidiary of Publishing and not
Incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary, (iii) any encumbrance or restriction pursuant to or in
connection with documents existing or securing any Foreign Subsidiary
Indebtedness that is not materially more restrictive than the terms of any such
restrictions existing on the date of the Senior Indenture or the date such
Subsidiary becomes a Restricted Subsidiary, as determined in good faith by an
officer of Publishing, (iv) encumbrances or restrictions entered into by Southam
in connection with Indebtedness of Southam Incurred at a time when Southam is a
Public Entity, (v) encumbrances or restrictions contained in the terms of any
Mirror Preferred, provided that such Mirror Preferred continues to qualify as
such under the definition thereof, (vi) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of
Publishing or any Restricted Subsidiary and (vii) any encumbrance or restriction
existing under any agreement that extends, renews, refinances or replaces the
agreements containing the encumbrances or restrictions in the foregoing clauses
(i), (ii) and (iii) (other than the covenants in the AP-91 Senior Notes),
provided that the terms and conditions of any such encumbrances or restrictions
are not materially less favorable to the holders of the Securities than those
under or pursuant to the agreement evidencing the Indebtedness so extended,
renewed, refinanced or replaced. (Section 10.16)
Provision of Financial Statements. Whether or not the Company is subject
to Section 13(a) or 15(d) of the Exchange Act, it will, to the extent permitted
under the Exchange Act, file with the Commission the annual reports, quarterly
reports and other documents that it would have been required to file with the
Commission pursuant to such Sections 13(a) or 15(d) of the Exchange Act,
including any "summarized information" or other information relating to
Publishing as may be required by Regulation S-X under the Exchange Act or by the
Commission, if it were so subject, such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates") by
which it would have been required so to file such documents if it were so
subject. The Company will in any event (x) within 15 days of each Required
Filing Date (i) transmit by mail to all holders of Senior Securities, as their
names and addresses appear in the security register, without cost to such
holders of Senior Securities and (ii) file with the Trustee copies of the annual
reports, quarterly reports and other documents which the Company would have been
required to file with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act if it were subject to such Sections and (y) if filing such
documents by the Company with the Commission is not permitted under the Exchange
Act, promptly upon written request and payment of the reasonable cost of
duplication and delivery,
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supply copies of such documents to any prospective holder of Senior Securities
at Publishing's cost. (Section 10.17)
Limitation on the Designation of Additional Restricted or Unrestricted
Subsidiaries. (a) The Board of Directors may designate any Restricted
Subsidiary as an Unrestricted Subsidiary if (i) such action is in compliance
with the "Limitation on Restricted Payments" covenant described above and (ii)
such action complies with the definition of "Unrestricted Subsidiaries."
(b) The Board of Directors may designate any Unrestricted Subsidiary or any
Person that is to become a Restricted Subsidiary as a Restricted Subsidiary if
immediately after giving effect to such action (and treating any Acquired
Indebtedness as having been incurred at the time of such action), Publishing
could have incurred at least $1.00 of additional Indebtedness pursuant to the
"Limitation on Indebtedness" covenant described above. (Section 10.20)
Additional Covenants. The Indenture also contains covenants with respect
to the following matters: (i) payment of principal, premium and interest; (ii)
maintenance of an office or agency in The City of New York; (iii) arrangements
regarding the handling of money held in trust; (iv) maintenance of corporate
existence; (v) payment of taxes and other claims; (vi) maintenance of
properties; (vii) maintenance of insurance; and (viii) statement by officers as
to default.
CERTAIN COVENANTS WITH RESPECT TO THE SENIOR SUBORDINATED SECURITIES
Limitation on Indebtedness. (a) Publishing will not, and will not permit
any of its Restricted Subsidiaries to, Incur any Indebtedness (including any
Acquired Indebtedness but excluding any Permitted Indebtedness) except for (x)
Indebtedness of Publishing or (y) Indebtedness of a Restricted Subsidiary
constituting Acquired Indebtedness, Permitted Subsidiary Indebtedness or Foreign
Subsidiary Indebtedness, provided that, in the case of the foregoing clauses (x)
and (y), the Consolidated Cash Flow Ratio for Publishing and the Restricted
Subsidiaries for the four full fiscal quarters immediately preceding the
Incurrence of such Indebtedness taken as one period is not greater than 6.0:1.0.
In addition (and without limiting the foregoing requirement), unless both of The
Telegraph and Southam are Restricted Subsidiaries, Publishing shall not permit
any Restricted Subsidiary to Incur any Indebtedness other than Acquired
Indebtedness or Permitted Subsidiary Indebtedness. For purposes of determining
the Consolidated Cash Flow Ratio for any period, pro forma effect shall be given
to (i) the Incurrence of such Indebtedness and (if applicable) the application
of the net proceeds therefrom, including to refinance other Indebtedness, as if
such Indebtedness was Incurred, and the application of such proceeds occurred,
at the beginning of such four-quarter period; (ii) the Incurrence, repayment or
retirement of any other Indebtedness by Publishing and its Restricted
Subsidiaries since the first day of such four-quarter period as if such
Indebtedness was Incurred, repaid or retired at the beginning of such
four-quarter period; (iii) in the case of Acquired Indebtedness, the related
acquisition (as if such acquisition had been consummated on the first day of
such four-quarter period); and (iv) any acquisition or disposition by Publishing
and its Restricted Subsidiaries of any company or any business or any assets out
of the ordinary course of business, whether by merger, stock purchase or sale or
asset purchase or sale or any related repayment of Indebtedness, in each case
since the first day of such four-quarter period (as if such acquisition or
disposition had been consummated on the first day of such four-quarter period).
(b) Prior to September 1, 1997, neither Publishing nor any Restricted
Subsidiary will issue any Public Debt, unless the aggregate principal amount (or
initial proceeds in the case of Public Debt sold with "original issue discount"
(within the meaning of Section 1273(a) of the Internal Revenue Code of 1986, as
amended)) of Public Debt so issued since the date of the Senior Subordinated
Indenture that is Senior Indebtedness does not exceed the aggregate principal
amount (or initial proceeds in the case of Public Debt sold with "original issue
discount") of Public Debt so issued since the date of the Senior Subordinated
Indenture that is pari passu with or subordinated to the 9 1/4% Notes and any
Senior Subordinated Securities. (Section 10.08)
Limitation on Restricted Payments. (a) Publishing will not, and will not
permit any Restricted Subsidiary to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution or
payment on or in respect of Publishing's Capital Stock (including dividends
or distributions of the Capital Stock of any Subsidiary), or make any other
payment to the direct or indirect holders (in their capacities as such) of
Publishing's
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Capital Stock (other than (x) dividends or distributions payable in shares
of Publishing's Qualified Capital Stock or in options, warrants or other
rights to acquire such Qualified Capital Stock and (y) a dividend or
distribution of up to $175 million payable to International; provided that,
simultaneously or in connection with such dividend or distribution,
International contributes or transfers, directly or indirectly, to
Publishing all of the Capital Stock of Hollinger Eastern then held by
International; and provided further that Hollinger Eastern then holds not
less than 42% of the voting interest of Southam);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any Capital Stock of Publishing or any Capital
Stock of any Affiliate of Publishing (other than Capital Stock of any
Wholly Owned Restricted Subsidiary (or, provided that both of The Telegraph
and Southam are Restricted Subsidiaries, Capital Stock of a Restricted
Subsidiary) or Capital Stock of a Person that is, or immediately following
such repurchase will become, a Wholly Owned Restricted Subsidiary (or,
provided that both of The Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary)), or options, warrants or other
rights to acquire such Capital Stock;
(iii) make any principal payment on, or repurchase, redeem, defease,
retire or otherwise acquire for value, prior to any scheduled principal
payment, sinking fund payment or maturity, any Subordinated Indebtedness;
(iv) declare or pay any dividend or distribution on any Capital Stock
of any Restricted Subsidiary to any Person (other than (x) dividends and
distributions on Preferred Stock of Restricted Subsidiaries or Mirror
Preferred or (y) dividends and distributions made to any Person (other than
a controlling Affiliate of Publishing or an Affiliate of such Affiliate
(other than Publishing and any Restricted Subsidiary)) on a pro rata basis
consistent with the ownership interests in such Capital Stock to the owners
of such Capital Stock, except that, in the case of the Capital Stock of a
Restricted Subsidiary that is a Guarantor, (i) no Default or Event of
Default shall have occurred and be continuing; and (ii) no holders of any
other Indebtedness of Publishing or any Restricted Subsidiary shall have an
Acceleration Right);
(v) Incur, create or assume any guarantee of Indebtedness of any
Affiliate of Publishing (other than a Wholly Owned Restricted Subsidiary of
Publishing (or, provided that both of The Telegraph and Southam are
Restricted Subsidiaries, a Restricted Subsidiary of Publishing) except as
permitted by the "Limitation on Issuances of Guarantees of Indebtedness"
covenant described below;
(vi) make any Investment in any Person (other than any Permitted
Investments); or
(vii) designate any Restricted Subsidiary as an Unrestricted
Subsidiary;
(any of the payments described in paragraphs (i) through (vii) above, other than
any such action that is a Permitted Payment (as defined below), collectively,
"Restricted Payments") unless at the time of and after giving effect to the
proposed Restricted Payment (the amount of any such Restricted Payment, if other
than cash, as determined by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution), (1) no Default or Event of
Default shall have occurred and be continuing; (2) no holders of any other
Indebtedness of Publishing or any Restricted Subsidiary shall have an
Acceleration Right; (3) immediately before and immediately after giving effect
to such transaction on a pro forma basis, Publishing could incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) under the provisions
described under the "Limitation on Indebtedness" covenant and (4) the aggregate
amount of all such Restricted Payments declared or made after the date of the
Senior Subordinated Indenture (provided that, in the case of a Restricted
Payment by a Restricted Subsidiary, such Restricted Payment is calculated for
the purposes of this paragraph (4) by multiplying the amount of the Restricted
Payment by the percentage of Publishing's common equity interest in such
Restricted Subsidiary at the time of such Restricted Payment but disregarding,
in the case of Southam, common equity interests which are pledged to secure the
Southam-Linked Debentures) does not exceed the sum of:
(A) 50% of the sum of (i) the aggregate cumulative Consolidated Net
Income of Publishing and its Restricted Subsidiaries accrued during the
period (treated as a single accounting period) beginning on the first day
of Publishing's fiscal quarter commencing prior to the date of the Senior
Subordinated Indenture and ending on the last day of Publishing's last
fiscal quarter ending prior to the date of the Restricted Payment (or, if
such aggregate cumulative Consolidated Net Income shall be a loss, 100% of
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such loss (treating a loss as a negative number)) and (ii) the aggregate
cumulative Amortization Expense of Publishing and its Restricted
Subsidiaries accrued during the period (treated as a single accounting
period) beginning on the first day of Publishing's fiscal quarter
commencing prior to the date of the Indenture and ending on the last day of
Publishing's last fiscal quarter ending prior to the date of the Restricted
Payment;
(B) 50% of the aggregate cumulative cash dividends or distributions
received by Publishing and its Consolidated Restricted Subsidiaries from
any of Publishing's Unrestricted Subsidiaries during the period (treated as
a single accounting period) beginning on the first day of Publishing's
fiscal quarter commencing prior to the date of the Senior Subordinated
Indenture and ending on the last day of Publishing's last fiscal quarter
ending prior to the date of the Restricted Payment; provided, however, that
for purposes of this clause (B), cash dividends and distributions shall not
include, without duplication, (x), prior to the time that Southam shall be
a Restricted Subsidiary, cash dividends received by Publishing from
Publishing's Unrestricted Subsidiaries not in excess of the Southam
Dividend Amount, (y) cash dividends or distributions received by Publishing
or any Wholly Owned Restricted Subsidiary in accordance with clause (vii)
of paragraph (b) of this "Limitation on Restricted Payments" covenant or
(z) dividends or distributions on any Argsub Preferred received by FDTH or
DTH;
(C) the aggregate Net Cash Proceeds received after the date of the
Senior Subordinated Indenture by Publishing from the issuance or sale
(other than to any of its Restricted Subsidiaries) of its Qualified Capital
Stock or any options, warrants or rights to purchase such Qualified Capital
Stock (except, in each case, to the extent such proceeds are used to
purchase, redeem or otherwise retire Capital Stock, Subordinated
Indebtedness or Pari Passu Indebtedness as set forth below);
(D) the aggregate Net Cash Proceeds received after the date of the
Senior Subordinated Indenture by Publishing (other than from any of its
Restricted Subsidiaries) upon the exercise of any options or warrants to
purchase Qualified Capital Stock of Publishing;
(E) the aggregate Net Cash Proceeds received after the date of the
Senior Subordinated Indenture by Publishing (other than from any of its
Subsidiaries) from cash capital contributions made to Publishing (other
than from the proceeds of the Common Stock Offering);
(F) the aggregate amount by which any Indebtedness (other than
Permitted Indebtedness) of Publishing or any Restricted Subsidiary is
reduced after the date of the Senior Subordinated Indenture as a result of
the conversion or exchange of debt securities or Redeemable Capital Stock
of Publishing that has been converted into or exchanged for Qualified
Capital Stock of Publishing to the extent such debt securities or
Redeemable Capital Stock were originally sold for cash plus the aggregate
Net Cash Proceeds received by Publishing at the time of any such conversion
or exchange; and
(G) $25,000,000.
(b) Notwithstanding the foregoing, and, in the case of clauses (ii) through
(viii) below, so long as (1) there is no Default or Event of Default continuing
and (2) no holders of any other Indebtedness of Publishing or any Restricted
Subsidiary have an Acceleration Right, the foregoing provisions will not
prohibit the following actions (clauses (i) through (x) being referred to as
"Permitted Payments"):
(i) the payment of any dividend or distribution within 60 days after
the date of declaration thereof, if at such date of declaration such
payment would be permitted by the provisions of paragraph (a) of this
section and such payment will be deemed to have been paid on such date of
declaration for purposes of the calculation required by paragraph (a) of
this covenant;
(ii) any repurchase, redemption or other acquisition or retirement of
any shares of Capital Stock of Publishing in exchange for (including any
such exchange pursuant to the exercise of a conversion right or privilege
in connection with which cash is paid in lieu of the issuance of fractional
shares or scrip), or out of the Net Cash Proceeds of a substantially
concurrent issue and sale for cash (other than to a Restricted Subsidiary)
of other Qualified Capital Stock of Publishing; provided that the Net Cash
Proceeds from the issuance of such shares of Qualified Capital Stock are
excluded from clauses 4(D) and (4)(E) of paragraph (a) of this covenant;
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(iii) any repurchase, redemption, defeasance, retirement or
acquisition for value or payment of principal of any Subordinated
Indebtedness in exchange for, or out of the net proceeds of, a
substantially concurrent issuance and sale for cash (other than to any
Restricted Subsidiary of Publishing) of any Qualified Capital Stock of
Publishing; provided that the Net Cash Proceeds from the issuance of such
Qualified Capital Stock are excluded from clauses 4(D) and (4)(E) of
paragraph (a) of this section; and
(iv) the repurchase, redemption, defeasance, retirement, refinancing,
acquisition for value or payment of principal of any Subordinated
Indebtedness (other than Redeemable Capital Stock) or Pari Passu
Indebtedness (a "refinancing") through the issuance of new Subordinated
Indebtedness of Publishing; provided that any such new Subordinated
Indebtedness (1) shall be in a principal amount that does not exceed the
principal amount so refinanced (or, if the Subordinated Indebtedness so
refinanced provides for an amount less than the principal amount thereof to
be due and payable upon a declaration or acceleration thereof, then such
lesser amount as of the date of determination), plus the amount of any
premium required to be paid in connection with such refinancing pursuant to
the terms of such refinanced Indebtedness and any reasonable out-of-pocket
expenses of Publishing Incurred in connection with such refinancing; (2)
has an Average Life to Stated Maturity greater than the remaining Average
Life to Stated Maturity of the Senior Subordinated Securities; (3) has a
Stated Maturity for its final scheduled principal payment later than the
Stated Maturity for the final scheduled principal payment of the Senior
Subordinated Securities; and (4) is expressly subordinated in right of
payment to the Senior Subordinated Securities at least to the same extent
as the Indebtedness to be refinanced;
(v) dividends paid to the Company after the date of the Senior
Subordinated Indenture to the extent not in excess of the Southam Dividend
Amount;
(vi) loans, advances, dividends or distributions by any Restricted
Subsidiary to Publishing or any Wholly Owned Restricted Subsidiary and by
FDTH or, to the extent it has received such funds directly or indirectly
from FDTH, DTH or Publishing to the Company for the purpose of redeeming
shares of Series A Preferred Stock not exceeding in the aggregate any
payments made by Hollinger Inc. to FDTH pursuant to the provisions of the
HTH/FDTH Share Exchange Agreement;
(vii) loans, advances, dividends or distributions to the Company in
amounts not to exceed $1 million per year to permit the Company to
repurchase, redeem or otherwise acquire or retire any shares of its Capital
Stock from employees, former employees or their estates upon disability,
death, retirement or termination of employment;
(viii) tax payments pursuant to a Tax Sharing Agreement to the extent
that the aggregate amount of such payments do not exceed the aggregate
amount of the tax payments that Publishing and the Restricted Subsidiaries
would have been required to make if they alone constituted a single
consolidated tax group;
(ix) payments by Publishing or a Restricted Subsidiary in connection
with the Scheme of Arrangement; and
(x) the issuance or redemption of or payment of distributions on
Mirror Preferred, but only to the extent Argsub Preferred is simultaneously
issued, redeemed or pays (or is deemed to pay) dividends, respectively, and
only so long as no cash is transferred in any such transaction, except for
cash payments in respect of certain Mirror Preferred made directly from
FDTH to DTH at the direction of Argsub.
For purposes of this "Limitation on Restricted Payments" covenant, if the
Board of Directors designates a Restricted Subsidiary as an Unrestricted
Subsidiary, or a Restricted Subsidiary is deemed to be so designated, a
"Restricted Payment" shall be deemed to have been made in an amount equal to the
fair value of the Investment of Publishing and its other Restricted Subsidiaries
in such Restricted Subsidiary as determined by the Board of Directors with the
concurrence of a majority of the Independent Directors (there being at least one
Independent Director), whose good faith determination shall be conclusive. If a
particular Restricted Payment involves a non-cash payment, including a
distribution of assets, then such Restricted Payment shall be deemed to be in an
amount equal to the fair market value of the non-cash portion of such Restricted
Payment as determined by the Board of Directors, whose good faith determination
shall be conclusive. (Section 10.09)
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Limitation on Transactions with Affiliates. (a) Publishing will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
enter into or suffer to exist any transaction or series of related transactions
(including, without limitation, the sale, purchase, exchange or lease of assets,
property or services) with any Affiliate of Publishing (other than Publishing or
a Wholly Owned Restricted Subsidiary, or, if both of The Telegraph and Southam
are Restricted Subsidiaries, a Restricted Subsidiary) unless (a) such
transaction or series of related transactions is on terms that are no less
favorable to Publishing or such Restricted Subsidiary, as the case may be, than
would be available in a comparable transaction in arm's-length dealings with an
unrelated third party and (b) with respect to any transaction or series of
related transactions involving aggregate payments in excess of $5,000,000,
Publishing delivers an Officers' Certificate to the Trustee certifying that such
transaction or series of related transactions complies with clause (a) above and
such transaction or series of related transactions has been approved by a
majority of the Independent Directors of the Board of Directors; provided that
any transaction or series of related transactions otherwise permitted under this
paragraph (other than any transaction or series of related transactions with
respect to the making of any Permitted Investment pursuant to clause (ix) of the
definition of "Permitted Investment" or any Restricted Payment permitted
pursuant to the "Limitation on Restricted Payments" covenant described above
(other than those referred to in clause (vi) of paragraph (b) thereof)) pursuant
to which Publishing or any Restricted Subsidiary shall receive or render value
exceeding $15,000,000 shall not be permitted unless, prior to the consummation
of any such transaction or series of related transactions, Publishing shall have
received an opinion, from an independent nationally recognized investment
banking firm or firm experienced in the appraisal or similar review of similar
types of transactions, that such transaction is fair to Publishing from a
financial point of view; provided further, that this covenant shall not apply to
(i) transactions or agreements as in effect or securities outstanding on the
date of the Senior Subordinated Indenture (provided that any amendment to any
existing agreement (including the Services Agreement and the Business
Opportunities Agreement), and any transaction pursuant to the Business
Opportunities Agreement, shall require approval pursuant to this covenant;
notwithstanding the foregoing, any amendment to the Services Agreement or the
Business Opportunities Agreement shall require the approval of a majority of the
Independent Directors); (ii) directors' fees approved by the Board of Directors;
(iii) any employee benefit plan or arrangement entered into or made available to
officers or other employees of Publishing or the Restricted Subsidiaries in the
ordinary course of business; (iv) sales by Publishing and its Restricted
Subsidiaries of their products in the ordinary course of business on
arm's-length terms; (v) tax payments pursuant to a Tax Sharing Agreement to the
extent that the aggregate amount of such payments do not exceed the aggregate
amount of the tax payments that Publishing and the Restricted Subsidiaries would
have been required to make if they alone constituted a single consolidated tax
group; (vi) loans, advances, dividends or distributions by FDTH, DTH or
Publishing to the Company in amounts and for the purpose permitted by clauses
(v) and (vii) of paragraph (b) of the "Limitation on Restricted Payments"
covenant described above; (vii) payments made to Hollinger Inc. pursuant to the
Services Agreement that constitute the reimbursement for the fair value (as
determined by a majority of the Independent Directors serving on an Independent
Committee) of services received by Publishing or a Restricted Subsidiary
consistent with past practices and (viii) the issuance or redemption, retraction
or transfer of or payment of dividends, distributions or other amounts on Mirror
Preferred by DTH or FDTH to an Argsub, but only to the extent that such Argsub
simultaneously, as the case may be, issues or redeems or pays dividends,
distributions or other amounts (or is deemed to have taken any such action) to
DTH or FDTH, in each case in equivalent amounts. (Section 10.10)
Limitation on Other Subordinated Indebtedness. Neither Publishing nor any
Restricted Subsidiary Guarantor will Incur or permit to exist any Indebtedness
(other than the Senior Subordinated Securities or a Guarantee thereof pursuant
to the Senior Subordinated Indenture, as applicable) that is subordinate in
right of payment to any Senior Indebtedness of Publishing (or such Guarantor)
unless such Indebtedness is also pari passu with, or subordinate in right of
payment to, the Senior Subordinated Securities or the Guarantee of such
Guarantor, as the case may be. For purposes of such covenant, Indebtedness will
be deemed to be pari passu with the Senior Subordinated Securities or such
Guarantee if it is subordinate to Senior Indebtedness of Publishing or the
relevant Guarantee pursuant to subordination provisions substantially similar to
those described under "Ranking of Senior Subordinated Securities" above.
(Section 10.11)
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Limitation on Liens. (a) Publishing will not, and will not permit any
Restricted Subsidiary to Incur, affirm or suffer to exist any Lien of any kind
securing any Pari Passu Indebtedness or Subordinated Indebtedness of Publishing
(including any assumption, guarantee or other liability with respect thereto by
any Restricted Subsidiary) upon any property or assets (including any
intercompany notes) of Publishing or any Restricted Subsidiary owned on the date
of the Senior Subordinated Indenture or acquired after the date of the Senior
Subordinated Indenture, or any income or profits therefrom, unless (i) in the
case of any Lien securing Pari Passu Indebtedness, the Senior Subordinated
Securities are secured by a Lien on such property, assets or proceeds that is
senior in priority to or pari passu with such Lien and (ii) in the case of any
Lien securing Subordinated Indebtedness of Publishing, the Senior Subordinated
Securities are secured by a Lien on such property, assets or proceeds that is
senior in priority to such Lien, except for (x) any Lien securing Acquired
Indebtedness created prior to (and not created in connection with, or in
contemplation of) the incurrence of such Pari Passu Indebtedness or Subordinated
Indebtedness by Publishing or any Restricted Subsidiary, in each case which
Indebtedness is permitted under the provisions of the "Limitation on
Indebtedness" covenant described above (provided that any such Lien only extends
to the assets that were subject to such Lien securing such Acquired Indebtedness
prior to the related acquisition by Publishing or its Restricted Subsidiaries)
and (y) any Lien securing Indebtedness owing to Publishing or a Wholly Owned
Restricted Subsidiary by a Restricted Subsidiary.
(b) Notwithstanding the foregoing, any security interest granted by
Publishing or any Restricted Subsidiary to secure the Senior Subordinated
Securities created pursuant to paragraph (a) above shall provide by its terms
that such security interest shall be automatically and unconditionally released
and discharged upon the release by the holders of the Indebtedness of Publishing
or any Restricted Subsidiary described in paragraph (a) above of their security
interest (including any deemed release upon payment in full of all obligations
under such Indebtedness), at a time when (A) no other Pari Passu Indebtedness
and Subordinated Indebtedness of Publishing or any Restricted Subsidiary has
been secured by such property or assets of Publishing or any such Restricted
Subsidiary or (B) the holders of all such other Pari Passu Indebtedness and
Subordinated Indebtedness which is secured by such property or assets of
Publishing or any such Restricted Subsidiary also release their security
interest in such property or assets (including any deemed release upon payment
in full of all obligations under such Indebtedness). (Section 10.12)
Limitation on Issuances of Guarantees of Indebtedness. (a) Publishing will
not permit any Restricted Subsidiary, directly or indirectly, to guarantee,
assume or in any other manner become liable with respect to any Pari Passu
Indebtedness or Subordinated Indebtedness of Publishing unless such Restricted
Subsidiary simultaneously executes and delivers a supplemental indenture to the
Senior Subordinated Indenture providing for a guarantee of the Senior
Subordinated Securities and (A) if the Senior Subordinated Securities are
subordinated in right of payment to such Indebtedness, the guarantee under the
supplemental indenture shall be subordinated to the same extent as the Senior
Subordinated Securities are subordinated to such Indebtedness under the Senior
Subordinated Indenture and (B) if such Indebtedness of Publishing is by its
terms expressly subordinated to the Senior Subordinated Securities, any such
assumption, guarantee or other liability of such Restricted Subsidiary with
respect to such Indebtedness shall be subordinated to such Restricted
Subsidiary's guarantee to the same extent as such Indebtedness is subordinated
to the Senior Subordinated Securities.
(b) Notwithstanding the foregoing, any guarantee by a Restricted Subsidiary
of the Senior Subordinated Securities that is provided pursuant to the foregoing
paragraph or under the provisions of the "Limitation on Issuance and Sale of
Capital Stock of Restricted Subsidiaries" covenant described below may provide
by its terms that it shall be automatically and unconditionally released and
discharged (i) upon any sale, exchange or transfer, to any Person not an
Affiliate of Publishing, of all of Publishing's Capital Stock in, or all or
substantially all the assets of, such Restricted Subsidiary, which sale,
exchange or transfer is in compliance with the Senior Subordinated Indenture,
(ii) if the Restricted Subsidiary issuing such guarantee ceases to be a
Restricted Subsidiary or (iii) upon the release by the holders of the
Indebtedness of Publishing described in paragraph (a) above of their Guarantee
by such Restricted Subsidiary (including any deemed release upon payment in full
of all obligations under such Indebtedness), at a time when (A) no Indebtedness
of Publishing or any Restricted Subsidiary has been guaranteed by such
Restricted Subsidiary or (B) the holders of all such other Indebtedness which is
guaranteed by such Restricted Subsidiary also release their Guarantee by such
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Restricted Subsidiary (including any deemed release upon payment in full of all
obligations under such Indebtedness). (Section 10.13)
Limitation on Sale of Assets. (a) Publishing will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, consummate an
Asset Sale unless (i) at least 80% of the proceeds from such Asset Sale are
received in cash (provided that the amount of (A) any Senior Indebtedness (as
shown on Publishing's or such Restricted Subsidiaries' most recent balance sheet
or in the notes thereto) of Publishing or any such Restricted Subsidiary that is
assumed by the transferee of any asset in connection with any Asset Sale and (B)
any deferred payment obligations received by Publishing or any such Restricted
Subsidiary as proceeds of an Asset Sale that are concurrently with the Asset
Sale converted into cash without recourse to Publishing or any of its Restricted
Subsidiaries shall be deemed to be cash for purposes of this provision; provided
further that, for purposes of this clause (i), "cash" shall include any cash
proceeds received from the sale of securities received in an Asset Sale as long
as at the time of such Asset Sale, Publishing or its Restricted Subsidiary, as
applicable, has entered into a legally binding agreement for the sale of such
securities and such securities are sold within 90 days of such Asset Sale; and
provided further that this clause (i) shall not apply to (x) Newspaper
Businesses received by Publishing or a Restricted Subsidiary from the transferee
as consideration for an Asset Sale (an "Asset Swap") so long as, immediately
before and immediately after giving effect to such transaction on a pro forma
basis, Publishing could incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the provisions described above under "Limitation
on Indebtedness," (y) a CST Real Estate Transaction or (z) a Permitted Real
Estate Sale, and (ii) Publishing or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the shares or assets sold (as determined by the Board of Directors of
Publishing and evidenced by a board resolution). The value of any properties or
assets (other than cash) received pursuant to an Asset Sale shall be determined
by the Board of Directors of Publishing and evidenced by a Board Resolution;
provided that if the value of the asset which is the subject of the Asset Sale
is in excess of $25,000,000, the value of the properties or assets received
shall be determined by an independent nationally recognized investment banking
firm or firm experienced in the appraisal or similar review of similar types of
assets (provided that for purposes of this sentence, any CST Real Estate
Transaction shall be deemed to involve an asset whose value exceeds
$25,000,000).
(b) If all or a portion of the Net Cash Proceeds of any Asset Sale is not
applied to permanently repay or otherwise permanently retire any Senior
Indebtedness then outstanding as permitted or required by the terms thereof, or
if no such Senior Indebtedness is then outstanding, Publishing or a Restricted
Subsidiary, as the case may be, may, within 12 months of the Asset Sale, invest
the Net Cash Proceeds in properties and assets that (as determined by the Board
of Directors) replace the properties and assets that were the subject of the
Asset Sale or in properties and assets that will be used in the businesses of
Publishing or its Restricted Subsidiaries existing on the date of the Senior
Subordinated Indenture or in businesses reasonably related thereto. The amount
of such Net Cash Proceeds neither used to permanently repay or prepay Senior
Indebtedness nor used or invested as set forth in this paragraph constitutes
"Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$20,000,000, Publishing will apply the Excess Proceeds to the repayment of the
Senior Subordinated Securities and any Pari Passu Indebtedness required to be
repurchased under the instrument governing such Pari Passu Indebtedness as
follows: (i) Publishing will make an offer to purchase (an "Offer") from all
holders of the Senior Subordinated Securities in accordance with the procedures
set forth in the Indenture in the maximum principal amount (expressed as a
multiple of $1,000) of Senior Subordinated Securities that may be purchased out
of an amount (the "Securities Amount") equal to the product of such Excess
Proceeds multiplied by a fraction, the numerator of which is the outstanding
principal amount of the Securities, and the denominator of which is the sum of
the outstanding principal amount of the Senior Subordinated Securities and such
Pari Passu Indebtedness (subject to proration in the event such amount is less
than the aggregate Offered Price (as defined herein) of all Senior Subordinated
Securities tendered) and (ii) to the extent required by such Pari Passu
Indebtedness to permanently reduce the principal amount of such Pari Passu
Indebtedness, Publishing will make an offer to purchase or otherwise repurchase
or redeem Pari Passu Indebtedness (a "Pari Passu Offer") in an amount (the "Pari
Passu Debt Amount") equal to the excess of the Excess Proceeds over the
Securities Amount; provided that in no event will the Pari Passu Debt Amount
exceed the
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principal amount of such Pari Passu Indebtedness plus the amount of any premium
required to be paid to repurchase such Pari Passu Indebtedness. The offer price
shall be payable in cash in an amount equal to 100% of the principal amount of
the Senior Subordinated Securities plus accrued and unpaid interest, if any, to
the date (the "Purchase Date") such Offer is consummated (the "Offered Price"),
in accordance with the procedures set forth in the Senior Subordinated
Indenture. To the extent that the aggregate Offered Price of the Senior
Subordinated Securities tendered pursuant to the Offer is less than the
Securities Amount relating thereto or the aggregate amount of Pari Passu
Indebtedness that is purchased is less than the Pari Passu Debt Amount (the
amount of such shortfall, if any, constituting a "Deficiency"), Publishing shall
use such Deficiency in the business of Publishing and its Restricted
Subsidiaries. Upon completion of the purchase of all Senior Subordinated
Securities tendered pursuant to an Offer and repurchase of the Pari Passu
Indebtedness pursuant to a Pari Passu Offer, the amount of Excess Proceeds, if
any, shall be reset at zero.
(d) Whenever the aggregate amount of Excess Proceeds received by Publishing
exceeds $20,000,000, such Excess Proceeds will, prior to the purchase of Senior
Subordinated Securities or any Pari Passu Indebtedness described in paragraph
(c) above, be set aside by Publishing in a separate account pending (i) deposit
with the depository or a paying agent of the amount required to purchase the
Senior Subordinated Securities or Pari Passu Indebtedness tendered in an Offer
or Pari Passu Offer, (ii) delivery by Publishing of the Offered Price to the
holders of the Securities or Pari Passu Indebtedness tendered in an Offer or a
Pari Passu Offer and (iii) application, as set forth above, of Excess Proceeds
in the business of Publishing and its Restricted Subsidiaries. Such Excess
Proceeds may be invested in Temporary Cash Investments; provided that the
maturity date of any such investment made after the amount of Excess Proceeds
equals or exceeds $20,000,000 shall not be later than the Purchase Date.
Publishing shall be entitled to any interest or dividends accrued, earned or
paid on such Temporary Cash Investments; provided that Publishing will not be
entitled to such interest and will not withdraw such interest from the separate
account if an Event of Default has occurred and is continuing.
(e) If Publishing becomes obligated to make an Offer pursuant to paragraph
(c) above, the Senior Subordinated Securities will be purchased by Publishing,
at the option of the holder thereof, in whole or in part in integral multiples
of $1,000, on a date that is not earlier than 30 days and not later than 60 days
from the date the notice is given to holders, or such later date as may be
necessary for Publishing to comply with the requirements under the Exchange Act,
subject to proration in the event the Securities Amount is less than the
aggregate Offered Price of all Senior Subordinated Securities tendered.
(f) Publishing will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer.
(g) Publishing will not, and will not permit any Subsidiary to, create or
permit to exist or become effective any restriction (other than restrictions
existing under (i) Indebtedness as in effect on the Issue Date as such
Indebtedness may be refinanced from time to time or (ii) any Senior Indebtedness
existing on the date of the Senior Subordinated Indenture or thereafter;
provided, in each case, that such restrictions are no less favorable to the
holders of Senior Subordinated Securities than those existing on the date of the
Senior Subordinated Indenture) that would expressly impair the ability of
Publishing to make an Offer to purchase the Senior Subordinated Securities or,
if such Offer is made, to pay for the Senior Subordinated Securities tendered
for purchase. (Section 10.14)
Purchase of Securities upon a Change of Control. If a Change of Control
occurs at any time, each holder with respect to Senior Subordinated Securities
of any Series will have the right to require that Publishing purchase such
holder's Securities in whole or in part in integral multiples of $1,000, at a
purchase price (the "Change of Control Purchase Price") in cash in an amount
equal to 101% of the principal amount of such Senior Subordinated Securities,
plus accrued and unpaid interest, if any, to the date of purchase (the "Change
of Control Purchase Date"), pursuant to the offer described below (the "Change
of Control Offer") and the other procedures set forth in the Senior Subordinated
Indenture.
Within 30 days following any Change of Control, Publishing shall notify the
Trustee thereof and give written notice of such Change of Control to each holder
of Senior Subordinated Securities, by first-class mail, postage prepaid, at his
address appearing in the security register, stating, among other things, (i) the
purchase price, (ii) the Change of Control Purchase Date, which shall be a
Business Day no earlier than 30 days nor
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later than 60 days from the date such notice is mailed, or such later date as is
necessary to comply with requirements under the Exchange Act, (iii) that any
Senior Subordinated Security not tendered will continue to accrue interest, (iv)
that, unless Publishing defaults in the payment of the purchase price, any
Senior Subordinated Securities accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control Purchase
Date and (v) certain other procedures that a holder of Senior Subordinated
Securities must follow to accept a Change of Control Offer or to withdraw such
acceptance.
If a Change of Control Offer is made, there can be no assurance that
Publishing will have available funds sufficient to pay the Change of Control
Purchase Price for any or all of the Senior Subordinated Securities that might
be delivered by holders of the Senior Subordinated Securities seeking to accept
the Change of Control Offer and, accordingly, none of the holders of the Senior
Subordinated Securities may receive the Change of Control Purchase Price for
their Senior Subordinated Securities in the event of a Change of Control. The
failure of Publishing to make or consummate the Change of Control Offer or pay
the Change of Control Purchase Price when due will give the Trustee and the
holders of the Senior Subordinated Securities the rights described under "Events
of Default."
The existence of a holder's right to require Publishing to repurchase such
holder's Senior Subordinated Securities upon a Change of Control may deter a
third party from acquiring Publishing in a transaction which constitutes a
Change of Control.
The provisions of the Senior Subordinated Indenture may not afford holders
of Senior Subordinated Securities the right to require Publishing to repurchase
the Senior Subordinated Securities in the event of a highly leveraged
transaction or certain transactions with Publishing's management or its
Affiliates or the management of the Company or Hollinger Inc. or their
Affiliates, including a reorganization, restructuring, merger or similar
transaction (including, in certain circumstances, an acquisition of Publishing
by its management or affiliates) involving Publishing that may adversely affect
holders of the Senior Subordinated Securities, if such transaction is not a
transaction defined as a Change of Control. Reference is made to "Certain
Definitions" for the definition of "Change of Control." A transaction involving
Publishing's management or its Affiliates or the management of the Company or
Hollinger Inc. or their Affiliates, or a transaction involving a
recapitalization of Publishing, may result in a Change of Control if it is the
type of transaction specified by such definition.
Publishing will comply with the applicable tender offer rules, including
Rule 14e-1 under the Exchange Act, and any other applicable securities laws or
regulations in connection with a Change of Control Offer.
Publishing shall not, and shall not permit any Subsidiary to, create or
permit to exist or become effective any restriction (other than restrictions
existing under (i) Indebtedness as in effect on the date of the Senior
Subordinated Indenture as such Indebtedness may be refinanced from time to time
or (ii) any Senior Indebtedness existing on the date of the Senior Subordinated
Indenture or thereafter; provided, in each case, that such restrictions are no
less favorable to the Holders than those existing on the date of the Senior
Subordinated Indenture) that would expressly impair the ability of Publishing to
make a Change of Control Offer to purchase the Senior Subordinated Securities
or, if such Change of Control Offer is made, to pay for the Senior Subordinated
Securities tendered for purchase. (Section 10.15)
Limitation on Issuance and Sale of Capital Stock of Restricted
Subsidiaries. (a) Until such time as both of The Telegraph and Southam are
Restricted Subsidiaries, Publishing will not permit (i) any Restricted
Subsidiary to issue any Capital Stock (other than to Publishing or any Wholly
Owned Restricted Subsidiary) or (ii) any Person (other than Publishing or a
Wholly Owned Restricted Subsidiary) to acquire any Capital Stock of any
Restricted Subsidiary from Publishing or any Restricted Subsidiary, except upon
the sale of all of the outstanding Capital Stock of such Restricted Subsidiary
owned by Publishing and the designation of such Subsidiary as an Unrestricted
Subsidiary; provided, however, that Publishing or a Restricted Subsidiary may
issue or sell common stock of a Restricted Subsidiary to a Person that is not an
Affiliate of Publishing so long as, on or prior to the consummation of such
issuance or sale, such Restricted Subsidiary issues and delivers a supplemental
indenture to the Indenture providing for the guarantee of the Securities, which
guarantee shall be subordinated in right of payment to any Senior Indebtedness
of such Restricted Subsidiary, on substantially the same terms as the Senior
Subordinated Securities are subordinated to all Senior Indebtedness of
Publishing; and
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(b) On or after the time that both Southam and The Telegraph are Restricted
Subsidiaries, (i) without limiting the requirements of the "Limitation on Sale
of Assets" covenant described above, in the event that (x) Publishing or a
Restricted Subsidiary issues or sells (other than to a Restricted Subsidiary)
Capital Stock of a Restricted Subsidiary (1) that was a Subsidiary on February
1, 1997 (which, for the purposes of this clause (1), is deemed to include
Southam and Hollinger Eastern), (2) any substantial portion of the operating
assets of which were held by a Subsidiary on February 1, 1997 and were
generating material revenue and cash flows on such date, or (3) any substantial
portion of the operating assets of which consist of assets that are acquired by
Publishing or a Restricted Subsidiary pursuant to the Hollinger Inc. Transaction
and (y) such issuance or sale involves less than 100% of the Capital Stock of
such Restricted Subsidiary held by Publishing and the Restricted Subsidiaries at
the time of such issuance or sale, then the Net Cash Proceeds of such issuance
or sale (1) shall be applied to permanently repay or otherwise permanently
retire any Senior Indebtedness then outstanding, as permitted or required by the
terms thereof, or (2) if there is no Senior Indebtedness then outstanding, then
the balance of such Net Cash Proceeds shall be deemed to constitute Excess
Proceeds for purposes of paragraph (c) of the "Limitation on Sale of Assets"
covenant described above; provided that the foregoing clause (i) shall not apply
to any new issuance of Capital Stock by Southam as long as (a) Southam is a
Public Entity at the time of such issuance; (b) neither Publishing nor any other
Restricted Subsidiary has at any time after February 1, 1997 sold any assets and
contributed, directly or indirectly, the proceeds therefrom to Southam; and (c)
neither Publishing nor any other Restricted Subsidiary has at any time after
February 1, 1997 contributed, directly or indirectly, any Newspaper Businesses
to Southam other than those Newspaper Businesses acquired in the Hollinger Inc.
Transaction; and (ii) if any issuance of Capital Stock by a Restricted
Subsidiary or sale or disposition of Capital Stock of a Restricted Subsidiary
results in a Restricted Subsidiary ceasing to qualify as a Subsidiary, such
transaction would be deemed, for purposes of the "Limitation or Restricted
Payments" covenant described above, to constitute the designation of such former
Restricted Subsidiary as an Unrestricted Subsidiary. (Section 10.16)
Limitation on Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries. Publishing will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distribution on its
Capital Stock to Publishing or any other Restricted Subsidiary, (b) pay any
Indebtedness owed to Publishing or any Restricted Subsidiary, (c) make any
Investment in Publishing or (d) transfer any of its properties or assets to
Publishing or any Restricted Subsidiary, except (i) any encumbrance or
restriction pursuant to or in connection with the New Bank Credit Facility or
the FDTH Credit Facility, each as in effect on the date such Subsidiary becomes
a Restricted Subsidiary or any other agreement in effect on the date of the
Senior Subordinated Indenture (including the AP-91 Senior Notes), (ii) any
encumbrance or restriction, with respect to a Restricted Subsidiary that is not
a Restricted Subsidiary of Publishing on the date of the Senior Subordinated
Indenture, in existence at the time such Person becomes a Restricted Subsidiary
of Publishing and not Incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary, (iii) any encumbrance or restriction
pursuant to or in connection with documents existing or securing any Foreign
Subsidiary Indebtedness that is not materially more restrictive than the terms
of any such restrictions existing on the date of the Senior Subordinated
Indenture or the date such Subsidiary becomes a Restricted Subsidiary, as
determined in good faith by an officer of Publishing, (iv) encumbrances or
restrictions entered into by Southam in connection with Indebtedness of Southam
Incurred at a time when Southam is a Public Entity, (v) encumbrances or
restrictions contained in the terms of any Mirror Preferred, provided that such
Mirror Preferred continues to qualify as such under the definition thereof, (vi)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of Publishing or any Restricted Subsidiary and (vii) any
encumbrance or restriction existing under any agreement that extends, renews,
refinances or replaces the agreements containing the encumbrances or
restrictions in the foregoing clauses (i), (ii) and (iii) (other than the
covenants in the AP-91 Senior Notes); provided that the terms and conditions of
any such encumbrances or restrictions are not materially less favorable to the
holders of the Securities than those under or pursuant to the agreement
evidencing the Indebtedness so extended, renewed, refinanced or replaced.
(Section 10.17)
Provision of Financial Statements. Whether or not the Company is subject
to Section 13(a) or 15(d) of the Exchange Act, it will, to the extent permitted
under the Exchange Act, file with the Commission the
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annual reports, quarterly reports and other documents that it would have been
required to file with the Commission pursuant to such Sections 13(a) or 15(d) of
the Exchange Act, including any "summarized information" or other information
relating to Publishing as may be required by Regulation S-X under the Exchange
Act or by the Commission, if it were so subject, such documents to be filed with
the Commission on or prior to the respective dates (the "Required Filing Dates")
by which it would have been required so to file such documents if it were so
subject. The Company will in any event (x) within 15 days of each Required
Filing Date (i) transmit by mail to all holders of Senior Subordinated
Securities, as their names and addresses appear in the security register,
without cost to such holders of Senior Subordinated Securities and (ii) file
with the Trustee copies of the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act if it were subject to
such Sections and (y) if filing such documents by the Company with the
Commission is not permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any prospective holder of Senior Subordinated
Securities at Publishing's cost. (Section 10.18)
Limitation on the Designation of Additional Restricted or Unrestricted
Subsidiaries. (a) The Board of Directors may designate any Restricted
Subsidiary as an Unrestricted Subsidiary if (i) such action is in compliance
with the "Limitation on Restricted Payments" covenant described above and (ii)
such action complies with the definition of "Unrestricted Subsidiaries."
(b) The Board of Directors may designate any Unrestricted Subsidiary or any
Person that is to become a Restricted Subsidiary as a Restricted Subsidiary if
immediately after giving effect to such action (and treating any Acquired
Indebtedness as having been incurred at the time of such action), Publishing
could have incurred at least $1.00 of additional Indebtedness pursuant to the
"Limitation on Indebtedness" covenant described above. (Section 10.21)
Additional Covenants. The Indenture also contains covenants with respect
to the following matters: (i) payment of principal, premium and interest; (ii)
maintenance of an office or agency in The City of New York; (iii) arrangements
regarding the handling of money held in trust; (iv) maintenance of corporate
existence; (v) payment of taxes and other claims; (vi) maintenance of
properties; (vii) maintenance of insurance; and (viii) statement by officers as
to default.
CONSOLIDATION, MERGER, SALE OF ASSETS
Each of the Indentures will provide that Publishing shall not, in a single
transaction or a series of related transactions, consolidate with or merge with
or into any other Person or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets to any Person
or group of affiliated Persons, or permit any of its Restricted Subsidiaries to
enter into any such transaction or transactions (other than, in the case of a
Restricted Subsidiary, such a consolidation, merger or transfer with or to one
or more wholly owned Restricted Subsidiaries) if such transaction or
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of Publishing and its Restricted Subsidiaries on a Consolidated basis to
any other Person or group of affiliated Persons, unless at the time and after
giving effect thereto (a) either (i) Publishing shall be the continuing
corporation or (ii) the Person (if other than Publishing) formed by such
consolidation or into which Publishing is merged or the Person which acquires by
sale, assignment, conveyance, transfer, lease or disposition all or
substantially all of the properties and assets of Publishing and its Restricted
Subsidiaries on a Consolidated basis (the "Surviving Entity") will be a
corporation duly organized and validly existing under the laws of the United
States of America, any state thereof or the District of Columbia and such Person
assumes by a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, all the obligations of Publishing under the
Securities and the relevant Indenture, and the relevant Indenture will remain in
full force and effect; (b) immediately before and immediately after giving
effect to such transaction on a pro forma basis, no Default or Event of Default
shall have occurred and be continuing; (c) immediately after giving effect to
the transaction on a pro forma basis, the Consolidated Net Worth of the
Surviving Entity is not less than the Consolidated Net Worth of Publishing and
the Restricted Subsidiaries immediately prior to the transaction; (d)
immediately before and immediately after giving effect to such transaction on a
pro forma basis (on the assumption that the transaction occurred on the first
day of the four-quarter period
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immediately prior to the consummation of such transaction with the appropriate
adjustments with respect to the transaction being included in such pro forma
calculation), Publishing (or the Surviving Entity if Publishing is not the
continuing obligor under the Indenture) could incur $1.00 of additional
Indebtedness under the "Limitation on Indebtedness" covenant in the relevant
Indenture (other than Permitted Indebtedness); (e) if any of the property or
assets of Publishing or any of its Restricted Subsidiaries would thereupon
become subject to any Lien, the "Limitation on Liens" covenant in the relevant
Indenture are complied with; and (f) Publishing or the Surviving Entity shall
have delivered, or caused to be delivered, to the Trustee, in form and substance
reasonably satisfactory to the Trustee, an officers' certificate and an opinion
of counsel, each to the effect that such consolidation, merger, transfer, sale,
assignment, lease or other transaction and the supplemental indenture in respect
thereto comply with the provisions described herein and that all conditions
precedent herein provided for relating to such transaction have been complied
with.
Neither the Company nor any Restricted Subsidiary Guarantor shall, and
Publishing will not permit a Restricted Subsidiary Guarantor to, in a single
transaction or series of related transactions, consolidate with or merge with or
into any other Person (other than Publishing, the Company or any other
Restricted Subsidiary Guarantor), or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets on a
Consolidated basis to any Person (other than Publishing, the Company or any
other Restricted Subsidiary Guarantor) if such transaction or transactions, in
the aggregate, would result in a sale, assignment, conveyance, transfer, lease
or disposition of all or substantially all of the properties and assets of such
Guarantor to any other Person or group of affiliated Persons, unless at the time
and after giving effect thereto: (a) either (i) the Company or such Restricted
Subsidiary Guarantor shall be the continuing corporation or (ii) the Person (if
other than the Company or such Restricted Subsidiary Guarantor) formed by such
consolidation or into which the Company or such Restricted Subsidiary Guarantor,
as the case may be, is merged or the Person which acquires by sale, assignment,
conveyance, transfer, lease or disposition all or substantially all the
properties and assets of the Company or such Restricted Subsidiary Guarantor
shall be a corporation duly organized and validly existing under the laws of the
United States, any state thereof or the District of Columbia and shall expressly
assume by a supplemental indenture, executed and delivered to the Trustee, in a
form and substance reasonably satisfactory to the Trustee, all the obligations
of the Company or such Restricted Subsidiary Guarantor, as the case may be,
under the Senior Securities, the Senior Subordinated Securities and the relevant
Indenture; (b) immediately before and immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing; and (c) the Company or such Restricted Subsidiary
Guarantor, as the case may be, shall have delivered or caused to be delivered to
the Trustee, in form and substance reasonably satisfactory to the Trustee, an
officers' certificate and an opinion of counsel, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer, lease or
disposition and such supplemental indenture comply with the relevant Indenture.
In the event of any transaction described in and complying with the
conditions listed in the immediately preceding paragraphs in which Publishing,
the Company or any Restricted Subsidiary Guarantor is not the continuing
corporation, the successor Person formed or remaining shall succeed to, and be
substituted for, and may exercise every right and power of, Publishing, the
Company or such Restricted Subsidiary Guarantor, as the case may be, and
Publishing, the Company or such Restricted Subsidiary Guarantor, as the case may
be, would be discharged from all obligations and covenants under the relevant
Indenture, the Senior Securities, the Senior Subordinated Securities and such
Guarantee; provided that in the case of a transfer by lease, the predecessor
shall not be released from the payment of principal and interest on the Senior
Securities, the Senior Subordinated Securities or such Guarantee, as the case
may be.
EVENTS OF DEFAULT
An Event of Default with respect to the Offered Securities of any Series
will occur under the Indentures if:
(i) there shall be a default in the payment of any interest on any
Securities of that Series when it becomes due and payable, and such default
shall continue for a period of 30 days;
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(ii) there shall be a default in the payment of the principal of (or
premium, if any, on) any Securities of that Series when and as the same
shall become due and payable at its Maturity (upon acceleration, optional
or mandatory redemption, required repurchase or otherwise);
(iii) (a) there shall be a default in the performance, or breach, of
any covenant or agreement of Publishing under the relevant Indenture (other
than a default in the performance, or breach, of a covenant or agreement
which is specifically dealt with in paragraphs (i) or (ii) or in clauses
(b) and (c) of this paragraph (iii)) and such default or breach shall
continue for a period of 30 days after written notice has been given, by
certified mail, (x) to Publishing by the Trustee or (y) to Publishing and
the Trustee by the holders of at least 25% in aggregate principal amount of
the outstanding Notes; (b) there shall be a default in the performance or
breach of the provisions described above under "Consolidation, Merger, Sale
of Assets;" or (c) Publishing shall have failed to make or consummate a
Change of Control Offer in accordance with the "Purchase of Securities upon
a Change of Control" covenant in the relevant Indenture;
(iv) one or more defaults shall have occurred under any agreements,
indentures or instruments under which Publishing, the Company or any
Restricted Subsidiary then has outstanding Indebtedness in excess of
$5,000,000 in the aggregate and, if not already matured at its final
maturity in accordance with its terms, such Indebtedness shall have been
accelerated;
(v) any Guarantee relating to any such Series shall for any reason
cease to be, or be asserted in writing by any guarantor or Publishing not
to be, in full force and effect, enforceable in accordance with its terms,
except to the extent contemplated by the relevant Indenture and any such
Guarantee;
(vi) one or more final judgments, orders or decrees for the payment of
money in excess of $5,000,000, either individually or in the aggregate,
shall be entered against Publishing, the Company or any Restricted
Subsidiary or any of their respective properties and shall not be
discharged and either (a) enforcement proceedings shall have been commenced
upon such judgment, order or decree or (b) there shall have been a period
of 60 consecutive days during which a stay of enforcement of such judgment
or order, by reason of an appeal or otherwise, shall not be in effect;
(vii) there shall have been the entry by a court of competent
jurisdiction of (a) a decree or order for relief in respect of Publishing,
any guarantor or any Material Restricted Subsidiary in an involuntary case
or proceeding under any applicable Bankruptcy Law or (b) a decree or order
adjudging Publishing, any guarantor or any Material Restricted Subsidiary
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment
or composition of or in respect of Publishing, any guarantor or any
Material Restricted Subsidiary under any applicable federal or state law,
or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of Publishing, any guarantor or any
Material Restricted Subsidiary or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and any such
decree or order for relief shall continue to be in effect, or any such
other decree or order shall be unstayed and in effect, for a period of 60
consecutive days;
(viii) (a) Publishing, any guarantor or any Material Restricted
Subsidiary shall commence a voluntary case or proceeding under any
applicable Bankruptcy Law or any other case or proceeding to be adjudicated
bankrupt or insolvent, (b) Publishing, any guarantor or any Material
Restricted Subsidiary consents to the entry of a decree or order for relief
in respect of Publishing, such guarantor or such Material Restricted
Subsidiary in an involuntary case or proceeding under any applicable
Bankruptcy Law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, (c) Publishing, any guarantor or any Material
Restricted Subsidiary files a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, (d)
Publishing, any guarantor or any Material Restricted Subsidiary (x)
consents to the filing of such petition or the appointment of, or taking
possession by, a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of Publishing, such guarantor or such
Material Restricted Subsidiary or of any substantial part of its property,
(y) makes an assignment for the benefit of creditors or (z) admits in
writing its inability to pay its debts generally as they become due or (e)
Publishing, any guarantor or any Material Restricted Subsidiary takes any
corporate action in furtherance of any such actions in this paragraph
(viii); or
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(ix) any outstanding Mirror Preferred shall cease to qualify as Mirror
Preferred under the definition thereof.
If an Event of Default (other than as specified in paragraphs (vii) and
(viii) of the prior paragraph with respect to Publishing) occurs and is
continuing with respect to Securities of any Series, the Trustee or the holders
of not less than 25% in aggregate principal amount of the outstanding Securities
hereunder (each such Series acting as a separate class) may, and the Trustee
upon the request of the holders of not less than 25% in the aggregate principal
amount of the outstanding Securities of such Series shall, declare the principal
amount (or, if the Securities of such Series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that Series) of all the Securities of such Series to be due and payable
immediately in an amount equal to the principal amount of the Securities of such
Series, together with accrued and unpaid interest, if any, to the date the
Securities of such Series shall have become due and payable, by a notice in
writing to Publishing (and to the Trustee if given by the holders of the
Securities of such Series) and, if the New Bank Credit Facility is in effect, to
the agent under the New Bank Credit Facility, and upon any such declaration such
amount shall become immediately due and payable; and thereupon the Trustee may,
at its discretion, proceed to protect and enforce the rights of the holders of
the Securities of such Series. If an Event of Default specified in clause (vii)
or (viii) of the prior paragraph (if the Event of Default is with respect to all
Series of Securities then outstanding) occurs with respect to Publishing and is
continuing, then all the Securities of such Series shall ipso facto become and
be immediately due and payable, in an amount equal to the principal amount of
the Securities of a Series (or, if the Securities of such Series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms thereof), together with accrued and unpaid interest, if
any, to the date the Securities of such Series become due and payable, without
any declaration or other action on the part of the Trustee or any holder.
After a declaration of acceleration has been made with respect to the
Securities of any or all Series, as the case may be, but before a judgment or
decree for payment of the money due has been obtained by the Trustee, the
holders of a majority in aggregate principal amount of outstanding Securities of
such Series, by written notice to Publishing and the Trustee, may rescind and
annul such declaration and its consequences if (a) Publishing has paid or
irrevocably deposited with the Trustee a sum sufficient to pay (i) all sums paid
or advanced by the Trustee under the relevant Indenture and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, (ii) all overdue interest on all outstanding Securities of such
Series, (iii) the principal of and premium, if any, on any outstanding
Securities of such Series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates presented
therefor by the terms of the Securities of such Series and (iv) to the extent
that payment of such interest is lawful, interest upon overdue interest at the
rate or rates presented therefor by the terms of the Securities of such Series;
and (b) all Events of Default with respect to such Series of Securities, other
than the nonpayment of principal of the Securities of such Series which have
become due solely by such declaration of acceleration, have been cured or
waived.
The holders of not less than a majority in aggregate principal amount of
the outstanding Securities of any Series may on behalf of the holders of all the
Securities of such Series waive any past defaults under the Indenture and its
consequences, except a default in the payment of the principal of, premium, if
any, or interest on any Security of such Series, or in respect of a covenant or
provision which under the relevant Indenture cannot be modified or amended
without the consent of the holder of each Security of such Series outstanding.
Publishing is also required to notify the Trustee within five business days
of the occurrence of any Default.
The Trust Indenture Act of 1939 contains limitations on the rights of the
Trustee, should it become a creditor of Publishing or any guarantor, to obtain
payment of claims in certain cases or to realize on certain property received by
it in respect of any such claims, as security or otherwise. The Trustee is
permitted to engage in other transactions; provided that if it acquires any
conflicting interest it must eliminate such conflict upon the occurrence of an
Event of Default or else resign.
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DEFEASANCE OR COVENANT DEFEASANCE
Publishing may, at its option and at any time (provided, that Publishing
obtains all legal opinions and complies with all other requirements under the
Indenture), elect to have the obligations of Publishing and any Guarantor
discharged with respect to the outstanding Offered Securities of any Series
("defeasance"). Such defeasance means that Publishing and any Guarantor shall be
deemed to have paid and discharged the entire indebtedness represented by the
defeased Securities of such Series, (which shall thereafter be deemed to be
"Outstanding" only for purposes of the provisions of the relevant Indenture
governing the money or U.S. Government Obligations deposited in trust pursuant
to the provisions described in the following paragraph, and for purposes of the
provisions governing the rights of holders of the defeased Securities of such
Series and the obligations of Publishing described in the following clauses (i)
and (ii)) and to have satisfied all its other obligations under such Securities
of such Series and the Indenture, except for (i) the rights of holders of
outstanding Securities of such Series to receive payments in respect of the
principal of, premium, if any, and interest on such Securities of such Series
when such payments are due, (ii) Publishing's obligations with respect to the
Securities of such Series concerning issuing temporary Securities of such
Series, registration of Securities of such Series, mutilated, destroyed, lost or
stolen Securities of such Series, and the maintenance of an office or agency for
payment and money for security payments held in trust, (iii) the rights, powers,
trusts, duties and immunities of the Trustee and (iv) the defeasance provisions
of the relevant Indenture. In addition, Publishing may, at its option and at any
time, elect to have the obligations of Publishing released with respect to
certain covenants (provided that Publishing's obligations to pay interest,
premium, if any, and principal on the Securities of such Series under the
relevant Indenture shall remain in full force and effect as long as the
Securities of such Series are outstanding), that are described in the relevant
Indenture ("covenant defeasance") and any omission to comply with such
obligations shall not constitute a Default or an Event of Default with respect
to the Securities of such Series. In the event covenant defeasance occurs,
certain events (not including nonpayment, bankruptcy and insolvency events)
described under "Events of Default" will no longer constitute an Event of
Default with respect to the Securities of such Series. In the event of covenant
defeasance, the defeased Securities of such Series will thereafter be deemed to
be not "Outstanding" for purposes of any direction, waiver, consent or
declaration or Acts of Holders in connection with the covenants from which
Publishing has been released, but shall continue to be deemed "Outstanding" for
all other purposes under the Indenture.
In order to exercise either defeasance or covenant defeasance, (i)
Publishing must irrevocably deposit with the Trustee, in trust, for the benefit
of the holders of the Securities of such Series, cash in United States dollars,
U.S. Government Obligations (as defined in the relevant Indenture), or a
combination thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay and
discharge the principal of, premium, if any, and interest on the outstanding
Securities of such Series on the Stated Maturity of such principal or
installment of principal (or on any date selected by Publishing on which the
Defeased Securities may be redeemed in whole at the option of Publishing (such
date being referred to as the "Defeasance Redemption Date"), if when exercising
either defeasance or covenant defeasance, Publishing has delivered to the
Trustee irrevocable notice to redeem all of the outstanding Securities of such
Series on the Defeasance Redemption Date); (ii) in case of defeasance,
Publishing shall have delivered to the Trustee an opinion of independent counsel
in the United States stating that (A) Publishing has received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since the date
of the relevant Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that the holders of the outstanding
Securities of such Series will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred; (iii) in the
case of covenant defeasance, Publishing shall have delivered to the Trustee an
opinion of independent counsel in the United States to the effect that the
holders of the outstanding Securities of such Series will not recognize income,
gain or loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such covenant
defeasance bad not occurred; (iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or insofar as clause
(vii) or (viii) under the first paragraph under "Events of Default" above are
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concerned, at any time during the period ending on the 121st day after the date
of deposit; (v) such defeasance or covenant defeasance shall not cause the
Trustee for the Securities of such Series to have a conflicting interest with
respect to any securities of Publishing; (vi) such defeasance or covenant
defeasance shall not result in a breach or violation of, or constitute a Default
under, the relevant Indenture or, in the case of the Senior Subordinated
Indenture, a breach or violation of any provision of any agreement relating to
any Senior Indebtedness; (vii) Publishing shall have delivered to the Trustee an
opinion of independent counsel in the United States to the effect that after the
121st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and, in the case of the Senior
Subordinated Indenture the trust funds will not be subject to any rights of
holders of Senior Indebtedness, including, without limitation, those arising
under the Senior Subordinated Indenture; (viii) Publishing shall have delivered
to the Trustee an officers' certificate stating that the deposit was not made by
Publishing with the intent of preferring the holders of the Securities of such
Series over the other creditors of Publishing with the intent of defeating,
hindering, delaying or defrauding creditors of Publishing; (ix) no event or
condition shall exist that would prevent Publishing from making payments of the
principal of, premium, if any, and interest on the Securities of such Series on
the date of such deposit or at any time ending on the 121st day after the date
of such deposit; and (x) Publishing shall have delivered to the Trustee an
officers' certificate and an opinion of independent counsel, each stating that
all conditions precedent provided for relating to either the defeasance or the
covenant defeasance, as the case may be, have been complied with. (Section 4.04)
SATISFACTION AND DISCHARGE
The Indentures will cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of the Securities of any Series,
as expressly provided for in the Indentures) as to all outstanding Securities of
any Series when (i) either (a) all the Securities of any Series theretofore
authenticated and delivered (except lost, stolen or destroyed Securities of any
Series which have been replaced or paid and Securities of any Series for whose
payment funds have been deposited in trust by Publishing and thereafter repaid
to Publishing or discharged from such trust) have been delivered to the Trustee
for cancellation or (b) all Securities of any Series not theretofore delivered
to the Trustee for cancellation (x) have become due and payable, (y) will become
due and payable at their Stated Maturity within one year or (z) are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the name, and at the
expense, of Publishing, and Publishing has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust an amount sufficient to pay
and discharge the entire indebtedness on the Securities of any Series not
theretofore delivered to the Trustee for cancellation, including principal of,
premium, if any, and accrued interest on such Securities of any Series, at such
Maturity, Stated Maturity or redemption date; (ii) Publishing has paid or caused
to be paid all other sums payable under the relevant Indenture by Publishing;
and (iii) Publishing has delivered to the Trustee an officers' certificate and
an opinion of counsel in the United States each stating that all conditions
precedent under the relevant Indenture relating to the satisfaction and
discharge of such Indenture have been complied with, and that such satisfaction
and discharge will not result in a breach or violation of, or constitute a
Default under, such Indenture or, in the case of the Senior Subordinated
Indenture, a breach or violation of any provision of any agreement relating to
any Senior Indebtedness. (Section 13.01)
MODIFICATIONS AND AMENDMENTS
Modifications and amendments of the Indentures with respect to any Series
of Securities may be made by Publishing, the Company, any Restricted Subsidiary
Guarantor and the Trustee with the consent of greater than 50% of the holders in
aggregate outstanding principal amount of the Securities of any such Series;
provided, however, that no such modification or amendment may, without the
consent of the holder of each outstanding Securities of any Series affected
thereby: (i) change the Stated Maturity of the principal of, or any installment
of interest on, any Securities of any Series or waive a default in the payment
of the principal or interest on any Security or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the coin or currency in which any Securities of
any Series or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment after the Stated
Maturity thereof; (ii) amend, change or modify the obligation of Publishing to
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make and consummate a Change of Control Offer in the event of a Change of
Control in accordance with the "Purchase of Debt Securities on Change of
Control" covenant in the relevant Indenture including amending, changing or
modifying any definitions with respect thereto; (iii) reduce the percentage in
principal amount of outstanding Securities of any Series, the consent of whose
holders is required for any such supplemental indenture, or the consent of whose
holders is required for any waiver; (iv) modify any of the provisions relating
to supplemental indentures requiring the consent of holders or relating to the
waiver of past defaults or relating to the waiver of certain covenants, except
to increase the percentage of outstanding Securities of any Series required for
such actions or to provide that certain other provisions of the Indentures
cannot be modified or waived without the consent of the holder of each Security
of any Series affected thereby; (v) except as otherwise permitted under
"Consolidation, Merger, Sale of Assets" above, consent to the assignment or
transfer by Publishing, the Company or any Restricted Subsidiary Guarantor of
any of its respective rights and obligations under the Indentures; or (vi) amend
or modify any of the provisions of the Senior Subordinated Indenture relating to
the subordination of the Senior Subordinated Securities of any Series or any
guarantee in any manner adverse to the holders of the Securities of any Series.
No amendment or modification of the Senior Subordinated Indenture shall
adversely affect the rights of any holders of Senior Indebtedness under the
subordination provisions of the Senior Subordinated Indenture unless the
requisite holders of each issue of Senior Indebtedness affected thereby shall
have consented to such amendment or modification.
The holders of greater than 50% in aggregate principal amount of the
Securities of any Series outstanding may waive compliance with certain
restrictive covenants and provisions of the relevant Indenture.
GUARANTEES
Each of the Indentures provides that the Company will unconditionally
guarantee the due and punctual payment of principal, premium, if any, and
interest on the Securities of any Series pursuant to the relevant Company
Guarantee. The Securities of any Series may also be guaranteed by one or more
Restricted Subsidiaries from time to time under certain circumstances.
In addition, the Senior Subordinated Indenture provides that the
Indebtedness to be evidenced by any Guarantee (including the payment of
principal of, premium, if any, and interest on the Senior Subordinated
Securities) will be subordinated to Senior Guarantor Indebtedness to the same
extent as the Senior Subordinated Securities are subordinated to Senior
Indebtedness. In particular, the Guarantee under the Senior Subordinated
Indenture will rank subordinate to the guarantee issued by the Company in
respect of the New Bank Credit Facility, the FDTH Credit Facility and the Senior
Securities. Each Guarantee will provide that upon any voluntary or involuntary
liquidation or dissolution of the Company or any Restricted Subsidiary
Guarantor, as the case may be, or any bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or such Restricted
Subsidiary Guarantor or any of their respective property, all Senior
Indebtedness guaranteed by it must be paid in full or provision made for such
payment, before any payment or distribution is made upon principal of, premium,
if any, or interest on, the Senior Subordinated Securities of such Series. By
reason of such subordination, in the event of liquidation or insolvency,
creditors of the Company or such Restricted Subsidiary Guarantor who are holders
of guarantees of Senior Indebtedness by the Company or such Restricted
Subsidiary Guarantor may recover more ratably than the holders of the Senior
Subordinated Securities of such Series and the holders of the Senior
Subordinated Securities of such Series may not recover any amounts in such
event.
GOVERNING LAW
The Indentures and the Securities of all Series will be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to the conflicts of law principles thereof.
CERTAIN DEFINITIONS
Each of the Indentures contains the following certain definitions.
"Acceleration Right" means a right, which at the time is immediately
exercisable (without further notice or lapse of time), by the holders or a
trustee to cause the acceleration of the maturity of Indebtedness of Publishing
or a Restricted Subsidiary having an aggregate principal amount outstanding of
at least $5,000,000; provided that this definition shall exclude the rights of
the holders of the existing preference shares of DTH
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and FDTH to require that Restricted Subsidiaries or Affiliates of Publishing
purchase those shares pursuant to the terms of the governing instruments or
existing agreements relating to such preference shares existing on January 1,
1997;
"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) (i) existing at the time such Person becomes a
Restricted Subsidiary or (ii) assumed in connection with the acquisition of
assets from such Person, in each case, other than Indebtedness incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary or such acquisition. Acquired Indebtedness will be deemed to be
incurred on the date of the related acquisition of assets from any Person or the
date the acquired Person becomes a Restricted Subsidiary.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) any other Person that
owns, directly or indirectly, 10% or more of such Person's equity ownership or
Voting Stock or any officer or director of any such Person or other Person or
with respect to any natural Person, any person having a relationship with such
Person by blood, marriage or adoption not more remote than first cousin. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person
directly or indirectly, whether through ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings relative to the foregoing.
"Agent" means The Toronto-Dominion Bank, the administrative agent under the
New Bank Credit Facility, and its successors and assigns.
"Amortization Expense" of any Person means, for any period, amounts
recognized during such period as (i) amortization of goodwill or (ii)
amortization of any other intangible assets with an original life of ten years
or more, in each case in accordance with GAAP and to the extent reflected in the
Consolidated Net Income of Publishing and the Restricted Subsidiaries; provided,
however, that in determining the aggregate cumulative Amortization Expense of
Publishing and its Restricted Subsidiaries for purposes of the "Limitation on
Restricted Payments" covenant in the relevant Indenture following the date on
which both of The Telegraph and Southam are Restricted Subsidiaries, the
Amortization Expense of Restricted Subsidiaries that are not Wholly Owned
Restricted Subsidiaries shall be determined in accordance with the actual
percentage of Publishing's common equity in such Restricted Subsidiary on the
date of the transaction necessitating the determination (thus, for example, in
the case of a Restricted Subsidiary in which Publishing owns a 51% common equity
interest on the date of the Restricted Payment, 51% of such Restricted
Subsidiary's Amortization Expense would be included in the calculation of the
aggregate cumulative Amortization Expense of Publishing and the Restricted
Subsidiaries).
"AP-91" means American Publishing (1991) Inc., a wholly owned, indirect
Subsidiary.
"AP-91 Senior Notes" means the $150 million original principal amount of
senior secured notes issued by AP-91.
"Argsub" means a wholly owned subsidiary of Argus.
"Argsub Preferred" means Capital Stock of a wholly owned subsidiary of
Argus issued to and held by DTH or FDTH.
"Argus" means Argus Corporation Limited, a Canadian corporation, so long as
such corporation is controlled by Hon. Conrad M. Black or his heirs, executors
and legal representatives of his Affiliates.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or
sale and leaseback transaction but not the grant of a pledge or security
interest) (collectively, a "transfer"), directly or indirectly, in one or a
series of related transactions, of (i) any Capital Stock of any Restricted
Subsidiary; (ii) all or substantially all of the properties and assets of any
division or line of business of Publishing or any of its Restricted
Subsidiaries; or (iii) any other properties or assets (other than cash) of
Publishing or any Restricted Subsidiary, other than in the ordinary course of
business. For the purposes of this definition, the term "Asset Sale" shall not
include any transfer of properties and assets (A) that is governed by the
provisions described under "Consolidation,
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Merger, Sale of Assets," (B) from any Restricted Subsidiary to Publishing in
accordance with the terms of the Indenture, (C) having a market value of less
than $1,000,000 (it being understood that if the market value of the properties
or assets being transferred exceeds $1,000,000, the entire value and not just
the portion in excess of $1,000,000, shall be deemed to have been the subject of
an Asset Sale), (D) which are obsolete (in the case of equipment) to
Publishing's and its Restricted Subsidiaries' businesses, (E) to any Wholly
Owned Restricted Subsidiary, (or, provided that both of The Telegraph and
Southam are Restricted Subsidiaries, a Restricted Subsidiary), (F) from any
Wholly Owned Restricted Subsidiary to any other Wholly Owned Restricted
Subsidiary, (or, provided that both of The Telegraph and Southam are Restricted
Subsidiaries, from a Restricted Subsidiary to a Restricted Subsidiary), (G)
consisting of any transfer of HTH common shares by FDTH or any Restricted
Subsidiary which may acquire or hold such HTH common shares to Hollinger Inc.
pursuant to the provisions of the HTH/FDTH Share Exchange Agreement, (H) by
Southam, provided that (i) Southam is a Restricted Subsidiary, (ii) Southam is a
Public Entity at the time of such sale of assets and (iii) the proceeds of such
sale of assets are not paid as a dividend or distribution on Southam's equity
capital; provided, however, that any issuance by Southam of its Capital Stock
shall be subject to the requirements of clause (i) of paragraph (b) of the
"Limitation on Issuance and Sale of Capital Stock of Restricted Subsidiaries"
covenant in the relevant Indenture, and (I) any issuance of Mirror Preferred so
long as the conditions set forth in the definition of Mirror Preferred are
satisfied.
"Average Life to Stated Maturity" means, as of the date of determination
with respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the products of (a) the number of years from the date of determination to the
date or dates of each successive scheduled principal payment of such
Indebtedness multiplied by (b) the amount of each such principal payment by (ii)
the sum of all such principal payments.
"Bankruptcy Law" means Title 11 of the United States Code, as amended, or
any similar United States federal or state or foreign law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Board of Directors" means the board of directors of Publishing or any duly
authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the Secretary
as an Assistant Secretary of Publishing to have been duly adopted by the board
of directors of Publishing or a duly authorized committee of such board and to
be in full force and effect on the date of such certification, and delivered to
the Trustee.
"Business Opportunities Agreement" means the Business Opportunities
Agreement dated as of February 7, 1996, between the Company and Hollinger Inc.
and any amendment, modification or supplement thereto or restatement thereof and
any similar agreements entered into after the date of the original issuance of
the Notes in accordance with the terms of the Indenture.
"Capital Lease Obligation" of any Person means any obligation of such
Person and its subsidiaries on a consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock.
"Cash Equivalents" means (i) any evidence of Indebtedness with a maturity
of 180 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided,
that the full faith and credit of the United States of America is pledged in
support thereof); (ii) certificates of deposit or acceptances with a maturity of
180 days or less of any financial institution that is a member of the Federal
Reserve System having combined capital and surplus and undivided profits of not
less than $500,000,000; (iii) commercial paper with a maturity of 180 days or
less issued by a corporation that is not an Affiliate of Publishing organized
under the laws of any state of the United States or the District of Columbia and
rated A-1 (or higher) according to S&P or P-1 (or higher) according to Moody's
or at least an equivalent rating category of another nationally recognized
securities rating agency; (iv) any money market deposit accounts issued or
offered by a domestic commercial bank having capital and surplus in excess of
$500,000,000; and (v) repurchase agreements and reverse repurchase agreements
relating to marketable
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direct obligations issued or unconditionally guaranteed by the government of the
United States of America or issued by any agency thereof and backed by the full
faith and credit of the United States of America, in each case maturing within
180 days from the date of acquisition; provided that the terms of such
agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions With Securities Dealers and Others, as
adopted by the Comptroller of the Currency on October 31, 1985.
"Change of Control" means the occurrence of any of the following:
(a) there is a report filed on Schedule 13D, 14D-1 or 14D-1F (or any
successor schedule, form or report) pursuant to the Exchange Act,
disclosing that any person (for purposes of this definition, as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act or any successor provision to either of the foregoing), other than any
person consisting solely of Conrad M. Black (or his heirs, executors or
legal representatives) and his Affiliates, has become the beneficial owner
(as the term "beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act) of Voting
Stock representing 50% or more of the total voting power attached to all
Voting Stock of Hollinger Inc., the Company or Publishing then outstanding;
provided, however, that a person shall not be deemed to be the beneficial
owner of, or to own beneficially, (i) any securities tendered pursuant to a
tender or exchange offer made by or on behalf of such person or any of such
person's Affiliates until such tendered securities are accepted for
purchase or exchange thereunder, or (ii) any securities if such beneficial
ownership (A) arises solely as a result of a revocable proxy delivered in
response to a proxy or consent solicitation made pursuant to applicable
law, and (B) is not also then reportable on Schedule 13D (or any successor
schedule) under the Exchange Act;
(b) there is a report filed or required to be filed with any
securities commission or securities regulatory authority in Canada,
disclosing that any offeror (as the term "offeror" is defined in Section
89(l) of Securities Act (Ontario) for the purpose of Section 101 of such
Securities Act or any successor provision of the foregoing) other than any
person consisting solely of Conrad M. Black (or his heirs, executors or
legal representatives) and his Affiliates, has acquired beneficial
ownership (within the meaning of the Securities Act (Ontario)) of, or the
power to exercise control or direction over, or securities convertible
into, any voting or equity shares of Hollinger Inc., that together with
such offeror's securities (as the term "offeror's securities" is defined in
Section 89(l) of the Securities Act (Ontario) or any successor provision
thereto in relation to the voting or equity shares of Hollinger Inc.) would
constitute Voting Stock of Hollinger Inc. representing 50% or more of the
total voting power attached to all Voting Stock of Hollinger Inc. then
outstanding;
(c) the Company shall cease to own, directly or indirectly, 100% of
the Voting Stock of Publishing;
(d) there is consummated a consolidation (involving a business
combination) or merger of Publishing or the Company, as the case may be,
(i) in which Publishing or the Company, as the case may be, is not the
continuing or surviving corporation or (ii) pursuant to which any Voting
Stock of Publishing or the Company, as the case may be, would be
reclassified, changed or converted into or exchanged for cash, securities
or other property, other than (in each case) a consolidation or merger of
Publishing or the Company, as the case may be, in which the holders of the
Voting Stock of Publishing or the Company, as the case may be, immediately
prior to the consolidation or merger have, directly or indirectly, 50% or
more of the Voting Stock of the continuing or surviving corporation
immediately after such transaction; or
(e) Conrad M. Black (or his heirs, executors and legal
representatives) and his Affiliates cease to beneficially own and control
the voting of, directly or indirectly, Voting Stock of Publishing or the
Company representing a greater percentage of the total voting power
attached to the Voting Stock of Publishing or the Company than the
percentage beneficially owned and controlled, directly or indirectly, by
any other single shareholder of Publishing or the Company together with its
Affiliates (a "Designated Transaction") and there shall occur a Rating
Decline.
Under each Indenture a "Rating Decline" will be deemed to have occurred if,
on any date within the period (the "Rating Period") beginning on the date (the
"Reference Date") of the earlier to occur of (A) the first public announcement
by Publishing or any other Person of an intention to effect any Designated
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Transaction and (B) the occurrence of such Designated Transaction, and ending on
the date 90 days thereafter, either of the following events has occurred: (1)
the Securities of any Series (or any other securities of Publishing which are
rated by a Rating Agency on the date which is 61 days prior to the Reference
Date (the "Rating Date")) shall be rated by any Rating Agency at any time during
the Rating Period at a rating which is lower than the rating of the Securities
of any Series (or such other securities of Publishing, as the case may be) by
such Rating Agency on the Rating Date by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories) or (2)
any Rating Agency shall have withdrawn its rating of the Securities of any
Series (or such other securities of Publishing, as the case may be) during the
Rating Period.
Conrad M. Black has advised Publishing that Hollinger Inc. does not
presently intend to reduce its voting power in the Company's outstanding Common
Stock to less than 50%. Furthermore, Mr. Black has advised Publishing that he
does not presently intend to reduce his voting control over Hollinger Inc. such
that a third party would be able to exercise effective control over it.
Hollinger Inc. has pledged all shares of the Company's Common Stock and Series A
Preferred Stock owned by it to a Canadian chartered bank as collateral for
outstanding indebtedness of Hollinger Inc. A default under such indebtedness and
foreclosure upon such shares may result in a Change of Control.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of the relevant Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Consolidated Assets" means with respect to Publishing, the total assets
shown on the balance sheet of Publishing and its Restricted Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, as of Publishing's
latest full fiscal quarter.
"Consolidated Cash Flow Ratio" means, as at any date of determination, the
ratio of (i) the aggregate amount of Indebtedness of Publishing and the
Restricted Subsidiaries on a Consolidated basis outstanding as at such date to
(ii) the Operating Cash Flow of Publishing and the Restricted Subsidiaries
(determined on a Consolidated basis) for the most recently completed period of
four consecutive fiscal quarters of Publishing; provided (a) that once both of
The Telegraph and Southam are Restricted Subsidiaries, for the purpose of
determining the Consolidated Cash Flow Ratio, the Indebtedness and Operating
Cash Flow of Restricted Subsidiaries that are not Wholly Owned Restricted
Subsidiaries shall be determined in accordance with the actual percentage of
Publishing's common equity interest in such Restricted Subsidiary on the date of
determination of the Consolidated Cash Flow Ratio (thus, for example, in the
case of a Restricted Subsidiary in which Publishing owns a 51% common equity
interest, 51% each of such Restricted Subsidiary's Indebtedness and Operating
Cash Flow would be included in the calculation of Publishing's aggregate
Indebtedness and Operating Cash Flow, respectively); and provided further that
(i) so long as Southam is a Restricted Subsidiary and (ii) until such time as
Southam is not a Public Entity, the portion of Operating Cash Flow represented
by Southam Operating Cash Flow shall not exceed thirty-three and one third
percent (33 1/3%) and, to the extent Southam Cash Flow represents greater than
thirty-three and one third percent (33 1/3%) of Operating Cash Flow, such excess
shall be deducted from Operating Cash Flow and (b) that, so long as any Southam
shares owned by Publishing or a Restricted Subsidiary are pledged, directly or
indirectly, to secure Indebtedness other than Indebtedness of Publishing or a
Restricted Subsidiary, the equity interest in Southam represented by such shares
shall be excluded for purposes of calculating the percentage of Southam's
Indebtedness and Operating Cash Flow to be included in determining Publishing's
aggregate Indebtedness and Operating Cash Flow on a Consolidated basis.
"Consolidated Net Income (Loss)" of Publishing and the Restricted
Subsidiaries means, for any period, the Consolidated net income (or loss (and
treating a loss as a negative number)) of Publishing and the Restricted
Subsidiaries for such period as determined in accordance with GAAP, adjusted by
(a) excluding, without duplication, to the extent included in calculating such
Consolidated Net Income (or Loss), (i) all extraordinary gains and losses, (ii)
the portion of Consolidated net income (or loss) of Publishing and its
Restricted Subsidiaries allocable to Investments in unconsolidated Persons
(other than Unrestricted Subsidi-
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<PAGE> 50
aries) to the extent that cash dividends or distributions have not actually been
received by such Person or one of its Restricted Subsidiaries, (iii) the portion
of Consolidated net income (or loss) of Publishing and its Restricted
Subsidiaries allocable to Publishing's Unrestricted Subsidiaries (or to payments
received therefrom), (iv) net income (or loss) of a Person combined with
Publishing or any of its subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (v) any gain or
loss, net of taxes, realized upon the termination of any employee pension
benefit plan, (vi) aggregate net gains and losses (less all fees and expenses
relating thereto) in respect of dispositions of assets (including without
limitation sales of shares of Unrestricted Subsidiaries or unconsolidated
Persons and non-cash writeoffs of assets (provided that there are no continuing
cash expenses related to such writeoffs)) other than in the ordinary course of
business, (vii) any income, gain or loss resulting from the issuance, sale or
redemption of Mirror Preferred or Argsub Preferred, (viii) the net income of any
Restricted Subsidiary to the extent that the declaration of dividends or similar
distributions by that Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or its
stockholders; provided, however, that the foregoing shall not apply to the net
income of AP-91 relating to the business of AP-91, as conducted as of the date
of the Indenture, on account of restrictions on AP-91 in agreements as in effect
on the date of the Indenture, restrictions permitted under in clauses (iii) and
(iv) of the "Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries" covenant in the relevant Indenture (to the extent such
clauses are applicable at the time of determination), (ix) any restoration to
income of any contingency reserve, except to the extent that provision for such
reserve was made out of income accrued at any time following the date of the
Indenture, (x) any net gain from the collection of proceeds of life insurance
policies, (xi) any gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness of Publishing or one of its
Restricted Subsidiaries, (xii) aggregate net gains or losses relating to foreign
currency transactions or translations and (xiii) redundancy costs relating to
the permanent elimination of jobs, provided that the amount of such expenses are
certified by Publishing's independent accountants, and (b) subtracting, without
duplication, the aggregate amount of dividends on Preferred Stock of Restricted
Subsidiaries to the extent that such Preferred Stock is included as Indebtedness
in the calculation of Publishing's Consolidated Cash Flow Ratio. In calculating
the Operating Cash Flow of Publishing and its Restricted Subsidiaries, the
Consolidated Net Income of Restricted Subsidiaries that are not Wholly Owned
Restricted Subsidiaries will be included only to the extent of Publishing's
common equity interest in such Restricted Subsidiaries, as provided in the
definition of Operating Cash Flow.
"Consolidated Net Worth" means the common and preferred stockholders'
equity of Publishing and its Restricted Subsidiaries (exclusive of any
redeemable capital stock), as determined on a Consolidated basis and in
accordance with GAAP.
"Consolidated Tangible Assets" means the total assets appearing on a
Consolidated balance sheet of Publishing and its Restricted Subsidiaries less,
without duplication, each of the following: (i) all applicable depreciation,
amortization and other valuation reserves; (iii) all other intangible assets and
deferred charges; (iv) deferred income tax assets (to the extent recorded as an
asset); and (v) all investments in unconsolidated subsidiaries (including all
Unrestricted Subsidiaries).
"Consolidation" means, with respect to any Person, the consolidation of the
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP; provided,
however, that the accounts of any Unrestricted Subsidiary shall not be
consolidated with Publishing but instead the interest of Publishing or any
Restricted Subsidiary therein will be accounted for as an investment. The term
"Consolidated" shall have a correlative meaning.
"CST Real Estate" means the real estate, including land, building and
fixtures, located at 401 North Wabash Avenue, Chicago, Illinois, where
Publishing currently maintains its headquarters, and all improvements thereon.
"CST Real Estate Transactions" means the sale or other disposition (other
than to an Affiliate) of all or any portion of the interest of Publishing or a
Restricted Subsidiary in the CST Real Estate.
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<PAGE> 51
"Currency Agreements" means one or more of the following agreements which
shall be entered into with one or more financial institutions: foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"DTH" means DT Holdings Limited, a corporation under the laws of England
and its successors and assigns.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extraordinary Cash Dividend" means in respect of the Southam Interests:
(i) a cash dividend in respect of a particular calendar year
representing the excess, if any, of (A) the aggregate of all cash dividends
declared and paid on such securities during the calendar year over (B) the
greatest of (x) 200% of the aggregate of all cash dividends declared and
paid on such securities during the immediately preceding calendar year, (y)
300% of the average of the aggregate of all cash dividends declared and
paid on such securities during the immediately preceding three calendar
years; and (z) 100% of the aggregate consolidated net income of the issuer
of such securities, before extraordinary items, for its immediately
preceding fiscal year; and
(ii) any cash dividend declared by Southern on its common shares which
the directors of Southam by resolution determine to be extraordinary,
taking into account the amount of the dividend, the effect of the dividend
on the market value of such securities after payment thereof, the form of
payment, the financial position of Southam, economic conditions, business
practices and such other factors as the directors of Southam consider to be
relevant.
"FDTH" means First DT Holdings Limited, a corporation under the laws of
England and its successors and assigns.
"FDTH Credit Facility" means the credit agreement dated as of May 30, 1996,
among FDTH, the financial institutions party thereto and The Toronto-Dominion
Bank, as issuing bank and Agent, as such agreement may be amended, renewed,
extended, substituted, refinanced, restructured, replaced, supplemented or
otherwise modified from time to time (including, without limitation, any
successive renewals, extensions, substitutions, refinancings, restructurings,
replacements, supplementations or other modifications of the foregoing that
increase the aggregate amount of borrowings outstanding or the aggregate
commitments of the lenders thereunder).
"Foreign Subsidiary Indebtedness" means Indebtedness Incurred by a non-U.S.
domiciled Restricted Subsidiary that has no material U.S. operations.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date of the relevant Indenture.
"Guarantee" means the guarantee by the Company and, if the context
requires, by any Restricted Subsidiary Guarantor of the Indenture Obligations.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
guaranteed directly or indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (i) to pay
or purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness (or to indemnify another Person for the costs
thereof), (ii) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the debtor to
make payment of such Indebtedness or to assure the holder of such Indebtedness
against loss, (iii) to supply funds to, or in any other manner invest in, the
debtor (including any agreement to pay for property or services without
requiring that such property be received or such services be rendered), (iv) to
maintain working capital or equity capital of the debtor, or otherwise to
maintain the net worth, solvency or other financial condition of the debtor or
(v) otherwise to assure a creditor against loss, provided that the term
"guarantee" shall not include endorsements for collection or deposit, in either
case in the ordinary course of business.
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<PAGE> 52
"Hollinger Inc. Transaction" means the transaction, in all material
respects as announced publicly on January 7, 1997, by which Hollinger Inc. is to
transfer, directly or indirectly, to Hollinger Eastern certain of its owned
Canadian publishing interests for an aggregate consideration not to exceed $382
million, subject to working capital adjustments and currency exchange
adjustments.
"Hollinger Eastern" means Hollinger Eastern Publishing Inc., a Canadian
corporation, and its successors and assigns.
"Hollinger International/Hollinger Eastern Interests" means Preferred Stock
of any Person (or other Capital Stock convertible or exchangeable into Preferred
Stock of such Person) which holds the voting interests of Hollinger Eastern
which are owned by the Company and its Subsidiaries as of the date that
Hollinger Eastern is designated as a Restricted Subsidiary.
"Hollinger International Guarantee" means (i) in the case of the Senior
Indenture, the unsecured, senior guarantee of the Senior Securities provided by
the Company and (ii) in the case of the Senior Subordinated Indenture, the
unsecured senior subordinated guarantee of the Securities.
"HTH" means Hollinger-Telegraph Holdings Inc., a corporation continued
under the laws of Alberta, and its successors and assigns.
"HTH/FDTH Share Exchange Agreement" means the share exchange agreement
dated as of July 19, 1995, between Hollinger Inc. and FDTH, as amended,
supplemented or otherwise modified from time to time.
"Incur" means create, issue, assume, guarantee or otherwise in any manner
become directly or indirectly liable for or with respect to or otherwise incur.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (or other obligations to former owners of acquired
businesses), excluding any trade payables and other accrued current liabilities
arising in the ordinary course of business, but including, without limitation,
all obligations, contingent or otherwise, of such Person in connection with any
letters of credit issued under letter of credit facilities, acceptance
facilities or other similar facilities and in connection with any agreement to
purchase, redeem, exchange, convert or otherwise acquire for value any Capital
Stock of such Person, or any warrants, rights or options to acquire such Capital
Stock, now or hereafter outstanding, (ii) all obligations of such Person
evidenced by bonds, notes, debentures or other similar instruments, (iii) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business, (iv) all
obligations under Interest Rate Agreements and Currency Agreements of such
Person, (v) all Capital Lease Obligations of such Person, (vi) all Indebtedness
referred to in clauses (i) through (v) above of other Persons and all dividends
of other Persons, the payment of which is secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vii) all
Guaranteed Debt of such Person, (viii) all Redeemable Capital Stock and (without
duplication) all Preferred Stock of Restricted Subsidiaries other than (a)
Mirror Preferred, provided that such Mirror Preferred continues to qualify as
such under the definition thereof, (b) the Hollinger International/ Hollinger
Eastern Interests, provided that the Company grants a security interest in such
Hollinger International/Hollinger Eastern Interests as security for its
guarantee of the Senior Securities or the Senior Subordinated Securities, as the
case may be, which security interest, in either case, shall be subordinate to
any security interest in the Hollinger International/Hollinger Eastern Interests
that may be granted under the New Bank Credit Facility, and (c) Preferred Stock
held by Restricted Subsidiaries or Publishing, in each case valued at the
greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued and unpaid dividends and (ix) any amendment, supplement, modification,
deferral, renewal, extension, refunding or refinancing of any Indebtedness of
the types referred to in clauses (i) through (viii) above; provided, however,
that this definition shall not apply to Indebtedness represented by the
Southam-Linked Debentures which are secured, directly or indirectly, by shares
of Southam which are owned directly or indirectly by Publishing. For purposes
hereof, the "maximum fixed repurchase price" of any Redeemable Capital Stock or
Preferred Stock
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<PAGE> 53
which does not have a fixed repurchase price shall be calculated in accordance
with the terms of such Redeemable Capital Stock or Preferred Stock as if such
Redeemable Capital Stock or Preferred Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to the Indenture, and
if such price is based upon, or measured by, the fair market value of such
Redeemable Capital Stock or Preferred Stock, such fair market value to be
determined in good faith by the Board of Directors of such Person.
"Indenture Obligations" means the obligations of Publishing under the
relevant Indenture or under the Securities to pay principal of, premium, if any,
and interest when due and payable, and all other amounts due or to become due
under or in connection with the relevant Indenture and, the Securities and the
performance of all other obligations to the Trustee, the Paying Agent and the
holders under the relevant Indenture and the Securities, according to the terms
thereof.
"Independent Committee" means a committee of the board of directors of
Publishing whose membership meets the requirements of the New York Stock
Exchange applicable to audit committees as in effect on the date of original
issuance of the Notes or a committee of the board of directors of Publishing
whose membership satisfies any more restrictive requirements of independence of
any securities exchange or market on which Publishing's or the Company's equity
securities are traded or listed.
"Independent Director" means a member of the board of directors of a Person
that is not an officer, employee or former officer or employee of such Person or
one of its Affiliates and, with respect to any transaction or series of related
transactions, a member of the board of directors who does not have any material
direct or indirect financial interest in or with respect to such transaction or
series of related transactions (including for such purpose the interest of any
other Person with respect to whom such director is also a director, officer or
employee).
"Interest Rate Agreements" means one or more of the following agreements
which shall be entered into from time to time with one or more financial
institution: interest rate protection agreements (including, without limitation,
interest rate swaps, caps, floors, collars and similar agreements) and/or other
types of interest rate hedging agreements.
"Investment" means, with respect to any Person, directly or indirectly, any
advance, loan (including guarantees), or other extension of credit or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase, acquisition or ownership by such Person of any Capital Stock, bonds,
notes, debentures or other securities issued or owned by, any other Person and
all other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
security interest, hypothecation or other encumbrance upon or with respect to
any property of any kind, real or personal, movable or immovable, now owned or
hereafter acquired.
"Material Restricted Subsidiary" means each Restricted Subsidiary of
Publishing which (i) for the most recent fiscal year of Publishing accounted for
more than 5% of the Consolidated revenues of Publishing and its Restricted
Subsidiaries or (ii) at the end of such fiscal year was the owner (beneficial or
otherwise) of more than 5% of the Consolidated Assets of Publishing and its
Restricted Subsidiaries, all as shown on Publishing's Consolidated financial
statements for such fiscal year.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein provided or as
provided in the relevant Indenture, whether at Stated Maturity, the Purchase
Date or the redemption date and whether by declaration of acceleration, Offer in
respect of Excess Proceeds, Change of Control, call for redemption or otherwise.
"Media Business" means the business of the broadcast of radio or television
broadcasting, cable and satellite programs (including national, regional or
local radio, television, cable and satellite programs).
"Mirror Preferred" means Preferred Stock of DTH or FDTH currently held by
or hereafter issued to an Argsub (i) having terms (including, without
limitation, terms with respect to liquidation, redemption and dividends)
identical to those contained in Argsub Preferred issued or transferred
simultaneously with such
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<PAGE> 54
Argsub's acquisition of such DTH or FDTH Preferred Stock in equivalent amounts
to DTH or FDTH, as the case may be, and (ii) in respect of which no cash
payments are or have been made by the issuer thereof, except for cash payments
in respect of certain Mirror Preferred directly from FDTH to DTH at the
direction of Argsub; provided that, at such time as (x) the foregoing clauses
(i) and (ii) are no longer satisfied, (y) the issuer of any Argsub Preferred
Incurs any Indebtedness or other liability other than tax liabilities or
pursuant to such Argsub Preferred or acquires any other assets other than the
Mirror Preferred, or (z) the holder of any Mirror Preferred transfers such stock
other than to a Wholly Owned Restricted Subsidiary, then (1) an Event of Default
will occur under the Indenture, (2) such Preferred Stock of FDTH held by Argsub,
will be deemed to be Redeemable Capital Stock that is Incurred on such date; and
provided further that in the event that the Mirror Preferred have not been
redeemed, retracted, transferred to DTH or otherwise cancelled without the
payment of cash (except for cash payments in respect of certain Mirror Preferred
directly to DTH) on or before July 1, 1997, then such Preferred Stock shall be
treated as Indebtedness for the purposes of the "Limitation on Indebtedness"
covenant in the relevant Indenture.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any Person,
the proceeds thereof in the form of cash or cash equivalents including payments
of principal and interest in respect of deferred payment obligations when
received in the form of, or stock or other assets when disposed of for, cash or
cash equivalents (except to the extent that such obligations are financed or
sold with recourse to Publishing or any Restricted Subsidiary) net of (i)
brokerage commissions and other reasonable fees and expenses (including fees and
expenses of counsel and investment bankers) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale, (iii) payments
made to retire indebtedness where payment of such indebtedness is secured by the
assets or properties the subject of such Asset Sale, (iv) amounts required to be
paid to any Person (other than Publishing or any Restricted Subsidiary) owning a
beneficial interest in the assets subject to the Asset Sale and (v) appropriate
amounts to be provided by Publishing or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by Publishing or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other postemployment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined and reflected in
an officers' certificate delivered to the Trustee and (b) with respect to any
issuance or sale of Capital Stock or options, warrants or rights to purchase
Capital Stock, or debt securities or Capital Stock that have been converted into
or exchanged for Capital Stock, as referred to in the "Limitation on Restricted
Payments" covenant in the relevant Indenture, the proceeds of such issuance or
sale in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed of for, cash or cash equivalents (except to the extent that
such obligations are financed or sold with recourse to Publishing or any
Restricted Subsidiary), net of attorney's fees, accountant's fees and brokerage,
consultation, underwriting and other fees and expenses actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"New Bank Credit Facility" means the credit agreement dated as of May 30,
1996 among Publishing, the financial institutions party thereto and The
Toronto-Dominion Bank, as issuing bank and agent, as such agreement may be
amended, renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified from time to time (including, without
limitation, any successive renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplementations or other modifications of the
foregoing that increase the aggregate amount of borrowings outstanding or the
aggregate commitments of the lenders thereunder).
"Newspaper Business" means the business of publishing and distributing
(including distributing by electronic means) newspapers, magazines and other
paid or free publications having national, regional, local or targeted markets,
including publications having limited or no news or editorial content such as
shoppers or other "total market coverage" publications and similar publications.
"Operating Cash Flow" means, for any period, an amount equal to the
Consolidated Net Income of Publishing and the Restricted Subsidiaries for such
period, plus, to the extent deducted in calculating such Consolidated Net
Income, (a) interest expense and other financing costs and expenses, (b)
dividends paid on any Preferred Stock of Restricted Subsidiaries to the extent
such Preferred Stock is included as Indebtedness
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in the calculation of Publishing's Consolidated Cash Flow Ratio, (c)
depreciation and amortization and (d) all taxes, whether or not deferred,
applicable to such period.
For purposes of calculating Operating Cash Flow for the four fiscal
quarters most recently completed prior to any date on which an action is taken
that requires a calculation of the Consolidated Cash Flow Ratio, (a) any Person
that is a Restricted Subsidiary on such date (or would become a Restricted
Subsidiary in connection with the transaction that requires the determination of
such ratio) shall be deemed to have been a Restricted Subsidiary at all times
during such period, (b) any Person that is not a Restricted Subsidiary on such
date (or would cease to be a Restricted Subsidiary in connection with the
transaction that requires the determination of such ratio) shall be deemed not
to have been a Restricted Subsidiary at any time during such period, (c) if
Publishing or any Restricted Subsidiary shall have in any manner acquired or
disposed of any operating business (including without limitation acquisitions
accounted for on a "pooling of interests" or "as if pooling of interests" basis)
during or subsequent to such period, such calculation shall be made on a pro
forma basis on the assumption that such acquisition or disposition has been
completed on the first day of such period and (d) in the case of a Restricted
Subsidiary that is not a Wholly Owned Restricted Subsidiary, the determination
of the percentage of the Operating Cash Flow of such Restricted Subsidiary that
is to be included in the calculation of Publishing's Consolidated Cash Flow
Ratio shall be made on a pro forma basis on the assumption that the percentage
of Publishing's common equity interest in such Restricted Subsidiary on the
first day of such period was equivalent to its common equity interest on the
date of the determination (it being understood, in the case of foregoing clause
(c), that if such pro forma calculations have been made in accordance with
Regulation S-X under the Exchange Act, such method of calculation (but not
necessarily the adjustments) shall be presumed to be acceptable) (it being
further understood that the foregoing clause (d) shall not be operative until
such time as both of The Telegraph and Southam shall be Restricted
Subsidiaries).
"Opinion of Counsel" means a written opinion of counsel, in form and
substance reasonably satisfactory to the Trustee, who may be counsel for
Publishing or the Trustee, and who shall be reasonably acceptable to the
Trustee, including but not limited to an Opinion of Independent Counsel.
"Opinion of Independent Counsel" means a written opinion, in form and
substance reasonably satisfactory to the Trustee, by someone who is not an
employee or former employee of Publishing and who shall be reasonably acceptable
to the Trustee.
"Original Issue Discount Security" means (i) any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof, and (ii) any other
Security which is issued with "original issue discount" within the meaning of
Section 1273(a) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Outstanding" when used with respect to Securities means, as of the date of
determination, all Securities theretofore authenticated and delivered under the
relevant Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore irrevocably deposited
with the Trustee or any Paying Agent (other than Publishing) in trust or
set aside and segregated in trust by Publishing (if Publishing shall act as
its own Paying Agent) for the Holders of such Securities; provided, that if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to the relevant Indenture or provision therefor reasonably
satisfactory to the Trustee has been made;
(c) Securities, except to the extent provided in the provisions
described above under "Defeasance or Covenant Defeasance"; and
(d) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to the relevant Indenture,
other than any such Securities in respect of which there shall have been
presented to the Trustee and Publishing proof reasonably satisfactory to
each of them that such Securities are held by a bona fide purchaser in
whose hands the Securities are valid obligations of Publishing; provided,
however, that in determining whether the Holders of the requisite principal
amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or
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waiver hereunder, Securities owned by Publishing or any other obligor upon
the Securities or any Affiliate of Publishing or such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee actually knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the reasonable
satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not Publishing or any other obligor
upon the Securities or any Affiliate of Publishing or such other obligor.
"Pari Passu Indebtedness" means (i) in the case of the Senior Indenture,
any Indebtedness of Publishing that is pari passu in right of payment with the
Senior Securities and (ii) in the case of the Senior Subordinated Indenture,
Indebtedness of Publishing that is pari passu with the Senior Subordinated
Securities.
"Permitted Indebtedness" means the following:
(i) Indebtedness of Publishing or Foreign Subsidiary Indebtedness
under the New Bank Credit Facility in an aggregate principal amount at any
one time outstanding not to exceed $150 million, and once both of The
Telegraph and Southam are Restricted Subsidiaries, $250 million and, once
the Hollinger Inc. Transaction closes, $475 million; provided, however,
that Indebtedness under the New Bank Credit Facility may not be Incurred
under this paragraph for purposes of purchasing or otherwise acquiring the
Capital Stock or a substantial portion of the assets of another Person
(including the minority interest in Southam but excluding acquisitions of
inventory, equipment and similar assets in the ordinary course of business)
unless, immediately after giving effect to such transaction on a pro forma
basis, Publishing could Incur $1.00 additional Indebtedness (other than
Permitted Indebtedness) under the "Limitation on Indebtedness" covenant in
the relevant Indenture;
(ii) Once Southam is a Restricted Subsidiary and until such time as
Southam is not a Public Entity, Indebtedness of Southam; provided that the
Southam Cash Flow Ratio for the four full fiscal quarters immediately
preceding the Incurrence of such Indebtedness taken as one period is not
greater than 4.0:1.0 (for purposes of determining the Southam Cash Flow
Ratio for any period, pro forma effect shall be given to (i) the Incurrence
of such Indebtedness and (if applicable) the application of the net
proceeds therefrom, including to refinance other Indebtedness, as if such
Indebtedness was Incurred, and the application of such proceeds occurred,
at the beginning of such four-quarter period; (ii) the Incurrence,
repayment or retirement of any other Indebtedness by Southam or any of its
Restricted Subsidiaries since the first day of such four-quarter period as
if such Indebtedness was Incurred, repaid or retired at the beginning of
such four-quarter period; (iii) in the case of Acquired Indebtedness, the
related acquisition (as if such acquisition had been consummated on the
first day of such four-quarter period); and (iv) any acquisition or
disposition by Southam or any of its Restricted Subsidiaries of any company
or any business or any assets out of the ordinary course of business,
whether by merger, stock purchase or sale or asset purchase or sale or any
related repayment of Indebtedness, in each case since the first day of such
four-quarter period, as if such acquisition or disposition had been
consummated on the first day of such four-quarter period); provided,
however, that Southam may not Incur Indebtedness under this paragraph for
purposes of purchasing or otherwise acquiring the Capital Stock or a
substantial portion of the assets of another Person (including the minority
interest in Southam but excluding acquisitions of inventory, equipment and
similar assets in the ordinary course of business) unless, immediately
after giving effect to such transaction on a pro forma basis, Publishing
could Incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the "Limitation on Indebtedness" covenant in the
relevant Indenture;
(iii) guarantees by, and Liens on the property of, any Restricted
Subsidiary guaranteeing or securing Indebtedness of Publishing or Foreign
Subsidiary Indebtedness under the New Bank Credit Facility and, provided
that both of The Telegraph and Southam are Restricted Subsidiaries,
guarantees of and Liens securing the FDTH Credit Facility, which guarantees
or Liens are in existence on the Issue Date or the date upon which they
became Restricted Subsidiaries or guarantees that are otherwise permitted
under the "Limitation on Issuances of Guarantees of Indebtedness" covenant
in the relevant Indenture;
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(iv) Indebtedness of Publishing pursuant to the Securities and
Indebtedness of any Restricted Subsidiary constituting a Guarantee of the
Securities;
(v) Indebtedness of Publishing or any Restricted Subsidiary
outstanding on the date of the relevant Indenture and listed on a schedule
to the relevant Indenture;
(vi) Indebtedness (a) of Publishing owing to a Wholly Owned Restricted
Subsidiary or, provided that both of The Telegraph and Southam are
Restricted Subsidiaries, a Restricted Subsidiary, or (b) of a Wholly Owned
Restricted Subsidiary owing to Publishing or another Wholly Owned
Restricted Subsidiary or, provided that both of The Telegraph and Southam
are Restricted Subsidiaries, a Restricted Subsidiary owing to another
Restricted Subsidiary or Publishing; provided that any such Indebtedness is
made pursuant to an intercompany note setting forth the principal amount,
interest rate and payment dates, the maturity or similar terms and, in the
case of Indebtedness of Publishing owing to a Wholly Owned Restricted
Subsidiary or a Restricted Subsidiary, as the case may be, is subordinated
in right of payment from and after such time as the Securities shall become
due and payable (whether at Stated Maturity, acceleration or otherwise) to
the payment and performance of Publishing's obligations under the Notes;
provided further that (x) any disposition, pledge or transfer of any such
Indebtedness to a Person (other than (A) to Publishing or a Wholly Owned
Restricted Subsidiary or, provided that both of The Telegraph and Southam
are Restricted Subsidiaries, a Restricted Subsidiary or (B) a pledge of
such Indebtedness to secure Indebtedness existing at such time under, and
pursuant to the terms of, the New Bank Credit Facility or the AP-91 Senior
Notes and, provided that both of The Telegraph and Southam are Restricted
Subsidiaries, the FDTH Credit Facility and the Southam credit facilities
existing on January 1, 1997, as amended) will be deemed to be an Incurrence
of such Indebtedness by the obligor not permitted by this clause (vi) and
(y) any transaction pursuant to which any Wholly Owned Restricted
Subsidiary or, provided that both of The Telegraph and Southam are
Restricted Subsidiaries, a Restricted Subsidiary, that has Indebtedness
owing to Publishing or any other Wholly Owned Restricted Subsidiary (or,
provided that both of The Telegraph and Southam are Restricted
Subsidiaries, any other Restricted Subsidiary), ceases to be a Wholly Owned
Restricted Subsidiary or, provided that both of The Telegraph and Southam
are Restricted Subsidiaries, a Restricted Subsidiary, will be deemed to be
the Incurrence of Indebtedness by Publishing or such other Restricted
Subsidiary that is not permitted by this clause (vi);
(vii) obligations of Publishing or any Restricted Subsidiary pursuant
to Interest Rate Agreements or Currency Agreements designed to protect
Publishing or any Restricted Subsidiary against fluctuations in interest
rates or currency exchange rates in respect of Indebtedness of Publishing
or any of its Restricted Subsidiaries or changes in dividend rates in
respect of preference shares of DTH, the notional amount of which (in the
case of Interest Rate Agreements) and the notional or exchange amount of
which (in the case of Currency Agreements) do not exceed the aggregate
principal amount of such Indebtedness or of such preference shares of DTH,
as the case may be;
(viii) guarantees by Restricted Subsidiaries of Senior Indebtedness
(in the case of the Senior Subordinated Indenture) or Pari Passu
Indebtedness (in the case of the Senior Indenture) of Publishing otherwise
permitted to be Incurred in accordance with the "Limitation on
Indebtedness" covenant in the relevant Indenture;
(ix) Indebtedness of Publishing or a Restricted Subsidiary Incurred to
finance a new printing plant for the Chicago Sun-Times and the liabilities
directly associated therewith (collectively, the "CST Printing Plant") in
an aggregate amount not in excess of the lesser of (x) $75,000,000 and (y)
the aggregate amount needed to finance the CST Printing Plant and
associated financing costs;
(x) letter of credit reimbursement obligations incurred by Publishing
or a Restricted Subsidiary in the ordinary course of business to support
workers' compensation insurance obligations to the extent that such
obligations are recorded on the balance sheet of the issuer;
(xi) any renewals, extensions, substitutions, refundings, refinancings
or replacements (collectively, a "refinancing") of any Indebtedness
described in paragraphs (i), (ii), (iii), (iv),(viii) and (xii) of this
definition of "Permitted Indebtedness" by Publishing or by the obligor of
such Permitted Indebtedness,
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including any successive refinancings, so long as such refinancing does not
increase the aggregate principal amount of Indebtedness represented thereby
and, in the case of Pari Passu Indebtedness or Subordinated Indebtedness,
such refinancing does not reduce the Average Life to Stated Maturity or the
Stated Maturity of such Indebtedness;
(xii) provided that both of The Telegraph and Southam are Restricted
Subsidiaries, Indebtedness of Publishing or any Restricted Subsidiary in an
aggregate amount at any time outstanding not to exceed $25 million in
respect of purchase money obligations, provided such Indebtedness (a) is
Incurred within 180 days of the purchase of the relevant assets, (b) does
not exceed the actual purchase price of such assets and (c) any related
Liens do not extend to any assets other than those being purchased; and
(xiii) provided that both of The Telegraph and Southam are Restricted
Subsidiaries, Indebtedness of Publishing or any Restricted Subsidiary in an
aggregate principal amount at any time outstanding not to exceed $10
million.
"Permitted Investment" means any of the following provided that, in the
case of clauses (vii), (viii),(ix), (x), (xi) and (xii), (a) no Default or Event
of Default shall have occurred and be continuing, (b) no holders of any other
Indebtedness of Publishing or any Restricted Subsidiary shall have an
Acceleration Right and (c) immediately before and immediately after giving
effect to such Investment, on a pro forma basis, Publishing could Incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) under the
"Limitation on Indebtedness" covenant in the relevant Indenture:
(i) Investments in any Wholly Owned Restricted Subsidiary (or,
provided that both of The Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary) or Publishing or Investments in a
Person, if as a result of such Investment (A) such Person becomes a Wholly
Owned Restricted Subsidiary (or, provided that both of The Telegraph and
Southam are Restricted Subsidiaries, a Restricted Subsidiary), or (B) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into,
Publishing or any Wholly Owned Restricted Subsidiary (or, provided that
both of The Telegraph and Southam are Restricted Subsidiaries, a Restricted
Subsidiary);
(ii) Investments in the Securities;
(iii) Indebtedness owing to a Wholly Owned Restricted Subsidiary or,
provided that both of The Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary, in each case as described under
clause (vi) of the definition of "Permitted Indebtedness";
(iv) Temporary Cash Investments;
(v) Investments acquired by Publishing or any Subsidiary in connection
with an Asset Sale permitted under the "Limitation on Sale of Assets"
covenant in the relevant Indenture to the extent such Investments are
non-cash consideration as permitted under such covenant;
(vi) Investments in existence on the date of the relevant Indenture;
(vii) Investments in or in Persons owning Newspaper Business or Media
Business assets (including investments in Unrestricted Subsidiaries but
excluding Investments in Affiliates that control Publishing) in an
aggregate amount following the date of the relevant Indenture not in excess
of 25% of the aggregate cumulative cash dividends or distributions received
by Publishing and its Restricted Subsidiaries from any of Publishing's
Unrestricted Subsidiaries received during the period (treated as a single
accounting period) after the date of the relevant Indenture and prior to
the date of the Permitted Investment; provided, however, that for purposes
of this clause, cash dividends or distributions shall not include the
Southam Dividend Amount or any cash dividends or distributions received by
Publishing or any Wholly Owned Restricted Subsidiary in accordance with
clause (vii) of paragraph (b) of the "Limitation on Restricted Payments"
covenant in the relevant Indenture;
(viii) provided that The Telegraph is a Restricted Subsidiary,
Investments in West Ferry Printers and Trafford Park Printers to cover The
Telegraph's share of operating losses associated with the printing of
newspapers and to finance capital expenditures related to the printing
business; provided that, at the
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time of any such Investment, neither West Ferry Printers nor Trafford Park
Printers shall be engaged in any business other than the business of
printing newspapers, periodicals and similar media;
(ix) Investments by Southam in Newspaper Businesses and Media
Businesses in Canada; provided that (i) Southam is at the time a Restricted
Subsidiary, (ii) Southam is at the time a Public Entity, and (iii) the
Investment is not made in an Affiliate of Southam (other than a Subsidiary
of Southam); and provided further that, unless such Investment by Southam
otherwise qualifies as a Permitted Investment under this definition (other
than pursuant to this clause (x)), such Investment will constitute a
Restricted Payment under the "Limitation on Restricted Payments" covenant
in the relevant Indenture;
(x) Investments by DTH or FDTH in Argsub Preferred, provided that (x)
the issuer of such Argsub Preferred simultaneously makes an Investment in
Mirror Preferred of DTH or FDTH, as the case may be, in an equivalent
amount and (y) such Mirror Preferred continues to qualify as such under the
definition thereof; and
(xi) in addition to the Investments described in clauses (i) through
(xi) of this definition of "Permitted Investments," Investments in any
Restricted Subsidiary, Unrestricted Subsidiary or in any joint venture or
other entity in an amount not to exceed $10,000,000 in the aggregate since
the date of the relevant Indenture; provided that so long as The Telegraph
is a Restricted Subsidiary, the loan of $6,000,000 from Publishing to FDTH
prior to the time The Telegraph became a Restricted Subsidiary shall not
count against the $10,000,000 amount provided for in this clause (xii).
"Permitted Real Estate Sale" means any Asset Sale not involving an
Affiliate of Publishing consisting of the sale of any printing or distribution
facility (including the associated real property and the improvements and
fixtures forming a part thereof) (other than the CST Real Estate) formerly used
by Publishing or a Restricted Subsidiary in the production of newspapers and
related publications (or acquired by one of them as part of the acquisition of a
Newspaper Business whether or not used by Publishing) and that after such Asset
Sale will not be used for the production of any newspaper or related publication
of Publishing or a Restricted Subsidiary, provided that the aggregate value (as
determined by the Board of Directors of Publishing) of all such Asset Sales
completed within any twelve-month period shall not exceed $5,000,000 (it being
understood that this definition does not include, among other things, any Asset
Sale consisting of the sale of any printing or distribution facility in
connection with the sale by Publishing or any Restricted Subsidiary of any
Newspaper Business).
"Permitted Subsidiary Indebtedness" means Indebtedness of the Restricted
Subsidiaries, taken as a whole, with an aggregate principal amount outstanding
(calculated exclusive of the AP-91 Senior Notes) not in excess of the greater of
(x) $40,000,000 and (y) 10% of Consolidated Tangible Assets measured as of the
most recent fiscal quarter.
"Preferred Stock" means, with respect to any Person, any Capital Stock of
any class or classes (however designated) which is preferred as to the payment
of dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person; provided that this definition
shall not include Mirror Preferred provided that such Mirror Preferred continues
to qualify as such under the definition thereof.
"Public Debt" means any notes, bonds or debentures or other evidence of
Indebtedness issued in the public markets or the market for securities sold
pursuant to Rule 144A under the Securities Act of 1933.
"Public Entity" means an entity (x) in which the equity interest of the
Company and its Affiliates does not exceed 80%, (y) in which the market value of
the Capital Stock held by non-affiliates exceeds $100,000,000, and (z) the
Capital Stock of which is traded on a recognized national securities exchange in
the United States or a prescribed securities exchange in Canada.
"Publishing" means Hollinger International Publishing Inc., a corporation
incorporated under the laws of Delaware, until a successor Person shall have
become such pursuant to the provisions described above under "Consolidation,
Merger, Sale of Assets" and thereafter "Publishing" shall mean such successor
Person. To the extent necessary to comply with the requirements of the
provisions of Trust Indenture Act Sections 310 through 317 as they are
applicable to Publishing, the term "Publishing" shall include any other obligor
with respect to the Securities for purposes of complying with such provisions,
including any Guarantor.
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"Publishing Request" or "Publishing Order" means a written request or order
signed in the name of Publishing by any one of its Chairman of the Board, its
Vice Chairman, its President or a Vice President (regardless of Vice
Presidential designation), and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and in form and substance
reasonably satisfactory to the Trustee and delivered to the Trustee.
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Rating Agency" means Standard & Poor's Corporation and its successors
("S&P"), and Moody's Investors Service, Inc. and its successors ("Moody's"), or
if S&P and Moody's or both shall not make a rating of the Notes publicly
available, a nationally recognized United States statistical rating agency or
agencies, substituted for S&P or Moody's or both, as the case may be.
"Rating Category" is defined in the Indenture as each major rating category
symbolized by (a) in the case of S&P, AAA, AA, A, BBB, BB, B, CCC, CC and C and
each such Rating Category shall include pluses or minuses ("gradations")
modifying such capital letters; and (b) in the case of Moody's, Aaa, Aa, A, Baa,
Ba, B, Caa, Ca and C and each such Rating Category shall include added numerals
such as 1, 2 or 3 ("gradations") modifying such letters.
"Redeemable Capital Stock" means any Capital Stock that, either by its
terms or by the terms of any security into which it is convertible or
exchangeable or otherwise, is, or upon the happening of an event or passage of
time would be, required to be redeemed prior to any Stated Maturity of the
principal of the Notes or is redeemable at the option of the holder thereof at
any time prior to any such Stated Maturity, or is convertible into or
exchangeable for debt securities at any time prior to any such Stated Maturity
at the option of the holder thereof; provided that this definition shall not
include Mirror Preferred provided that such Mirror Preferred continues to
qualify as such under the definition thereof.
"Restricted Subsidiary" means, initially, each Subsidiary of Publishing
existing on the date of the Indenture, other than DTH and its Subsidiaries, and
any other Subsidiary designated from time to time by the Board of Directors of
Publishing as a "Restricted Subsidiary" in accordance with the "Restricted
Subsidiaries" covenant of the Indenture.
"Restricted Subsidiary Guarantor" means each Subsidiary of Publishing that
is required to issue a Guarantee of the Securities under the terms of the
Indenture.
"Scheme of Arrangement" means the acquisition by FDTH of the publicly held
shares in The Telegraph not owned by FDTH or any of its Affiliates effected by
way of a "Scheme of Arrangement" under Section 425 of the Companies Act 1985 of
England.
"Securities Act" means the Securities Act of 1933, as amended.
"Series" means any series of debentures, notes, bonds or other evidence of
Indebtedness issued pursuant to either of the Indentures.
"Series A Preferred Shares" means the Series A Redeemable Convertible
Preferred Stock of the Company, as in effect on the date of the relevant
Indenture.
"Services Agreement" means the Services Agreement dated as of February 7,
1996, as amended in connection with the 9 1/4% Notes offering, among the
Company, Publishing and Hollinger Inc., and as the same may be further amended
in accordance with the terms of the relevant Indenture.
"Southam Cash Flow" means, for any period, an amount equal to the Southam
Net Income for such period, plus, to the extent deducted in calculating such
Southam Net Income, (a) interest expense and other financing costs and expenses,
(b) dividends paid on any Preferred Stock of Restricted Subsidiaries of Southam
to the extent such Preferred Stock is included as Indebtedness in the
calculation of the Southam Cash Flow Ratio, (c) depreciation and amortization,
and (d) all taxes, whether or not deferred, applicable to such period.
For purposes of calculating Southam Cash Flow for the four fiscal quarters
most recently completed prior to any date on which an action is taken that
requires a calculation of the Southam Cash Flow Ratio, (a) any
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Person that is a Restricted Subsidiary of Southam on such date (or would become
a Restricted Subsidiary of Southam in connection with the transaction that
requires the determination of such ratio) shall be deemed to have been a
Restricted Subsidiary of Southam at all times during such period, (b) any Person
that is not a Restricted Subsidiary of Southam on such date (or would cease to
be a Restricted Subsidiary of Southam in connection with the transaction that
requires the determination of such ratio) shall be deemed not to have been a
Restricted Subsidiary of Southam at any time during such period;(c)if Southam or
any of its Restricted Subsidiaries shall have in any manner acquired or disposed
of any operating business during or subsequent to such period, such calculation
shall be made on a pro forma basis on the assumption that such acquisition or
disposition has been completed on the first day of such period; and (d) in the
case of a Restricted Subsidiary that is not a Wholly Owned Restricted
Subsidiary, the determination of the percentage of the Operating Cash Flow of
such Restricted Subsidiary that is to be included in the calculation of
Publishing's Consolidated Cash Flow Ratio shall be made on a pro forma basis on
the assumption that the percentage of Publishing's common equity interest in
such Restricted Subsidiary on the first day of such period was equivalent to its
common equity interest on the date of the determination (it being understood, in
the case of the foregoing clause (c), that if such pro forma calculations have
been made in accordance with Regulation S-X under the Exchange Act, such method
of calculation (but not necessarily the adjustments) shall be presumed to be
acceptable).
"Southam Cash Flow Ratio" means, as at any date of determination, the ratio
of (i) the aggregate amount of Indebtedness of Southam and its Restricted
Subsidiaries outstanding as at such date to (ii) the Southam Cash Flow
(determined on a Consolidated basis for Southam and its Restricted Subsidiaries)
for the most recently completed period of four consecutive fiscal quarters of
Southam, provided that once Southam is a Restricted Subsidiary, for the purpose
of determining the Southam Cash Flow Ratio, the Indebtedness and Southam Cash
Flow of Restricted Subsidiaries of Southam that are not Wholly Owned Restricted
Subsidiaries of Southam shall be determined in accordance with the actual
percentage of Southam's common equity interest in such Restricted Subsidiary on
the date of determination of the Southam Cash Flow Ratio (thus, for example, in
the case of a Restricted Subsidiary of Southam in which Southam owns a 51%
common equity interest, 51% each of such Restricted Subsidiary's Indebtedness
and Southam Cash Flow would be included in the calculation of Southam's
aggregate Indebtedness and the aggregate Southam Cash Flow, respectively).
"Southam Dividend Amount" means the lesser of (x) the aggregate amount paid
or payable by the Guarantor since the date of original issuance of the Notes in
respect of regularly scheduled periodic dividends on the Series A Preferred and
(y) the aggregate amount of the Southam Interests Dividends received by
Publishing since the date of original issuance of the Notes on account of its
ownership interest (whether direct or indirect) in Southam.
"Southam Interests" means 7,395,000 Southam common shares held by the
Company or its subsidiaries; provided, however, that if Southam shall pay a
dividend, or make a distribution, on its common shares in the form of capital
stock of the same or another corporation, or subdivide its outstanding common
shares into a greater number of common shares, or combine its outstanding common
shares into a smaller number of common shares, or effect a reorganization or
reclassification of its Capital Stock, or amalgamate, enter into an arrangement
or consolidation or merge with or into another entity (other than an
amalgamation, arrangement, consolidation or merger which does not result in a
reclassification or change of the outstanding common shares of Southam), the
"Southam Interests" shall thereafter include any securities distributed with
respect to any such shares or into which any such shares shall be converted,
changed or reclassified or for which any such shares shall be exchanged.
"Southam Interests Dividend" means a dividend or other distribution paid on
or with respect to the Southam Interests on or prior to the earlier of (i) the
redemption date for the redemption of all the Series A Preferred Shares
outstanding as of such redemption date or (ii) the date of final distribution to
the holders of the Series A Preferred Shares of the full preferential amount
provided under the terms thereof; provided, however, that the term "Southam
Interests Dividend" does not mean or include (x) any part of any dividend or
distribution that is payable otherwise than in cash or that constitutes an
Extraordinary Cash Dividend as
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applied to the Southam Interests, or (y) any dividend or distribution on or with
respect to the 7,395,000 Southam common shares held by the Company or its
subsidiaries.
"Southam-Linked Debentures" means the debentures of Hollinger Inc. in the
original principal amount of Cdn.$125,000,000 due November 1, 1998.
"Southam Net Income (or Loss)" means, for any period, the Consolidated net
income (or loss (and treating a loss as a negative number)) of Southam and its
Restricted Subsidiaries for such period as determined in accordance with GAAP,
adjusted by (a) excluding, without duplication, to the extent included in
calculating such Consolidated net income (or loss), (i) all extraordinary gains
and losses, (ii) the portion of consolidated net income (or loss) of Southam and
its Restricted Subsidiaries allocable to Investments in unconsolidated Persons
(other than Unrestricted Subsidiaries) to the extent that cash dividends or
distributions have not actually been received by Southam or one of its
Restricted Subsidiaries, (iii) the portion of Consolidated net income (or loss)
of Southam and its Restricted Subsidiaries allocable to Southam's Unrestricted
Subsidiaries (or to payments received therefrom), (iv) net income (or loss) of a
Person combined with Southam or any of its Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(v) any gain or loss, net of taxes, realized upon the termination of any
employee pension benefit plan, (vi) aggregate net gains and losses (less all
fees and expenses relating thereto) in respect of dispositions of assets
(including without limitation sales of shares of Unrestricted Subsidiaries or
unconsolidated Persons and non-cash writeoffs of assets (provided that there are
no continuing cash expenses related to such writeoffs)) other than in the
ordinary course of business, (vii) the net income of any Restricted Subsidiary
to the extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulations
applicable to that Restricted Subsidiary or its stockholders; provided, however,
that the foregoing shall not apply to the restrictions permitted under clause
(iv) of the "Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries" covenant in the relevant Indenture (to the extent such
provision is applicable at the time of determination), (viii) any restoration to
income of any contingency reserve, except to the extent that provision for such
reserve was made out of income accrued at any time following the date of the
Indenture, (ix) any net gain from the collection of proceeds of life insurance
policies, (x) any gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness of Southam or one of its
Restricted Subsidiaries, (xi) aggregate net gains or losses relating to foreign
currency transactions or translations, (xii) redundancy costs relating to the
permanent elimination of jobs, provided that the amount of such expenses are
certified by Southam's independent accountants, and (b) subtracting, without
duplication, the aggregate amount of dividends on Preferred Stock of Restricted
Subsidiaries of Southam (i) to the extent such Preferred Stock is not equivalent
to common stock for purposes of the payment of dividends and (ii) to the extent
that such Preferred Stock is included as Indebtedness in the calculation of the
Southam Cash Flow Ratio.
"Stated Maturity," when used with respect to any Indebtedness or any
installment of interest thereon, means the dates specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest, as the case may be, is due and payable.
"Subordinated Indebtedness" means (i) in the case of any person other than
Publishing, Indebtedness of such person that is expressly subordinate in right
of payment to any other Indebtedness of such Person pursuant to a written
agreement, and (ii) in the case of Publishing, Indebtedness of Publishing that
is expressly subordinate in right of payment to the Senior Securities, in the
case of the Senior Indenture, or the Senior Subordinated Securities, in the case
of the Senior Subordinated Indenture.
"Subsidiary" means any Person a majority of the equity ownership of the
Voting Stock of which is at the time owned, directly or indirectly, by
Publishing or by one or more Subsidiaries, or by Publishing and one or more
other Subsidiaries; provided that, notwithstanding the foregoing, (i) Southam
will be a Subsidiary so long as a majority of the Voting Stock of Southam is
held by a Person in which, directly or indirectly, (x) 50% of the Voting Stock
is held by Publishing and the remainder is held by Hollinger Inc. and (y) 100%
of the non-voting Capital Stock is held by Publishing, and (ii) Hollinger
Eastern will be a Subsidiary so long as 50%
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of its Voting Stock is held, directly or indirectly, by Publishing and the
remainder is held, directly or indirectly, by Hollinger Inc.
"Tax Sharing Agreement" means an agreement providing for the payment of
amounts in lieu of income taxes among Publishing and other companies with which
it forms a single consolidated tax group.
"The Telegraph" means Telegraph Group Limited (formerly The Telegraph plc),
a corporation under the laws of England.
"Temporary Cash Investments" means (i) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof, and
guaranteed fully as to principal, premium, if any, and interest by the United
States of America, (ii) any certificate of deposit, maturing not more than one
year after the date of acquisition, issued by, or time deposit of, the Trustee
or a commercial banking institution that is a member of the Federal Reserve
System and that has combined capital and surplus and undivided profits of not
less than $500,000,000, whose debt has a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Moody's or "A-1"
(or higher) according to S&P, (iii) commercial paper, maturing not more than one
year after the date of acquisition, issued by a corporation (other than an
Affiliate or Restricted Subsidiary of Publishing) organized and existing under
the laws of the United States of America with a rating, at the time as of which
any investment therein is made, of "P-1" (or higher) according to Moody's or
"A-1" (or higher) according to S&P, (iv) any money market deposit accounts
issued or offered by the Trustee or a domestic commercial bank having capital
and surplus in excess of $500,000,000.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Unrestricted Subsidiary" means any Subsidiary that is not a Restricted
Subsidiary, including any Restricted Subsidiary that becomes an Unrestricted
Subsidiary in accordance with the "Restricted Subsidiaries" covenant of the
Indenture; provided, however, that a Person may not be designated as an
Unrestricted Subsidiary unless (i) the creditors of such Person have no direct
or indirect recourse (including, but not limited to, recourse with respect to
the payment of principal or interest on Indebtedness of such Subsidiary) to
Publishing or a Restricted Subsidiary and (ii) a default by such Person on any
of its Indebtedness will not result in, or permit any holder of Indebtedness of
Publishing or a Restricted Subsidiary to declare, a default on such Indebtedness
of Publishing or a Restricted Subsidiary or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity. Any subsidiary of an
Unrestricted Subsidiary shall be an Unrestricted Subsidiary for purposes of the
relevant Indenture.
"Voting Stock" means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency).
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary all the
outstanding Capital Stock (other than directors' qualifying shares) of which are
owned by Publishing or another Wholly Owned Restricted Subsidiary or, in the
case of a Restricted Subsidiary of Southam, all the outstanding Capital Stock
(other than directors' qualifying shares) of which are owned by Southam or
another Wholly Owned Restricted Subsidiary of Southam.
In addition, the Senior Subordinated Indenture contains the following
definition.
"Permitted Junior Securities" means, so long as the effect of any exclusion
employing this definition is not to cause the Securities to be treated in (a)
any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to Publishing or to its assets, or (b) any liquidation,
dissolution or other winding up of Publishing, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any assignment for
the benefit of creditors or any other marshaling of assets or liabilities of
Publishing as part of the same class of claims as the Senior Indebtedness or any
class of claims pari passu with, or senior to, the Senior Indebtedness, for any
payment or distribution, debt or equity securities of Publishing or any
successor corporation provided for by a plan of reorganization or readjustment
that are subordinated at least to the same extent that the Securities are
subordinated to the payment of all Senior Indebtedness then outstanding;
provided that (1) if a
62
<PAGE> 64
new corporation results from such reorganization or readjustment, such
corporation assumes any Senior Indebtedness not paid in full in cash or Cash
Equivalents in connection with such reorganization or readjustment and (2) the
rights of the holders of such Senior Indebtedness are not, without the consent
of such holders, altered by such reorganization or readjustment.
63
<PAGE> 65
PLAN OF DISTRIBUTION
The Company may sell Securities to one or more underwriters for public
offering and sale by them or may sell Securities to investors directly or
through agents or dealers. Any such underwriter, agent or dealer involved in the
offer and sale of the Securities will be named in an applicable Prospectus
Supplement. Securities offered pursuant to a particular Prospectus Supplement
are referred to herein as "Offered Securities."
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company also may, from time to time, authorize
underwriters acting as its agents to offer and sell the Offered Securities upon
the terms and conditions set forth in any Prospectus Supplement. In connection
with the sale of Offered Securities, underwriters may be deemed to have received
compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Offered
Securities for whom they may act as agent. Underwriters may sell Offered
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions (which may be changed from time to time) from the purchasers for
whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Offered Securities may be
deemed to be underwriters under the Securities Act, and any discounts and
commissions received by them and any profit realized by them on resale of the
Offered Securities may be deemed to be underwriting discounts and commissions
under the Securities Act. Underwriters, dealers and agents may be entitled,
under agreements with the Company, to indemnification against and contribution
toward certain civil liabilities, including liabilities under the Securities
Act, and to reimbursement by the Company for certain expenses.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to such
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale.
If so indicated in an applicable Prospectus Supplement, the Company will
authorize dealers acting as its agents to solicit offers by certain institutions
to purchase Offered Securities from the Company at the public offering price set
forth in such Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date or dates stated in
such Prospectus Supplement. Each Contract will be for an amount not less than,
and the aggregate principal amount of Offered Securities sold pursuant to
Contracts shall not be less nor more than, the respective amounts stated in such
Prospectus Supplement. Institutions with whom Contracts, when authorized, may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions, but will in all cases be subject to the approval of the Company.
Contracts will not be subject to any conditions except (i) the purchase by an
institution of the Offered Securities covered by its Contracts shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject, and (ii) if the Offered Securities
are being sold to underwriters, the Company shall have sold to such underwriters
the total principal amount of the Offered Securities less the principal amount
thereof covered by Contracts. Agents and underwriters will have no
responsibility in respect of the delivery or performance of Contracts.
LEGAL MATTERS
Certain legal matters in connection with the Securities offered hereby will
be passed upon for the Company by Kirkpatrick & Lockhart LLP, Pittsburgh,
Pennsylvania. Certain legal matters relating to the Securities offered hereby
will be passed upon for any underwriter, dealer or agent by Cravath, Swaine &
Moore, New York, New York.
64
<PAGE> 66
EXPERTS
The consolidated financial statements of the Company as of December 31,
1995 and 1994, and for each of the years in the three-year period ended December
31, 1995 incorporated herein by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 (as amended) have been
incorporated by reference in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, and upon the authority of said firm as
experts in accounting and auditing.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy solicitation materials and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy solicitation materials and other information can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices located at Seven World Trade Center, Suite 1300,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Website that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. Such reports, proxy
and information statements and other information may be found on the
Commission's site address, http://www.sec.gov. The Class A Common Stock is
listed on the NYSE. Such reports, proxy solicitation materials and other
information can also be inspected and copied at the NYSE at 20 Broad Street, New
York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act with respect to the offering
made hereby. This Prospectus does not contain all of the information set forth
in the Registration Statement, certain portions of which are omitted in
accordance with the rules and regulations of the Commission. Such additional
information may be obtained from the Commission's principal office in
Washington, D.C. as set forth above. For further information, reference is
hereby made to the Registration Statement, including the exhibits filed as a
part thereof or otherwise incorporated herein. Statements made in this
Prospectus as to the contents of any documents referred to are not necessarily
complete, and in each instance reference is made to such exhibit for a more
complete description and each such statement is modified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
0-24004) pursuant to the Exchange Act are incorporated herein by reference:
1. the Company's Annual Report on Form 10-K for the year ended December 31,
1995 (as amended);
2. the Company's Proxy Statement for the Annual Meeting of Stockholders
held May 28, 1996;
3. the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996 (as amended);
4. the Company's Current Reports on Form 8-K dated February 7, 1996, April
24, 1996, August 7, 1996, December 11, 1996 (as amended on February 24, 1997),
January 7, 1997 and February 28, 1997; and
5. the description of the Class A Common Stock contained in the Company's
Registration Statement on Form 8-A, as the same may be amended.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and any Prospectus Supplement and prior to the termination of the
offering made by this Prospectus and any Prospectus Supplement shall be deemed
to be incorporated by reference herein. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this
65
<PAGE> 67
Prospectus and any Prospectus Supplement to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as modified or superseded, to constitute a part of this
Prospectus and any Prospectus Supplement.
The Company will provide without charge to each person to whom a copy of
this Prospectus and any Prospectus Supplement is delivered, upon the written or
oral request of such person, a copy of any or all of the documents that are
incorporated herein by reference, other than exhibits to such information
(unless such exhibits are specifically incorporated by reference into such
documents). Requests should be directed to Hollinger International Inc., 401
North Wabash Avenue, Chicago, Illinois 60611, Attention: Secretary, telephone
number (312) 321-2299.
66
<PAGE> 68
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Company in connection with the
distribution of the securities being registered are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee.................. $151,516
NYSE listing fee............................................... --
Accounting fees and expenses................................... 150,000
Legal fees and expenses........................................ 175,000
Printing....................................................... 125,000
Trustees' fees................................................. 17,000
Miscellaneous expenses......................................... 6,424
--------
Total........................................................ 625,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Restated Certificate of Incorporation, as amended, provides
that no director of the Company will be personally liable to the Company or any
of its stockholders for monetary damages arising from the director's breach of
the duty of care as a director, with certain limited exceptions.
Pursuant to the provisions of Section 145 of the Delaware General
Corporation Law, every Delaware corporation has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in the right of the corporation) by reason of the fact that he is
or was a director, officer, employee or agent of any corporation, partnership,
joint venture, trust or other enterprise, against any and all expenses,
judgments, fines and amounts paid in settlement and reasonably incurred in
connection with such action, suit or proceeding. The power to indemnify applies
only if such person acted in good faith and in a manner he reasonably believed
to be in the best interest, or not opposed to the best interest, of the
corporation and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
The power to indemnify applies to actions brought by or in the right of the
corporation as well, but only to the extent of defense and settlement expenses
and to any satisfaction of a judgment or settlement of the claim itself, and
with the further limitation that in such actions no indemnification shall be
made in the event of any adjudication or liability unless the court, in its
discretion, believes that in light of all the circumstances indemnification
should apply.
To the extent any of the persons referred to in the two immediately
preceding paragraphs is successful in the defense of the actions referred to
therein, such person is entitled, pursuant to Section 145, to indemnification as
described above.
The Company's Restated Certificate of Incorporation, as amended, and
Amended and Restated Bylaws provide for indemnification to officers and
directors of the Company to the fullest extent permitted by the Delaware General
Corporation Law.
The Company maintains a policy of liability insurance which insures its
officers and directors against losses resulting from certain wrongful acts
committed by them in their capacity as officers and directors of the Company.
The form of Underwriting Agreement included as Exhibit 1.01 provides for
indemnifying the Company and certain controlling persons under certain
circumstances, including indemnification for liabilities under the Securities
Act of 1933, as amended (the "Securities Act").
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
II-1
<PAGE> 69
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS. The following exhibits are filed as part of this registration
statement:
<TABLE>
<CAPTION>
EXHIBIT PRIOR FILING OR
NUMBER DESCRIPTION SEQUENTIAL PAGE NUMBER
- - ------- ------------------------------------------------------- -------------------------
<C> <S> <C>
1.01 Forms of Purchase Agreement between Publishing and the
Purchasers with respect to the Senior Securities and
the Senior Subordinated Securities
4.01 Form of Senior Indenture, dated as of ,
among Publishing, the Company, as Guarantor and Fleet
National Bank, as Trustee relating to the Senior
Securities
4.02 Form of Senior Subordinated Indenture, dated as of
, among Publishing, the Company, as
Guarantor and Fleet National Bank, as Trustee relating
to the Senior Subordinated Securities
4.04 Specimen certificate evidencing Class A Common Stock Incorporated by reference
to Exhibit 4.1 to
Registration Statement on
Form S-1 (No. 33-74980)
5.01 Opinion of Kirkpatrick & Lockhart LLP
23.01 Consent of Kirkpatrick & Lockhart LLP (included in
Exhibit 5.01)
23.02 Consent of KPMG Peat Marwick LLP
24.01 Powers of Attorney (included on original signature page
of this registration statement)
25.01 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of Fleet National Bank, as Trustee
under the Senior Indenture relating to the Senior
Securities
25.02 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of Fleet National Bank, as Trustee
under the Senior Subordinated Indenture relating to the
Senior Subordinated Securities
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registration pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE> 70
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of trustees to act under subsection (a)
of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the
Securities Act.
The undersigned registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE> 71
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago, State of Illinois, on
February 28, 1997.
HOLLINGER INTERNATIONAL
PUBLISHING INC.
HOLLINGER INTERNATIONAL INC.
By: /s/ CONRAD M. BLACK
-----------------------------
Conrad M. Black,
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- - ------------------------------ ----------------------------------------- ------------------
<C> <S> <C>
/s/ CONRAD M. BLACK Chairman of the Board, Chief Executive February 28, 1997
- - ------------------------------ Officer and Director (Principal Executive
Conrad M. Black Officer)
* President, Chief Operating Officer and February 28, 1997
- - ------------------------------ Director
F. David Radler
/s/ J. A. BOULTBEE Vice President and Chief Financial February 28, 1997
- - ------------------------------ Officer (Principal Financial Officer)
J. A. Boultbee
/s/ FREDERICK A. CREASEY Group Corporate Controller (Principal February 28, 1997
- - ------------------------------ Accounting Officer)
Frederick A. Creasey
* Director February 28, 1997
- - ------------------------------
Barbara Amiel Black
* Director February 28, 1997
- - ------------------------------
Dwayne O. Andreas
* Director February 28, 1997
- - ------------------------------
Richard Burt
Director February , 1997
- - ------------------------------
Raymond G. Chambers
* Director February 28, 1997
- - ------------------------------
Daniel W. Colson
* Director February 28, 1997
- - ------------------------------
Henry A. Kissinger
* Director February 28, 1997
- - ------------------------------
Marie-Josee Kravis
* Director February 28, 1997
- - ------------------------------
Shmuel Meitar
</TABLE>
<PAGE> 72
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- - ------------------------------ ----------------------------------------- ------------------
<C> <S> <C>
- - ------------------------------ Director February , 1997
Richard N. Perle
* Director February 28, 1997
- - ------------------------------
Robert S. Strauss
* Director February 28, 1997
- - ------------------------------
Alfred Taubman
* Director February 28, 1997
- - ------------------------------
James R. Thompson
* Director February 28, 1997
- - ------------------------------
Lord Weidenfeld
* Director February 28, 1997
- - ------------------------------
Leslie H. Wexner
*By: /s/ KENNETH L. SEROTA February 28, 1997
- - ------------------------------
Kenneth L. Serota
Attorney-in-fact,
pursuant to power of attorney
previously filed as part of
this Registration Statement
</TABLE>
<PAGE> 73
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PRIOR FILING OR
NO. DESCRIPTION SEQUENTIAL PAGE NUMBER
- - ------- ------------------------------------------------------- -------------------------
<C> <S> <C>
1.01 Forms of Purchase Agreement between Publishing and the
Purchasers with respect to the Senior Securities and
the Senior Subordinated Securities
4.01 Form of Indenture, dated as of , among
Publishing, the Company, as Guarantor, and Fleet
National Bank, as Trustee relating to the Senior
Securities
4.02 Form of Senior Subordinated Indenture, dated as of
, among Publishing, the Company, as
Guarantor, and Fleet National Bank, as Trustee relating
to the Senior Subordinated Securities
4.04 Specimen certificate evidencing Class A Common Stock Incorporated by reference
to Exhibit 4.1 to
Registration Statement on
Form S-1 (No. 33-74980)
5.01 Opinion of Kirkpatrick & Lockhart LLP
23.01 Consent of Kirkpatrick & Lockhart LLP (included in
Exhibit 5.01)
23.02 Consent of KPMG Peat Marwick LLP
24.01 Powers of Attorney (included on original signature page
of this Registration Statement)
25.01 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of Fleet National Bank, as Trustee
under the Indenture relating to the Senior Securities
25.02 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of Fleet National Bank, as Trustee
under the Senior Subordinated Indenture relating to the
Senior Subordinated Securities
</TABLE>
<PAGE> 1
Exhibit 1.01
[Form of Purchase Agreement]
HOLLINGER INTERNATIONAL PUBLISHING INC.
(a Delaware corporation)
HOLLINGER INTERNATIONAL INC.
(a Delaware corporation)
$___________
__% Senior Notes due 2005
PURCHASE AGREEMENT
__________, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
CIBC WOOD GUNDY SECURITIES CORP.
SCOTIA CAPITAL MARKETS (USA) INC.
TORONTO DOMINION SECURITIES (USA) INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Ladies and Gentlemen:
Hollinger International Publishing Inc., a Delaware corporation
("Publishing"), and Hollinger International Inc., a Delaware corporation (the
"Guarantor"), confirm their agreement with Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), CIBC Wood Gundy Securities Corp.
("CIBC"), Scotia Capital Markets (USA) Inc. ("Scotia"), and Toronto Dominion
Securities (USA) Inc. ("TD") (collectively, the "Underwriters", which term
shall also include any underwriter substituted as hereinafter provided in
Section 10), with respect to the sale by Publishing and the purchase by the
Underwriters, acting severally and not jointly, of $___________ (all dollar
references herein are in U.S. dollars unless otherwise specifically indicated)
aggregate principal amount
<PAGE> 2
of Publishing's __% Senior Notes due 2005 (the "Securities"). The Securities
will be guaranteed by the Guarantor on a senior subordinated basis.
The aforesaid $___________ aggregate principal amount of Securities are to
be issued pursuant to an Indenture to be dated as of _____, 1997, as amended,
(the "Senior Indenture"), among Publishing, the Guarantor and Fleet National
Bank of Connecticut, as trustee (the "Trustee").
The interest rate and certain other terms of the Securities and the purchase
price of the Securities to be paid by the Underwriters shall be agreed upon by
Publishing, the Guarantor and the Underwriters and such agreement shall be set
forth in a separate written instrument substantially in the form of Exhibit I
hereto (the "Price Determination Agreement"). The Price Determination
Agreement may take the form of an exchange of any standard form of written
telecommunication among Publishing, the Guarantor and the Underwriters and
shall specify such applicable information as is indicated in Exhibit A hereto.
The offering of the Securities will be governed by this Agreement, as
supplemented by the Price Determination Agreement. From and after the date of
the execution and delivery of the Price Determination Agreement, this Agreement
shall be deemed to incorporate, and all references herein to "this Agreement"
or "herein" shall be deemed to include, the Price Determination Agreement.
Concurrently with the execution of this Agreement, Publishing, the Guarantor
and Merrill Lynch, Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"),
TD, Bear Stearns & Co. Inc. ("Bear Stearns") and CIBC are entering into a
senior subordinated note purchase agreement (the "Senior Subordinated Note
Purchase Agreement") pursuant to which Publishing will issue and sell to
Merrill Lynch, DLJ, TD, Bear Stearns and CIBC $_________ aggregate principal
amount of Publishing's __% Senior Subordinated Notes due 2007 (the "Senior
Subordinated Notes"). The pricing terms for the Senior Subordinated Notes to
be sold pursuant to the Senior Subordinated Notes Purchase Agreement shall be
set forth in a separate agreement (the "Senior Subordinated Notes Price
Determination Agreement"), the form of which will be attached to the Senior
Subordinated Notes Purchase Agreement.
<PAGE> 3
3
Publishing and the Guarantor have prepared and filed with
the Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 (No. ________) and a related preliminary prospectus for
the registration of the Securities under the Securities Act of 1933 (the "1933
Act"), have filed such amendments thereto, if any, and such amended preliminary
prospectuses as may have been required to the date hereof, and will file such
additional amendments thereto and such amended prospectuses as may hereafter be
required. The term "Registration Statement" as used in this Agreement means the
registration statement (including all financial schedules and exhibits), as
amended at the time it becomes effective, and as thereafter amended by
post-effective amendment, and any registration statement and any amendments
thereto filed pursuant to Rule 462(b) of the 1933 Act relating to the offering
covered by the initial registration statement (the "Rule 462(b) Registration
Statement"). The term "Prospectuses" as used in this Agreement means the
prospectuses in the forms included in the Registration Statement, or, if the
prospectuses included in the Registration Statement omit information in reliance
on Rule 430A under the 1933 Act and such information is included in prospectuses
filed with the Commission pursuant to Rule 424(b) under the 1933 Act, the term
"Prospectuses" as used in this Agreement means the prospectuses in the forms
included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectuses filed with the Commission
pursuant to Rule 424(b).
Publishing and the Guarantor understand that the Underwriters propose to
make a public offering of the Securities as soon as the Underwriters deem
advisable after the Registration Statement becomes effective and the Price
Determination Agreement has been executed and delivered.
SECTION 1. Representations and Warranties. (a) Publishing and the
Guarantor jointly and severally represent and warrant to the Underwriters as of
the date hereof and as of the date of the Price Determination Agreement (such
latter date being hereinafter referred to as the "Representation Date") as
follows:
(i) The Registration Statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective
amendment thereto or any Rule 462(b) Registration Statement or
<PAGE> 4
4
amendment thereto shall become effective and the Prospectus and any
supplement or amendment thereto when filed with the Commission under Rule
424(b) under the 1933 Act, complied or will comply in all material respects
with the provisions of the 1933 Act and did not or will not at any such times
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information relating
to the Underwriters furnished to Publishing and the Guarantor in writing by
or on behalf of the Underwriters through you expressly for use therein.
(ii) All the outstanding shares of common stock of Publishing and the
Guarantor have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; and the
authorized capital stock of Publishing and the Guarantor conforms to the
description thereof in the Registration Statement and the Prospectus. Except
as described in the Prospectus, there are no outstanding options, warrants or
other rights issued by Publishing or the Guarantor calling for the issuance
of, nor any written agreement entered into by Publishing or the Guarantor or
oral commitments of Publishing or the Guarantor to issue, any shares of
capital stock or any other security of Publishing or the Guarantor or any
security convertible into or exchangeable or exercisable for capital stock or
any other security of Publishing or the Guarantor.
(iii) Publishing and the Guarantor are corporations duly incorporated and
validly existing in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate their properties
and to conduct their business as described in the Registration Statement and
the Prospectus.
(iv) The only significant subsidiaries (as defined in the 1933 Act) of
Publishing and the Guarantor are the subsidiaries listed in Schedule II
hereto (each a "Subsidiary" and collectively the "Subsidiaries"). Each
Subsidiary is a corporation duly incorporated, validly existing and in good
standing in the
<PAGE> 5
5
jurisdiction of its incorporation, with corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus, and is duly qualified as a
foreign corporation for the transaction of business in and is in good
standing under the laws of each other jurisdiction where the nature of its
properties or the conduct of its business requires such qualification, except
where the failure so to qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net worth or
results of operations of such Subsidiary; all the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable, and all shares of the
capital stock of the Subsidiaries that are owned directly or indirectly by
Publishing or the Guarantor are owned free and clear of any lien, adverse
claim, security interest, equity, or other encumbrance, except, to the extent
set forth or described in the Registration Statement and the Prospectus,
currently existing liens, claims and security interests of creditors and
liens, claims and security interests pursuant to the terms of the [New Bank
Credit Facility] (as defined).
(v) There are no legal or governmental proceedings pending or, to the
knowledge of Publishing or the Guarantor, threatened, against Publishing or
the Guarantor or any of the Subsidiaries, or to which Publishing or the
Guarantor or any of the Subsidiaries, or to which any of their respective
properties is subject, that are required to be described in the Registration
Statement or the Prospectus but are not described as required, or which might
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operation of Publishing, the
Guarantor and their subsidiaries considered as one enterprise, or which might
materially and adversely affect the properties or assets thereof or which
might materially and adversely affect the consummation of this Agreement; all
pending legal or governmental proceedings to which Publishing or the
Guarantor or any of the Subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, are, considered in the
<PAGE> 6
6
aggregate, not material; and there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the
1933 Act.
(vi) Except as set forth in the Prospectus, neither Publishing, the
Guarantor nor any of the Subsidiaries (A) is in violation of its certificate
or articles of incorporation or by-laws, or other organizational documents,
(B) is in violation of any law, ordinance, administrative or governmental
rule or regulation applicable to Publishing or the Guarantor or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over Publishing or the Guarantor or any of the
Subsidiaries, or (C) is in default in any material respect in the performance
of any obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any material agreement,
indenture, lease or other instrument to which Publishing or the Guarantor or
any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, except, in the case of clause (B) with
respect to the Subsidiaries, where such violation does not have a material
effect on the condition (financial or other), business, properties, net worth
or results of operations of Publishing, the Guarantor and their subsidiaries
considered as one enterprise.
(vii) Neither the issuance and sale of the Securities, the execution,
delivery or performance of this Agreement and the Price Determination
Agreement by Publishing or the Guarantor, nor the consummation by Publishing
or the Guarantor of the transactions contemplated hereby (A) requires any
consent, approval, authorization or other order of or registration or filing
with, any court, regulatory body, administrative agency or other governmental
body, agency or official (except such as may be required for the registration
of the Securities under the 1933 Act and the Securities Exchange Act of 1934
(the "Exchange Act") and compliance with the securities or Blue Sky laws of
various jurisdictions, both of which have been or will be effected in
accordance with this Agreement) or violates or will violate the certificate
or articles of
<PAGE> 7
7
incorporation or by-laws, or other organizational documents, of Publishing or
the Guarantor or any of the Subsidiaries or (B) constitutes or will
constitute a breach of, or a default under, any material agreement,
indenture, lease or other instrument to which Publishing or the Guarantor or
any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound (except where consents or waivers as to
such default have been obtained prior to the time of the execution of the
Price Determination Agreement (the "Pricing Time")), or violates or will
violate any statute, law, regulation or judgment, injunction, order or decree
applicable to Publishing or the Guarantor or any of the Subsidiaries or any
of their respective properties, or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of Publishing
or the Guarantor or any of the Subsidiaries pursuant to the terms of any
agreement or instrument to which any of them is a party or by which any of
them may be bound or to which any of the property or assets of any of them is
subject.
(viii) KPMG Peat Marwick LLP, who have certified or shall certify certain
of the financial statements included in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are independent public
accountants as required by the Act.
(ix) The supplemental consolidated financial statements of the Guarantor
and its subsidiaries and Publishing (including the financial statements of
the Restricted Group as defined in the Registration Statement), together with
related notes, included in the Registration Statement and the Prospectus (and
any amendment or supplement thereto), (A) in the case of the historical
financial statements present fairly the supplemental consolidated financial
position and results of operations of the Guarantor and its subsidiaries and
of the Restricted Group, and (B) in the case of the pro forma financial
statements present fairly, on a pro forma basis, the pro forma supplemental
consolidated financial position and results of operations of the Guarantor
and its subsidiaries, including Telegraph Group Limited ("Telegraph") and its
indirect equity investments in Southam Inc. ("Southam"), in each case on the
basis
<PAGE> 8
8
stated in the Registration Statement at the respective dates or for the
respective periods to which they apply. Such financial statements, pro forma
financial statements and related notes have been prepared in accordance with
U.S. generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed therein; and the other financial
and statistical information and data included in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) are accurately
presented in all material respects and prepared on a basis consistent with
such financial statements and the books and records of the Guarantor,
Publishing and their subsidiaries.
(x) The execution and delivery of, and the performance by Publishing and
the Guarantor of their obligations under, this Agreement and the Price
Determination Agreement have been duly and validly authorized by Publishing
and the Guarantor, and this Agreement and the Price Determination Agreement
have been duly executed and delivered by Publishing and the Guarantor.
(xi) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), subsequent to the respective dates
as of which such information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), neither Publishing nor
the Guarantor nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Publishing, the
Guarantor and their subsidiaries considered as one enterprise, and there has
not been any change in the capital stock, or material increase in the
short-term debt or long-term debt, of Publishing or the Guarantor or any of
the Subsidiaries, or any material adverse change, or any development
involving, or which may reasonably be expected to involve, a prospective
material adverse change, in the condition (financial or other), business, net
worth or results of operations of Publishing, the Guarantor and their
subsidiaries considered as one enterprise.
(xii) Each of Publishing, the Guarantor and the Subsidiaries has good and
marketable title to all
<PAGE> 9
9
property (real and personal) described in the Prospectus as being owned by
them (excluding properties owned by West Ferry Printers, Trafford Park
Printers, or Southam), free and clear of all liens, claims, security
interests or other encumbrances except to the extent set forth or described
in the Registration Statement and the Prospectus or in a document filed as an
exhibit to the Registration Statement or are not material to the business of
Publishing, the Guarantor and their subsidiaries considered as one enterprise
and all the property described in the Prospectus as being held under lease by
each of Publishing, the Guarantor and the Subsidiaries is held by it under
valid, subsisting and enforceable leases with such exceptions as are not
material to the business of Publishing, the Guarantor and their subsidiaries
considered as one enterprise and do not interfere with the use made and
proposed to be made of such properties by Publishing and the Guarantor and
their subsidiaries.
(xiii) Neither Publishing nor the Guarantor has distributed and, prior to
the later to occur of (i) the Closing Date and (ii) completion of the
distribution of the Securities, neither will distribute any offering material
in connection with the offering and sale of the Securities other than the
Registration Statement, the Prospectus or other materials, if any, permitted
by the Act.
(xiv) Publishing, the Guarantor and each of the Subsidiaries has such
governmental authorizations, approvals, orders, licenses, certificates,
franchises and permits of and from all governmental or regulatory officials
and bodies ("permits") as are necessary to own its respective properties and
to conduct its business in the manner described in the Prospectus, with such
exceptions as are not material to the business of Publishing, the Guarantor
and the Subsidiaries considered as one enterprise and do not interfere with
the use made and proposed to be made of such properties by Publishing, the
Guarantor and the Subsidiaries or are otherwise disclosed; Publishing, the
Guarantor and each of the Subsidiaries has fulfilled and performed all its
material obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights
of the
<PAGE> 10
10
holder of any such permit, with such exceptions as are not material to the
business of Publishing and the Guarantor and their subsidiaries considered as
one enterprise and do not interfere with the use made and proposed to be made
of such properties by Publishing and the Guarantor and the Subsidiaries or
are otherwise disclosed; and, except as described in the Prospectus, none of
such permits contains any restriction that is materially burdensome to
Publishing and the Guarantor and their subsidiaries considered as one
enterprise.
(xv) Publishing and the Guarantor maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xvi) To Publishing's or the Guarantor's knowledge, neither Publishing nor
the Guarantor nor any of the Subsidiaries nor any employee or agent of
Publishing, the Guarantor or any Subsidiary has made any payment of funds of
Publishing, the Guarantor or any Subsidiary or received or retained any funds
in violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Prospectus.
(xvii) Except as described in the Registration Statement and the
Prospectus, Publishing, the Guarantor and each of the Subsidiaries have filed
all tax returns required to be filed, which returns are complete and correct,
and neither Publishing, the Guarantor nor any Subsidiary is in default in the
payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto, with such exceptions as are not material to
the financial position of Publishing, the Guarantor and their subsidiaries
considered as one enterprise.
<PAGE> 11
11
(xviii) Publishing, the Guarantor and the Subsidiaries own, or possess
adequate rights to use, all patents, trademarks, service marks, trade names,
copyrights, licenses, and rights described in the Prospectus as being owned
by them or any of them or necessary for the conduct of their respective
businesses, and neither Publishing nor the Guarantor is aware of any claim to
the contrary or any challenge by any other person to the rights of
Publishing, the Guarantor and the Subsidiaries with respect to the foregoing.
(xix) Neither Publishing nor the Guarantor is now, and after sale of the
Securities to be sold by it hereunder and application of the net proceeds
from such sale as described in the Prospectus under the caption "Use of
Proceeds" will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(xx) Publishing and the Guarantor have complied with all provisions of
Florida Statutes, Section 517.075, relating to issuers doing business with
Cuba.
(xxi) The Indenture has been duly authorized by Publishing and the
Guarantor, will be substantially in the form heretofore delivered to the
Underwriters and, when duly executed and delivered by Publishing, the
Guarantor and the Trustee, will have been duly qualified under the 1939 Act
and will constitute a valid and binding obligation of Publishing and the
Guarantor, enforceable against Publishing and the Guarantor in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization or other
similar laws affecting enforcement of creditors' rights generally and except
as enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
the Indenture conforms to the description thereof contained in the
Prospectus; the Indenture and the form and issuance of the Securities
thereunder comply with the provisions of the 1939 Act.
(xxii) The Securities have been duly authorized by Publishing and the
Guarantor and, when executed, authenticated, issued and delivered in the
manner
<PAGE> 12
12
provided for in the Indenture and sold and paid for as provided in this
Agreement, the Securities will constitute valid and binding obligations of
the Publishing and the Guarantor enforceable against Publishing and the
Guarantor in accordance with their terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization or other similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law); the holders thereof will be entitled to the
benefits of the Indenture; and the Indenture and the Securities conform to
the descriptions thereof contained in the Prospectus.
(xxiii) No holder of any security of Publishing or the Guarantor nor any
other person has any right, contractual or otherwise, to have any securities
included in the Registration Statement or the right, because of the filing of
the Registration Statement or consummation of the transactions contemplated
by this Agreement, to require registration of any security of Publishing or
the Guarantor under the Act.
(xxiv) Except as set forth in the Prospectus, no labor dispute with the
employees of Publishing or the Guarantor or any of the Subsidiaries exists
or, to the knowledge of Publishing or the Guarantor, is imminent, which might
be expected to result in a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of Publishing, the Guarantor and their subsidiaries considered as
one enterprise.
(xxv) Except as set forth in the Registration Statement and except as would
not result in a material effect on the condition (financial or other),
business, properties, net worth or results of operations of Publishing, the
Guarantor and their subsidiaries considered as one enterprise and which would
not materially and adversely affect the consummation of this Agreement, (i)
to the knowledge of Publishing and the Guarantor after reasonable inquiry,
neither Publishing nor the Guarantor is in violation of any applicable
Federal, foreign, state or local environmental law or any applicable order of
any
<PAGE> 13
13
governmental authority with respect thereto; (ii) neither Publishing nor the
Guarantor is in violation of or subject to any existing, or pending or, to
Publishing's and the Guarantor's knowledge, threatened action, suit,
investigation, inquiry or proceeding by any governmental authority nor is
Publishing or the Guarantor subject to any environmental claim by any
citizens' group or to remedial obligations under any applicable Federal,
foreign, state or local environmental law; (iii) Publishing, the Guarantor
and the subsidiaries are in compliance with all permits or similar
authorizations, if any, required to be obtained or filed in connection with
their operations including, without limitation, emissions, discharges,
treatment, storage, disposal or release of a Hazardous Material into the
environment except where any noncompliance could not reasonably be expected
to have a material adverse effect on the operations of Publishing, the
Guarantor and the Subsidiaries; and (iv) to the knowledge of Publishing and
the Guarantor after reasonable inquiry, no Hazardous Materials have been
disposed of or released by Publishing or the Guarantor or the Subsidiaries
at, under or on any property currently or formerly owned or operated by
Publishing, the Guarantor or the Subsidiaries, except in accordance with
applicable environmental laws. The term "Hazardous Material" means any oil
(including petroleum products, crude oil and any fraction thereof), chemical,
contaminant, pollutant, solid or hazardous waste or material, or Hazardous
Substance (as defined in Section 101(14) of the Comprehensive Environmental
Response, Compensation and Liability Act and regulations thereunder), that is
regulated as toxic or hazardous to human health or the environment under any
Federal, foreign, state or local environmental law.
(xxvi) Publishing and the Guarantor and each other person or entity that,
together with Publishing and the Guarantor, is treated as a single employer
under Section 414 of the Internal Revenue Code of 1986, as amended (the
"Code") (each such person or entity being an "ERISA Affiliate"), complies in
all material respects with the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and the Code with respect to each pension plan
(as defined in Section 3(2) of ERISA) maintained by Publishing, the Guarantor
or such ERISA Affiliate, and none of
<PAGE> 14
14
Publishing, the Guarantor or any of its ERISA Affiliates has incurred any
material liability to any pension plan or to the Pension Benefit Guaranty
Corporation that has not been fully paid as of the date hereof except as
disclosed in the Registration Statement or Prospectus (or any amendment or
supplement thereto).
(b) Any certificate signed by an officer of Publishing or the Guarantor and
delivered to the Underwriters or to counsel for the Underwriters shall be
deemed a representation and warranty by Publishing and the Guarantor to the
Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing. (a) On the basis
of the representations and warranties herein contained, and subject to the
terms and conditions herein set forth, Publishing agrees to sell to the
Underwriters, and the Underwriters agree to purchase from Publishing, at the
purchase price set forth in the Price Determination Agreement, the Securities.
(b) If Publishing has elected not to rely upon Rule 430A under the 1933 Act
Regulations, the initial public offering price and the purchase price to be
paid by the Underwriters shall be agreed upon and set forth in the Price
Determination Agreement, dated the date hereof, and an amendment to the
Registration Statement containing such information will be filed with the
Commission, before the Registration Statement becomes effective.
(c) If Publishing has elected to rely upon Rule 430A under the 1933 Act
Regulations, the initial public offering price and the purchase price to be
paid by the Underwriters shall be agreed upon and set forth in the Price
Determination Agreement. In the event that the Price Determination Agreement
has not been executed by the close of business on the fourth business day
following the date on which the Registration Statement becomes effective, this
Agreement shall terminate forthwith, without liability of any party to any
other party except that Sections 6, 7 and 8 shall remain in effect.
(d) Publishing will deliver the Securities to the Underwriters, at the
offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York, NY 10019, or
at such other place as shall be agreed upon by Publishing, the Guarantor
<PAGE> 15
15
and the Underwriters, against payment of the gross purchase price by wire
transfer to Publishing in U.S. dollars, in funds immediately available to
Publishing, at 10:00 a.m. either (i) on the third business day following the
date upon which the Publishing and the Guarantor shall have fulfilled all
requirements which under the 1933 Act must be fulfilled to qualify the
Securities for distribution and the Registration Statement shall have become
effective or (ii) if Publishing has elected to rely upon Rule 430A under the
1933 Act Regulations, on the third business day after execution of the Price
Determination Agreement, or at such other time not later than ten full business
days thereafter as the Underwriters and Publishing determine (such time being
herein referred to as the "Closing Date"). The Securities so to be delivered
will be in definitive, fully registered form in such denominations ($1,000
principal amount or an integral multiple thereof) and registered in such names
as the Underwriters shall request in writing at least two full business days
prior to the Closing Date, and will be made available for checking and
packaging at the office of the Trustee, not later than 10:00 a.m. on the
business day prior to the Closing Date. Concurrently with the payment by the
Underwriters of the gross purchase price for the Securities in the manner
described in this Section 2(d), Publishing will pay to the Underwriters by
certified or official bank check or checks in U.S. dollars, in funds available
the next succeeding business day drawn to the order of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, North Tower, World Financial Center, New York, New
York 10281-1305, for the account of the Underwriters, an amount equal to the
underwriting commission applicable to the Securities as described in the Price
Determination Agreement.
SECTION 3. Covenants of Publishing and the Guarantor. Publishing and the
Guarantor, jointly and severally, covenant with the Underwriters as follows:
(a) Publishing will notify the Underwriters immediately, and confirm the
notice in writing, (i) of the effectiveness of the Registration Statement and
any amendment thereto (including any posteffective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the
<PAGE> 16
16
initiation of any proceedings for that purpose. Publishing will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Publishing will furnish to the Underwriters, without charge, five true
and correct copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and
all exhibits to the Registration Statement, and of any Rule 462(b) Registration
Statement and any amendment thereto, and will also furnish to you, without
charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but without exhibits, and of
any Rule 462(b) Registration Statement and any amendment thereto, as you may
reasonably request.
(c) Publishing will not (i) file any amendment to the Registration
Statement, any Rule 462(b) Registration Statement or amendment thereto, or make
any amendment or supplement to the Prospectuses of which you shall not
previously have been advised or to which you shall reasonably object in writing
after being so advised or (ii) so long as, in the written opinion of counsel
for the Underwriters (a copy of which shall be delivered to Publishing), a
Prospectus is required to be delivered in connection with sales by any
Underwriters or dealer, file any information, documents or reports pursuant to
the Exchange Act, without delivering a copy of such information, documents or
reports to you prior to such filing.
(d) Publishing will furnish to the Underwriters, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act
or the Securities Exchange Act of 1934 (the "1934 Act"), such number of copies
of the Prospectus (as amended or supplemented) as the Underwriters may
reasonably request for the purposes contemplated by the 1933 Act or the 1934
Act or the respective applicable rules and regulations of the Commission
thereunder.
(e) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the Underwriters, to amend or supplement the Prospectus
in order to make the Prospectus not misleading, in the light of the
circumstances existing at the time it is delivered to a purchaser, Publishing
will forthwith amend or supplement the
<PAGE> 17
17
Prospectus (in form and substance satisfactory to counsel for the Underwriters
so that, as so amended or supplemented, the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading), and
Publishing will furnish to the Underwriters a reasonable number of copies of
such amendment or supplement.
(f) Publishing will endeavor, in cooperation with the Underwriters, to
qualify the Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions of the United States as the
Underwriters may designate; provided, however, that Publishing shall not be
obligated to qualify as a foreign corporation in any jurisdiction in which it
is not so qualified. In each jurisdiction in which the Securities have been so
qualified Publishing will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the Registration
Statement.
(g) Publishing will make generally available to its security holders as
soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions
of Rule 158 of the 1933 Act Regulations) covering a 12-month period beginning
not later than the first day of Publishing's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(h) Publishing will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
(i) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A of the
1933 Act Regulations, then immediately following the execution of the Price
Determination Agreement, Publishing will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A and Rule 424(b) of
the 1933 Act Regulations, copies of an amended Prospectus, or, if required by
such Rule 430A, a post-effective amendment of the Registration Statement
(including an amended Prospectus), containing all information so omitted.
<PAGE> 18
18
(j) Except as provided in this Agreement, Publishing will not directly or
indirectly, offer, sell, grant any option to purchase or otherwise dispose of,
any debt security of Publishing which is publicly offered or sold pursuant to
Rule 144A of the 1933 Act Regulations for a period of 180 days after the date
of the Prospectus, without the prior written consent of Merrill Lynch.
(k) For a period of three years after the Closing Date the Guarantor will
furnish to the Underwriters copies of all reports and communications delivered
to the Guarantor's stockholders or to holders of the Securities as a class and
will also furnish copies of all reports (excluding exhibits) filed with the
Commission on Form 8-K, 10-Q and 10-K, and all other reports and information
furnished to its stockholders generally, at the time such reports are furnished
to stockholders generally. For such period of time, the Guarantor will file
with the Commission such documents required to be filed with the Commission
pursuant to Sections 13(a) and 15(d) of the 1934 Act, whether or not the
Guarantor or Publishing has a class of securities registered under the 1934
Act.
(l) The Company will use reasonable efforts to effect the listing of the
Securities on the New York Stock Exchange on the date of the Price
Determination Agreement.
SECTION 4. Payment of Expenses. Publishing will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed, and of
each amendment thereto, (ii) the printing of this Agreement, the Price
Determination Agreement, the Indenture and any Legal Investment Survey, (iii)
the preparation, issuance and delivery of the certificates for the Securities
to the Underwriters, (iv) the fees and disbursements of Publishing's and the
Guarantor's counsel and accountants, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f),
including filing fees and the fee and the disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey, (vi) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each amendment
thereto, of the preliminary prospectus, and of the Prospectus and any
amendments or supplements thereto, (vii) the printing and delivery to the
Underwriters of copies of the Blue Sky
<PAGE> 19
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Survey, (viii) the filing fee of the National Association of Securities
Dealers, Inc., (ix) the fees and expenses of the Trustee, including the fees
and disbursements of counsel for the Trustee, in connection with the Indenture
and the Securities, and (x) any fees charged by investment-rating agencies for
the rating of the Securities.
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section 5, Section 9(a) or Section 11, Publishing shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of Publishing and the Guarantor herein contained, to the
performance by Publishing and the Guarantor of their obligations hereunder, and
to the following further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 p.m. on the date hereof, or, with the consent of the Underwriters, at a
later time and date, not later, however, than 5:30 p.m. on the first business
day following the date hereof or at such later time and date as may be approved
by the Underwriters; and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission. If
Publishing has elected to rely upon Rule 430A of the 1933 Act Regulations, the
price of the Securities and any price-related information previously omitted
from the effective Registration Statement pursuant to such Rule 430A shall have
been transmitted to the Commission for filing pursuant to Rule 424(b) of the
1933 Act Regulations within the prescribed time period, and prior to the
Closing Date Publishing shall have provided evidence satisfactory to the
Underwriters of such timely filing, or a post-effective amendment providing
such information shall have been promptly filed and declared effective in
accordance with the requirements of Rule 430A of the 1933 Act Regulations.
(b) At the Closing Date, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Prospectus, any
<PAGE> 20
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material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of Publishing and the
Guarantor and their subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriters shall have
received a certificate of the Chairman and Chief Executive Officer of each of
Publishing and the Guarantor and of the Vice President of each of Publishing
and the Guarantor, dated as of Closing Date, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties
in Section 1(a) are true and correct with the same force and effect as though
expressly made at and as of the Closing Date, (iii) Publishing and the
Guarantor have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Closing Date, and
(iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the Commission. As used in this Section 5, the term "Prospectus"
means the Prospectus in the form first used to confirm sales of Securities.
(c) You shall have received on the Closing Date an opinion of Kirkpatrick
& Lockhart LLP, counsel for Publishing and the Guarantor, dated the Closing
Date and addressed to you, to the effect that:
(i) Publishing, the Guarantor and each of the United States Subsidiaries
(the "U.S. Subsidiaries") is a corporation duly incorporated and validly
existing in good standing under the laws of the jurisdiction of its
organization, with corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), and
is duly qualified as a foreign corporation for the transaction of business in
and is in good standing under the laws of each jurisdiction where the nature
of its properties or the conduct of its business requires such qualification,
except where the failure so to qualify would not have a material adverse
effect on the condition (financial or otherwise), business, properties, net
worth or results of operations of Publishing, the Guarantor and their
subsidiaries, considered as one enterprise.
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(ii) All the outstanding shares of capital stock of each of the U.S.
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned of record by Publishing directly, or indirectly
through one of the other U.S. Subsidiaries, and are not subject to any
perfected security interest, or, to the best knowledge of such counsel after
reasonable inquiry, any adverse claims within the meaning of the Uniform
Commercial Code, except, to the extent set forth or described in the
Registration Statement and the Prospectus, currently existing liens, claims
and security interests of creditors and liens, claims and security interests
pursuant to the terms of the New Bank Credit Facility (as defined).
(iii) The authorized and outstanding capital stock of the Guarantor to be
in effect as of the Closing Date is as set forth under the caption
"Capitalization" in the Prospectus.
(iv) The Registration Statement and all post-effective amendments, if any,
have become effective under the 1933 Act, the Indenture has been duly
qualified under the 1939 Act and, to the best knowledge of such counsel after
reasonable inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
are pending before or contemplated by the Commission; and any required filing
of the Prospectus pursuant to Rule 424(b) has been made in accordance with
Rule 424(b).
(v) Publishing and the Guarantor have corporate power and authority to
enter into this Agreement and to issue, sell and deliver the Securities to
the Underwriter as provided herein, and this Agreement has been duly
authorized, executed and delivered by Publishing and the Guarantor.
(vi) Neither Publishing, the Guarantor nor any of the U.S. Subsidiaries is
in violation of its certificate or articles of incorporation or its
respective by-laws or, to the best knowledge of such counsel after reasonable
inquiry, is in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note or other
evidence of indebtedness to which the Guarantor,
<PAGE> 22
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Publishing or any U.S. Subsidiary is a party that is included as an exhibit
to, or otherwise described or summarized in, the Registration Statement,
except as may be disclosed in the Prospectus and except for defaults under
existing indebtedness of Publishing, the Guarantor or any U.S. Subsidiary as
to which consents or waivers have been obtained prior to the Pricing Time.
(vii) Neither the offer, sale or delivery of the Securities, the execution,
delivery or performance of this Agreement or the Indenture, compliance by
Publishing or the Guarantor with the provisions of this Agreement or the
Indenture, nor consummation by Publishing or the Guarantor of the
transactions contemplated hereby violates the certificate or articles of
incorporation or by-laws, or other organizational documents, of Publishing or
the Guarantor or any of the U.S. Subsidiaries or constitutes a breach of or
default under any agreement, indenture, lease or other instrument to which
Publishing, the Guarantor or any of the U.S. Subsidiaries is a party or by
which any of them or any of their respective properties is bound (except for
defaults under existing indebtedness of Publishing, the Guarantor or any U.S.
subsidiary as to which consents or waivers have been obtained prior to the
Pricing Time) and that is an exhibit to the Registration Statement, or is
material and is known to such counsel after reasonable inquiry, or will
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of Publishing, the Guarantor or any of the U.S.
Subsidiaries, nor will any such action violate any existing law, regulation,
ruling (assuming compliance with all applicable state securities and Blue Sky
laws), judgment, injunction, order or decree known to such counsel after
reasonable inquiry, that names Publishing, the Guarantor or any of the U.S.
Subsidiaries and is specifically directed to any of them or any of their
respective properties.
(viii) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on the
part of Publishing or the Guarantor (except as have been obtained under the
1933 Act, the Exchange Act, and the 1939 Act or such as may be required under
state
<PAGE> 23
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securities or Blue Sky laws governing the purchase and distribution of the
Securities) for the valid issuance and sale of the Securities by Publishing
to the Underwriters or the consummation by Publishing and the Guarantor of
the other transactions set forth in this Agreement.
(ix) The Registration Statement and the Prospectus and any supplements or
amendments thereto (except for the financial statements and the notes thereto
and the schedules and other financial and statistical data included therein,
as to which such counsel need not express any opinion) comply as to form in
all material respects with the requirements of the 1933 Act.
(x) Assuming that (A) Publishing and the Guarantor have all requisite
corporate power and authority to execute, deliver and perform its obligations
under the Securities and the Indenture, (B) the Securities have been duly
authorized, executed and delivered by Publishing and the Guarantor, (C) the
Indenture has been duly authorized, executed and delivered by Publishing and
the Guarantor and the Trustees and (D) the Securities have been duly
authenticated by one of the Trustees pursuant to the Indenture (which fact
such counsel need not determine by an inspection of the Securities), the
Securities and the Indenture each constitute valid and binding obligations of
Publishing and the Guarantor, enforceable against Publishing and the
Guarantor in accordance with their respective terms, in each case subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting creditors' rights generally from
time to time in effect; and the holders of the Securities are entitled to the
benefits of the Indenture. The enforceability of the obligations of
Publishing and the Guarantor is also subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(xi) To the best knowledge of such counsel after reasonable inquiry, (A)
other than as described or contemplated in the Prospectus (or any supplement
thereto), there are no legal or governmental proceedings pending or
threatened against Publishing, the Guarantor or any of the U.S. Subsidiaries,
or to
<PAGE> 24
24
which Publishing, the Guarantor or any of the U.S. Subsidiaries, or any of
their property, is subject, which are required to be described in the
Registration Statement or Prospectus (or any amendment or supplement
thereto), and (B) there are no material agreements, contracts, indentures,
leases or other instruments to which the Guarantor, Publishing or any U.S.
Subsidiary is a party, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or to be
filed as an exhibit to the Registration Statement that are not described or
filed as required, as the case may be.
(xii) The statements in the Registration Statement and Prospectus, insofar
as they are descriptions or summaries of contracts, agreements or other legal
documents to which Publishing, the Guarantor or any U.S. Subsidiary is a
party, or are statements of law or legal conclusions (other than matters of
English, Canadian, Australian or Israeli law), are accurate in all material
respects and present fairly the information required to be shown.
(xiii) Except as described in the Prospectus and except for options granted
under the Company's 1994 Stock Option Plan, there are no outstanding options,
warrants or other rights issued by Publishing or the Guarantor calling for
the issuance of, and to the best knowledge of such counsel after reasonable
investigation there are no written agreements entered into by Publishing or
the Guarantor or binding oral commitments by Publishing or the Guarantor to
issue, any shares of capital stock of Publishing or the Guarantor or any
security convertible into or exchangeable or exercisable for capital stock of
Publishing or the Guarantor.
(xiv) Except as described in the Prospectus, there is no holder of any
security of Publishing or the Guarantor or, to the best knowledge of such
counsel after reasonable inquiry, any other person who has the right,
contractual or otherwise, to cause Publishing or the Guarantor to sell or
otherwise issue to them, or to permit them to underwrite the sale of, the
Securities or the right to have any securities of Publishing or the Guarantor
included in the Registration Statement or the right, as a result of the
filing of the Registration Statement, to require registration under
<PAGE> 25
25
the 1933 Act of any securities of Publishing or the Guarantor.
(xv) At the Closing Date, Southam Inc. qualifies as a Subsidiary of
Publishing as defined in the Senior Indenture/
(xvi) Although counsel cannot opine as to factual matters, and the
character of determinations involved in the registration process in such that
counsel cannot pass upon and assume any responsibility for the accuracy or
completeness of the information contained in the Registration Statement and
the Prospectus, counsel shall advise the Underwriters that on the basis of
its review of the Registration Statement and the Prospectus and its
participation in the preparation thereof (relying as to materiality to a
large extent upon the statements of officers and other representatives of the
Company) that counsel has no reason to believe that (A) the Registration
Statement (except for the financial statements and notes thereto and the
schedules and other financial or statistical data included therein or omitted
therefrom, as to which counsel need express no opinion), at the time the
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or (B) the
Prospectus (except for the financial statements and notes thereto and the
schedules and other financial or statistical data included therein or omitted
therefrom, as to which counsel need express no opinion) at the time the
Prospectus was issued, includes an untrue statement of a material fact or
omitted state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; also, that counsel has no reason to believe, based upon the
procedures described above, that either the Registration Statement or the
Prospectus (except for the financial statements and notes thereto and the
schedules and other financial or statistical data included therein or omitted
therefrom, as to which counsel need express no opinion) as of the date and
time of delivery of counsel's opinion contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements
<PAGE> 26
26
therein, in light of the circumstances in which they were made, not
misleading.
In rendering their opinion as aforesaid, counsel may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by them,
Publishing or the Guarantor as to laws of any jurisdiction other than the
United States, the Commonwealth of Pennsylvania or the Delaware General
Corporation Law, provided that (1) each such local counsel is acceptable to the
Underwriters, (2) such reliance is expressly authorized by each opinion so
relied upon and a copy of each such opinion is delivered to the Underwriters
and is, in form and substance, satisfactory to the Underwriters and their
counsel, and (3) counsel shall state in their opinion that they believe that
they and the Underwriters are justified in relying thereon. Counsel may also
rely, to the extent they deem such reliance proper, as to matters of fact upon
certificates of officers of Publishing or the Guarantor and of government
officials. Copies of all such certificates shall be furnished to counsel to
the Underwriters on the Closing Date. Such opinion may state that it is
limited to the laws of the Commonwealth of Pennsylvania (excluding the conflict
of laws rules), the Delaware Business Corporation Law and the Federal
securities laws of the United States, and that such counsel expresses no
opinion as to any other laws (except with respect to the Indenture, as to which
such counsel will express certain opinions under New York law) and further that
such opinions are being given as if the Purchase Agreement was governed by
Pennsylvania law.
(d) You shall have received on the Closing Date an opinion of Clifford
Chance, special English counsel for the Guarantor, dated the Closing Date and
addressed to you, to the effect that:
(i) Each of Publishing's subsidiaries, DT Holdings Limited ("DTH"), First
DT Holdings Limited ("FDTH") and Telegraph, is a corporation duly
incorporated and validly existing under the laws of England, with corporate
power and authority to own or lease its properties and to conduct its
business as described in the Registration Statement and the Prospectus.
(ii) All the issued shares in the capital of DTH, FDTH and Telegraph have
been duly authorized, validly issued and credited as fully paid.
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(iii) Neither the offer, sale or delivery of the Securities, the
execution, delivery or performance of this Agreement, compliance by
Publishing or the Guarantor with the provisions of this Agreement or the
Indenture, nor consummation by Publishing or the Guarantor of the
transactions contemplated hereby (i) violates the memorandum or articles of
association of DTH, FDTH or Telegraph or (ii) constitutes a breach of or
default by FDTH, DTH or Telegraph under any agreement listed on Schedule III
hereto to which DTH, FDTH or Telegraph is a party or by which they are bound,
or is material and is known to such counsel, or (iii) violates any existing
English law, regulation, ruling, judgment, injunction, order or decree known
to such counsel that names DTH, FDTH or Telegraph or is specifically directed
to DTH, FDTH or Telegraph or their properties in England and would, in the
case of this clause (iii), have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of Publishing, the Guarantor and their subsidiaries considered as
one enterprise.
(iv) The statements in the Registration Statement and Prospectus with
respect to DTH, FDTH and Telegraph and English law, insofar as they are
descriptions of agreements listed on Schedule III hereto or are statements of
law or legal conclusions with respect thereto, are accurate in all material
respects and present fairly the information required to be shown.
(v) Argsub Limited is a corporation duly incorporated and validly existing
under the laws of England, with corporate power and authority to own or lease
its properties and to conduct its business as described in the Prospectus;
all the issued preference shares in the capital of Argsub Limited of the
series issued to DTH in exchange for the FDTH Preference Shares previously
held by DTH have been duly authorized and validly issued.
In rendering their opinion as aforesaid, counsel's opinion shall be limited
to the laws of England; provided that such counsel may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by them or
Publishing as to laws of any jurisdiction other than England, provided that (1)
each such local counsel is acceptable to the Underwriters, (2) such reliance is
<PAGE> 28
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expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Underwriters and is, in form and substance
satisfactory to the Underwriters and their counsel, and (3) counsel shall state
in their opinion that they believe that they and the Underwriters are justified
in relying thereon.
(e) You shall have received letters addressed to you dated the date hereof
and the Closing Date from KPMG Peat Marwick, independent certified public
accountants for Publishing and the Guarantor, substantially in the forms
heretofore approved by you.
(f) You shall have received on the Closing Date an opinion of Cravath,
Swaine & Moore, counsel for the Underwriters, dated the Closing Date and
addressed to you, the Underwriters, as to such matters as the Representatives
may reasonably request.
(g) At the Closing Date and at each Date of Delivery, if any, counsel for
the Underwriters shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated and related actions referred to
in subparagraphs (h), (i) and (k) hereof, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by Publishing and the
Guarantor in connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the Underwriters
and counsel for the Underwriters.
(h) At the Closing Date, Southam Inc. shall qualify as a Subsidiary of
Publishing pursuant to the terms of the Senior Indenture.
SECTION 6. Indemnification. (a) Publishing and the Guarantor agree,
jointly and severally, to indemnify and hold harmless the Underwriters and each
person, if any, who controls the Underwriters within the meaning of Section 15
of the 1933 Act to the extent and in the manner set forth in clauses (i), (ii)
and (iii) below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of
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a material fact contained in the Registration Statement (or any amendment
thereto), including the information deemed to be part of the Registration
Statement pursuant to Rule 430A of the 1933 Act Regulations, if applicable,
and any information contained in a Rule 462(b) Registration Statement or any
amendments thereto, or the omission or alleged omission therefrom of a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with the
written consent of Publishing and the Guarantor; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel chosen
by the Underwriters, reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under
(i) and (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to Publishing or the
Guarantor by the Underwriters expressly for use in the Registration Statement
(or any amendment
<PAGE> 30
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thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto)[; and the parties agree that the statements set forth in
the last paragraph on the cover page, the legends on the inside cover page, and
the statements in the second and fourth paragraphs (except for the first
sentence of the fourth paragraph) under the caption "Underwriting" in the
Prospectus constitute the only information so furnished].
(b) Each Underwriter severally agrees to indemnify and hold harmless
Publishing and the Guarantor, their directors, each of their officers who
signed the Registration Statement, and each person, if any, who controls
Publishing or the Guarantor within the meaning of Section 15 of the 1933 Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions made in the Registration Statement (or amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to Publishing or the Guarantor by the Underwriters expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) [and set
forth in the last paragraph on the cover page, the stabilization legends on the
inside cover page, and the statements in the second and fourth paragraph
(except for the first sentence of the fourth paragraph) under the caption
"Underwriting" in the Prospectus].
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any
such action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
<PAGE> 31
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SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which an indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, Publishing and the Guarantor
on the one hand and the Underwriters on the other hand shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity incurred by Publishing and the Guarantor on the
one hand and the Underwriters on the other hand, as incurred, in such
proportions that (a) the Underwriters are responsible for that portion
represented by the percentage that the underwriting commission appearing on the
cover page of the Prospectus bears to the aggregate stated principal amount
appearing thereon, and (b) Publishing and the Guarantor are responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls the Underwriters within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Underwriters, and each
director of each of Publishing and the Guarantor, each officer of Publishing or
the Guarantor who signed the Registration Statement, and each person, if any,
who controls Publishing or the Guarantor within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as Publishing or the
Guarantor.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement and
the Price Determination Agreement, or contained in certificates of officers of
Publishing or the Guarantor submitted pursuant hereto, shall remain operative
and in full force and effect, regardless of any investigation made by or on
behalf of any Underwriters or controlling person, or by or on behalf of
Publishing or the Guarantor, and shall survive delivery of the Securities to
the Underwriters.
SECTION 9. Termination of Agreement. (a) The Underwriters may terminate
this Agreement by notice to Publishing or the Guarantor at any time at or prior
to the Closing Date (i) if there has been, since the date of this Agreement or
since the respective date as of which information is given in the Prospectus,
any material adverse
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change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of Publishing, the Guarantor and their
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any outbreak of
hostilities or escalation thereof or other calamity or crisis, the effect of
which on the financial markets of the United States is such as to make it, in
the judgment of the Underwriters, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in the
Common Stock of the Guarantor has been suspended by the Commission, or if
trading generally on either the American Stock Exchange or the New York Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by
either of said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal or New York authorities. Notice of such termination may be given by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
As used in this Section 10(a), the term "Prospectus" means the Prospectus in
the form first used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except
as provided in Section 4. Notwithstanding any such termination, the provisions
of Sections 6 and 7 shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Date to purchase the Securities that
it or they are obligated to purchase pursuant to this Agreement (the "Defaulted
Securities"), you shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms set forth
in this Agreement; if, however, you have not completed such arrangements within
such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities, the nondefaulting Underwriters
shall be obligated to purchase the full amount thereof in the
<PAGE> 33
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proportions that their respective Securities underwriting obligation
proportions bear to the underwriting obligation proportions of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities, this Agreement shall terminate without
liability on the part of any nondefaulting Underwriters.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriters" includes
any person substituted for an Underwriter under this Section 10.
SECTION 11. Default by Publishing. If Publishing shall fail at the Closing
Date or at the Date of Delivery to sell and deliver the number of Securities
which it is obligated to sell hereunder, then this Agreement shall terminate
without any liability on the part of any non-defaulting party.
No action taken pursuant to this Section shall relieve Publishing from
liability, if any, in respect of such default.
SECTION 12. Notices. Unless otherwise specifically indicated herein, all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to Merrill
Lynch at Merrill Lynch World Headquarters, North Tower, World Financial Center,
New York, New York 10281, attention of Syndicate Operations; notices to
Publishing shall be directed to it at 401 North Wabash Avenue, Chicago,
Illinois 60611, attention of President or Secretary; and notices to the
Guarantor shall be directed to it at 401 North Wabash Avenue, Chicago, Illinois
60611, attention of President or Secretary.
<PAGE> 34
34
SECTION 13. Parties. This Agreement and the Price Determination Agreement
shall each inure to the benefit of and be binding upon the Underwriters and
Publishing and the Guarantor and their respective successors, heirs and legal
representatives. Nothing expressed or mentioned in this Agreement or the Price
Determination Agreement is intended or shall be construed to give any person,
firm or corporation, other than the Underwriters and Publishing and the
Guarantor and their respective successors, heirs and legal representatives, and
the controlling persons and officers and directors referred to in Sections 6
and 7 hereof and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or the Price
Determination Agreement or any provision herein or therein contained. This
Agreement and the Price Determination Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Underwriters, Publishing and the Guarantor and their respective
successors, heirs and legal representatives and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the Underwriters shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. Governing Law and Time. This Agreement and the Price
Determination Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State. Specified times of day refer to New York City time.
<PAGE> 35
35
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to Publishing and the Guarantor a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters, Publishing and the Guarantor in accordance
with its terms.
Very truly yours,
HOLLINGER INTERNATIONAL
PUBLISHING INC.
by
_____________________________
J. A. Boultbee
Vice President, Treasury and
Finance
HOLLINGER INTERNATIONAL INC.
by
____________________________
J. A. Boultbee
Vice President, Treasury and
Finance
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
CIBC WOOD GUNDY SECURITIES INC.
SCOTIA CAPITAL MARKETS (USA) INC.
TORONTO DOMINION SECURITIES (USA) INC.
<PAGE> 36
36
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
by
_______________________
<PAGE> 37
Exhibit A
HOLLINGER INTERNATIONAL
PUBLISHING INC.
(a Delaware corporation)
HOLLINGER INTERNATIONAL INC.
(a Delaware corporation)
$___________
__% Senior Notes due 2005
PRICE DETERMINATION AGREEMENT
__________, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
CIBC WOOD GUNDY SECURITIES CORP.
SCOTIA CAPITAL MARKETS (USA) INC.
TORONTO DOMINION SECURITIES (USA) INC.
c/o MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Ladies and Gentlemen:
Reference is made to the Purchase Agreement dated __________, 1997 (the
"Purchase Agreement") among Hollinger International Publishing Inc., a Delaware
corporation ("Publishing"), Hollinger International Inc. (the "Guarantor") and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, CIBC Wood Gundy Securities
Corp., Scotia Capital Markets (USA) Inc. and, and Toronto Dominion
<PAGE> 38
2
Securities (USA) Inc. (the "Underwriters"). The Purchase Agreement provides
for the purchase by the Underwriters from Publishing, subject to the terms and
conditions set forth therein, of $___________ aggregate principal amount of
Publishing's __% Senior Notes due 2005 (the "Securities"). This Agreement is
the Price Determination Agreement referred to in the Purchase Agreement.
Pursuant to Section 2 of the Purchase Agreement, the undersigned agrees with
the Underwriters as follows:
1. The initial public offering price of the Securities shall be 100% of
the aggregate stated principal amount thereof, plus accrued interest from
__________, 1997 to the Closing Time.
2. The purchase price of the Securities to be paid by the several
Underwriters shall be __% of the aggregate stated principal amount thereof,
plus accrued interest from February 1, 1996 to the Closing Time.
3. The interest rate to be borne by the Securities shall be __% per
annum.
4. The Securities will mature on __________, 2005.
Publishing and the Guarantor represent and warrant to each of the
Underwriters that the representations and warranties of Publishing and the
Guarantor set forth in Section 1(a) of the Purchase Agreement are accurate as
though expressly made at and as of the date hereof.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to Publishing and the Guarantor a counterpart hereof,
whereupon this instrument along with all counterparts and together with the
Purchase Agreement shall be a binding agreement among the Underwriters and
Publishing and the Guarantor in accordance with its terms and the terms of the
Purchase Agreement.
Very truly yours,
<PAGE> 39
3
HOLLINGER INTERNATIONAL
PUBLISHING INC.
By ____________________________
J. A. Boultbee
Vice President, Treasury and
Finance
HOLLINGER INTERNATIONAL INC.
By ____________________________
J. A. Boultbee
Vice President, Treasury and
Finance
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
CIBC WOOD GUNDY SECURITIES CORP.
SCOTIA CAPITAL MARKETS (USA) INC.
TORONTO DOMINION SECURITIES (USA) INC.
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By ____________________________
<PAGE> 40
SCHEDULE I
Principal Amount
of Securities
Underwriters to Be Purchased
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . $____________
CIBC Wood Gundy Securities Corp . . . . . . . . . . . . . . . . ____________
Scotia Capital Markets (USA) Inc. . . . . . . . . . . . . . . . ____________
Toronto Dominion Securities
(USA) Inc. . . . . . . . . . . . . . . . . . . . . . . . . . ____________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $=============
<PAGE> 41
SCHEDULE II
Significant Subsidiaries of Hollinger International Inc.
and Hollinger International Publishing Inc.
<PAGE> 42
HOLLINGER INTERNATIONAL PUBLISHING INC.
(a Delaware corporation)
HOLLINGER INTERNATIONAL INC.
(a Delaware corporation)
$___________
__% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
__________, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
BEAR STEARNS & CO. INC.
CIBC WOOD GUNDY SECURITIES CORP.
TORONTO DOMINION SECURITIES (USA) INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Ladies and Gentlemen:
Hollinger International Publishing Inc., a Delaware corporation
("Publishing"), and Hollinger International Inc., a Delaware corporation (the
"Guarantor"), confirm their agreement with Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ"), Toronto Dominion Securities (USA) Inc. ("TD"), Bear
Stearns & Co. Inc. ("Bear Stearns") and CIBC Wood Gundy Securities Corp.
("CIBC") (collectively, the "Underwriters", which term shall also include any
underwriter substituted as hereinafter provided in Section 10), with respect to
the sale by Publishing and the purchase by the Underwriters, acting severally
and not jointly, of $___________ (all
<PAGE> 43
dollar references herein are in U.S. dollars unless otherwise specifically
indicated) aggregate principal amount of Publishing's __% Senior Subordinated
Notes due 2007 (the "Securities"). The Notes will be guaranteed by the
Guarantor on a senior subordinated basis.
The aforesaid $___________ aggregate principal amount of Securities are to
be issued pursuant to an Indenture to be dated as of ________, 1997, as
amended, (the "Senior Subordinated Indenture"), among Publishing, the Guarantor
and Fleet National Bank of Connecticut, as trustee (the "Trustee").
The interest rate and certain other terms of the Securities and the purchase
price of the Securities to be paid by the Underwriters shall be agreed upon by
Publishing, the Guarantor and the Underwriters and such agreement shall be set
forth in a separate written instrument substantially in the form of Exhibit I
hereto (the "Price Determination Agreement"). The Price Determination
Agreement may take the form of an exchange of any standard form of written
telecommunication among Publishing, the Guarantor and the Underwriters and
shall specify such applicable information as is indicated in Exhibit A hereto.
The offering of the Securities will be governed by this Agreement, as
supplemented by the Price Determination Agreement. From and after the date of
the execution and delivery of the Price Determination Agreement, this Agreement
shall be deemed to incorporate, and all references herein to "this Agreement"
or "herein" shall be deemed to include, the Price Determination Agreement.
Concurrently with the execution of this Agreement, Publishing, the Guarantor
and Merrill Lynch, CIBC, Scotia Capital Markets (USA) Inc. ("Scotia") and TD
are entering into a senior note purchase agreement (the "Senior Note Purchase
Agreement") pursuant to which Publishing will issue and sell to Merrill Lynch,
CIBC, Scotia and TD $_________ aggregate principal amount of Publishing's __%
Senior Notes due 2005 (the "Senior Notes"). The pricing terms for the Senior
Notes to be sold pursuant to the Senior Notes Purchase Agreement shall be set
forth in a separate agreement (the "Senior Notes Price Determination
Agreement"), the form of which will be attached to the Senior Notes Purchase
Agreement.
Publishing and the Guarantor have prepared and filed with the Securities and
Exchange Commission (the
<PAGE> 44
3
"Commission") a registration statement on Form S-3 (No. ________) and a related
preliminary prospectus for the registration of the Securities under the
Securities Act of 1933 (the "1933 Act"), have filed such amendments thereto, if
any, and such amended preliminary prospectuses as may have been required to the
date hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. The term "Registration Statement"
as used in this Agreement means the registration statement (including all
financial schedules and exhibits), as amended at the time it becomes effective,
and as thereafter amended by post-effective amendment, and any registration
statement and any amendments thereto filed pursuant to Rule 462(b) of the 1933
Act relating to the offering covered by the initial registration statement (the
"Rule 462(b) Registration Statement"). The term "Prospectuses" as used in this
Agreement means the prospectuses in the forms included in the Registration
Statement, or, if the prospectuses included in the Registration Statement omit
information in reliance on Rule 430A under the 1933 Act and such information is
included in prospectuses filed with the Commission pursuant to Rule 424(b)
under the 1933 Act, the term "Prospectuses" as used in this Agreement means the
prospectuses in the forms included in the Registration Statement as
supplemented by the addition of the Rule 430A information contained in the
prospectuses filed with the Commission pursuant to Rule 424(b).
Publishing and the Guarantor understand that the Underwriters propose to
make a public offering of the Securities as soon as the Underwriters deem
advisable after the Registration Statement becomes effective and the Price
Determination Agreement has been executed and delivered.
SECTION 1. Representations and Warranties. (a) Publishing and the
Guarantor jointly and severally represent and warrant to the Underwriters as of
the date hereof and as of the date of the Price Determination Agreement (such
latter date being hereinafter referred to as the "Representation Date") as
follows:
(i) The Registration Statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective
amendment thereto or any Rule 462(b) Registration Statement or amendment
thereto shall become effective and the Prospectus and any supplement or
amendment thereto when
<PAGE> 45
4
filed with the Commission under Rule 424(b) under the 1933 Act, complied or
will comply in all material respects with the provisions of the 1933 Act and
did not or will not at any such times contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to the Underwriters furnished to
Publishing and the Guarantor in writing by or on behalf of the Underwriters
through you expressly for use therein.
(ii) All the outstanding shares of common stock of Publishing and the
Guarantor have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; and the
authorized capital stock of Publishing and the Guarantor conforms to the
description thereof in the Registration Statement and the Prospectus. Except
as described in the Prospectus, there are no outstanding options, warrants or
other rights issued by Publishing or the Guarantor calling for the issuance
of, nor any written agreement entered into by Publishing or the Guarantor or
oral commitments of Publishing or the Guarantor to issue, any shares of
capital stock or any other security of Publishing or the Guarantor or any
security convertible into or exchangeable or exercisable for capital stock or
any other security of Publishing or the Guarantor.
(iii) Publishing and the Guarantor are corporations duly incorporated and
validly existing in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate their properties
and to conduct their business as described in the Registration Statement and
the Prospectus.
(iv) The only significant subsidiaries (as defined in the 1933 Act) of
Publishing and the Guarantor are the subsidiaries listed in Schedule II
hereto (each a "Subsidiary" and collectively the "Subsidiaries"). Each
Subsidiary is a corporation duly incorporated, validly existing and in good
standing in the jurisdiction of its incorporation, with corporate power and
authority to own, lease and operate its properties
<PAGE> 46
5
and to conduct its business as described in the Registration Statement and
the Prospectus, and is duly qualified as a foreign corporation for the
transaction of business in and is in good standing under the laws of each
other jurisdiction where the nature of its properties or the conduct of its
business requires such qualification, except where the failure so to qualify
does not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of such
Subsidiary; all the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, and all shares of the capital stock of the Subsidiaries that
are owned directly or indirectly by Publishing or the Guarantor are owned
free and clear of any lien, adverse claim, security interest, equity, or
other encumbrance, except, to the extent set forth or described in the
Registration Statement and the Prospectus, currently existing liens, claims
and security interests of creditors and liens, claims and security interests
pursuant to the terms of the [New Bank Credit Facility] (as defined).
(v) There are no legal or governmental proceedings pending or, to the
knowledge of Publishing or the Guarantor, threatened, against Publishing or
the Guarantor or any of the Subsidiaries, or to which Publishing or the
Guarantor or any of the Subsidiaries, or to which any of their respective
properties is subject, that are required to be described in the Registration
Statement or the Prospectus but are not described as required, or which might
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operation of Publishing, the
Guarantor and their subsidiaries considered as one enterprise, or which might
materially and adversely affect the properties or assets thereof or which
might materially and adversely affect the consummation of this Agreement; all
pending legal or governmental proceedings to which Publishing or the
Guarantor or any of the Subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material; and there are
no agreements, contracts, indentures, leases or other instruments that
<PAGE> 47
6
are required to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement that are not
described or filed as required by the 1933 Act.
(vi) Except as set forth in the Prospectus, neither Publishing, the
Guarantor nor any of the Subsidiaries (A) is in violation of its certificate
or articles of incorporation or by-laws, or other organizational documents,
(B) is in violation of any law, ordinance, administrative or governmental
rule or regulation applicable to Publishing or the Guarantor or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over Publishing or the Guarantor or any of the
Subsidiaries, or (C) is in default in any material respect in the performance
of any obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any material agreement,
indenture, lease or other instrument to which Publishing or the Guarantor or
any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, except, in the case of clause (B) with
respect to the Subsidiaries, where such violation does not have a material
effect on the condition (financial or other), business, properties, net worth
or results of operations of Publishing, the Guarantor and their subsidiaries
considered as one enterprise.
(vii) Neither the issuance and sale of the Securities, the execution,
delivery or performance of this Agreement and the Price Determination
Agreement by Publishing or the Guarantor, nor the consummation by Publishing
or the Guarantor of the transactions contemplated hereby (A) requires any
consent, approval, authorization or other order of or registration or filing
with, any court, regulatory body, administrative agency or other governmental
body, agency or official (except such as may be required for the registration
of the Securities under the 1933 Act and the Securities Exchange Act of 1934
(the "Exchange Act") and compliance with the securities or Blue Sky laws of
various jurisdictions, both of which have been or will be effected in
accordance with this Agreement) or violates or will violate the certificate
or articles of incorporation or by-laws, or other organizational documents,
of Publishing or the Guarantor or any of the
<PAGE> 48
7
Subsidiaries or (B) constitutes or will constitute a breach of, or a default
under, any material agreement, indenture, lease or other instrument to which
Publishing or the Guarantor or any of the Subsidiaries is a party or by which
any of them or any of their respective properties may be bound (except where
consents or waivers as to such default have been obtained prior to the time
of the execution of the Price Determination Agreement (the "Pricing Time")),
or violates or will violate any statute, law, regulation or judgment,
injunction, order or decree applicable to Publishing or the Guarantor or any
of the Subsidiaries or any of their respective properties, or will result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of Publishing or the Guarantor or any of the Subsidiaries
pursuant to the terms of any agreement or instrument to which any of them is
a party or by which any of them may be bound or to which any of the property
or assets of any of them is subject.
(viii) KPMG Peat Marwick LLP, who have certified or shall certify certain
of the financial statements included in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are independent public
accountants as required by the Act.
(ix) The supplemental consolidated financial statements of the Guarantor
and its subsidiaries and Publishing (including the financial statements of
the Restricted Group as defined in the Registration Statement), together with
related notes, included in the Registration Statement and the Prospectus (and
any amendment or supplement thereto), (A) in the case of the historical
financial statements present fairly the supplemental consolidated financial
position and results of operations of the Guarantor and its subsidiaries and
of the Restricted Group, and (B) in the case of the pro forma financial
statements present fairly, on a pro forma basis, the pro forma supplemental
consolidated financial position and results of operations of the Guarantor
and its subsidiaries, including Telegraph Group Limited ("Telegraph") and its
indirect equity investments in Southam Inc. ("Southam"), in each case on the
basis stated in the Registration Statement at the respective dates or for the
respective periods to which they
<PAGE> 49
8
apply. Such financial statements, pro forma financial statements and related
notes have been prepared in accordance with U.S. generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; and the other financial and statistical
information and data included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) are accurately presented
in all material respects and prepared on a basis consistent with such
financial statements and the books and records of the Guarantor, Publishing
and their subsidiaries.
(x) The execution and delivery of, and the performance by Publishing and
the Guarantor of their obligations under, this Agreement and the Price
Determination Agreement have been duly and validly authorized by Publishing
and the Guarantor, and this Agreement and the Price Determination Agreement
have been duly executed and delivered by Publishing and the Guarantor.
(xi) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), subsequent to the respective dates
as of which such information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), neither Publishing nor
the Guarantor nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Publishing, the
Guarantor and their subsidiaries considered as one enterprise, and there has
not been any change in the capital stock, or material increase in the
short-term debt or long-term debt, of Publishing or the Guarantor or any of
the Subsidiaries, or any material adverse change, or any development
involving, or which may reasonably be expected to involve, a prospective
material adverse change, in the condition (financial or other), business, net
worth or results of operations of Publishing, the Guarantor and their
subsidiaries considered as one enterprise.
(xii) Each of Publishing, the Guarantor and the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by them (excluding properties
<PAGE> 50
9
owned by West Ferry Printers, Trafford Park Printers, or Southam), free and
clear of all liens, claims, security interests or other encumbrances except
to the extent set forth or described in the Registration Statement and the
Prospectus or in a document filed as an exhibit to the Registration Statement
or are not material to the business of Publishing, the Guarantor and their
subsidiaries considered as one enterprise and all the property described in
the Prospectus as being held under lease by each of Publishing, the Guarantor
and the Subsidiaries is held by it under valid, subsisting and enforceable
leases with such exceptions as are not material to the business of
Publishing, the Guarantor and their subsidiaries considered as one enterprise
and do not interfere with the use made and proposed to be made of such
properties by Publishing and the Guarantor and their subsidiaries.
(xiii) Neither Publishing nor the Guarantor has distributed and, prior to
the later to occur of (i) the Closing Date and (ii) completion of the
distribution of the Securities, neither will distribute any offering material
in connection with the offering and sale of the Securities other than the
Registration Statement, the Prospectus or other materials, if any, permitted
by the Act.
(xiv) Publishing, the Guarantor and each of the Subsidiaries has such
governmental authorizations, approvals, orders, licenses, certificates,
franchises and permits of and from all governmental or regulatory officials
and bodies ("permits") as are necessary to own its respective properties and
to conduct its business in the manner described in the Prospectus, with such
exceptions as are not material to the business of Publishing, the Guarantor
and the Subsidiaries considered as one enterprise and do not interfere with
the use made and proposed to be made of such properties by Publishing, the
Guarantor and the Subsidiaries or are otherwise disclosed; Publishing, the
Guarantor and each of the Subsidiaries has fulfilled and performed all its
material obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights
of the holder of any such permit, with such exceptions as are not material to
the business of Publishing and the
<PAGE> 51
10
Guarantor and their subsidiaries considered as one enterprise and do not
interfere with the use made and proposed to be made of such properties by
Publishing and the Guarantor and the Subsidiaries or are otherwise disclosed;
and, except as described in the Prospectus, none of such permits contains any
restriction that is materially burdensome to Publishing and the Guarantor and
their subsidiaries considered as one enterprise.
(xv) Publishing and the Guarantor maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xvi) To Publishing's or the Guarantor's knowledge, neither Publishing nor
the Guarantor nor any of the Subsidiaries nor any employee or agent of
Publishing, the Guarantor or any Subsidiary has made any payment of funds of
Publishing, the Guarantor or any Subsidiary or received or retained any funds
in violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Prospectus.
(xvii) Except as described in the Registration Statement and the
Prospectus, Publishing, the Guarantor and each of the Subsidiaries have filed
all tax returns required to be filed, which returns are complete and correct,
and neither Publishing, the Guarantor nor any Subsidiary is in default in the
payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto, with such exceptions as are not material to
the financial position of Publishing, the Guarantor and their subsidiaries
considered as one enterprise.
(xviii) Publishing, the Guarantor and the Subsidiaries own, or possess
adequate rights to use,
<PAGE> 52
11
all patents, trademarks, service marks, trade names, copyrights, licenses,
and rights described in the Prospectus as being owned by them or any of them
or necessary for the conduct of their respective businesses, and neither
Publishing nor the Guarantor is aware of any claim to the contrary or any
challenge by any other person to the rights of Publishing, the Guarantor and
the Subsidiaries with respect to the foregoing.
(xix) Neither Publishing nor the Guarantor is now, and after sale of the
Securities to be sold by it hereunder and application of the net proceeds
from such sale as described in the Prospectus under the caption "Use of
Proceeds" will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(xx) Publishing and the Guarantor have complied with all provisions of
Florida Statutes, Section 517.075, relating to issuers doing business with
Cuba.
(xxi) The Indenture has been duly authorized by Publishing and the
Guarantor, will be substantially in the form heretofore delivered to the
Underwriters and, when duly executed and delivered by Publishing, the
Guarantor and the Trustee, will have been duly qualified under the 1939 Act
and will constitute a valid and binding obligation of Publishing and the
Guarantor, enforceable against Publishing and the Guarantor in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization or other
similar laws affecting enforcement of creditors' rights generally and except
as enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
the Indenture conforms to the description thereof contained in the
Prospectus; the Indenture and the form and issuance of the Securities
thereunder comply with the provisions of the 1939 Act.
(xxii) The Securities have been duly authorized by Publishing and the
Guarantor and, when executed, authenticated, issued and delivered in the
manner provided for in the Indenture and sold and paid for as provided in
this Agreement, the Securities will
<PAGE> 53
12
constitute valid and binding obligations of the Publishing and the Guarantor
enforceable against Publishing and the Guarantor in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization or other
similar laws affecting enforcement of creditors' rights generally and except
as enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
the holders thereof will be entitled to the benefits of the Indenture; and
the Indenture and the Securities conform to the descriptions thereof
contained in the Prospectus.
(xxiii) No holder of any security of Publishing or the Guarantor nor any
other person has any right, contractual or otherwise, to have any securities
included in the Registration Statement or the right, because of the filing of
the Registration Statement or consummation of the transactions contemplated
by this Agreement, to require registration of any security of Publishing or
the Guarantor under the Act.
(xxiv) Except as set forth in the Prospectus, no labor dispute with the
employees of Publishing or the Guarantor or any of the Subsidiaries exists
or, to the knowledge of Publishing or the Guarantor, is imminent, which might
be expected to result in a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of Publishing, the Guarantor and their subsidiaries considered as
one enterprise.
(xxv) Except as set forth in the Registration Statement and except as would
not result in a material effect on the condition (financial or other),
business, properties, net worth or results of operations of Publishing, the
Guarantor and their subsidiaries considered as one enterprise and which would
not materially and adversely affect the consummation of this Agreement, (i)
to the knowledge of Publishing and the Guarantor after reasonable inquiry,
neither Publishing nor the Guarantor is in violation of any applicable
Federal, foreign, state or local environmental law or any applicable order of
any governmental authority with respect thereto; (ii) neither Publishing nor
the Guarantor is in
<PAGE> 54
13
violation of or subject to any existing, or pending or, to Publishing's and
the Guarantor's knowledge, threatened action, suit, investigation, inquiry or
proceeding by any governmental authority nor is Publishing or the Guarantor
subject to any environmental claim by any citizens' group or to remedial
obligations under any applicable Federal, foreign, state or local
environmental law; (iii) Publishing, the Guarantor and the subsidiaries are
in compliance with all permits or similar authorizations, if any, required to
be obtained or filed in connection with their operations including, without
limitation, emissions, discharges, treatment, storage, disposal or release of
a Hazardous Material into the environment except where any noncompliance
could not reasonably be expected to have a material adverse effect on the
operations of Publishing, the Guarantor and the Subsidiaries; and (iv) to the
knowledge of Publishing and the Guarantor after reasonable inquiry, no
Hazardous Materials have been disposed of or released by Publishing or the
Guarantor or the Subsidiaries at, under or on any property currently or
formerly owned or operated by Publishing, the Guarantor or the Subsidiaries,
except in accordance with applicable environmental laws. The term "Hazardous
Material" means any oil (including petroleum products, crude oil and any
fraction thereof), chemical, contaminant, pollutant, solid or hazardous waste
or material, or Hazardous Substance (as defined in Section 101(14) of the
Comprehensive Environmental Response, Compensation and Liability Act and
regulations thereunder), that is regulated as toxic or hazardous to human
health or the environment under any Federal, foreign, state or local
environmental law.
(xxvi) Publishing and the Guarantor and each other person or entity that,
together with Publishing and the Guarantor, is treated as a single employer
under Section 414 of the Internal Revenue Code of 1986, as amended (the
"Code") (each such person or entity being an "ERISA Affiliate"), complies in
all material respects with the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and the Code with respect to each pension plan
(as defined in Section 3(2) of ERISA) maintained by Publishing, the Guarantor
or such ERISA Affiliate, and none of Publishing, the Guarantor or any of its
ERISA Affiliates has incurred any material liability to any
<PAGE> 55
14
pension plan or to the Pension Benefit Guaranty Corporation that has not been
fully paid as of the date hereof except as disclosed in the Registration
Statement or Prospectus (or any amendment or supplement thereto).
(b) Any certificate signed by an officer of Publishing or the Guarantor and
delivered to the Underwriters or to counsel for the Underwriters shall be
deemed a representation and warranty by Publishing and the Guarantor to the
Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing. (a) On the basis
of the representations and warranties herein contained, and subject to the
terms and conditions herein set forth, Publishing agrees to sell to the
Underwriters, and the Underwriters agree to purchase from Publishing, at the
purchase price set forth in the Price Determination Agreement, the Securities.
(b) If Publishing has elected not to rely upon Rule 430A under the 1933 Act
Regulations, the initial public offering price and the purchase price to be
paid by the Underwriters shall be agreed upon and set forth in the Price
Determination Agreement, dated the date hereof, and an amendment to the
Registration Statement containing such information will be filed with the
Commission, before the Registration Statement becomes effective.
(c) If Publishing has elected to rely upon Rule 430A under the 1933 Act
Regulations, the initial public offering price and the purchase price to be
paid by the Underwriters shall be agreed upon and set forth in the Price
Determination Agreement. In the event that the Price Determination Agreement
has not been executed by the close of business on the fourth business day
following the date on which the Registration Statement becomes effective, this
Agreement shall terminate forthwith, without liability of any party to any
other party except that Sections 6, 7 and 8 shall remain in effect.
(d) Publishing will deliver the Securities to the Underwriters, at the
offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York, NY 10019, or
at such other place as shall be agreed upon by Publishing, the Guarantor and
the Underwriters, against payment of the gross purchase price by wire transfer
to Publishing in U.S. dollars, in
<PAGE> 56
15
funds immediately available to Publishing, at 10:00 a.m. either (i) on the
third business day following the date upon which the Publishing and the
Guarantor shall have fulfilled all requirements which under the 1933 Act must
be fulfilled to qualify the Securities for distribution and the Registration
Statement shall have become effective or (ii) if Publishing has elected to rely
upon Rule 430A under the 1933 Act Regulations, on the third business day after
execution of the Price Determination Agreement, or at such other time not later
than ten full business days thereafter as the Underwriters and Publishing
determine (such time being herein referred to as the "Closing Date"). The
Securities so to be delivered will be in definitive, fully registered form in
such denominations ($1,000 principal amount or an integral multiple thereof)
and registered in such names as the Underwriters shall request in writing at
least two full business days prior to the Closing Date, and will be made
available for checking and packaging at the office of the Trustee, not later
than 10:00 a.m. on the business day prior to the Closing Date. Concurrently
with the payment by the Underwriters of the gross purchase price for the
Securities in the manner described in this Section 2(d), Publishing will pay to
the Underwriters by certified or official bank check or checks in U.S. dollars,
in funds available the next succeeding business day drawn to the order of
Merrill Lynch, Pierce, Fenner & Smith Incorporated, North Tower, World
Financial Center, New York, New York 10281-1305, for the account of the
Underwriters, an amount equal to the underwriting commission applicable to the
Securities as described in the Price Determination Agreement.
SECTION 3. Covenants of Publishing and the Guarantor. Publishing and the
Guarantor, jointly and severally, covenant with the Underwriters as follows:
(a) Publishing will notify the Underwriters immediately, and confirm the
notice in writing, (i) of the effectiveness of the Registration Statement and
any amendment thereto (including any posteffective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose. Publishing will make every reasonable effort to prevent the issuance
of
<PAGE> 57
16
any stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Publishing will furnish to the Underwriters, without charge, five true
and correct copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and
all exhibits to the Registration Statement, and of any Rule 462(b) Registration
Statement and any amendment thereto, and will also furnish to you, without
charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but without exhibits, and of
any Rule 462(b) Registration Statement and any amendment thereto, as you may
reasonably request.
(c) Publishing will not (i) file any amendment to the Registration
Statement, any Rule 462(b) Registration Statement or amendment thereto, or make
any amendment or supplement to the Prospectuses of which you shall not
previously have been advised or to which you shall reasonably object in writing
after being so advised or (ii) so long as, in the written opinion of counsel
for the Underwriters (a copy of which shall be delivered to Publishing), a
Prospectus is required to be delivered in connection with sales by any
Underwriters or dealer, file any information, documents or reports pursuant to
the Exchange Act, without delivering a copy of such information, documents or
reports to you prior to such filing.
(d) Publishing will furnish to the Underwriters, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act
or the Securities Exchange Act of 1934 (the "1934 Act"), such number of copies
of the Prospectus (as amended or supplemented) as the Underwriters may
reasonably request for the purposes contemplated by the 1933 Act or the 1934
Act or the respective applicable rules and regulations of the Commission
thereunder.
(e) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the Underwriters, to amend or supplement the Prospectus
in order to make the Prospectus not misleading, in the light of the
circumstances existing at the time it is delivered to a purchaser, Publishing
will forthwith amend or supplement the Prospectus (in form and substance
satisfactory to counsel for the Underwriters so that, as so amended or
supplemented,
<PAGE> 58
17
the Prospectus will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances existing at the time it is delivered to a
purchaser, not misleading), and Publishing will furnish to the Underwriters a
reasonable number of copies of such amendment or supplement.
(f) Publishing will endeavor, in cooperation with the Underwriters, to
qualify the Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions of the United States as the
Underwriters may designate; provided, however, that Publishing shall not be
obligated to qualify as a foreign corporation in any jurisdiction in which it
is not so qualified. In each jurisdiction in which the Securities have been so
qualified Publishing will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the Registration
Statement.
(g) Publishing will make generally available to its security holders as
soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions
of Rule 158 of the 1933 Act Regulations) covering a 12-month period beginning
not later than the first day of Publishing's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(h) Publishing will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
(i) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A of the
1933 Act Regulations, then immediately following the execution of the Price
Determination Agreement, Publishing will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A and Rule 424(b) of
the 1933 Act Regulations, copies of an amended Prospectus, or, if required by
such Rule 430A, a post-effective amendment of the Registration Statement
(including an amended Prospectus), containing all information so omitted.
<PAGE> 59
18
(j) Except as provided in this Agreement, Publishing will not directly or
indirectly, offer, sell, grant any option to purchase or otherwise dispose of,
any debt security of Publishing which is publicly offered or sold pursuant to
Rule 144A of the 1933 Act Regulations for a period of 180 days after the date
of the Prospectus, without the prior written consent of Merrill Lynch.
(k) For a period of three years after the Closing Date the Guarantor will
furnish to the Underwriters copies of all reports and communications delivered
to the Guarantor's stockholders or to holders of the Securities as a class and
will also furnish copies of all reports (excluding exhibits) filed with the
Commission on Form 8-K, 10-Q and 10-K, and all other reports and information
furnished to its stockholders generally, at the time such reports are furnished
to stockholders generally. For such period of time, the Guarantor will file
with the Commission such documents required to be filed with the Commission
pursuant to Sections 13(a) and 15(d) of the 1934 Act, whether or not the
Guarantor or Publishing has a class of securities registered under the 1934
Act.
(l) The Company will use reasonable efforts to effect the listing of the
Securities on the New York Stock Exchange on the date of the Price
Determination Agreement.
SECTION 4. Payment of Expenses. Publishing will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed, and of
each amendment thereto, (ii) the printing of this Agreement, the Price
Determination Agreement, the Indenture and any Legal Investment Survey, (iii)
the preparation, issuance and delivery of the certificates for the Securities
to the Underwriters, (iv) the fees and disbursements of Publishing's and the
Guarantor's counsel and accountants, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f),
including filing fees and the fee and the disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey, (vi) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each amendment
thereto, of the preliminary prospectus, and of the Prospectus and any
amendments or supplements thereto, (vii) the printing and delivery to the
Underwriters of copies of the Blue Sky
<PAGE> 60
19
Survey, (viii) the filing fee of the National Association of Securities
Dealers, Inc., (ix) the fees and expenses of the Trustee, including the fees
and disbursements of counsel for the Trustee, in connection with the Indenture
and the Securities, and (x) any fees charged by investment-rating agencies for
the rating of the Securities.
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section 5, Section 9(a) or Section 11, Publishing shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of Publishing and the Guarantor herein contained, to the
performance by Publishing and the Guarantor of their obligations hereunder, and
to the following further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 p.m. on the date hereof, or, with the consent of the Underwriters, at a
later time and date, not later, however, than 5:30 p.m. on the first business
day following the date hereof or at such later time and date as may be approved
by the Underwriters; and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission. If
Publishing has elected to rely upon Rule 430A of the 1933 Act Regulations, the
price of the Securities and any price-related information previously omitted
from the effective Registration Statement pursuant to such Rule 430A shall have
been transmitted to the Commission for filing pursuant to Rule 424(b) of the
1933 Act Regulations within the prescribed time period, and prior to the
Closing Date Publishing shall have provided evidence satisfactory to the
Underwriters of such timely filing, or a post-effective amendment providing
such information shall have been promptly filed and declared effective in
accordance with the requirements of Rule 430A of the 1933 Act Regulations.
(b) At the Closing Date, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Prospectus, any
<PAGE> 61
20
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of Publishing and the
Guarantor and their subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriters shall have
received a certificate of the Chairman and Chief Executive Officer of each of
Publishing and the Guarantor and of the Vice President of each of Publishing
and the Guarantor, dated as of Closing Date, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties
in Section 1(a) are true and correct with the same force and effect as though
expressly made at and as of the Closing Date, (iii) Publishing and the
Guarantor have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Closing Date, and
(iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the Commission. As used in this Section 5, the term "Prospectus"
means the Prospectus in the form first used to confirm sales of Securities.
(c) You shall have received on the Closing Date an opinion of Kirkpatrick
& Lockhart LLP, counsel for Publishing and the Guarantor, dated the Closing
Date and addressed to you, to the effect that:
(i) Publishing, the Guarantor and each of the United States Subsidiaries
(the "U.S. Subsidiaries") is a corporation duly incorporated and validly
existing in good standing under the laws of the jurisdiction of its
organization, with corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), and
is duly qualified as a foreign corporation for the transaction of business in
and is in good standing under the laws of each jurisdiction where the nature
of its properties or the conduct of its business requires such qualification,
except where the failure so to qualify would not have a material adverse
effect on the condition (financial or otherwise), business, properties, net
worth or results of operations of Publishing, the Guarantor and their
subsidiaries, considered as one enterprise.
<PAGE> 62
21
(ii) All the outstanding shares of capital stock of each of the U.S.
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned of record by Publishing directly, or indirectly
through one of the other U.S. Subsidiaries, and are not subject to any
perfected security interest, or, to the best knowledge of such counsel after
reasonable inquiry, any adverse claims within the meaning of the Uniform
Commercial Code, except, to the extent set forth or described in the
Registration Statement and the Prospectus, currently existing liens, claims
and security interests of creditors and liens, claims and security interests
pursuant to the terms of the New Bank Credit Facility (as defined).
(iii) The authorized and outstanding capital stock of the Guarantor to be
in effect as of the Closing Date is as set forth under the caption
"Capitalization" in the Prospectus.
(iv) The Registration Statement and all post-effective amendments, if any,
have become effective under the 1933 Act, the Indenture has been duly
qualified under the 1939 Act and, to the best knowledge of such counsel after
reasonable inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
are pending before or contemplated by the Commission; and any required filing
of the Prospectus pursuant to Rule 424(b) has been made in accordance with
Rule 424(b).
(v) Publishing and the Guarantor have corporate power and authority to
enter into this Agreement and to issue, sell and deliver the Securities to
the Underwriter as provided herein, and this Agreement has been duly
authorized, executed and delivered by Publishing and the Guarantor.
(vi) Neither Publishing, the Guarantor nor any of the U.S. Subsidiaries is
in violation of its certificate or articles of incorporation or its
respective by-laws or, to the best knowledge of such counsel after reasonable
inquiry, is in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note or other
evidence of indebtedness to which the Guarantor,
<PAGE> 63
22
Publishing or any U.S. Subsidiary is a party that is included as an exhibit
to, or otherwise described or summarized in, the Registration Statement,
except as may be disclosed in the Prospectus and except for defaults under
existing indebtedness of Publishing, the Guarantor or any U.S. Subsidiary as
to which consents or waivers have been obtained prior to the Pricing Time.
(vii) Neither the offer, sale or delivery of the Securities, the execution,
delivery or performance of this Agreement or the Indenture, compliance by
Publishing or the Guarantor with the provisions of this Agreement or the
Indenture, nor consummation by Publishing or the Guarantor of the
transactions contemplated hereby violates the certificate or articles of
incorporation or by-laws, or other organizational documents, of Publishing or
the Guarantor or any of the U.S. Subsidiaries or constitutes a breach of or
default under any agreement, indenture, lease or other instrument to which
Publishing, the Guarantor or any of the U.S. Subsidiaries is a party or by
which any of them or any of their respective properties is bound (except for
defaults under existing indebtedness of Publishing, the Guarantor or any U.S.
subsidiary as to which consents or waivers have been obtained prior to the
Pricing Time) and that is an exhibit to the Registration Statement, or is
material and is known to such counsel after reasonable inquiry, or will
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of Publishing, the Guarantor or any of the U.S.
Subsidiaries, nor will any such action violate any existing law, regulation,
ruling (assuming compliance with all applicable state securities and Blue Sky
laws), judgment, injunction, order or decree known to such counsel after
reasonable inquiry, that names Publishing, the Guarantor or any of the U.S.
Subsidiaries and is specifically directed to any of them or any of their
respective properties.
(viii) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on the
part of Publishing or the Guarantor (except as have been obtained under the
1933 Act, the Exchange Act, and the 1939 Act or such as may be required under
state
<PAGE> 64
23
securities or Blue Sky laws governing the purchase and distribution of the
Securities) for the valid issuance and sale of the Securities by Publishing
to the Underwriters or the consummation by Publishing and the Guarantor of
the other transactions set forth in this Agreement.
(ix) The Registration Statement and the Prospectus and any supplements or
amendments thereto (except for the financial statements and the notes thereto
and the schedules and other financial and statistical data included therein,
as to which such counsel need not express any opinion) comply as to form in
all material respects with the requirements of the 1933 Act.
(x) Assuming that (A) Publishing and the Guarantor have all requisite
corporate power and authority to execute, deliver and perform its obligations
under the Securities and the Indenture, (B) the Securities have been duly
authorized, executed and delivered by Publishing and the Guarantor, (C) the
Indenture has been duly authorized, executed and delivered by Publishing and
the Guarantor and the Trustees and (D) the Securities have been duly
authenticated by one of the Trustees pursuant to the Indenture (which fact
such counsel need not determine by an inspection of the Securities), the
Securities and the Indenture each constitute valid and binding obligations of
Publishing and the Guarantor, enforceable against Publishing and the
Guarantor in accordance with their respective terms, in each case subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting creditors' rights generally from
time to time in effect; and the holders of the Securities are entitled to the
benefits of the Indenture. The enforceability of the obligations of
Publishing and the Guarantor is also subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(xi) To the best knowledge of such counsel after reasonable inquiry, (A)
other than as described or contemplated in the Prospectus (or any supplement
thereto), there are no legal or governmental proceedings pending or
threatened against Publishing, the Guarantor or any of the U.S. Subsidiaries,
or to
<PAGE> 65
24
which Publishing, the Guarantor or any of the U.S. Subsidiaries, or any of
their property, is subject, which are required to be described in the
Registration Statement or Prospectus (or any amendment or supplement
thereto), and (B) there are no material agreements, contracts, indentures,
leases or other instruments to which the Guarantor, Publishing or any U.S.
Subsidiary is a party, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or to be
filed as an exhibit to the Registration Statement that are not described or
filed as required, as the case may be.
(xii) The statements in the Registration Statement and Prospectus, insofar
as they are descriptions or summaries of contracts, agreements or other legal
documents to which Publishing, the Guarantor or any U.S. Subsidiary is a
party, or are statements of law or legal conclusions (other than matters of
English, Canadian, Australian or Israeli law), are accurate in all material
respects and present fairly the information required to be shown.
(xiii) Except as described in the Prospectus and except for options granted
under the Company's 1994 Stock Option Plan, there are no outstanding options,
warrants or other rights issued by Publishing or the Guarantor calling for
the issuance of, and to the best knowledge of such counsel after reasonable
investigation there are no written agreements entered into by Publishing or
the Guarantor or binding oral commitments by Publishing or the Guarantor to
issue, any shares of capital stock of Publishing or the Guarantor or any
security convertible into or exchangeable or exercisable for capital stock of
Publishing or the Guarantor.
(xiv) Except as described in the Prospectus, there is no holder of any
security of Publishing or the Guarantor or, to the best knowledge of such
counsel after reasonable inquiry, any other person who has the right,
contractual or otherwise, to cause Publishing or the Guarantor to sell or
otherwise issue to them, or to permit them to underwrite the sale of, the
Securities or the right to have any securities of Publishing or the Guarantor
included in the Registration Statement or the right, as a result of the
filing of the Registration Statement, to require registration under
<PAGE> 66
25
the 1933 Act of any securities of Publishing or the Guarantor.
(xv) At the Closing Date, Southam Inc. qualifies as a Subsidiary as
defined in the Senior Indenture.
(xvi) Although counsel cannot opine as to factual matters, and the
character of determinations involved in the registration process in such that
counsel cannot pass upon and assume any responsibility for the accuracy or
completeness of the information contained in the Registration Statement and
the Prospectus, counsel shall advise the Underwriters that on the basis of
its review of the Registration Statement and the Prospectus and its
participation in the preparation thereof (relying as to materiality to a
large extent upon the statements of officers and other representatives of the
Company) that counsel has no reason to believe that (A) the Registration
Statement (except for the financial statements and notes thereto and the
schedules and other financial or statistical data included therein or omitted
therefrom, as to which counsel need express no opinion), at the time the
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or (B) the
Prospectus (except for the financial statements and notes thereto and the
schedules and other financial or statistical data included therein or omitted
therefrom, as to which counsel need express no opinion) at the time the
Prospectus was issued, includes an untrue statement of a material fact or
omitted state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; also, that counsel has no reason to believe, based upon the
procedures described above, that either the Registration Statement or the
Prospectus (except for the financial statements and notes thereto and the
schedules and other financial or statistical data included therein or omitted
therefrom, as to which counsel need express no opinion) as of the date and
time of delivery of counsel's opinion contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were made,
not misleading.
<PAGE> 67
26
In rendering their opinion as aforesaid, counsel may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by them,
Publishing or the Guarantor as to laws of any jurisdiction other than the
United States, the Commonwealth of Pennsylvania or the Delaware General
Corporation Law, provided that (1) each such local counsel is acceptable to the
Underwriters, (2) such reliance is expressly authorized by each opinion so
relied upon and a copy of each such opinion is delivered to the Underwriters
and is, in form and substance, satisfactory to the Underwriters and their
counsel, and (3) counsel shall state in their opinion that they believe that
they and the Underwriters are justified in relying thereon. Counsel may also
rely, to the extent they deem such reliance proper, as to matters of fact upon
certificates of officers of Publishing or the Guarantor and of government
officials. Copies of all such certificates shall be furnished to counsel to
the Underwriters on the Closing Date. Such opinion may state that it is
limited to the laws of the Commonwealth of Pennsylvania (excluding the conflict
of laws rules), the Delaware Business Corporation Law and the Federal
securities laws of the United States, and that such counsel expresses no
opinion as to any other laws (except with respect to the Indenture, as to which
such counsel will express certain opinions under New York law) and further that
such opinions are being given as if the Purchase Agreement was governed by
Pennsylvania law.
(d) You shall have received on the Closing Date an opinion of Clifford
Chance, special English counsel for the Guarantor, dated the Closing Date and
addressed to you, to the effect that:
(i) Each of Publishing's subsidiaries, DT Holdings Limited ("DTH"), First
DT Holdings Limited ("FDTH") and Telegraph, is a corporation duly
incorporated and validly existing under the laws of England, with corporate
power and authority to own or lease its properties and to conduct its
business as described in the Registration Statement and the Prospectus.
(ii) All the issued shares in the capital of DTH, FDTH and Telegraph have
been duly authorized, validly issued and credited as fully paid.
(iii) Neither the offer, sale or delivery of the Securities, the execution,
delivery or performance of
<PAGE> 68
27
this Agreement, compliance by Publishing or the Guarantor with the provisions
of this Agreement or the Indenture, nor consummation by Publishing or the
Guarantor of the transactions contemplated hereby (i) violates the memorandum
or articles of association of DTH, FDTH or Telegraph or (ii) constitutes a
breach of or default by FDTH, DTH or Telegraph under any agreement listed on
Schedule III hereto to which DTH, FDTH or Telegraph is a party or by which
they are bound, or is material and is known to such counsel, or (iii)
violates any existing English law, regulation, ruling, judgment, injunction,
order or decree known to such counsel that names DTH, FDTH or Telegraph or is
specifically directed to DTH, FDTH or Telegraph or their properties in
England and would, in the case of this clause (iii), have a material adverse
effect on the condition (financial or other), business, properties, net worth
or results of operations of Publishing, the Guarantor and their subsidiaries
considered as one enterprise.
(iv) The statements in the Registration Statement and Prospectus with
respect to DTH, FDTH and Telegraph and English law, insofar as they are
descriptions of agreements listed on Schedule III hereto or are statements of
law or legal conclusions with respect thereto, are accurate in all material
respects and present fairly the information required to be shown.
(v) Argsub Limited is a corporation duly incorporated and validly existing
under the laws of England, with corporate power and authority to own or lease
its properties and to conduct its business as described in the Prospectus;
all the issued preference shares in the capital of Argsub Limited of the
series issued to DTH in exchange for the FDTH Preference Shares previously
held by DTH have been duly authorized and validly issued.
In rendering their opinion as aforesaid, counsel's opinion shall be limited
to the laws of England; provided that such counsel may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by them or
Publishing as to laws of any jurisdiction other than England, provided that (1)
each such local counsel is acceptable to the Underwriters, (2) such reliance is
expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Underwriters
<PAGE> 69
28
and is, in form and substance satisfactory to the Underwriters and their
counsel, and (3) counsel shall state in their opinion that they believe that
they and the Underwriters are justified in relying thereon.
(e) You shall have received letters addressed to you dated the date hereof
and the Closing Date from KPMG Peat Marwick, independent certified public
accountants for Publishing and the Guarantor, substantially in the forms
heretofore approved by you.
(f) You shall have received on the Closing Date an opinion of Cravath,
Swaine & Moore, counsel for the Underwriters, dated the Closing Date and
addressed to you, the Underwriters, as to such matters as the Representatives
may reasonably request.
(g) At the Closing Date and at each Date of Delivery, if any, counsel for
the Underwriters shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated and related actions referred to
in subparagraphs (h), (i) and (k) hereof, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by Publishing and the
Guarantor in connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the Underwriters
and counsel for the Underwriters.
(h) At the Closing Date, Southam Inc. shall qualify as a Subsidiary as
defined in the Senior Subordinated Indenture.
SECTION 6. Indemnification. (a) Publishing and the Guarantor agree,
jointly and severally, to indemnify and hold harmless the Underwriters and each
person, if any, who controls the Underwriters within the meaning of Section 15
of the 1933 Act to the extent and in the manner set forth in clauses (i), (ii)
and (iii) below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information
<PAGE> 70
29
deemed to be part of the Registration Statement pursuant to Rule 430A of the
1933 Act Regulations, if applicable, and any information contained in a Rule
462(b) Registration Statement or any amendments thereto, or the omission or
alleged omission therefrom of a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with the
written consent of Publishing and the Guarantor; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel chosen
by the Underwriters, reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under
(i) and (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to Publishing or the
Guarantor by the Underwriters expressly for use in the Registration Statement
(or any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto)[; and the parties agree
<PAGE> 71
30
that the statements set forth in the last paragraph on the cover page, the
legends on the inside cover page, and the statements in the second and fourth
paragraphs (except for the first sentence of the fourth paragraph) under the
caption "Underwriting" in the Prospectus constitute the only information so
furnished].
(b) Each Underwriter severally agrees to indemnify and hold harmless
Publishing and the Guarantor, their directors, each of their officers who
signed the Registration Statement, and each person, if any, who controls
Publishing or the Guarantor within the meaning of Section 15 of the 1933 Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions made in the Registration Statement (or amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to Publishing or the Guarantor by the Underwriters expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) [and set
forth in the last paragraph on the cover page, the stabilization legends on the
inside cover page, and the statements in the second and fourth paragraph
(except for the first sentence of the fourth paragraph) under the caption
"Underwriting" in the Prospectus].
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any
such action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
<PAGE> 72
31
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which an indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, Publishing and the Guarantor
on the one hand and the Underwriters on the other hand shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity incurred by Publishing and the Guarantor on the
one hand and the Underwriters on the other hand, as incurred, in such
proportions that (a) the Underwriters are responsible for that portion
represented by the percentage that the underwriting commission appearing on the
cover page of the Prospectus bears to the aggregate stated principal amount
appearing thereon, and (b) Publishing and the Guarantor are responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls the Underwriters within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Underwriters, and each
director of each of Publishing and the Guarantor, each officer of Publishing or
the Guarantor who signed the Registration Statement, and each person, if any,
who controls Publishing or the Guarantor within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as Publishing or the
Guarantor.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement and
the Price Determination Agreement, or contained in certificates of officers of
Publishing or the Guarantor submitted pursuant hereto, shall remain operative
and in full force and effect, regardless of any investigation made by or on
behalf of any Underwriters or controlling person, or by or on behalf of
Publishing or the Guarantor, and shall survive delivery of the Securities to
the Underwriters.
SECTION 9. Termination of Agreement. (a) The Underwriters may terminate
this Agreement by notice to Publishing or the Guarantor at any time at or prior
to the Closing Date (i) if there has been, since the date of this Agreement or
since the respective date as of which information is given in the Prospectus,
any material adverse
<PAGE> 73
32
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of Publishing, the Guarantor and their
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any outbreak of
hostilities or escalation thereof or other calamity or crisis, the effect of
which on the financial markets of the United States is such as to make it, in
the judgment of the Underwriters, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in the
Common Stock of the Guarantor has been suspended by the Commission, or if
trading generally on either the American Stock Exchange or the New York Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by
either of said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal or New York authorities. Notice of such termination may be given by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
As used in this Section 10(a), the term "Prospectus" means the Prospectus in
the form first used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except
as provided in Section 4. Notwithstanding any such termination, the provisions
of Sections 6 and 7 shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Date to purchase the Securities that
it or they are obligated to purchase pursuant to this Agreement (the "Defaulted
Securities"), you shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms set forth
in this Agreement; if, however, you have not completed such arrangements within
such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities, the nondefaulting Underwriters
shall be obligated to purchase the full amount thereof in the
<PAGE> 74
33
proportions that their respective Securities underwriting obligation
proportions bear to the underwriting obligation proportions of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities, this Agreement shall terminate without
liability on the part of any nondefaulting Underwriters.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriters" includes
any person substituted for an Underwriter under this Section 10.
SECTION 11. Default by Publishing. If Publishing shall fail at the Closing
Date or at the Date of Delivery to sell and deliver the number of Securities
which it is obligated to sell hereunder, then this Agreement shall terminate
without any liability on the part of any non-defaulting party.
No action taken pursuant to this Section shall relieve Publishing from
liability, if any, in respect of such default.
SECTION 12. Notices. Unless otherwise specifically indicated herein, all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to Merrill
Lynch at Merrill Lynch World Headquarters, North Tower, World Financial Center,
New York, New York 10281, attention of Syndicate Operations; notices to
Publishing shall be directed to it at 401 North Wabash Avenue, Chicago,
Illinois 60611, attention of President or Secretary; and notices to the
Guarantor shall be directed to it at 401 North Wabash Avenue, Chicago, Illinois
60611, attention of President or Secretary.
<PAGE> 75
34
SECTION 13. Parties. This Agreement and the Price Determination Agreement
shall each inure to the benefit of and be binding upon the Underwriters and
Publishing and the Guarantor and their respective successors, heirs and legal
representatives. Nothing expressed or mentioned in this Agreement or the Price
Determination Agreement is intended or shall be construed to give any person,
firm or corporation, other than the Underwriters and Publishing and the
Guarantor and their respective successors, heirs and legal representatives, and
the controlling persons and officers and directors referred to in Sections 6
and 7 hereof and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or the Price
Determination Agreement or any provision herein or therein contained. This
Agreement and the Price Determination Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Underwriters, Publishing and the Guarantor and their respective
successors, heirs and legal representatives and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the Underwriters shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. Governing Law and Time. This Agreement and the Price
Determination Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State. Specified times of day refer to New York City time.
<PAGE> 76
35
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to Publishing and the Guarantor a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters, Publishing and the Guarantor in accordance
with its terms.
Very truly yours,
HOLLINGER INTERNATIONAL
PUBLISHING INC.
by
_____________________________
J. A. Boultbee
Vice President, Treasury and
Finance
HOLLINGER INTERNATIONAL INC.
by
____________________________
J. A. Boultbee
Vice President, Treasury and
Finance
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
TORONTO DOMINION SECURITIES (USA) INC.
BEAR STEARNS & CO. INC.
CIBC WOOD GUNDY SECURITIES CORP.
<PAGE> 77
36
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
by _______________________
<PAGE> 78
Exhibit A
HOLLINGER INTERNATIONAL
PUBLISHING INC.
(a Delaware corporation)
HOLLINGER INTERNATIONAL INC.
(a Delaware corporation)
$___________
__% Senior Subordinated Notes due 2007
PRICE DETERMINATION AGREEMENT
__________, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE SECURITIES
CORPORATION
TORONTO DOMINION SECURITIES (USA) INC.
BEAR STEARNS & CO. INC.
CIBC WOOD GUNDY SECURITIES INC.
c/o MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Ladies and Gentlemen:
Reference is made to the Purchase Agreement dated __________, 1997 (the
"Purchase Agreement") among Hollinger International Publishing Inc., a Delaware
corporation ("Publishing"), Hollinger International Inc. (the
<PAGE> 79
2
"Guarantor") and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation, Toronto
Dominion Securities (USA) Inc., Bear Stearns & Co. Inc. and CIBC Wood Gundy
Securities Corp. (the "Underwriters"). The Purchase Agreement provides for the
purchase by the Underwriters from Publishing, subject to the terms and
conditions set forth therein, of $___________ aggregate principal amount of
Publishing's __% Senior Subordinated Notes due 2007 (the "Securities"). This
Agreement is the Price Determination Agreement referred to in the Purchase
Agreement.
Pursuant to Section 2 of the Purchase Agreement, the undersigned agrees with
the Underwriters as follows:
1. The initial public offering price of the Securities shall be 100% of
the aggregate stated principal amount thereof, plus accrued interest from
__________, 1997 to the Closing Time.
2. The purchase price of the Securities to be paid by the several
Underwriters shall be __% of the aggregate stated principal amount thereof,
plus accrued interest from February 1, 1996 to the Closing Time.
3. The interest rate to be borne by the Securities shall be __% per
annum.
4. The Securities will mature on __________, 2007.
5. The optional redemption prices (to be supplied on page __ of the
Prospectus (and correspondingly in the Indenture)) shall be equal to the
percentage of the principal amount set forth below if redeemed during the
12-month period beginning __________ for the years indicated:
Redemption
Year Price
____ _______%
____ _______%
____ _______%
and thereafter at 100% of the principal amount, together in the case of any
such redemption with accrued and unpaid interest to the redemption date.
Publishing and the Guarantor represent and warrant to each of the
Underwriters that the representations and warranties of Publishing and the
Guarantor set forth in Section 1(a) of the Purchase Agreement are accurate as
though expressly made at and as of the date hereof.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to Publishing and the Guarantor a counterpart hereof,
whereupon this instrument along with all counterparts and together with the
Purchase Agreement shall be a binding agreement among the Underwriters and
Publishing and the Guarantor in accordance with its terms and the terms of the
Purchase Agreement.
Very truly yours,
HOLLINGER INTERNATIONAL
PUBLISHING INC.
By ____________________________
J. A. Boultbee
Vice President, Treasury and
Finance
HOLLINGER INTERNATIONAL INC.
By ____________________________
J. A. Boultbee
Vice President, Treasury and
Finance
<PAGE> 80
3
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
TORONTO DOMINION SECURITIES (USA) INC.
BEAR STEARNS & CO. INC.
CIBC WOOD GUNDY SECURITIES CORP.
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By ____________________________
<PAGE> 81
SCHEDULE I
Principal Amount
of Securities
Underwriters to Be Purchased
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . . . $___________
Donaldson, Lufkin, Jenrette
Securities Corporation . . . . . . . . . . . . . . . . . . . . . ___________
Toronto Dominion Securities
(USA) Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . ___________
Bear Stearns & Co. Inc. . . . . . . . . . . . . . . . . . . . . . ___________
CIBC Wood Gundy Securities Corp.. . . . . . . . . . . . . . . . . ___________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $===========
<PAGE> 82
SCHEDULE II
Significant Subsidiaries of Hollinger International Inc.
and Hollinger International Publishing Inc.
<PAGE> 1
Exhibit 4.01
[Form of Senior Indenture]
SENIOR INDENTURE, dated as of ,
among HOLLINGER INTERNATIONAL PUBLISHING INC., a
Delaware corporation (as more fully defined
below, "Publishing"), HOLLINGER INTERNATIONAL
INC., a Delaware corporation (as more fully
defined below, "Hollinger International") and
FLEET NATIONAL BANK, as trustee (the "Trustee").
RECITALS OF PUBLISHING
Publishing has duly authorized the execution and delivery of this Indenture
to provide for the issuance of its senior debentures, notes, bonds or other
evidences of indebtedness, to be issued in one or more series pursuant to
Article III hereof or a supplemental indenture (each a "Series" and
collectively the "Securities").
Hollinger International has duly authorized the issuance of a guarantee (the
"Guarantee") of the Securities, of substantially the tenor as hereinafter set
forth, and to provide therefor, Hollinger International has duly authorized the
execution and delivery of this Indenture in its capacity as Guarantor
hereunder.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of and to govern
indentures qualified under the Trust Indenture Act; and
All acts and things necessary have been done to make (i) the Securities,
when executed by Publishing and authenticated and delivered hereunder and duly
issued by Publishing, the valid obligations of Publishing and (ii) this
Indenture a valid agreement of Publishing and Hollinger International in
accordance with the terms of this Indenture.
NOW, THEREFORE, in consideration of the premises and the purchase of the
Securities by the Holders thereof,
<PAGE> 2
2
it is mutually covenanted and agreed, for the equal and proportionate benefit
of all Holders of the Securities, as follows:
ARTICLE I
Definitions and Other Provisions of General Application
SECTION 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(e) all references to $, US$, dollars or United States dollars shall refer
to the lawful currency of the United States of America.
The following terms shall have the meanings set forth in this Section:
"Acceleration Right" means a right, which at the time is immediately
exercisable (without further notice or lapse of time), by the holders or a
trustee to cause the acceleration of the maturity of Indebtedness of Publishing
or a Restricted Subsidiary having an aggregate principal amount outstanding of
at least $5,000,000; provided that this definition shall exclude the rights of
the holders of the existing preference shares of DTH and FDTH to require that
Restricted Subsidiaries or Affiliates purchase those shares pursuant to the
terms of the governing instruments or
<PAGE> 3
3
existing agreements relating to such preference shares existing on January 1,
1997.
"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) (i) existing at the time such Person becomes a
Restricted Subsidiary or (ii) assumed in connection with the acquisition of
assets from such Person, in each case, other than Indebtedness Incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary or such acquisition. Acquired Indebtedness will be deemed to be
Incurred on the date of the related acquisition of assets from any Person or
the date the acquired Person becomes a Restricted Subsidiary.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) any other Person
that owns, directly or indirectly, 10% or more of such Person's equity
ownership or Voting Stock or any officer or director of any such Person or
other Person or with respect to any natural Person, any person having a
relationship with such Person by blood, marriage or adoption not more remote
than first cousin. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the management
and policies of such Person directly or indirectly, whether through ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" means the administrative agent under the New Bank Credit Facility,
and its successors and assigns in such capacity.
"Amortization Expense" of any Person means, for any period, amounts
recognized during such period as (i) amortization of goodwill or (ii)
amortization of any other intangible assets with an original life of ten years
or more, in each case in accordance with GAAP and to the extent reflected in
the Consolidated Net Income of Publishing and the Restricted Subsidiaries;
provided, however, that in determining the aggregate cumulative Amortization
Expense of Publishing and its Restricted Subsidiaries for purposes of Section
10.09 following the date on which both of the Telegraph and Southam are
Restricted Subsidiaries, the Amortization Expense of
<PAGE> 4
4
Restricted Subsidiaries that are not Wholly Owned Restricted Subsidiaries shall
be determined in accordance with the actual percentage of Publishing's common
equity in such Restricted Subsidiary on the date of the transaction
necessitating the determination (thus, for example, in the case of a Restricted
Subsidiary in which Publishing owns a 51% common equity interest on the date of
the Restricted Payment, 51% of such Restricted Subsidiary's Amortization
Expense would be included in the calculation of the aggregate cumulative
Amortization Expense of Publishing and the Restricted Subsidiaries).
"AP-91" means American Publishing (1991) Inc., a wholly owned, indirect
Subsidiary.
"AP-91 Senior Notes" means the $150 million in senior secured notes issued
by AP-91 which are held by 19 insurance companies.
"Argsub" means a wholly owned subsidiary of Argus.
"Argsub Preferred" means Preferred Stock of any Argsub issued to and held by
DTH or FDTH.
"Argus" means Argus Corporation Limited, a Canadian corporation, so long as
such corporation is controlled by Hon. Conrad M. Black or his heirs, executors
and legal representatives and his Affiliates.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or
sale and leaseback transaction but not the grant of a pledge or security
interest) (collectively, a "transfer"), directly or indirectly, in one or a
series of related transactions, of (i) any Capital Stock of any Restricted
Subsidiary; (ii) all or substantially all of the properties and assets of any
division or line of business of Publishing or any of its Restricted
Subsidiaries; or (iii) any other properties or assets (other than cash) of
Publishing or any Restricted Subsidiary, other than in the ordinary course of
business. For the purposes of this definition, the term "Asset Sale" shall not
include any transfer of properties and assets (A) that is governed by the
provisions of Article VIII, (B) from any Restricted Subsidiary to Publishing in
accordance with the terms of this Indenture, (C) having a market value of less
than $1,000,000 (it being understood that if the market value of the properties
or assets being
<PAGE> 5
5
transferred exceeds $1,000,000, the entire value and not just the portion in
excess of $1,000,000 shall be deemed to have been the subject of an Asset
Sale), (D) which are obsolete (in the case of equipment) to Publishing's and
its Restricted Subsidiaries' businesses, (E) to any Wholly Owned Restricted
Subsidiary (or, provided that both the Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary), (F) from any Wholly Owned Restricted
Subsidiary to any other Wholly Owned Restricted Subsidiary (or, provided that
both The Telegraph and Southam are Restricted Subsidiaries, from a Restricted
Subsidiary to a Restricted Subsidiary), (G) consisting of any transfer of
common shares of HTH by FDTH or any Restricted Subsidiary which may require or
hold such HTH common shares to Hollinger Inc. pursuant to the provisions of the
HTH/FDTH Share Exchange Agreement, (H) by Southam provided that (i) Southam
is a Restricted Subsidiary; (ii) Southam is a Public Entity at the time of such
sale of assets and (iii) the proceeds of such sale of assets are not paid as a
dividend or distribution of Southam's equity capital; provided, however, that
any issuance by Southam of its Capital Stock shall be subject to the
requirements of Section 10.15(b)(i), and (I) any issuance of Mirror Preferred
so long as the conditions set forth in the definition of Mirror Preferred are
satisfied.
"Average Life to Stated Maturity" means, as of the date of determination
with respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the products of (a) the number of years from the date of determination to
the date or dates of each successive scheduled principal payment of such
Indebtedness multiplied by (b) the amount of each such principal payment by
(ii) the sum of all such principal payments.
"Bankruptcy Law" means Title 11 of the United States Code, as amended, or
any similar United States Federal or state or foreign law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization
or relief of debtors or any amendment to, succession to or change in any such
law.
"Board of Directors" means the board of directors of Publishing or any duly
authorized committee of such board.
<PAGE> 6
6
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of Publishing to have been duly adopted by such Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York, or
the city in which the principal corporate trust office of the Trustee is
located (initially Hartford, CT), are authorized or obligated by law or
executive order to close.
"Business Opportunities Agreement" means the Business Opportunities
Agreement dated as of February 7, 1996, between Hollinger Inc. and Hollinger
International and any amendment, modification, or supplement thereto or
restatement thereof and any similar agreements entered into after the date of
the original issuance of the Securities in accordance with the terms of this
Indenture.
"Capital Lease Obligation" of any Person means any obligation of such Person
and its subsidiaries on a consolidated basis under any capital lease of real or
personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock.
"Cash Equivalents" means (i) any evidence of Indebtedness with a maturity of
180 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided
that the full faith and credit of the United States of America is pledged in
support thereof); (ii) certificates of deposit or acceptances with a maturity
of 180 days or less of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and undivided
profits of not less than $500,000,000; (iii) commercial paper with a maturity
of 180 days or less issued by a corporation that is not an Affiliate of
Publishing organized under the laws of any state of the United States or the
District of Columbia and rated A-1 (or higher) according to S&P or P-1 (or
higher) according to Moody's or at least an equivalent rating category of
another nationally recognized securities rating
<PAGE> 7
7
agency; (iv) any money market deposit accounts issued or offered by a domestic
commercial bank having capital and surplus in excess of $500,000,000; and (v)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the government of
the United States of America or issued by any agency thereof and backed by the
full faith and credit of the United States of America, in each case maturing
within 180 days from the date of acquisition; provided that the terms of such
agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions with Securities Dealers and Others, as
adopted by the Comptroller of the Currency on October 31, 1985.
"Change of Control" means the occurrence of any of the following:
(a) there is a report filed on Schedule 13D, 14D-1 or 14D-1F (or any
successor schedule, form or report) pursuant to the Exchange Act, disclosing
that any person (for purposes of this definition, as the term "person" is used
in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing), other than any person consisting solely
of Conrad M. Black (or his heirs, executors or legal representatives) and his
Affiliates, has become the beneficial owner (as the term "beneficial owner" is
defined under Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of Voting Stock representing 50% or more of the total voting
power attached to all Voting Stock of Hollinger Inc., Hollinger International
or Publishing then outstanding; provided, however, that a person shall not be
deemed to be the beneficial owner of, or to own beneficially, (i) any
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such person or any of such person's Affiliates until such tendered
securities are accepted for purchase or exchange thereunder, or (ii) any
securities if such beneficial ownership (A) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to applicable law, and (B) is not also then reportable on Schedule 13D
(or any successor schedule) under the Exchange Act;
(b) there is a report filed or required to be filed with any securities
commission or securities regulatory authority in Canada, disclosing that any
offeror (as the term "offeror" is defined in Section 89(1) of
<PAGE> 8
8
Securities Act (Ontario) for the purpose of Section 101 of such Securities Act
or any successor provision of the foregoing) other than any person consisting
solely of Conrad M. Black (or his heirs, executors or legal representatives)
and his Affiliates, has acquired beneficial ownership (within the meaning of
the Securities Act (Ontario)) of, or the power to exercise control or direction
over, or securities convertible into, any voting or equity shares of Hollinger
Inc. that together with such offeror's securities (as the term "offeror's
securities" is defined in Section 89(1) of the Securities Act (Ontario) or any
successor provision thereto in relation to the voting or equity shares of
Hollinger Inc., would constitute Voting Stock of Hollinger Inc. representing
50% or more of the total voting power attached to all Voting Stock of Hollinger
Inc. then outstanding;
(c) Hollinger International shall cease to own, directly or indirectly, 100%
of the Voting Stock of Publishing;
(d) there is consummated a consolidation (involving a business combination)
or merger of Publishing or Hollinger International, as the case may be, (i) in
which Publishing or Hollinger International, as the case may be, is not the
continuing or surviving corporation or (ii) pursuant to which any Voting Stock
of Publishing or Hollinger International, as the case may be, would be
reclassified, changed or converted into or exchanged for cash, securities or
other property, other than (in each case) a consolidation or merger of
Publishing or Hollinger International, as the case may be, in which the holders
of the Voting Stock of Publishing or Hollinger International, as the case may
be, immediately prior to the consolidation or merger have, directly or
indirectly, 50% or more of the Voting Stock of the continuing or surviving
corporation immediately after such transaction; or
(e) Conrad M. Black (or his heirs, executors and legal representatives) and
his Affiliates cease to beneficially own and control the voting of, directly or
indirectly, Voting Stock of Publishing or Hollinger International representing
a greater percentage of the total voting power attached to the Voting Stock of
Publishing or Hollinger International than the percentage beneficially owned
and controlled, directly or indirectly, by any other single shareholder of
Publishing or Hollinger International
<PAGE> 9
9
together with its Affiliates (a "Designated Transaction") and there shall occur
a Rating Decline.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any property, assets, proceeds or other items that may be
pledged as security for the Securities, whether pursuant to Section 10.12 or
otherwise.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock Offering" means the issuance by Hollinger International of up
to 16,100,000 shares of its Class A Common Stock, par value $.01 per share,
concurrently with the issuance of the Securities.
"Consolidated Assets" means, with respect to Publishing, the total assets
shown on the balance sheet of Publishing and its Restricted Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, as of Publishing's
latest full fiscal quarter.
"Consolidated Cash Flow Ratio" means, as at any date of determination, the
ratio of (i) the aggregate amount of Indebtedness of Publishing and the
Restricted Subsidiaries on a Consolidated basis outstanding as at such date to
(ii) the Operating Cash Flow of Publishing and the Restricted Subsidiaries
(determined on a Consolidated basis) for the most recently completed period of
four consecutive fiscal quarters of Publishing; provided (a) that once both of
the Telegraph and Southam are Restricted Subsidiaries, for the purpose of
determining the Consolidated Cash Flow Ratio, the Indebtedness and Operating
Cash Flow of Restricted Subsidiaries that are not Wholly Owned Restricted
Subsidiaries shall be determined in accordance with the actual percentage of
Publishing's common equity interest in such Restricted Subsidiary on the date
of determination of the Consolidated Cash Flow Ratio (thus, for example, in the
case of a Restricted Subsidiary in which Publishing owns a 51% common equity
interest, 51% each of such Restricted Subsidiary's Indebtedness and Operating
Cash Flow would be
<PAGE> 10
10
included in the calculation of Publishing's aggregate Indebtedness and
Operating Cash Flow, respectively); and provided further that (i) so long as
Southam is a Restricted Subsidiary and (ii) until such time as Southam is not a
Public Entity, the portion of Operating Cash Flow represented by Southam
Operating Cash Flow shall not exceed thirty-three and one third percent (33-
1/3%) and, to the extent Southam Cash Flow represents greater than thirty-three
and one third percent (33-1/3%) of Operating Cash Flow, such excess shall be
deducted from Operating Cash Flow and (b) that, so long as any Southam shares
owned by Publishing or a Restricted Subsidiary are pledged, directly or
indirectly, to secure Indebtedness other than Indebtedness by Publishing or a
Restricted Subsidiary, the equity interest in Southam represented by such
shares shall be excluded for purposes of calculating the percentage of
Southam's Indebtedness and Operating Cash Flow to be included in determining
Publishing's aggregate Indebtedness and Operating Cash Flow on a Consolidated
basis.
"Consolidated Net Income (Loss)" of Publishing and the Restricted
Subsidiaries means, for any period, the Consolidated net income (or loss (and
treating a loss as a negative number)) of Publishing and the Restricted
Subsidiaries for such period as determined in accordance with GAAP, adjusted by
(a) excluding, without duplication, to the extent included in calculating such
Consolidated Net Income (or Loss), (i) all extraordinary gains and losses, (ii)
the portion of Consolidated net income (or loss) of Publishing and its
Restricted Subsidiaries allocable to Investments in unconsolidated Persons
(other than Unrestricted Subsidiaries) to the extent that cash dividends or
distributions have not actually been received by such Person or one of its
Restricted Subsidiaries, (iii) the portion of Consolidated net income (or loss)
of Publishing and its Restricted Subsidiaries allocable to Publishing's
Unrestricted Subsidiaries (or to payments received therefrom), (iv) net income
(or loss) of a Person combined with Publishing or any of its subsidiaries on a
"pooling of interests" basis attributable to any period prior to the date of
combination, (v) any gain or loss, net of taxes, realized upon the termination
of any employee pension benefit plan, (vi) aggregate net gains and losses (less
all fees and expenses relating thereto) in respect of dispositions of assets
(including without limitation sales of shares of Unrestricted Subsidiaries or
unconsolidated Persons and noncash writeoffs of assets (provided that there are
no continuing cash expenses related to such writeoffs))
<PAGE> 11
11
other than in the ordinary course of business, (vii) any income, gain or loss
resulting from the issuance, sale or redemption of Mirror Preferred or Argsub
Preferred, (viii) the net income of any Restricted Subsidiary to the extent
that the declaration of dividends or similar distributions by that Restricted
Subsidiary of that income is not at the time permitted, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulations applicable
to that Restricted Subsidiary or its stockholders; provided, however, that the
foregoing shall not apply to the net income of AP-91 relating to the business
of AP-91, as conducted as of the date of this Indenture on account of
restrictions on AP-91, or in agreements as in effect on the date of this
Indenture, restrictions permitted under clauses (iii) and (iv) of Section
10.16 (to the extent such clauses are applicable at the time of determination),
(ix) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued at any time
following the date of this Indenture, (x) any net gain from the collection of
proceeds of life insurance policies, (xi) any gain arising from the acquisition
of any securities, or the extinguishment, under GAAP, of any Indebtedness of
Publishing or one of its Restricted Subsidiaries, (xii) aggregate net gains or
losses relating to foreign currency transactions or translations, (xiii)
redundancy costs relating to the permanent elimination of jobs, provided that
the amount of such expenses are certified by Publishing's independent
accountants, and (b) subtracting, without duplication, the aggregate amount of
dividends on Preferred Stock of Restricted Subsidiaries to the extent that such
Preferred Stock is included as Indebtedness in the calculation of Publishing's
Consolidated Cash Flow Ratio. In calculating the Operating Cash Flow of
Publishing and its Restricted Subsidiaries, the Consolidated Net Income of
Restricted Subsidiaries that are not Wholly Owned Restricted Subsidiaries will
be included only to the extent of Publishing's common equity interest in such
Restricted Subsidiaries.
"Consolidated Net Worth" means the common and preferred stockholders' equity
of Publishing and its Restricted Subsidiaries (exclusive of any redeemable
capital stock), as determined on a Consolidated basis and in accordance with
GAAP.
<PAGE> 12
12
"Consolidated Tangible Assets" means the total assets appearing on a
Consolidated balance sheet of Publishing and its Restricted Subsidiaries less,
without duplication, each of the following: (i) all applicable depreciation,
amortization and other valuation reserves, (ii) all other intangible assets and
deferred charges, (iii) deferred income tax assets (to the extent recorded as
an asset) and (iv) all investments in unconsolidated subsidiaries (including
all Unrestricted Subsidiaries).
"Consolidation" means, with respect to any Person, the consolidation of the
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP; provided,
however, that the accounts of any Unrestricted Subsidiary shall not be
consolidated with Publishing but instead the interest of Publishing or any
Restricted Subsidiary therein will be accounted for as an investment. The term
"Consolidated" shall have a correlative meaning.
"Corporate Trust Office" means the office of the Trustee or an affiliate or
agent thereof at which at any particular time the corporate trust business for
the purposes of this Indenture shall be principally administered, which office
at the date of execution of this Indenture is located at 777 Main Street,
Hartford, Connecticut 06115-2001.
"CST Real Estate" means the real estate, including land, building and
fixtures, located at 401 North Wabash Avenue, Chicago, Illinois, where
Publishing currently maintains its headquarters, and all improvements thereon.
"CST Real Estate Transaction" means the sale or other disposition (other
than to an Affiliate) of all or any portion of the interest of Publishing or a
Restricted Subsidiary in the CST Real Estate.
"Currency Agreements" means one or more of the following agreements which
shall be entered into with one or more financial institutions: foreign
exchange contracts, currency swap agreements or other similar agreements or
arrangements designed to protect against fluctuations in currency values.
<PAGE> 13
13
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"DTH" means DT Holdings Limited, a corporation under the laws of England.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" has the meaning specified in Article V.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extraordinary Cash Dividend" means in respect of the Southam Interests:
(i) a cash dividend in respect of a particular calendar year representing
the excess, if any, of (A) the aggregate of all cash dividends declared and
paid on such securities during the calendar year over (B) the greatest of (x)
200% of the aggregate of all cash dividends declared and paid on such
securities during the immediately preceding calendar year, (y) 300% of the
average of the aggregate of all cash dividends declared and paid on such
securities during the immediately preceding three calendar years; and (z)
100% of the aggregate consolidated net income of the issuer of such
securities, before extraordinary items, for its immediately preceding fiscal
year; and
(ii) any cash dividend declared by Southam on its common shares which the
directors of Southam by resolution determine to be extraordinary, taking into
<PAGE> 14
14
account the amount of the dividend, the effect of the dividend on the market
value of such securities after payment thereof, the form of payment, the
financial position of Southam, economic conditions, business practices and
such other factors as the directors of Southam consider to be relevant.
"FDTH" means First DT Holdings Limited, a corporation under the laws of
England.
"FDTH Credit Facility" means the credit agreement dated as of May 30, 1996,
among FDTH, the financial institutions party thereto and The Toronto-Dominion
Bank, as issuing bank and Agent, as such agreement may be amended, renewed,
extended, substituted, refinanced, restructured, replaced, supplemented or
otherwise modified from time to time (including, without limitation, any
successive renewals, extensions, substitutions, refinancings, restructurings,
replacements, supplementations or other modifications of the foregoing that
increase the aggregate amount of borrowings outstanding or the aggregate
commitments of the lenders thereunder).
"Foreign Subsidiary Indebtedness" means Indebtedness Incurred by a non-U.S.
domiciled Subsidiary that has no material U.S. operations.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied,
which are in effect on the date of this Indenture.
"Global Security" means a Security evidencing all or part of the Securities
of any Series and issued to a Depository in accordance with Section 3.03 hereof
and bearing the legend prescribed in Section 2.05 hereof.
"Guarantee" means the guarantee by the Company and, if the context requires,
by any Restricted Subsidiary Guarantor of the Indenture Obligations.
"Guaranteed Debt" of any Person means, without duplication, all Indebtedness
of any other Person referred to in the definition of Indebtedness guaranteed
directly or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (i) to pay or
purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such
<PAGE> 15
15
Indebtedness (or to indemnify another Person for the costs thereof), (ii) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such Indebtedness or to assure the holder of such Indebtedness against loss,
(iii) to supply funds to, or in any other manner invest in, the debtor
(including any agreement to pay for property or services without requiring that
such property be received or such services be rendered), (iv) to maintain
working capital or equity capital of the debtor, or otherwise to maintain the
net worth, solvency or other financial condition of the debtor or (v) otherwise
to assure a creditor against loss, provided that the term "guarantee" shall not
include endorsements for collection or deposit, in either case in the ordinary
course of business.
"Guarantor" means any guarantor of the Securities in accordance with the
terms of this Indenture, including Hollinger International.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Hollinger Eastern" means Hollinger Eastern Publishing Inc., a Canadian
corporation, and its successors and assigns.
"Hollinger Inc. Transaction" means the transaction, in all material respects
as announced publicly on January 7, 1997, by which Hollinger Inc. is to
transfer to Hollinger Eastern certain of its owned Canadian publishing
interests for an aggregate consideration not to exceed $382 million, subject to
working capital adjustments and currency exchange adjustments.
"Hollinger International" means Hollinger International Inc., a corporation
incorporated under the laws of Delaware and a Guarantor of the Indenture
Obligations, until a successor Person shall have become such pursuant to
Article VIII of this Indenture and thereafter "Hollinger International" shall
mean such successor Person.
"Hollinger International/Hollinger Eastern Interests" means Preferred Stock
of any Person (or other Capital Stock convertible or exchangeable into
Preferred Stock of such Person) which holds the voting interests of Hollinger
Eastern which are owned by Hollinger International
<PAGE> 16
16
and its Subsidiaries as of the date that Hollinger Eastern is designated as a
Restricted Subsidiary.
"Hollinger International Guarantee" means the unsecured, senior guarantee of
the Securities provided by the Company.
"HTH" means Hollinger-Telegraph Holdings Inc., a corporation continued under
the laws of Alberta, and its successors and assigns.
"HTH/FDTH Share Exchange Agreement" means the share exchange agreement dated
as of July 19, 1995, between Hollinger Inc. and FDTH, as amended, supplemented
or otherwise modified from to time.
"Incur" means create, issue, assume, guarantee or otherwise in any manner
become directly or indirectly liable for or with respect to or otherwise incur.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (or other obligations to former owners of
acquired businesses), excluding any trade payables and other accrued current
liabilities arising in the ordinary course of business, but including, without
limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit issued under letter of credit facilities,
acceptance facilities or other similar facilities and in connection with any
agreement to purchase, redeem, exchange, convert or otherwise acquire for value
any Capital Stock of such Person, or any warrants, rights or options to acquire
such Capital Stock, now or hereafter outstanding, (ii) all obligations of such
Person evidenced by bonds, notes, debentures or other similar instruments,
(iii) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person
(even if the rights and remedies of the seller or lender under such agreement
in the event of default are limited to repossession or sale of such property),
but excluding trade payables arising in the ordinary course of business, (iv)
all obligations under Interest Rate Agreements and Currency Agreements of such
Person, (v) all Capital Lease Obligations of such Person, (vi) all Indebtedness
referred to in clauses (i) through (v) above of other Persons and all dividends
of other Persons, the payment of which is secured
<PAGE> 17
17
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien, upon or with respect to
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, (vii) all Guaranteed Debt of such Person, (viii)
all Redeemable Capital Stock and (without duplication) all Preferred Stock of
Subsidiaries other than (a) Mirror Preferred, provided that such Mirror
Preferred continues to qualify as such under the definition thereof, (b)
Hollinger International/Hollinger Eastern Interests, provided that Hollinger
International grants a security interest, pari passu in right of payment with
the Securities, in such Hollinger International/Hollinger Eastern Interests as
security for its guarantee of securities, and (c) Preferred Stock held by
Restricted Subsidiaries or Publishing, in each case valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends and (ix) any amendment, supplement, modification, deferral, renewal,
extension, refunding or refinancing of any Indebtedness of the types referred to
in clauses (i) through (viii) above; provided, however, that this definition
shall not apply to Indebtedness represented by Southam-Linked Debentures, which
are secured, directly or indirectly, by shares of Southam held directly or
indirectly by Publishing. For purposes hereof, the "maximum fixed repurchase
price" of any Redeemable Capital Stock or Preferred Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock or Preferred Stock as if such Redeemable Capital Stock
or Preferred Stock were purchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture, and if such price is based
upon, or measured by, the fair market value of such Redeemable Capital Stock or
Preferred Stock, such fair market value to be determined in good faith by the
Board of Directors of such Person.
"Indenture" means this instrument as originally executed (including all
exhibits and schedules thereto) and as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of particular
Series of Securities established as contemplated by Section 3.01.
<PAGE> 18
18
"Indenture Obligations" means the obligations of Publishing under this
Indenture or under the Securities to pay principal of, premium, if any, and
interest when due and payable, and all other amounts due or to become due under
or in connection with this Indenture and the Securities, and the performance of
all other obligations to the Trustee, the Paying Agent and the holders under
this Indenture and the Securities, according to the terms thereof.
"Independent Committee" means a committee of the board of directors of
Publishing whose membership meets the requirements of the New York Stock
Exchange applicable to audit committees as in effect on the date of original
issuance of the Securities or a committee of the board of directors of
Publishing whose membership satisfies any more restrictive requirements of
independence of any securities exchange or market on which Publishing's or
Hollinger International's equity securities are traded or listed.
"Independent Director" means a member of the board of directors of a Person
that is not an officer, employee or former officer or employee of such Person
or one of its Affiliates and, with respect to any transaction or series of
related transactions, a member of the board of directors who does not have any
material direct or indirect financial interest in or with respect to such
transaction or series of related transactions (including for such purpose the
interest of any other Person with respect to whom such director is also a
director, officer or employee).
"Interest Payment Date" means the Stated Maturity of a regular installment
of interest on the Securities or the Special Payment Date with respect to
Defaulted Interest.
"Interest Rate Agreements" means one or more of the following agreements
which shall be entered into from time to time with one or more financial
institutions: interest rate protection agreements (including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements)
and/or other types of interest rate hedging agreements.
"Investment" means, with respect to any Person, directly or indirectly, any
advance, loan (including guarantees), or other extension of credit or capital
contribution to (by means of any transfer of cash or other property to others
or any payment for property or services for the account or use of others), or
any purchase,
<PAGE> 19
19
acquisition or ownership by such Person of any Capital Stock, bonds, notes,
debentures or other securities issued or owned by, any other Person and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
security interest, hypothecation or other encumbrance upon or with respect to
any property of any kind, real or personal, movable or immovable, now owned or
hereafter acquired.
"Marketable Security" means any common stock, debt security or other
security of a Person which is (or will, upon distribution thereof, be) listed
on the NYSE, the American Stock Exchange or any national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended,
or approved for quotation in the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System or any
similar system of automated dissemination of quotations of securities prices in
the United States or for which there is a recognized market maker or trading
market.
"Material Restricted Subsidiary" means each Restricted Subsidiary of
Publishing which (i) for the most recent fiscal year of Publishing accounted
for more than 5% of the Consolidated revenues of Publishing and its Restricted
Subsidiaries or (ii) at the end of such fiscal year was the owner (beneficial
or otherwise) of more than 5% of the Consolidated Assets of Publishing and its
Restricted Subsidiaries, all as shown on Publishing's Consolidated financial
statements for such fiscal year.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein provided or
as provided in this Indenture, whether at Stated Maturity, the Purchase Date or
the Redemption Date and whether by declaration of acceleration, Offer in
respect of Excess Proceeds, Change of Control, call for redemption or
otherwise.
"Media Business" means the business of the broadcast of radio or television
broadcasting, cable and satellite programs (including national, regional or
local radio, television, cable and satellite programs).
<PAGE> 20
20
"Mirror Preferred" means Preferred Stock of DTH or FDTH currently held by or
hereafter issued to an Argsub (i) having items (including, without limitation,
terms with respect to liquidation, redemption and dividends) identical to those
contained in Argsub Preferred issued or transferred simultaneously with such
Argsub's acquisition of such DTH or FDTH Preferred Stock in equivalent amounts
to DTH or FDTH, as the case may be, and (ii) in respect of which no cash
payments are or have been made by the issuer thereof, except for cash payments
in respect of certain Mirror Preferred directly from FDTH to DTH at the
direction of Argsub; provided that, at such time as (x) the foregoing clauses
(i) and (ii) are no longer satisfied, (y) the issuer of any Argsub Preferred
Incurs any Indebtedness or other liability other than tax liabilities or
pursuant to such Argsub Preferred or acquires any other assets other than the
Mirror Preferred, or (z) the Holder of any Mirror Preferred transfers such
stock other than to a Wholly-Owned Restricted Subsidiary, (1) an Event of
Default will occur under the Indenture, and (2) such Preferred Stock of FDTH
held by Argsub will be deemed to be Redeemable Capital Stock that Incurred on
such date; and provided further, that in the event that the Mirror Preferred
have not been redeemed, retracted, transferred to DTH or otherwise cancelled
without the payment of cash (except for cash payments in respect of certain
Mirror Preferred directly to DTH) on or before July 1, 1997, then such
Preferred Stock shall be treated as Indebtedness for the purposes of
Section 10.08.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any Person,
the proceeds thereof in the form of cash or cash equivalents including payments
of principal and interest in respect of deferred payment obligations when
received in the form of, or stock or other assets when disposed of for, cash or
cash equivalents (except to the extent that such obligations are financed or
sold with recourse to Publishing or any Restricted Subsidiary) net of (i)
brokerage commissions and other reasonable fees and expenses (including fees
and expenses of counsel and investment bankers) related to such Asset Sale,
(ii) provisions for all taxes payable as a result of such Asset Sale, (iii)
payments made to retire indebtedness where payment of such indebtedness is
secured by the assets or properties the subject of such Asset Sale, (iv)
amounts required to be paid to any Person (other than Publishing or any
Restricted Subsidiary) owning a beneficial interest in the assets subject to
the Asset Sale and (v) appropriate
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amounts to be provided by Publishing or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by Publishing or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined and reflected in
an Officers' Certificate delivered to the Trustee and (b) with respect to any
issuance or sale of Capital Stock or options, warrants or rights to purchase
Capital Stock, or debt securities or Capital Stock that have been converted
into or exchanged for Capital Stock, as referred to in Section 10.09, the
proceeds of such issuance or sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed of for, cash or cash
equivalents (except to the extent that such obligations are financed or sold
with recourse to Publishing or any Restricted Subsidiary), net of attorneys'
fees, accountants' fees and brokerage, consultation, underwriting and other
fees and expenses actually incurred in connection with such issuance or sale
and net of taxes paid or payable as a result thereof.
"New Bank Credit Facility" means the credit agreement dated as of May 30,
1996, among Publishing, the financial institutions party thereto and The
Toronto-Dominion Bank, as issuing bank and the Agent, as such agreement may be
amended, renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified from time to time (including, without
limitation, any successive renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplementations or other modifications of the
foregoing that increase the aggregate amount of borrowings outstanding or the
aggregate commitments of the lenders thereunder).
"Newspaper Business" means the business of publishing and distributing
(including distributing by electronic means) newspapers, magazines and other
paid or free publications having national, regional, local or targeted markets,
including publications having limited or no news or editorial content such as
shoppers or other "total market coverage" publications and similar
publications.
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"Officers' Certificate" means a certificate signed by the Chairman of the
Board, Vice Chairman, President or a Vice President (regardless of Vice
Presidential designation), and by the Treasurer, Secretary or an Assistant
Secretary, of Publishing, in form and substance reasonably satisfactory to, and
delivered to, the Trustee.
"Operating Cash Flow" means, for any period, an amount equal to the
Consolidated Net Income of Publishing and the Restricted Subsidiaries for such
period, plus, to the extent deducted in calculating such Consolidated Net
Income, (a) interest expense and other financing costs and expenses, (b)
dividends paid on any Preferred Stock of Restricted Subsidiaries to the extent
such Preferred Stock is included as Indebtedness in the calculation of
Publishing's Consolidated Cash Flow Ratio, (c) depreciation and amortization,
and (d) all taxes, whether or not deferred, applicable to such period.
For purposes of calculating Operating Cash Flow for the four fiscal quarters
most recently completed prior to any date on which an action is taken that
requires a calculation of the Consolidated Cash Flow Ratio, (a) any Person that
is a Restricted Subsidiary on such date (or would become a Restricted
Subsidiary in connection with the transaction that requires the determination
of such ratio) shall be deemed to have been a Restricted Subsidiary at all
times during such period, (b) any Person that is not a Restricted Subsidiary on
such date (or would cease to be a Restricted Subsidiary in connection with the
transaction that requires the determination of such ratio) shall be deemed not
to have been a Restricted Subsidiary at any time during such period, (c) if
Publishing or any Restricted Subsidiary shall have in any manner acquired or
disposed of any operating business (including without limitation acquisitions
accounted for on a "pooling of interests" or "as if pooling of interests"
basis) during or subsequent to such period, such calculation shall be made on a
pro forma basis on the assumption that such acquisition or disposition has been
completed on the first day of such period and (d) in the case of a Restricted
Subsidiary that is not a Wholly Owned Restricted Subsidiary, the determination
of the percentage of the Operating Cash Flow of such Restricted Subsidiary that
is to be included in the calculation of
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Publishing's Cash Flow Ratio shall be made on a pro forma basis on the
assumption that the percentage of Publishing's common equity interest on the
date of determination (it being understood, in the case of foregoing clause
(c), that if such pro forma calculations shall have been made in accordance
with Regulation S-X under the Exchange Act, such method of calculation (but not
necessarily the adjustments) shall be presumed to be acceptable) (it being
further understood that the foregoing clause (d) shall not be operative until
such time as both The Telegraph and Southam shall both be Restricted
Subsidiaries).
"Opinion of Counsel" means a written opinion of counsel, in form and
substance reasonably satisfactory to the Trustee, who may be counsel for
Publishing or the Trustee, and who shall be reasonably acceptable to the
Trustee, including but not limited to an Opinion of Independent Counsel.
"Opinion of Independent Counsel" means a written opinion, in form and
substance reasonably satisfactory to the Trustee, by someone who is not an
employee or former employee of Publishing and who shall be reasonably
acceptable to the Trustee.
"Original Issue Discount Security" means (i) any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof, and (ii) any other
Security which is issued with "original issue discount" within the meaning of
Section 1273(a) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Outstanding" when used with respect to Securities means, as of the date of
determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption money
in the necessary amount has been theretofore irrevocably deposited with the
Trustee or any Paying Agent (other than Publishing) in trust or set aside and
segregated in trust by Publishing (if Publishing shall act as its own Paying
Agent) for the
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Holders of such Securities; provided that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor reasonably satisfactory to the Trustee has
been made;
(c) Securities, except to the extent provided in Sections 4.02 and 4.03,
with respect to which Publishing has effected defeasance or covenant
defeasance as provided in Article IV; and
(d) Securities in exchange for or in lieu of which other Securities have
been authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee and Publishing proof reasonably satisfactory to each of them that
such Securities are held by a bona fide purchaser in whose hands the
Securities are valid obligations of Publishing; provided, however, that in
determining whether the Holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by
Publishing or any other obligor upon the Securities or any Affiliate of
Publishing or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee actually knows
to be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the reasonable satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not
Publishing or any other obligor upon the Securities or any Affiliate of
Publishing or such other obligor.
"Pari Passu Guarantor Indebtedness" means any Indebtedness of any Guarantor
that is pari passu in right of payment with such Guarantor's Guarantee.
"Pari Passu Indebtedness" means any Indebtedness of Publishing that is pari
passu in right of payment with the Securities.
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"Paying Agent" means any Person authorized by Publishing to pay the
principal, premium, if any, or interest on any Securities on behalf of
Publishing. The Company initially authorizes the Trustee to act as Paying
Agent for the Securities on its behalf. The Company may at any time and from
time to time authorize one or more Persons to act as Paying Agent in addition
to or in place of the Trustee with respect to any Series of Securities issued
under this Indenture.
"Permitted Indebtedness" means the following:
(i) Indebtedness of Publishing or Foreign Subsidiary Indebtedness under the
New Bank Credit Facility in an aggregate principal amount at any one time
outstanding not to exceed $150 million; and once both of The Telegraph and
Southam are Restricted Subsidiaries, $250 million and, once the Hollinger
Inc. Transaction closes, $475 million; provided, however, that Indebtedness
under the New Bank Credit Facility may not be Incurred under this paragraph
for purposes of purchasing or otherwise acquiring the Capital Stock or a
substantial portion of the assets of another Person (including the minority
interest in Southam but excluding acquisitions of inventory, equipment and
similar assets in the ordinary course of business) unless, immediately after
giving effect to such transaction on a pro forma basis, Publishing could
Incur $1.00 of additional Indebtedness (other than Permitted Indebtedness)
under Section 10.08;
(ii) once Southam is a Restricted Subsidiary and until such time as Southam
is not a Public Entity, Indebtedness of Southam; provided that the Southam
Cash Flow Ratio for the four full fiscal quarters immediately preceding the
Incurrence of such Indebtedness taken as one period is not greater than
4.0:1.0 (for purposes of determining the Southam Cash Flow Ratio for any
period, pro forma effect shall be given to (i) the Incurrence of such
Indebtedness and (if applicable) the application of the net proceeds
therefrom, including to refinance other Indebtedness, as if such Indebtedness
was Incurred, and the application of such proceeds occurred, at the beginning
of such four-quarter period; (ii) the Incurrence, repayment or retirement of
any other Indebtedness by Southam or any of its Restricted Subsidiaries since
the first day of such four-quarter period as if such
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Indebtedness was Incurred, repaid or retired at the beginning of such
four-quarter period; (iii) in the case of Acquired Indebtedness, the related
acquisition (as if such acquisition had been consummated on the first day of
such four-quarter period); and (iv) any acquisition or disposition by Southam
or any of its Restricted Subsidiaries of any company or any business or any
assets out of the ordinary course of business, whether by merger, stock
purchase or sale or asset purchase or sale or any related repayment of
Indebtedness, in each case since the first day of such four-quarter period,
as if such acquisition or disposition had been consummated on the first day
of such four-quarter period); provided, however, that Southam may not Incur
Indebtedness under this paragraph for purposes of purchasing or otherwise
acquiring the Capital Stock or a substantial portion of the assets of another
Person (including the minority interest in Southam but excluding acquisitions
of inventory, equipment and similar assets in the ordinary course of
business) unless, immediately after giving effect to such transaction on a
pro forma basis, Publishing could Incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 10.08;
(iii) guarantees by, and Liens on the property of, any Restricted Subsidiary
guaranteeing or securing Indebtedness of Publishing or Foreign Subsidiary
Indebtedness under the New Bank Credit Facility and, provided that both of
The Telegraph and Southam are Restricted Subsidiaries, guarantees of, and
Liens securing, the FDTH Credit Facility, which guarantees or Liens are in
existence on the date of this Indenture or on the date which they become
Restricted Subsidiaries or guarantees that are otherwise permitted under
Section 10.12;
(iv) Indebtedness of Publishing pursuant to the Securities and Indebtedness
of any Restricted Subsidiary constituting a Guarantee of the Securities;
(v) Indebtedness of Publishing or any Restricted Subsidiary outstanding on
the date of this Indenture and listed on Schedule I hereto;
(vi) Indebtedness (a) of Publishing owing to a Wholly Owned Restricted
Subsidiary or, provided that both of The Telegraph and Southam are Restricted
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Subsidiaries, a Restricted Subsidiary, or (b) of a Wholly Owned Restricted
Subsidiary owing to Publishing or another Wholly Owned Restricted Subsidiary
or, provided that both of The Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary owing to another Restricted Subsidiary
or Publishing; provided that any such Indebtedness is made pursuant to an
intercompany note setting forth the principal amount, interest rate and
payment dates, the maturity or similar terms, and, in the case of
Indebtedness of Publishing owing to a Wholly Owned Restricted Subsidiary or a
Restricted Subsidiary, as the case may be, is subordinated in right of
payment from and after such time as the Securities shall become due and
payable (whether at Stated Maturity or otherwise) to the payment and
performance of Publishing's obligations under the Securities; provided
further, that (x) any disposition, pledge or transfer of any such
Indebtedness to a Person (other than (x) to Publishing or a Wholly Owned
Restricted Subsidiary or, provided that both of The Telegraph and Southam are
Restricted Subsidiaries, a Restricted Subsidiary or (y) a pledge of such
Indebtedness to secure Indebtedness existing at such time under, and pursuant
to the terms of, the New Bank Credit Facility or the AP-91 Senior Notes and
provided that both of The Telegraph and Southam are Restricted Subsidiaries,
the FDTH Credit Facility and the Southam credit facilities existing on
January 1, 1997, as amended), will be deemed to be an Incurrence of such
Indebtedness by the obligor not permitted by this clause (vi) and (y) any
transaction pursuant to which any Wholly Owned Restricted Subsidiary or,
provided that both of The Telegraph and Southam are Restricted Subsidiaries,
a Restricted Subsidiary, that has Indebtedness owing to Publishing or any
other Wholly Owned Restricted Subsidiary (or, provided that both of The
Telegraph and Southam are Restricted Subsidiaries, any other Restricted
Subsidiary), ceases to be a Wholly Owned Restricted Subsidiary or, provided
that both of The Telegraph and Southam are Restricted Subsidiaries, a
Restricted Subsidiary, will be deemed to be the Incurrence of Indebtedness by
Publishing or such other Restricted Subsidiary that is not permitted by this
clause (vi);
(vii) obligations of Publishing or any Restricted Subsidiary pursuant to
Interest Rate Agreements or Currency Agreements designed to protect
Publishing or
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any Restricted Subsidiary against fluctuations in interest rates or currency
exchange rates in respect of Indebtedness of Publishing or any of its
Restricted Subsidiaries or changes in dividend rates in respect of preference
shares of DTH, the notional amount of which (in the case of Interest Rate
Agreements) and the notional or exchange amount of which (in the case of
Currency Agreements) do not exceed the aggregate principal amount of such
Indebtedness or of such preference shares of DTH, as the case may be;
(viii) guarantees by Restricted Subsidiaries of Pari Passu Indebtedness of
Publishing otherwise permitted to be Incurred in accordance with the
provisions of Section 10.08;
(ix) Indebtedness of Publishing or a Restricted Subsidiary Incurred to
finance a new printing plant for the Chicago Sun-Times and the liabilities
directly associated therewith (collectively, the "CST Printing Plant") in
an aggregate amount not in excess of the lesser of (x) $75,000,000 and
(y) the aggregate amount needed to finance the CST Printing Plant and
associated financing costs;
(x) letter of credit reimbursement obligations Incurred by Publishing or a
Restricted Subsidiary in the ordinary course of business to support workers
compensation insurance obligations to the extent that such obligations are
recorded on the balance sheet of the issuer;
(xi) any renewals, extensions, substitutions, refundings, refinancings or
replacements (collectively, a "refinancing") of any Indebtedness described in
paragraphs (i), (ii), (iii), (iv), (viii) and (xii) of this definition of
"Permitted Indebtedness" by Publishing or by the obligor of such Permitted
Indebtedness, including any successive refinancings, so long as such
refinancing does not increase the aggregate principal amount of Indebtedness
represented thereby and such refinancing does not reduce the Average Life to
Stated Maturity or the Stated Maturity of such Indebtedness;
(xii) provided that both of The Telegraph and Southam are Restricted
Subsidiaries, Indebtedness of
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Publishing or any Restricted Subsidiary in an aggregate amount at any time
outstanding not to exceed $25 million in respect of purchase money
obligations, provided such Indebtedness (a) is Incurred within 180 days of
the purchase of the relevant assets, (b) does not exceed the actual purchase
price of such assets and (c) any related Liens do not extend to any assets
other than those being purchased; and
(xiii) provided that both of The Telegraph and Southam are Restricted
Subsidiaries, Indebtedness of Publishing or any Restricted Subsidiary in an
aggregate principal amount at any time outstanding not to exceed $10 million.
"Permitted Investment" means any of the following provided that, in the case
of clauses (vii), (viii), (ix), (x), (xi) and (xii), (a) no Default or Event of
Default shall have occurred and be continuing, (b) no holders of any other
Indebtedness of Publishing or any Restricted Subsidiary shall have an
Acceleration Right and (c) immediately before and immediately after giving
effect to such Investment, on a pro forma basis, Publishing could Incur $1.00
of additional Indebtedness (other than Permitted Indebtedness) under the
provisions described in Section 10.08 of this Indenture:
(i) Investments in any Wholly Owned Restricted Subsidiary (or, provided that
both of The Telegraph and Southam are Restricted Subsidiaries, a Restricted
Subsidiary) or Publishing or Investments in a Person, if as a result of such
Investment (A) such Person becomes a Wholly Owned Restricted Subsidiary (or,
provided both of The Telegraph and Southam are Restricted Subsidiaries, a
Restricted Subsidiary), or (B) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, Publishing or any Wholly Owned Restricted
Subsidiary (or, provided that both of The Telegraph and Southam are
Restricted Subsidiaries, a Restricted Subsidiary);
(ii) Investments in the Securities;
(iii) Indebtedness owing to a Wholly Owned Restricted Subsidiary or,
provided that both of The Telegraph and Southam are Restricted Subsidiaries,
a Restricted Subsidiary, in each case as described under
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clause (vi) of the definition of "Permitted Indebtedness";
(iv) Temporary Cash Investments;
(v) Investments acquired by Publishing or any Subsidiary in connection with
an Asset Sale permitted under Section 10.14 to the extent such Investments
are non-cash consideration as permitted under such covenant;
(vi) Investments in existence on the date of this Indenture;
(vii) Investments in or in Persons owning Newspaper Business or Media
Business assets (including Investments in Unrestricted Subsidiaries but
excluding Investments in Affiliates that control Publishing) in an aggregate
amount following the date of this Indenture not in excess of 25% of the
aggregate cumulative cash dividends or distributions received by Publishing
and its Restricted Subsidiaries from any of Publishing's Unrestricted
Subsidiaries received during the period (treated as a single accounting
period) after the date of this Indenture and prior to the date of the
Permitted Investment; provided, however, that for purposes of this clause
(vii), cash dividends or distributions shall not include the Southam Dividend
Amount or any cash dividends or distributions received by Publishing or any
Wholly Owned Restricted Subsidiary in accordance with Section 10.09(b)(iv);
(viii) provided that The Telegraph is a Restricted Subsidiary, Investments in
West Ferry Printers and Trafford Park Printers to cover The Telegraph's share
of operating losses associated with the printing of newspapers and to finance
capital expenditures related to the printing business; provided that at any
time of any such Investment, neither West Ferry Printers nor Trafford Park
Printers shall be engaged in any business other than the business of printing
newspapers, periodicals and similar media;
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(ix) Investments by Southam in Newspaper Businesses and Media Businesses and
Media Businesses in Canada; provided that (i) Southam is at the time a
Restricted Subsidiary, (ii) Southam is at the time a Public Entity and (iii)
the Investment is not made in an Affiliate of Southam (other than a
Subsidiary of Southam); and provided further that, unless such Investment by
Southam otherwise qualifies as a Permitted Investment under this definition
(other than pursuant to this clause (x)), such Investment will constitute a
Restricted Payment under Section 10.09;
(x) Investments by DTH or FDTH in Argsub Preferred, provided that (x) the
issuer of such Argsub Preferred simultaneously makes an Investment in Mirror
Preferred of DTH or FDTH, as the case may be, in an equivalent amount and (y)
such Mirror Preferred continues to qualify as such under the definition
thereof; and
(xi) in addition to the Investments described in clauses (i) through (xi)
of this definition of "Permitted Investments," Investments in any Restricted
Subsidiary, Unrestricted Subsidiary or in any joint venture or other entity
in an amount not to exceed $10,000,000 in aggregate since the date of this
Indenture; provided that so long as The Telegraph is a Restricted Subsidiary,
the loan of $6,000,000 from Publishing to FDTH prior to the time The
Telegraph became a Restricted Subsidiary shall not count against the
$10,000,000 amount provided for in this clause (xii).
"Permitted Real Estate Sale" means any Asset Sale not involving an Affiliate
of Publishing consisting of the sale of any printing or distribution facility
(including the associated real property and the improvements and fixtures
forming a part thereof) (other than the CST Real Estate) formerly used by
Publishing or a Restricted Subsidiary in the production of newspapers and
related publications (or acquired by one of them as part of the acquisition of
a Newspaper Business whether or not used by Publishing) and that after such
Asset Sale will not be used for the production of any newspaper or related
publication of Publishing or a Restricted Subsidiary, provided that the
aggregate value (as determined by the Board of Directors of Publishing) of all
such Asset Sales completed within any twelve month period shall not exceed
$5,000,000 (it being
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understood that this definition does not include, among other things, any Asset
Sale consisting of the sale of any printing or distribution facility in
connection with the sale by Publishing or any Restricted Subsidiary of any
Newspaper Business).
"Permitted Subsidiary Indebtedness" means Indebtedness of the Restricted
Subsidiaries, taken as a whole, with an aggregate principal amount outstanding
(calculated exclusive of the AP-91 Senior Notes) not in excess of the greater
of (x) $40,000,000 and (y) 10% of Consolidated Tangible Assets measured as of
the most recent fiscal quarter.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivisions thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any Capital Stock of
any class or classes (however designated) which is preferred as to the payment
of dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person, provided that this definition
shall not include Mirror Preferred provided that such Mirror Preferred
continues to qualify as such under the definition thereof.
"Public Debt" means any notes, bonds or debentures or other evidence of
Indebtedness in the public markets or the market for securities sold pursuant
to Rule 144A under the Securities Act of 1933.
"Public Entity" means an entity (x) in which the equity interest of
Hollinger International and its Affiliates does not exceed 80%, (y) in which
the market value of the Capital Stock held by nonaffiliates exceeds
$100,000,000 and (z) the Capital Stock of which is traded on a recognized
national securities exchange in the United States or a prescribed securities
exchange in Canada.
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"Publishing" means Hollinger International Publishing Inc., a corporation
incorporated under the laws of Delaware, until a successor Person shall have
become such pursuant to Article VIII of this Indenture and thereafter
"Publishing" shall mean such successor Person. To the extent necessary to
comply with the requirements of the provisions of Trust Indenture Act Sections
310 through 317 as they are applicable to Publishing, the term "Publishing"
shall include any other obligor with respect to the Securities for purposes of
complying with such provisions, including any Guarantor.
"Publishing Request" or "Publishing Order" means a written request or order
signed in the name of Publishing by any one of its Chairman of the Board, its
Vice Chairman, its President or a Vice President (regardless of Vice
Presidential designation), and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and in form and substance
reasonably satisfactory to the Trustee and delivered to the Trustee.
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Rating Agency" means Standard & Poor's Corporation and its successors
("S&P"), and Moody's Investors Service, Inc. and its successors ("Moody's"), or
if S&P and Moody's or both shall not make a rating of the Securities publicly
available, a nationally recognized United States statistical rating agency or
agencies, substituted for S&P or Moody's or both, as the case may be.
"Rating Category" means each major rating category symbolized by (a) in the
case of S&P, AAA, AA, A, BBB, BB, B, CCC, CC and C and each such Rating
Category shall include pluses or minuses ("gradations") modifying such capital
letters; and (b) in the case of Moody's, Aaa, Aa, A, Baa, Ba, B, Caa, Ca and C
and each such Rating Category shall include added numerals such as 1, 2 or 3
("gradations") modifying such letters.
"Rating Decline" means an event that will be deemed to have occurred if, on
any date within the period (the "Rating Period") beginning on the date (the
"Reference Date") of the earlier to occur of (A) the first public announcement
by Publishing or any other Person of an intention to effect any Designated
Transaction and (B) the
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occurrence of such Designated Transaction, and ending on the date 90 days
thereafter, either of the following events has occurred: (1) the Securities of
any Series (or any other securities of Publishing which are rated by a Rating
Agency on the date which is 61 days prior to the Reference Date (the "Rating
Date")) shall be rated by any Rating Agency at any time during the Rating
Period at a rating which is lower than the rating of the Securities of such
Series (or such other securities of Publishing, as the case may be) by such
Rating Agency on the Rating Date by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories) or
(2) any Rating Agency shall have withdrawn its rating of the Securities of any
Series (or such other securities of Publishing, as the case may be) during the
Rating Period.
"Redeemable Capital Stock" means any Capital Stock that, either by its terms
or by the terms of any security into which it is convertible or exchangeable or
otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed prior to any Stated Maturity of the principal of the
Securities or is redeemable at the option of the holder thereof at any time
prior to any such Stated Maturity, or is convertible into or exchangeable for
debt securities at any time prior to any such Stated Maturity at the option of
the holder thereof; provided that this definition shall not include Mirror
Preferred provided that such Mirror Preferred continues to qualify as such
under the definition thereof.
"Redemption Date" when used with respect to any Security to be redeemed
pursuant to any provision in this Indenture means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed
pursuant to any provision in this Indenture means the price at which it is to
be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
relating to a particular Series means the date specified in the Board
Resolution or supplemental indenture relating to such Series.
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"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Division of the Trustee or any agent of
the Trustee appointed hereunder, including the president, any vice president,
any assistant vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or assistant trust
officer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated functions similar to
those performed by any of the above designated officers or any other officer
appointed hereunder to whom any corporate trust matter is referred because of
his or her knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means, initially, each Subsidiary of Publishing
existing on the date of this Indenture, other than DTH and its Subsidiaries,
and any other Subsidiary designated from time to time by the Board of Directors
of Publishing as a "Restricted Subsidiary" in accordance with Section 10.20 of
this Indenture.
"Restricted Subsidiary Guarantor" means each Subsidiary of Publishing that
is required to issue a Guarantee of the Securities under the terms of this
Indenture.
"Scheme of Arrangement" means the acquisition by FDTH of the publicly held
shares in The Telegraph not owned by FDTH or any of its Affiliates effected by
way of a "Scheme of Arrangement under Section 425 of the Companies Act 1985 of
England.
"Securities" has the meaning specified in the first recital of this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Subordinated Securities" means the securities, and any series
thereof, issued under the Senior Subordinated Securities Indenture.
"Senior Subordinated Securities Indenture" means the Senior Subordinated
Indenture, dated as of ,
<PAGE> 36
36
among Publishing, Hollinger International and Fleet National Bank of
Connecticut, as Trustee.
"Series" means any series of debentures, notes, bonds or other evidences of
indebtedness issued pursuant to Article III hereof or a supplemental indenture.
"Series A Preferred Shares" means the Series A Redeemable Convertible
Preferred Stock of Hollinger International, as in effect on the date of this
Indenture.
"Services Agreement" means the Services Agreement dated as of February 7,
1996, as amended in connection with the offering of the Securities, among
Hollinger International, Publishing and Hollinger Inc., and as the same may be
further amended in accordance with the terms of this Indenture.
"Southam" means Southam Inc., a corporation continued under the laws of
Canada.
"Southam Cash Flow" means, for any period, an amount equal to the Southam
Net Income for such period, plus, to the extent deducted in calculating such
Southam Net Income, (a) interest expense and other financing costs and
expenses, (b) dividends paid on any Preferred Stock of Restricted Subsidiaries
of Southam to the extent such Preferred Stock is included as Indebtedness in
the calculation of the Southam Cash Flow Ratio, (c) depreciation and
amortization, and (d) all taxes, whether or not deferred, applicable to such
period.
For purposes of calculating Southam Cash Flow for the four fiscal quarters
most recently completed prior to any date on which an action is taken that
requires a calculation of the Southam Cash Flow Ratio, (a) any Person that is a
Restricted Subsidiary of Southam on such date (or would become a Restricted
Subsidiary of Southam in connection with the transaction that requires the
determination of such ratio) shall be deemed to have been a Restricted
Subsidiary of Southam at all times during such period, (b) any Person that is
not a Restricted Subsidiary of Southam on such date (or would cease to be a
Restricted Subsidiary of Southam in connection with the transaction that
requires the determination of such ratio) shall be deemed not to have been a
Restricted Subsidiary of Southam at any time during such period;(c)if Southam
or any of its Restricted Subsidiaries shall have in any manner acquired or
<PAGE> 37
37
disposed of any operating business during or subsequent to such period, such
calculation shall be made on a pro forma basis on the assumption that such
acquisition or disposition has been completed on the first day of such period;
and (d) in the case of a Restricted Subsidiary that is not a Wholly Owned
Restricted Subsidiary, the determination of the percentage of the Operating
Cash Flow of such Restricted Subsidiary that is to be included in the
calculation of the Consolidated Publishing's Consolidated Cash Flow Ratio
shall be made on a pro forma basis on the assumption that the percentage of
Publishing's common equity interest in such Restricted Subsidiary on the first
day of such period was equivalent to its common equity interest on the date of
the determination (it being understood, in the case of the foregoing clause
(c), that if such pro forma calculations have been made in accordance with
Regulation S-X under the Exchange Act, such method of calculation (but not
necessarily the adjustments) shall be presumed to be acceptable).
"Southam Cash Flow Ratio" means, as at any date of determination, the ratio
of (i) the aggregate amount of Indebtedness of Southam and its Restricted
Subsidiaries outstanding as at such date to (ii) the Southam Cash Flow
(determined on a Consolidated basis for Southam and its Restricted
Subsidiaries) for the most recently completed period of four consecutive fiscal
quarters of Southam, provided that once Southam is a Restricted Subsidiary, for
the purpose of determining the Southam Cash Flow Ratio, the Indebtedness and
Southam Cash Flow of Restricted Subsidiaries of Southam that are not Wholly
Owned Restricted Subsidiaries of Southam will be determined in accordance with
the actual percentage of Southam's common equity interest in such Restricted
Subsidiary on the date of determination of the Southam Cash Flow ratio (thus,
for example, in the case of a Restricted Subsidiary of Southam in which Southam
owns 51% common equity interest, 51% each of such Restricted Subsidiary's
indebtedness and Southam Cash Flow would be included in the calculation of
Southam's aggregate Indebtedness and the aggregate of Southam Cash Flow,
respectively).
"Southam Dividend Amount" means the lesser of (x) the aggregate amount paid
or payable by Hollinger International since the date of original issuance of
the Securities in respect of regularly scheduled periodic dividends on the
Series A Preferred and (y) the aggregate amount of the Southam Interests
Dividends received by
<PAGE> 38
38
Publishing since the date of original issuance of the Securities on account of
its ownership interest (whether direct or indirect) in Southam.
"Southam Interests" means 7,395,000 Southam common shares held by Hollinger
International or it subsidiaries; provided, however, that if Southam shall pay
a dividend, or make a distribution, on its common shares in the form of capital
stock of the same or another corporation, or subdivide its outstanding common
shares into a greater number of common shares, or combine its outstanding
common shares into a smaller number of common shares, or effect a
reorganization or reclassification of its Capital Stock, or amalgamate, enter
into an arrangement or consolidation or merge with or into another entity
(other than an amalgamation, arrangement, consolidation or merger which does
not result in a reclassification or change of the outstanding common shares of
Southam), the "Southam Interests" shall thereafter include any securities
distributed with respect to any such shares or into which any such shares shall
be converted, changed or reclassified or for which any such shares shall be
exchanged.
"Southam Interests Dividend" means a dividend or other distribution paid on
or with respect to the Southam Interests on or prior to the earlier of (i) the
redemption date for the redemption of all the Series A Preferred Shares
outstanding as of such redemption date or (ii) the date of final distribution
to the holders of the Series A Preferred Shares of the full preferential amount
provided under the terms thereof; provided, however, that the term "Southam
Interests Dividend" does not mean or include (x) any part of any dividend or
distribution that is payable otherwise than in cash or that constitutes an
Extraordinary Cash Dividend as applied to the Southam Interests, or (y) any
dividend or distribution on or with respect to the 7,395,000 Southam common
shares held by Hollinger International or its subsidiaries.
"Southam-Linked Debentures" means the debentures of Hollinger Inc. in the
original principal amount of Cdn.$125,000,000 due November 1, 1998.
"Southam Net Income (Loss)" means, for any period, the Consolidated net
income (or loss) (and treating a loss as a negative number)) of Southam and its
Restricted Subsidiaries for such period as determined in accordance with GAAP,
adjusted by (a) excluding, without duplication,
<PAGE> 39
39
to the extent included in calculating such Consolidated net income (or loss),
(i) all extraordinary gains and losses, (ii) the portion of Consolidated net
income (or loss) of Southam and its Restricted Subsidiaries allocable to
Investments in unconsolidated Persons (other than Unrestricted Subsidiaries) to
the extent that cash dividends or distributions have not actually been received
by such Southam or one of its Restricted Subsidiaries, (iii) the portion of
Consolidated net income (or loss) of Southam and its Restricted Subsidiaries
allocable to Southam's Unrestricted Subsidiaries (or to payments received
therefrom), (iv) net income (or loss) of a Person combined with Southam or any
of its Subsidiaries on a "pooling of interests" basis attributable to any
period prior to the date of combination, (v) any gain or loss, net of taxes,
realized upon the termination of any employee pension benefit plan, (vi)
aggregate net gains and losses (less all fees and expenses relating thereto) in
respect of dispositions of assets (including without limitation sales of shares
of Unrestricted Subsidiaries or unconsolidated Persons and noncash writeoffs of
assets (provided that there are no continuing cash expenses related to such
writeoffs)) other than in the ordinary course of business, (vii) the net income
of any Restricted Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is not at
time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or its
stockholders; provided, however, that the foregoing shall not apply to the
restrictions permitted under clause (iv) of Section 10.16 (to the extent such
clause is applicable at the time of determination), (viii) any restoration to
income of any contingency reserve, except to the extent that provision for such
reserve was made out of income accrued at any time following the date of the
Indenture, (ix) any net gain from the collection of proceeds of life insurance
policies, (x) any gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness of Southam or one of its
Restricted Subsidiaries, (xi) aggregate net gains or losses relating to foreign
currency transactions or translations, (xii) redundancy costs relating to the
permanent elimination of jobs, provided that the amount of such expenses are
certified by Southam's independent accountants and (b) subtracting, without
duplication, the aggregate amount of dividends on Preferred Stock of Restricted
Subsidiaries
<PAGE> 40
40
of Southam (i) to the extent such Preferred Stock is not equivalent to Common
Stock for purposes of the payment of dividends and (ii) to the extent that such
Preferred Stock is included as Indebtedness in the calculation of the Southam
Cash Flow Ratio.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the dates specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest, as the case may be, is due and payable.
"Subordinated Guarantor Indebtedness" means Indebtedness of a Guarantor
subordinated in right of payment to such Guarantor's Guarantee.
"Subordinated Indebtedness" means (i) in the case of any person other than
Publishing, Indebtedness of such person that is expressly subordinate in right
of payment to any other Indebtedness of such Person pursuant to a written
agreement, and (ii) in the case of Publishing, Indebtedness of Publishing that
is expressly subordinate in right of payment to the Senior Securities.
"Subsidiary" means any Person a majority of the equity ownership of the
Voting Stock of which is at the time owned, directly or indirectly, by
Publishing or by one or more Subsidiaries, or by Publishing and one or more
other Subsidiaries; provided that, notwithstanding the foregoing, (i) Southam
will be a Subsidiary so long as majority of the Voting Stock of Southam is held
by a Person in which, directly or indirectly, (x) 50% of the Voting Stock is
held by Publishing and the remainder is held by Hollinger Inc. and (y) 100% of
the nonvoting Capital Stock is held by Publishing, and (ii) Hollinger Eastern
will be a Subsidiary so long as 50% of its Voting Stock is held, directly or
indirectly, by Publishing and the remainder is held, directly or indirectly, by
Hollinger Inc.
"Tax Sharing Agreement" means an agreement providing for the payment of
amounts in lieu of income taxes among Publishing and other companies with which
it forms a single consolidated tax group.
"The Telegraph" means Telegraph Group Limited (formerly The Telegraph plc),
a corporation under the laws of England.
<PAGE> 41
41
"Temporary Cash Investments" means (i) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof, and
guaranteed fully as to principal, premium, if any, and interest by the United
States of America, (ii) any certificate of deposit, maturing not more than one
year after the date of acquisition, issued by, or time deposit of the Trustee
or a commercial banking institution that is a member of the Federal Reserve
System and that has combined capital and surplus and undivided profits of not
less than $500,000,000, whose debt has a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Moody's or "A-1"
(or higher") according to S&P, (iii) commercial paper, maturing not more than
one year after the date of acquisition, issued by a corporation (other than an
Affiliate or Restricted Subsidiary of Publishing) organized and existing under
the laws of the United States of America with a rating, at the time as of which
any investment therein is made, of "P-1" (or higher according to Moody's or
"A-1" (or higher) according to S&P, (iv) any money market deposit accounts
issued or offered by the Trustee or a domestic commercial bank having capital
and surplus in excess of $500,000,000.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture, until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee. If at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any Series shall
mean the Trustee with respect to Securities of that Series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Unrestricted Subsidiary" means any Subsidiary that is not a Restricted
Subsidiary, including any Restricted Subsidiary that becomes an Unrestricted
Subsidiary in accordance with Section 10.20 of this Indenture; provided,
however, that a Person may not be designated as an Unrestricted Subsidiary
unless (i) the
<PAGE> 42
42
creditors of such Person have no direct or indirect recourse (including, but
not limited to, recourse with respect to the payment of principal or interest
on Indebtedness of such Subsidiary) to Publishing or a Restricted Subsidiary
and (ii) a default by such Person on any of its Indebtedness will not result
in, or permit any holder of Indebtedness of Publishing or a Restricted
Subsidiary to declare, a default on such Indebtedness of Publishing or a
Restricted Subsidiary or cause the payment thereof to be accelerated or payable
prior to its Stated Maturity. Any subsidiary of an Unrestricted Subsidiary
shall be an Unrestricted Subsidiary for purposes of this Indenture.
"Voting Stock" means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary all the
outstanding Capital Stock (other than directors' qualifying shares) of which
are owned by Publishing or another Wholly Owned Restricted Subsidiary or, in
the case of a Restricted Subsidiary of Southam, all the outstanding Capital
Stock (other than directors' qualifying shares) of which are owned by Southam
or another Wholly Owned Restricted Subsidiary of Southam.
<PAGE> 43
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SECTION 1.02. Other Definitions.
Defined in
Term Section
- - ---- -------
"Act" 1.05
"Change of Control Offer" 10.14
"Change of Control Purchase Date" 10.14
"Change of Control Purchase Notice" 10.14
"Change of Control Purchase Price" 10.14
"covenant defeasance" 4.03
"Defaulted Interest" 3.07
"defeasance" 4.02
"Defeasance Redemption Date" 4.04
"Defeased Securities" 4.01
"Deficiency" 10.13
"Excess Proceeds" 10.13
"Excluded Indebtedness 10.11
"Initial Blockage Period" 12.03
"Note Amount" 10.13
"Offer" 10.13
"Offered Price" 10.13
"Pari Passu Debt Amount" 10.13
"Pari Passu Offer" 10.13
"Payment Blockage Period" 12.03
"Permitted Payment" 10.09
"Purchase Date" 10.13
"refinancing" 10.09
"Required Filing Dates" 10.17
"Restricted Payments" 10.09
"Security Register" 3.05
"Security Registrar" 3.05
"Senior Representative" 12.03
"Senior Subordinated Securities Offer" 11.13
"Special Payment Date" 3.07
"Surviving Entity" 8.01
"U.S. Government Obligations" 4.04
SECTION 1.03. Compliance Certificates and Opinions. Upon any application
or request by Publishing to the Trustee to take any action under any provision
of this Indenture, Publishing shall furnish to the Trustee an Officers'
Certificate to the effect that all conditions precedent, if any, provided for
in this Indenture (including any covenant compliance with which constitutes a
condition precedent) relating to the proposed action have been complied with
and an Opinion of Counsel to the effect that
<PAGE> 44
44
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that, in the case of any such application or request as
to which the furnishing of any certificates and/or opinions is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.
Every certificate or Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement to the effect that each individual or firm signing such
certificate or opinion has read and understands such covenant or condition
and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement to the effect that, in the opinion of each such individual
or such firm, he has made such examination or investigation as is necessary
to enable him or them to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual or
such firm, such condition or covenant has been complied with.
SECTION 1.04. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of Publishing may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
<PAGE> 45
45
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any certificate or opinion of such an officer or of counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of Publishing with respect
to such factual matters and which contains a statement to the effect that the
information with respect to such factual matters is in the possession of
Publishing, unless such officer or counsel knows that the certificate or
opinion or representations with respect to such matters are erroneous.
Opinions of Counsel required to be delivered to the Trustee may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of Publishing or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.05. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by Holders of any Series may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to Publishing. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee and Publishing, if made in the manner provided in this
Section.
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(b) The ownership of Securities shall be proved by the Security Register.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Security shall bind every future Holder of
the same Security or the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything
done, suffered or omitted to be done by the Trustee, any Paying Agent or
Publishing in reliance thereon, whether or not notation of such action is made
upon such Security.
(d) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
a certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate of affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
SECTION 1.06. Notices, etc., to Trustee and Publishing. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with:
(a) the Trustee by any Holder or by Publishing shall be sufficient for every
purpose hereunder if made, given, furnished or filed, in writing, by
first-class mail postage prepaid (return receipt requested) or delivered in
person or by recognized overnight courier to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust Division, or at any other
address furnished in writing prior thereto to the Holders and Publishing by
the Trustee; or
(b) Publishing or Hollinger International shall be sufficient for every
purpose (except as provided in Section 5.01(c)) hereunder if in writing and
mailed, first-class postage prepaid or delivered by recognized
<PAGE> 47
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overnight courier, to Publishing, addressed to it at: 401 North Wabash
Avenue, Chicago, IL 60611 Attn: General Counsel or to Hollinger
International, addressed to it at: 401 North Wabash Avenue, Chicago, IL 60611
Attn: General Counsel, or at any other address previously furnished in
writing to the Trustee by Publishing or Hollinger International, as the case
may be.
SECTION 1.07. Notice to Holders; Waiver. Where this Indenture or the
Securities of any Series provide for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the Security Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Any notice when mailed to a Holder
in the aforesaid manner shall be conclusively deemed to have been received by
such Holder whether or not actually received by such Holder. Where this
Indenture or the Securities of any Series provide for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause, it shall be impracticable to mail notice of any event as
required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee or Publishing, as
applicable, shall be deemed to be a sufficient giving of such notice.
SECTION 1.08. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with any provision of the Trust Indenture Act or
another provision which is required or deemed to be included in this Indenture
by any of the provisions of the Trust Indenture Act, the provision or
requirement of the Trust Indenture Act
<PAGE> 48
48
shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, such
provision of the Trust Indenture Act shall be deemed to apply to this Indenture
as so modified or to be excluded, as the case may be.
SECTION 1.09. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.10. Successors and Assigns. All covenants and agreements in this
Indenture by Publishing or any Guarantor shall bind its successors and assigns,
whether so expressed or not.
SECTION 1.11. Separability Clause. In case any provision in this Indenture
or in the Securities of any Series shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 1.12. Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person (other than the
parties hereto and their successors hereunder, any Paying Agent and the
Holders) any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 1.13. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
SECTION 1.14. Legal Holidays. In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a Business Day,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal or premium, if any, need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at Maturity or the Stated Maturity, and no interest shall accrue with
respect to such payment for the period from and after such Interest Payment
Date, Redemption Date, Maturity or Stated Maturity, as the case may be, to the
next succeeding Business Day.
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49
SECTION 1.15. Schedules. All schedules attached hereto are by this
reference made a part with the same effect as if herein set forth in full.
SECTION 1.16. Counterparts. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities and the Trustee's
certificate of authentication thereof shall be in substantially the forms set
forth in this Article II, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange, any organizational document or
governing instrument or applicable law or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face of the Security.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 2.02. Forms of Securities. Each Security shall be in one of the
forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the
delivery of a Security to the Trustee for authentication in any form approved
by or pursuant to a Board Resolution, Publishing shall deliver to the Trustee
the Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true
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and correct copy of the form of Security which has been approved thereby or, if
a Board Resolution authorizes a specific officer or officers to approve of form
of Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to
Publishing.
SECTION 2.03. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be included on the form of the
face of the Securities substantially in the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned Indenture.
FLEET NATIONAL BANK OF
CONNECTICUT, as Trustee
by
______________________
Authorized Signatory
SECTION 2.04. Form of Guarantee of Hollinger International.
The form of Guarantee of Hollinger International shall be set forth on the
Securities substantially as follows:
GUARANTEE OF HOLLINGER INTERNATIONAL INC.
For value received, HOLLINGER INTERNATIONAL INC., a Delaware corporation,
hereby absolutely, unconditionally and irrevocably guarantees to the holder of
this Security and the Trustee, as if Hollinger International were the principal
debtor, the punctual payment of principal of, premium, if any, and interest on
this Security in the amounts and at the time when due and interest on the
overdue principal and interest, if any, of this Security, if lawful, and the
payment or performance of all other obligations of Publishing under the
Indenture or the Securities, to the holder of this Security and the Trustee,
all in accordance
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with and subject to the terms and limitations of this Security and Article
Fourteen of the Indenture. This Guarantee will not become effective until the
Trustee duly executes the certificate of authentication on this Security.
HOLLINGER INTERNATIONAL INC.
Attest: By
--------------------- -----------------------
Authorized Signatory
SECTION 2.05. Securities Issuable in the Form of a Global Security. (a)
If Publishing shall establish pursuant to Sections 2.02 and 3.01 that the
Securities of a particular Series are to be issued in whole or in part in the
form of one or more Global Securities, then Publishing shall execute and the
Trustee or its agent shall, in accordance with Section 3.03 and any order by
Publishing delivered to the Trustee or its agent thereunder, authenticate and
deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such Series to be represented by such Global
Security or Securities, or such portion thereof as Publishing shall specify in
such order, (ii) shall be registered in the name of the Depository for such
Global Security or Securities or its nominee, (iii) shall be delivered by the
Trustee or its agent to the Depository or pursuant to the Depository's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized representative of the
Depository to Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of the nominee of
the Depository or in such other name as is requested by an authorized
representative of the Depository (and any payment is made to the nominee of the
Depository or to such other entity as is requested by an authorized
representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, the nominee of the Depository, has an interest
herein."
(b) Notwithstanding any other provision of this Section 2.05 or of Section
3.05, and subject to the provisions of paragraph (c) below, unless the terms of
a Global Security expressly permit such Global Security to be exchanged in
whole or in part for individual Securities, a
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Global Security may be transferred, in whole but not in part and in the manner
provided in Section 3.05, only to a nominee of the Depository for such Global
Security, or to the Depository, or a successor Depository for such Global
Security selected or approved by the Company, or to a nominee of such successor
Depository.
(c) (i) If at any time the Depository for a Global Security notifies
Publishing that it is unwilling or unable to continue as Depository for such
Global Security or if at any time the Depository for the Securities for such
Series shall no longer be eligible or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation,
Publishing shall appoint a successor Depository with respect to such Global
Security. If a successor Depository for such Global Security is not appointed
by Publishing within 90 days after Publishing receives such notice or becomes
aware of such ineligibility, Publishing will execute, and the Trustee or its
agent, upon receipt of a request by Publishing for the authentication and
delivery of individual Securities of such Series in exchange for such Global
Security, will authenticate and deliver, individual Securities of such Series
of like tenor and terms in an aggregate principal amount equal to the principal
amount of the Global Security in exchange for such Global Security.
(ii) Publishing may at any time and in its sole discretion determine that
the Securities of any Series or portion thereof issued or issuable in the form
of one or more Global Securities shall no longer be represented by such Global
Security or Securities. In such event Publishing will execute, and the
Trustee, upon receipt of a Company Request for the authentication and delivery
of individual Securities of such Series in exchange in whole or in part for
such Global Security, will authenticate and deliver individual Securities of
such Series of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such Global Security or
Securities representing such Series or portion thereof in exchange for such
Global Security or Securities.
(iii) If specified by Publishing pursuant to Sections 2.02 and 3.01 with
respect to Securities issued or issuable in the form of a Global Security, the
Depository for such Global Security may surrender such Global Security in
exchange in whole or in part for individual Securities of such Series of like
tenor and terms in definitive form on
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such terms as are acceptable to Publishing and such Depository. Thereupon
Publishing shall execute, and the Trustee or its agent shall authenticate and
deliver, without service charge, (1) to each Person specified by such
Depository a new Security or Securities of the same Series of like tenor and
terms and of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest as specified by such Depository in the Global Security; and
(2) to such Depository a new Global Security of like tenor and terms and in an
authorized denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal amount of
Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding three paragraphs,
Publishing will execute and the Trustee or its agent will authenticate and
deliver individual Securities in definitive registered form in authorized
denominations. Upon the exchange of the entire principal amount of a Global
Security for individual Securities, such Global Security shall be cancelled by
the Trustee or its agent. Except as provided in the preceding paragraph,
Securities issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depository for such Global Security, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee or the
Security Registrar. The Trustee or the Security Registrar shall deliver at its
Corporate Trust Office such Securities to the Persons in whose names such
Securities are so registered.
ARTICLE III
The Securities
SECTION 3.01. General Title; General Limitations; Issuable in Series; Terms
of Particular Series. The aggregate principal amount of Securities which may
be authenticated and delivered under this Indenture is not limited.
The Securities may be issued in one or more Series as from time to time may
be authorized by the Board of Directors. There shall be established in or
pursuant to a Board Resolution or in a supplemental indenture, subject to
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Section 3.11, prior to the issuance of Securities of any such Series:
(1) the title of the Securities of such Series (which shall distinguish the
Securities of such Series from Securities of any other Series);
(2) any limit upon the aggregate principal amount of the Securities of such
Series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of such Series pursuant
to Section 3.04, 3.05, 3.06, 9.06, and 11.08 and except for any Securities
which, pursuant to Section 3.03, are deemed never to have been authenticated
and delivered hereunder);
(3) the Person to whom any interest on a Security of such Series shall be
payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(4) the date or dates on which the principal of the Securities of such
Series is payable;
(5) the rate or rates at which the Securities of such Series shall bear
interest, if any, the date or dates from which such interest shall accrue,
the Interest Payment Dates on which any such interest shall be payable and
the Regular Record Date for any interest payable on any Interest Payment
Date;
(6) the place or places where the principal of and any premium and interest
on Securities of such Series shall be payable;
(7) the price or prices at which the Securities of such Series shall be
issued;
(8) the period or periods within which the Redemption Price or Prices at
which and the terms and conditions upon which Securities of such Series may
be redeemed or repaid, as the case may be, in whole or in part, at the option
of Publishing or the Holder;
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55
(9) the obligation, if any, of Publishing to purchase Securities of such
Series pursuant to any sinking fund or analogous provisions or at the option
of a Holder thereof and the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities of such
Series shall be purchased, in whole or in part, pursuant to such obligation;
(10) provisions, if any, with regard to the conversion or exchange of the
Securities of such Series, at the option of the Holders thereof or the
Company, as the case may be, for or into new Securities of a different
Series, Common Stock or other securities and, if the Securities of such
Series are convertible into Common Stock or other Marketable Securities, the
Conversion Price therefor;
(11) any terms applicable to Securities of such Series issued at an issue
price below their stated principal amount, including the issue price thereof
and the rate or rates at which such original issue discount will occur;
(12) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of such Series shall be
issuable;
(13) if other than U.S. dollars, the currency or currencies or units based
on or related to currencies in which the Securities of such Series shall be
denominated and in which payments of principal of, and any premium and
interest on, such Securities shall or may be payable;
(14) if the amount of payments of principal of (and premium, if any) or
interest, if any, on the Securities of such Series may be determined with
reference to an index based on a coin or currency (including a composite
currency) other than that in which the Securities are stated to be payable,
the manner in which such amounts shall be determined;
(15) if the principal of (and premium, if any) or interest, if any, on the
Securities of such Series are to be payable, at the election of Publishing or
a Holder thereof, in a coin or currency (including a composite currency)
other than that in which the
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Securities are stated to be payable, the period or periods within which, and
the terms and conditions upon which, such election may be made;
(16) the portion of the principal amount of Securities of the Series, if
other than the principal amount thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.02
or provable in bankruptcy pursuant to Section 5.04;
(17) any Event of Default with respect to the Securities of such Series, if
not set forth herein, and any additions, deletions or other changes to the
Events of Default set forth herein that shall be applicable to the Securities
of such Series;
(18) any special United States Federal income tax considerations applicable
to the Securities of such Series;
(19) if the Securities of such Series shall be issued in whole or in part in
the form of a Global Security or Securities, the terms and conditions, if
any, upon which such Global Security or Securities may be exchanged in whole
or in part for other individual Securities; and the Depository for such
Global Security or Securities; and
(20) any other terms of such Series,
all upon such terms as may be determined in or pursuant to such Board
Resolution or supplemental indenture with respect to such Series.
The form of the Securities of each Series shall be established pursuant to
the provisions of this Indenture in or pursuant to the Board Resolution or in
the supplemental indenture creating such Series. The Securities of each Series
shall be distinguished from the Securities of each other Series in such manner,
reasonably satisfactory to the Trustee, as the Board of Directors may
determine.
Unless otherwise provided with respect to Securities of a particular Series,
the Securities of any Series may only be issuable in registered form, without
coupons.
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Any terms or provisions in respect of the Securities of any Series issued
under this Indenture may be determined pursuant to this Section by providing
for the method by which such terms or provisions shall be determined.
SECTION 3.02. Denominations. The Securities of each Series shall be
issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such Series. In the absence of any such
provisions with respect to the Securities of any Series, the Securities of that
Series shall be issuable only in fully registered form in denominations of
$1,000 and any integral multiple thereof.
The Securities shall be redeemable as provided in Article XI.
At the election of Publishing, the entire indebtedness on the Securities or
certain of Publishing's obligations and covenants and certain Events of Default
thereunder may be defeased as provided in Article IV.
SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of Publishing by one of its Chairman of
the Board, Vice-Chairman, President or one of its Vice Presidents under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of Publishing shall bind Publishing,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices on the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, Publishing may deliver Securities executed by Publishing to the
Trustee for authentication, together with a Publishing Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall
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authenticate and deliver such Securities as provided in this Indenture and not
otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture.
In case Publishing, pursuant to Article VIII, shall be consolidated or
merged with or into any other Person or shall sell, convey, assign, transfer,
lease or otherwise dispose of substantially all of its properties and assets to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which Publishing shall have been merged or
consolidated, or the successor Person which shall have received a conveyance,
transfer, lease or other disposition as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article VIII, any of
the Securities authenticated or delivered prior to such consolidation, merger,
conveyance, transfer, lease or other disposition may, from time to time, at the
request of the successor Person, be exchanged for other Securities executed in
the name of the successor Person with such changes in phraseology and form as
may be appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon a Publishing Request of the successor Person, shall authenticate and
deliver Securities as specified in such request for the purpose of such
exchange. If Securities shall at any time be authenticated and delivered in
any new name of a successor Person pursuant to this Section in exchange or
substitution for or upon registration of transfer of any Securities, such
successor Person, at the option of a Holder but without expense to such Holder,
shall provide for the exchange of all Securities at the time Outstanding held
by such Holder for Securities authenticated and delivered in such new name.
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The Trustee may appoint an authenticating agent reasonably acceptable to
Publishing to authenticate Securities on behalf of the Trustee. Unless limited
by the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Security Registrar or Paying
Agent to deal with Publishing and its Affiliates.
SECTION 3.04. Temporary Securities. Pending the preparation of definitive
Securities of any Series, Publishing may execute, and upon a Publishing Order
the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities of any Series are issued, Publishing will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of Publishing designated for such purpose
pursuant to Section 10.02 (or in accordance with Section 3.03, in the case of
the initial Securities), without charge to the Holders thereof. Upon surrender
for cancellation of any one or more temporary Securities, Publishing shall
execute and upon a Publishing Order the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Securities of such
Series of authorized denominations. Until so exchanged the temporary
Securities of such Series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
SECTION 3.05. Registration, Registration of Transfer and Exchange.
Publishing shall cause to be kept at the Corporate Trust Office of the Trustee,
or such other office as the Trustee may designate, a register (the register
maintained in such office and in any other office or agency designated pursuant
to Section 10.02 being herein sometimes referred to as the "Security Register")
in which,
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subject to such reasonable regulations as the Security Registrar may prescribe,
Publishing shall provide for the registration of Securities, or of Securities
of a particular Series, and of transfers of Securities or of Securities of such
Series. The Trustee or an agent thereof or of Publishing shall initially be
the "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided. Publishing may appoint one or more
co-registrars, but there shall be only one Security Register per Series of
Securities.
Upon surrender for registration of transfer of any Security at the office or
agency of Publishing designated pursuant to Section 10.02, Publishing shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of such Series
of any authorized denomination or denominations, of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange,
Publishing shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of Publishing, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer, or for
exchange or redemption, shall (if so required by Publishing or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to Publishing, the Trustee and the Security Registrar, duly
executed by the Holder thereof or such Holder's attorney duly authorized in
writing.
No service charge shall be made to a Holder for any registration of,
transfer, exchange or redemption of Securities, but Publishing or the Trustee
may require payment of a sum sufficient to pay all or other governmental
charges that may be imposed in connection with any
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registration of, transfer, exchange or redemption of Securities, other than
exchanges pursuant to Section 3.03 3.04, 3.06, 9.06, 10.14, 10.15 or 11.08 not
involving any transfer.
Publishing shall not be required (a) to issue, register the transfer of or
exchange any Security of any Series during a period beginning at the opening of
business (i) 15 days before the mailing of a notice of redemption of the
Securities selected for redemption under Section 11.04 and ending at the close
of business on the day of such mailing or (ii) 15 days before an Interest
Payment Date and ending on the close of business on the Interest Payment Date,
or (b) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of Securities
being redeemed in part.
None of Publishing, the Trustee, any agent of the Trustee, any Paying Agent
or the Security Registrar will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If (a) any
mutilated Security is surrendered to the Trustee, or (b) Publishing and the
Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, and there is delivered to Publishing or the Trustee,
such security and/or indemnity, in each case as may be required by them to save
each of them harmless, then, in the absence of notice to Publishing or the
Trustee that such Security has been acquired by a bona fide purchaser,
Publishing shall execute and upon receipt of a Publishing Request the Trustee
shall authenticate and deliver, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a replacement Security
of like tenor and principal amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, Publishing in its discretion may, instead
of issuing a replacement Security, pay such Security.
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Upon the issuance of any replacement Securities under this Section,
Publishing may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charge that may
be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee and its agents and counsel) connected therewith.
Every replacement Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of Publishing, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities of the same Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved. Interest on
any Security which is payable, and is punctually paid or duly provided for, on
the Stated Maturity of such interest shall be paid to the Person in whose name
that Security is registered at the close of business on the Regular Record Date
for such interest payment.
Any interest on any Security which is payable, but is not paid or duly
provided for on the Stated Maturity of such interest (or within 15 days after
the Stated Maturity of such interest) and interest on such defaulted interest
at the then applicable interest rate borne by the Securities, to the extent
lawful (such defaulted interest and interest thereon herein collectively called
"Defaulted Interest") shall forthwith cease to be payable to the Holder in
whose name such Security is registered as of the Regular Record Date; and such
Defaulted Interest may be paid by Publishing, at its election in each case, as
provided in Subsection (a) or (b) below:
(a) Publishing may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner.
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Publishing shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the proposed
payment (the "Special Payment Date"), and at the same time Publishing shall
irrevocably deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the Special Payment Date, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
Subsection provided. Such notice shall be received by the Trustee no less
than 30 days prior to the Special Payment Date. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which
Special Record Date shall be not more than 15 days and not less than 10 days
prior to the Special Payment Date and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify Publishing in writing of such Special Record Date. In the
name and at the expense of Publishing, the Trustee shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date and
Special Payment Date therefor to be mailed, certified or registered (return
receipt requested) first-class postage prepaid, to each Holder at his address
as it appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the Proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities
are registered on such Special Record Date and shall no longer be payable
pursuant to the following Subsection (b).
(b) Publishing may make payment to the Persons in whose name the Securities
are registered at the close of business on the Special Record Date of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, unless,
after written notice given by Publishing to the Trustee of the proposed
payment pursuant to this Subsection, such manner of payment shall not be
deemed practicable by the Trustee (acting reasonably). The Trustee shall
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give prompt written notice to Publishing of any such determination.
Subject to the foregoing provisions of this Section 3.07, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, Publishing, the Trustee and any agent of
Publishing or the Trustee may treat the Person in whose name any Security is
registered on the Security Register as the owner of such Security for the
purpose of receiving payment of principal of, premium, if any, and (subject to
Section 3.07) interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of Publishing, the Trustee or
any agent of Publishing or the Trustee shall be affected by notice to the
contrary.
None of the Company, the Trustee, any Paying Agent or the Security Registrar
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
SECTION 3.09. Cancellation. All Securities surrendered for payment,
purchase, redemption, registration of transfer or exchange shall be delivered
to the Trustee and, if not already canceled, shall be promptly canceled by it.
Publishing or any Restricted Subsidiary may at any time deliver to the Trustee
for cancellation any Securities previously authenticated and delivered
hereunder which Publishing or any such Restricted Subsidiary may have acquired
in any manner whatsoever, and all Securities so delivered shall upon receipt of
a Publishing Order be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
securities held by the Trustee shall, unless by a Publishing Order received by
the Trustee prior to such destruction Publishing shall direct that the canceled
Securities be returned to it, be destroyed in accordance with its customary
procedures and
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certification of their destruction delivered to Publishing. The Trustee shall
provide Publishing a list of all Securities that have been canceled from time
to time as requested by Publishing.
SECTION 3.10. Computation of Interest. Unless otherwise provided as
contemplated in Section 3.01, interest on the Securities shall be computed on
the basis of a 360-day year of twelve 30-day months.
SECTION 3.11. Delayed Issuance of Securities. Notwithstanding any contrary
provision herein, if all Securities of a Series are not to be originally issued
at one time, it shall not be necessary for Publishing to deliver to the Trustee
an Officers' Certificate, Board Resolution, supplemental indenture or Opinion
of Counsel otherwise required pursuant to Sections 1.03, 2.02, 3.01 and 3.03 at
or prior to the time of authentication of each Security of such Series if such
documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first Security of such Series to
be issued; provided that any subsequent request by Publishing to the Trustee to
authenticate Securities of such Series upon original issuance shall constitute
a representation and warranty by Publishing that as of the date of such
request, the statements made in the Officers' Certificate or other certificates
delivered pursuant to Sections 1.02 and 2.02 shall be true and correct as if
made on such date.
An Officers' Certificate or Board Resolution or supplemental indenture
delivered by Publishing to the Trustee in the circumstances set forth in the
preceding paragraph may provide that Securities which are the subject thereof
will be authenticated and delivered by the Trustee or its agent on original
issue from time to time in the aggregate principal amount, if any, established
for such Series pursuant to such procedures acceptable to the Trustee as may be
specified from time to time upon the telephonic, electronic or written order of
Persons designated in such Officers' Certificate, supplemental indenture or
Board Resolution (any such telephonic or electronic instructions to be promptly
confirmed in writing by such Persons) and that such Persons are authorized to
determine, consistent with such Officers' Certificate, supplemental indenture
or Board Resolution, such terms and conditions of said Securities as are
specified in such Officers' Certificate, supplemental indenture or Board
Resolution.
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ARTICLE IV
Defeasance and Covenant Defeasance
SECTION 4.01. Publishing's Option To Effect Defeasance or Covenant
Defeasance. Publishing may, at its option by Board Resolution, at any time,
with respect to any Series of Securities, elect to have either Section 4.02 or
Section 4.03 be applied to all of the Outstanding Securities of such Series
(the "Defeased Securities"), upon compliance with the conditions set forth
below in this Article IV.
SECTION 4.02. Defeasance and Discharge. Upon Publishing's exercise under
Section 4.01 of the option applicable to this Section 4.02, Publishing shall be
deemed to have been discharged from its obligations with respect to the
Defeased Securities on the date the conditions set forth below are satisfied
(hereinafter, "defeasance") and each Guarantor shall be deemed to be discharged
from its obligations with respect to its Guarantee relating to the Defeased
Securities. For this purpose, such defeasance means that Publishing shall be
deemed to have paid and discharged the entire indebtedness represented by the
Defeased Securities, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 4.05 and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of Publishing and upon written
request, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Securities to receive, solely
from the trust fund described in Section 4.04 and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due, (b) Publishing's
obligations with respect to such Defeased Securities under Sections 3.04, 3.05,
3.06, 10.02 and 10.03, (c) the rights, powers, trusts, duties, indemnities and
immunities of the Trustee hereunder, and (d) this Article IV. Subject to
compliance with this Article IV, Publishing may exercise its option under this
Section 4.02 notwithstanding the prior exercise of its option under Section
4.03 with respect to the Securities.
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SECTION 4.03. Covenant Defeasance. Upon Publishing's exercise under
Section 4.01 of the option applicable to this Section 4.03, Publishing shall be
released from its obligations under any covenant or provision contained in
Sections 10.05 through 10.18, inclusive, and Sections 13.16 through 13.27 shall
not apply, with respect to the Defeased Securities on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance"),
and the Defeased Securities shall thereafter be deemed to be not "Outstanding"
for the purposes of any direction, waiver, consent or declaration or Act of
Holders (and the consequences of any thereof) in connection with such covenants
and provisions, but shall continue to be deemed "Outstanding" for all other
purposes hereunder. For this purpose, such covenant defeasance means that,
with respect to the Defeased Securities, Publishing may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such Section or Article, whether directly or indirectly, by reason
of any reference elsewhere herein or in such Defeased Securities to any such
Section or Article or by reason of any reference in any such Section or Article
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
5.01(c), (d) or (f) but, except as specified above, the remainder of this
Indenture and such Defeased Securities shall be unaffected thereby.
SECTION 4.04. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of either Section 4.02 or
Section 4.03 to the Defeased Securities:
(1) Publishing shall irrevocably have deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Series of Securities, (a) United States
dollars in an amount, (b) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of
any payment, money in an amount, or (c) a combination thereof, in such amounts
as will be sufficient, as reflected in the written report of a nationally
recognized firm of independent public accountants or a nationally recognized
investment banking firm delivered to
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the Trustee, to pay and discharge (and which shall be applied by the Trustee to
pay and discharge) the principal of, premium, if any, and interest on, the
Defeased Securities on (x) the Stated Maturity thereof or (y) any date selected
by Publishing on which the Defeased Securities may be redeemed in whole at the
option of Publishing (such date being referred to as the "Defeasance Redemption
Date"), if (in the case of clause (y)) when electing either defeasance or
covenant defeasance, Publishing has delivered to the Trustee an irrevocable
notice to redeem all of the outstanding Securities of such Series on the
Defeasance Redemption Date) of such principal or installment of interest;
provided that the Trustee (or such qualifying trustee) shall have been
irrevocably instructed to apply such United States dollars or the proceeds of
such U.S. Government Obligations to said payments with respect to the
Securities of such Series. For this purpose, "U.S. Government Obligations"
means securities that are (i) direct obligations of the United States of
America for the timely payment of which its full faith and credit is pledged or
(ii) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the timely payment of
which is unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment of
principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
(2) In the case of an election under Section 4.02, Publishing shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
to the effect that (A) Publishing has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable Federal income tax
law, in either case to the effect that the Holders of the Outstanding
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Securities of such Series will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred.
(3) In the case of an election under Section 4.03, Publishing shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
to the effect that the Holders of the Outstanding Securities of such Series
will not recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred.
(4) No Default or Event of Default shall have occurred and be continuing on
the date of such deposit or insofar as subsections 5.01(g) and (h) are
concerned, at any time during the period ending on the 121st day after the date
of deposit.
(5) Such defeasance or covenant defeasance shall not cause the Trustee to
have a conflicting interest with respect to any securities of Publishing.
(6) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a Default under, this Indenture or a breach or
violation of any provision of any agreement relating to any Indebtedness.
(7) Publishing shall have delivered to the Trustee an Opinion of
Independent Counsel in the United States to the effect that after the 121st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally.
(8) Publishing shall have delivered to the Trustee an Officers' Certificate
stating that the deposit was not made by Publishing with the intent of
preferring the holders of the Securities of such Series over the other
creditors of Publishing or with the intent of defeating, hindering, delaying or
defrauding creditors of Publishing.
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(9) No event or condition shall exist that would prevent Publishing from
making payments of the principal of, premium, if any, and interest on the
Securities of such Series on the date of such deposit or at any time ending on
the 121st day after the date of such deposit.
(10) Publishing shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each to the effect that all
conditions precedent provided for relating to either the defeasance under
Section 4.02 or the covenant defeasance under Section 4.03 (as the case may be)
have been complied with as contemplated by this Section 4.04.
Opinions of Counsel required to be delivered under this Section may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of Publishing or
government or other officials customary for opinions of the type required,
which certificates shall be limited to matters of fact, including that various
financial covenants have been complied with.
SECTION 4.05. Deposited Money and U.S. Government Obligations To Be Held in
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 10.03, all United States dollars and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee
pursuant to Section 4.04 in respect of the Defeased Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Series of Securities and this Indenture, to the payment, either directly or
through any Paying Agent as the Trustee may determine, to the Holders of such
Series of Securities of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.
Publishing shall fully pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 4.04 or the principal and interest received in
respect thereof, other than any such tax, fee or other charge which by law is
for the account of the Holders of the Defeased Securities.
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Anything in this Article IV to the contrary notwithstanding, the Trustee
shall deliver or pay to Publishing from time to time upon a Publishing Request
any United States dollars or U.S. Government Obligations held by it as provided
in Section 4.04 which, in the opinion of a nationally recognized firm of
independent public accountants or nationally recognized investment banking firm
expressed in a written report delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect
defeasance or covenant defeasance. In the event of an error in any calculation
resulting in a withdrawal hereunder, Publishing shall deposit an amount equal
to the amount erroneously withdrawn as promptly as practicable after becoming
aware of such error.
SECTION 4.06. Reinstatement. If the Trustee or Paying Agent is unable to
apply any United States dollars or U.S. Government Obligations in accordance
with Section 4.02 or 4.03, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then Publishing's obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 4.02 or 4.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
United States dollars or U.S. Government Obligations in accordance with Section
4.02 or 4.03, as the case may be; provided, however, that (a) if Publishing
makes any payment to the Trustee or Paying Agent of principal, premium, if any,
or interest on any Security following the reinstatement of its obligations, the
Trustee or Paying Agent shall promptly pay any such amount to the Holders of
the Securities and Publishing shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the United States dollars and
U.S. Government Obligations held by the Trustee or Paying Agent and (b) the
Trustee or Paying Agent shall return all such United States dollars and U.S.
Government Obligations to Publishing promptly after receiving a Publishing
Request therefor at any time, if the Trustee or Paying Agent receives written
notice from Publishing that such reinstatement of Publishing's obligations has
occurred and continues to be in effect at such time.
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ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used herein,
means with respect to any Series of Securities any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless such event is either inapplicable
to a particular Series or it is specifically modified in or pursuant to the
supplemental indenture or Board Resolution creating such Series of Security or
in the form of Security for such Series:
(a) there shall be a default in the payment of any interest on any Security
of that Series when it becomes due and payable, and such default shall
continue for a period of 30 days;
(b) there shall be a default in the payment of the principal of (or premium,
if any, on) any Security of that Series when and as the same shall become due
and payable at its Maturity (upon acceleration, optional or mandatory
redemption, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach, of any
covenant or agreement of Publishing under this Indenture (other than a
default in the performance, or breach, of a covenant or agreement which is
specifically dealt with in Section 5.01(a) or (b) or in clauses (ii) or (iii)
of this Section 5.01(c)), and such default or breach shall continue for a
period of 30 days after written notice has been given, by certified mail, (x)
to Publishing by the Trustee or (y) to Publishing and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities; (ii) there shall be a default in the performance or breach of the
provisions of Article VIII; or (iii) Publishing shall have failed to make or
consummate a Change of Control Offer in accordance with the provisions of
Section 10.14;
(d) one or more defaults shall have occurred under any agreements, indentures
or instruments under which
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Publishing, any Guarantor or any Restricted Subsidiary then has outstanding
Indebtedness in excess of $5,000,000 in the aggregate and, if not already
matured at its final maturity in accordance with its terms, such Indebtedness
shall have been accelerated;
(e) any Guarantee relating to such Series shall for any reason cease to be,
or be asserted in writing by any Guarantor or Publishing not to be, in full
force and effect, enforceable in accordance with its terms, except to the
extent contemplated by the Indenture and any such Guarantee;
(f) one or more final judgments, orders or decrees for the payment of money
in excess of $5,000,000, either individually or in the aggregate, shall be
entered against Publishing, any Guarantor or any Restricted Subsidiary or any
of their respective properties and shall not be discharged and either (i)
enforcement proceedings shall have been commenced upon such judgment, order
or decree or (ii) there shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by reason of an
appeal or otherwise, shall not be in effect;
(g) there shall have been the entry by a court of competent jurisdiction of
(i) a decree or order for relief in respect of Publishing, any Guarantor or
any Material Restricted Subsidiary in an involuntary case or proceeding under
any applicable Bankruptcy Law or (ii) a decree or order adjudging Publishing,
any Guarantor or any Material Restricted Subsidiary bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of or in
respect of Publishing, any Guarantor or any Material Restricted Subsidiary
under any applicable Federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official of
Publishing, any Guarantor or any Material Restricted Subsidiary or of any
substantial part of its property, or ordering the winding up or liquidation
of its affairs, and any such decree or order for relief shall continue to be
in effect, or any such other decree or order shall be unstayed and in effect,
for a period of 60 consecutive days;
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(h) (i) Publishing, any Guarantor or any Material Restricted Subsidiary
commences a voluntary case or proceeding under any applicable Bankruptcy Law
or any other case or proceeding to be adjudicated bankrupt or insolvent, (ii)
Publishing, any Guarantor or any Material Restricted Subsidiary consents to
the entry of a decree or order for relief in respect of Publishing, any
Guarantor or such Material Restricted Subsidiary in an involuntary case or
proceeding under any applicable Bankruptcy Law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, (iii) Publishing, any
Guarantor or any Material Restricted Subsidiary files a petition or answer or
consent seeking reorganization or relief under any applicable Federal or
state law, (iv) Publishing, any Guarantor or any Material Restricted
Subsidiary (x) consents to the filing of such petition or the appointment of,
or taking possession by, a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of Publishing, any Guarantor or
such Material Restricted Subsidiary or of any substantial part of its
property, (y) makes an assignment for the benefit of creditors or (z) admits
in writing its inability to pay its debts generally as they become due or (v)
Publishing, any Guarantor or any Material Restricted Subsidiary takes any
corporate action in furtherance of any such actions in this paragraph (h); or
(i) any outstanding Mirror Preferred shall cease to qualify as Mirror
Preferred under the definition thereof.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default (other than an Event of Default specified in Sections 5.01(g)
and (h) with respect to Publishing) occurs and is continuing with respect to
any Series, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities hereunder (each such Series
acting as a separate class) may, and the Trustee upon the request of the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of such Series shall, declare the principal amount (or, if the
Securities of such Series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that Series) of all
the Securities of such Series to be due and payable immediately in an amount
equal to the principal
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amount of the Securities of such Series, together with accrued and unpaid
interest, if any, to the date the Securities of such Series shall have become
due and payable, by a notice in writing to Publishing (and to the Trustee, if
given by Holders) and, if the New Bank Credit Facility is in effect, to the
Agent, and upon any such declaration such amount shall become immediately due
and payable. If an Event of Default specified in Sections 5.01(g) or (h) (if
the Event of Default under these paragraphs is with respect to all Series of
Securities then Outstanding) occurs with respect to Publishing and is
continuing, then all the Securities shall ipso facto become and be immediately
due and payable, in an amount equal to the principal amount of the Securities
of any Series (or, if any Securities are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms thereof),
together with accrued and unpaid interest, if any, to the date the Securities
become due and payable, without any declaration or other act on the part of the
Trustee or any Holder.
At any time after such declaration or acceleration has been made with
respect to the Securities of any or all Series, as the case may be, and before
a judgment or decree for payment of the money due has been obtained by the
Trustee as provided hereinafter in this Article, the Holders of at least a
majority in aggregate principal amount of the Outstanding Securities of such
Series, by written notice to Publishing and the Trustee, may rescind and annul
such declaration and its consequences if:
(a) Publishing has paid or irrevocably deposited with the Trustee a sum
sufficient to pay
(i) all sums paid or advanced by the Trustee under Section 6.07 and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel;
(ii) all overdue interest on all Securities of such Series;
(iii) the principal and the premium, if any, on any Securities of such
Series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates presented therefor by
the terms of the Securities of such Series, to the extent that payment of
such interest is lawful;
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(iv) interest upon overdue interest at the rate or rates presented therefor
by the terms of the Securities of such Series, to the extent that payment of
such interest is lawful; and
(b) all Events of Default with respect to such Series of Securities, other
than the nonpayment of principal of the Securities of such Series which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 5.13.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. Publishing covenants that if
(a) default is made in the payment of any interest on any Security of any
Series when such interest becomes due and payable and such default continues
for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if any,
on) any Security at the Stated Maturity (upon acceleration, optional or
mandatory redemption, required repurchase or otherwise) thereof,
Publishing will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities the whole amount then due and payable on such
Securities for principal and premium, if any, and interest, with interest upon
the overdue principal and premium, if any, and, to the extent that payment of
such interest shall be legally enforceable, upon overdue installments of
interest, at the rate or rates as may be presented therefor by the terms of any
such Security.
If Publishing fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against Publishing or any other obligor upon the Securities of such Series and
collect the moneys adjudged or decreed to be payable in the manner
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provided by law out of the property of Publishing or any other obligor upon
such Securities, wherever situated.
If an Event of Default with respect to any Series of Securities occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such Series under
this Indenture by such appropriate private or judicial proceedings as the
Trustee shall deem most effectual to protect and enforce such rights, whether
for the specific enforcement of any covenant or agreement in this Indenture or
in aid of the exercise of any power granted herein or therein, or to enforce
any other proper remedy.
The rights and remedies under this Section 5.03 are in addition to the other
rights and remedies under this Article V or Article XIII.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other similar judicial proceeding
relative to Publishing or the property of Publishing, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on Publishing for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and of the Holders allowed in such judicial
proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such
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payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, composition or other similar
arrangement affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities of any
Series may be prosecuted and enforced by the Trustee without the possession of
any of the Securities of such Series or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name and as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities of the
Series in respect of which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money collected by the
Trustee with respect to a Series of Securities pursuant to this Article or
otherwise on behalf of the Holders or the Trustee pursuant to this Article or
through any proceeding or any arrangement or restructuring in anticipation or
in lieu of any proceeding contemplated by this Article shall be applied,
subject to applicable law, in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal, premium, if any, or interest, upon presentation of the Securities of
such Series and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.07;
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SECOND: To the payment in full of the amounts then due and unpaid upon the
Securities of that Series for principal, premium, if any, and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal, premium, if any, and
interest; and
THIRD: The balance, if any, to the Person or Persons entitled thereto as a
court of competent jurisdiction shall direct, or to Publishing; provided that
all sums due and owing to the Holders and the Trustee have been paid in full as
required by this Indenture.
SECTION 5.07. Limitation on Suits. No Holder of any Securities of any
Series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture or the Securities, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to Securities of such Series;
(b) the Holders of not less than 25% in principal amount of the Outstanding
Securities of such Series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered, and if requested have provided, to
the Trustee an indemnity satisfactory to the Trustee in its sole discretion
against the costs, expenses and liabilities that may be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer (and if requested, provision) of indemnity has failed to institute any
such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of such Series;
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it being understood and intended that no one or more Holders of Securities of
such Series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of such Series, or to obtain or to seek to
obtain priority or preference over any other Holders or to enforce any right
under this Indenture, except in the manner provided in this Indenture and for
the equal and ratable benefit of all the Holders of all Securities of such
Series.
SECTION 5.08. Unconditional Right of Holders To Receive Principal, Premium
and Interest. Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right on the terms stated herein, which
is absolute and unconditional, to receive payment of the principal of, premium,
if any, and (subject to Section 3.07) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, (a)
Publishing, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder, and (b) thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as provided in
Section 3.06, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
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SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of not less than a majority
in aggregate principal amount of the Outstanding Securities of any Series shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture (including, without limitation, Section 5.07) or expose the
Trustee to personal liability; and
(b) subject to the provisions of Section 315 of the Trust Indenture Act, the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of any
Series may on behalf of the Holders of all the Securities of such Series waive
any past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if any, or interest on any
Security of such Series, or
(b) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such Series affected by such modification or
amendment.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this
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Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in principal amount of
the Outstanding Securities of any Series to which the suit relates, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of, premium, if any, or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
SECTION 5.15. Waiver of Stay, Extension or Usury Laws. Publishing (to the
extent that it may lawfully do so) covenants that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other similar law
wherever enacted, now or at any time hereafter in force, which would prohibit
or forgive Publishing from paying all or any portion of the principal of,
premium, if any, or interest on the Securities contemplated herein or in the
Securities or which may affect the covenants or the performance of this
Indenture; and Publishing (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 5.16. Remedies Subject to Applicable Law. All rights, remedies and
powers provided by this Article may be exercised only to the extent that the
exercise thereof
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does not violate any applicable provision of law in the premises, and all the
provisions of this Indenture are intended to be subject to all applicable
mandatory provisions of law which may be controlling in the premises and to be
limited to the extent necessary so that they will not render this Indenture
invalid, unenforceable or not entitled to be recorded, registered or filed
under the provisions of any applicable law.
ARTICLE VI
The Trustee
SECTION 6.01. Duties of Trustee. (a) If a Default or an Event of Default
with respect to any Series of Securities actually known to the Trustee has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in its exercise thereof as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs. The Trustee shall not be
charged with knowledge of any Default or Event of Default with respect to any
Series of Securities, Asset Sale or Change of Control unless written notice
thereof shall have been delivered to a Responsible Officer by Publishing or any
other Person.
(b) Except during the continuance of a Default or an Event of Default with
respect to any Series of Securities actually known to the Trustee:
(1) the Trustee need perform only those duties as are specifically set forth
in this Indenture and no covenants or obligations shall be implied in this
Indenture that are adverse to the Trustee; and
(2) in the absence of bad faith or wilful misconduct on its part, the
Trustee may with respect to any Series of Securities, conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own wilful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 6.01;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction of the Holders of
a majority in principal amount of Outstanding Securities of any Series
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power confirmed
upon the Trustee under this Indenture.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any loss, expense, fees or financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or loss, expense, fees or financial liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (d) of this Section 6.01.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree with Publishing. Assets held in
trust by the Trustee need not be segregated from other assets except to the
extent required by law.
SECTION 6.02. Notice of Defaults. Within 30 days after a Responsible
Officer of the Trustee receives notice of the occurrence of any Default with
respect to Securities of any Series, the Trustee shall, at Publishing's
expense, transmit by mail to all Holders of such Series or any other persons
entitled to receive reports pursuant to Trust
<PAGE> 85
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Indenture Act Section 313(c), as their names and addresses appear in the
Security Register, notice of such Default, unless such Default shall have been
cured or waived; provided, however, that, except in the case of a Default in
the payment of the principal of, premium, if any, or interest on any Security,
the Trustee shall be protected in withholding such notice if and so long as a
trust committee of Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders of such
Series.
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of
Trust Indenture Act Sections 315(a) through 315(d):
(a) the Trustee may rely conclusively and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of Publishing mentioned herein shall be
sufficiently evidenced by a Publishing Request or Publishing Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) wherever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to the taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) in the absence of bad faith on
its part, may rely conclusively, upon an Officers' Certificate and/or an
Opinion of Counsel;
(d) the Trustee may consult with counsel and any written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon in accordance with such
advice or Opinion of Counsel;
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(e) notwithstanding any other provisions contained in this Indenture, the
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall have offered to
the Trustee security or indemnity satisfactory to the Trustee in its sole
discretion against the costs, expenses and liabilities which might be
incurred therein or thereby in compliance with such request or direction;
(f) the Trustee shall not be liable for any action taken or omitted by it in
good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any
liabilities arising out of the negligence or wilful misconduct of the
Trustee;
(g) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or
document; but the Trustee in its discretion may make such further inquiry or
investigation in accordance with any of the provisions of this Indenture into
such facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine such relevant books, records and premises of Publishing as may be
reasonable, personally or by agent or attorney;
(h) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder; and
(i) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights and powers.
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SECTION 6.04. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of Publishing, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or the Securities, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder
and that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1 supplied to Publishing are true and accurate subject
to the qualifications set forth therein. The Trustee shall not be accountable
for the use or application by Publishing of Securities or the proceeds thereof.
SECTION 6.05. Trustee and Agents May Hold Securities; Collections; etc.
The Trustee, any Paying Agent, Security Registrar or any other agent of
Publishing, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Trust Indenture Act Sections 310 and 311, may otherwise deal with Publishing
and receive, collect, hold and retain collections from Publishing with the same
rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 6.06. Money Held in Trust. All moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Except for
funds or securities deposited with the Trustee pursuant to Article IV, the
Trustee shall only be required to invest moneys received by the Trustee, until
used or applied as herein provided, in Temporary Cash Investments in accordance
with the directions of Publishing.
SECTION 6.07. Compensation and Indemnification of Trustee and Its Prior
Claim. Publishing covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder (which, to the extent lawful, shall not be
limited by any provision of law in
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regard to the compensation of a trustee of an express trust) and Publishing
covenants and agrees to pay or reimburse the Trustee and each predecessor
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by or on behalf of it in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and other persons
not regularly in its employ) except any such expense, disbursement or advance
as may arise from its negligence, bad faith or wilful misconduct. When the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 5.01(g) or Section 5.01(h), the expenses
(including the reasonable compensation and the expenses and disbursements of
its counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law. Publishing also covenants to indemnify the
Trustee and each predecessor Trustee, and their respective officers, agents and
employees for, and to hold them harmless against, any claim, loss, liability,
tax, assessment or other governmental charge (other than taxes applicable to
the Trustee's compensation hereunder) or expense incurred without negligence,
bad faith or wilful misconduct on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including enforcement of this Section 6.07 and also
including any liability which the Trustee may incur as a result of failure to
withhold, pay or report any tax, assessment or other governmental charge, and
the costs and expenses of defending itself against or investigating any claim
of liability in the premises. The obligations of Publishing under this Section
to compensate and indemnify the Trustee and each predecessor Trustee and to pay
or reimburse the Trustee and each predecessor Trustee for expenses,
disbursements and advances shall constitute an additional obligation hereunder
and shall survive the satisfaction and discharge of this Indenture and the
resignation or removal of the Trustee and each predecessor Trustee. As
security for the performance of the obligations of Publishing under this
Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of Holders of particular Securities.
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SECTION 6.08. Conflicting Interests. The Trustee shall comply with the
provisions of Section 310(b) of the Trust Indenture Act. In determining
whether the Trustee has a conflicting interest as defined in Section 310(b) of
the Trust Indenture Act with respect to the Securities of any Series, there
shall be excluded this Indenture with respect to Securities of any particular
Series of Securities other than that Series. Nothing herein shall prevent the
Trustee from filing with the Commission the application referred to in the
second to last paragraph of Section 310(b) of the Trust Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be eligible to act as Trustee under
the Trust Indenture Act Section 310(a)(1) and which shall have a combined
capital and surplus of at least $100,000,000, and have a Corporate Trust Office
in The City of New York to the extent there is such an institution eligible and
willing to serve. If the Trustee does not have an office in the City of New
York, the Trustee shall appoint an agent in the City of New York reasonably
acceptable to Publishing to conduct any activities which the Trustee is
required under this Indenture to conduct in the City of New York. The Trustee
may not rescind any such agency without the consent of Publishing, which
consent may not be unreasonably withheld, unless the Trustee appoints a
satisfactory replacement or has a Corporate Trust Office in the City of New
York. If such corporation publishes reports of conditions at least annually,
pursuant to law or to the requirements of Federal, state, territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of conditions so published. If at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 6.10. Resignation and Removal; Appointment of Successor Trustee.
(a) No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.
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(b) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign with respect to any Series of Securities by giving written notice
thereof to Publishing. Upon receiving such notice of resignation, Publishing
shall use its best efforts to promptly appoint a successor Trustee by Board
Resolution or written instrument executed by authority of the Board of
Directors of Publishing, a copy of which shall be delivered to the resigning
Trustee and a copy to the successor Trustee. If an instrument of acceptance by
a successor Trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may, or
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee.
Such court may thereupon, after such notice, if any, as it may deem proper,
appoint a successor Trustee.
(c) The Trustee may be removed with respect to any Series of Securities at
any time by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of that Series, delivered to the
Trustee and to Publishing.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Trust Indenture
Act Section 310(b) with respect to any Series of Securities after written
request therefor by Publishing or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 with respect
to any Series of Securities and shall fail to resign after written request
therefor by Publishing or by any such Holder, or
(3) the Trustee shall become incapable of acting with respect to any Series
of Securities or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
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then, in any case, (i) Publishing by a Board Resolution may remove the Trustee,
with respect to any Series of Securities or in the case of bankruptcy or
insolvency or receivership pursuant to clause (3) above, with respect to all
Series, or (ii) subject to Section 5.14, any Holder of any Security who has
been a bona fide Holder of a Security of such Series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee with respect to the Series, or in the case of bankruptcy or
insolvency or receivership pursuant to clause (3) above, with respect to all
Series. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting
with respect to any Series of Securities, or if a vacancy shall occur in the
office of Trustee with respect to any Series for any cause, Publishing, by a
Board Resolution or written instrument executed by authority of the Board of
Directors of Publishing, shall use its best efforts to promptly appoint a
successor Trustee for that Series of Securities and shall comply with the
applicable requirements of Section 6.11. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy,
Publishing or a court of competent jurisdiction has not appointed a successor
Trustee, a successor Trustee with respect to such Series of Securities shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such Series delivered to Publishing and the retiring
Trustee, and the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to
such Series of Securities and supersede the successor Trustee appointed by
Publishing with respect to such Series of Securities. If no successor Trustee
shall have been so appointed by Publishing or the Holders of such Series of
Securities and accepted appointment in the manner hereinafter provided, any
Holder of a Security who has been a bona fide Holder of a Security of that
Series for at least six months may, subject to Section 5.14, on behalf of
himself and all other similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
Series.
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(f) Publishing shall give notice of each resignation and each removal of
the Trustee with respect to any Series and each appointment of a successor
Trustee with respect to any Series by mailing written notice of such event by
first-class mail, postage prepaid, to the Holders of Securities of that Series
as their names and addresses appear in the Security Register. Each notice
shall include the name of the successor Trustee and the address of its
Corporate Trust Office or agent hereunder.
SECTION 6.11. Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Trustee with respect to the Securities,
every such successor Trustee so appointed shall execute, acknowledge and
deliver to Publishing and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee under this Indenture with respect to any such
Series; but, nevertheless, on the written request of Publishing or the
successor Trustee, upon payment of its charges then unpaid, such retiring
Trustee shall pay over to the successor Trustee all moneys at the time held by
it hereunder with respect to any such Series and shall execute and deliver an
instrument transferring to such successor Trustee all such rights, powers,
duties and obligations.
Upon request of any such successor Trustee, Publishing shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights and powers. Any Trustee ceasing to act
shall, nevertheless, retain a prior claim upon all property or funds held or
collected by such Trustee or such successor Trustee to secure any amounts then
due such Trustee pursuant to the provisions of Section 6.07.
No successor Trustee with respect to the Securities shall accept appointment
as provided in this Section 6.11 unless at the time of such acceptance such
successor Trustee shall be eligible to act as Trustee under the provisions of
Trust Indenture Act Section 310(a) and this Article VI and shall have a
combined capital and surplus of at least $100,000,000 and have a Corporate
Trust Office or an agent selected in accordance with Section 6.09 in the City
of New York.
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Upon acceptance of appointment by any successor Trustee as provided in this
Section 6.11, Publishing shall give notice thereof to the Holders of the
Securities of such Series, by mailing such notice to such Holders at their
addresses as they shall appear on the Security Register. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If Publishing fails to give such notice within 10
days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be given at the expense of Publishing.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided such corporation shall be eligible under
Trust Indenture Act Section 310(a) and this Article VI and shall have a
combined capital and surplus of at least $100,000,000.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor Trustee. In all such cases such certificates
shall have the full force and effect which this Indenture provides for the
certificate of authentication of the Trustee; provided that the right to adopt
the certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, amalgamation, conversion or consolidation.
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SECTION 6.13. Preferential Collection of Claims Against Publishing. If and
when the Trustee shall be or become a creditor of Publishing, the Trustee shall
be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against Publishing.
ARTICLE VII
Holders' Lists and Reports by Trustee and Publishing
SECTION 7.01. Publishing To Furnish Trustee Names and Addresses of Holders.
Publishing will furnish or cause to be furnished to the Trustee:
(a) semiannually, not more than 10 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities of each Series as of such Regular
Record Date; and
(b) at such other times as the Trustee may reasonably request in writing,
within 30 days after receipt by Publishing of any such request, a list of
similar form and content to that in subsection (a) hereof as of a date not
more than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar for Securities of a Series, no such list need be furnished with
respect to such Series of Securities.
SECTION 7.02. Disclosure of Names and Addresses of Holders. Every Holder
of Securities of any Series, by receiving and holding the same, agrees with
Publishing and the Trustee that neither Publishing nor the Trustee or any agent
of either of them shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable or
liable by reason of mailing any material pursuant to a request made under Trust
Indenture Act Section 312.
SECTION 7.03. Reports by Trustee. (a) Within 60 days after May 15 of each
year commencing with the first
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May 15 after the issuance of Securities of any Series, the Trustee shall
transmit by mail, at Publishing's expense, to all Holders, as their names and
addresses appear in the Security Register, as provided in Trust Indenture Act
Section 313(c), a brief report dated as of such May 15 in accordance with and
with respect to the matters required by Trust Indenture Act Section 313(a).
(b) The Trustee shall promptly transmit to Publishing a copy of any report
it transmits to Holders of such Series pursuant to this Section 7.03.
SECTION 7.04. Reports by Publishing. Publishing shall do the following:
(a) file with the Trustee, in accordance with Section 10.17 hereof, and in
any event within 30 days after Publishing is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which
Publishing is required to file with the Commission separately or together with
Hollinger International pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if Publishing is not required to file information, documents or
reports pursuant to either of said Sections, then it shall (i) deliver to the
Trustee annual audited financial statements of Publishing and its Restricted
Subsidiaries, prepared on a Consolidated basis in conformity with GAAP, within
120 days after the end of each fiscal year of Publishing, and (ii) file with
the Trustee and the Commission, in accordance with, and so long as not
prohibited by, the rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by Publishing
with the conditions and covenants of this Indenture as is required from time to
time by such rules and regulations (including such rules and regulations, if
any, referred to in Trust Indenture Act Section 314(a)); and
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(c) transmit by mail to all Holders or any other persons entitled to receive
a report pursuant to Trust Indenture Act Section 313(c), within 30 days after
the filing thereof with the Trustee, in the manner and to the extent provided
in Trust Indenture Act Section 313(c), such summaries of any information,
documents and reports required to be filed by Publishing pursuant to Section
10.17 hereunder and subsections (a) and (b) of this Section as is required and
not prohibited by rules and regulations prescribed from time to time by the
Commission.
ARTICLE VIII
Consolidation, Merger, Sale of Assets
SECTION 8.01. Publishing May Merge, Consolidate, etc., Only on Certain
Terms. (a) Publishing shall not, in a single transaction or a series of
related transactions, consolidate with or merge with or into any other Person
or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Restricted Subsidiaries to enter into
any such transaction or transactions (other than, in the case of a Restricted
Subsidiary, such a consolidation, merger or transfer with or to one or more
Wholly Owned Restricted Subsidiaries) if such transaction or transactions, in
the aggregate, would result in a sale, assignment, conveyance, transfer, lease
or disposition of all or substantially all of the properties and assets of
Publishing and its Restricted Subsidiaries on a Consolidated basis to any other
Person or group of affiliated Persons, unless at the time and after giving
effect thereto:
(i) either (a) Publishing shall be the continuing corporation, or (b) the
Person (if other than Publishing) formed by such consolidation or into which
Publishing is merged or the Person which acquires by sale, assignment,
conveyance, transfer, lease or disposition all or substantially all of the
properties and assets of Publishing and its Restricted Subsidiaries on a
Consolidated basis (the "Surviving Entity") shall be a corporation duly
organized and validly existing under the laws of the United States of
America, any state thereof or the District of Columbia and shall expressly
assume, by a supplemental indenture hereto, executed and delivered to the
Trustee, in form
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and substance reasonably satisfactory to the Trustee, all the obligations of
Publishing under the Securities and this Indenture, and this Indenture shall
remain in full force and effect;
(ii) immediately before and immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing;
(iii) immediately after giving effect to the transaction on a pro forma
basis, the Consolidated Net Worth of the Surviving Entity is not less than
the Consolidated Net Worth of Publishing and the Restricted Subsidiaries
immediately prior to the transaction;
(iv) immediately before and immediately after giving effect to such
transaction on a pro forma basis (on the assumption that the transaction
occurred on the first day of the four-quarter period immediately prior to the
consummation of such transaction with the appropriate adjustments with
respect to the transaction being included in such pro forma calculation),
Publishing (or the Surviving Entity if Publishing is not the continuing
obligor under this Indenture) could Incur $1.00 of additional Indebtedness
under the provisions of Section 10.08 (other than Permitted Indebtedness);
(v) if any of the property or assets of Publishing or any of its Restricted
Subsidiaries would thereupon become subject to any Lien, the provisions of
Section 10.12 are complied with; and
(vi) Publishing or the Surviving Entity shall have delivered, or caused to
be delivered, to the Trustee, in form and substance reasonably satisfactory
to the Trustee, an Officers' Certificate and an Opinion of Counsel, each to
the effect that such consolidation, merger, transfer, sale, assignment, lease
or other transaction and the supplemental indenture in respect thereof comply
with the provisions described in this . Section 8.01(a) and that all
conditions precedent herein provided for in this Section 8.01(a) relating to
such transaction have been complied with.
(b) Neither Hollinger International nor any Restricted Subsidiary Guarantor
shall, and Publishing shall
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not permit a Restricted Subsidiary Guarantor to, in a single transaction or
series of related transactions, consolidate with or merge with or into any
other Person (other than Publishing, Hollinger International or any other
Restricted Subsidiary Guarantor), or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets on a
Consolidated basis to any Person (other than Publishing, Hollinger
International or any other Restricted Subsidiary Guarantor) if such transaction
or transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of such Guarantor to any other Person or group of
affiliated Persons, unless at the time and after giving effect thereto:
(i) either (a) Hollinger International or such Restricted Subsidiary
Guarantor shall be the continuing corporation or (b) the Person (if other than
Hollinger International or such Restricted Subsidiary Guarantor) formed by such
consolidation or into which Hollinger International or such Restricted
Subsidiary Guarantor, as the case may be, is merged or the Person which
acquires by sale, assignment, conveyance, transfer, lease or disposition all or
substantially all of the properties and assets of Hollinger International or
such Restricted Subsidiary Guarantor shall be a corporation duly organized and
validly existing under the laws of the United States of America, any state
thereof or the District of Columbia and shall (except where Hollinger
International or such Restricted Subsidiary Guarantor is the continuing
corporation) expressly assume, by a supplemental indenture hereto, executed and
delivered to the Trustee, in form and substance reasonably satisfactory to the
Trustee, all the obligations of Hollinger International or such Restricted
Subsidiary Guarantor, as the case may be, under the Securities and this
Indenture, and this Indenture shall remain in full force and effect;
(ii) immediately before and immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing; and
(iii) Hollinger International or such Restricted Subsidiary Guarantor, as
the case may be, shall have delivered, or caused to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee,
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an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer, lease or other
transaction and the supplemental indenture in respect thereof comply with the
provisions described in this Section 8.01(b), and that all conditions precedent
herein provided for in this Section 8.01(a) relating to such transactions have
been complied with.
(c) Notwithstanding anything in this Article Eight to the contrary, any
Guarantee by a Restricted Subsidiary of the Securities may be released in
accordance with the provisions of Section 10.13(c).
SECTION 8.02. Successor Substituted. Upon any consolidation or merger, or
any sale, assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets on a Consolidated basis of
Publishing, Hollinger International or any Restricted Subsidiary Guarantor in
accordance with Section 8.01 with respect to which Publishing, Hollinger
International or such Restricted Subsidiary Guarantor is not the continuing
corporation, the successor Person formed by such consolidation or into which
Publishing, Hollinger International or such Restricted Subsidiary Guarantor is
merged or the successor Person to which such sale, assignment, conveyance,
transfer, lease or disposition is made shall succeed to, and be substituted
for, and may exercise every right and power of, Publishing, Hollinger
International or such Restricted Subsidiary Guarantor, as the case may be,
under this Indenture, with the same effect as if such successor had been named
as Publishing, Hollinger International or such Restricted Subsidiary Guarantor,
as the case may be, herein. When a successor assumes all the obligations and
covenants of its predecessor under this Indenture or the Securities, the
predecessor shall be released from those obligations and covenants; provided
that, in the case of a transfer by lease, the predecessor shall not be released
from the payment of principal and interest on the Securities or, in the case of
Hollinger International or a Restricted Subsidiary Guarantor, such Guarantee,
as the case may be.
Any successor to Publishing described in the foregoing paragraph may cause
to be signed, and may issue either in its own name or in the name of
Publishing, any or all of the Securities issuable hereunder which theretofore
shall not have been signed by Publishing and delivered to
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the Trustee; and, upon the order of such successor, instead of Publishing, and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of
Publishing to the Trustee for authentication, and any Securities which such
successor thereafter shall cause to be signed and delivered to the Trustee for
that purpose. All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution of this
Indenture.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures and Agreements Without Consent of
Holders. Without the consent of any Holders of the Securities of any Series,
Publishing, each Guarantor and the Trustee, at any time and from time to time,
may enter into one or more indentures supplemental hereto, in form and
substance reasonably satisfactory to the Trustee, for any of the following
purposes:
(a) to evidence the succession of another Person to Publishing or any
Guarantor, and the assumption by any such successor of the covenants of
Publishing or such Guarantor, as the case may be, herein and in the
Securities of any Series;
(b) to add to the covenants of Publishing or the Guarantors for the benefit
of the Holders of the Securities of any or all Series (and if such covenants
or the surrender of such right or power are to be for the benefit of less
than all Series of Securities, stating that such covenants are expressly
being included or such surrenders are expressly being made solely for the
benefit of one or more specified Series), or to surrender any right or power
conferred upon Publishing or the Guarantors in this Indenture or the
Securities of any Series;
(c) to cure any ambiguity or to correct or supplement any provision in this
Indenture or the
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Securities of any Series which may be defective or inconsistent with any
other provision in this Indenture or the Securities;
(d) to comply with the requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act,
as contemplated by Section 9.05 or otherwise;
(e) to add a Guarantee of the Indenture Obligations;
(f) to evidence and provide the acceptance of the appointment of a successor
Trustee hereunder;
(g) to mortgage, pledge, hypothecate or grant a security interest in favor
of the Trustee for the benefit of the Holders as additional security,
pursuant to the requirements of Section 10.12 or otherwise, for the payment
and performance of the Indenture Obligations, in any property or assets,
including any which are required to be mortgaged, pledged or hypothecated, or
in which a security interest is required to be granted, to the Trustee
pursuant to this Indenture or otherwise;
(h) to clarify or make any other provisions with respect to matters or
questions arising under this Indenture or the Securities; provided that, in
each case, such clarification or provision thus made shall not adversely
affect the interests of the Holders; and
(i) to establish any form of Security, as provided in Article Two, and to
provide for the issuance of any Series of Securities as provided in Article
Three and to set forth the terms thereof, and/or to add to the rights of the
Holders of the Securities of any Series.
SECTION 9.02. Supplemental Indentures and Agreements with Consent of
Holders. Except as permitted by Section 9.01, with the consent of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Securities of each Series affected by such supplemental indenture or
indentures, by Act of said Holders delivered to Publishing and the Trustee,
Publishing and each Guarantor (if a party thereto) and the Trustee may (i)
enter into an indenture or indentures supplemental hereto, in form
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and substance reasonably satisfactory to the Trustee, for the purpose of adding
any provisions to or amending, modifying or changing in any manner or
eliminating any of the provisions of this Indenture or the Securities of each
such Series (including, but not limited to, for the purpose of modifying in any
manner the rights of the Holders of the Securities of each such Series under
this Indenture) or (ii) waive compliance with any provision in this Indenture
or the Securities of each such Series (other than waivers of past Defaults
covered by Section 5.13 and waivers of covenants which are covered by Section
10.19); provided, however, that no such supplemental indenture, agreement or
instrument shall, without the consent of the Holder of each Outstanding
Securities of any Series affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
interest on, any Securities of any Series or waive a default in the payment
of the principal or interest on any Security of any Series or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or change the coin or currency in which
the principal of any Security or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment after the Stated Maturity thereof;
(b) amend, change or modify the obligation of Publishing to make and
consummate a Change of Control Offer in the event of a Change of Control in
accordance with Section 10.14, including amending, changing or modifying any
of the provisions or definitions with respect thereto;
(c) reduce the percentage in principal amount of the Outstanding Securities
of any Series, the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
Defaults hereunder and their consequences provided for in this Indenture;
(d) modify any of the provisions of this Section or Sections 5.13 or 10.19,
except to increase the percentage of Outstanding Securities of any Series
required for such actions or to provide that certain other provisions of this
Indenture cannot be modified
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or waived without the consent of the Holder of each Security affected thereby;
or
(e) except as otherwise permitted under Article VIII, consent to the
assignment or transfer by Publishing or any Guarantor of any of its rights
and obligations under this Indenture.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular Series of Securities, or which modifies the
rights of the Holders of Securities of such Series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other Series.
Upon the written request of Publishing, accompanied by a copy of a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Holders as
aforesaid, the Trustee shall join with Publishing in the execution of such
supplemental indenture.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or
agreement, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 9.03. Execution of Supplemental Indentures and Agreements. In
executing, or accepting the additional trusts created by, any supplemental
indenture, agreement or instrument permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee
shall be entitled to receive, and (subject to Trust Indenture Act Section
315(a) through 315(d) and Section 6.03 hereof) shall be fully protected in
relying upon, an Opinion of Counsel and an Officers' Certificate to the effect
that the execution of such supplemental indenture, agreement or instrument is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture, agreement or
instrument which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
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SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the Trust Indenture Act as then in effect.
SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If Publishing shall so determine,
new Securities modified so as to conform to any such supplemental indenture, in
the opinion of the Trustee and the Board of Directors, may be prepared and
executed by Publishing and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
SECTION 9.07. Record Date. If Publishing shall solicit from the Holders of
any Series of Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, Publishing may, but shall not be obligated to,
fix a record date for the purpose of determining the Holders of such Series
entitled to consent to any supplemental indenture, agreement or instrument or
any waiver, and shall promptly notify the Trustee of any such record date. If
a record date is fixed, those Persons who were Holders of such Series at such
record date (or their duly designated proxies), and only those Persons, shall
be entitled to consent to such supplemental indenture, agreement or instrument
or waiver or to revoke any consent previously given, whether or not such
Persons continue to be Holders after such record date. The record date shall
be a date no more than 30 days prior to the first solicitation of Holders
generally in connection therewith and no later than the date such solicitation
is completed. No such consent shall be valid or effective for more than six
months after such record date. Subject to applicable law, until any
supplemental indenture, agreement, instrument or waiver
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becomes effective, or a consent to it by a Holder of a Security of such Series
shall cease to be valid and effective as set forth in the preceding sentence,
such consent is a continuing consent by the Holder and every subsequent Holder
of a Security of such Series or portion of a Security of such Series that
evidences the same debt as the consenting Holder's Security.
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and Interest. With respect to
each Series of Securities, Publishing will duly and punctually pay the
principal of, premium, if any, and interest on such Securities in accordance
with the terms of such Securities and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. Publishing will maintain
in The City of New York an office or agency where Securities may be presented
or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
Publishing in respect of the Securities and this Indenture may be served. The
office of the Trustee at 14 Wall Street, Window #2, New York, New York 10005,
shall be such office or agency of Publishing, unless Publishing shall designate
and maintain some other office or agency for one or more of such purposes.
Publishing will give prompt written notice to the Trustee of any change in the
location of any such office or agency. If at any time Publishing shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office, and Publishing
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
Publishing may from time to time designate one or more other offices or
agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to
time rescind such designation; provided, however, that no such designation or
rescission shall in any manner relieve Publishing of its obligation to maintain
an office or agency
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in The City of New York for such purposes. Publishing will give prompt written
notice to the Trustee of any such designation or rescission and any change in
the location of any such office or agency.
SECTION 10.03. Money for Security Payments To Be Held in Trust. Publishing
will, on or before Noon, New York time, on each due date of the principal of,
premium, if any, or interest on, Securities with respect to each Series of
Securities, deposit with a Paying Agent (which shall not be Publishing) a sum
in same-day funds sufficient to pay the principal, premium, if any, or interest
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) Publishing will promptly notify the Trustee of such action or
any failure so to act.
Publishing will cause each Paying Agent other than the Trustee for any
Series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of, premium,
if any, or interest on Securities of such Series in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by Publishing (or any other
obligor upon the Securities of such Series) in the making of any payment of
principal, premium, if any, or interest on the Securities of such Series;
(c) at any time during the continuance of any such Default, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and liabilities
of such Paying Agent.
Publishing may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture
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with respect to any Series of Securities or for any other purpose, by
Publishing Order direct any Paying Agent to pay to the Trustee all sums held in
trust by such Paying Agent in respect of each and every Series of Securities as
to which it seeks to discharge this Indenture or, if for any other purpose, all
sums so held in trust by Publishing in respect of all Securities, such sums to
be held by the Trustee upon the same trusts as those upon which such sums were
held by such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent in trust for the
payment of the principal of, premium, if any, or interest on any Security of
any Series and remaining unclaimed for two years after such principal and
premium, if any, or interest has become due and payable shall promptly be paid
to Publishing upon Publishing Request; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to Publishing for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of Publishing as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment to Publishing, may
at the expense of Publishing cause to be published once, in The New York Times
and The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining will promptly be repaid to Publishing.
SECTION 10.04. Corporate Existence. Subject to Article VIII, Publishing
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and related rights and franchises
(charter and statutory) of Publishing and each Restricted Subsidiary; provided,
however, that Publishing shall not be required to preserve any such right or
franchise or the corporate existence of any such Restricted Subsidiary if the
Board of Directors of Publishing shall determine that the preservation thereof
is no longer desirable in the conduct of the business of Publishing and its
Restricted Subsidiaries as a whole and that the loss thereof would not
reasonably be expected to have a material adverse effect on the ability of
Publishing to perform its
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obligations hereunder; and provided further, however, that the foregoing shall
not prohibit a sale, transfer or conveyance of a Restricted Subsidiary or any
of its assets in compliance with the terms of this Indenture.
SECTION 10.05. Payment of Taxes and Other Claims. Publishing will pay or
discharge or cause to be paid or discharged, on or before the date the same
shall become due and payable, (a) all material taxes, assessments and
governmental charges levied or imposed upon Publishing or any Restricted
Subsidiary shown to be due on any tax return of Publishing or any Restricted
Subsidiary or otherwise assessed or upon the income, profits or property of
Publishing or any Restricted Subsidiary and (b) all material lawful claims for
labor, materials and supplies, which, if unpaid, would by law become a Lien
upon the property of Publishing or any Restricted Subsidiary, except for any
Lien permitted to be Incurred under Section 10.11; provided, however, that
Publishing shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and in respect of
which appropriate reserves (in the good-faith judgment of management of
Publishing) are being maintained in accordance with GAAP consistently applied.
SECTION 10.06. Maintenance of Properties. Publishing will cause all
material properties owned by Publishing or any Restricted Subsidiary or used or
held for use in the conduct of its business or the business of any Restricted
Subsidiary to be maintained and kept in good condition, repair and working
order (ordinary wear and tear excepted) and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
Publishing may be consistent with sound business practice and reasonably
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 10.06 shall prevent Publishing from discontinuing the
maintenance of any of such properties if such discontinuance is, in the
judgment of Publishing, desirable in the conduct of the business of Publishing
and its Restricted Subsidiaries and not reasonably expected to have a material
adverse effect on the ability of Publishing to perform its obligations
hereunder.
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SECTION 10.07. Insurance. Publishing will at all times keep all of its and
its Restricted Subsidiaries' properties which are of an insurable nature
reasonably self-insured or insured with insurers, believed by Publishing to be
responsible, against loss or damage to the extent that property of similar
character is usually so insured by corporations similarly situated and owning
like properties in the same general geographic areas in which Publishing and
its Restricted Subsidiaries operate, except where the failure to do so would
not reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or prospects of Publishing
and its Restricted Subsidiaries, taken as a whole.
SECTION 10.08. Limitation on Indebtedness. Publishing will not, and will
not permit any of its Restricted Subsidiaries to, Incur any Indebtedness
(including any Acquired Indebtedness but excluding any Permitted Indebtedness)
except for (x) Indebtedness of Publishing or (y) Indebtedness of a Restricted
Subsidiary constituting Acquired Indebtedness, Permitted Subsidiary
Indebtedness or Foreign Subsidiary Indebtedness, provided that, in the case of
the foregoing clauses (x) and (y), the Consolidated Cash Flow Ratio for
Publishing and the Restricted Subsidiaries for the four full fiscal quarters
immediately preceding the Incurrence of such Indebtedness taken as one period
is not greater than 6.0:1.0. In addition (and without limiting the foregoing
requirement), unless both of The Telegraph and Southam are Restricted
Subsidiaries, Publishing shall not permit any Restricted Subsidiary to Incur
any Indebtedness other than Acquired Indebtedness or Permitted Subsidiary
Indebtedness. For purposes of determining the Consolidated Cash Flow Ratio for
any period, pro forma effect shall be given to (i) the Incurrence of such
Indebtedness and (if applicable) the application of the net proceeds therefrom,
including to refinance other Indebtedness, as if such Indebtedness was
Incurred, and the application of such proceeds occurred, at the beginning of
such four-quarter period; (ii) the Incurrence, repayment or retirement of any
other Indebtedness by Publishing and its Restricted Subsidiaries since the
first day of such four-quarter period as if such Indebtedness was Incurred,
repaid or retired at the beginning of such four-quarter period; (iii) in the
case of Acquired Indebtedness, the related acquisition (as if such acquisition
had been consummated on the first day of such four-quarter period); and (iv)
any acquisition or
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disposition by Publishing and its Restricted Subsidiaries of any company or any
business or any assets out of the ordinary course of business, whether by
merger, stock purchase or sale or asset purchase or sale or any related
repayment of Indebtedness, in each case since the first day of such
four-quarter period (as if such acquisition or disposition had been consummated
on the first day of such four-quarter period).
(b) Prior to September 1, 1997, neither Publishing nor any Restricted
Subsidiary will issue any Public Debt unless the aggregate principal amount (or
initial proceeds in the case of Public Debt sold with "original issue discount"
(within the meaning of Section 1273(a) of the Internal Revenue Code of 1986, as
amended)) of Public Debt so issued after the date of this Indenture that is Pari
Passu Indebtedness does not exceed the aggregate principal amount (or initial
proceeds in the case of Public Debt sold with "original issue discount") of
Public Debt so issued after the date of this Indenture that is pari passu with
or subordinated to the Securities.
SECTION 10.09. Limitation on Restricted Payments. (a) Publishing will
not, and will not permit any Restricted Subsidiary to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution or payment on
or in respect of Publishing's Capital Stock (including dividends or
distributions of the Capital Stock of any Subsidiary), or make any other
payment to the direct or indirect holders (in their capacities as such) of
Publishing's Capital Stock (other than dividends or distributions payable in
shares of Publishing's Qualified Capital Stock or in options, warrants or
other rights to acquire such Qualified Capital Stock) and (y) a dividend or
distribution of up to $175 million payable to Hollinger International;
provided that, simultaneously or in connection with such dividend or
distribution, Hollinger International contributes or transfers, directly or
indirectly, to Publishing all of the Capital Stock of Hollinger Eastern then
held by Hollinger International; and provided further, that Hollinger Eastern
then holds not less than 42% of the voting interest of Southam);
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(ii) purchase, redeem or otherwise acquire or retire for value, directly or
indirectly, any Capital Stock of Publishing or any Capital Stock of any
Affiliate of Publishing (other than Capital Stock of any Wholly Owned
Restricted Subsidiary (or, provided that both of The Telegraph and Southam
are Restricted Subsidiaries, Capital Stock of a Restricted Subsidiary) or
Capital Stock of a Person that is, or immediately following such repurchase
will become, a Wholly Owned Restricted Subsidiary (or, provided that both of
The Telegraph and Southam are Restricted Subsidiaries, a Restricted
Subsidiary)) or options, warrants or other rights to acquire such Capital
Stock;
(iii) make any principal payment on, or repurchase, redeem, defease, retire
or otherwise acquire for value, prior to any scheduled principal payment,
sinking fund payment or maturity, any Subordinated Indebtedness (other than
pursuant to Section 10.13(c);
(iv) declare or pay any dividend or distribution on any Capital Stock of any
Restricted Subsidiary to any Person (other than (x) dividends and
distributions on Preferred Stock of Restricted Subsidiaries or Mirror
Preferred or (y) dividends and distributions made to any Person (other than a
controlling Affiliate of Publishing or an Affiliate of such Affiliate (other
than Publishing and any Restricted Subsidiary)) on a pro rata basis
consistent with the ownership interests in such Capital Stock to the owners
of such Capital Stock, except that, in the case of the Capital Stock of a
Restricted Subsidiary that is a Guarantor, (i) no Default or Event of Default
shall have occurred and be continuing; and (ii) no holders of any other
Indebtedness of Publishing or any Restricted Subsidiary shall have an
Acceleration Right);
(v) Incur, create or assume any guarantee of Indebtedness of any Affiliate
of Publishing (other than a Wholly Owned Restricted Subsidiary of Publishing
or, provided that both of The Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary of Publishing) except as permitted by
Section 10.12;
(vi) make any Investment in any Person (other than any Permitted
Investments); or
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(vii) designate any Restricted Subsidiary as an Unrestricted Subsidiary;
(any of the payments described in paragraphs (i) through (vii) above, other
than any such action that is a Permitted Payment (as defined below),
collectively, "Restricted Payments") unless at the time of and after giving
effect to the proposed Restricted Payment (the amount of any such Restricted
Payment, if other than cash, as determined by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution), (1) no
Default or Event of Default shall have occurred and be continuing; (2) no
holders of any other Indebtedness of Publishing or any Restricted Subsidiary
shall have an Acceleration Right; (3) immediately before and immediately after
giving effect to such transaction on a pro forma basis, Publishing could Incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) under the
provisions of Section 10.08; and (4) the aggregate amount of all such
Restricted Payments declared or made after the date of this Indenture (provided
that, in the case of a Restricted Payment by a Restricted Subsidiary, such
Restricted Payment is calculated for the purposes of this paragraph (4) by
multiplying the amount of the Restricted Payment by the percentage of
Publishing common equity in such Restricted Subsidiary at the time of such
Restricted Payment but disregarding, in the case of Southam, common equity
interests which are pledged to secure the Southam-Linked Debentures) does not
exceed the sum of:
(A) 50% of the sum of (i) the aggregate cumulative Consolidated Net Income
of Publishing and its Restricted Subsidiaries accrued during the period
(treated as a single accounting period) beginning on the first day of
Publishing's fiscal quarter commencing prior to the date of this Indenture
and ending on the last day of Publishing's last fiscal quarter ending prior
to the date of the Restricted Payment (or, if such aggregate cumulative
Consolidated Net Income shall be a loss, 100% of such loss (treating a loss
as a negative number)) and (ii) the aggregate cumulative Amortization Expense
of Publishing and its Restricted Subsidiaries accrued during the period
(treated as a single accounting period) beginning on the first day of
Publishing's fiscal quarter commencing prior to the date of this Indenture
and ending on the last day of Publishing's last fiscal quarter ending prior
to the date of the Restricted Payment;
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(B) 50% of the aggregate cumulative cash dividends or distributions received
by Publishing and its Consolidated Restricted Subsidiaries from any of
Publishing's Unrestricted Subsidiaries during the period (treated as a single
accounting period) beginning on the first day of Publishing's fiscal quarter
commencing prior to the date of this Indenture and ending on the last day of
Publishing's last fiscal quarter ending prior to the date of the Restricted
Payment; provided, however, that for purposes of this clause (B), cash
dividends and distributions shall not include, without duplication, (x),
prior to the time that Southam shall be a Restricted Subsidiary, cash
dividends received by Publishing from Publishing's Unrestricted Subsidiaries
not in excess of the Southam Dividend Amount, (y) cash dividends or
distributions received by Publishing or any Wholly Owned Restricted
Subsidiary in accordance with Section 10.09(b)(vii) or (z) dividends or
distributions on any Argsub Preferred received by FDTH or DTH;
(C) the aggregate Net Cash Proceeds received after the date of this
Indenture by Publishing from the issuance or sale (other than to any of its
Restricted Subsidiaries) of its Qualified Capital Stock or any options,
warrants or rights to purchase such Qualified Capital Stock (except, in each
case, to the extent such proceeds are used to purchase, redeem or otherwise
retire Capital Stock, Subordinated Indebtedness or Pari Passu Indebtedness as
set forth below);
(D) the aggregate Net Cash Proceeds received after the date of this
Indenture by Publishing (other than from any of its Restricted Subsidiaries)
upon the exercise of any options or warrants to purchase Qualified Capital
Stock of Publishing;
(E) the aggregate Net Cash Proceeds received after the date of this
Indenture by Publishing (other than from any of its Subsidiaries) from cash
capital contributions made to Publishing (other than from the proceeds of the
Common Stock Offering);
(F) the aggregate amount by which any Indebtedness (other than Permitted
Indebtedness) of Publishing or any Restricted Subsidiary is reduced after the
date of this Indenture as a result of the conversion or exchange of debt
securities or Redeemable Capital Stock
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of Publishing that has been converted into or exchanged for Qualified Capital
Stock of Publishing to the extent such debt securities or Redeemable Capital
Stock were originally sold for cash plus the aggregate Net Cash Proceeds
received by Publishing at the time of any such conversion or exchange; and
(G) $25,000,000.
(b) Notwithstanding the foregoing, and, in the case of clauses (ii) through
(x) below, so long as (1) there is no Default or Event of Default continuing
and (2) no holders of any other Indebtedness of Publishing or any Restricted
Subsidiary have an Acceleration Right, the foregoing provisions will not
prohibit the following actions (clauses (i) through (x) being referred to as
"Permitted Payments"):
(i) the payment of any dividend or distribution within 60 days after the
date of declaration thereof, if at such date of declaration such payment
would be permitted by the provisions of paragraph (a) of this section and
such payment will be deemed to have been paid on such date of declaration for
purposes of the calculation required by paragraph (a) of this section;
(ii) the repurchase, redemption or other acquisition or retirement of any
shares of Capital Stock of Publishing in exchange for (including any such
exchange pursuant to the exercise of a conversion right or privilege in
connection with which cash is paid in lieu of the issuance of fractional
shares or scrip), or out of the Net Cash Proceeds of a substantially
concurrent issue and sale for cash (other than to a Restricted Subsidiary) of
other Qualified Capital Stock of Publishing; provided that the Net Cash
Proceeds from the issuance of such shares of Qualified Capital Stock are
excluded from clauses (4)(D) and (4)(E) of paragraph (a) of this section;
(iii) any repurchase, redemption, defeasance, retirement or acquisition for
value or payment of principal of any Subordinated Indebtedness in exchange
for, or out of the net proceeds of, a substantially concurrent issuance and
sale for cash (other than to any Restricted Subsidiary of Publishing) of any
Qualified Capital Stock of Publishing; provided that the Net Cash Proceeds
from the issuance of such
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Qualified Capital Stock are excluded from clauses (4)(D) and (4)(E) of
paragraph (a) of this section;
(iv) the repurchase, redemption, defeasance, retirement, refinancing,
acquisition for value or payment of principal of any Subordinated
Indebtedness (other than Redeemable Capital Stock) (a "refinancing") through
the issuance of new Subordinated Indebtedness of Publishing; provided that
any such new Subordinated Indebtedness (1) shall be in a principal amount
that does not exceed the principal amount so refinanced (or, if the
Subordinated Indebtedness so refinanced provides for an amount less than the
principal amount thereof to be due and payable upon a declaration or
acceleration thereof, then such lesser amount as of the date of
determination), plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of such refinanced
Indebtedness and any reasonable out-of-pocket expenses of Publishing
incurred in connection with such refinancing; (2) has an Average Life to
Stated Maturity greater than the remaining Average Life to Stated Maturity of
the Securities; (3) has a Stated Maturity for its final scheduled principal
payment later than the Stated Maturity for the final scheduled principal
payment of the Securities; and (4) is expressly subordinated in right of
payment to the Securities at least to the same extent as the Indebtedness to
be refinanced;
(v) dividends paid to Hollinger International after the date of this
Indenture to the extent not in excess of the Southam Dividend Amount;
(vi) loans, advances, dividends or distributions by any Restricted
Subsidiary to Publishing or any Wholly Owned Restricted Subsidiary and by
FDTH or, to the extent it has received such funds directly or indirectly from
FDTH, DTH or Publishing to Hollinger International for the purpose of
redeeming shares of Series A Preferred Stock not exceeding in the aggregate
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any payments made by Hollinger Inc. to FDTH pursuant to the provisions of the
HTH/FDTH Share Exchange Agreement;
(vii) loans, advances, dividends or distributions to Hollinger
International in amounts not to exceed $1 million per year to permit
Hollinger International to repurchase, redeem or otherwise acquire or retire
any shares of its Capital Stock from employees, former employees or their
estates upon disability, death, retirement or termination of employment;
(viii) tax payments pursuant to a Tax Sharing Agreement to the extent that
the aggregate amount of such payments do not exceed the aggregate amount of
the tax payments that Publishing and the Restricted Subsidiaries would have
been required to make if they alone constituted a single consolidated tax
group;
(ix) payments by Publishing or a Restricted Subsidiary in connection with the
Scheme of Arrangement; and
(x) the issuance or redemption of or payment of distributions on Mirror
Preferred, but only to the extent Argsub Preferred is simultaneously issued,
redeemed or pays (or is deemed to pay) dividends, respectively, and only so
long as no cash is transferred in any such transaction, except for cash
payments in respect of certain Mirror Preferred made directly from FDTH to
DTH at the direction of Argsub.
For purposes of this Section 10.09, if the Board of Directors designates a
Restricted Subsidiary as an Unrestricted Subsidiary, or a Restricted Subsidiary
is deemed to be so designated, a "Restricted Payment" shall be deemed to have
been made in an amount equal to the fair value of the Investment of Publishing
and its other Restricted Subsidiaries in such Restricted Subsidiary as
determined by the Board of Directors with the concurrence of a majority of the
Independent Directors (there being at least one Independent Director), whose
good faith determination shall be conclusive. If a particular Restricted
Payment involves a non-cash payment, including a distribution of assets, then
such Restricted Payment shall be deemed to be in an amount equal to the fair
market value of the non-cash portion of such Restricted Payment as
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determined by the Board of Directors, whose good faith determination shall be
conclusive.
SECTION 10.10. Limitation on Transactions with Affiliates. (a) Publishing
will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, enter into or suffer to exist any transaction or series of
related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with any Affiliate of
Publishing (other than Publishing or a Wholly Owned Restricted Subsidiary, or,
if both of The Telegraph and Southam are Restricted Subsidiaries, a Restricted
Subsidiary) unless (a) such transaction or series of related transactions is on
terms that are no less favorable to Publishing or such Restricted Subsidiary,
as the case may be, than would be available in a comparable transaction in
arm's-length dealings with an unrelated third party and (b) with respect to any
transaction or series of related transactions involving aggregate payments in
excess of $5,000,000, Publishing delivers an Officers' Certificate to the
Trustee certifying that such transaction or series of related transactions
complies with clause (a) above and such transaction or series of related
transactions has been approved by a majority of the Independent Directors of
the Board of Directors; provided that any transaction or series of related
transactions otherwise permitted under this paragraph (other than any
transaction or series of related transactions with respect to the making of any
Permitted Investment pursuant to clause (ix) of the definition of "Permitted
Investment" or any Restricted Payment permitted pursuant to Section 10.09
(other than those referred to in clause (vi) of paragraph (b) thereof) pursuant
to which Publishing or any Restricted Subsidiary shall receive or render value
exceeding $15,000,000 shall not be permitted unless, prior to the consummation
of any such transaction or series of related transactions, Publishing shall
have received an opinion, from an independent nationally recognized investment
banking firm or firm experienced in the appraisal or similar review of similar
types of transactions, that such transaction is fair to Publishing from a
financial point of view; provided further, that this covenant shall not apply
to (i) transactions or agreements as in effect or securities outstanding on the
date of this Indenture (provided that any amendment to any existing agreement
(including the Services Agreement and the Business Opportunities Agreement),
and any transaction pursuant to the Business Opportunities Agreement, shall
require approval
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pursuant to this covenant; notwithstanding the foregoing, any amendment to the
Services Agreement or the Business Opportunities Agreement shall require the
approval of a majority of the Independent Directors); (ii) directors' fees
approved by the Board of Directors; (iii) any employee benefit plan or
arrangement entered into or made available to officers or other employees of
Publishing or the Restricted Subsidiaries in the ordinary course of business;
(iv) sales by Publishing and its Restricted Subsidiaries of their products in
the ordinary course of business on arm's-length terms; (v) tax payments pursuant
to a Tax Sharing Agreement to the extent that the aggregate amount of such
payments do not exceed the aggregate amount of the tax payments that Publishing
and the Restricted Subsidiaries would have been required to make if they alone
constituted a single consolidated tax group; (vi) loans, advances, dividends or
distributions by FDTH, DTH or Publishing to Hollinger International in amounts
and for the purpose permitted by Section 10.09(b)(v) and (vii); (vii) payments
made to Hollinger Inc. pursuant to the Services Agreement that constitute the
reimbursement for the fair value (as determined by a majority of the Independent
Directors serving on an Independent Committee) of services received by
Publishing or a Restricted Subsidiary consistent with past practices; and (viii)
the issuance or redemption, retraction or transfer of or payment of dividends,
distributions or other amounts on Mirror Preferred by DTH or FDTH to an Argsub,
but only to the extent that such Argsub simultaneously, as the case may be,
issues or redeems or pays dividends, distributions or other amounts (or is
deemed to have taken any such action) to DTH or FDTH, in each case in equivalent
amounts.
Section 10.11. Limitation on Liens. (a) Publishing will not, and will not
permit any Restricted Subsidiary to Incur, affirm or suffer to exist any Lien of
any kind securing any pari passu Public Debt or Subordinated Indebtedness
(including any assumption, guarantee or other liability with respect thereto by
any Restricted Subsidiary) upon any property or assets (including any
intercompany notes) of Publishing or any Restricted Subsidiary owned on the date
of this Indenture or acquired after the date of this Indenture, or any income or
profits therefrom, unless (i) in the case of any Lien securing pari passu Public
Debt, the Securities are
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secured by a Lien on such property, assets or proceeds that is senior in
priority to or pari passu with such Lien and (ii) in the case of any Lien
securing Subordinated Indebtedness, the Securities are secured by a Lien on
such property, assets or proceeds that is senior in priority to such Lien,
except for (i) any Lien securing Acquired Indebtedness created prior to (and
not created in connection with, or in contemplation of) the issuance of such
pari passu Public Debt or the Incurrence of such Subordinated Indebtedness
by Publishing or any Restricted Subsidiary, in each case which Indebtedness is
permitted under the provisions of Section 10.08 (provided that any such Lien
only extends to the assets that were subject to such Lien securing such
Acquired Indebtedness prior to the related acquisition by Publishing or its
Restricted Subsidiaries), and (ii) any Lien securing Indebtedness owing to
Publishing or a Wholly Owned Restricted Subsidiary by a Restricted Subsidiary.
(b) Notwithstanding the foregoing, any security interest granted by
Publishing or any Restricted Subsidiary to secure the Securities created
pursuant to paragraph (a) above shall provide by its terms that such security
interest shall be automatically and unconditionally released and discharged
upon the release by the holders of the Indebtedness of Publishing or any
Restricted Subsidiary described in paragraph (a) above of their security
interest (including any deemed release upon payment in full of all obligations
under such Indebtedness), at a time when (A) no pari passu Public Debt or
Subordinated Indebtedness of Publishing or any Restricted Subsidiary has been
secured by such property or assets of Publishing or any such Restricted
Subsidiary or (B) the holders of all such pari passu Public Debt and
Subordinated Indebtedness which is secured by such property or assets of
Publishing or any such Restricted Subsidiary also release their security
interest in such property or assets (including any deemed release upon payment
in full of all obligations under such Indebtedness).
SECTION 10.12. Limitation on Issuances of Guarantees of Indebtedness. (a)
Publishing will not permit any Restricted Subsidiary, directly or indirectly,
to guarantee, assume or in any other manner become liable with respect to any
Indebtedness of Publishing (other than pursuant to the New Bank Credit
Facility) unless such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to this Indenture providing for a
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senior guarantee of the Securities and if such Indebtedness of Publishing is by
its terms expressly subordinated to the Securities, any such assumption,
guarantee or other liability of such Restricted Subsidiary with respect to such
Indebtedness shall be subordinated to such Restricted Subsidiary's guarantee to
the same extent as such Indebtedness is subordinated to the Securities.
(b) Notwithstanding the foregoing, any guarantee by a Restricted Subsidiary
of the Securities that is provided pursuant to the foregoing paragraph or under
the provisions of Section 10.15 may provide by its terms that it shall be
automatically and unconditionally released and discharged (i) upon any sale,
exchange or transfer, to any Person not an Affiliate of Publishing, of all of
Publishing's Capital Stock in, or all or substantially all the assets of, such
Restricted Subsidiary, which sale, exchange or transfer is in compliance with
this Indenture, (ii) if the Restricted Subsidiary issuing such guarantee ceases
to be a Restricted Subsidiary or (iii) upon the release by the holders of the
Indebtedness of Publishing described in paragraph (a) above of their Guarantee
by such Restricted Subsidiary (including any deemed release upon payment in
full of all obligations under such Indebtedness), at a time when (A) no
Indebtedness of Publishing or any Restricted Subsidiary has been guaranteed by
such Restricted Subsidiary or (B) the holders of all such other Indebtedness
which is guaranteed by such Restricted Subsidiary also release their Guarantee
by such Restricted Subsidiary (including any deemed release upon payment in
full of all obligations under such Indebtedness).
SECTION 10.13. Limitation on Sale of Assets. (a) Publishing will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
consummate an Asset Sale unless (i) at least 80% of the proceeds from such
Asset Sale are received in cash (provided that the amount of (A) any Pari Passu
Indebtedness or Indebtedness of such Restricted Subsidiary that is pari passu
with any guarantee of the Securities (as shown on Publishing's or such
Restricted Subsidiaries' most recent balance sheet or in the notes thereto) of
Publishing or any such Restricted Subsidiary that is assumed by the transferee
of any asset in connection with any Asset Sale and (B) any deferred payment
obligations received by Publishing or any such Restricted Subsidiary as
proceeds of an Asset Sale that are concurrently with the Asset Sale converted
into cash without recourse to Publishing or any of its Restricted
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Subsidiaries shall be deemed to be cash for purposes of this provision;
provided further that, for purposes of this clause (i), "cash" shall include
any cash proceeds received from the sale of securities received in an Asset
Sale as long as at the time of such Asset Sale, Publishing or its Restricted
Subsidiary, as applicable, has entered into a legally binding agreement for the
sale of such securities and such securities are sold within 90 days of such
Asset Sale; and provided further that this clause (i) shall not apply to (w)
Newspaper Businesses received by Publishing or a Restricted Subsidiary from the
transferee as consideration for an Asset Sale (an "Asset Swap") so long as,
immediately before and immediately after giving effect to such transaction on a
pro forma basis, Publishing could Incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under the provisions of Section 10.08, (x) a CST
Real Estate Transaction or (y) a Permitted Real Estate Sale)) and (ii)
Publishing or such Restricted Subsidiary receives consideration at the time of
such Asset Sale at least equal to the fair market value of the shares or assets
sold (as determined by the Board of Directors of Publishing and evidenced by a
board resolution). The value of any properties or assets (other than cash)
received pursuant to an Asset Sale shall be determined by the Board of
Directors of Publishing and evidenced by a Board Resolution; provided that if
the value of the asset which is the subject of the Asset Sale is in excess of
$25,000,000, the value of the properties or assets received shall be determined
by an independent nationally recognized investment banking firm or firm
experienced in the appraisal or similar review of similar types of assets
(provided that for purposes of this sentence, any CST Real Estate Transaction
shall be deemed to involve an asset whose value exceeds $25,000,000).
(b) If all or a portion of the Net Cash Proceeds of any Asset Sale is not
applied to permanently repay or otherwise permanently retire any Pari Passu
Indebtedness then outstanding as permitted or required by the terms thereof, or
if no such Pari Passu Indebtedness is then outstanding, Publishing or a
Restricted Subsidiary, as the case may be, may, within 12 months of the Asset
Sale, invest the Net Cash Proceeds in properties and assets that (as determined
by the Board of Directors) replace the properties and assets that were the
subject of the Asset Sale or in properties and assets that will be used in the
businesses of Publishing or its Restricted Subsidiaries existing on the date of
this Indenture or in businesses reasonably related thereto. The amount of such
Net Cash Proceeds neither used
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to permanently repay or prepay Pari Passu Indebtedness nor used or invested as
set forth in this paragraph constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$20,000,000, Publishing shall apply the Excess Proceeds to the repayment of the
Securities and any Pari Passu Indebtedness required to be repurchased under the
instrument governing such Pari Passu Indebtedness as follows: (i) Publishing
shall make an offer to purchase (an "Offer") from all Holders in accordance
with the procedures set forth in this Indenture in the maximum principal amount
(expressed as a multiple of $1,000) of Securities that may be purchased out of
an amount (the "Amount") equal to the product of such Excess Proceeds
multiplied by a fraction, the numerator of which is the outstanding principal
amount of the Securities, and the denominator of which is the sum of the
outstanding principal amount of the Securities and such Pari Passu Indebtedness
(subject to proration in the event such amount is less than the aggregate
Offered Price (as defined herein) of all Securities tendered) and (ii) to the
extent required by such Pari Passu Indebtedness to permanently reduce the
principal amount of such Pari Passu Indebtedness, Publishing shall make an
offer to purchase or otherwise repurchase or redeem Pari Passu Indebtedness (a
"Pari Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the
excess of the Excess Proceeds over the Amount; provided that in no event shall
the Pari Passu Debt Amount exceed the principal amount of such Pari Passu
Indebtedness plus the amount of any premium required to be paid to repurchase
such Pari Passu Indebtedness. The offer price shall be payable in cash in an
amount equal to 100% of the principal amount of the Securities plus accrued and
unpaid interest, if any, to the date (the "Purchase Date") such Offer is
consummated (the "Offered Price"), in accordance with the procedures set forth
in this Indenture. To the extent that the aggregate Offered Price of the
Securities tendered pursuant to the Offer is less than the Amount relating
thereto or the aggregate amount of Pari Passu Indebtedness that is purchased is
less than the Pari Passu Debt Amount (the amount of such shortfall, if any,
constituting a "Deficiency"), Publishing may then (i)(a) to the extent required
by the Senior Subordinated Securities Indenture, purchase Senior Subordinated
Securities tendered pursuant to an offer by Publishing for the Senior
Subordinated Securities (the "Senior Subordinated Securities Offer") at a
purchase price of 100% of their principal amount plus accrued interest to the
date of purchase in
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accordance with the procedures set forth in the Senior Subordinated Securities
Indenture and (b) to the extent required by the terms of any other senior
subordinated Indebtedness (other than Senior Subordinated Securities) to
permanently reduce the principal amount of such other senior subordinated
Indebtedness, make an offer to purchase or otherwise repurchase or redeem such
other senior subordinated Indebtedness, or (ii) use such Deficiency in the
business of Publishing and its Restricted Subsidiaries. Upon completion of the
purchase of all Securities tendered pursuant to an Offer and repurchase of the
Pari Passu Indebtedness pursuant to a Pari Passu Offer, the amount of Excess
Proceeds, if any, shall be reset at zero.
(d) Whenever the aggregate amount of Excess Proceeds received by Publishing
exceeds $20,000,000, such Excess Proceeds shall, prior to the purchase of
Securities, Pari Passu Indebtedness or any Senior Subordinated Securities or
Indebtedness described in paragraph (c) above, be set aside by Publishing in a
separate account pending (i) deposit with the depository or a Paying Agent of
the amount required to purchase the Securities or Pari Passu Indebtedness
tendered in an Offer or a Subordinated Offer, (ii) delivery by Publishing of
the Offered Price to the holders of the Securities or Pari Passu Indebtedness
tendered in an Offer or a Pari Passu Offer and (iii) application, as set forth
above, of Excess Proceeds in the business of Publishing and its Restricted
Subsidiaries. Such Excess Proceeds may be invested in Temporary Cash
Investments; provided that the maturity date of any such investment made after
the amount of Excess Proceeds equals or exceeds $20,000,000 shall not be later
than the Purchase Date. Publishing shall be entitled to any interest or
dividends accrued, earned or paid on such Temporary Cash Investments; provided
that Publishing shall not be entitled to such interest and shall not withdraw
such interest from the separate account, if an Event of Default has occurred
and is continuing.
(e) If Publishing becomes obligated to make an Offer pursuant to paragraph
(c) above, the Securities shall be purchased by Publishing, at the option of
the Holder thereof, in whole or in part in integral multiples of $1,000, on a
date that is not earlier than 30 days and not later than 60 days from the date
the notice is given to Holders, or such later date as may be necessary for
Publishing to comply with the requirements under the Exchange Act, subject to
proration in the event the Note
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Amount is less than the aggregate Offered Price of all Securities tendered.
(f) Publishing shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable
securities laws or regulations in connection with an Offer.
(g) Publishing shall not, and shall not permit any Subsidiary to, create or
permit to exist or become effective any restriction (other than restrictions
existing under (i) Indebtedness as in effect on the date of this Indenture as
such Indebtedness may be refinanced from time to time or (ii) any Pari Passu
Indebtedness existing on the date of this Indenture or thereafter; provided, in
each case, that such restrictions are no less favorable to the Holders than
those existing on the date of this Indenture) that would expressly impair the
ability of Publishing to make an Offer to purchase the Securities or, if such
Offer is made, to pay for the Securities tendered for purchase.
(h) Within 30 days after the date on which the amount of Excess Proceeds
equals or exceeds $20,000,000, Publishing shall send by first-class mail,
postage prepaid, to the Trustee and to each Holder of the Securities of that
Series, at such Holder's address appearing in the Security Register, a notice
stating or including:
A. that the Holder of such Series has the right to require Publishing to
repurchase, subject to proration, part or all of such Holder's Securities at
the Offered Price;
B. the Purchase Date;
C. the instructions a Holder of such Series must follow in order to have
its Securities purchased in accordance with paragraph (c) of this Section;
and
D. (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of Publishing, the most recent
subsequently filed Quarterly Report on Form 10-Q, as applicable, and any
Current Report on Form 8-K of Publishing filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Sales otherwise
described in the
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offering materials (or corresponding successor reports) (or in the event
Publishing is not required to prepare any of the foregoing Forms, the
comparable information required pursuant to Section 10.17), (ii) a
description of material developments in Publishing's business subsequent to
the date of the latest of such Reports, (iii) if material, appropriate pro
forma financial information, and (iv) such other information, if any,
concerning the business of Publishing and its Restricted Subsidiaries which
Publishing in good faith believes will enable such Holders to make an
informed investment decision regarding the Offer;
E. the Offered Price;
F. the names and addresses of the Paying Agent and the offices or agencies
referred to in Section 10.02;
G. that Securities of such Series must be surrendered at least three
Business Days prior to the Purchase Date to the Paying Agent or to an office
or agency referred to in Section 10.02 to collect payment;
H. that any Securities of such Series not tendered will continue to accrue
interest and that unless Publishing defaults in the payment of the purchase
price, any Security accepted for payment pursuant to the Offer shall cease
to accrue interest on and after the Purchase Date; and
I. the procedures for withdrawing a tender.
(i) Holders electing to have Securities of such Series purchased hereunder
will be required to surrender such Securities at the address specified in the
notice at least three Business Days prior to the Purchase Date. Holders will
be entitled to withdraw their election to have their Securities purchased
pursuant to this Section 10.13 if Publishing receives, not later than three
Business Days prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth (1) the name of the Holder, (2) the
certificate number of the Security in respect of which such notice of
withdrawal is being submitted, (3) the principal amount of the Security (which
shall be $1,000 or an integral multiple thereof) delivered
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for purchase by the Holder as to which his election is to be withdrawn, (4) a
statement that such Holder is withdrawing such Holder's election to have such
principal amount of such Security purchased, and (5) the principal amount, if
any, of such Security (which shall be $1,000 or an integral multiple thereof)
that remains subject to the original notice of the Offer and that has been or
will be delivered for purchase by Publishing.
(j) Publishing shall (i) not later than the Purchase Date, accept for
payment Securities of such Series or portions thereof tendered pursuant to the
Offer, (ii) not later than 11:00 a.m. (New York time) on the Purchase Date,
deposit with the Trustee or with a Paying Agent an amount of money in same day
funds (or New York Clearing House funds if such deposit is made prior to the
Purchase Date) sufficient to pay the aggregate Offered Price of all the
Securities or portions thereof which are to be purchased on that date and (iii)
not later than 11:00 a.m. (New York time) on the Purchase Date, deliver to the
Paying Agent an Officers' Certificate stating the Securities or portions
thereof have been accepted for payment by Publishing.
The Trustee and the Paying Agent shall return to Publishing any cash that
remains unclaimed, together with interest, if any, thereon, held by them for
the payment of the Offered Price; provided, however, that, (x) to the extent
that the aggregate amount of cash deposited by Publishing with the Trustee or a
Paying Agent in respect of an Offer exceeds the aggregate Offered Price of the
Securities or portions thereof to be purchased, then the Trustee or a Paying
Agent shall hold such excess for Publishing and (y) unless otherwise directed
by Publishing in writing, promptly after the Business Day following the
Purchase Date the Trustee or a Paying Agent shall return any such excess to
Publishing together with interest or dividends, if any, thereon.
(k) Securities of that Series to be purchased shall, on the Purchase Date,
become due and payable at the Offered Price and from and after such date
(unless Publishing shall default in the payment of the Offered Price) such
Securities shall cease to bear interest. The Offered Price shall be paid to
such Holder promptly following the later of the Purchase Date and the time of
delivery of such Security to the relevant Paying Agent at the office of such
Paying Agent by the Holder thereof in the manner required. Upon surrender of
any such Security for
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purchase in accordance with the foregoing provisions, such Security shall be
paid by Publishing at the Offered Price; provided, however, that installments
of interest whose Stated Maturity is on or prior to the Purchase Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Regular Record Dates according
to the terms and the provisions of Section 3.07; provided further that
Securities of that Series to be purchased are subject to proration in the event
the Excess Proceeds are less than the aggregate Offered Price of all Securities
of such Series tendered for purchase, with such adjustments as may be deemed
appropriate by the Trustee so that only Securities of such Series in
denominations of $1,000 or integral multiples thereof shall be purchased. If
any Security of such Series tendered for purchase in accordance with the terms
of this Section shall not be so paid upon surrender thereof by deposit of funds
with the Trustee or a Paying Agent in accordance with paragraph (j) above, the
principal thereof (and premium, if any, thereon) shall, until paid, bear
interest from the Purchase Date at the rate borne by such Security. Any
Security of such Series that is to be purchased only in part shall be
surrendered to a Paying Agent in accordance with the terms of this Section at
the office of such Paying Agent (with, if Publishing or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to Publishing and the Trustee duly executed by, the Holder thereof
or such Holder's attorney duly authorized in writing), and Publishing shall
execute and pursuant to a Publishing Order the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, one or more new
Securities of any authorized denomination as requested by such Holder in an
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Security so surrendered that is not purchased.
SECTION 10.14. Purchase of Securities upon a Change of Control. (a) If a
Change of Control shall occur at any time, then each Holder with respect to
Securities of any Series shall have the right to require that Publishing
purchase such Holder's Securities, pursuant to an offer described in subsection
(b) of this Section (a "Change of Control Offer"), in whole or in part in
integral multiples of $1,000, at a purchase price (the "Change of Control
Purchase Price") in cash in an amount equal to 101% of the principal amount of
such Securities, plus accrued and unpaid interest, if any, to the date of
purchase (the "Change of Control Purchase Date"), in accordance with the
procedures
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set forth in paragraphs (b), (c), (d) and (e) of this Section.
(b) Within 30 days following any Change of Control, Publishing shall notify
the Trustee thereof and give written notice (a "Change of Control Purchase
Notice") of such Change of Control to each Holder by first-class mail, postage
prepaid, to the Trustee and to each Holder at his address appearing in the
Security Register, stating or including:
A. that a Change of Control has occurred, the date of such event, and that
such Holder has the right to require Publishing to repurchase such Holder's
Securities at the Change of Control Purchase Price;
B. the circumstances and relevant facts regarding such Change of Control
(including but not limited to information with respect to pro forma
historical income, cash flow and capitalization after giving effect to such
Change of Control, if any);
C. that the Change of Control Offer is being made pursuant to Section
10.14(a) and that all Securities properly tendered pursuant to the Change of
Control Offer will be accepted for payment at the Change of Control Offer
Purchase Price;
D. the Change of Control Purchase Date, which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is
mailed or such later date as may be necessary for Publishing to comply with
the requirements under the Exchange Act;
E. (i) the most recently filed Annual Report on Form 10-K (including audited
consolidated financial statements) of Publishing, the most recent
subsequently filed Quarterly Report on Form 10-Q, as applicable, and any
Current Report on Form 8-K of Publishing filed subsequent to such Quarterly
Report (or in the event Publishing is not required to prepare any of the
foregoing Forms, the comparable information required to be prepared by
Publishing pursuant to Section 10.17), (ii) a description of material
developments in Publishing's business subsequent to the date of the latest of
such reports and (iii) such other information, if any, concerning the
business of Publishing and its Restricted Subsidiaries which
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Publishing in good faith believes will enable such Holders to make an
informed investment decision regarding the Change of Control Offer;
F. the Change of Control Purchase Price;
G. the names and addresses of the Paying Agent and the offices or agencies
referred to in Section 10.02;
H. that Securities of that Series must be surrendered at least three
Business Days prior to the Change of Control Purchase Date to the Paying
Agent at the Office of the Paying Agent or to an office or agency referred to
in Section 10.02 to collect payment;
I. that the Change of Control Purchase Price for any Security which has been
properly tendered and not withdrawn will be paid promptly following the
Change of Control Purchase Date;
J. the procedures for withdrawing a tender of Securities and Change of
Control Purchase Notice;
K. that any Security of such Series not tendered will continue to accrue
interest; and
L. that, unless Publishing defaults in the payment of the Change of Control
Purchase Price, any Security of such Series accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest after the Change
of Control Purchase Date.
(c) Upon receipt by Publishing of the proper tender of Securities of such
Series, each Holder of a Security in respect of which such proper tender was
made shall (unless the tender of such Security is properly withdrawn)
thereafter be entitled to receive solely the Change of Control Purchase Price
with respect to such Security. Upon surrender of any such Security for
purchase in accordance with the foregoing provisions, such Security shall be
paid by Publishing at the Change of Control Purchase Price; provided, however,
that installments of interest whose Stated Maturity is on or prior to the
Change of Control Purchase Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on the
relevant Regular Record Dates according to the terms and the provisions of
Section 3.07. If any Security tendered for purchase in accordance with the
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provisions of this Section shall not be so paid upon surrender thereof by
deposit of funds with the Paying Agent in accordance with paragraph (d) below,
the principal thereof (and premium, if any, thereon) shall, until paid, bear
interest from the Change of Control Purchase Date at the rate borne by such
Security. Holders electing to have Securities of such Series purchased will be
required to surrender such Securities to the Paying Agent at the address
specified in the notice at least three Business Days prior to the Change of
Control Purchase Date. Any Security of such Series that is to be purchased
only in part shall be surrendered to a Paying Agent in accordance with the
provisions of this Section at the office of such Paying Agent (with, if
Publishing or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to Publishing and the Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing), and Publishing shall execute and pursuant to a Publishing Order the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge, one or more new Securities of any authorized denomination as
requested by such Holder in an aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Security so
surrendered that is not purchased.
(d) Publishing shall (i) not later than the Change of Control Purchase
Date, accept for payment of Securities of such Series or portion thereof
tendered pursuant to the Change of Control Offer, (ii) not later than 11:00
a.m. (New York time) on the Change of Control Purchase Date, deposit with the
Paying Agent an amount of cash sufficient to pay the aggregate Change of
Control Purchase Price of all the Securities or portions thereof which are to
be purchased as of the Change of Control Purchase Date and (iii) not later than
11:00 a.m. (New York time) on the Change of Control Purchase Date, deliver to
the Paying Agent an Officers' Certificate stating the Securities of such Series
or portions thereof accepted for payment by Publishing. The Paying Agent shall
promptly mail or deliver to Holders of Securities of such Series so accepted
payment in an amount equal to the Change of Control Purchase Price of the
Securities of such Series purchased from each such Holder. Any Securities of
such Series not so accepted shall be promptly mailed or delivered by the Paying
Agent at Publishing's expense to the Holder thereof. Publishing will publicly
announce the results of the Change of Control Offer on the Change of Control
Purchase Date. For purposes of
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this Section 10.14, Publishing shall choose a Paying Agent which shall not be
Publishing.
(e) A tender made in response to a Change of Control Purchase Notice may be
withdrawn before or after delivery by the Holder to the Paying Agent at the
office of the Paying Agent of the Security of such Series to which such Change
of Control Purchase Notice relates, by means of a written notice of withdrawal
delivered by the Holder to the Paying Agent at the office of the Paying Agent
or to the office or agency referred to in Section 10.02 to which the related
Change of Control Purchase Notice was delivered not later than three Business
Days prior to the Change of Control Purchase Date specifying as applicable:
(1) the name of the Holder;
(2) the certificate number of the Security in respect of which such notice
of withdrawal is being submitted;
(3) the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) delivered for purchase by the Holder as to which
such notice of withdrawal is being submitted;
(4) a statement that such Holder is withdrawing such Holder's election to
have such principal amount of such Security purchased; and
(5) the principal amount, if any, of such Security (which shall be $1,000 or
an integral multiple thereof) that remains subject to the original Change of
Control Purchase Notice and that has been or will be delivered for purchase
by Publishing.
(f) As provided in the Securities, the Trustee and the Paying Agent shall
return to Publishing any cash that remains unclaimed, together with interest or
dividends, if any, thereon, held by either of them for the payment of the
Change of Control Purchase Price; provided, however, that, (x) to the extent
that the aggregate amount of cash deposited by Publishing pursuant to clause
(ii) of paragraph (d) above exceeds the aggregate Change of Control Purchase
Price of the Securities of any such Series or portions thereof to be purchased,
then the Trustee or the Paying Agent shall hold such excess for Publishing and
(y) unless otherwise directed by Publishing in writing,
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promptly after the Business Day following the Change of Control Purchase Date,
the Trustee or the Paying Agent shall return any such excess to Publishing
together with interest, if any, thereon.
(g) Publishing shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable
securities laws or regulations in connection with a Change of Control Offer.
(h) Notwithstanding the occurrence of a Change of Control, Publishing shall
not be obligated to repurchase the Securities of any such Series pursuant to a
Change of Control Offer, or otherwise comply with this Section 10.14, if
Publishing has elected to redeem all of the Securities of such Series in
accordance with Article XI.
Publishing shall not, and shall not permit any Subsidiary to, create or
permit to exist or become effective any restriction (other than restrictions
existing under Indebtedness as in effect on the date of this Indenture as such
Indebtedness may be refinanced from time to time, provided that such
restrictions are no less favorable to the Holders than those existing on the
date of this Indenture) that would expressly impair the ability of Publishing
to make a Change of Control Offer to purchase the Securities or, if such Change
of Control Offer is made, to pay for the Securities tendered for purchase.
SECTION 10.15. Limitation on Issuance and Sale of Capital Stock of
Restricted Subsidiaries. (a) Until such time as both of The Telegraph and
Southam are Restricted Subsidiaries, Publishing will not permit (i) any
Restricted Subsidiary to issue any Capital Stock (other than to a Publishing or
any Wholly Owned Restricted Subsidiary) or (ii) any Person (other than
Publishing or a Wholly Owned Restricted Subsidiary) to acquire any Capital
Stock of any Restricted Subsidiary from Publishing or any Restricted
Subsidiary, except upon the sale of all of the outstanding Capital Stock of
such Restricted Subsidiary owned by Publishing and the designation of such
Subsidiary as an Unrestricted Subsidiary; provided, however, that Publishing or
a Restricted Subsidiary may issue or sell common stock of a Restricted
Subsidiary to a Person that is not an Affiliate of Publishing so long as, on or
prior to the consummation of such issuance or sale, such Restricted Subsidiary
issues and delivers a supplemental indenture to this Indenture providing for
the guarantee of the Securities, which
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guarantee shall be senior to any Subordinated Indebtedness of such Restricted
Subsidiary (and in the case of any Indebtedness of such Restricted Subsidiary
that constitutes a guarantee of Subordinated Indebtedness of Publishing, the
terms of such subordination shall be at least as favorable to the holders of
the Securities as the terms under which the related Subordinated Indebtedness
of Publishing is subordinated to the Securities).
(b) On or after the time that both Southam and The Telegraph are Restricted
Subsidiaries, (i) without limiting the requirements of Section 10.13, in the
event that (x) Publishing or a Restricted Subsidiary issues or sells (other
than to a Restricted Subsidiary) Capital Stock of a Restricted Subsidiary (1)
that was a Subsidiary on February 1, 1997 (which, for purposes of this clause
(1), is deemed to include Southam and Hollinger Eastern), (2) any substantial
portion of the operating assets of which were held by a Subsidiary on February
1, 1997 and were generating material revenue and cash flows on such date, or
(3) any substantial portion of the operating assets of which consist of assets
that are acquired by Publishing or a Restricted Subsidiary pursuant to the
Hollinger Inc. Transaction and (y) such issuance or sale involves less than
100% of the Capital Stock of such Restricted Subsidiary held by Publishing and
the Restricted Subsidiaries at the time of such issuance or sale, then (1) the
Net Cash Proceeds of such issuance or sale shall be applied to permanently
repay or otherwise permanently retire any Pari Passu Indebtedness then
outstanding, as permitted or required by the terms thereof and (2) to the
extent not so applied, may be applied to repay or retire other Indebtedness or
otherwise used in the Company's business; provided that the foregoing clause
(i) shall not apply to any new issuance of Capital Stock by Southam as long as
(a) Southam is a Public Entity at the time of such issuance; (b) neither
Publishing nor any other Restricted Subsidiary has at any time after February
1, 1997 sold any assets and contributed, directly or indirectly, the proceeds
therefrom to Southam; and (c) neither Publishing nor any other Restricted
Subsidiary has at any time after February 1, 1997 contributed, directly or
indirectly, any Newspaper Businesses to Southam other than those Newspaper
Businesses acquired in the Hollinger Inc. Transaction; and (ii) if any issuance
of Capital Stock by a Restricted Subsidiary or sale or disposition of Capital
Stock of a Restricted Subsidiary results in a Restricted Subsidiary ceasing to
qualify as a Subsidiary, such transaction would deemed, for purposes of Section
10.09, to constitute the
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designation of such former Restricted Subsidiary as an Unrestricted Subsidiary.
SECTION 10.16. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries. Publishing will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) pay dividends or
make any other distribution on its Capital Stock to Publishing or any other
Restricted Subsidiary, (b) pay any Indebtedness owed to Publishing or any other
Restricted Subsidiary, (c) make any Investment in Publishing or (d) transfer
any of its properties or assets to Publishing or any Restricted Subsidiary,
except (i) any encumbrance or restriction pursuant to or in connection with the
New Bank Credit Facility or the FDTH Bank Credit Facility as in effect on the
date of this Indenture or any other agreement in effect on the date of this
Indenture (including the AP-91 Senior Notes), (ii) any encumbrance or
restriction, with respect to a Restricted Subsidiary that is not a Restricted
Subsidiary of Publishing on the date of this Indenture, in existence at the
time such Person becomes a Restricted Subsidiary of Publishing and not Incurred
in connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary, (iii) any encumbrance or restriction pursuant to or in connection
with documents existing or securing any Foreign Subsidiary Indebtedness that is
not materially more restrictive than the terms of any such restrictions
existing on the date of the Indenture or the date such Subsidiary becomes a
Restricted Subsidiary, as determined in good faith by an officer of Publishing,
(iv) encumbrances or restrictions entered into by Southam in connection with
Indebtedness of Southam Incurred at a time when Southam is a Public Entity, (v)
encumbrances or restrictions contained in the terms of any Mirror Preferred;
provided that such Mirror Preferred continues to quality as such under the
definition thereof, (vi) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of Publishing or any
Restricted Subsidiary and (vii) any encumbrance or restriction existing under
any agreement that extends, renews, refinances or replaces the agreements
containing the encumbrances or restrictions in the foregoing clauses (i), (ii)
and (iii) (other than the covenants in the AP-91 Senior Notes); provided that
the terms and conditions of any such encumbrances or restrictions are not
materially less favorable to the Holders than those under or pursuant
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to the agreement evidencing the Indebtedness so extended, renewed, refinanced
or replaced.
SECTION 10.17. Provision of Financial Statements. Whether or not Hollinger
International is subject to Section 13(a) or 15(d) of the Exchange Act,
Hollinger International will, to the extent permitted under the Exchange Act,
file with the Commission the annual reports, quarterly reports and other
documents that it would have been required to file with the Commission pursuant
to such Sections 13(a) or 15(d), including any "summarized information" or
other information relating to Publishing as may be required by Regulation S-X
under the Exchange Act or by the Commission, if it were so subject, such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which it would have been required so to file
such documents if it were so subject. Hollinger International will in any
event (x) within 15 days of such Required Filing Date (i) transmit by mail to
all Holders, as their names and addresses appear in the Security Register,
without cost to such Holders and (ii) file with the Trustee copies of the
annual reports, quarterly reports and other documents which Publishing would
have been required to file with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act if Hollinger International were subject to such
Sections and (y) if filing such documents by Hollinger International with the
Commission is not permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any prospective holder of Securities at
Publishing's cost.
SECTION 10.18. Statement by Officers as to Default. (a) Publishing will
deliver to the Trustee, on or before a date not more than 45 days after the end
of each fiscal quarter and not more than 90 days after the end of each fiscal
year of Publishing ending after the date hereof, a written statement signed by
two executive officers of Publishing, one of whom shall be the principal
executive officer, principal financial officer or principal accounting officer
of Publishing, stating whether or not, after a review of the activities of
Publishing during such year or such quarter and of Publishing's performance
under this Indenture, to the best knowledge, based on such review, of the
signers thereof, Publishing has fulfilled all its obligations and is in
compliance with all conditions and covenants under this indenture throughout
such year or quarter, as the case may be, and, if there has been a
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Default, specifying each Default and the nature and status thereof.
(b) When any Default or Event of Default has occurred and is continuing, or
if the Trustee or any Holder or the trustee for or the holder of any other
evidence of Indebtedness of Publishing or any Restricted Subsidiary gives any
notice or takes any other action with respect to a claimed default, Publishing
shall deliver to the Trustee by registered or certified mail or by telegram,
telex or facsimile transmission followed by hard copy an Officers' Certificate
specifying such Default, Event of Default, notice or other action, the status
thereof and what action Publishing is taking or proposes to take with respect
thereto, within five Business Days of its occurrence.
Section 10.19. Waiver of Certain Covenants. Publishing may omit in any
particular instance to comply with any covenant or condition set forth in
Sections 10.05 through 10.14 and Sections 10.16 through 10.18 if, before or
after the time for such compliance, the Holders of not less than a majority in
aggregate principal amount of the Securities of any Series at the time
Outstanding waive such compliance in such instance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of Publishing and the duties of the
Trustee in respect of any such covenant or condition shall remain in full force
and effect.
SECTION 10.20. Limitation on the Disignation of Additional Restricted or
Unrestricted Subsidiaries. (a) The Board of Directors may designate any
Restricted Subsidiary as an Unrestricted Subsidiary if (i) such action is in
compliance with Section 10.09 of this Indenture and (ii) such action complies
with the definition of "Unrestricted Subsidiaries."
(b) The Board of Directors may designate any Unrestricted Subsidiary or any
Person that is to become a Restricted Subsidiary as a Restricted Subsidiary if
immediately after giving effect to such action (and treating any Acquired
Indebtedness as having been Incurred at the time of such action), Publishing
could have Incurred at least $1.00 of additional Indebtedness pursuant to
Section 10.08 of this Indenture.
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ARTICLE XI
Redemption of Securities
The Securities of any Series will not be subject to redemption at the option
of Publishing at any time prior to maturity.
ARTICLE XII
Satisfaction and Discharge
SECTION 12.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect (except as to surviving rights of
registration of transfer or exchange of the Securities of any Series herein
expressly provided for) and the Trustee, on demand of and at the expense of
Publishing, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(1) all the Securities of any Series theretofore authenticated and delivered
(other than (x) lost, stolen or destroyed Securities of any Series which have
been replaced or paid as provided in Section 3.06 and (y) Securities of any
Series for whose payment United States dollars have theretofore been
irrevocably deposited in trust by Publishing and thereafter repaid to
Publishing or discharged from such trust, as provided in Section 10.03) have
been delivered to the Trustee for cancellation; or
(2) all Securities of any Series not theretofore delivered to the Trustee for
cancellation
(x) have become due and payable, or
(y) will become due and payable at their Stated Maturity within one year, or
(z) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of Publishing,
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and Publishing has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust an amount sufficient to pay and discharge the
entire indebtedness on the Securities of such Series not theretofore
delivered to the Trustee for cancellation, including principal of, premium,
if any, and accrued interest on the Securities of such Series at such
Maturity, Stated Maturity or Redemption Date;
(b) Publishing has paid all other sums payable hereunder by Publishing; and
(c) Publishing has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each to the effect that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with and that such satisfaction and discharge will not result in
a breach or violation of, or constitute a default under, this Indenture.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of Publishing to the Trustee under Section 6.07 and, if United
States dollars shall have been deposited with the Trustee pursuant to subclause
(2) of Subsection (a) of this Section, the obligations of the Trustee under
Section 12.02 and the last paragraph of Section 10.03 shall survive.
SECTION 12.02. Application of Trust Money. Subject to the provisions of
the last paragraph of Section 10.03, all United States dollars deposited with
the Trustee pursuant to Section 12.01 shall be held in trust and applied by it,
in accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal of, premium, if
any, and interest on the Securities for whose payment such United States
dollars have been deposited with the Trustee.
ARTICLE XIII
Guarantee
SECTION 13.01. Hollinger International Guarantee. For value received,
Hollinger International, in accordance with this Article XIII, hereby
absolutely, unconditionally
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and irrevocably guarantees to the Trustee and the Holders, as if Hollinger
International were the principal debtor, the punctual payment and performance
when due of all Indenture Obligations (which for purposes of this Guarantee
shall also be deemed to include all commissions, fees, charges, costs and other
expenses (including reasonable legal fees and disbursements of one counsel)
arising out of or incurred by the Trustee or the Holders in connection with the
enforcement of this Guarantee).
SECTION 13.02. Continuing Guarantee; No Right of Set-Off; Independent
Obligation. (a) This Guarantee shall be a continuing guarantee of the payment
and performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
(including the fees and expenses of its agents and counsel) or the Holders; and
this Guarantee shall not be considered as wholly or partially satisfied by the
payment or liquidation at any time or from time to time of any sum of money for
the time being due or remaining unpaid to the Trustee or the Holders.
Hollinger International covenants and agrees to comply with all obligations,
covenants, agreements and provisions applicable to it in this Indenture
including those set forth in Article VIII and Section 10.17. Without limiting
the generality of the foregoing, Hollinger International's liability shall
extend to all amounts which constitute part of the Indenture Obligations and
would be owed by Publishing under this Indenture and the Securities but for the
fact that they are unenforceable, reduced, limited, impaired, suspended or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving Publishing.
(b) Hollinger International hereby guarantees that the Indenture
Obligations will be paid to the Trustee without set-off or counterclaim or
other reduction whatsoever (whether for taxes, withholding or otherwise) in
lawful currency of the United States of America.
(c) Hollinger International guarantees that the Indenture Obligations shall
be paid strictly in accordance with their terms regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the holders of the Securities.
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(d) Hollinger International's liability to pay or perform or cause the
performance of the Indenture Obligations under this Guarantee shall arise
forthwith after demand for payment or performance by the Trustee has been given
to Hollinger International in the manner prescribed in Section 1.06 hereof.
(e) Except as provided herein, the provisions of this Article XIII cover
all agreements between the parties hereto relative to this Guarantee and none
of the parties shall be bound by any representation, warranty or promise made
by any Person relative thereto which is not embodied herein; and it is
specifically acknowledged and agreed that this Guarantee has been delivered by
Hollinger International free of any conditions whatsoever and that no
representations, warranties or promises have been made to Hollinger
International affecting its liabilities hereunder, and that the Trustee shall
not be bound by any representations, warranties or promises now or at any time
hereafter made by Publishing to Hollinger International.
SECTION 13.03. Guarantee Absolute. The obligations of Hollinger
International hereunder are independent of the obligations of Publishing under
the Securities and this Indenture and a separate action or actions may be
brought and prosecuted against Hollinger International whether or not an action
or proceeding is brought against Publishing and whether or not Publishing is
joined in any such action or proceeding. The liability of Hollinger
International hereunder is irrevocable, absolute and unconditional and (to the
extent permitted by law) the liability and obligations of Hollinger
International hereunder shall not be released, discharged, mitigated, waived,
impaired or affected in whole or in part by:
(a) any defect or lack of validity or enforceability in respect of any
Indebtedness or other obligation of Publishing or any other Person under this
Indenture or the Securities, or any agreement or instrument relating to any
of the foregoing;
(b) any grants of time, renewals, extensions, indulgences, releases,
discharges or modifications which the Trustee or the Holders may extend to,
or make with, Publishing, Hollinger International or any other Person, or any
change in the time, manner or place of payment of, or in any other term of,
all or any of the Indenture Obligations, or any other amendment or waiver
<PAGE> 141
141
of, or any consent to or departure from, this Indenture or the Securities,
including any increase or decrease in the Indenture Obligations;
(c) the taking of security from Publishing, Hollinger International or any
other Person, and the release, discharge or alteration of, or other dealing
with, such security;
(d) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of
the Indenture Obligations and the obligations of Hollinger International
hereunder;
(e) the abstention from taking security from Publishing, Hollinger
International or any other Person or from perfecting, continuing to keep
perfected or taking advantage of any security;
(f) any loss, diminution of value or lack of enforceability of any security
received from Publishing, Hollinger International or any other Person, and
including any other guarantees received by the Trustee;
(g) any other dealings with Publishing, Hollinger International or any other
Person, or with any security;
(h) the Trustee's or the Holders' acceptance of or entering into any
composition with Publishing or Hollinger International;
(i) the application by the Holders or the Trustee of all monies at any time
and from time to time received from Publishing, Hollinger International or
any other Person on account of any indebtedness and liabilities owing by
Publishing or Hollinger International to the Trustee or the Holders, in such
manner as the Trustee or the Holders deems best and the changing of such
application in whole or in part and at any time or from time to time, or any
manner of application of collateral, or proceeds thereof, to all
<PAGE> 142
142
or any of the Indenture Obligations, or the manner of sale of any Collateral;
(j) the release or discharge of Publishing or Hollinger International or of
any other Guarantor of the Securities or of any Person liable directly as
surety or otherwise by operation of law or otherwise for the Securities,
other than an express release in writing given by the Trustee, on behalf of
the Holders, of the liability and obligations of Hollinger International
hereunder;
(k) any change in the name, business, capital structure or governing
instrument of Publishing or Hollinger International or any refinancing or
restructuring of any of the Indenture Obligations;
(l) the sale of Publishing's or Hollinger International's business or any
part thereof;
(m) subject to Section 13.14, any merger or consolidation, arrangement or
reorganization of Publishing, Hollinger International, any Person resulting
from the merger or consolidation of Publishing or Hollinger International
with any other Person or any other successor to such Person or merged or
consolidated Person or any other change in the corporate existence, structure
or ownership of Publishing or Hollinger International;
(n) the insolvency, bankruptcy, liquidation, winding-up, dissolution,
receivership or distribution of the assets of Publishing or its assets or any
resulting discharge of any obligations of Publishing (whether voluntary or
involuntary) or of Hollinger International or the loss of corporate
existence;
(o) subject to Section 13.14, any arrangement or plan of reorganization
affecting Publishing or Hollinger International;
(p) any other circumstance (including any statute of limitations) that might
otherwise constitute a defense available to, or discharge of, Publishing or
Hollinger International; or
(q) any modification, compromise, settlement or release by the Trustee, or by
operation of law or
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143
otherwise, of the Indenture Obligations or the liability of Publishing or any
other obligor under the Securities, or of any Collateral, in whole or in
part, and any refusal of payment by the Trustee, in whole or in part, from
any other obligor or other guarantor in connection with any of the Indenture
Obligations, whether or not with notice to, or further assent by, or any
reservation of rights against, Hollinger International.
SECTION 13.04. Right to Demand Full Performance. In the event of any
demand for payment or performance by the Trustee from Hollinger International
hereunder, the Trustee or the Holders shall have the right to demand its full
claim and to receive all dividends or other payments in respect thereof until
the Indenture Obligations shall have been paid in full, and Hollinger
International shall continue to be liable hereunder for any balance which may
be owing to the Trustee (including the fees and expenses of its agent and
counsel) or the Holders by Publishing under this Indenture and the Securities.
The retention by the Trustee or the Holders of any security, prior to the
realization by the Trustee or the Holders of its rights to such security upon
foreclosure thereon, shall not, as between the Trustee and Hollinger
International, be considered as a purchase of such security, or as payment,
satisfaction or reduction of the Indenture Obligations due to the Trustee or
the Holders by Publishing or any part thereof.
SECTION 13.05. Waivers. (a) Hollinger International hereby expressly
waives (to the extent permitted by law) notice of the acceptance of this
Guarantee and notice of the existence, renewal, extension or the
nonperformance, nonpayment, or nonobservance on the part of Publishing of any
of the terms, covenants, conditions and provisions of this Indenture or the
Securities or any other notice whatsoever to or upon Publishing or Hollinger
International with respect to the Indenture Obligations. Hollinger
International hereby acknowledges communication to it of the terms of this
Indenture and the Securities and all of the provisions therein contained and
consents to and approves the same. Hollinger International hereby expressly
waives (to the extent permitted by law) diligence, presentment, protest and
demand for payment.
(b) Without prejudice to any of the rights or recourses which the Trustee
or the Holders may have against Publishing, Hollinger International hereby
expressly waives
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(to the extent permitted by law) any right to require the Trustee or the
Holders to:
(i) initiate or exhaust any rights, remedies or recourse against Publishing,
Hollinger International or any other Person;
(ii) value, realize upon, or dispose of any security of Publishing or any
other Person held by the Trustee or the Holders; or
(iii) initiate or exhaust any other remedy which the Trustee or the Holders
may have in law or equity;
before requiring or becoming entitled to demand payment from Hollinger
International under this Guarantee.
SECTION 13.06. Hollinger International Remains Obligated in Event
Publishing Is No Longer Obligated to Discharge Indenture Obligations. It is
the express intention of the Trustee and Hollinger International that if for
any reason Publishing has no legal existence, is or becomes under no legal
obligation to discharge the Indenture Obligations owing to the Trustee or the
Holders by Publishing or if any of the Indenture Obligations owing by
Publishing to the Trustee or the Holders becomes irrecoverable from Publishing
by operation of law or for any reason whatsoever, this Guarantee and the
covenants, agreements and obligations of Hollinger International contained in
this Article XIII shall nevertheless be binding upon Hollinger International,
as principal debtor, until such time as all such Indenture Obligations have
been paid in full to the Trustee and all Indenture Obligations owing to the
Trustee or the Holders by Publishing have been discharged, or such earlier time
as Section 4.02 shall apply to the Securities and Hollinger International shall
be responsible for the payment thereof to the Trustee or the Holders upon
demand.
SECTION 13.07. Waiver of Rights. Hollinger International agrees (to the
extent permitted by law) that it hereby waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, exoneration, contribution, indemnity or subrogation (whether
contractual, under Section 509 of Title Eleven of the United States Code, under
common law or otherwise) or any similar rights or "claims" (as such term is
defined under Title Eleven of the United States Code),
<PAGE> 145
145
against Publishing or any Restricted Subsidiary arising from the existence of,
or performance by, Hollinger International under this Guarantee.
SECTION 13.08. Guarantee Is in Addition to Other Security. This Guarantee
shall be in addition to and not in substitution for any other guarantees or
other security which the Trustee may now or hereafter hold in respect of the
Indenture Obligations owing to the Trustee or the Holders by Publishing and
(except as may be required by law) the Trustee shall be under no obligation to
marshal in favor of Hollinger International any other guarantees or other
security or any moneys or other assets which the Trustee may be entitled to
receive or upon which the Trustee or the Holders may have a claim.
SECTION 13.09. Release of Security Interests. Without limiting the
generality of the foregoing and except as otherwise provided in this Indenture,
Hollinger International hereby consents and agrees, to the fullest extent
permitted by applicable law, that the rights of the Trustee hereunder, and the
liability of Hollinger International hereunder, shall not be affected by any
and all releases for any purpose of any Collateral, if any, from the Liens and
security interests created by any document relating thereto and that this
Guarantee shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Indenture Obligations is rescinded or
must otherwise be returned by the Trustee upon the insolvency, bankruptcy or
reorganization of Publishing or otherwise, all as though such payment had not
been made.
SECTION 13.10. No Bar to Further Actions. Except as provided by law, no
action or proceeding brought or instituted under Article XIII and this
Guarantee and no recovery or judgment in pursuance thereof shall be a bar or
defense to any further action or proceeding which may be brought under Article
XIII and this Guarantee by reason of any further default or defaults under
Article XIII and this Guarantee or in the payment of any of the Indenture
Obligations owing by Publishing.
SECTION 13.11. Failure to Exercise Rights Shall Not Operate as a Waiver; No
Suspension of Remedies. (a) No failure to exercise and no delay in
exercising, on the part of the Trustee or the Holders, any right, power,
privilege or remedy under this Article XIII and this Guarantee shall operate as
a waiver thereof, nor shall any single or partial
<PAGE> 146
146
exercise of any rights, power, privilege or remedy preclude any other or
further exercise thereof, or the exercise of any other rights, powers,
privileges or remedies. The rights and remedies herein provided for are
cumulative and not exclusive of any rights or remedies provided in law or
equity.
(b) Nothing contained in this Article XIII shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Securities pursuant to Article V or to pursue any rights or remedies hereunder
or under applicable law.
SECTION 13.12. Trustee's Duties; Notice to Trustee. (a) Any provision in
this Article XIII or elsewhere in this Indenture allowing the Trustee to
request any information or to take any action authorized by, or on behalf of
Hollinger International, shall be permissive and shall not be obligatory on the
Trustee except as the Holders may direct in accordance with the provisions of
this Indenture.
(b) The Trustee shall not be required to inquire into the existence, powers
or capacities of Publishing, Hollinger International or the officers, directors
or agents acting or purporting to act on their respective behalf.
(c) Notwithstanding the provisions of this Article XIII or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from Hollinger International; and, prior
to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 6.01, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Responsible Officer of the
Trustee shall not have received any such notice from Hollinger International at
least three Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of, premium, if any, or interest on any Security),
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purpose for which such money was received and shall not be affected by
any notice to the contrary which may be received
<PAGE> 147
147
by it within three Business Days prior to such date; nor shall the Trustee be
charged with knowledge of the curing of any such default or the elimination of
the act or condition preventing any such payment unless and until the
Responsible Officer of the Trustee shall have received an Officers' Certificate
to such effect.
(d) In the case at any time any Paying Agent other than the Trustee shall
have been appointed by Publishing and be then acting hereunder, the term
"Trustee" as used in this Article XIII shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article XIII in addition to or in place of the
Trustee; provided, however, that this Section 13.12 shall not apply to
Publishing or any Affiliate of Publishing if Publishing or such Affiliate acts
as Paying Agent.
SECTION 13.13. Successors and Assigns. All terms, agreements and
conditions of this Article XIII shall extend to and be binding upon Hollinger
International and its successors and permitted assigns and shall enure to the
benefit of and may be enforced by the Trustee and its successors and assigns;
provided, however, that Hollinger International may not assign any of its
rights or obligations hereunder other than in accordance with Article VIII.
SECTION 13.14. Release of Guarantee. Concurrently with the payment in full
of all of the Indenture Obligations, Hollinger International shall be released
from and relieved of its obligations under this Article XIII. Upon the
delivery by Publishing to the Trustee of an Officer's Certificate and, if
requested by the Trustee, an Opinion of Counsel to the effect that the
transaction giving rise to the release of this Guarantee was made by Publishing
in accordance with the provisions of this Indenture and the Securities, the
Trustee shall execute any documents reasonably required in order to evidence
the release of Hollinger International from its obligations under this
Guarantee. If any of the Indenture Obligations are revived and reinstated
after the termination of this Guarantee, then all of the obligations of
Hollinger International under this Guarantee shall be revived and reinstated as
if this Guarantee had not been terminated until such time as the Indenture
Obligations are paid in full, and Hollinger International shall enter into an
<PAGE> 148
148
amendment to this Guarantee, reasonably satisfactory to the Trustee, evidencing
such revival and reinstatement.
This Guarantee shall terminate (a) upon a merger or consolidation of
Hollinger International with Publishing, in accordance with Article VIII or (b)
if after giving effect to a transaction or transactions permitted to be
consummated pursuant to Article VIII, Hollinger International no longer owns
any Capital Stock of Publishing.
SECTION 13.15. Execution of Guarantee. To evidence the Guarantee,
Hollinger International hereby agrees to execute a guarantee substantially in
the form set forth in Section 2.05, to be endorsed on each Security
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of Hollinger International by its Chairman of the Board, its
President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or
facsimile.
SECTION 13.16. Payment Permitted by Hollinger International if No Default.
Nothing contained in this Article, elsewhere in this Indenture or in any of the
Securities shall prevent Hollinger International from making payments at any
time of principal of, premium, if any, or interest on the Securities.
* * * *
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149
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
HOLLINGER INTERNATIONAL
PUBLISHING INC.
by ________________________
Name:
Title:
Attest: ______________________
Name:
Title:
HOLLINGER INTERNATIONAL INC.,
solely in its capacity as
Guarantor
by _________________________
Name:
Title:
Attest: ______________________
Name:
Title:
FLEET NATIONAL BANK OF
CONNECTICUT
by _________________________
Name:
Title:
<PAGE> 1
Exhibit 4.02
[Form of Senior Subordinated Indenture]
SENIOR SUBORDINATED INDENTURE, dated as of
, among HOLLINGER INTERNATIONAL PUBLISHING INC.,
a Delaware corporation (as more fully defined
below, "Publishing"), HOLLINGER INTERNATIONAL
INC., a Delaware corporation (as more fully
defined below, "Hollinger International") and
FLEET NATIONAL BANK, as trustee (the "Trustee").
RECITALS OF PUBLISHING
Publishing has duly authorized the execution and delivery of this Indenture
to provide for the issuance of its senior subordinated debentures, notes, bonds
or other evidences of indebtedness, to be issued in one or more series pursuant
to Article III hereof or a supplemental indenture (each a "Series" and
collectively the "Securities").
Hollinger International has duly authorized the issuance of a guarantee (the
"Guarantee") of the Securities, of substantially the tenor as hereinafter set
forth, and to provide therefor, Hollinger International has duly authorized the
execution and delivery of this Indenture in its capacity as Guarantor
hereunder.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of and to govern
indentures qualified under the Trust Indenture Act; and
All acts and things necessary have been done to make (i) the Securities,
when executed by Publishing and authenticated and delivered hereunder and duly
issued by Publishing, the valid obligations of Publishing and (ii) this
Indenture a valid agreement of Publishing and Hollinger International in
accordance with the terms of this Indenture.
NOW, THEREFORE, in consideration of the premises and the purchase of the
Securities by the Holders thereof,
<PAGE> 2
2
it is mutually covenanted and agreed, for the equal and proportionate benefit
of all Holders of the Securities, as follows:
ARTICLE I
Definitions and Other Provisions of General Application
SECTION 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(e) all references to $, US$, dollars or United States dollars shall refer
to the lawful currency of the United States of America.
The following terms shall have the meanings set forth in this Section:
"Acceleration Right" means a right, which at the time is immediately
exercisable (without further notice or lapse of time), by the holders or a
trustee to cause the acceleration of the maturity of Indebtedness of Publishing
or a Restricted Subsidiary having an aggregate principal amount outstanding of
at least $5,000,000; provided that this definition shall exclude the rights of
the holders of the existing preference shares of DTH and FDTH to require that
Restricted Subsidiaries or Affiliates purchase those shares pursuant to the
terms of the governing instruments or
<PAGE> 3
3
existing agreements relating to such preference shares existing on January 1,
1997.
"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) (i) existing at the time such Person becomes a
Restricted Subsidiary or (ii) assumed in connection with the acquisition of
assets from such Person, in each case, other than Indebtedness Incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary or such acquisition. Acquired Indebtedness will be deemed to be
Incurred on the date of the related acquisition of assets from any Person or
the date the acquired Person becomes a Restricted Subsidiary.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) any other Person
that owns, directly or indirectly, 10% or more of such Person's equity
ownership or Voting Stock or any officer or director of any such Person or
other Person or with respect to any natural Person, any person having a
relationship with such Person by blood, marriage or adoption not more remote
than first cousin. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the management
and policies of such Person directly or indirectly, whether through ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" means the administrative agent under the New Bank Credit Facility,
and its successors and assigns in such capacity.
"Amortization Expense" of any Person means, for any period, amounts
recognized during such period as (i) amortization of goodwill or (ii)
amortization of any other intangible assets with an original life of ten years
or more, in each case in accordance with GAAP and to the extent reflected in
the Consolidated Net Income of Publishing and the Restricted Subsidiaries;
provided, however, that in determining the aggregate cumulative Amortization
Expense of Publishing and its Restricted Subsidiaries for purposes of Section
10.09 following the date on which both of the Telegraph and Southam are
Restricted Subsidiaries, the Amortization Expense of
<PAGE> 4
4
Restricted Subsidiaries that are not Wholly Owned Restricted Subsidiaries shall
be determined in accordance with the actual percentage of Publishing's common
equity in such Restricted Subsidiary on the date of the transaction
necessitating the determination (thus, for example, in the case of a Restricted
Subsidiary in which Publishing owns a 51% common equity interest on the date of
the Restricted Payment, 51% of such Restricted Subsidiary's Amortization
Expense would be included in the calculation of the aggregate cumulative
Amortization Expense of Publishing and the Restricted Subsidiaries).
"AP-91" means American Publishing (1991) Inc., a wholly owned, indirect
Subsidiary.
"AP-91 Senior Notes" means the $150 million in senior secured notes issued
by AP-91 which are held by 19 insurance companies.
"Argsub" means a wholly owned subsidiary of Argus.
"Argsub Preferred" means Preferred Stock of any Argsub issued to and held by
DTH or FDTH.
"Argus" means Argus Corporation Limited, a Canadian corporation, so long as
such corporation is controlled by Hon. Conrad M. Black or his heirs, executors
and legal representatives and his Affiliates.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or
sale and leaseback transaction but not the grant of a pledge or security
interest) (collectively, a "transfer"), directly or indirectly, in one or a
series of related transactions, of (i) any Capital Stock of any Restricted
Subsidiary; (ii) all or substantially all of the properties and assets of any
division or line of business of Publishing or any of its Restricted
Subsidiaries; or (iii) any other properties or assets (other than cash) of
Publishing or any Restricted Subsidiary, other than in the ordinary course of
business. For the purposes of this definition, the term "Asset Sale" shall not
include any transfer of properties and assets (A) that is governed by the
provisions of Article VIII, (B) from any Restricted Subsidiary to Publishing in
accordance with the terms of this Indenture, (C) having a market value of less
than $1,000,000 (it being understood that if the market value of the properties
or assets being
<PAGE> 5
5
transferred exceeds $1,000,000, the entire value and not just the portion in
excess of $1,000,000 shall be deemed to have been the subject of an Asset
Sale), (D) which are obsolete (in the case of equipment) to Publishing's and
its Restricted Subsidiaries' businesses, (E) to any Wholly Owned Restricted
Subsidiary (or, provided that both the Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary), (F) from any Wholly Owned Restricted
Subsidiary to any other Wholly Owned Restricted Subsidiary (or, provided that
both The Telegraph and Southam are Restricted Subsidiaries, from a Restricted
Subsidiary to a Restricted Subsidiary), (G) consisting of any transfer of
common shares of HTH by FDTH or any Restricted Subsidiary which may require or
hold such HTH common shares to Hollinger Inc. pursuant to the provisions of the
HTH/FDTH Share Exchange Agreement, (H) by Southam provided that (i) Southam
is a Restricted Subsidiary; (ii) Southam is a Public Entity at the time of such
sale of assets and (iii) the proceeds of such sale of assets are not paid as a
dividend or distribution of Southam's equity capital; provided, however, that
any issuance by Southam of its Capital Stock shall be subject to the
requirements of Section 10.16(b)(i), and (I) any issuance of Mirror Preferred
so long as the conditions set forth in the definition of Mirror Preferred are
satisfied.
"Average Life to Stated Maturity" means, as of the date of determination
with respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the products of (a) the number of years from the date of determination to
the date or dates of each successive scheduled principal payment of such
Indebtedness multiplied by (b) the amount of each such principal payment by
(ii) the sum of all such principal payments.
"Bankruptcy Law" means Title 11 of the United States Code, as amended, or
any similar United States Federal or state or foreign law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization
or relief of debtors or any amendment to, succession to or change in any such
law.
"Board of Directors" means the board of directors of Publishing or any duly
authorized committee of such board.
<PAGE> 6
6
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of Publishing to have been duly adopted by such Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York, or
the city in which the principal corporate trust office of the Trustee is
located (initially Hartford, CT), are authorized or obligated by law or
executive order to close.
"Business Opportunities Agreement" means the Business Opportunities
Agreement dated as of February 7, 1996, between Hollinger Inc. and Hollinger
International and any amendment, modification, or supplement thereto or
restatement thereof and any similar agreements entered into after the date of
the original issuance of the Securities in accordance with the terms of this
Indenture.
"Capital Lease Obligation" of any Person means any obligation of such Person
and its subsidiaries on a consolidated basis under any capital lease of real or
personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock.
"Cash Equivalents" means (i) any evidence of Indebtedness with a maturity of
180 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided
that the full faith and credit of the United States of America is pledged in
support thereof); (ii) certificates of deposit or acceptances with a maturity
of 180 days or less of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and undivided
profits of not less than $500,000,000; (iii) commercial paper with a maturity
of 180 days or less issued by a corporation that is not an Affiliate of
Publishing organized under the laws of any state of the United States or the
District of Columbia and rated A-1 (or higher) according to S&P or P-1 (or
higher) according to Moody's or at least an equivalent rating category of
another nationally recognized securities rating
<PAGE> 7
7
agency; (iv) any money market deposit accounts issued or offered by a domestic
commercial bank having capital and surplus in excess of $500,000,000; and (v)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the government of
the United States of America or issued by any agency thereof and backed by the
full faith and credit of the United States of America, in each case maturing
within 180 days from the date of acquisition; provided that the terms of such
agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions with Securities Dealers and Others, as
adopted by the Comptroller of the Currency on October 31, 1985.
"Change of Control" means the occurrence of any of the following:
(a) there is a report filed on Schedule 13D, 14D-1 or 14D-1F (or any
successor schedule, form or report) pursuant to the Exchange Act, disclosing
that any person (for purposes of this definition, as the term "person" is used
in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing), other than any person consisting solely
of Conrad M. Black (or his heirs, executors or legal representatives) and his
Affiliates, has become the beneficial owner (as the term "beneficial owner" is
defined under Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of Voting Stock representing 50% or more of the total voting
power attached to all Voting Stock of Hollinger Inc., Hollinger International
or Publishing then outstanding; provided, however, that a person shall not be
deemed to be the beneficial owner of, or to own beneficially, (i) any
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such person or any of such person's Affiliates until such tendered
securities are accepted for purchase or exchange thereunder, or (ii) any
securities if such beneficial ownership (A) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to applicable law, and (B) is not also then reportable on Schedule 13D
(or any successor schedule) under the Exchange Act;
(b) there is a report filed or required to be filed with any securities
commission or securities regulatory authority in Canada, disclosing that any
offeror (as the term "offeror" is defined in Section 89(1) of
<PAGE> 8
8
Securities Act (Ontario) for the purpose of Section 101 of such Securities Act
or any successor provision of the foregoing) other than any person consisting
solely of Conrad M. Black (or his heirs, executors or legal representatives)
and his Affiliates, has acquired beneficial ownership (within the meaning of
the Securities Act (Ontario)) of, or the power to exercise control or direction
over, or securities convertible into, any voting or equity shares of Hollinger
Inc. that together with such offeror's securities (as the term "offeror's
securities" is defined in Section 89(1) of the Securities Act (Ontario) or any
successor provision thereto in relation to the voting or equity shares of
Hollinger Inc., would constitute Voting Stock of Hollinger Inc. representing
50% or more of the total voting power attached to all Voting Stock of Hollinger
Inc. then outstanding;
(c) Hollinger International shall cease to own, directly or indirectly, 100%
of the Voting Stock of Publishing;
(d) there is consummated a consolidation (involving a business combination)
or merger of Publishing or Hollinger International, as the case may be, (i) in
which Publishing or Hollinger International, as the case may be, is not the
continuing or surviving corporation or (ii) pursuant to which any Voting Stock
of Publishing or Hollinger International, as the case may be, would be
reclassified, changed or converted into or exchanged for cash, securities or
other property, other than (in each case) a consolidation or merger of
Publishing or Hollinger International, as the case may be, in which the holders
of the Voting Stock of Publishing or Hollinger International, as the case may
be, immediately prior to the consolidation or merger have, directly or
indirectly, 50% or more of the Voting Stock of the continuing or surviving
corporation immediately after such transaction; or
(e) Conrad M. Black (or his heirs, executors and legal representatives) and
his Affiliates cease to beneficially own and control the voting of, directly or
indirectly, Voting Stock of Publishing or Hollinger International representing
a greater percentage of the total voting power attached to the Voting Stock of
Publishing or Hollinger International than the percentage beneficially owned
and controlled, directly or indirectly, by any other single shareholder of
Publishing or Hollinger International
<PAGE> 9
9
together with its Affiliates (a "Designated Transaction") and there shall occur
a Rating Decline.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any property, assets, proceeds or other items that may be
pledged as security for the Securities, whether pursuant to Section 10.13 or
otherwise.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock Offering" means the issuance by Hollinger International of up
to 16,100,000 shares of its Class A Common Stock, par value $.01 per share,
concurrently with the issuance of the Securities.
"Consolidated Assets" means, with respect to Publishing, the total assets
shown on the balance sheet of Publishing and its Restricted Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, as of Publishing's
latest full fiscal quarter.
"Consolidated Cash Flow Ratio" means, as at any date of determination, the
ratio of (i) the aggregate amount of Indebtedness of Publishing and the
Restricted Subsidiaries on a Consolidated basis outstanding as at such date to
(ii) the Operating Cash Flow of Publishing and the Restricted Subsidiaries
(determined on a Consolidated basis) for the most recently completed period of
four consecutive fiscal quarters of Publishing; provided (a) that once both of
the Telegraph and Southam are Restricted Subsidiaries, for the purpose of
determining the Consolidated Cash Flow Ratio, the Indebtedness and Operating
Cash Flow of Restricted Subsidiaries that are not Wholly Owned Restricted
Subsidiaries shall be determined in accordance with the actual percentage of
Publishing's common equity interest in such Restricted Subsidiary on the date
of determination of the Consolidated Cash Flow Ratio (thus, for example, in the
case of a Restricted Subsidiary in which Publishing owns a 51% common equity
interest, 51% each of such Restricted Subsidiary's Indebtedness and Operating
Cash Flow would be
<PAGE> 10
10
included in the calculation of Publishing's aggregate Indebtedness and
Operating Cash Flow, respectively); and provided further that (i) so long as
Southam is a Restricted Subsidiary and (ii) until such time as Southam is not a
Public Entity, the portion of Operating Cash Flow represented by Southam
Operating Cash Flow shall not exceed thirty-three and one third percent (33-
1/3%) and, to the extent Southam Cash Flow represents greater than thirty-three
and one third percent (33-1/3%) of Operating Cash Flow, such excess shall be
deducted from Operating Cash Flow and (b) that, so long as any Southam shares
owned by Publishing or a Restricted Subsidiary are pledged, directly or
indirectly, to secure Indebtedness other than Indebtedness by Publishing or a
Restricted Subsidiary, the equity interest in Southam represented by such
shares shall be excluded for purposes of calculating the percentage of
Southam's Indebtedness and Operating Cash Flow to be included in determining
Publishing's aggregate Indebtedness and Operating Cash Flow on a Consolidated
basis.
"Consolidated Net Income (Loss)" of Publishing and the Restricted
Subsidiaries means, for any period, the Consolidated net income (or loss (and
treating a loss as a negative number)) of Publishing and the Restricted
Subsidiaries for such period as determined in accordance with GAAP, adjusted by
(a) excluding, without duplication, to the extent included in calculating such
Consolidated Net Income (or Loss), (i) all extraordinary gains and losses, (ii)
the portion of Consolidated net income (or loss) of Publishing and its
Restricted Subsidiaries allocable to Investments in unconsolidated Persons
(other than Unrestricted Subsidiaries) to the extent that cash dividends or
distributions have not actually been received by such Person or one of its
Restricted Subsidiaries, (iii) the portion of Consolidated net income (or loss)
of Publishing and its Restricted Subsidiaries allocable to Publishing's
Unrestricted Subsidiaries (or to payments received therefrom), (iv) net income
(or loss) of a Person combined with Publishing or any of its subsidiaries on a
"pooling of interests" basis attributable to any period prior to the date of
combination, (v) any gain or loss, net of taxes, realized upon the termination
of any employee pension benefit plan, (vi) aggregate net gains and losses (less
all fees and expenses relating thereto) in respect of dispositions of assets
(including without limitation sales of shares of Unrestricted Subsidiaries or
unconsolidated Persons and noncash writeoffs of assets (provided that there are
no continuing cash expenses related to such writeoffs))
<PAGE> 11
11
other than in the ordinary course of business, (vii) any income, gain or loss
resulting from the issuance, sale or redemption of Mirror Preferred or Argsub
Preferred, (viii) the net income of any Restricted Subsidiary to the extent
that the declaration of dividends or similar distributions by that Restricted
Subsidiary of that income is not at the time permitted, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulations applicable
to that Restricted Subsidiary or its stockholders; provided, however, that the
foregoing shall not apply to the net income of AP-91 relating to the business
of AP-91, as conducted as of the date of this Indenture on account of
restrictions on AP-91, or in agreements as in effect on the date of this
Indenture, restrictions permitted under clauses (iii) and (iv) of Section
10.17 (to the extent such clauses are applicable at the time of determination),
(ix) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued at any time
following the date of this Indenture, (x) any net gain from the collection of
proceeds of life insurance policies, (xi) any gain arising from the acquisition
of any securities, or the extinguishment, under GAAP, of any Indebtedness of
Publishing or one of its Restricted Subsidiaries, (xii) aggregate net gains or
losses relating to foreign currency transactions or translations, (xiii)
redundancy costs relating to the permanent elimination of jobs, provided that
the amount of such expenses are certified by Publishing's independent
accountants, and (b) subtracting, without duplication, the aggregate amount of
dividends on Preferred Stock of Restricted Subsidiaries to the extent that such
Preferred Stock is included as Indebtedness in the calculation of Publishing's
Consolidated Cash Flow Ratio. In calculating the Operating Cash Flow of
Publishing and its Restricted Subsidiaries, the Consolidated Net Income of
Restricted Subsidiaries that are not Wholly Owned Restricted Subsidiaries will
be included only to the extent of Publishing's common equity interest in such
Restricted Subsidiaries.
"Consolidated Net Worth" means the common and preferred stockholders' equity
of Publishing and its Restricted Subsidiaries (exclusive of any redeemable
capital stock), as determined on a Consolidated basis and in accordance with
GAAP.
<PAGE> 12
12
"Consolidated Tangible Assets" means the total assets appearing on a
Consolidated balance sheet of Publishing and its Restricted Subsidiaries less,
without duplication, each of the following: (i) all applicable depreciation,
amortization and other valuation reserves, (ii) all other intangible assets and
deferred charges, (iii) deferred income tax assets (to the extent recorded as
an asset) and (iv) all investments in unconsolidated subsidiaries (including
all Unrestricted Subsidiaries).
"Consolidation" means, with respect to any Person, the consolidation of the
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP; provided,
however, that the accounts of any Unrestricted Subsidiary shall not be
consolidated with Publishing but instead the interest of Publishing or any
Restricted Subsidiary therein will be accounted for as an investment. The term
"Consolidated" shall have a correlative meaning.
"Corporate Trust Office" means the office of the Trustee or an affiliate or
agent thereof at which at any particular time the corporate trust business for
the purposes of this Indenture shall be principally administered, which office
at the date of execution of this Indenture is located at 777 Main Street,
Hartford, Connecticut 06115-2001.
"CST Real Estate" means the real estate, including land, building and
fixtures, located at 401 North Wabash Avenue, Chicago, Illinois, where
Publishing currently maintains its headquarters, and all improvements thereon.
"CST Real Estate Transaction" means the sale or other disposition (other
than to an Affiliate) of all or any portion of the interest of Publishing or a
Restricted Subsidiary in the CST Real Estate.
"Currency Agreements" means one or more of the following agreements which
shall be entered into with one or more financial institutions: foreign
exchange contracts, currency swap agreements or other similar agreements or
arrangements designed to protect against fluctuations in currency values.
<PAGE> 13
13
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness under the
New Bank Credit Facility and (ii) any other Senior Indebtedness which, at the
time of determination, has an aggregate principal amount outstanding of at
least $50,000,000 and is specifically designated by Publishing in the
instrument evidencing such Senior Indebtedness or the agreement under which
such Senior Indebtedness arises as "Designated Senior Indebtedness."
"DTH" means DT Holdings Limited, a corporation under the laws of England.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" has the meaning specified in Article V.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extraordinary Cash Dividend" means in respect of the Southam Interests:
(i) a cash dividend in respect of a particular calendar year representing
the excess, if any, of (A) the aggregate of all cash dividends declared and
paid on such securities during the calendar year over (B) the greatest of (x)
200% of the aggregate of all cash dividends declared and paid on such
securities during the immediately preceding calendar year, (y) 300% of the
average of the aggregate of all cash dividends declared and paid on such
securities during the immediately preceding three calendar years; and (z)
100% of the aggregate consolidated net income of the issuer of such
securities, before extraordinary items, for its immediately preceding fiscal
year; and
(ii) any cash dividend declared by Southam on its common shares which the
directors of Southam by resolution determine to be extraordinary, taking into
account the amount of the dividend, the effect of the dividend on the market
value of such securities after payment thereof, the form of payment, the
financial
<PAGE> 14
14
position of Southam, economic conditions, business practices and such other
factors as the directors of Southam consider to be relevant.
"FDTH" means First DT Holdings Limited, a corporation under the laws of
England.
"FDTH Credit Facility" means the credit agreement dated as of May 30, 1996,
among FDTH, the financial institutions party thereto and The Toronto-Dominion
Bank, as issuing bank and Agent, as such agreement may be amended, renewed,
extended, substituted, refinanced, restructured, replaced, supplemented or
otherwise modified from time to time (including, without limitation, any
successive renewals, extensions, substitutions, refinancings, restructurings,
replacements, supplementations or other modifications of the foregoing that
increase the aggregate amount of borrowings outstanding or the aggregate
commitments of the lenders thereunder).
"Foreign Subsidiary Indebtedness" means Indebtedness Incurred by a non-U.S.
domiciled Subsidiary that has no material U.S. operations.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied,
which are in effect on the date of this Indenture.
"Global Security" means a Security evidencing all or part of the Securities
of any Series and issued to a Depositary in accordance with Section 3.03 hereof
and bearing the legend prescribed in Section 2.05 hereof.
"Guarantee" means the guarantee by the Company and, if the context requires,
by any Restricted Subsidiary Guarantor of the Indenture Obligations.
"Guaranteed Debt" of any Person means, without duplication, all Indebtedness
of any other Person referred to in the definition of Indebtedness guaranteed
directly or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (i) to pay or
purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness (or to indemnify another Person for the costs
thereof), (ii) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily
<PAGE> 15
15
for the purpose of enabling the debtor to make payment of such Indebtedness or
to assure the holder of such Indebtedness against loss, (iii) to supply funds
to, or in any other manner invest in, the debtor (including any agreement to
pay for property or services without requiring that such property be received
or such services be rendered), (iv) to maintain working capital or equity
capital of the debtor, or otherwise to maintain the net worth, solvency or
other financial condition of the debtor or (v) otherwise to assure a creditor
against loss, provided that the term "guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of business.
"Guarantor" means any guarantor of the Securities in accordance with the
terms of this Indenture, including Hollinger International.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Hollinger Eastern" means Hollinger Eastern Publishing Inc., a Canadian
corporation, and its successors and assigns.
"Hollinger Inc. Transaction" means the transaction, in all material respects
as announced publicly on January 7, 1997, by which Hollinger Inc. is to
transfer to Hollinger Eastern certain of its owned Canadian publishing
interests for an aggregate consideration not to exceed $382 million, subject to
working capital adjustments and currency exchange adjustments.
"Hollinger International" means Hollinger International Inc., a corporation
incorporated under the laws of Delaware and a Guarantor of the Indenture
Obligations, until a successor Person shall have become such pursuant to
Article VIII of this Indenture and thereafter "Hollinger International" shall
mean such successor Person.
"Hollinger International/Hollinger Eastern Interests" means Preferred Stock
of any Person (or other Capital Stock convertible or exchangeable into
Preferred Stock of such Person) which holds the voting interests of Hollinger
Eastern which are owned by Hollinger International and its Subsidiaries as of
the date that Hollinger Eastern is designated as a Restricted Subsidiary.
<PAGE> 16
16
"Hollinger International Guarantee" means the unsecured, senior subordinated
guarantee of the Securities provided by the Company.
"HTH" means Hollinger-Telegraph Holdings Inc., a corporation continued under
the laws of Alberta, and its successors and assigns.
"HTH/FDTH Share Exchange Agreement" means the share exchange agreement dated
as of July 19, 1995, between Hollinger Inc. and FDTH, as amended, supplemented
or otherwise modified from to time.
"Incur" means create, issue, assume, guarantee or otherwise in any manner
become directly or indirectly liable for or with respect to or otherwise incur.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (or other obligations to former owners of
acquired businesses), excluding any trade payables and other accrued current
liabilities arising in the ordinary course of business, but including, without
limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit issued under letter of credit facilities,
acceptance facilities or other similar facilities and in connection with any
agreement to purchase, redeem, exchange, convert or otherwise acquire for value
any Capital Stock of such Person, or any warrants, rights or options to acquire
such Capital Stock, now or hereafter outstanding, (ii) all obligations of such
Person evidenced by bonds, notes, debentures or other similar instruments,
(iii) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person
(even if the rights and remedies of the seller or lender under such agreement
in the event of default are limited to repossession or sale of such property),
but excluding trade payables arising in the ordinary course of business, (iv)
all obligations under Interest Rate Agreements and Currency Agreements of such
Person, (v) all Capital Lease Obligations of such Person, (vi) all Indebtedness
referred to in clauses (i) through (v) above of other Persons and all dividends
of other Persons, the payment of which is secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien, upon or with respect to property (including,
<PAGE> 17
17
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness, (vii) all Guaranteed Debt of such Person, (viii) all Redeemable
Capital Stock and (without duplication) all Preferred Stock of Subsidiaries
other than (a) Mirror Preferred, provided that such Mirror Preferred continues
to qualify as such under the definition thereof, (b) Hollinger
International/Hollinger Eastern Interests, provided that Hollinger International
grants a security interest, subordinated to the same extent as the Securities,
in such Hollinger International/Hollinger Eastern Interests as security for its
guarantee of securities, and (c) Preferred Stock held by Restricted Subsidiaries
or Publishing, in each case valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends and
(ix) any amendment, supplement, modification, deferral, renewal, extension,
refunding or refinancing of any Indebtedness of the types referred to in clauses
(i) through (viii) above; provided, however, that this definition shall not
apply to Indebtedness represented by Southam-Linked Debentures, which are
secured, directly or indirectly, by shares of Southam held directly or
indirectly by Publishing. For purposes hereof, the "maximum fixed repurchase
price" of any Redeemable Capital Stock or Preferred Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock or Preferred Stock as if such Redeemable Capital Stock
or Preferred Stock were purchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture, and if such price is based
upon, or measured by, the fair market value of such Redeemable Capital Stock or
Preferred Stock, such fair market value to be determined in good faith by the
Board of Directors of such Person.
"Indenture" means this instrument as originally executed (including all
exhibits and schedules thereto) and as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of particular
Series of Securities established as contemplated by Section 3.01.
"Indenture Obligations" means the obligations of Publishing under this
Indenture or under the Securities to pay principal of, premium, if any, and
interest when due and payable, and all other amounts due or to become due under
or
<PAGE> 18
18
in connection with this Indenture and the Securities, and the performance of
all other obligations to the Trustee, the Paying Agent and the holders under
this Indenture and the Securities, according to the terms thereof.
"Independent Committee" means a committee of the board of directors of
Publishing whose membership meets the requirements of the New York Stock
Exchange applicable to audit committees as in effect on the date of original
issuance of the Securities or a committee of the board of directors of
Publishing whose membership satisfies any more restrictive requirements of
independence of any securities exchange or market on which Publishing's or
Hollinger International's equity securities are traded or listed.
"Independent Director" means a member of the board of directors of a Person
that is not an officer, employee or former officer or employee of such Person
or one of its Affiliates and, with respect to any transaction or series of
related transactions, a member of the board of directors who does not have any
material direct or indirect financial interest in or with respect to such
transaction or series of related transactions (including for such purpose the
interest of any other Person with respect to whom such director is also a
director, officer or employee).
"Interest Payment Date" means the Stated Maturity of a regular installment
of interest on the Securities or the Special Payment Date with respect to
Defaulted Interest.
"Interest Rate Agreements" means one or more of the following agreements
which shall be entered into from time to time with one or more financial
institutions: interest rate protection agreements (including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements)
and/or other types of interest rate hedging agreements.
"Investment" means, with respect to any Person, directly or indirectly, any
advance, loan (including guarantees), or other extension of credit or capital
contribution to (by means of any transfer of cash or other property to others
or any payment for property or services for the account or use of others), or
any purchase, acquisition or ownership by such Person of any Capital Stock,
bonds, notes, debentures or other securities issued or owned by, any other
Person and all other items that are
<PAGE> 19
19
or would be classified as investments on a balance sheet prepared in accordance
with GAAP.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
security interest, hypothecation or other encumbrance upon or with respect to
any property of any kind, real or personal, movable or immovable, now owned or
hereafter acquired.
"Marketable Security" means any common stock, debt security or other
security of a Person which is (or will, upon distribution thereof, be) listed
on the NYSE, the American Stock Exchange or any national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended,
or approved for quotation in the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System or any
similar system of automated dissemination of quotations of securities prices in
the United States or for which there is a recognized market maker or trading
market.
"Material Restricted Subsidiary" means each Restricted Subsidiary of
Publishing which (i) for the most recent fiscal year of Publishing accounted
for more than 5% of the Consolidated revenues of Publishing and its Restricted
Subsidiaries or (ii) at the end of such fiscal year was the owner (beneficial
or otherwise) of more than 5% of the Consolidated Assets of Publishing and its
Restricted Subsidiaries, all as shown on Publishing's Consolidated financial
statements for such fiscal year.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein provided or
as provided in this Indenture, whether at Stated Maturity, the Purchase Date or
the Redemption Date and whether by declaration of acceleration, Offer in
respect of Excess Proceeds, Change of Control, call for redemption or
otherwise.
"Media Business" means the business of the broadcast of radio or television
broadcasting, cable and satellite programs (including national, regional or
local radio, television, cable and satellite programs).
"Mirror Preferred" means Preferred Stock of DTH or FDTH currently held by or
hereafter issued to an Argsub (i) having items (including, without limitation,
terms with respect to liquidation, redemption and dividends) identical
<PAGE> 20
20
to those contained in Argsub Preferred issued or transferred simultaneously with
such Argsub's acquisition of such DTH or FDTH Preferred Stock in equivalent
amounts to DTH or FDTH, as the case may be, and (ii) in respect of which no cash
payments are or have been made by the issuer thereof, except for cash payments
in respect of certain Mirror Preferred directly from FDTH to DTH at the
direction of Argsub; provided that, at such time as (x) the foregoing clauses
(i) and (ii) are no longer satisfied, (y) the issuer of any Argsub Preferred
Incurs any Indebtedness or other liability other than tax liabilities or
pursuant to such Argsub Preferred or acquires any other assets other than the
Mirror Preferred, or (z) the Holder of any Mirror Preferred transfers such stock
other than to a Wholly-Owned Restricted Subsidiary, (1) an Event of Default will
occur under the Indenture, and (2) such Preferred Stock of FDTH held by Argsub
will be deemed to be Redeemable Capital Stock that Incurred on such date; and
provided further, that in the event that the Mirror Preferred have not been
redeemed, retracted, transferred to DTH or otherwise cancelled without the
payment of cash (except for cash payments in respect of certain Mirror Preferred
directly to DTH) on or before July 1, 1997, then such Preferred Stock shall be
treated as Indebtedness for the purposes of Section 10.08.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any Person,
the proceeds thereof in the form of cash or cash equivalents including payments
of principal and interest in respect of deferred payment obligations when
received in the form of, or stock or other assets when disposed of for, cash or
cash equivalents (except to the extent that such obligations are financed or
sold with recourse to Publishing or any Restricted Subsidiary) net of (i)
brokerage commissions and other reasonable fees and expenses (including fees
and expenses of counsel and investment bankers) related to such Asset Sale,
(ii) provisions for all taxes payable as a result of such Asset Sale, (iii)
payments made to retire indebtedness where payment of such indebtedness is
secured by the assets or properties the subject of such Asset Sale, (iv)
amounts required to be paid to any Person (other than Publishing or any
Restricted Subsidiary) owning a beneficial interest in the assets subject to
the Asset Sale and (v) appropriate amounts to be provided by Publishing or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
Publishing or any Restricted
<PAGE> 21
21
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined and reflected in
an Officers' Certificate delivered to the Trustee and (b) with respect to any
issuance or sale of Capital Stock or options, warrants or rights to purchase
Capital Stock, or debt securities or Capital Stock that have been converted
into or exchanged for Capital Stock, as referred to in Section 10.09, the
proceeds of such issuance or sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed of for, cash or cash
equivalents (except to the extent that such obligations are financed or sold
with recourse to Publishing or any Restricted Subsidiary), net of attorneys'
fees, accountants' fees and brokerage, consultation, underwriting and other
fees and expenses actually incurred in connection with such issuance or sale
and net of taxes paid or payable as a result thereof.
"New Bank Credit Facility" means the credit agreement dated as of May 30,
1996, among Publishing, the financial institutions party thereto and The
Toronto-Dominion Bank, as issuing bank and the Agent, as such agreement may be
amended, renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified from time to time (including, without
limitation, any successive renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplementations or other modifications of the
foregoing that increase the aggregate amount of borrowings outstanding or the
aggregate commitments of the lenders thereunder).
"Newspaper Business" means the business of publishing and distributing
(including distributing by electronic means) newspapers, magazines and other
paid or free publications having national, regional, local or targeted markets,
including publications having limited or no news or editorial content such as
shoppers or other "total market coverage" publications and similar
publications.
"Nonpayment Default" means any event (other than a Payment Default) the
occurrence of which entitles one or
<PAGE> 22
22
more Persons to accelerate at such time the maturity of any Designated Senior
Indebtedness.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, Vice Chairman, President or a Vice President (regardless of Vice
Presidential designation), and by the Treasurer, Secretary or an Assistant
Secretary, of Publishing, in form and substance reasonably satisfactory to, and
delivered to, the Trustee.
"Operating Cash Flow" means, for any period, an amount equal to the
Consolidated Net Income of Publishing and the Restricted Subsidiaries for such
period, plus, to the extent deducted in calculating such Consolidated Net
Income, (a) interest expense and other financing costs and expenses, (b)
dividends paid on any Preferred Stock of Restricted Subsidiaries to the extent
such Preferred Stock is included as Indebtedness in the calculation of
Publishing's Consolidated Cash Flow Ratio, (c) depreciation and amortization
and (d) all taxes, whether or not deferred, applicable to such period.
For purposes of calculating Operating Cash Flow for the four fiscal quarters
most recently completed prior to any date on which an action is taken that
requires a calculation of the Consolidated Cash Flow Ratio, (a) any Person that
is a Restricted Subsidiary on such date (or would become a Restricted
Subsidiary in connection with the transaction that requires the determination
of such ratio) shall be deemed to have been a Restricted Subsidiary at all
times during such period, (b) any Person that is not a Restricted Subsidiary on
such date (or would cease to be a Restricted Subsidiary in connection with the
transaction that requires the determination of such ratio) shall be deemed not
to have been a Restricted Subsidiary at any time during such period, (c) if
Publishing or any Restricted Subsidiary shall have in any manner acquired or
disposed of any operating business (including without limitation acquisitions
accounted for on a "pooling of interests" or "as if pooling of interests"
basis) during or subsequent to such period, such calculation shall be made on a
pro forma basis on the assumption that such acquisition or disposition has been
completed on the first day of such period and (d) in the case of a Restricted
Subsidiary that is not a
<PAGE> 23
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Wholly Owned Restricted Subsidiary, the determination of the percentage of the
Operating Cash Flow of such Restricted Subsidiary that is to be included in the
calculation of Publishing's Cash Flow Ratio shall be made on a pro forma basis
on the assumption that the percentage of Publishing's common equity interest on
the date of determination (it being understood, in the case of foregoing clause
(c), that if such pro forma calculations shall have been made in accordance
with Regulation S-X under the Exchange Act, such method of calculation (but not
necessarily the adjustments) shall be presumed to be acceptable) (it being
further understood that the foregoing clause (d) shall not be operative until
such time as both The Telegraph and Southam shall both be Restricted
Subsidiaries).
"Opinion of Counsel" means a written opinion of counsel, in form and
substance reasonably satisfactory to the Trustee, who may be counsel for
Publishing or the Trustee, and who shall be reasonably acceptable to the
Trustee, including but not limited to an Opinion of Independent Counsel.
"Opinion of Independent Counsel" means a written opinion, in form and
substance reasonably satisfactory to the Trustee, by someone who is not an
employee or former employee of Publishing and who shall be reasonably
acceptable to the Trustee.
"Original Issue Discount Security" means (i) any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof, and (ii) any other
Security which is issued with "original issue discount" within the meaning of
Section 1273(a) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Outstanding" when used with respect to Securities means, as of the date of
determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption money in
the necessary amount has been theretofore irrevocably deposited with the
Trustee
<PAGE> 24
24
or any Paying Agent (other than Publishing) in trust or set aside and
segregated in trust by Publishing (if Publishing shall act as its own Paying
Agent) for the Holders of such Securities; provided, that if such Securities
are to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor reasonably satisfactory to the Trustee
has been made;
(c) Securities, except to the extent provided in Sections 4.02 and 4.03,
with respect to which Publishing has effected defeasance or covenant
defeasance as provided in Article IV; and
(d) Securities in exchange for or in lieu of which other Securities have
been authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee and Publishing proof reasonably satisfactory to each of them that
such Securities are held by a bona fide purchaser in whose hands the
Securities are valid obligations of Publishing; provided, however, that in
determining whether the Holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by
Publishing or any other obligor upon the Securities or any Affiliate of
Publishing or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee actually knows
to be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the reasonable satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not
Publishing or any other obligor upon the Securities or any Affiliate of
Publishing or such other obligor.
"Pari Passu Guarantor Indebtedness" means any Indebtedness of any Guarantor
that is pari passu in right of payment with such Guarantor's Guarantee.
<PAGE> 25
25
"Pari Passu Indebtedness" means any Indebtedness of Publishing that is pari
passu in right of payment with the Securities.
"Paying Agent" means any Person authorized by Publishing to pay the
principal, premium, if any, or interest on any Securities on behalf of
Publishing. The Company initially authorizes the Trustee to act as Paying
Agent for the Securities on its behalf. The Company may at any time and from
time to time authorize one or more Persons to act as Paying Agent in addition
to or in place of the Trustee with respect to any Series of Securities issued
under this Indenture.
"Payment Default" means any default in the payment of principal, premium, if
any, interest, commitment fees, letter of credit fees, reimbursement
obligations in respect of amounts owing under letters of credit or payments in
respect of interest under Interest Rate Agreements, in each case, on any
Designated Senior Indebtedness.
"Permitted Guarantor Junior Securities" means, so long as the effect of any
exclusion employing this definition is not to cause the Securities to be
treated in any case or proceeding or similar event described in clauses (a),
(b) or (c) of the first paragraph of Section 14.17 as part of the same class of
claims as the Senior Guarantor Indebtedness or any class of claims pari passu
with, or senior to, the Senior Guarantor Indebtedness, for any payment or
distribution, debt or equity securities of Hollinger International or any
successor corporation provided for by a plan of reorganization or readjustment
that are subordinated at least to the same extent that the Guarantee of
Hollinger International is subordinated to the payment of all Senior Guarantor
Indebtedness then outstanding; provided that (1) if a new corporation results
from such reorganization or readjustment, such corporation assumes any Senior
Guarantor Indebtedness not paid in full in cash or Cash Equivalents in
connection with such reorganization or readjustment and (2) the rights of the
holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment.
"Permitted Indebtedness" means the following:
(i) Indebtedness of Publishing or Foreign Subsidiary Indebtedness under the
New Bank Credit
<PAGE> 26
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Facility in an aggregate principal amount at any one time outstanding not to
exceed $150 million; and once both of The Telegraph and Southam are
Restricted Subsidiaries, $250 million and, once the Hollinger Inc.
Transaction closes, $475 million; provided, however, that Indebtedness under
the New Bank Credit Facility may not be Incurred under this paragraph for
purposes of purchasing or otherwise acquiring the Capital Stock or a
substantial portion of the assets of another Person (including the minority
interest in Southam but excluding acquisitions of inventory, equipment and
similar assets in the ordinary course of business) unless, immediately after
giving effect to such transaction on a pro forma basis, Publishing could
Incur $1.00 of additional Indebtedness (other than Permitted Indebtedness)
under Section 10.08;
(ii) once Southam is a Restricted Subsidiary and until such time as Southam
is not a Public Entity, Indebtedness of Southam; provided that the Southam
Cash Flow Ratio for the four full fiscal quarters immediately preceding the
Incurrence of such Indebtedness taken as one period is not greater than
4.0:1.0 (for purposes of determining the Southam Cash Flow Ratio for any
period, pro forma effect shall be given to (i) the Incurrence of such
Indebtedness and (if applicable) the application of the net proceeds
therefrom, including to refinance other Indebtedness, as if such Indebtedness
was Incurred, and the application of such proceeds occurred, at the beginning
of such four-quarter period; (ii) the Incurrence, repayment or retirement of
any other Indebtedness by Southam or any of its Restricted Subsidiaries since
the first day of such four-quarter period as if such Indebtedness was
Incurred, repaid or retired at the beginning of such four-quarter period;
(iii) in the case of Acquired Indebtedness, the related acquisition (as if
such acquisition had been consummated on the first day of such four-quarter
period); and (iv) any acquisition or disposition by Southam or any of its
Restricted Subsidiaries of any company or any business or any assets out of
the ordinary course of business, whether by merger, stock purchase or sale or
asset purchase or sale or any related repayment of Indebtedness, in each case
since the first day of such four-quarter period, as if such acquisition or
disposition had been consummated on the first day of such four-quarter
period); provided, however, that
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Southam may not Incur Indebtedness under this paragraph for purposes of
purchasing or otherwise acquiring the Capital Stock or a substantial portion
of the assets of another Person (including the minority interest in Southam
but excluding acquisitions of inventory, equipment and similar assets in the
ordinary course of business) unless, immediately after giving effect to such
transaction on a pro forma basis, Publishing could Incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under Section 10.08;
(iii) guarantees by, and Liens on the property of, any Restricted Subsidiary
guaranteeing or securing Indebtedness of Publishing or Foreign Subsidiary
Indebtedness under the New Bank Credit Facility and, provided that both of
The Telegraph and Southam are Restricted Subsidiaries, guarantees of, and
Liens securing, the FDTH Credit Facility, which guarantees or Liens are in
existence on the date of this Indenture or on the date which they become
Restricted Subsidiaries or guarantees that are otherwise permitted under
Section 10.13;
(iv) Indebtedness of Publishing pursuant to the Securities and Indebtedness
of any Restricted Subsidiary constituting a Guarantee of the Securities;
(v) Indebtedness of Publishing or any Restricted Subsidiary outstanding on
the date of this Indenture and listed on Schedule I hereto;
(vi) Indebtedness (a) of Publishing owing to a Wholly Owned Restricted
Subsidiary or, provided that both of The Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary, or (b) of a Wholly Owned Restricted
Subsidiary owing to Publishing or another Wholly Owned Restricted Subsidiary
or, provided that both of The Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary owing to another Restricted Subsidiary
or Publishing; provided that any such Indebtedness is made pursuant to an
intercompany note setting forth the principal amount, interest rate and
payment dates, the maturity or similar terms, and, in the case of
Indebtedness of Publishing owing to a Wholly Owned Restricted Subsidiary or a
Restricted Subsidiary, as the case may be, is subordinated in right of
payment from and after such time as the Securities shall become due and
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payable (whether at Stated Maturity or otherwise) to the payment and
performance of Publishing's obligations under the Securities; provided
further, that (x) any disposition, pledge or transfer of any such
Indebtedness to a Person (other than (x) to Publishing or a Wholly Owned
Restricted Subsidiary or, provided that both of The Telegraph and Southam are
Restricted Subsidiaries, a Restricted Subsidiary or (y) a pledge of such
Indebtedness to secure Indebtedness existing at such time under, and pursuant
to the terms of, the New Bank Credit Facility or the AP-91 Senior Notes and
provided that both of The Telegraph and Southam are Restricted Subsidiaries,
the FDTH Credit Facility and the Southam credit facilities existing on
January 1, 1997, as amended), will be deemed to be an Incurrence of such
Indebtedness by the obligor not permitted by this clause (vi) and (y) any
transaction pursuant to which any Wholly Owned Restricted Subsidiary or,
provided that both of The Telegraph and Southam are Restricted Subsidiaries,
a Restricted Subsidiary, that has Indebtedness owing to Publishing or any
other Wholly Owned Restricted Subsidiary (or, provided that both of The
Telegraph and Southam are Restricted Subsidiaries, any other Restricted
Subsidiary), ceases to be a Wholly Owned Restricted Subsidiary or, provided
that both of The Telegraph and Southam are Restricted Subsidiaries, a
Restricted Subsidiary, will be deemed to be the Incurrence of Indebtedness by
Publishing or such other Restricted Subsidiary that is not permitted by this
clause (vi);
(vii) obligations of Publishing or any Restricted Subsidiary pursuant to
Interest Rate Agreements or Currency Agreements designed to protect
Publishing or any Restricted Subsidiary against fluctuations in interest
rates or currency exchange rates in respect of Indebtedness of Publishing or
any of its Restricted Subsidiaries or changes in dividend rates in respect of
preference shares of DTH, the notional amount of which (in the case of
Interest Rate Agreements) and the notional or exchange amount of which (in
the case of Currency Agreements) do not exceed the aggregate principal amount
of such Indebtedness or of such preference shares of DTH, as the case may be;
(viii) guarantees by Restricted Subsidiaries of Senior Indebtedness of
Publishing otherwise permitted
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to be Incurred in accordance with the provisions of Section 10.08;
(ix) Indebtedness of Publishing or a Restricted Subsidiary Incurred to
finance a new printing plant for the Chicago Sun-Times and the liabilities
directly associated therewith (collectively, the "CST Printing Plant") in an
aggregate amount not in excess of the lesser of (x) $75,000,000 and (y) the
aggregate amount needed to finance the CST Printing Plant and associated
financing costs;
(x) letter of credit reimbursement obligations Incurred by Publishing or a
Restricted Subsidiary in the ordinary course of business to support workers
compensation insurance obligations to the extent that such obligations are
recorded on the balance sheet of the issuer;
(xi) any renewals, extensions, substitutions, refundings, refinancings or
replacements (collectively, a "refinancing") of any Indebtedness described in
paragraphs (i), (ii), (iii), (iv), (viii) and (xii) of this definition of
"Permitted Indebtedness" by Publishing or by the obligor of such Permitted
Indebtedness, including any successive refinancings, so long as such
refinancing does not increase the aggregate principal amount of Indebtedness
represented thereby and, in the case of Pari Passu Indebtedness or
Subordinated Indebtedness, such refinancing does not reduce the Average Life
to Stated Maturity or the Stated Maturity of such Indebtedness;
(xii) provided that both of The Telegraph and Southam are Restricted
Subsidiaries, Indebtedness of Publishing or any Restricted Subsidiary in an
aggregate amount at any time outstanding not to exceed $25 million in respect
of purchase money obligations, provided such Indebtedness (a) is Incurred
within 180 days of the purchase of the relevant assets, (b) does not exceed
the actual purchase price of such assets and (c) any related Liens do not
extend to any assets other than those being purchased; and
(xiii) provided that both of The Telegraph and Southam are Restricted
Subsidiaries, Indebtedness of Publishing or any Restricted Subsidiary in an
aggregate
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principal amount at any time outstanding not to exceed $10 million.
"Permitted Investment" means any of the following provided that, in the case
of clauses (vii), (viii), (ix), (x), (xi) and (xii), (a) no Default or Event of
Default shall have occurred and be continuing, (b) no holders of any other
Indebtedness of Publishing or any Restricted Subsidiary shall have an
Acceleration Right and (c) immediately before and immediately after giving
effect to such Investment, on a pro forma basis, Publishing could Incur $1.00
of additional Indebtedness (other than Permitted Indebtedness) under the
provisions described in Section 10.08 of this Indenture:
(i) Investments in any Wholly Owned Restricted Subsidiary (or, provided that
both of The Telegraph and Southam are Restricted Subsidiaries, a Restricted
Subsidiary) or Publishing or Investments in a Person, if as a result of such
Investment (A) such Person becomes a Wholly Owned Restricted Subsidiary (or,
provided both of The Telegraph and Southam are Restricted Subsidiaries, a
Restricted Subsidiary), or (B) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, Publishing or any Wholly Owned Restricted
Subsidiary (or, provided that both of The Telegraph and Southam are
Restricted Subsidiaries, a Restricted Subsidiary);
(ii) Investments in the Securities;
(iii) Indebtedness owing to a Wholly Owned Restricted Subsidiary or,
provided that both of The Telegraph and Southam are Restricted Subsidiaries,
a Restricted Subsidiary, in each case as described under clause (vi) of the
definition of "Permitted Indebtedness";
(iv) Temporary Cash Investments;
(v) Investments acquired by Publishing or any Subsidiary in connection with
an Asset Sale permitted under Section 10.15 to the extent such Investments
are non-cash consideration as permitted under such covenant;
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(vi) Investments in existence on the date of this Indenture;
(vii) Investments in or in Persons owning Newspaper Business or Media
Business assets (including Investments in Unrestricted Subsidiaries but
excluding Investments in Affiliates that control Publishing) in an aggregate
amount following the date of this Indenture not in excess of 25% of the
aggregate cumulative cash dividends or distributions received by Publishing
and its Restricted Subsidiaries from any of Publishing's Unrestricted
Subsidiaries received during the period (treated as a single accounting
period) after the date of this Indenture and prior to the date of the
Permitted Investment; provided, however, that for purposes of this clause
(vii), cash dividends or distributions shall not include the Southam Dividend
Amount or any cash dividends or distributions received by Publishing or any
Wholly Owned Restricted Subsidiary in accordance with Section 10.09(b)(vi);
(viii) provided that The Telegraph is a Restricted Subsidiary, Investments in
West Ferry Printers and Trafford Park Printers to cover The Telegraph's share
of operating losses associated with the printing of newspapers and to finance
capital expenditures related to the printing business; provided that at any
time of any such Investment, neither West Ferry Printers nor Trafford Park
Printers shall be engaged in any business other than the business of printing
newspapers, periodicals and similar media;
(ix) Investments by Southam in Newspaper Businesses and Media Businesses and
Media Businesses in Canada; provided that (i) Southam is at the time a
Restricted Subsidiary, (ii) Southam is at the time a Public Entity and (iii)
the Investment is not made in an Affiliate of Southam (other than a
Subsidiary of Southam); and provided further that, unless such Investment by
Southam otherwise qualifies as a Permitted Investment under this definition
(other than pursuant to this clause (x)), such Investment will constitute a
Restricted Payment under Section 10.09;
<PAGE> 32
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(x) Investments by DTH or FDTH in Argsub Preferred, provided that (x) the
issuer of such Argsub Preferred simultaneously makes an Investment in Mirror
Preferred of DTH or FDTH, as the case may be, in an equivalent amount and (y)
such Mirror Preferred continues to qualify as such under the definition
thereof; and
(xi) in addition to the Investments described in clauses (i) through (xi)
of this definition of "Permitted Investments," Investments in any Restricted
Subsidiary, Unrestricted Subsidiary or in any joint venture or other entity
in an amount not to exceed $10,000,000 in aggregate since the date of this
Indenture; provided that so long as The Telegraph is a Restricted Subsidiary,
the loan of $6,000,000 from Publishing to FDTH prior to the time The
Telegraph became a Restricted Subsidiary shall not count against the
$10,000,000 amount provided for in this clause (xii).
"Permitted Junior Securities" means, so long as the effect of any exclusion
employing this definition is not to cause the Securities to be treated in any
case or proceeding or similar event described in clauses (a), (b) or (c) of the
first paragraph of Section 12.02 as part of the same class of claims as the
Senior Indebtedness or any class of claims pari passu with, or senior to, the
Senior Indebtedness, for any payment or distribution, debt or equity securities
of Publishing or any successor corporation provided for by a plan of
reorganization or readjustment that are subordinated at least to the same
extent that the Securities are subordinated to the payment of all Senior
Indebtedness then outstanding; provided that (1) if a new corporation results
from such reorganization or readjustment, such corporation assumes any Senior
Indebtedness not paid in full in cash or Cash Equivalents in connection with
such reorganization or readjustment and (2) the rights of the holders of such
Senior Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment.
"Permitted Real Estate Sale" means any Asset Sale not involving an Affiliate
of Publishing consisting of the sale of any printing or distribution facility
(including the associated real property and the improvements and fixtures
forming a part thereof) (other than the CST Real Estate) formerly used by
Publishing or a Restricted Subsidiary in
<PAGE> 33
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the production of newspapers and related publications (or acquired by one of
them as part of the acquisition of a Newspaper Business whether or not used by
Publishing) and that after such Asset Sale will not be used for the production
of any newspaper or related publication of Publishing or a Restricted
Subsidiary, provided that the aggregate value (as determined by the Board of
Directors of Publishing) of all such Asset Sales completed within any twelve
month period shall not exceed $5,000,000 (it being understood that this
definition does not include, among other things, any Asset Sale consisting of
the sale of any printing or distribution facility in connection with the sale
by Publishing or any Restricted Subsidiary of any Newspaper Business).
"Permitted Subsidiary Indebtedness" means Indebtedness of the Restricted
Subsidiaries, taken as a whole, with an aggregate principal amount outstanding
(calculated exclusive of the AP-91 Senior Notes) not in excess of the greater
of (x) $40,000,000 and (y) 10% of Consolidated Tangible Assets measured as of
the most recent fiscal quarter.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivisions thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any Capital Stock of
any class or classes (however designated) which is preferred as to the payment
of dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person, provided that this definition
shall not include Mirror Preferred provided that such Mirror
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Preferred continues to qualify as such under the definition thereof.
"Public Debt" means any notes, bonds or debentures or other evidence of
Indebtedness in the public markets or the market for securities sold pursuant
to Rule 144A under the Securities Act of 1933.
"Public Entity" means an entity (x) in which the equity interest of
Hollinger International and its Affiliates does not exceed 80%, (y) in which
the market value of the Capital Stock held by nonaffiliates exceeds
$100,000,000 and (z) the Capital Stock of which is traded on a recognized
national securities exchange in the United States or a prescribed securities
exchange in Canada.
"Publishing" means Hollinger International Publishing Inc., a corporation
incorporated under the laws of Delaware, until a successor Person shall have
become such pursuant to Article VIII of this Indenture and thereafter
"Publishing" shall mean such successor Person. To the extent necessary to
comply with the requirements of the provisions of Trust Indenture Act Sections
310 through 317 as they are applicable to Publishing, the term "Publishing"
shall include any other obligor with respect to the Securities for purposes of
complying with such provisions, including any Guarantor.
"Publishing Request" or "Publishing Order" means a written request or order
signed in the name of Publishing by any one of its Chairman of the Board, its
Vice Chairman, its President or a Vice President (regardless of Vice
Presidential designation), and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and in form and substance
reasonably satisfactory to the Trustee and delivered to the Trustee.
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Rating Agency" means Standard & Poor's Corporation and its successors
("S&P"), and Moody's Investors Service, Inc. and its successors ("Moody's"), or
if S&P and Moody's or both shall not make a rating of the Securities publicly
available, a nationally recognized United States statistical rating agency or
agencies, substituted for S&P or Moody's or both, as the case may be.
"Rating Category" means each major rating category symbolized by (a) in the
case of S&P, AAA, AA, A, BBB, BB, B, CCC, CC and C and each such Rating
Category shall include pluses or minuses ("gradations") modifying such capital
<PAGE> 35
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letters; and (b) in the case of Moody's, Aaa, Aa, A, Baa, Ba, B, Caa, Ca and C
and each such Rating Category shall include added numerals such as 1, 2 or 3
("gradations") modifying such letters.
"Rating Decline" means an event that will be deemed to have occurred if, on
any date within the period (the "Rating Period") beginning on the date (the
"Reference Date") of the earlier to occur of (A) the first public announcement
by Publishing or any other Person of an intention to effect any Designated
Transaction and (B) the occurrence of such Designated Transaction, and ending
on the date 90 days thereafter, either of the following events has occurred:
(1) the Securities of any Series (or any other securities of Publishing which
are rated by a Rating Agency on the date which is 61 days prior to the
Reference Date (the "Rating Date")) shall be rated by any Rating Agency at any
time during the Rating Period at a rating which is lower than the rating of the
Securities of such Series (or such other securities of Publishing, as the case
may be) by such Rating Agency on the Rating Date by one or more gradations
(including gradations within Rating Categories as well as between Rating
Categories) or (2) any Rating Agency shall have withdrawn its rating of the
Securities of any Series (or such other securities of Publishing, as the case
may be) during the Rating Period.
"Redeemable Capital Stock" means any Capital Stock that, either by its terms
or by the terms of any security into which it is convertible or exchangeable or
otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed prior to any Stated Maturity of the principal of the
Securities or is redeemable at the option of the holder thereof at any time
prior to any such Stated Maturity, or is convertible into or exchangeable for
debt securities at any time prior to any such Stated Maturity at the option of
the holder thereof; provided that this definition shall not include Mirror
Preferred provided that such Mirror Preferred continues to qualify as such
under the definition thereof.
"Redemption Date" when used with respect to any Security to be redeemed
pursuant to any provision in this Indenture means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed
pursuant to any provision in this
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Indenture means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
relating to a particular Series means the date specified in the Board
Resolution or supplemental indenture relating to such Series.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Division of the Trustee or any agent of
the Trustee appointed hereunder, including the president, any vice president,
any assistant vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or assistant trust
officer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated functions similar to
those performed by any of the above designated officers or any other officer
appointed hereunder to whom any corporate trust matter is referred because of
his or her knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means, initially, each Subsidiary of Publishing
existing on the date of this Indenture, other than DTH and its Subsidiaries,
and any other Subsidiary designated from time to time by the Board of Directors
of Publishing as a "Restricted Subsidiary" in accordance with Section 10.21 of
this Indenture.
"Restricted Subsidiary Guarantor" means each Subsidiary of Publishing that
is required to issue a Guarantee of the Securities under the terms of this
Indenture.
"Scheme of Arrangement" means the acquisition by FDTH of the publicly held
shares in The Telegraph not owned by FDTH or any of its Affiliates effected by
way of a "Scheme of Arrangement under Section 425 of the Companies Act 1985 of
England.
<PAGE> 37
37
"Securities" has the meaning specified in the first recital of this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Guarantor Indebtedness" means, with respect to any Guarantor, such
Guarantor's guarantee of Publishing's payment obligations in respect of the New
Bank Credit Facility, the FDTH Credit Agreement and any other Indebtedness of
such Guarantor (other than as otherwise provided in this definition), whether
outstanding on the date of this Indenture or thereafter created, Incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Guarantees. Notwithstanding the foregoing, "Senior Guarantor
Indebtedness" shall not include (i) Indebtedness evidenced by such Guarantor's
Guarantee of the Securities; (ii) Indebtedness of such Guarantor that is
subordinate or junior in right of payment to any other Indebtedness of such
Guarantor; (iii) Indebtedness of such Guarantor which, when Incurred and
without respect to any other election under Section 1111(b) of Title 11, United
States Code, is without recourse to such Guarantor; (iv) Indebtedness which is
represented by Redeemable Capital Stock of such Guarantor; (v) any liability
for foreign, federal, state, local or other taxes owed or owing by such
Guarantor; (vi) Indebtedness of such Guarantor to a Restricted Subsidiary or
any other Affiliate of such Guarantor or any of such Affiliate's subsidiaries;
(vii) that portion of any Indebtedness which at the time of Incurrence is
issued in violation of this Indenture; and (viii) trade payables owed or owing
by such Guarantor.
"Series" means any series of debentures, notes, bonds or other evidences of
indebtedness issued pursuant to Article III hereof or a supplemental indenture.
"Senior Indebtedness" means, with respect to Publishing, the principal of,
premium, if any, and interest in respect of the New Bank Credit Facility and
any other Indebtedness of Publishing (other than as otherwise provided in this
definition), whether outstanding on the date of this Indenture or thereafter
created, Incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
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38
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Securities. Without limiting the
generality of the foregoing, "Senior Indebtedness" shall include the principal
of, premium, if any, interest and all other obligations owing to the lenders
under (a) the New Bank Credit Facility and (b) holders under the Senior
Securities. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (i) Indebtedness evidenced by the Securities; (ii) Indebtedness of
Publishing that is subordinate or junior in right of payment to any other
Indebtedness of Publishing; (iii) Indebtedness of Publishing which, when
Incurred and without respect to any other election under Section 1111(b) of
Title 11, United States Code, is without recourse to Publishing; (iv)
Indebtedness which is represented by Redeemable Capital Stock; (v) any
liability for foreign, federal, state, local or other taxes owed or owing by
Publishing; (vi) Indebtedness of Publishing to a Restricted Subsidiary or any
other Affiliate of Publishing or any of such Affiliate's subsidiaries; (vii)
that portion of any Indebtedness which at the time of Incurrence is issued in
violation of this Indenture; and (viii) trade payables owed or owing by
Publishing.
"Series A Preferred Shares" means the Series A Redeemable Convertible
Preferred Stock of Hollinger International, as in effect on the date of this
Indenture.
"Services Agreement" means the Services Agreement dated as of February 7,
1996, as amended in connection with the offering of the Securities, among
Hollinger International, Publishing and Hollinger Inc., and as the same may be
further amended in accordance with the terms of this Indenture.
"Southam" means Southam Inc., a corporation continued under the laws of
Canada.
"Southam Cash Flow" means, for any period, an amount equal to the Southam
Net Income for such period, plus, to the extent deducted in calculating such
Southam Net Income, (a) interest expense and other financing costs and
expenses, (b) dividends paid on any Preferred Stock of Restricted Subsidiaries
of Southam to the extent such Preferred Stock is included as Indebtedness in
the calculation of the Southam Cash Flow Ratio, (c) depreciation and
amortization, and (d) all taxes, whether or not deferred, applicable to such
period.
<PAGE> 39
39
For purposes of calculating Southam Cash Flow for the four fiscal quarters
most recently completed prior to any date on which an action is taken that
requires a calculation of the Southam Cash Flow Ratio, (a) any Person that is a
Restricted Subsidiary of Southam on such date (or would become a Restricted
Subsidiary of Southam in connection with the transaction that requires the
determination of such ratio) shall be deemed to have been a Restricted
Subsidiary of Southam at all times during such period, (b) any Person that is
not a Restricted Subsidiary of Southam on such date (or would cease to be a
Restricted Subsidiary of Southam in connection with the transaction that
requires the determination of such ratio) shall be deemed not to have been a
Restricted Subsidiary of Southam at any time during such period;(c)if Southam
or any of its Restricted Subsidiaries shall have in any manner acquired or
disposed of any operating business during or subsequent to such period, such
calculation shall be made on a pro forma basis on the assumption that such
acquisition or disposition has been completed on the first day of such period;
and (d) in the case of a Restricted Subsidiary that is not a Wholly Owned
Restricted Subsidiary, the determination of the percentage of the Operating
Cash Flow of such Restricted Subsidiary that is to be included in the
calculation of the Consolidated Publishing's Consolidated Cash Flow Ratio
shall be made on a pro forma basis on the assumption that the percentage of
Publishing's common equity interest in such Restricted Subsidiary on the first
day of such period was equivalent to its common equity interest on the date of
the determination (it being understood, in the case of the foregoing clause
(c), that if such pro forma calculations have been made in accordance with
Regulation S-X under the Exchange Act, such method of calculation (but not
necessarily the adjustments) shall be presumed to be acceptable).
"Southam Cash Flow Ratio" means, as at any date of determination, the ratio
of (i) the aggregate amount of Indebtedness of Southam and its Restricted
Subsidiaries outstanding as at such date to (ii) the Southam Cash Flow
(determined on a Consolidated basis for Southam and its Restricted
Subsidiaries) for the most recently completed period of four consecutive fiscal
quarters of Southam, provided that once Southam is a Restricted Subsidiary, for
the purpose of determining the Southam Cash Flow Ratio, the Indebtedness and
Southam Cash Flow of Restricted Subsidiaries of Southam that are not Wholly
Owned Restricted Subsidiaries of Southam will be determined in accordance
<PAGE> 40
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with the actual percentage of Southam's common equity interest in such
Restricted Subsidiary on the date of determination of the Southam Cash Flow
ratio (thus, for example, in the case of a Restricted Subsidiary of Southam in
which Southam owns 51% common equity interest, 51% each of such Restricted
Subsidiary's indebtedness and Southam Cash Flow would be included in the
calculation of Southam's aggregate Indebtedness and the aggregate of Southam
Cash Flow, respectively).
"Southam Dividend Amount" means the lesser of (x) the aggregate amount paid
or payable by Hollinger International since the date of original issuance of
the Securities in respect of regularly scheduled periodic dividends on the
Series A Preferred and (y) the aggregate amount of the Southam Interests
Dividends received by Publishing since the date of original issuance of the
Securities on account of its ownership interest (whether direct or indirect) in
Southam.
"Southam Interests" means 7,395,000 Southam common shares held by Hollinger
International or it subsidiaries; provided, however, that if Southam shall pay
a dividend, or make a distribution, on its common shares in the form of capital
stock of the same or another corporation, or subdivide its outstanding common
shares into a greater number of common shares, or combine its outstanding
common shares into a smaller number of common shares, or effect a
reorganization or reclassification of its Capital Stock, or amalgamate, enter
into an arrangement or consolidation or merge with or into another entity
(other than an amalgamation, arrangement, consolidation or merger which does
not result in a reclassification or change of the outstanding common shares of
Southam), the "Southam Interests" shall thereafter include any securities
distributed with respect to any such shares or into which any such shares shall
be converted, changed or reclassified or for which any such shares shall be
exchanged.
"Southam Interests Dividend" means a dividend or other distribution paid on
or with respect to the Southam Interests on or prior to the earlier of (i) the
redemption date for the redemption of all the Series A Preferred Shares
outstanding as of such redemption date or (ii) the date of final distribution
to the holders of the Series A Preferred Shares of the full preferential amount
provided under the terms thereof; provided, however, that the term "Southam
Interests Dividend" does not mean or include (x) any part of
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any dividend or distribution that is payable otherwise than in cash or that
constitutes an Extraordinary Cash Dividend as applied to the Southam Interests,
or (y) any dividend or distribution on or with respect to the 7,395,000 Southam
common shares held by Hollinger International or its subsidiaries.
"Southam-Linked Debentures" means the debentures of Hollinger Inc. in the
original principal amount of Cdn.$125,000,000 due November 1, 1998.
"Southam Net Income (Loss)" means, for any period, the Consolidated net
income (or loss) (and treating a loss as a negative number)) of Southam and its
Restricted Subsidiaries for such period as determined in accordance with GAAP,
adjusted by (a) excluding, without duplication, to the extent included in
calculating such Consolidated net income (or loss), (i) all extraordinary gains
and losses, (ii) the portion of Consolidated net income (or loss) of Southam
and its Restricted Subsidiaries allocable to Investments in unconsolidated
Persons (other than Unrestricted Subsidiaries) to the extent that cash
dividends or distributions have not actually been received by such Southam or
one of its Restricted Subsidiaries, (iii) the portion of Consolidated net
income (or loss) of Southam and its Restricted Subsidiaries allocable to
Southam's Unrestricted Subsidiaries (or to payments received therefrom), (iv)
net income (or loss) of a Person combined with Southam or any of its
Subsidiaries on a "pooling of interests" basis attributable to any period prior
to the date of combination, (v) any gain or loss, net of taxes, realized upon
the termination of any employee pension benefit plan, (vi) aggregate net gains
and losses (less all fees and expenses relating thereto) in respect of
dispositions of assets (including without limitation sales of shares of
Unrestricted Subsidiaries or unconsolidated Persons and noncash writeoffs of
assets (provided that there are no continuing cash expenses related to such
writeoffs)) other than in the ordinary course of business, (vii) the net income
of any Restricted Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is not at
time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or its
stockholders; provided, however, that the foregoing shall not apply to the
restrictions permitted under clause (iv) of
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Section 10.17 (to the extent such clause is applicable at the time of
determination), (viii) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of income
accrued at any time following the date of the Indenture, (ix) any net gain from
the collection of proceeds of life insurance policies, (x) any gain arising
from the acquisition of any securities, or the extinguishment, under GAAP, of
any Indebtedness of Southam or one of its Restricted Subsidiaries, (xi)
aggregate net gains or losses relating to foreign currency transactions or
translations, (xii) redundancy costs relating to the permanent elimination of
jobs, provided that the amount of such expenses are certified by Southam's
independent accountants and (b) subtracting, without duplication, the aggregate
amount of dividends on Preferred Stock of Restricted Subsidiaries of Southam
(i) to the extent such Preferred Stock is not equivalent to Common Stock for
purposes of the payment of dividends and (ii) to the extent that such Preferred
Stock is included as Indebtedness in the calculation of the Southam Cash Flow
Ratio.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the dates specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest, as the case may be, is due and payable.
"Subordinated Guarantor Indebtedness" means Indebtedness of a Guarantor
subordinated in right of payment to such Guarantor's Guarantee.
"Subordinated Indebtedness" means (i) in the case of any person other than
Publishing, Indebtedness of such person that is expressly subordinate in right
of payment to any other Indebtedness of such Person pursuant to a written
agreement, and (ii) in the case of Publishing, Indebtedness of Publishing that
is expressly subordinate in right of payment to the Senior Subordinated
Securities.
"Subsidiary" means any Person a majority of the equity ownership of the
Voting Stock of which is at the time owned, directly or indirectly, by
Publishing or by one or more Subsidiaries, or by Publishing and one or more
other Subsidiaries; provided that, notwithstanding the foregoing, (i) Southam
will be a Subsidiary so long as majority of the Voting Stock of Southam is held
by a Person in which,
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directly or indirectly, (x) 50% of the Voting Stock is held by Publishing and
the remainder is held by Hollinger Inc. and (y) 100% of the nonvoting Capital
Stock is held by Publishing, and (ii) Hollinger Eastern will be a Subsidiary so
long as 50% of its Voting Stock is held, directly or indirectly, by Publishing
and the remainder is held, directly or indirectly, by Hollinger Inc.
"Tax Sharing Agreement" means an agreement providing for the payment of
amounts in lieu of income taxes among Publishing and other companies with which
it forms a single consolidated tax group.
"Telegraph" means Telegraph Group Limited (formerly The Telegraph plc), a
corporation under the laws of England.
"Temporary Cash Investments" means (i) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof, and
guaranteed fully as to principal, premium, if any, and interest by the United
States of America, (ii) any certificate of deposit, maturing not more than one
year after the date of acquisition, issued by, or time deposit of the Trustee
or a commercial banking institution that is a member of the Federal Reserve
System and that has combined capital and surplus and undivided profits of not
less than $500,000,000, whose debt has a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Moody's or "A-1"
(or higher") according to S&P, (iii) commercial paper, maturing not more than
one year after the date of acquisition, issued by a corporation (other than an
Affiliate or Restricted Subsidiary of Publishing) organized and existing under
the laws of the United States of America with a rating, at the time as of which
any investment therein is made, of "P-1" (or higher according to Moody's or
"A-1" (or higher) according to S&P, (iv) any money market deposit accounts
issued or offered by the Trustee or a domestic commercial bank having capital
and surplus in excess of $500,000,000.
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"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture, until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee. If at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any Series shall
mean the Trustee with respect to Securities of that Series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Unrestricted Subsidiary" means any Subsidiary that is not a Restricted
Subsidiary, including any Restricted Subsidiary that becomes an Unrestricted
Subsidiary in accordance with Section 10.21 of this Indenture; provided,
however, that a Person may not be designated as an Unrestricted Subsidiary
unless (i) the creditors of such Person have no direct or indirect recourse
(including, but not limited to, recourse with respect to the payment of
principal or interest on Indebtedness of such Subsidiary) to Publishing or a
Restricted Subsidiary and (ii) a default by such Person on any of its
Indebtedness will not result in, or permit any holder of Indebtedness of
Publishing or a Restricted Subsidiary to declare, a default on such
Indebtedness of Publishing or a Restricted Subsidiary or cause the payment
thereof to be accelerated or payable prior to its Stated Maturity. Any
subsidiary of an Unrestricted Subsidiary shall be an Unrestricted Subsidiary
for purposes of this Indenture.
"Voting Stock" means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary all the
outstanding Capital Stock (other than directors' qualifying shares) of which
are owned by Publishing or another Wholly Owned Restricted Subsidiary or, in
the case of a Restricted Subsidiary of Southam, all the outstanding Capital
Stock (other than directors' qualifying shares) of which are owned by Southam
or another Wholly Owned Restricted Subsidiary of Southam.
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SECTION 1.02. Other Definitions.
Defined in
Term Section
- - ---- ----------
"Act" 1.05
"Change of Control Offer" 10.15
"Change of Control Purchase Date" 10.15
"Change of Control Purchase Notice" 10.15
"Change of Control Purchase Price" 10.15
"covenant defeasance" 4.03
"Defaulted Interest" 3.07
"defeasance" 4.02
"Defeasance Redemption Date" 4.04
"Defeased Securities" 4.01
"Deficiency" 10.14
"Excess Proceeds" 10.14
"Initial Blockage Period" 12.03
"Note Amount" 10.14
"Offer" 10.14
"Offered Price" 10.14
"Pari Passu Debt Amount" 10.14
"Pari Passu Offer" 10.14
"Payment Blockage Period" 12.03
"Permitted Payment" 10.09
"Purchase Date" 10.14
"refinancing" 10.09
"Required Filing Dates" 10.18
"Restricted Payments" 10.09
"Security Register" 3.05
"Security Registrar" 3.05
"Senior Representative" 12.03
"Special Payment Date" 3.07
"Surviving Entity" 8.01
"U.S. Government Obligations" 4.04
SECTION 1.03. Compliance Certificates and Opinions. Upon any application
or request by Publishing to the Trustee to take any action under any provision
of this Indenture, Publishing shall furnish to the Trustee an Officers'
Certificate to the effect that all conditions precedent, if any, provided for
in this Indenture (including any covenant compliance with which constitutes a
condition precedent) relating to the proposed action have been complied with
and an Opinion of Counsel to the effect that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that, in the
case of any such application or request as to which the
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furnishing of any certificates and/or opinions is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement to the effect that each individual or firm signing such
certificate or opinion has read and understands such covenant or condition
and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement to the effect that, in the opinion of each such individual
or such firm, he has made such examination or investigation as is necessary
to enable him or them to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual or
such firm, such condition or covenant has been complied with.
SECTION 1.04. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of Publishing may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to
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the matters upon which his certificate or opinion is based are erroneous. Any
certificate or opinion of such an officer or of counsel may be based, insofar
as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of Publishing with respect to such
factual matters and which contains a statement to the effect that the
information with respect to such factual matters is in the possession of
Publishing, unless such officer or counsel knows that the certificate or
opinion or representations with respect to such matters are erroneous.
Opinions of Counsel required to be delivered to the Trustee may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of Publishing or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.05. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by Holders of any Series may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to Publishing. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee and Publishing, if made in the manner provided in this
Section.
(b) The ownership of Securities shall be proved by the Security Register.
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(c) Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Security shall bind every future Holder of
the same Security or the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything
done, suffered or omitted to be done by the Trustee, any Paying Agent or
Publishing in reliance thereon, whether or not notation of such action is made
upon such Security.
(d) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
a certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate of affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
SECTION 1.06. Notices, etc., to Trustee and Publishing. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with:
(a) the Trustee by any Holder or by Publishing shall be sufficient for every
purpose hereunder if made, given, furnished or filed, in writing, by
first-class mail postage prepaid (return receipt requested) or delivered in
person or by recognized overnight courier to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust Division, or at any other
address furnished in writing prior thereto to the Holders and Publishing by
the Trustee; or
(b) Publishing or Hollinger International shall be sufficient for every
purpose (except as provided in Section 5.01(c)) hereunder if in writing and
mailed, first-class postage prepaid or delivered by recognized overnight
courier, to Publishing, addressed to it at: 401 North Wabash Avenue, Chicago,
IL 60611 Attn: General Counsel or to Hollinger International,
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addressed to it at: 401 North Wabash Avenue, Chicago, IL 60611 Attn: General
Counsel, or at any other address previously furnished in writing to the
Trustee by Publishing or Hollinger International, as the case may be.
SECTION 1.07. Notice to Holders; Waiver. Where this Indenture or the
Securities of any Series provide for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the Security Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Any notice when mailed to a Holder
in the aforesaid manner shall be conclusively deemed to have been received by
such Holder whether or not actually received by such Holder. Where this
Indenture or the Securities of any Series provide for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause, it shall be impracticable to mail notice of any event as
required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee or Publishing, as
applicable, shall be deemed to be a sufficient giving of such notice.
SECTION 1.08. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with any provision of the Trust Indenture Act or
another provision which is required or deemed to be included in this Indenture
by any of the provisions of the Trust Indenture Act, the provision or
requirement of the Trust Indenture Act shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that
may be so modified or excluded, such provision of the Trust
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Indenture Act shall be deemed to apply to this Indenture as so modified or to
be excluded, as the case may be.
SECTION 1.09. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.10. Successors and Assigns. All covenants and agreements in this
Indenture by Publishing or any Guarantor shall bind its successors and assigns,
whether so expressed or not.
SECTION 1.11. Separability Clause. In case any provision in this Indenture
or in the Securities of any Series shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 1.12. Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person (other than the
parties hereto and their successors hereunder, any Paying Agent and the
Holders) any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 1.13. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
SECTION 1.14. Legal Holidays. In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a Business Day,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal or premium, if any, need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at Maturity or the Stated Maturity, and no interest shall accrue with
respect to such payment for the period from and after such Interest Payment
Date, Redemption Date, Maturity or Stated Maturity, as the case may be, to the
next succeeding Business Day.
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SECTION 1.15. Schedules. All schedules attached hereto are by this
reference made a part with the same effect as if herein set forth in full.
SECTION 1.16. Counterparts. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities and the Trustee's
certificate of authentication thereof shall be in substantially the forms set
forth in this Article II, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange, any organizational document or
governing instrument or applicable law or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face of the Security.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 2.02. Forms of Securities. Each Security shall be in one of the
forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the
delivery of a Security to the Trustee for authentication in any form approved
by or pursuant to a Board Resolution, Publishing shall deliver to the Trustee
the Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true
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and correct copy of the form of Security which has been approved thereby or, if
a Board Resolution authorizes a specific officer or officers to approve of form
of Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to
Publishing.
SECTION 2.03. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be included on the form of the
face of the Securities substantially in the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned Indenture.
FLEET NATIONAL BANK OF
CONNECTICUT, as Trustee
by
------------------------
Authorized Signatory
SECTION 2.04. Form of Guarantee of Hollinger International.
The form of Guarantee of Hollinger International shall be set forth on the
Securities substantially as follows:
GUARANTEE OF HOLLINGER INTERNATIONAL INC.
For value received, HOLLINGER INTERNATIONAL INC., a Delaware corporation,
hereby absolutely, unconditionally and irrevocably guarantees to the holder of
this Security and the Trustee, as if Hollinger International were the principal
debtor, the punctual payment of principal of, premium, if any, and interest on
this Security in the amounts and at the time when due and interest on the
overdue principal and interest, if any, of this Security, if lawful, and the
payment or performance of all other obligations of Publishing under the
Indenture or the Securities, to the holder of this Security and the Trustee,
all in accordance
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with and subject to the terms and limitations of this Security and Article
Fourteen of the Indenture. This Guarantee will not become effective until the
Trustee duly executes the certificate of authentication on this Security.
HOLLINGER INTERNATIONAL INC.
Attest: By
--------------------- -----------------------
Authorized Signatory
SECTION 2.05. Securities Issuable in the Form of a Global Security. (a)
If Publishing shall establish pursuant to Sections 2.02 and 3.01 that the
Securities of a particular Series are to be issued in whole or in part in the
form of one or more Global Securities, then Publishing shall execute and the
Trustee or its agent shall, in accordance with Section 3.03 and any order by
Publishing delivered to the Trustee or its agent thereunder, authenticate and
deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such Series to be represented by such Global
Security or Securities, or such portion thereof as Publishing shall specify in
such order, (ii) shall be registered in the name of the Depository for such
Global Security or Securities or its nominee, (iii) shall be delivered by the
Trustee or its agent to the Depository or pursuant to the Depository's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized representative of the
Depository to Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of the nominee of
the Depository or in such other name as is requested by an authorized
representative of the Depository (and any payment is made to the nominee of the
Depository or to such other entity as is requested by an authorized
representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, the nominee of the Depository, has an interest
herein."
(b) Notwithstanding any other provision of this Section 2.05 or of Section
3.05, and subject to the provisions of paragraph (c) below, unless the terms of
a Global Security expressly permit such Global Security to be exchanged in
whole or in part for individual Securities, a
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Global Security may be transferred, in whole but not in part and in the manner
provided in Section 3.05, only to a nominee of the Depository for such Global
Security, or to the Depository, or a successor Depository for such Global
Security selected or approved by the Company, or to a nominee of such successor
Depository.
(c) (i) If at any time the Depository for a Global Security notifies
Publishing that it is unwilling or unable to continue as Depository for such
Global Security or if at any time the Depository for the Securities for such
Series shall no longer be eligible or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation,
Publishing shall appoint a successor Depository with respect to such Global
Security. If a successor Depository for such Global Security is not appointed
by Publishing within 90 days after Publishing receives such notice or becomes
aware of such ineligibility, Publishing will execute, and the Trustee or its
agent, upon receipt of a request by Publishing for the authentication and
delivery of individual Securities of such Series in exchange for such Global
Security, will authenticate and deliver, individual Securities of such Series
of like tenor and terms in an aggregate principal amount equal to the principal
amount of the Global Security in exchange for such Global Security.
(ii) Publishing may at any time and in its sole discretion determine that
the Securities of any Series or portion thereof issued or issuable in the form
of one or more Global Securities shall no longer be represented by such Global
Security or Securities. In such event Publishing will execute, and the
Trustee, upon receipt of a Company Request for the authentication and delivery
of individual Securities of such Series in exchange in whole or in part for
such Global Security, will authenticate and deliver individual Securities of
such Series of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such Global Security or
Securities representing such Series or portion thereof in exchange for such
Global Security or Securities.
(iii) If specified by Publishing pursuant to Sections 2.02 and 3.01 with
respect to Securities issued or issuable in the form of a Global Security, the
Depository for such Global Security may surrender such Global Security in
exchange in whole or in part for individual Securities of such Series of like
tenor and terms in definitive form on
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such terms as are acceptable to Publishing and such Depository. Thereupon
Publishing shall execute, and the Trustee or its agent shall authenticate and
deliver, without service charge, (1) to each Person specified by such
Depository a new Security or Securities of the same Series of like tenor and
terms and of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest as specified by such Depository in the Global Security; and
(2) to such Depository a new Global Security of like tenor and terms and in an
authorized denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal amount of
Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding three paragraphs,
Publishing will execute and the Trustee or its agent will authenticate and
deliver individual Securities in definitive registered form in authorized
denominations. Upon the exchange of the entire principal amount of a Global
Security for individual Securities, such Global Security shall be cancelled by
the Trustee or its agent. Except as provided in the preceding paragraph,
Securities issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depository for such Global Security, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee or the
Security Registrar. The Trustee or the Security Registrar shall deliver at its
Corporate Trust Office such Securities to the Persons in whose names such
Securities are so registered.
ARTICLE III
The Securities
SECTION 3.01. General Title; General Limitations; Issuable in Series; Terms
of Particular Series. The aggregate principal amount of Securities which may
be authenticated and delivered under this Indenture is not limited.
The Securities may be issued in one or more Series as from time to time may
be authorized by the Board of Directors. There shall be established in or
pursuant to a Board Resolution or in a supplemental indenture, subject to
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Section 3.11, prior to the issuance of Securities of any such Series:
(1) the title of the Securities of such Series (which shall distinguish the
Securities of such Series from Securities of any other Series);
(2) any limit upon the aggregate principal amount of the Securities of such
Series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of such Series pursuant
to Section 3.04, 3.05, 3.06, 9.06, and 11.08 and except for any Securities
which, pursuant to Section 3.03, are deemed never to have been authenticated
and delivered hereunder);
(3) the Person to whom any interest on a Security of such Series shall be
payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(4) the date or dates on which the principal of the Securities of such
Series is payable;
(5) the rate or rates at which the Securities of such Series shall bear
interest, if any, the date or dates from which such interest shall accrue,
the Interest Payment Dates on which any such interest shall be payable and
the Regular Record Date for any interest payable on any Interest Payment
Date;
(6) the place or places where the principal of and any premium and interest
on Securities of such Series shall be payable;
(7) the price or prices at which the Securities of such Series shall be
issued;
(8) the period or periods within which the Redemption Price or Prices at
which and the terms and conditions upon which Securities of such Series may
be redeemed or repaid, as the case may be, in whole or in part, at the option
of Publishing or the Holder;
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(9) the obligation, if any, of Publishing to purchase Securities of such
Series pursuant to any sinking fund or analogous provisions or at the option
of a Holder thereof and the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities of such
Series shall be purchased, in whole or in part, pursuant to such obligation;
(10) provisions, if any, with regard to the conversion or exchange of the
Securities of such Series, at the option of the Holders thereof or the
Company, as the case may be, for or into new Securities of a different
Series, Common Stock or other securities and, if the Securities of such
Series are convertible into Common Stock or other Marketable Securities, the
Conversion Price therefor;
(11) any terms applicable to Securities of such Series issued at an issue
price below their stated principal amount, including the issue price thereof
and the rate or rates at which such original issue discount will occur;
(12) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of such Series shall be
issuable;
(13) if other than U.S. dollars, the currency or currencies or units based
on or related to currencies in which the Securities of such Series shall be
denominated and in which payments of principal of, and any premium and
interest on, such Securities shall or may be payable;
(14) if the amount of payments of principal of (and premium, if any) or
interest, if any, on the Securities of such Series may be determined with
reference to an index based on a coin or currency (including a composite
currency) other than that in which the Securities are stated to be payable,
the manner in which such amounts shall be determined;
(15) if the principal of (and premium, if any) or interest, if any, on the
Securities of such Series are to be payable, at the election of Publishing or
a Holder thereof, in a coin or currency (including a composite currency)
other than that in which the
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Securities are stated to be payable, the period or periods within which, and
the terms and conditions upon which, such election may be made;
(16) the portion of the principal amount of Securities of the Series, if
other than the principal amount thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.02
or provable in bankruptcy pursuant to Section 5.04;
(17) any Event of Default with respect to the Securities of such Series, if
not set forth herein, and any additions, deletions or other changes to the
Events of Default set forth herein that shall be applicable to the Securities
of such Series;
(18) any special United States Federal income tax considerations applicable
to the Securities of such Series;
(19) if the Securities of such Series shall be issued in whole or in part in
the form of a Global Security or Securities, the terms and conditions, if
any, upon which such Global Security or Securities may be exchanged in whole
or in part for other individual Securities; and the Depository for such
Global Security or Securities; and
(20) any other terms of such Series,
all upon such terms as may be determined in or pursuant to such Board
Resolution or supplemental indenture with respect to such Series.
The form of the Securities of each Series shall be established pursuant to
the provisions of this Indenture in or pursuant to the Board Resolution or in
the supplemental indenture creating such Series. The Securities of each Series
shall be distinguished from the Securities of each other Series in such manner,
reasonably satisfactory to the Trustee, as the Board of Directors may
determine.
Unless otherwise provided with respect to Securities of a particular Series,
the Securities of any Series may only be issuable in registered form, without
coupons.
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Any terms or provisions in respect of the Securities of any Series issued
under this Indenture may be determined pursuant to this Section by providing
for the method by which such terms or provisions shall be determined.
SECTION 3.02. Denominations. The Securities of each Series shall be
issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such Series. In the absence of any such
provisions with respect to the Securities of any Series, the Securities of that
Series shall be issuable only in fully registered form in denominations of
$1,000 and any integral multiple thereof.
The Securities shall be redeemable as provided in Article XI.
At the election of Publishing, the entire indebtedness on the Securities or
certain of Publishing's obligations and covenants and certain Events of Default
thereunder may be defeased as provided in Article IV.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XII.
SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of Publishing by one of its Chairman of
the Board, Vice-Chairman, President or one of its Vice Presidents under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of Publishing shall bind Publishing,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices on the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, Publishing may deliver Securities executed by Publishing to the
Trustee for authentication, together with a Publishing Order for the
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authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as
provided in this Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture.
In case Publishing, pursuant to Article VIII, shall be consolidated or
merged with or into any other Person or shall sell, convey, assign, transfer,
lease or otherwise dispose of substantially all of its properties and assets to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which Publishing shall have been merged or
consolidated, or the successor Person which shall have received a conveyance,
transfer, lease or other disposition as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article VIII, any of
the Securities authenticated or delivered prior to such consolidation, merger,
conveyance, transfer, lease or other disposition may, from time to time, at the
request of the successor Person, be exchanged for other Securities executed in
the name of the successor Person with such changes in phraseology and form as
may be appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon a Publishing Request of the successor Person, shall authenticate and
deliver Securities as specified in such request for the purpose of such
exchange. If Securities shall at any time be authenticated and delivered in
any new name of a successor Person pursuant to this Section in exchange or
substitution for or upon registration of transfer of any Securities, such
successor Person, at the option of a Holder but without expense to such Holder,
shall provide for the exchange of all Securities at the time Outstanding held
by such Holder for Securities authenticated and delivered in such new name.
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The Trustee may appoint an authenticating agent reasonably acceptable to
Publishing to authenticate Securities on behalf of the Trustee. Unless limited
by the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Security Registrar or Paying
Agent to deal with Publishing and its Affiliates.
SECTION 3.04. Temporary Securities. Pending the preparation of definitive
Securities of any Series, Publishing may execute, and upon a Publishing Order
the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities of any Series are issued, Publishing will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of Publishing designated for such purpose
pursuant to Section 10.02 (or in accordance with Section 3.03, in the case of
the initial Securities), without charge to the Holders thereof. Upon surrender
for cancellation of any one or more temporary Securities, Publishing shall
execute and upon a Publishing Order the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Securities of such
Series of authorized denominations. Until so exchanged the temporary
Securities of such Series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
SECTION 3.05. Registration, Registration of Transfer and Exchange.
Publishing shall cause to be kept at the Corporate Trust Office of the Trustee,
or such other office as the Trustee may designate, a register (the register
maintained in such office and in any other office or agency designated pursuant
to Section 10.02 being herein sometimes referred to as the "Security Register")
in which,
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subject to such reasonable regulations as the Security Registrar may prescribe,
Publishing shall provide for the registration of Securities, or of Securities
of a particular Series, and of transfers of Securities or of Securities of such
Series. The Trustee or an agent thereof or of Publishing shall initially be
the "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided. Publishing may appoint one or more
co-registrars, but there shall be only one Security Register per Series of
Securities.
Upon surrender for registration of transfer of any Security at the office or
agency of Publishing designated pursuant to Section 10.02, Publishing shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of such Series
of any authorized denomination or denominations, of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange,
Publishing shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of Publishing, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer, or for
exchange or redemption, shall (if so required by Publishing or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to Publishing, the Trustee and the Security Registrar, duly
executed by the Holder thereof or such Holder's attorney duly authorized in
writing.
No service charge shall be made to a Holder for any registration of,
transfer, exchange or redemption of Securities, but Publishing or the Trustee
may require payment of a sum sufficient to pay all or other governmental
charges that may be imposed in connection with any
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registration of, transfer, exchange or redemption of Securities, other than
exchanges pursuant to Section 3.03 3.04, 3.06, 9.06, 10.15, 10.16 or 11.08 not
involving any transfer.
Publishing shall not be required (a) to issue, register the transfer of or
exchange any Security of any Series during a period beginning at the opening of
business (i) 15 days before the mailing of a notice of redemption of the
Securities selected for redemption under Section 11.04 and ending at the close
of business on the day of such mailing or (ii) 15 days before an Interest
Payment Date and ending on the close of business on the Interest Payment Date,
or (b) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of Securities
being redeemed in part.
None of Publishing, the Trustee, any agent of the Trustee, any Paying Agent
or the Security Registrar will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If (a) any
mutilated Security is surrendered to the Trustee, or (b) Publishing and the
Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, and there is delivered to Publishing or the Trustee,
such security and/or indemnity, in each case as may be required by them to save
each of them harmless, then, in the absence of notice to Publishing or the
Trustee that such Security has been acquired by a bona fide purchaser,
Publishing shall execute and upon receipt of a Publishing Request the Trustee
shall authenticate and deliver, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a replacement Security
of like tenor and principal amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, Publishing in its discretion may, instead
of issuing a replacement Security, pay such Security.
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Upon the issuance of any replacement Securities under this Section,
Publishing may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charge that may
be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee and its agents and counsel) connected therewith.
Every replacement Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of Publishing, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities of the same Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved. Interest on
any Security which is payable, and is punctually paid or duly provided for, on
the Stated Maturity of such interest shall be paid to the Person in whose name
that Security is registered at the close of business on the Regular Record Date
for such interest payment.
Any interest on any Security which is payable, but is not paid or duly
provided for on the Stated Maturity of such interest (or within 15 days after
the Stated Maturity of such interest) and interest on such defaulted interest
at the then applicable interest rate borne by the Securities, to the extent
lawful (such defaulted interest and interest thereon herein collectively called
"Defaulted Interest") shall forthwith cease to be payable to the Holder in
whose name such Security is registered as of the Regular Record Date; and such
Defaulted Interest may be paid by Publishing, at its election in each case, as
provided in Subsection (a) or (b) below:
(a) Publishing may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner.
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Publishing shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the proposed
payment (the "Special Payment Date"), and at the same time Publishing shall
irrevocably deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the Special Payment Date, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
Subsection provided. Such notice shall be received by the Trustee no less
than 30 days prior to the Special Payment Date. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which
Special Record Date shall be not more than 15 days and not less than 10 days
prior to the Special Payment Date and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify Publishing in writing of such Special Record Date. In the
name and at the expense of Publishing, the Trustee shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date and
Special Payment Date therefor to be mailed, certified or registered (return
receipt requested) first-class postage prepaid, to each Holder at his address
as it appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the Proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities
are registered on such Special Record Date and shall no longer be payable
pursuant to the following Subsection (b).
(b) Publishing may make payment to the Persons in whose name the Securities
are registered at the close of business on the Special Record Date of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, unless,
after written notice given by Publishing to the Trustee of the proposed
payment pursuant to this Subsection, such manner of payment shall not be
deemed practicable by the Trustee (acting reasonably). The Trustee shall
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give prompt written notice to Publishing of any such determination.
Subject to the foregoing provisions of this Section 3.07, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, Publishing, the Trustee and any agent of
Publishing or the Trustee may treat the Person in whose name any Security is
registered on the Security Register as the owner of such Security for the
purpose of receiving payment of principal of, premium, if any, and (subject to
Section 3.07) interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of Publishing, the Trustee or
any agent of Publishing or the Trustee shall be affected by notice to the
contrary.
None of the Company, the Trustee, any Paying Agent or the Security Registrar
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
SECTION 3.09. Cancellation. All Securities surrendered for payment,
purchase, redemption, registration of transfer or exchange shall be delivered
to the Trustee and, if not already canceled, shall be promptly canceled by it.
Publishing or any Restricted Subsidiary may at any time deliver to the Trustee
for cancellation any Securities previously authenticated and delivered
hereunder which Publishing or any such Restricted Subsidiary may have acquired
in any manner whatsoever, and all Securities so delivered shall upon receipt of
a Publishing Order be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
securities held by the Trustee shall, unless by a Publishing Order received by
the Trustee prior to such destruction Publishing shall direct that the canceled
Securities be returned to it, be destroyed in accordance with its customary
procedures and
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certification of their destruction delivered to Publishing. The Trustee shall
provide Publishing a list of all Securities that have been canceled from time
to time as requested by Publishing.
SECTION 3.10. Computation of Interest. Unless otherwise provided as
contemplated in Section 3.01, interest on the Securities shall be computed on
the basis of a 360-day year of twelve 30-day months.
SECTION 3.11. Delayed Issuance of Securities. Notwithstanding any contrary
provision herein, if all Securities of a Series are not to be originally issued
at one time, it shall not be necessary for Publishing to deliver to the Trustee
an Officers' Certificate, Board Resolution, supplemental indenture or Opinion
of Counsel otherwise required pursuant to Sections 1.03, 2.02, 3.01 and 3.03 at
or prior to the time of authentication of each Security of such Series if such
documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first Security of such Series to
be issued; provided that any subsequent request by Publishing to the Trustee to
authenticate Securities of such Series upon original issuance shall constitute
a representation and warranty by Publishing that as of the date of such
request, the statements made in the Officers' Certificate or other certificates
delivered pursuant to Sections 1.02 and 2.02 shall be true and correct as if
made on such date.
An Officers' Certificate or Board Resolution or supplemental indenture
delivered by Publishing to the Trustee in the circumstances set forth in the
preceding paragraph may provide that Securities which are the subject thereof
will be authenticated and delivered by the Trustee or its agent on original
issue from time to time in the aggregate principal amount, if any, established
for such Series pursuant to such procedures acceptable to the Trustee as may be
specified from time to time upon the telephonic, electronic or written order of
Persons designated in such Officers' Certificate, supplemental indenture or
Board Resolution (any such telephonic or electronic instructions to be promptly
confirmed in writing by such Persons) and that such Persons are authorized to
determine, consistent with such Officers' Certificate, supplemental indenture
or Board Resolution, such terms and conditions of said Securities as are
specified in such Officers' Certificate, supplemental indenture or Board
Resolution.
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ARTICLE IV
Defeasance and Covenant Defeasance
SECTION 4.01. Publishing's Option To Effect Defeasance or Covenant
Defeasance. Publishing may, at its option by Board Resolution, at any time,
with respect to any Series of Securities, elect to have either Section 4.02 or
Section 4.03 be applied to all of the Outstanding Securities of such Series
(the "Defeased Securities"), upon compliance with the conditions set forth
below in this Article IV.
SECTION 4.02. Defeasance and Discharge. Upon Publishing's exercise under
Section 4.01 of the option applicable to this Section 4.02, Publishing shall be
deemed to have been discharged from its obligations with respect to the
Defeased Securities on the date the conditions set forth below are satisfied
(hereinafter, "defeasance") and each Guarantor shall be deemed to be discharged
from its obligations with respect to its Guarantee relating to the Defeased
Securities. For this purpose, such defeasance means that Publishing shall be
deemed to have paid and discharged the entire indebtedness represented by the
Defeased Securities, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 4.05 and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of Publishing and upon written
request, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Securities to receive, solely
from the trust fund described in Section 4.04 and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due, (b) Publishing's
obligations with respect to such Defeased Securities under Sections 3.04, 3.05,
3.06, 10.02 and 10.03, (c) the rights, powers, trusts, duties, indemnities and
immunities of the Trustee hereunder, and (d) this Article IV. Subject to
compliance with this Article IV, Publishing may exercise its option under this
Section 4.02 notwithstanding the prior exercise of its option under Section
4.03 with respect to the Securities.
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SECTION 4.03. Covenant Defeasance. Upon Publishing's exercise under
Section 4.01 of the option applicable to this Section 4.03, Publishing shall be
released from its obligations under any covenant or provision contained in
Sections 10.05 through 10.19, inclusive, and the provisions of Article XII and
Sections 14.16 through 14.29 shall not apply, with respect to the Defeased
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Defeased Securities shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with such covenants and provisions, but shall continue
to be deemed "Outstanding" for all other purposes hereunder. For this purpose,
such covenant defeasance means that, with respect to the Defeased Securities,
Publishing may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such Section or Article,
whether directly or indirectly, by reason of any reference elsewhere herein or
in such Defeased Securities to any such Section or Article or by reason of any
reference in any such Section or Article to any other provision herein or in
any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 5.01(c), (d) or (f) but, except as
specified above, the remainder of this Indenture and such Defeased Securities
shall be unaffected thereby.
SECTION 4.04. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of either Section 4.02 or
Section 4.03 to the Defeased Securities:
(1) Publishing shall irrevocably have deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Series of Securities, (a) United States
dollars in an amount, (b) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of
any payment, money in an amount, or (c) a combination thereof, in such amounts
as will be sufficient, as reflected in the written report of a nationally
recognized firm of independent public accountants or a nationally recognized
investment banking firm delivered to
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the Trustee, to pay and discharge (and which shall be applied by the Trustee to
pay and discharge) the principal of, premium, if any, and interest on, the
Defeased Securities on (x) the Stated Maturity thereof or (y) any date selected
by Publishing on which the Defeased Securities may be redeemed in whole at the
option of Publishing (such date being referred to as the "Defeasance Redemption
Date"), if (in the case of clause (y)) when electing either defeasance or
covenant defeasance, Publishing has delivered to the Trustee an irrevocable
notice to redeem all of the outstanding Securities of such Series on the
Defeasance Redemption Date) of such principal or installment of interest;
provided that the Trustee (or such qualifying trustee) shall have been
irrevocably instructed to apply such United States dollars or the proceeds of
such U.S. Government Obligations to said payments with respect to the
Securities of such Series. For this purpose, "U.S. Government Obligations"
means securities that are (i) direct obligations of the United States of
America for the timely payment of which its full faith and credit is pledged or
(ii) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the timely payment of
which is unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment of
principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
(2) In the case of an election under Section 4.02, Publishing shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
to the effect that (A) Publishing has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable Federal income tax
law, in either case to the effect that the Holders of the Outstanding
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Securities of such Series will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred.
(3) In the case of an election under Section 4.03, Publishing shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
to the effect that the Holders of the Outstanding Securities of such Series
will not recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred.
(4) No Default or Event of Default shall have occurred and be continuing on
the date of such deposit or insofar as subsections 5.01(g) and (h) are
concerned, at any time during the period ending on the 121st day after the date
of deposit.
(5) Such defeasance or covenant defeasance shall not cause the Trustee to
have a conflicting interest with respect to any securities of Publishing.
(6) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a Default under, this Indenture or a breach or
violation of any provision of any agreement relating to any Senior
Indebtedness.
(7) Publishing shall have delivered to the Trustee an Opinion of
Independent Counsel in the United States to the effect that (A) the trust funds
will not be subject to any rights of holders of Senior Indebtedness, including
without limitation, those arising under this Indenture and (B) after the 121st
day following the deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally.
(8) Publishing shall have delivered to the Trustee an Officers' Certificate
stating that the deposit was not made by Publishing with the intent of
preferring the holders of the Securities of such Series over the other
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creditors of Publishing or with the intent of defeating, hindering, delaying or
defrauding creditors of Publishing.
(9) No event or condition shall exist that would prevent Publishing from
making payments of the principal of, premium, if any, and interest on the
Securities of such Series on the date of such deposit or at any time ending on
the 121st day after the date of such deposit.
(10) Publishing shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each to the effect that all
conditions precedent provided for relating to either the defeasance under
Section 4.02 or the covenant defeasance under Section 4.03 (as the case may be)
have been complied with as contemplated by this Section 4.04.
Opinions of Counsel required to be delivered under this Section may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of Publishing or
government or other officials customary for opinions of the type required,
which certificates shall be limited to matters of fact, including that various
financial covenants have been complied with.
SECTION 4.05. Deposited Money and U.S. Government Obligations To Be Held in
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 10.03, all United States dollars and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee
pursuant to Section 4.04 in respect of the Defeased Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Series of Securities and this Indenture, to the payment, either directly or
through any Paying Agent as the Trustee may determine, to the Holders of such
Series of Securities of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.
Publishing shall fully pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 4.04 or the principal and interest received in
respect thereof, other than any such tax, fee or
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other charge which by law is for the account of the Holders of the Defeased
Securities.
Anything in this Article IV to the contrary notwithstanding, the Trustee
shall deliver or pay to Publishing from time to time upon a Publishing Request
any United States dollars or U.S. Government Obligations held by it as provided
in Section 4.04 which, in the opinion of a nationally recognized firm of
independent public accountants or nationally recognized investment banking firm
expressed in a written report delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect
defeasance or covenant defeasance. In the event of an error in any calculation
resulting in a withdrawal hereunder, Publishing shall deposit an amount equal
to the amount erroneously withdrawn as promptly as practicable after becoming
aware of such error.
SECTION 4.06. Reinstatement. If the Trustee or Paying Agent is unable to
apply any United States dollars or U.S. Government Obligations in accordance
with Section 4.02 or 4.03, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then Publishing's obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 4.02 or 4.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
United States dollars or U.S. Government Obligations in accordance with Section
4.02 or 4.03, as the case may be; provided, however, that (a) if Publishing
makes any payment to the Trustee or Paying Agent of principal, premium, if any,
or interest on any Security following the reinstatement of its obligations, the
Trustee or Paying Agent shall promptly pay any such amount to the Holders of
the Securities and Publishing shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the United States dollars and
U.S. Government Obligations held by the Trustee or Paying Agent and (b) the
Trustee or Paying Agent shall return all such United States dollars and U.S.
Government Obligations to Publishing promptly after receiving a Publishing
Request therefor at any time, if the Trustee or Paying Agent receives written
notice from Publishing that such reinstatement of Publishing's obligations has
occurred and continues to be in effect at such time.
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ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used herein,
means with respect to any Series of Securities any one of the following events
(whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article XII or be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body), unless such event is either inapplicable to a particular
Series or it is specifically modified in or pursuant to the supplemental
indenture or Board Resolution creating such Series of Security or in the form
of Security for such Series:
(a) there shall be a default in the payment of any interest on any Security
of that Series when it becomes due and payable, and such default shall
continue for a period of 30 days;
(b) there shall be a default in the payment of the principal of (or premium,
if any, on) any Security of that Series when and as the same shall become due
and payable at its Maturity (upon acceleration, optional or mandatory
redemption, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach, of any
covenant or agreement of Publishing under this Indenture (other than a
default in the performance, or breach, of a covenant or agreement which is
specifically dealt with in Section 5.01(a) or (b) or in clauses (ii) or (iii)
of this Section 5.01(c)), and such default or breach shall continue for a
period of 30 days after written notice has been given, by certified mail, (x)
to Publishing by the Trustee or (y) to Publishing and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities; (ii) there shall be a default in the performance or breach of the
provisions of Article VIII; or (iii) Publishing shall have failed to make or
consummate a Change of Control Offer in accordance with the provisions of
Section 10.15;
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(d) one or more defaults shall have occurred under any agreements,
indentures or instruments under which Publishing, any Guarantor or any
Restricted Subsidiary then has outstanding Indebtedness in excess of
$5,000,000 in the aggregate and, if not already matured at its final maturity
in accordance with its terms, such Indebtedness shall have been accelerated;
(e) any Guarantee relating to such Series shall for any reason cease to be,
or be asserted in writing by any Guarantor or Publishing not to be, in full
force and effect, enforceable in accordance with its terms, except to the
extent contemplated by the Indenture and any such Guarantee;
(f) one or more final judgments, orders or decrees for the payment of money
in excess of $5,000,000, either individually or in the aggregate, shall be
entered against Publishing, any Guarantor or any Restricted Subsidiary or any
of their respective properties and shall not be discharged and either (i)
enforcement proceedings shall have been commenced upon such judgment, order
or decree or (ii) there shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by reason of an
appeal or otherwise, shall not be in effect;
(g) there shall have been the entry by a court of competent jurisdiction of
(i) a decree or order for relief in respect of Publishing, any Guarantor or
any Material Restricted Subsidiary in an involuntary case or proceeding under
any applicable Bankruptcy Law or (ii) a decree or order adjudging Publishing,
any Guarantor or any Material Restricted Subsidiary bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of or in
respect of Publishing, any Guarantor or any Material Restricted Subsidiary
under any applicable Federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official of
Publishing, any Guarantor or any Material Restricted Subsidiary or of any
substantial part of its property, or ordering the winding up or liquidation
of its affairs, and any such decree or order for relief shall continue to be
in effect, or any such other decree or order shall be unstayed and in effect,
for a period of 60 consecutive days;
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(h) (i) Publishing, any Guarantor or any Material Restricted Subsidiary
commences a voluntary case or proceeding under any applicable Bankruptcy Law
or any other case or proceeding to be adjudicated bankrupt or insolvent, (ii)
Publishing, any Guarantor or any Material Restricted Subsidiary consents to
the entry of a decree or order for relief in respect of Publishing, any
Guarantor or such Material Restricted Subsidiary in an involuntary case or
proceeding under any applicable Bankruptcy Law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, (iii) Publishing, any
Guarantor or any Material Restricted Subsidiary files a petition or answer or
consent seeking reorganization or relief under any applicable Federal or
state law, (iv) Publishing, any Guarantor or any Material Restricted
Subsidiary (x) consents to the filing of such petition or the appointment of,
or taking possession by, a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of Publishing, any Guarantor or
such Material Restricted Subsidiary or of any substantial part of its
property, (y) makes an assignment for the benefit of creditors or (z) admits
in writing its inability to pay its debts generally as they become due or (v)
Publishing, any Guarantor or any Material Restricted Subsidiary takes any
corporate action in furtherance of any such actions in this paragraph (h); or
(i) any outstanding Mirror Preferred shall cease to qualify as Mirror
Preferred under the definition thereof.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default (other than an Event of Default specified in Sections 5.01(g)
and (h) with respect to Publishing) occurs and is continuing with respect to
any Series, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities hereunder (each such Series
acting as a separate class) may, and the Trustee upon the request of the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of such Series shall, declare the principal amount (or, if the
Securities of such Series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that Series) of all
the Securities of such Series to be due and payable immediately in an amount
equal to the principal
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amount of the Securities of such Series, together with accrued and unpaid
interest, if any, to the date the Securities of such Series shall have become
due and payable, by a notice in writing to Publishing (and to the Trustee, if
given by Holders) and, if the New Bank Credit Facility is in effect, to the
Agent, and upon any such declaration such amount shall become immediately due
and payable. If an Event of Default specified in Sections 5.01(g) or (h) (if
the Event of Default under these paragraphs is with respect to all Series of
Securities then Outstanding) occurs with respect to Publishing and is
continuing, then all the Securities shall ipso facto become and be immediately
due and payable, in an amount equal to the principal amount of the Securities
of any Series (or, if any Securities are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms thereof),
together with accrued and unpaid interest, if any, to the date the Securities
become due and payable, without any declaration or other act on the part of the
Trustee or any Holder.
At any time after such declaration or acceleration has been made with
respect to the Securities of any or all Series, as the case may be, and before
a judgment or decree for payment of the money due has been obtained by the
Trustee as provided hereinafter in this Article, the Holders of at least a
majority in aggregate principal amount of the Outstanding Securities of such
Series, by written notice to Publishing and the Trustee, may rescind and annul
such declaration and its consequences if:
(a) Publishing has paid or irrevocably deposited with the Trustee a sum
sufficient to pay
(i) all sums paid or advanced by the Trustee under Section 6.07 and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel;
(ii) all overdue interest on all Securities of such Series;
(iii) the principal and the premium, if any, on any Securities of such
Series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates presented therefor by
the terms of the Securities of such Series, to the extent that payment of
such interest is lawful;
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(iv) interest upon overdue interest at the rate or rates presented therefor
by the terms of the Securities of such Series, to the extent that payment of
such interest is lawful; and
(b) all Events of Default with respect to such Series of Securities, other
than the nonpayment of principal of the Securities of such Series which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 5.13.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. Publishing covenants that if
(a) default is made in the payment of any interest on any Security of any
Series when such interest becomes due and payable and such default continues
for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if any,
on) any Security at the Stated Maturity (upon acceleration, optional or
mandatory redemption, required repurchase or otherwise) thereof,
Publishing will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities the whole amount then due and payable on such
Securities for principal and premium, if any, and interest, with interest upon
the overdue principal and premium, if any, and, to the extent that payment of
such interest shall be legally enforceable, upon overdue installments of
interest, at the rate or rates as may be presented therefor by the terms of any
such Security.
If Publishing fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against Publishing or any other obligor upon the Securities of such Series and
collect the moneys adjudged or decreed to be payable in the manner
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provided by law out of the property of Publishing or any other obligor upon
such Securities, wherever situated.
If an Event of Default with respect to any Series of Securities occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such Series under
this Indenture by such appropriate private or judicial proceedings as the
Trustee shall deem most effectual to protect and enforce such rights, whether
for the specific enforcement of any covenant or agreement in this Indenture or
in aid of the exercise of any power granted herein or therein, or to enforce
any other proper remedy.
The rights and remedies under this Section 5.03 are in addition to the other
rights and remedies under this Article V or Article XIV.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other similar judicial proceeding
relative to Publishing or the property of Publishing, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on Publishing for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and of the Holders allowed in such judicial
proceeding; and
(b) subject to Article XII, to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the
same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such
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payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, composition or other similar
arrangement affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities of any
Series may be prosecuted and enforced by the Trustee without the possession of
any of the Securities of such Series or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name and as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities of the
Series in respect of which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money collected by the
Trustee with respect to a Series of Securities pursuant to this Article or
otherwise on behalf of the Holders or the Trustee pursuant to this Article or
through any proceeding or any arrangement or restructuring in anticipation or
in lieu of any proceeding contemplated by this Article shall be applied,
subject to applicable law, in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal, premium, if any, or interest, upon presentation of the Securities of
such Series and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.07;
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SECOND: Subject to Article XII, to the payment in full of the amounts then
due and unpaid upon the Securities of that Series for principal, premium, if
any, and interest, in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium, if any, and interest; and
THIRD: Subject to Article XII, the balance, if any, to the Person or
Persons entitled thereto as a court of competent jurisdiction shall direct, or
to Publishing; provided that all sums due and owing to the Holders and the
Trustee have been paid in full as required by this Indenture.
SECTION 5.07. Limitation on Suits. No Holder of any Securities of any
Series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture or the Securities, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to Securities of such Series;
(b) the Holders of not less than 25% in principal amount of the Outstanding
Securities of such Series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered, and if requested have provided, to
the Trustee an indemnity satisfactory to the Trustee in its sole discretion
against the costs, expenses and liabilities that may be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer (and if requested, provision) of indemnity has failed to institute any
such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of such Series;
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it being understood and intended that no one or more Holders of Securities of
such Series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of such Series, or to obtain or to seek to
obtain priority or preference over any other Holders or to enforce any right
under this Indenture, except in the manner provided in this Indenture and for
the equal and ratable benefit of all the Holders of all Securities of such
Series.
SECTION 5.08. Unconditional Right of Holders To Receive Principal, Premium
and Interest. Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right on the terms stated herein, which
is absolute and unconditional, to receive payment of the principal of, premium,
if any, and (subject to Section 3.07) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder, subject to Article XII.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, (a)
Publishing, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder, and (b) thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as provided in
Section 3.06, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
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SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of not less than a majority
in aggregate principal amount of the Outstanding Securities of any Series shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture (including, without limitation, Section 5.07) or expose the
Trustee to personal liability; and
(b) subject to the provisions of Section 315 of the Trust Indenture Act, the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of any
Series may on behalf of the Holders of all the Securities of such Series waive
any past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if any, or interest on any
Security of such Series, or
(b) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such Series affected by such modification or
amendment.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this
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84
Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in principal amount of
the Outstanding Securities of any Series to which the suit relates, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of, premium, if any, or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
SECTION 5.15. Waiver of Stay, Extension or Usury Laws. Publishing (to the
extent that it may lawfully do so) covenants that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other similar law
wherever enacted, now or at any time hereafter in force, which would prohibit
or forgive Publishing from paying all or any portion of the principal of,
premium, if any, or interest on the Securities contemplated herein or in the
Securities or which may affect the covenants or the performance of this
Indenture; and Publishing (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 5.16. Remedies Subject to Applicable Law. All rights, remedies and
powers provided by this Article may be exercised only to the extent that the
exercise thereof
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85
does not violate any applicable provision of law in the premises, and all the
provisions of this Indenture are intended to be subject to all applicable
mandatory provisions of law which may be controlling in the premises and to be
limited to the extent necessary so that they will not render this Indenture
invalid, unenforceable or not entitled to be recorded, registered or filed
under the provisions of any applicable law.
ARTICLE VI
The Trustee
SECTION 6.01. Duties of Trustee. (a) If a Default or an Event of Default
with respect to any Series of Securities actually known to the Trustee has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in its exercise thereof as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs. The Trustee shall not be
charged with knowledge of any Default or Event of Default with respect to any
Series of Securities, Asset Sale or Change of Control unless written notice
thereof shall have been delivered to a Responsible Officer by Publishing or any
other Person.
(b) Except during the continuance of a Default or an Event of Default with
respect to any Series of Securities actually known to the Trustee:
(1) the Trustee need perform only those duties as are specifically set forth
in this Indenture and no covenants or obligations shall be implied in this
Indenture that are adverse to the Trustee; and
(2) in the absence of bad faith or wilful misconduct on its part, the
Trustee may with respect to any Series of Securities, conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own wilful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 6.01;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction of the Holders of
a majority in principal amount of Outstanding Securities of any Series
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power confirmed
upon the Trustee under this Indenture.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any loss, expense, fees or financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or loss, expense, fees or financial liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (d) of this Section 6.01.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree with Publishing. Assets held in
trust by the Trustee need not be segregated from other assets except to the
extent required by law.
SECTION 6.02. Notice of Defaults. Within 30 days after a Responsible
Officer of the Trustee receives notice of the occurrence of any Default with
respect to Securities of any Series, the Trustee shall, at Publishing's
expense, transmit by mail to all Holders of such Series or any other persons
entitled to receive reports pursuant to Trust
<PAGE> 87
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Indenture Act Section 313(c), as their names and addresses appear in the
Security Register, notice of such Default, unless such Default shall have been
cured or waived; provided, however, that, except in the case of a Default in
the payment of the principal of, premium, if any, or interest on any Security,
the Trustee shall be protected in withholding such notice if and so long as a
trust committee of Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders of such
Series.
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of
Trust Indenture Act Sections 315(a) through 315(d):
(a) the Trustee may rely conclusively and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of Publishing mentioned herein shall be
sufficiently evidenced by a Publishing Request or Publishing Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) wherever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to the taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) in the absence of bad faith on
its part, may rely conclusively, upon an Officers' Certificate and/or an
Opinion of Counsel;
(d) the Trustee may consult with counsel and any written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon in accordance with such
advice or Opinion of Counsel;
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88
(e) notwithstanding any other provisions contained in this Indenture, the
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall have offered to
the Trustee security or indemnity satisfactory to the Trustee in its sole
discretion against the costs, expenses and liabilities which might be
incurred therein or thereby in compliance with such request or direction;
(f) the Trustee shall not be liable for any action taken or omitted by it in
good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any
liabilities arising out of the negligence or wilful misconduct of the
Trustee;
(g) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or
document; but the Trustee in its discretion may make such further inquiry or
investigation in accordance with any of the provisions of this Indenture into
such facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine such relevant books, records and premises of Publishing as may be
reasonable, personally or by agent or attorney;
(h) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder; and
(i) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights and powers.
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SECTION 6.04. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of Publishing, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or the Securities, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder
and that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1 supplied to Publishing are true and accurate subject
to the qualifications set forth therein. The Trustee shall not be accountable
for the use or application by Publishing of Securities or the proceeds thereof.
SECTION 6.05. Trustee and Agents May Hold Securities; Collections; etc.
The Trustee, any Paying Agent, Security Registrar or any other agent of
Publishing, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Trust Indenture Act Sections 310 and 311, may otherwise deal with Publishing
and receive, collect, hold and retain collections from Publishing with the same
rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 6.06. Money Held in Trust. All moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Except for
funds or securities deposited with the Trustee pursuant to Article IV, the
Trustee shall only be required to invest moneys received by the Trustee, until
used or applied as herein provided, in Temporary Cash Investments in accordance
with the directions of Publishing.
SECTION 6.07. Compensation and Indemnification of Trustee and Its Prior
Claim. Publishing covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder (which, to the extent lawful, shall not be
limited by any provision of law in
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regard to the compensation of a trustee of an express trust) and Publishing
covenants and agrees to pay or reimburse the Trustee and each predecessor
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by or on behalf of it in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and other persons
not regularly in its employ) except any such expense, disbursement or advance
as may arise from its negligence, bad faith or wilful misconduct. When the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 5.01(g) or Section 5.01(h), the expenses
(including the reasonable compensation and the expenses and disbursements of
its counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law. Publishing also covenants to indemnify the
Trustee and each predecessor Trustee, and their respective officers, agents and
employees for, and to hold them harmless against, any claim, loss, liability,
tax, assessment or other governmental charge (other than taxes applicable to
the Trustee's compensation hereunder) or expense incurred without negligence,
bad faith or wilful misconduct on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including enforcement of this Section 6.07 and also
including any liability which the Trustee may incur as a result of failure to
withhold, pay or report any tax, assessment or other governmental charge, and
the costs and expenses of defending itself against or investigating any claim
of liability in the premises. The obligations of Publishing under this Section
to compensate and indemnify the Trustee and each predecessor Trustee and to pay
or reimburse the Trustee and each predecessor Trustee for expenses,
disbursements and advances shall constitute an additional obligation hereunder
and shall survive the satisfaction and discharge of this Indenture and the
resignation or removal of the Trustee and each predecessor Trustee. As
security for the performance of the obligations of Publishing under this
Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of Holders of particular Securities.
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SECTION 6.08. Conflicting Interests. The Trustee shall comply with the
provisions of Section 310(b) of the Trust Indenture Act. In determining
whether the Trustee has a conflicting interest as defined in Section 310(b) of
the Trust Indenture Act with respect to the Securities of any Series, there
shall be excluded this Indenture with respect to Securities of any particular
Series of Securities other than that Series. Nothing herein shall prevent the
Trustee from filing with the Commission the application referred to in the
second to last paragraph of Section 310(b) of the Trust Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be eligible to act as Trustee under
the Trust Indenture Act Section 310(a)(1) and which shall have a combined
capital and surplus of at least $100,000,000, and have a Corporate Trust Office
in The City of New York to the extent there is such an institution eligible and
willing to serve. If the Trustee does not have an office in the City of New
York, the Trustee shall appoint an agent in the City of New York reasonably
acceptable to Publishing to conduct any activities which the Trustee is
required under this Indenture to conduct in the City of New York. The Trustee
may not rescind any such agency without the consent of Publishing, which
consent may not be unreasonably withheld, unless the Trustee appoints a
satisfactory replacement or has a Corporate Trust Office in the City of New
York. If such corporation publishes reports of conditions at least annually,
pursuant to law or to the requirements of Federal, state, territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of conditions so published. If at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 6.10. Resignation and Removal; Appointment of Successor Trustee.
(a) No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.
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(b) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign with respect to any Series of Securities by giving written notice
thereof to Publishing. Upon receiving such notice of resignation, Publishing
shall use its best efforts to promptly appoint a successor Trustee by Board
Resolution or written instrument executed by authority of the Board of
Directors of Publishing, a copy of which shall be delivered to the resigning
Trustee and a copy to the successor Trustee. If an instrument of acceptance by
a successor Trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may, or
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee.
Such court may thereupon, after such notice, if any, as it may deem proper,
appoint a successor Trustee.
(c) The Trustee may be removed with respect to any Series of Securities at
any time by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of that Series, delivered to the
Trustee and to Publishing.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Trust Indenture
Act Section 310(b) with respect to any Series of Securities after written
request therefor by Publishing or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 with respect
to any Series of Securities and shall fail to resign after written request
therefor by Publishing or by any such Holder, or
(3) the Trustee shall become incapable of acting with respect to any Series
of Securities or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
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then, in any case, (i) Publishing by a Board Resolution may remove the Trustee,
with respect to any Series of Securities or in the case of bankruptcy or
insolvency or receivership pursuant to clause (3) above, with respect to all
Series, or (ii) subject to Section 5.14, any Holder of any Security who has
been a bona fide Holder of a Security of such Series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee with respect to the Series, or in the case of bankruptcy or
insolvency or receivership pursuant to clause (3) above, with respect to all
Series. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting
with respect to any Series of Securities, or if a vacancy shall occur in the
office of Trustee with respect to any Series for any cause, Publishing, by a
Board Resolution or written instrument executed by authority of the Board of
Directors of Publishing, shall use its best efforts to promptly appoint a
successor Trustee for that Series of Securities and shall comply with the
applicable requirements of Section 6.11. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy,
Publishing or a court of competent jurisdiction has not appointed a successor
Trustee, a successor Trustee with respect to such Series of Securities shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such Series delivered to Publishing and the retiring
Trustee, and the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to
such Series of Securities and supersede the successor Trustee appointed by
Publishing with respect to such Series of Securities. If no successor Trustee
shall have been so appointed by Publishing or the Holders of such Series of
Securities and accepted appointment in the manner hereinafter provided, any
Holder of a Security who has been a bona fide Holder of a Security of that
Series for at least six months may, subject to Section 5.14, on behalf of
himself and all other similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
Series.
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(f) Publishing shall give notice of each resignation and each removal of
the Trustee with respect to any Series and each appointment of a successor
Trustee with respect to any Series by mailing written notice of such event by
first-class mail, postage prepaid, to the Holders of Securities of that Series
as their names and addresses appear in the Security Register. Each notice
shall include the name of the successor Trustee and the address of its
Corporate Trust Office or agent hereunder.
SECTION 6.11. Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Trustee with respect to the Securities,
every such successor Trustee so appointed shall execute, acknowledge and
deliver to Publishing and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee under this Indenture with respect to any such
Series; but, nevertheless, on the written request of Publishing or the
successor Trustee, upon payment of its charges then unpaid, such retiring
Trustee shall pay over to the successor Trustee all moneys at the time held by
it hereunder with respect to any such Series and shall execute and deliver an
instrument transferring to such successor Trustee all such rights, powers,
duties and obligations.
Upon request of any such successor Trustee, Publishing shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights and powers. Any Trustee ceasing to act
shall, nevertheless, retain a prior claim upon all property or funds held or
collected by such Trustee or such successor Trustee to secure any amounts then
due such Trustee pursuant to the provisions of Section 6.07.
No successor Trustee with respect to the Securities shall accept appointment
as provided in this Section 6.11 unless at the time of such acceptance such
successor Trustee shall be eligible to act as Trustee under the provisions of
Trust Indenture Act Section 310(a) and this Article VI and shall have a
combined capital and surplus of at least $100,000,000 and have a Corporate
Trust Office or an agent selected in accordance with Section 6.09 in the City
of New York.
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Upon acceptance of appointment by any successor Trustee as provided in this
Section 6.11, Publishing shall give notice thereof to the Holders of the
Securities of such Series, by mailing such notice to such Holders at their
addresses as they shall appear on the Security Register. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If Publishing fails to give such notice within 10
days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be given at the expense of Publishing.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided such corporation shall be eligible under
Trust Indenture Act Section 310(a) and this Article VI and shall have a
combined capital and surplus of at least $100,000,000.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor Trustee. In all such cases such certificates
shall have the full force and effect which this Indenture provides for the
certificate of authentication of the Trustee; provided that the right to adopt
the certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, amalgamation, conversion or consolidation.
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SECTION 6.13. Preferential Collection of Claims Against Publishing. If and
when the Trustee shall be or become a creditor of Publishing, the Trustee shall
be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against Publishing.
ARTICLE VII
Holders' Lists and Reports by Trustee and Publishing
SECTION 7.01. Publishing To Furnish Trustee Names and Addresses of Holders.
Publishing will furnish or cause to be furnished to the Trustee:
(a) semiannually, not more than 10 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities of each Series as of such Regular
Record Date; and
(b) at such other times as the Trustee may reasonably request in writing,
within 30 days after receipt by Publishing of any such request, a list of
similar form and content to that in subsection (a) hereof as of a date not
more than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar for Securities of a Series, no such list need be furnished with
respect to such Series of Securities.
SECTION 7.02. Disclosure of Names and Addresses of Holders. Every Holder
of Securities of any Series, by receiving and holding the same, agrees with
Publishing and the Trustee that neither Publishing nor the Trustee or any agent
of either of them shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable or
liable by reason of mailing any material pursuant to a request made under Trust
Indenture Act Section 312.
SECTION 7.03. Reports by Trustee. (a) Within 60 days after May 15 of each
year commencing with the first
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May 15 after the issuance of Securities of any Series, the Trustee shall
transmit by mail, at Publishing's expense, to all Holders, as their names and
addresses appear in the Security Register, as provided in Trust Indenture Act
Section 313(c), a brief report dated as of such May 15 in accordance with and
with respect to the matters required by Trust Indenture Act Section 313(a).
(b) The Trustee shall promptly transmit to Publishing a copy of any report
it transmits to Holders of such Series pursuant to this Section 7.03.
SECTION 7.04. Reports by Publishing. Publishing shall do the following:
(a) file with the Trustee, in accordance with Section 10.18 hereof, and in
any event within 30 days after Publishing is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which
Publishing is required to file with the Commission separately or together with
Hollinger International pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if Publishing is not required to file information, documents or
reports pursuant to either of said Sections, then it shall (i) deliver to the
Trustee annual audited financial statements of Publishing and its Restricted
Subsidiaries, prepared on a Consolidated basis in conformity with GAAP, within
120 days after the end of each fiscal year of Publishing, and (ii) file with
the Trustee and the Commission, in accordance with, and so long as not
prohibited by, the rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by Publishing
with the conditions and covenants of this Indenture as is required from time to
time by such rules and regulations (including such rules and regulations, if
any, referred to in Trust Indenture Act Section 314(a)); and
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(c) transmit by mail to all Holders or any other persons entitled to receive
a report pursuant to Trust Indenture Act Section 313(c), within 30 days after
the filing thereof with the Trustee, in the manner and to the extent provided
in Trust Indenture Act Section 313(c), such summaries of any information,
documents and reports required to be filed by Publishing pursuant to Section
10.18 hereunder and subsections (a) and (b) of this Section as is required and
not prohibited by rules and regulations prescribed from time to time by the
Commission.
ARTICLE VIII
Consolidation, Merger, Sale of Assets
SECTION 8.01. Publishing May Merge, Consolidate, etc., Only on Certain
Terms. (a) Publishing shall not, in a single transaction or a series of
related transactions, consolidate with or merge with or into any other Person
or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Restricted Subsidiaries to enter into
any such transaction or transactions (other than, in the case of a Restricted
Subsidiary, such a consolidation, merger or transfer with or to one or more
Wholly Owned Restricted Subsidiaries) if such transaction or transactions, in
the aggregate, would result in a sale, assignment, conveyance, transfer, lease
or disposition of all or substantially all of the properties and assets of
Publishing and its Restricted Subsidiaries on a Consolidated basis to any other
Person or group of affiliated Persons, unless at the time and after giving
effect thereto:
(i) either (a) Publishing shall be the continuing corporation, or (b) the
Person (if other than Publishing) formed by such consolidation or into which
Publishing is merged or the Person which acquires by sale, assignment,
conveyance, transfer, lease or disposition all or substantially all of the
properties and assets of Publishing and its Restricted Subsidiaries on a
Consolidated basis (the "Surviving Entity") shall be a corporation duly
organized and validly existing under the laws of the United States of
America, any state thereof or the District of Columbia and shall expressly
assume, by a supplemental indenture hereto, executed and delivered to the
Trustee, in form
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and substance reasonably satisfactory to the Trustee, all the obligations of
Publishing under the Securities and this Indenture, and this Indenture shall
remain in full force and effect;
(ii) immediately before and immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing;
(iii) immediately after giving effect to the transaction on a pro forma
basis, the Consolidated Net Worth of the Surviving Entity is not less than
the Consolidated Net Worth of Publishing and the Restricted Subsidiaries
immediately prior to the transaction;
(iv) immediately before and immediately after giving effect to such
transaction on a pro forma basis (on the assumption that the transaction
occurred on the first day of the four-quarter period immediately prior to the
consummation of such transaction with the appropriate adjustments with
respect to the transaction being included in such pro forma calculation),
Publishing (or the Surviving Entity if Publishing is not the continuing
obligor under this Indenture) could Incur $1.00 of additional Indebtedness
under the provisions of Section 10.08 (other than Permitted Indebtedness);
(v) if any of the property or assets of Publishing or any of its Restricted
Subsidiaries would thereupon become subject to any Lien, the provisions of
Section 10.13 are complied with; and
(vi) Publishing or the Surviving Entity shall have delivered, or caused to
be delivered, to the Trustee, in form and substance reasonably satisfactory
to the Trustee, an Officers' Certificate and an Opinion of Counsel, each to
the effect that such consolidation, merger, transfer, sale, assignment, lease
or other transaction and the supplemental indenture in respect thereof comply
with the provisions described in this . Section 8.01(a) and that all
conditions precedent herein provided for in this Section 8.01(a) relating to
such transaction have been complied with.
(b) Neither Hollinger International nor any Restricted Subsidiary Guarantor
shall, and Publishing shall
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not permit a Restricted Subsidiary Guarantor to, in a single transaction or
series of related transactions, consolidate with or merge with or into any
other Person (other than Publishing, Hollinger International or any other
Restricted Subsidiary Guarantor), or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets on a
Consolidated basis to any Person (other than Publishing, Hollinger
International or any other Restricted Subsidiary Guarantor) if such transaction
or transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of such Guarantor to any other Person or group of
affiliated Persons, unless at the time and after giving effect thereto:
(i) either (a) Hollinger International or such Restricted Subsidiary
Guarantor shall be the continuing corporation or (b) the Person (if other than
Hollinger International or such Restricted Subsidiary Guarantor) formed by such
consolidation or into which Hollinger International or such Restricted
Subsidiary Guarantor, as the case may be, is merged or the Person which
acquires by sale, assignment, conveyance, transfer, lease or disposition all or
substantially all of the properties and assets of Hollinger International or
such Restricted Subsidiary Guarantor shall be a corporation duly organized and
validly existing under the laws of the United States of America, any state
thereof or the District of Columbia and shall (except where Hollinger
International or such Restricted Subsidiary Guarantor is the continuing
corporation) expressly assume, by a supplemental indenture hereto, executed and
delivered to the Trustee, in form and substance reasonably satisfactory to the
Trustee, all the obligations of Hollinger International or such Restricted
Subsidiary Guarantor, as the case may be, under the Securities and this
Indenture, and this Indenture shall remain in full force and effect;
(ii) immediately before and immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing; and
(iii) Hollinger International or such Restricted Subsidiary Guarantor, as
the case may be, shall have delivered, or caused to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee,
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an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer, lease or other
transaction and the supplemental indenture in respect thereof comply with the
provisions described in this Section 8.01(b), and that all conditions precedent
herein provided for in this Section 8.01(a) relating to such transactions have
been complied with.
(c) Notwithstanding anything in this Article Eight to the contrary, any
Guarantee by a Restricted Subsidiary of the Securities may be released in
accordance with the provisions of Section 10.14(c).
SECTION 8.02. Successor Substituted. Upon any consolidation or merger, or
any sale, assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets on a Consolidated basis of
Publishing, Hollinger International or any Restricted Subsidiary Guarantor in
accordance with Section 8.01 with respect to which Publishing, Hollinger
International or such Restricted Subsidiary Guarantor is not the continuing
corporation, the successor Person formed by such consolidation or into which
Publishing, Hollinger International or such Restricted Subsidiary Guarantor is
merged or the successor Person to which such sale, assignment, conveyance,
transfer, lease or disposition is made shall succeed to, and be substituted
for, and may exercise every right and power of, Publishing, Hollinger
International or such Restricted Subsidiary Guarantor, as the case may be,
under this Indenture, with the same effect as if such successor had been named
as Publishing, Hollinger International or such Restricted Subsidiary Guarantor,
as the case may be, herein. When a successor assumes all the obligations and
covenants of its predecessor under this Indenture or the Securities, the
predecessor shall be released from those obligations and covenants; provided
that, in the case of a transfer by lease, the predecessor shall not be released
from the payment of principal and interest on the Securities or, in the case of
Hollinger International or a Restricted Subsidiary Guarantor, such Guarantee,
as the case may be.
Any successor to Publishing described in the foregoing paragraph may cause
to be signed, and may issue either in its own name or in the name of
Publishing, any or all of the Securities issuable hereunder which theretofore
shall not have been signed by Publishing and delivered to
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the Trustee; and, upon the order of such successor, instead of Publishing, and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of
Publishing to the Trustee for authentication, and any Securities which such
successor thereafter shall cause to be signed and delivered to the Trustee for
that purpose. All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution of this
Indenture.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures and Agreements Without Consent of
Holders. Without the consent of any Holders of the Securities of any Series,
Publishing, each Guarantor and the Trustee, at any time and from time to time,
may enter into one or more indentures supplemental hereto, in form and
substance reasonably satisfactory to the Trustee, for any of the following
purposes:
(a) to evidence the succession of another Person to Publishing or any
Guarantor, and the assumption by any such successor of the covenants of
Publishing or such Guarantor, as the case may be, herein and in the
Securities of any Series;
(b) to add to the covenants of Publishing or the Guarantors for the benefit
of the Holders of the Securities of any or all Series (and if such covenants
or the surrender of such right or power are to be for the benefit of less
than all Series of Securities, stating that such covenants are expressly
being included or such surrenders are expressly being made solely for the
benefit of one or more specified Series), or to surrender any right or power
conferred upon Publishing or the Guarantors in this Indenture or the
Securities of any Series;
(c) to cure any ambiguity or to correct or supplement any provision in this
Indenture or the
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Securities of any Series which may be defective or inconsistent with any other
provision in this Indenture or the Securities;
(d) to comply with the requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act,
as contemplated by Section 9.05 or otherwise;
(e) to add a Guarantee of the Indenture Obligations;
(f) to evidence and provide the acceptance of the appointment of a successor
Trustee hereunder;
(g) to mortgage, pledge, hypothecate or grant a security interest in favor
of the Trustee for the benefit of the Holders as additional security,
pursuant to the requirements of Section 10.13 or otherwise, for the payment
and performance of the Indenture Obligations, in any property or assets,
including any which are required to be mortgaged, pledged or hypothecated, or
in which a security interest is required to be granted, to the Trustee
pursuant to this Indenture or otherwise;
(h) to clarify or make any other provisions with respect to matters or
questions arising under this Indenture or the Securities; provided that, in
each case, such clarification or provision thus made shall not adversely
affect the interests of the Holders; and
(i) to establish any form of Security, as provided in Article Two, and to
provide for the issuance of any Series of Securities as provided in Article
Three and to set forth the terms thereof, and/or to add to the rights of the
Holders of the Securities of any Series.
SECTION 9.02. Supplemental Indentures and Agreements with Consent of
Holders. Except as permitted by Section 9.01, with the consent of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Securities of each Series affected by such supplemental indenture or
indentures, by Act of said Holders delivered to Publishing and the Trustee,
Publishing and each Guarantor (if a party thereto) and the Trustee may (i)
enter into an indenture or indentures supplemental hereto, in form
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and substance reasonably satisfactory to the Trustee, for the purpose of adding
any provisions to or amending, modifying or changing in any manner or
eliminating any of the provisions of this Indenture or the Securities of each
such Series (including, but not limited to, for the purpose of modifying in any
manner the rights of the Holders of the Securities of each such Series under
this Indenture) or (ii) waive compliance with any provision in this Indenture
or the Securities of each such Series (other than waivers of past Defaults
covered by Section 5.13 and waivers of covenants which are covered by Section
10.20); provided, however, that no such supplemental indenture, agreement or
instrument shall, without the consent of the Holder of each Outstanding
Securities of any Series affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
interest on, any Security of any Series or waive a default in the payment of
the principal or interest on any Security of any Series or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or change the coin or currency in which
the principal of any Security of any Series or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement
of any such payment after the Stated Maturity thereof;
(b) amend, change or modify the obligation of Publishing to make and
consummate a Change of Control Offer in the event of a Change of Control in
accordance with Section 10.15, including amending, changing or modifying any
of the provisions or definitions with respect thereto;
(c) reduce the percentage in principal amount of the Outstanding Securities
of any Series, the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
Defaults hereunder and their consequences provided for in this Indenture;
(d) modify any of the provisions of this Section or Sections 5.13 or 10.20,
except to increase the percentage of Outstanding Securities of any Series
required for such actions or to provide that certain other provisions of this
Indenture cannot be modified
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or waived without the consent of the Holder of each Security affected
thereby;
(e) except as otherwise permitted under Article VIII, consent to the
assignment or transfer by Publishing or any Guarantor of any of its rights
and obligations under this Indenture; or
(f) amend or modify any of the provisions of this Indenture relating to the
subordination of the Securities of any Series or any Guarantee in any manner
adverse to the holders of the Securities of such Series.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular Series of Securities, or which modifies the
rights of the Holders of Securities of such Series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other Series.
Upon the written request of Publishing, accompanied by a copy of a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Holders as
aforesaid, the Trustee shall join with Publishing in the execution of such
supplemental indenture.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or
agreement, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 9.03. Execution of Supplemental Indentures and Agreements. In
executing, or accepting the additional trusts created by, any supplemental
indenture, agreement or instrument permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee
shall be entitled to receive, and (subject to Trust Indenture Act Section
315(a) through 315(d) and Section 6.03 hereof) shall be fully protected in
relying upon, an Opinion of Counsel and an Officers' Certificate to the effect
that the execution of such supplemental indenture, agreement or instrument is
authorized or permitted by this Indenture. The Trustee may,
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but shall not be obligated to, enter into any such supplemental indenture,
agreement or instrument which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the Trust Indenture Act as then in effect.
SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If Publishing shall so determine,
new Securities modified so as to conform to any such supplemental indenture, in
the opinion of the Trustee and the Board of Directors, may be prepared and
executed by Publishing and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
SECTION 9.07. Record Date. If Publishing shall solicit from the Holders of
any Series of Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, Publishing may, but shall not be obligated to,
fix a record date for the purpose of determining the Holders of such Series
entitled to consent to any supplemental indenture, agreement or instrument or
any waiver, and shall promptly notify the Trustee of any such record date. If
a record date is fixed, those Persons who were Holders of such Series at such
record date (or their duly designated proxies), and only those Persons, shall
be entitled to consent to such supplemental indenture, agreement or instrument
or waiver or to revoke any consent previously given, whether or not such
Persons continue to be Holders after such record date. The record date shall
be a date no more than 30 days prior to the first solicitation of
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Holders generally in connection therewith and no later than the date such
solicitation is completed. No such consent shall be valid or effective for
more than six months after such record date. Subject to applicable law, until
any supplemental indenture, agreement, instrument or waiver becomes effective,
or a consent to it by a Holder of a Security of such Series shall cease to be
valid and effective as set forth in the preceding sentence, such consent is a
continuing consent by the Holder and every subsequent Holder of a Security of
such Series or portion of a Security of such Series that evidences the same
debt as the consenting Holder's Security.
SECTION 9.08. Effect on Senior Indebtedness. No supplemental indenture
shall adversely affect the rights under Article XII, or any definitions or
provisions related thereto, or the guarantees of any holder of Senior
Indebtedness unless the requisite holders of each issue of Senior Indebtedness
affected thereby shall have consented to such supplemental indenture.
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and Interest. With respect to
each Series of Securities, Publishing will duly and punctually pay the
principal of, premium, if any, and interest on such Securities in accordance
with the terms of such Securities and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. Publishing will maintain
in The City of New York an office or agency where Securities may be presented
or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
Publishing in respect of the Securities and this Indenture may be served. The
office of the Trustee at 14 Wall Street, Window #2, New York, New York 10005,
shall be such office or agency of Publishing, unless Publishing shall designate
and maintain some other office or agency for one or more of such purposes.
Publishing will give prompt written notice to the Trustee of any change in the
location of any such office or agency. If at any time Publishing shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the
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address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office, and Publishing hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands.
Publishing may from time to time designate one or more other offices or
agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to
time rescind such designation; provided, however, that no such designation or
rescission shall in any manner relieve Publishing of its obligation to maintain
an office or agency in The City of New York for such purposes. Publishing will
give prompt written notice to the Trustee of any such designation or rescission
and any change in the location of any such office or agency.
SECTION 10.03. Money for Security Payments To Be Held in Trust. Publishing
will, on or before Noon, New York time, on each due date of the principal of,
premium, if any, or interest on, Securities with respect to each Series of
Securities, deposit with a Paying Agent (which shall not be Publishing) a sum
in same-day funds sufficient to pay the principal, premium, if any, or interest
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) Publishing will promptly notify the Trustee of such action or
any failure so to act.
Publishing will cause each Paying Agent other than the Trustee for any
Series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of, premium,
if any, or interest on Securities of such Series in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by Publishing (or any other
obligor upon the Securities of such Series) in the making of any payment of
principal, premium, if any, or interest on the Securities of such Series;
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(c) at any time during the continuance of any such Default, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and liabilities
of such Paying Agent.
Publishing may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture with respect to any Series of Securities or for
any other purpose, by Publishing Order direct any Paying Agent to pay to the
Trustee all sums held in trust by such Paying Agent in respect of each and
every Series of Securities as to which it seeks to discharge this Indenture or,
if for any other purpose, all sums so held in trust by Publishing in respect of
all Securities, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent in trust for the
payment of the principal of, premium, if any, or interest on any Security of
any Series and remaining unclaimed for two years after such principal and
premium, if any, or interest has become due and payable shall promptly be paid
to Publishing upon Publishing Request; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to Publishing for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of Publishing as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment to Publishing, may
at the expense of Publishing cause to be published once, in The New York Times
and The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining will promptly be repaid to Publishing.
SECTION 10.04. Corporate Existence. Subject to Article VIII, Publishing
will do or cause to be done all
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things necessary to preserve and keep in full force and effect its corporate
existence and related rights and franchises (charter and statutory) of
Publishing and each Restricted Subsidiary; provided, however, that Publishing
shall not be required to preserve any such right or franchise or the corporate
existence of any such Restricted Subsidiary if the Board of Directors of
Publishing shall determine that the preservation thereof is no longer desirable
in the conduct of the business of Publishing and its Restricted Subsidiaries as
a whole and that the loss thereof would not reasonably be expected to have a
material adverse effect on the ability of Publishing to perform its obligations
hereunder; and provided further, however, that the foregoing shall not prohibit
a sale, transfer or conveyance of a Restricted Subsidiary or any of its assets
in compliance with the terms of this Indenture.
SECTION 10.05. Payment of Taxes and Other Claims. Publishing will pay or
discharge or cause to be paid or discharged, on or before the date the same
shall become due and payable, (a) all material taxes, assessments and
governmental charges levied or imposed upon Publishing or any Restricted
Subsidiary shown to be due on any tax return of Publishing or any Restricted
Subsidiary or otherwise assessed or upon the income, profits or property of
Publishing or any Restricted Subsidiary and (b) all material lawful claims for
labor, materials and supplies, which, if unpaid, would by law become a Lien
upon the property of Publishing or any Restricted Subsidiary, except for any
Lien permitted to be Incurred under Section 10.13; provided, however, that
Publishing shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and in respect of
which appropriate reserves (in the good-faith judgment of management of
Publishing) are being maintained in accordance with GAAP consistently applied.
SECTION 10.06. Maintenance of Properties. Publishing will cause all
material properties owned by Publishing or any Restricted Subsidiary or used or
held for use in the conduct of its business or the business of any Restricted
Subsidiary to be maintained and kept in good condition, repair and working
order (ordinary wear and tear excepted) and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as
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in the judgment of Publishing may be consistent with sound business practice
and reasonably necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 10.06 shall prevent Publishing from
discontinuing the maintenance of any of such properties if such discontinuance
is, in the judgment of Publishing, desirable in the conduct of the business of
Publishing and its Restricted Subsidiaries and not reasonably expected to have
a material adverse effect on the ability of Publishing to perform its
obligations hereunder.
SECTION 10.07. Insurance. Publishing will at all times keep all of its and
its Restricted Subsidiaries' properties which are of an insurable nature
reasonably self-insured or insured with insurers, believed by Publishing to be
responsible, against loss or damage to the extent that property of similar
character is usually so insured by corporations similarly situated and owning
like properties in the same general geographic areas in which Publishing and
its Restricted Subsidiaries operate, except where the failure to do so would
not reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or prospects of Publishing
and its Restricted Subsidiaries, taken as a whole.
SECTION 10.08. Limitation on Indebtedness. (a) Publishing will not, and
will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness
(including any Acquired Indebtedness but excluding any Permitted Indebtedness)
except for (x) Indebtedness of Publishing or (y) Indebtedness of a Restricted
Subsidiary constituting Acquired Indebtedness, Permitted Subsidiary
Indebtedness or Foreign Subsidiary Indebtedness, provided that, in the case of
the foregoing clauses (x) and (y), the Consolidated Cash Flow Ratio for
Publishing and the Restricted Subsidiaries for the four full fiscal quarters
immediately preceding the Incurrence of such Indebtedness taken as one period
is greater than 6.0:1.0. In addition (and without limiting the foregoing
requirement), unless both of The Telegraph and Southam are Restricted
Subsidiaries, Publishing shall not permit any Restricted Subsidiary to Incur
any Indebtedness other than Acquired Indebtedness or Permitted Subsidiary
Indebtedness. For purposes of determining the Consolidated Cash Flow Ratio for
any period, pro forma effect shall be given to (i) the Incurrence of such
Indebtedness and (if applicable) the
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application of the net proceeds therefrom, including to refinance other
Indebtedness, as if such Indebtedness was Incurred, and the application of such
proceeds occurred, at the beginning of such four-quarter period; (ii) the
Incurrence, repayment or retirement of any other Indebtedness by Publishing and
its Restricted Subsidiaries since the first day of such four-quarter period as
if such Indebtedness was Incurred, repaid or retired at the beginning of such
four-quarter period; (iii) in the case of Acquired Indebtedness, the related
acquisition (as if such acquisition had been consummated on the first day of
such four-quarter period); and (iv) any acquisition or disposition by
Publishing and its Restricted Subsidiaries of any company or any business or
any assets out of the ordinary course of business, whether by merger, stock
purchase or sale or asset purchase or sale or any related repayment of
Indebtedness, in each case since the first day of such four-quarter period (as
if such acquisition or disposition had been consummated on the first day of
such four-quarter period).
(b) Prior to September 1, 1997, neither Publishing nor any Restricted
Subsidiary will issue any Public Debt unless the aggregate principal amount (or
initial proceeds in the case of Public Debt sold with "original issue discount"
(within the meaning of Section 1273(a) of the Internal Revenue Code of 1986, as
amended)) of Public Debt so issued since the date of this Indenture that is
Senior Indebtedness does not exceed the aggregate principal amount (or initial
proceeds in the case of Public Debt sold with "original issue discount") of
Public Debt so issued since the date of this Indenture that is pari passu with
or subordinated to the Securities.
SECTION 10.09. Limitation on Restricted Payments. (a) Publishing will
not, and will not permit any Restricted Subsidiary to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution or payment on
or in respect of Publishing's Capital Stock (including dividends or
distributions of the Capital Stock of any Subsidiary), or make any other
payment to the direct or indirect holders (in their capacities as such) of
Publishing's Capital Stock (other than dividends or distributions payable in
shares of Publishing's Qualified Capital
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Stock or in options, warrants or other rights to acquire such Qualified
Capital Stock) and (y) a dividend or distribution of up to $175 million
payable to Hollinger International; provided that, simultaneously or in
connection with such dividend or distribution, Hollinger International
contributes or transfers, directly or indirectly, to Publishing all of the
Capital Stock of Hollinger Eastern then held by Hollinger International; and
provided further, that Hollinger Eastern then holds not less than 42% of the
voting interest of Southam);
(ii) purchase, redeem or otherwise acquire or retire for value, directly or
indirectly, any Capital Stock of Publishing or any Capital Stock of any
Affiliate of Publishing (other than Capital Stock of any Wholly Owned
Restricted Subsidiary (or, provided that both of The Telegraph and Southam
are Restricted Subsidiaries, Capital Stock of a Restricted Subsidiary) or
Capital Stock of a Person that is, or immediately following such repurchase
will become, a Wholly Owned Restricted Subsidiary (or, provided that both of
The Telegraph and Southam are Restricted Subsidiaries, a Restricted
Subsidiary)) or options, warrants or other rights to acquire such Capital
Stock;
(iii) make any principal payment on, or repurchase, redeem, defease, retire
or otherwise acquire for value, prior to any scheduled principal payment,
sinking fund payment or maturity, any Subordinated Indebtedness;
(iv) declare or pay any dividend or distribution on any Capital Stock of any
Restricted Subsidiary to any Person (other than (x) dividends and
distributions on Preferred Stock of Restricted Subsidiaries or Mirror
Preferred or (y) dividends and distributions made to any Person (other than a
controlling Affiliate of Publishing or an Affiliate of such Affiliate (other
than Publishing and any Restricted Subsidiary)) on a pro rata basis
consistent with the ownership interests in such Capital Stock to the owners
of such Capital Stock, except that, in the case of the Capital Stock of a
Restricted Subsidiary that is a Guarantor, (i) no Default or Event of Default
shall have occurred and be continuing; and (ii) no holders of any other
Indebtedness of Publishing or any Restricted Subsidiary shall have an
Acceleration Right);
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(v) Incur, create or assume any guarantee of Indebtedness of any Affiliate
of Publishing (other than a Wholly Owned Restricted Subsidiary of Publishing
or, provided that both of The Telegraph and Southam are Restricted
Subsidiaries, a Restricted Subsidiary of Publishing) except as permitted by
Section 10.14;
(vi) make any Investment in any Person (other than any Permitted
Investments); or
(vii) designate any Restricted Subsidiary as an Unrestricted Subsidiary;
(any of the payments described in paragraphs (i) through (vii) above, other
than any such action that is a Permitted Payment (as defined below),
collectively, "Restricted Payments") unless at the time of and after giving
effect to the proposed Restricted Payment (the amount of any such Restricted
Payment, if other than cash, as determined by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution), (1) no
Default or Event of Default shall have occurred and be continuing; (2) no
holders of any other Indebtedness of Publishing or any Restricted Subsidiary
shall have an Acceleration Right; (3) immediately before and immediately after
giving effect to such transaction on a pro forma basis, Publishing could Incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) under the
provisions of Section 10.08; and (4) the aggregate amount of all such
Restricted Payments declared or made after the date of this Indenture (provided
that, in the case of a Restricted Payment by a Restricted Subsidiary, such
Restricted Payment is calculated for the purposes of this paragraph (4) by
multiplying the amount of the Restricted Payment by the percentage of
Publishing common equity in such Restricted Subsidiary at the time of such
Restricted Payment but disregarding, in the case of Southam, common equity
interests which are pledged to secure the Southam-Linked Debentures) does not
exceed the sum of:
(A) 50% of the sum of (i) the aggregate cumulative Consolidated Net Income
of Publishing and its Restricted Subsidiaries accrued during the period
(treated as a single accounting period) beginning on the first day of
Publishing's fiscal quarter commencing prior to the date of this Indenture
and ending on the last day of Publishing's last fiscal quarter ending prior
to the date of the Restricted Payment (or, if such aggregate cumulative
Consolidated Net Income shall
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be a loss, 100% of such loss (treating a loss as a negative number)) and (ii)
the aggregate cumulative Amortization Expense of Publishing and its
Restricted Subsidiaries accrued during the period (treated as a single
accounting period) beginning on the first day of Publishing's fiscal quarter
commencing prior to the date of this Indenture and ending on the last day of
Publishing's last fiscal quarter ending prior to the date of the Restricted
Payment;
(B) 50% of the aggregate cumulative cash dividends or distributions received
by Publishing and its Consolidated Restricted Subsidiaries from any of
Publishing's Unrestricted Subsidiaries during the period (treated as a single
accounting period) beginning on the first day of Publishing's fiscal quarter
commencing prior to the date of this Indenture and ending on the last day of
Publishing's last fiscal quarter ending prior to the date of the Restricted
Payment; provided, however, that for purposes of this clause (B), cash
dividends and distributions shall not include, without duplication, (x),
prior to the time that Southam shall be a Restricted Subsidiary, cash
dividends received by Publishing from Publishing's Unrestricted Subsidiaries
not in excess of the Southam Dividend Amount, (y) cash dividends or
distributions received by Publishing or any Wholly Owned Restricted
Subsidiary in accordance with Section 10.09(b)(vii) or (z) dividends or
distributions on any Argsub Preferred received by FDTH or DTH;
(C) the aggregate Net Cash Proceeds received after the date of the original
issuance of the Securities by Publishing from the issuance or sale (other
than to any of its Restricted Subsidiaries) of its Qualified Capital Stock or
any options, warrants or rights to purchase such Qualified Capital Stock
(except, in each case, to the extent such proceeds are used to purchase,
redeem or otherwise retire Capital Stock, Subordinated Indebtedness or Pari
Passu Indebtedness as set forth below);
(D) the aggregate Net Cash Proceeds received after the date of the original
issuance of the Securities by Publishing (other than from any of its
Restricted Subsidiaries) upon the exercise of any options or warrants to
purchase Qualified Capital Stock of Publishing;
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(E) the aggregate Net Cash Proceeds received after the date of this
Indenture by Publishing (other than from any of its Subsidiaries) from cash
capital contributions made to Publishing (other than from the proceeds of the
Common Stock Offering);
(F) the aggregate amount by which any Indebtedness (other than Permitted
Indebtedness) of Publishing or any Restricted Subsidiary is reduced after the
date of this Indenture as a result of the conversion or exchange of debt
securities or Redeemable Capital Stock of Publishing that has been converted
into or exchanged for Qualified Capital Stock of Publishing to the extent
such debt securities or Redeemable Capital Stock were originally sold for
cash plus the aggregate Net Cash Proceeds received by Publishing at the time
of any such conversion or exchange; and
(G) $25,000,000.
(b) Notwithstanding the foregoing, and, in the case of clauses (ii) through
(x) below, so long as (1) there is no Default or Event of Default continuing
and (2) no holders of any other Indebtedness of Publishing or any Restricted
Subsidiary have an Acceleration Right, the foregoing provisions will not
prohibit the following actions (clauses (i) through (x) being referred to as
"Permitted Payments"):
(i) the payment of any dividend or distribution within 60 days after the
date of declaration thereof, if at such date of declaration such payment
would be permitted by the provisions of paragraph (a) of this section and
such payment will be deemed to have been paid on such date of declaration for
purposes of the calculation required by paragraph (a) of this section;
(ii) the repurchase, redemption or other acquisition or retirement of any
shares of Capital Stock of Publishing in exchange for (including any such
exchange pursuant to the exercise of a conversion right or privilege in
connection with which cash is paid in lieu of the issuance of fractional
shares or scrip), or out of the Net Cash Proceeds of a substantially
concurrent issue and sale for cash (other than to a Restricted Subsidiary) of
other Qualified Capital Stock of Publishing; provided that the Net Cash
Proceeds from the issuance of such shares of Qualified Capital Stock
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are excluded from clauses (4)(D) and (4)(E) of paragraph (a) of this section;
(iii) any repurchase, redemption, defeasance, retirement or acquisition for
value or payment of principal of any Subordinated Indebtedness in exchange
for, or out of the net proceeds of, a substantially concurrent issuance and
sale for cash (other than to any Restricted Subsidiary of Publishing) of any
Qualified Capital Stock of Publishing; provided that the Net Cash Proceeds
from the issuance of such Qualified Capital Stock are excluded from clauses
(4)(D) and (4)(E) of paragraph (a) of this section;
(iv) the repurchase, redemption, defeasance, retirement, refinancing,
acquisition for value or payment of principal of any Subordinated
Indebtedness (other than Redeemable Capital Stock) or Pari Passu Indebtedness
(a "refinancing") through the issuance of new Subordinated Indebtedness of
Publishing; provided that any such new Subordinated Indebtedness (1) shall be
in a principal amount that does not exceed the principal amount so refinanced
(or, if the Subordinated Indebtedness so refinanced provides for an amount
less than the principal amount thereof to be due and payable upon a
declaration or acceleration thereof, then such lesser amount as of the date
of determination), plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of such refinanced
Indebtedness and any reasonable out-of-pocket expenses of Publishing incurred
in connection with such refinancing; (2) has an Average Life to Stated
Maturity greater than the remaining Average Life to Stated Maturity of the
Securities; (3) has a Stated Maturity for its final scheduled principal
payment later than the Stated Maturity for the final scheduled principal
payment of the Securities; and (4) is expressly subordinated in right of
payment to the Securities at least to the same extent as the Indebtedness to
be refinanced;
(v) dividends paid to Hollinger International after the date of original
issuance of the Securities to the extent not in excess of the Southam
Dividend Amount;
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(vi) loans, advances, dividends or distributions by any Restricted
Subsidiary to Publishing or any Wholly Owned Restricted Subsidiary and by
FDTH or, to the extent it has received such funds directly or indirectly from
FDTH, DTH or Publishing to Hollinger International for the purpose of
redeeming shares of Series A Preferred Stock not exceeding in the aggregate
any payments made by Hollinger Inc. to FDTH pursuant to the provisions of the
HTH/FDTH Share Exchange Agreement;
(vii) loans, advances, dividends or distributions to Hollinger
International in amounts not to exceed $1 million per year to permit
Hollinger International to repurchase, redeem or otherwise acquire or retire
any shares of its Capital Stock from employees, former employees or their
estates upon disability, death, retirement or termination of employment;
(viii) tax payments pursuant to a Tax Sharing Agreement to the extent that
the aggregate amount of such payments do not exceed the aggregate amount of
the tax payments that Publishing and the Restricted Subsidiaries would have
been required to make if they alone constituted a single consolidated tax
group;
(ix) payments by Publishing or a Restricted Subsidiary in connection with the
Scheme of Arrangement; and
(x) the issuance or redemption of or payment of distributions on Mirror
Preferred, but only to the extent Argsub Preferred is simultaneously issued,
redeemed or pays (or is deemed to pay) dividends, respectively, and only so
long as no cash is transferred in any such transaction, except for cash
payments in respect of certain Mirror Preferred made directly from FDTH to
DTH at the direction of Argsub.
For purposes of this Section 10.09, if the Board of Directors designates a
Restricted Subsidiary as an
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Unrestricted Subsidiary, or a Restricted Subsidiary is deemed to be so
designated, a "Restricted Payment" shall be deemed to have been made in an
amount equal to the fair value of the Investment of Publishing and its other
Restricted Subsidiaries in such Restricted Subsidiary as determined by the
Board of Directors with the concurrence of a majority of the Independent
Directors (there being at least one Independent Director), whose good faith
determination shall be conclusive. If a particular Restricted Payment involves
a non-cash payment, including a distribution of assets, then such Restricted
Payment shall be deemed to be in an amount equal to the fair market value of
the non-cash portion of such Restricted Payment as determined by the Board of
Directors, whose good faith determination shall be conclusive.
SECTION 10.10. Limitation on Transactions with Affiliates. (a) Publishing
will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, enter into or suffer to exist any transaction or series of
related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with any Affiliate of
Publishing (other than Publishing or a Wholly Owned Restricted Subsidiary, or,
if both of The Telegraph and Southam are Restricted Subsidiaries, a Restricted
Subsidiary) unless (a) such transaction or series of related transactions is on
terms that are no less favorable to Publishing or such Restricted Subsidiary,
as the case may be, than would be available in a comparable transaction in
arm's-length dealings with an unrelated third party and (b) with respect to any
transaction or series of related transactions involving aggregate payments in
excess of $5,000,000, Publishing delivers an Officers' Certificate to the
Trustee certifying that such transaction or series of related transactions
complies with clause (a) above and such transaction or series of related
transactions has been approved by a majority of the Independent Directors of
the Board of Directors; provided that any transaction or series of related
transactions otherwise permitted under this paragraph (other than any
transaction or series of related transactions with respect to the making of any
Permitted Investment pursuant to clause (ix) of the definition of "Permitted
Investment" or any Restricted Payment permitted pursuant to Section 10.09
(other than those referred to in clause (vi) of paragraph (b) thereof) pursuant
to which Publishing or any Restricted Subsidiary shall receive or render value
exceeding $15,000,000 shall not be permitted
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unless, prior to the consummation of any such transaction or series of related
transactions, Publishing shall have received an opinion, from an independent
nationally recognized investment banking firm or firm experienced in the
appraisal or similar review of similar types of transactions, that such
transaction is fair to Publishing from a financial point of view; provided
further, that this covenant shall not apply to (i) transactions or agreements as
in effect or securities outstanding on the date of the Indenture (provided that
any amendment to any existing agreement (including the Services Agreement and
the Business Opportunities Agreement), and any transaction pursuant to the
Business Opportunities Agreement, shall require approval pursuant to this
covenant; notwithstanding the foregoing, any amendment to the Services Agreement
or the Business Opportunities Agreement shall require the approval of a majority
of the Independent Directors); (ii) directors' fees approved by the Board of
Directors; (iii) any employee benefit plan or arrangement entered into or made
available to officers or other employees of Publishing or the Restricted
Subsidiaries in the ordinary course of business; (iv) sales by Publishing and
its Restricted Subsidiaries of their products in the ordinary course of business
on arm's-length terms; (v) tax payments pursuant to a Tax Sharing Agreement to
the extent that the aggregate amount of such payments do not exceed the
aggregate amount of the tax payments that Publishing and the Restricted
Subsidiaries would have been required to make if they alone constituted a single
consolidated tax group; (vi) loans, advances, dividends or distributions by
FDTH, DTH or Publishing to Hollinger International in amounts and for the
purpose permitted by Section 10.09(b)(v) and (vii); (vii) payments made to
Hollinger Inc. pursuant to the Services Agreement that constitute the
reimbursement for the fair value (as determined by a majority of the Independent
Directors serving on an Independent Committee) of services received by
Publishing or a Restricted Subsidiary consistent with past practices; and (viii)
the issuance or redemption, retraction or transfer of or payment of dividends,
distributions or other amounts on Mirror Preferred by DTH or FDTH to an Argsub,
but only to the extent that such Argsub simultaneously, as the case may be,
issues or redeems or pays dividends, distributions or other amounts (or is
deemed to have taken any such action) to DTH or FDTH, in each case in equivalent
amounts.
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SECTION 10.11. Limitation on Other Subordinated Indebtedness. Neither
Publishing nor any Restricted Subsidiary Guarantor will Incur or permit to
exist any Indebtedness (other than the Securities or a Guarantee thereof
pursuant to this Indenture, as applicable) that is subordinate in right of
payment to any Senior Indebtedness of Publishing (or such Guarantor) unless
such Indebtedness is also pari passu with, or subordinate in right of payment
to, the Securities or the Guarantee of such Guarantor, as the case may be. For
purposes of this covenant, Indebtedness will be deemed to be pari passu with
the Securities or such Guarantee if it is subordinate to Senior Indebtedness of
Publishing or the relevant Guarantee pursuant to subordination provisions
substantially similar to those described in Section 12.01.
SECTION 10.12. Limitation on Liens. (a) Publishing will not, and will not
permit any Restricted Subsidiary to Incur, affirm or suffer to exist any Lien
of any kind securing any Pari Passu Indebtedness or Subordinated Indebtedness
(including any assumption, guarantee or other liability with respect thereto by
any Restricted Subsidiary) upon any property or assets (including any
intercompany notes) of Publishing or any Restricted Subsidiary owned on the
date of this Indenture or acquired after the date of this Indenture, or any
income or profits therefrom, unless (i) in the case of any Lien securing Pari
Passu Indebtedness, the Securities are secured by a Lien on such property,
assets or proceeds that is senior in priority to or pari passu with such Lien
and (ii) in the case of any Lien securing Subordinated Indebtedness, the
Securities are secured by a Lien on such property, assets or proceeds that is
senior in priority to such Lien, except for (i) any Lien securing Acquired
Indebtedness created prior to (and not created in connection with, or in
contemplation of) the Incurrence of such Pari Passu Indebtedness or
Subordinated Indebtedness by Publishing or any Restricted Subsidiary, in each
case which Indebtedness is permitted under the provisions of Section 10.08
(provided that any such Lien only extends to the assets that were subject to
such Lien securing such Acquired Indebtedness prior to the related acquisition
by Publishing or its Restricted Subsidiaries) and (ii) any Lien securing
Indebtedness owing to Publishing or a Wholly Owned Restricted Subsidiary by a
Restricted Subsidiary.
(b) Notwithstanding the foregoing, any security interest granted by
Publishing or any Restricted Subsidiary
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to secure the Securities created pursuant to paragraph (a) above shall provide
by its terms that such security interest shall be automatically and
unconditionally released and discharged upon the release by the holders of the
Indebtedness of Publishing or any Restricted Subsidiary described in paragraph
(a) above of their security interest (including any deemed release upon payment
in full of all obligations under such Indebtedness), at a time when (A) no
other Pari Passu Indebtedness and Subordinated Indebtedness of Publishing or
any Restricted Subsidiary has been secured by such property or assets of
Publishing or any such Restricted Subsidiary or (B) the holders of all such
other Pari Passu Indebtedness and Subordinated Indebtedness which is secured by
such property or assets of Publishing or any such Restricted Subsidiary also
release their security interest in such property or assets (including any
deemed release upon payment in full of all obligations under such
Indebtedness).
SECTION 10.13. Limitation on Issuances of Guarantees of Indebtedness. (a)
Publishing will not permit any Restricted Subsidiary, directly or indirectly,
to guarantee, assume or in any other manner become liable with respect to any
Pari Passu Indebtedness or Subordinated Indebtedness unless such Restricted
Subsidiary simultaneously executes and delivers a supplemental indenture to
this Indenture providing for a guarantee of the Securities and (A) if the
Securities are subordinated in right of payment to such Indebtedness, the
guarantee under the supplemental indenture shall be subordinated to the same
extent as the Securities are subordinated to such Indebtedness under this
Indenture and (B) if such Indebtedness of Publishing is by its terms expressly
subordinated to the Securities, any such assumption, guarantee or other
liability of such Restricted Subsidiary with respect to such Indebtedness shall
be subordinated to such Restricted Subsidiary's guarantee to the same extent as
such Indebtedness is subordinated to the Securities.
(b) Notwithstanding the foregoing, any guarantee by a Restricted Subsidiary
of the Securities that is provided pursuant to the foregoing paragraph or under
the provisions of Section 10.16 may provide by its terms that it shall be
automatically and unconditionally released and discharged (i) upon any sale,
exchange or transfer, to any Person not an Affiliate of Publishing, of all of
Publishing's Capital Stock in, or all or substantially all the assets of, such
Restricted Subsidiary, which sale,
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exchange or transfer is in compliance with this Indenture, (ii) if the
Restricted Subsidiary issuing such guarantee ceases to be a Restricted
Subsidiary or (iii) upon the release by the holders of the Indebtedness of
Publishing described in paragraph (a) above of their Guarantee by such
Restricted Subsidiary (including any deemed release upon payment in full of all
obligations under such Indebtedness), at a time when (A) no Indebtedness of
Publishing or any Restricted Subsidiary has been guaranteed by such Restricted
Subsidiary or (B) the holders of all such other Indebtedness which is
guaranteed by such Restricted Subsidiary also release their Guarantee by such
Restricted Subsidiary (including any deemed release upon payment in full of all
obligations under such Indebtedness).
SECTION 10.14. Limitation on Sale of Assets. (a) Publishing will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
consummate an Asset Sale unless (i) at least 80% of the proceeds from such
Asset Sale are received in cash (provided that the amount of (A) any Senior
Indebtedness (as shown on Publishing's or such Restricted Subsidiaries' most
recent balance sheet or in the notes thereto) of Publishing or any such
Restricted Subsidiary that is assumed by the transferee of any asset in
connection with any Asset Sale and (B) any deferred payment obligations
received by Publishing or any such Restricted Subsidiary as proceeds of an
Asset Sale that are concurrently with the Asset Sale converted into cash
without recourse to Publishing or any of its Restricted Subsidiaries shall be
deemed to be cash for purposes of this provision; provided further that, for
purposes of this clause (i), "cash" shall include any cash proceeds received
from the sale of securities received in an Asset Sale as long as at the time of
such Asset Sale, Publishing or its Restricted Subsidiary, as applicable, has
entered into a legally binding agreement for the sale of such securities and
such securities are sold within 90 days of such Asset Sale; and provided
further that this clause (i) shall not apply to (w) Newspaper Businesses
received by Publishing or a Restricted Subsidiary from the transferee as
consideration for an Asset Sale (an "Asset Swap") so long as, immediately
before and immediately after giving effect to such transaction on a pro forma
basis, Publishing could Incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the provisions of Section 10.08, (x) a CST Real
Estate Transaction or (y) a Permitted Real Estate Sale)) and (ii) Publishing or
such Restricted Subsidiary receives consideration at the time of such Asset
Sale at
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least equal to the fair market value of the shares or assets sold (as
determined by the Board of Directors of Publishing and evidenced by a board
resolution). The value of any properties or assets (other than cash) received
pursuant to an Asset Sale shall be determined by the Board of Directors of
Publishing and evidenced by a Board Resolution; provided that if the value of
the asset which is the subject of the Asset Sale is in excess of $25,000,000,
the value of the properties or assets received shall be determined by an
independent nationally recognized investment banking firm or firm experienced
in the appraisal or similar review of similar types of assets (provided that
for purposes of this sentence, any CST Real Estate Transaction shall be deemed
to involve an asset whose value exceeds $25,000,000).
(b) If all or a portion of the Net Cash Proceeds of any Asset Sale is not
applied to permanently repay or otherwise permanently retire any Senior
Indebtedness then outstanding as permitted or required by the terms thereof, or
if no such Senior Indebtedness is then outstanding, Publishing or a Restricted
Subsidiary, as the case may be, may, within 12 months of the Asset Sale, invest
the Net Cash Proceeds in properties and assets that (as determined by the Board
of Directors) replace the properties and assets that were the subject of the
Asset Sale or in properties and assets that will be used in the businesses of
Publishing or its Restricted Subsidiaries existing on the date of this
Indenture or in businesses reasonably related thereto. The amount of such Net
Cash Proceeds neither used to permanently repay or prepay Senior Indebtedness
nor used or invested as set forth in this paragraph constitutes "Excess
Proceeds."
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$20,000,000, Publishing shall apply the Excess Proceeds to the repayment of the
Securities and any Pari Passu Indebtedness required to be repurchased under the
instrument governing such Pari Passu Indebtedness as follows: (i) Publishing
shall make an offer to purchase (an "Offer") from all Holders in accordance
with the procedures set forth in this Indenture in the maximum principal amount
(expressed as a multiple of $1,000) of Securities that may be purchased out of
an amount (the "Note Amount") equal to the product of such Excess Proceeds
multiplied by a fraction, the numerator of which is the outstanding principal
amount of the Securities, and the denominator of which is the sum of the
outstanding principal amount of the Securities and such Pari Passu Indebtedness
(subject to proration in the event such amount is less than the
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aggregate Offered Price (as defined herein) of all Securities tendered) and
(ii) to the extent required by such Pari Passu Indebtedness to permanently
reduce the principal amount of such Pari Passu Indebtedness, Publishing shall
make an offer to purchase or otherwise repurchase or redeem Pari Passu
Indebtedness (a "Pari Passu Offer") in an amount (the "Pari Passu Debt Amount")
equal to the excess of the Excess Proceeds over the Note Amount; provided that
in no event shall the Pari Passu Debt Amount exceed the principal amount of
such Pari Passu Indebtedness plus the amount of any premium required to be paid
to repurchase such Pari Passu Indebtedness. The offer price shall be payable
in cash in an amount equal to 100% of the principal amount of the Securities
plus accrued and unpaid interest, if any, to the date (the "Purchase Date")
such Offer is consummated (the "Offered Price"), in accordance with the
procedures set forth in this Indenture. To the extent that the aggregate
Offered Price of the Securities tendered pursuant to the Offer is less than the
Note Amount relating thereto or the aggregate amount of Pari Passu Indebtedness
that is purchased is less than the Pari Passu Debt Amount (the amount of such
shortfall, if any, constituting a "Deficiency"), Publishing shall use such
Deficiency in the business of Publishing and its Restricted Subsidiaries. Upon
completion of the purchase of all Securities tendered pursuant to an Offer and
repurchase of the Pari Passu Indebtedness pursuant to a Pari Passu Offer, the
amount of Excess Proceeds, if any, shall be reset at zero.
(d) Whenever the aggregate amount of Excess Proceeds received by Publishing
exceeds $20,000,000, such Excess Proceeds shall, prior to the purchase of
Securities or any Pari Passu Indebtedness described in paragraph (c) above, be
set aside by Publishing in a separate account pending (i) deposit with the
depository or a Paying Agent of the amount required to purchase the Securities
or Pari Passu Indebtedness tendered in an Offer or a Pari Passu Offer, (ii)
delivery by Publishing of the Offered Price to the holders of the Securities or
Pari Passu Indebtedness tendered in an Offer or a Pari Passu Offer and (iii)
application, as set forth above, of Excess Proceeds in the business of
Publishing and its Restricted Subsidiaries. Such Excess Proceeds may be
invested in Temporary Cash Investments; provided that the maturity date of any
such investment made after the amount of Excess Proceeds equals or exceeds
$20,000,000 shall not be later than the Purchase Date. Publishing shall be
entitled to any interest or dividends accrued, earned or paid on such Temporary
Cash
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Investments; provided that Publishing shall not be entitled to such interest
and shall not withdraw such interest from the separate account, if an Event of
Default has occurred and is continuing.
(e) If Publishing becomes obligated to make an Offer pursuant to paragraph
(c) above, the Securities shall be purchased by Publishing, at the option of
the Holder thereof, in whole or in part in integral multiples of $1,000, on a
date that is not earlier than 30 days and not later than 60 days from the date
the notice is given to Holders, or such later date as may be necessary for
Publishing to comply with the requirements under the Exchange Act, subject to
proration in the event the Note Amount is less than the aggregate Offered Price
of all Securities tendered.
(f) Publishing shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable
securities laws or regulations in connection with an Offer.
(g) Publishing shall not, and shall not permit any Subsidiary to, create or
permit to exist or become effective any restriction (other than restrictions
existing under (i) Indebtedness as in effect on the date of this Indenture as
such Indebtedness may be refinanced from time to time or (ii) any Senior
Indebtedness existing on the date of this Indenture or thereafter; provided, in
each case, that such restrictions are no less favorable to the Holders than
those existing on the date of this Indenture) that would expressly impair the
ability of Publishing to make an Offer to purchase the Securities or, if such
Offer is made, to pay for the Securities tendered for purchase.
(h) Within 30 days after the date on which the amount of Excess Proceeds
equals or exceeds $20,000,000, Publishing shall send by first-class mail,
postage prepaid, to the Trustee and to each Holder of the Securities of that
Series, at such Holder's address appearing in the Security Register, a notice
stating or including:
A. that the Holder of such Series has the right to require Publishing to
repurchase, subject to proration, part or all of such Holder's Securities at
the Offered Price;
B. the Purchase Date;
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C. the instructions a Holder of such Series must follow in order to have
its Securities purchased in accordance with paragraph (c) of this Section;
and
D. (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of Publishing, the most recent
subsequently filed Quarterly Report on Form 10-Q, as applicable, and any
Current Report on Form 8-K of Publishing filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Sales otherwise
described in the offering materials (or corresponding successor reports) (or
in the event Publishing is not required to prepare any of the foregoing
Forms, the comparable information required pursuant to Section 10.18), (ii)
a description of material developments in Publishing's business subsequent
to the date of the latest of such Reports, (iii) if material, appropriate
pro forma financial information, and (iv) such other information, if any,
concerning the business of Publishing and its Restricted Subsidiaries which
Publishing in good faith believes will enable such Holders to make an
informed investment decision regarding the Offer;
E. the Offered Price;
F. the names and addresses of the Paying Agent and the offices or agencies
referred to in Section 10.02;
G. that Securities of such Series must be surrendered at least three
Business Days prior to the Purchase Date to the Paying Agent or to an office
or agency referred to in Section 10.02 to collect payment;
H. that any Securities of such Series not tendered will continue to accrue
interest and that unless Publishing defaults in the payment of the purchase
price, any Security accepted for payment pursuant to the Offer shall cease
to accrue interest on and after the Purchase Date; and
I. the procedures for withdrawing a tender.
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(i) Holders electing to have Securities of such Series purchased hereunder
will be required to surrender such Securities at the address specified in the
notice at least three Business Days prior to the Purchase Date. Holders will
be entitled to withdraw their election to have their Securities purchased
pursuant to this Section 10.15 if Publishing receives, not later than three
Business Days prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth (1) the name of the Holder, (2) the
certificate number of the Security in respect of which such notice of
withdrawal is being submitted, (3) the principal amount of the Security (which
shall be $1,000 or an integral multiple thereof) delivered for purchase by the
Holder as to which his election is to be withdrawn, (4) a statement that such
Holder is withdrawing such Holder's election to have such principal amount of
such Security purchased, and (5) the principal amount, if any, of such Security
(which shall be $1,000 or an integral multiple thereof) that remains subject to
the original notice of the Offer and that has been or will be delivered for
purchase by Publishing.
(j) Publishing shall (i) not later than the Purchase Date, accept for
payment Securities of such Series or portions thereof tendered pursuant to the
Offer, (ii) not later than 11:00 a.m. (New York time) on the Purchase Date,
deposit with the Trustee or with a Paying Agent an amount of money in same day
funds (or New York Clearing House funds if such deposit is made prior to the
Purchase Date) sufficient to pay the aggregate Offered Price of all the
Securities or portions thereof which are to be purchased on that date and (iii)
not later than 11:00 a.m. (New York time) on the Purchase Date, deliver to the
Paying Agent an Officers' Certificate stating the Securities or portions
thereof have been accepted for payment by Publishing.
The Trustee and the Paying Agent shall return to Publishing any cash that
remains unclaimed, together with interest, if any, thereon, held by them for
the payment of the Offered Price; provided, however, that, (x) to the extent
that the aggregate amount of cash deposited by Publishing with the Trustee or a
Paying Agent in respect of an Offer exceeds the aggregate Offered Price of the
Securities or portions thereof to be purchased, then the Trustee or a Paying
Agent shall hold such excess for Publishing and (y) unless otherwise directed
by Publishing in writing, promptly after the Business Day following the
Purchase Date the Trustee or a Paying Agent shall return any
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such excess to Publishing together with interest or dividends, if any, thereon.
(k) Securities of that Series to be purchased shall, on the Purchase Date,
become due and payable at the Offered Price and from and after such date
(unless Publishing shall default in the payment of the Offered Price) such
Securities shall cease to bear interest. The Offered Price shall be paid to
such Holder promptly following the later of the Purchase Date and the time of
delivery of such Security to the relevant Paying Agent at the office of such
Paying Agent by the Holder thereof in the manner required. Upon surrender of
any such Security for purchase in accordance with the foregoing provisions,
such Security shall be paid by Publishing at the Offered Price; provided,
however, that installments of interest whose Stated Maturity is on or prior to
the Purchase Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such on the relevant Regular Record
Dates according to the terms and the provisions of Section 3.07; provided
further that Securities of that Series to be purchased are subject to proration
in the event the Excess Proceeds are less than the aggregate Offered Price of
all Securities of such Series tendered for purchase, with such adjustments as
may be deemed appropriate by the Trustee so that only Securities of such Series
in denominations of $1,000 or integral multiples thereof shall be purchased.
If any Security of such Series tendered for purchase in accordance with the
terms of this Section shall not be so paid upon surrender thereof by deposit of
funds with the Trustee or a Paying Agent in accordance with paragraph (j)
above, the principal thereof (and premium, if any, thereon) shall, until paid,
bear interest from the Purchase Date at the rate borne by such Security. Any
Security of such Series that is to be purchased only in part shall be
surrendered to a Paying Agent in accordance with the terms of this Section at
the office of such Paying Agent (with, if Publishing or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to Publishing and the Trustee duly executed by, the Holder thereof
or such Holder's attorney duly authorized in writing), and Publishing shall
execute and pursuant to a Publishing Order the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, one or more new
Securities of any authorized denomination as requested by such Holder in an
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Security so surrendered that is not purchased.
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SECTION 10.15. Purchase of Securities upon a Change of Control. (a) If a
Change of Control shall occur at any time, then each Holder with respect to
Securities of any Series shall have the right to require that Publishing
purchase such Holder's Securities, pursuant to an offer described in subsection
(b) of this Section (a "Change of Control Offer"), in whole or in part in
integral multiples of $1,000, at a purchase price (the "Change of Control
Purchase Price") in cash in an amount equal to 101% of the principal amount of
such Securities, plus accrued and unpaid interest, if any, to the date of
purchase (the "Change of Control Purchase Date"), in accordance with the
procedures set forth in paragraphs (b), (c), (d) and (e) of this Section.
(b) Within 30 days following any Change of Control, Publishing shall notify
the Trustee thereof and give written notice (a "Change of Control Purchase
Notice") of such Change of Control to each Holder by first-class mail, postage
prepaid, to the Trustee and to each Holder at his address appearing in the
Security Register, stating or including:
A. that a Change of Control has occurred, the date of such event, and that
such Holder has the right to require Publishing to repurchase such Holder's
Securities at the Change of Control Purchase Price;
B. the circumstances and relevant facts regarding such Change of Control
(including but not limited to information with respect to pro forma
historical income, cash flow and capitalization after giving effect to such
Change of Control, if any);
C. that the Change of Control Offer is being made pursuant to Section
10.15(a) and that all Securities properly tendered pursuant to the Change of
Control Offer will be accepted for payment at the Change of Control Offer
Purchase Price;
D. the Change of Control Purchase Date, which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is
mailed or such later date as may be necessary for Publishing to comply with
the requirements under the Exchange Act;
E. (i) the most recently filed Annual Report on Form 10-K (including audited
consolidated financial
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statements) of Publishing, the most recent subsequently filed Quarterly
Report on Form 10-Q, as applicable, and any Current Report on Form 8- K of
Publishing filed subsequent to such Quarterly Report (or in the event
Publishing is not required to prepare any of the foregoing Forms, the
comparable information required to be prepared by Publishing pursuant to
Section 10.18), (ii) a description of material developments in Publishing's
business subsequent to the date of the latest of such reports and (iii) such
other information, if any, concerning the business of Publishing and its
Restricted Subsidiaries which Publishing in good faith believes will enable
such Holders to make an informed investment decision regarding the Change of
Control Offer;
F. the Change of Control Purchase Price;
G. the names and addresses of the Paying Agent and the offices or agencies
referred to in Section 10.02;
H. that Securities of that Series must be surrendered at least three
Business Days prior to the Change of Control Purchase Date to the Paying
Agent at the Office of the Paying Agent or to an office or agency referred to
in Section 10.02 to collect payment;
I. that the Change of Control Purchase Price for any Security which has been
properly tendered and not withdrawn will be paid promptly following the
Change of Control Purchase Date;
J. the procedures for withdrawing a tender of Securities and Change of
Control Purchase Notice;
K. that any Security of such Series not tendered will continue to accrue
interest; and
L. that, unless Publishing defaults in the payment of the Change of Control
Purchase Price, any Security of such Series accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest after the Change
of Control Purchase Date.
(c) Upon receipt by Publishing of the proper tender of Securities of such
Series, each Holder of a Security in respect of which such proper tender was
made shall (unless the tender of such Security is properly
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withdrawn) thereafter be entitled to receive solely the Change of Control
Purchase Price with respect to such Security. Upon surrender of any such
Security for purchase in accordance with the foregoing provisions, such
Security shall be paid by Publishing at the Change of Control Purchase Price;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Change of Control Purchase Date shall be payable to the Holders of
such Securities, or one or more Predecessor Securities, registered as such on
the relevant Regular Record Dates according to the terms and the provisions of
Section 3.07. If any Security tendered for purchase in accordance with the
provisions of this Section shall not be so paid upon surrender thereof by
deposit of funds with the Paying Agent in accordance with paragraph (d) below,
the principal thereof (and premium, if any, thereon) shall, until paid, bear
interest from the Change of Control Purchase Date at the rate borne by such
Security. Holders electing to have Securities of such Series purchased will be
required to surrender such Securities to the Paying Agent at the address
specified in the notice at least three Business Days prior to the Change of
Control Purchase Date. Any Security of such Series that is to be purchased
only in part shall be surrendered to a Paying Agent in accordance with the
provisions of this Section at the office of such Paying Agent (with, if
Publishing or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to Publishing and the Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing), and Publishing shall execute and pursuant to a Publishing Order the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge, one or more new Securities of any authorized denomination as
requested by such Holder in an aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Security so
surrendered that is not purchased.
(d) Publishing shall (i) not later than the Change of Control Purchase
Date, accept for payment of Securities of such Series or portion thereof
tendered pursuant to the Change of Control Offer, (ii) not later than 11:00
a.m. (New York time) on the Change of Control Purchase Date, deposit with the
Paying Agent an amount of cash sufficient to pay the aggregate Change of
Control Purchase Price of all the Securities or portions thereof which are to
be purchased as of the Change of Control Purchase Date and (iii) not later than
11:00 a.m. (New York time) on the Change of Control Purchase Date, deliver to
the Paying Agent
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an Officers' Certificate stating the Securities of such Series or portions
thereof accepted for payment by Publishing. The Paying Agent shall promptly
mail or deliver to Holders of Securities of such Series so accepted payment in
an amount equal to the Change of Control Purchase Price of the Securities of
such Series purchased from each such Holder. Any Securities of such Series not
so accepted shall be promptly mailed or delivered by the Paying Agent at
Publishing's expense to the Holder thereof. Publishing will publicly announce
the results of the Change of Control Offer on the Change of Control Purchase
Date. For purposes of this Section 10.15, Publishing shall choose a Paying
Agent which shall not be Publishing.
(e) A tender made in response to a Change of Control Purchase Notice may be
withdrawn before or after delivery by the Holder to the Paying Agent at the
office of the Paying Agent of the Security of such Series to which such Change
of Control Purchase Notice relates, by means of a written notice of withdrawal
delivered by the Holder to the Paying Agent at the office of the Paying Agent
or to the office or agency referred to in Section 10.02 to which the related
Change of Control Purchase Notice was delivered not later than three Business
Days prior to the Change of Control Purchase Date specifying as applicable:
(1) the name of the Holder;
(2) the certificate number of the Security in respect of which such notice
of withdrawal is being submitted;
(3) the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) delivered for purchase by the Holder as to which
such notice of withdrawal is being submitted;
(4) a statement that such Holder is withdrawing such Holder's election to
have such principal amount of such Security purchased; and
(5) the principal amount, if any, of such Security (which shall be $1,000 or
an integral multiple thereof) that remains subject to the original Change of
Control Purchase Notice and that has been or will be delivered for purchase
by Publishing.
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(f) As provided in the Securities, the Trustee and the Paying Agent shall
return to Publishing any cash that remains unclaimed, together with interest or
dividends, if any, thereon, held by either of them for the payment of the
Change of Control Purchase Price; provided, however, that, (x) to the extent
that the aggregate amount of cash deposited by Publishing pursuant to clause
(ii) of paragraph (d) above exceeds the aggregate Change of Control Purchase
Price of the Securities of any such Series or portions thereof to be purchased,
then the Trustee or the Paying Agent shall hold such excess for Publishing and
(y) unless otherwise directed by Publishing in writing, promptly after the
Business Day following the Change of Control Purchase Date, the Trustee or the
Paying Agent shall return any such excess to Publishing together with interest,
if any, thereon.
(g) Publishing shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable
securities laws or regulations in connection with a Change of Control Offer.
(h) Notwithstanding the occurrence of a Change of Control, Publishing shall
not be obligated to repurchase the Securities of any such Series pursuant to a
Change of Control Offer, or otherwise comply with this Section 10.15, if
Publishing has elected to redeem all of the Securities of such Series in
accordance with Article XI.
Publishing shall not, and shall not permit any Subsidiary to, create or
permit to exist or become effective any restriction (other than restrictions
existing under (i) Indebtedness as in effect on the date of this Indenture as
such Indebtedness may be refinanced from time to time or (ii) any Senior
Indebtedness existing on the date of this Indenture or thereafter; provided, in
each case, that such restrictions are no less favorable to the Holders than
those existing on the date of this Indenture) that would expressly impair the
ability of Publishing to make a Change of Control Offer to purchase the
Securities or, if such Change of Control Offer is made, to pay for the
Securities tendered for purchase.
SECTION 10.16. Limitation on Issuance and Sale of Capital Stock of
Restricted Subsidiaries. (a) Until such time as both of The Telegraph and
Southam are Restricted Subsidiaries, Publishing will not permit (i) any
Restricted Subsidiary to issue any Capital Stock (other than to a
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Publishing or any Wholly Owned Restricted Subsidiary) or (ii) any Person (other
than Publishing or a Wholly Owned Restricted Subsidiary) to acquire any Capital
Stock of any Restricted Subsidiary from Publishing or any Restricted
Subsidiary, except upon the sale of all of the outstanding Capital Stock of
such Restricted Subsidiary owned by Publishing and the designation of such
Subsidiary as an Unrestricted Subsidiary; provided, however, that Publishing or
a Restricted Subsidiary may issue or sell common stock of a Restricted
Subsidiary to a Person that is not an Affiliate of Publishing so long as, on or
prior to the consummation of such issuance or sale, such Restricted Subsidiary
issues and delivers a supplemental indenture to this Indenture providing for
the guarantee of the Securities, which guarantee shall be subordinated in right
of payment to any Senior Indebtedness of such Restricted Subsidiary, on
substantially the same terms as the Securities are subordinated to all Senior
Indebtedness of Publishing.
(b) On or after the time that both Southam and The Telegraph are Restricted
Subsidiaries, (i) without limiting the requirements of Section 10.14, in the
event that (x) Publishing or a Restricted Subsidiary issues or sells (other
than to a Restricted Subsidiary) Capital Stock of a Restricted Subsidiary (1)
that was a Subsidiary on February 1, 1997 (which, for purposes of this clause
(1), is deemed to include Southam and Hollinger Eastern), (2) any substantial
portion of the operating assets of which were held by a Subsidiary on February
1, 1997 and were generating material revenue and cash flows on such date, or
(3) any substantial portion of the operating assets of which consist of assets
that are acquired by Publishing or a Restricted Subsidiary pursuant to the
Hollinger Inc. Transaction and (y) such issuance or sale involves less than
100% of the Capital Stock of such Restricted Subsidiary held by Publishing and
the Restricted Subsidiaries at the time of such issuance or sale, then the Net
Cash Proceeds of such issuance or sale (1) shall be applied to permanently
repay or otherwise permanently retire any Senior Indebtedness then outstanding,
as permitted or required by the terms thereof, or (2) if there is no Senior
Indebtedness then outstanding, then the balance of such Net Cash Proceeds shall
be deemed to constitute Excess Proceeds for purposes of Section 10.14(c);
provided that the foregoing clause (i) shall not apply to any new issuance of
Capital Stock by Southam as long as (a) Southam is a Public Entity at the time
of such issuance; (b) neither Publishing nor any other Restricted Subsidiary
has at any time after February 1, 1997 sold any
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assets and contributed, directly or indirectly, the proceeds therefrom to
Southam; and (c) neither Publishing nor any other Restricted Subsidiary has at
any time after February 1, 1997 contributed, directly or indirectly, any
Newspaper Businesses to Southam other than those Newspaper Businesses acquired
in the Hollinger Inc. Transaction; and (ii) if any issuance of Capital Stock by
a Restricted Subsidiary or sale or disposition of Capital Stock of a Restricted
Subsidiary results in a Restricted Subsidiary ceasing to qualify as a
Subsidiary, such transaction would deemed, for purposes of Section 10.09, to
constitute the designation of such former Restricted Subsidiary as an
Unrestricted Subsidiary.
SECTION 10.17. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries. Publishing will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) pay dividends or
make any other distribution on its Capital Stock to Publishing or any other
Restricted Subsidiary, (b) pay any Indebtedness owed to Publishing or any other
Restricted Subsidiary, (c) make any Investment in Publishing or (d) transfer
any of its properties or assets to Publishing or any Restricted Subsidiary,
except (i) any encumbrance or restriction pursuant to or in connection with the
New Bank Credit Facility or the FDTH Bank Credit Facility as in effect on the
date of this Indenture or any other agreement in effect on the date of this
Indenture (including the AP-91 Senior Notes), (ii) any encumbrance or
restriction, with respect to a Restricted Subsidiary that is not a Restricted
Subsidiary of Publishing on the date of this Indenture, in existence at the
time such Person becomes a Restricted Subsidiary of Publishing and not Incurred
in connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary, (iii) any encumbrance or restriction pursuant to or in connection
with documents existing or securing any Foreign Subsidiary Indebtedness that is
not materially more restrictive than the terms of any such restrictions
existing on the date of the Indenture or the date such Subsidiary becomes a
Restricted Subsidiary, as determined in good faith by an officer of Publishing,
(iv) encumbrances or restrictions entered into by Southam in connection with
Indebtedness of Southam Incurred at a time when Southam is a Public Entity, (v)
encumbrances or restrictions contained in the terms of any Mirror Preferred,
provided that such Mirror Preferred continues to quality as such under the
definition
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thereof, (vi) customary provisions restricting subletting or assignment of any
lease governing a leasehold interest of Publishing or any Restricted Subsidiary
and (vii) any encumbrance or restriction existing under any agreement that
extends, renews, refinances or replaces the agreements containing the
encumbrances or restrictions in the foregoing clauses (i), (ii) and (iii)
(other than the covenants in the AP-91 Senior Notes); provided that the terms
and conditions of any such encumbrances or restrictions are not materially less
favorable to the Holders than those under or pursuant to the agreement
evidencing the Indebtedness so extended, renewed, refinanced or replaced.
SECTION 10.18. Provision of Financial Statements. Whether or not Hollinger
International is subject to Section 13(a) or 15(d) of the Exchange Act,
Hollinger International will, to the extent permitted under the Exchange Act,
file with the Commission the annual reports, quarterly reports and other
documents that it would have been required to file with the Commission pursuant
to such Sections 13(a) or 15(d), including any "summarized information" or
other information relating to Publishing as may be required by Regulation S-X
under the Exchange Act or by the Commission, if it were so subject, such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which it would have been required so to file
such documents if it were so subject. Hollinger International will in any
event (x) within 15 days of such Required Filing Date (i) transmit by mail to
all Holders, as their names and addresses appear in the Security Register,
without cost to such Holders and (ii) file with the Trustee copies of the
annual reports, quarterly reports and other documents which Publishing would
have been required to file with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act if Hollinger International were subject to such
Sections and (y) if filing such documents by Hollinger International with the
Commission is not permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any prospective holder of Securities at
Publishing's cost.
SECTION 10.19. Statement by Officers as to Default. (a) Publishing will
deliver to the Trustee, on or before a date not more than 45 days after the end
of each fiscal quarter and not more than 90 days after the end of each fiscal
year of Publishing ending after the date hereof, a written statement signed by
two executive officers of
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Publishing, one of whom shall be the principal executive officer, principal
financial officer or principal accounting officer of Publishing, stating
whether or not, after a review of the activities of Publishing during such year
or such quarter and of Publishing's performance under this Indenture, to the
best knowledge, based on such review, of the signers thereof, Publishing has
fulfilled all its obligations and is in compliance with all conditions and
covenants under this indenture throughout such year or quarter, as the case may
be, and, if there has been a Default, specifying each Default and the nature
and status thereof.
(b) When any Default or Event of Default has occurred and is continuing, or
if the Trustee or any Holder or the trustee for or the holder of any other
evidence of Indebtedness of Publishing or any Restricted Subsidiary gives any
notice or takes any other action with respect to a claimed default, Publishing
shall deliver to the Trustee by registered or certified mail or by telegram,
telex or facsimile transmission followed by hard copy an Officers' Certificate
specifying such Default, Event of Default, notice or other action, the status
thereof and what action Publishing is taking or proposes to take with respect
thereto, within five Business Days of its occurrence.
SECTION 10.20. Waiver of Certain Covenants. Publishing may omit in any
particular instance to comply with any covenant or condition set forth in
Sections 10.05 through 10.15 and Sections 10.17 through 10.19 if, before or
after the time for such compliance, the Holders of not less than a majority in
aggregate principal amount of the Securities of any Series at the time
Outstanding waive such compliance in such instance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of Publishing and the duties of the
Trustee in respect of any such covenant or condition shall remain in full force
and effect.
SECTION 10.21. Limitation on the Designation of Additional Restricted or
Unrestricted Subsidiaries. (a) The Board of Directors may designate any
Restricted Subsidiary as an Unrestricted Subsidiary if (i) such action is in
compliance with Section 10.09 of this Indenture and (ii) such action complies
with definition of "Unrestricted Subsidiaries."
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(b) The Board of Directors may designate any Unrestricted Subsidiary or any
Person that is to become a Restricted Subsidiary as a Restricted Subsidiary if
immediately after giving effect to such action (and treating any Acquired
Indebtedness as having been Incurred at the time of such action), Publishing
could have Incurred at least $1.00 of additional Indebtedness pursuant to
Section 10.08 of this Indenture.
ARTICLE XI
Redemption of Securities
SECTION 11.01. Right of Redemption. The Securities of any Series may be
redeemed, at the election of Publishing, as a whole or in part, at any time on
or after [ , 2001], subject to the conditions and at the Redemption Prices
specified in the form of Security of such Series or in the indenture
supplemental hereto with respect to Securities of such Series as provided in
Section 3.01, together with accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record of Securities of
such Series on relevant Regular Record Dates and Special Record Dates to
receive interest due on relevant Interest Payment Dates) to the extent that
this Article does not conflict with the terms of the form of Security of such
Series.
SECTION 11.02. Applicability of Article. Redemption of Securities at the
election of Publishing or otherwise, as permitted or required by any provision
of this Indenture, shall be made in accordance with such provision and this
Article.
SECTION 11.03. Election To Redeem; Notice to Trustee. The election of
Publishing to redeem any Securities pursuant to Section 11.01 shall be
evidenced by a Publishing Order and an Officers' Certificate. In case of any
redemption at the election of Publishing, Publishing shall, not less than 30
nor more than 60 days prior to the Redemption Date fixed by Publishing (unless
a shorter notice period shall be satisfactory to the Trustee), notify the
Trustee in writing of such Redemption Date and of the principal amount of
Securities of such Series and the Tranche (as defined in Section 11.04) to be
redeemed.
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SECTION 11.04. Selection by Trustee of Securities To Be Redeemed. If less
than all the Securities of like tenor and terms of any Series (a "Tranche") are
to be redeemed, the particular Securities or portions thereof to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee (or such shorter period as the Trustee may agree upon), from the
Outstanding Securities of such Tranche not previously called for redemption, by
lot or such other method as the Trustee shall deem fair and reasonable, and the
amounts to be redeemed may be equal to $1,000 or any integral multiple thereof,
unless otherwise provided in the terms of a particular Series of Securities.
The Trustee shall promptly notify Publishing and each Security Registrar in
writing of the Securities selected for redemption and, in the case of the
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case
of any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
SECTION 11.05. Notice of Redemption. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at his address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all the Outstanding Securities of any Series are to be
redeemed, the identification of the particular Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the principal amount
of such Security to be redeemed and that after the Redemption Date upon
surrender of such Security, a new Security or
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Securities in the aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(e) that Securities called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security or portion thereof to be redeemed, and that
(unless Publishing shall default in payment of the Redemption Price) interest
thereon shall cease to accrue on and after said date;
(g) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(h) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities to be redeemed at the election of
Publishing shall be given by Publishing or at Publishing's written request, by
the Trustee in the name and at the expense of Publishing. If Publishing elects
to give notice of redemption, it shall provide the Trustee with a certificate
stating that such notice has been given in compliance with the requirements of
this Section 11.05.
Such notice if mailed in the manner herein provided shall be conclusively
presumed to have been given, whether or not the Holder receives such notice.
In any case, failure to give such notice by mail or any defect in the notice to
the Holder of any Security designated for redemption as a whole or in part
shall not effect the validity of the proceedings for the redemption of any
other Security.
SECTION 11.06. Deposit of Redemption Price. Prior to Noon, New York time,
on any Redemption Date, Publishing shall irrevocably deposit with the Trustee
or with a Paying Agent an amount of money in same day funds sufficient to pay
the Redemption Price of, and, except if the Redemption Date shall be an
Interest Payment Date, accrued interest on, all the Securities or portions
thereof which are to be redeemed on that date. The Trustee or the Paying Agent
shall hold in trust for, and return to, Publishing promptly after the Business
Day following the
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Redemption Date any interest or dividends, if any, earned on amounts deposited
with the Trustee or the Paying Agent remaining after the payment of the
aggregate Redemption Price for all securities to be redeemed; provided that
neither the Trustee nor the Paying Agent shall be under any obligation to place
or invest such funds in an interest bearing account.
SECTION 11.07. Securities Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified and from and after such date (unless Publishing shall not have
deposited funds in accordance with Section 11.06 in respect of the payment of
the Redemption Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance
with said notice, such Security shall be paid by Publishing at the Redemption
Price together with accrued interest to the Redemption Date; provided, however,
that installments of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such on the relevant Regular Record
Dates according to the terms and the provisions of Section 3.07.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, by deposit or segregation of funds in accordance with
Section 11.06, the principal and premium, if any, shall, until paid, bear
interest from the Redemption Date at the rate then borne by such Security.
SECTION 11.08. Securities Redeemed or Purchased in Part. Any Security
which is to be redeemed or purchased only in part shall be surrendered to the
Paying Agent at the office or agency maintained for such purpose pursuant to
Section 10.02 (with, if Publishing, the Security Registrar or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to Publishing, the Security Registrar or the Trustee as the case
may be, duly executed by the Holder thereof or such Holder's attorney duly
authorized in writing), and Publishing shall execute, and pursuant to a
Publishing Order the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities, of any
authorized denomination as requested by
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such Holder in aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal of the Security so surrendered that is not
redeemed or purchased.
ARTICLE XII
Subordination of Securities
SECTION 12.01. Securities Subordinate to Senior Indebtedness. Publishing
covenants and agrees, and each Holder, by such Holder's acceptance of the
Securities, likewise covenants and agrees, that, to the extent and in the
manner hereinafter set forth in this Article, the Indebtedness represented by
the Securities and the payment of the principal of, premium, if any, and
interest on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment as provided in this Article to the
prior payment in full, in cash or Cash Equivalents or in any manner acceptable
to the requisite holders of Designated Senior Indebtedness, of all Senior
Indebtedness. For purposes of this Indenture, the requisite holders of
Designated Senior Indebtedness shall be determined by the instruments governing
Designated Senior Indebtedness.
This Article XII shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold Senior
Indebtedness; and such provisions are made for the benefit of the holders of
Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
SECTION 12.02. Payment of Proceeds Upon Dissolution, etc. In the event of
(a) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to Publishing or to its assets, or (b) any liquidation,
dissolution or other winding up of Publishing, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any assignment
for the benefit of creditors or any other marshaling of assets or liabilities
of Publishing, then and in any such event:
(1) the holders of Senior Indebtedness shall be entitled to receive payment
in full in cash or Cash
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Equivalents or in any other manner acceptable to the requisite holders of
Designated Senior Indebtedness, of all amounts due on or in respect of all
Senior Indebtedness, before the Holders of the Securities are entitled to
receive any payment or distribution of any kind or character (excluding
Permitted Junior Securities) on account of the principal of, premium, if any,
or interest on the Securities or on account of the purchase, redemption,
defeasance or other acquisition of or in respect of the Securities (including
any payment or other distribution which may be received from the holders of
Subordinated Indebtedness as a result of any payment on such Subordinated
Indebtedness); and
(2) any payment or distribution of assets of Publishing of any kind or
character, whether in cash, property or securities (excluding Permitted Junior
Securities), by set-off or otherwise, to which the Holders or the Trustee would
be entitled but for the provisions of this Article shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness held or represented by
each, to the extent necessary to make payment in full in cash or Cash
Equivalents or in any other manner acceptable to the requisite holders of
Designated Senior Indebtedness, of all Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of Publishing of any kind or character,
whether in cash, property or securities, in respect of principal, premium, if
any, and interest on the Securities or on account of the purchase, redemption,
defeasance or other acquisition of or in respect of the Securities before all
Senior Indebtedness is paid in full; then and in such event such payment or
distribution (excluding Permitted Junior Securities) (including any payment or
other distribution which may be received from the
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holders of Subordinated Indebtedness as a result of any payment on such
Subordinated Indebtedness) shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee,
agent or other person making payment or distribution of assets of Publishing
for application to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all Senior Indebtedness in full in cash or Cash
Equivalents or in any other manner acceptable to the requisite holders of
Designated Senior Indebtedness, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness and until so paid
shall be held in trust for the benefit of the holders of Senior Indebtedness.
The consolidation of Publishing with, or the merger of Publishing with or
into, another Person or the liquidation or dissolution of Publishing following
the sale, assignment, conveyance, transfer, lease or other disposal of all or
substantially all of Publishing's properties or assets to another Person upon
the terms and conditions set forth in Article VIII shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the
benefit of creditors or marshaling of assets and liabilities of Publishing for
the purposes of this Section if the Person formed by such consolidation or the
surviving entity of such merger or the Person which acquires by sale,
assignment, conveyance, transfer, lease or other disposal of all or
substantially all of Publishing's properties or assets, as the case may be,
shall, as a part of such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposal, comply with the conditions set forth in
Article VIII.
SECTION 12.03. Suspension of Payment When Senior Indebtedness in Default.
(a) Unless Section 12.02 shall be applicable, upon the occurrence and
continuation of a Payment Default beyond the applicable grace period, no
payment (other than any payments previously made pursuant to the provisions
described in Article IV) or distribution of any assets of Publishing of any
kind or character (excluding Permitted Junior Securities) shall be made by
Publishing on account of principal of, premium, if any, or interest on, the
Securities or on account of the purchase, redemption, defeasance or other
acquisition of or in respect of the Securities unless and until such Payment
Default shall have been cured or waived or shall have ceased to exist or the
Designated Senior Indebtedness shall have been discharged or
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paid in full in cash or Cash Equivalents, or in any other manner acceptable to
the requisite holders of such Designated Senior Indebtedness, after which
Publishing shall resume making any and all required payments in respect of the
Securities, including any missed payments.
(b) Unless Section 12.02 shall be applicable, upon (1) the occurrence and
continuation of a Non-payment Default and (2) receipt by the Trustee (with a
copy to Publishing) from a Senior Representative (as defined below) of written
notice of such occurrence, no payment (other than any payments previously made
pursuant to the provision described in Article IV) or distribution of any
assets of Publishing of any kind or character (excluding Permitted Junior
Securities) shall be made by Publishing on account of any principal of,
premium, if any, or interest on, the Securities or on account of the purchase,
redemption, defeasance or other acquisition of or in respect of Securities for
a period ("Payment Blockage Period") commencing on the date of receipt by the
Trustee of such notice unless and until the earliest of (subject to any
blockage of payments that may then or thereafter be in effect under subsection
(a) of this Section 12.03) (x) 179 days having elapsed since receipt of such
written notice by the Trustee (provided any Designated Senior Indebtedness as
to which notice was given shall not theretofore have been accelerated), (y) the
date such Non-payment Default and all other Non-payment Defaults as to which
notice is also given after such Payment Blockage Period is initiated shall have
been cured or waived or shall have ceased to exist or the Designated Senior
Indebtedness related thereto shall have been discharged or paid in full in cash
or Cash Equivalents or in any other manner acceptable to the requisite holders
of such Designated Senior Indebtedness or (z) the date on which such Payment
Blockage Period (and all Non-Payment Defaults as to which notice is given after
such Payment Blockage Period is initiated) shall have been terminated by
written notice to Publishing or the Trustee from the Agent or such other
representative of holders of Designated Senior Indebtedness (a "Senior
Representative"), after which, in each such case, Publishing shall resume
making any and all required payments in respect of the Securities, including
any missed payments and accrued interest thereon. Notwithstanding any other
provision of this paragraph (b), in no event shall a Payment Blockage Period
extend beyond 179 days from the date of the receipt by the Trustee of the
notice referred to in clause (2) of this paragraph (b) (such 179-day period
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referred to as the "Initial Blockage Period"). Any number of notices of
Non-Payment Defaults may be given during the Initial Blockage Period; provided
that during any 365-day consecutive period only one Payment Blockage Period
during which payment of principal of, premium, if any, or interest on, the
Securities may not be made may commence and the duration of such Payment
Blockage Period may not exceed 179 days. No Non-payment Default with respect
to Designated Senior Indebtedness which existed or was continuing on the date
of the commencement of any Payment Blockage Period will be, or can be, made the
basis for the commencement of a second Payment Blockage Period, whether or not
within a period of 365 consecutive days, unless such Non-payment Default shall
have been cured or waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, Publishing shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be paid over and delivered forthwith to a Senior Representative of the holders
of the Designated Senior Indebtedness or as a court of competent jurisdiction
shall direct and until so paid shall be held in trust for the benefit of the
holders of Senior Indebtedness.
SECTION 12.04. Payment Permitted if No Default. Nothing contained in this
Article, elsewhere in this Indenture or in any of the Securities shall prevent
Publishing, at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of Publishing referred
to in Section 12.02 or under the conditions described in Section 12.03, from
making payments at any time of principal of, premium, if any, or interest on
the Securities in accordance with the terms of this Indenture.
SECTION 12.05. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness in cash or Cash
Equivalents or in any other manner acceptable to the requisite holders of
Designated Senior Indebtedness, the Holders of the Securities shall be
subrogated to the rights of the holders of all Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of, premium, if any, and interest on
the Securities shall be paid in full.
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For purposes of such subrogation, no payments or distributions to the holders
of Senior Indebtedness of any cash, property or securities to which the Holders
of the Securities or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article
to the holders of Senior Indebtedness by Holders of the Securities or the
Trustee, shall, as among Publishing, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment or
distribution by Publishing to or on account of the Senior Indebtedness.
SECTION 12.06. Provisions Solely To Define Relative Rights. The provisions
of this Article are intended solely for the purpose of defining the relative
rights of the Holders of the Securities on the one hand and the holders of
Senior Indebtedness on the other hand. Nothing contained in this Article or
elsewhere in this Indenture or in the Securities is intended to or shall (a)
impair, as among Publishing, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the obligation of Publishing,
which is absolute and unconditional, to pay to the Holders of the Securities
the principal of, premium, if any, and interest on the Securities as and when
the same shall become due and payable in accordance with their terms; or (b)
affect the relative rights against Publishing of the Holders of the Securities
and creditors of Publishing other than the holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshaling
of assets and liabilities of Publishing referred to in Section 12.02, to
receive, pursuant to and in accordance with such Section, cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder, or
(2) under the conditions specified in Section 12.03, to prevent any payment
prohibited by such Section or enforce their rights pursuant to Section
12.03(c).
SECTION 12.07. Trustee To Effectuate Subordination. Each Holder of a
Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and
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appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of Publishing whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the Indebtedness of Publishing owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved. If the Trustee
does not file a proper claim at least 30 days before the expiration of the time
to file such claim, then the holders of Senior Indebtedness, and their agents,
trustees or other representatives are authorized to do so for and on behalf of
the Holders. The Trustee shall not be liable to any Holder for failure to file
such claim unless such failure is due to its negligence or wilful misconduct.
SECTION 12.08. No Waiver of Subordination Provisions. (a) No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of Publishing or by any act or failure to act
by any such holder, or by any non-compliance by Publishing with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
(b) Without limiting the generality of Subsection (a) of this Section, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (2) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (3) release any Person liable in any manner for the
collection or payment of Senior Indebtedness; and (4) exercise or refrain from
exercising any rights against Publishing and any other Person; provided,
however, that in no event shall any such actions limit the right of the Holders
of the Securities to take any action to
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accelerate the maturity of the Securities in accordance with the provisions set
forth in Article V in this Indenture or to pursue any rights or remedies
hereunder or under applicable laws if the taking of such action does not
otherwise violate the terms of this Article.
SECTION 12.09. Notice to Trustee. (a) Publishing shall give prompt written
notice to the Trustee of any fact known to Publishing which would prohibit the
making of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee
in respect of the Securities, unless and until the Trustee shall have received
written notice thereof from Publishing or a holder of Senior Indebtedness or
from a Senior Representative or any trustee, fiduciary or agent therefore; and,
prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects to assume that no such facts exist; provided, however, that if
the Trustee shall not have received the notice provided for in this Section at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of, premium, if any, or interest on any Security),
then, anything herein contained to the contrary notwithstanding but without
limiting the rights and remedies of the holders of Senior Indebtedness or any
trustee, fiduciary or agent thereof, the Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it within two Business Days prior to such date; nor
shall the Trustee be charged with knowledge of the curing of any such default
or the elimination of the act or condition preventing any such payment unless
and until the Trustee shall have received an Officers' Certificate to such
effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee by a Person representing himself to be a Senior
Representative or a holder of Senior Indebtedness (or a trustee, fiduciary or
agent therefore) to establish that such notice has been given by a Senior
Representative or a holder of Senior Indebtedness (or a trustee, fiduciary or
agent therefor); provided, however, that failure to give such notice to
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Publishing shall not affect in any way the ability of the Trustee to rely on
such notice. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such Payment.
SECTION 12.10. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of Publishing referred to in
this Article, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other Indebtedness of Publishing, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article; provided that the foregoing shall apply only if
such court has been fully apprised of the provisions of this Article.
SECTION 12.11. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder. Nothing in this
Article shall apply to claims of, or payments to, the Trustee under or pursuant
to the provisions in this Indenture regarding compensation and indemnification
of the Trustee.
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SECTION 12.12. Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by Publishing
and be then acting under this Indenture, the term "Trustee" as used in this
Article shall in such case (unless the context otherwise requires) be construed
as extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that Section 12.11
shall not apply to Publishing or any Affiliate of Publishing if it or such
Affiliate acts as Paying Agent.
SECTION 12.13. No Suspension of Remedies. Nothing contained in this
Article shall limit the right of the Trustee or the Holders of Securities to
take any action to accelerate the maturity of the Securities pursuant to the
provisions described under "Events of Default" and as set forth in this
Indenture or to pursue any rights or remedies hereunder or under applicable
law, subject to the rights, if any, under this Article of the holders, from
time to time, of Senior Indebtedness to receive the cash, property or
securities receivable upon the exercise of such rights or remedies.
SECTION 12.14. Trustee's Relation to Senior Indebtedness. With respect to
the holders of Senior Indebtedness, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set
forth in this Article, and no implied covenants or obligations with respect to
the holders of Senior Indebtedness shall be read into this Article against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and the Trustee shall not be liable to any
holder of Senior Indebtedness if it shall, in the absence of gross negligence
or wilful misconduct, pay over or deliver to Holders, Publishing or any other
Person moneys or assets to which any holder of Senior Indebtedness shall be
entitled by virtue of this Article or otherwise.
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ARTICLE XIII
Satisfaction and Discharge
SECTION 13.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect (except as to surviving rights of
registration of transfer or exchange of the Securities of any Series herein
expressly provided for) and the Trustee, on demand of and at the expense of
Publishing, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(1) all the Securities of any Series theretofore authenticated and delivered
(other than (x) lost, stolen or destroyed Securities of any Series which have
been replaced or paid as provided in Section 3.06 and (y) Securities of any
Series for whose payment United States dollars have theretofore been
irrevocably deposited in trust by Publishing and thereafter repaid to
Publishing or discharged from such trust, as provided in Section 10.03) have
been delivered to the Trustee for cancellation; or
(2) all Securities of any Series not theretofore delivered to the Trustee for
cancellation
(x) have become due and payable, or
(y) will become due and payable at their Stated Maturity within one year,
or
(z) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of Publishing,
and Publishing has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust an amount sufficient to pay and discharge the
entire indebtedness on the Securities of such Series not theretofore
delivered to the Trustee for cancellation, including principal of, premium,
if any, and accrued interest on the Securities of such Series at such
Maturity, Stated Maturity or Redemption Date;
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(b) Publishing has paid all other sums payable hereunder by Publishing; and
(c) Publishing has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each to the effect that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with and that such satisfaction and discharge will not result in
a breach or violation of, or constitute a default under, this Indenture or a
breach or violation of any agreement relating to any Senior Indebtedness.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of Publishing to the Trustee under Section 6.07 and, if United
States dollars shall have been deposited with the Trustee pursuant to subclause
(2) of Subsection (a) of this Section, the obligations of the Trustee under
Section 13.02 and the last paragraph of Section 10.03 shall survive.
SECTION 13.02. Application of Trust Money. Subject to the provisions of
the last paragraph of Section 10.03, all United States dollars deposited with
the Trustee pursuant to Section 13.01 shall be held in trust and applied by it,
in accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal of, premium, if
any, and interest on the Securities for whose payment such United States
dollars have been deposited with the Trustee.
ARTICLE XIV
Guarantee
SECTION 14.01. Hollinger International Guarantee. For value received,
Hollinger International, in accordance with this Article XIV, hereby
absolutely, unconditionally and irrevocably guarantees to the Trustee and the
Holders, as if Hollinger International were the principal debtor, the punctual
payment and performance when due of all Indenture Obligations (which for
purposes of this Guarantee shall also be deemed to include all commissions,
fees, charges, costs and other expenses (including reasonable legal fees and
disbursements of one counsel) arising out of or incurred by
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the Trustee or the Holders in connection with the enforcement of this
Guarantee).
SECTION 14.02. Continuing Guarantee; No Right of Set-Off; Independent
Obligation. (a) This Guarantee shall be a continuing guarantee of the payment
and performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
(including the fees and expenses of its agents and counsel) or the Holders; and
this Guarantee shall not be considered as wholly or partially satisfied by the
payment or liquidation at any time or from time to time of any sum of money for
the time being due or remaining unpaid to the Trustee or the Holders.
Hollinger International covenants and agrees to comply with all obligations,
covenants, agreements and provisions applicable to it in this Indenture
including those set forth in Article VIII and Section 10.18. Without limiting
the generality of the foregoing, Hollinger International's liability shall
extend to all amounts which constitute part of the Indenture Obligations and
would be owed by Publishing under this Indenture and the Securities but for the
fact that they are unenforceable, reduced, limited, impaired, suspended or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving Publishing.
(b) Hollinger International hereby guarantees that the Indenture
Obligations will be paid to the Trustee without set-off or counterclaim or
other reduction whatsoever (whether for taxes, withholding or otherwise) in
lawful currency of the United States of America.
(c) Hollinger International guarantees that the Indenture Obligations shall
be paid strictly in accordance with their terms regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the holders of the Securities.
(d) Hollinger International's liability to pay or perform or cause the
performance of the Indenture Obligations under this Guarantee shall arise
forthwith after demand for payment or performance by the Trustee has been given
to Hollinger International in the manner prescribed in Section 1.06 hereof.
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(e) Except as provided herein, the provisions of this Article XIV cover all
agreements between the parties hereto relative to this Guarantee and none of
the parties shall be bound by any representation, warranty or promise made by
any Person relative thereto which is not embodied herein; and it is
specifically acknowledged and agreed that this Guarantee has been delivered by
Hollinger International free of any conditions whatsoever and that no
representations, warranties or promises have been made to Hollinger
International affecting its liabilities hereunder, and that the Trustee shall
not be bound by any representations, warranties or promises now or at any time
hereafter made by Publishing to Hollinger International.
SECTION 14.03. Guarantee Absolute. The obligations of Hollinger
International hereunder are independent of the obligations of Publishing under
the Securities and this Indenture and a separate action or actions may be
brought and prosecuted against Hollinger International whether or not an action
or proceeding is brought against Publishing and whether or not Publishing is
joined in any such action or proceeding. The liability of Hollinger
International hereunder is irrevocable, absolute and unconditional and (to the
extent permitted by law) the liability and obligations of Hollinger
International hereunder shall not be released, discharged, mitigated, waived,
impaired or affected in whole or in part by:
(a) any defect or lack of validity or enforceability in respect of any
Indebtedness or other obligation of Publishing or any other Person under this
Indenture or the Securities, or any agreement or instrument relating to any
of the foregoing;
(b) any grants of time, renewals, extensions, indulgences, releases,
discharges or modifications which the Trustee or the Holders may extend to,
or make with, Publishing, Hollinger International or any other Person, or any
change in the time, manner or place of payment of, or in any other term of,
all or any of the Indenture Obligations, or any other amendment or waiver of,
or any consent to or departure from, this Indenture or the Securities,
including any increase or decrease in the Indenture Obligations;
(c) the taking of security from Publishing, Hollinger International or any
other Person, and the
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release, discharge or alteration of, or other dealing with, such security;
(d) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of
the Indenture Obligations and the obligations of Hollinger International
hereunder;
(e) the abstention from taking security from Publishing, Hollinger
International or any other Person or from perfecting, continuing to keep
perfected or taking advantage of any security;
(f) any loss, diminution of value or lack of enforceability of any security
received from Publishing, Hollinger International or any other Person, and
including any other guarantees received by the Trustee;
(g) any other dealings with Publishing, Hollinger International or any other
Person, or with any security;
(h) the Trustee's or the Holders' acceptance of or entering into any
composition with Publishing or Hollinger International;
(i) the application by the Holders or the Trustee of all monies at any time
and from time to time received from Publishing, Hollinger International or
any other Person on account of any indebtedness and liabilities owing by
Publishing or Hollinger International to the Trustee or the Holders, in such
manner as the Trustee or the Holders deems best and the changing of such
application in whole or in part and at any time or from time to time, or any
manner of application of collateral, or proceeds thereof, to all or any of
the Indenture Obligations, or the manner of sale of any Collateral;
(j) the release or discharge of Publishing or Hollinger International or of
any other Guarantor of the Securities or of any Person liable directly as
surety or otherwise by operation of law or otherwise
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for the Securities, other than an express release in writing given by the
Trustee, on behalf of the Holders, of the liability and obligations of
Hollinger International hereunder;
(k) any change in the name, business, capital structure or governing
instrument of Publishing or Hollinger International or any refinancing or
restructuring of any of the Indenture Obligations;
(l) the sale of Publishing's or Hollinger International's business or any
part thereof;
(m) subject to Section 14.14, any merger or consolidation, arrangement or
reorganization of Publishing, Hollinger International, any Person resulting
from the merger or consolidation of Publishing or Hollinger International
with any other Person or any other successor to such Person or merged or
consolidated Person or any other change in the corporate existence, structure
or ownership of Publishing or Hollinger International;
(n) the insolvency, bankruptcy, liquidation, winding-up, dissolution,
receivership or distribution of the assets of Publishing or its assets or any
resulting discharge of any obligations of Publishing (whether voluntary or
involuntary) or of Hollinger International or the loss of corporate
existence;
(o) subject to Section 14.14, any arrangement or plan of reorganization
affecting Publishing or Hollinger International;
(p) any other circumstance (including any statute of limitations) that might
otherwise constitute a defense available to, or discharge of, Publishing or
Hollinger International; or
(q) any modification, compromise, settlement or release by the Trustee, or
by operation of law or otherwise, of the Indenture Obligations or the
liability of Publishing or any other obligor under the Securities, or of any
Collateral, in whole or in part, and any refusal of payment by the Trustee,
in whole or in part, from any other obligor or other guarantor in connection
with any of the Indenture Obligations, whether or not with notice to, or
further assent by, or
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any reservation of rights against, Hollinger International.
SECTION 14.04. Right to Demand Full Performance. In the event of any
demand for payment or performance by the Trustee from Hollinger International
hereunder, the Trustee or the Holders shall have the right to demand its full
claim and to receive all dividends or other payments in respect thereof until
the Indenture Obligations shall have been paid in full, and Hollinger
International shall continue to be liable hereunder for any balance which may
be owing to the Trustee (including the fees and expenses of its agent and
counsel) or the Holders by Publishing under this Indenture and the Securities.
The retention by the Trustee or the Holders of any security, prior to the
realization by the Trustee or the Holders of its rights to such security upon
foreclosure thereon, shall not, as between the Trustee and Hollinger
International, be considered as a purchase of such security, or as payment,
satisfaction or reduction of the Indenture Obligations due to the Trustee or
the Holders by Publishing or any part thereof.
SECTION 14.05. Waivers. (a) Hollinger International hereby expressly
waives (to the extent permitted by law) notice of the acceptance of this
Guarantee and notice of the existence, renewal, extension or the
nonperformance, nonpayment, or nonobservance on the part of Publishing of any
of the terms, covenants, conditions and provisions of this Indenture or the
Securities or any other notice whatsoever to or upon Publishing or Hollinger
International with respect to the Indenture Obligations. Hollinger
International hereby acknowledges communication to it of the terms of this
Indenture and the Securities and all of the provisions therein contained and
consents to and approves the same. Hollinger International hereby expressly
waives (to the extent permitted by law) diligence, presentment, protest and
demand for payment.
(b) Without prejudice to any of the rights or recourses which the Trustee
or the Holders may have against Publishing, Hollinger International hereby
expressly waives (to the extent permitted by law) any right to require the
Trustee or the Holders to:
(i) initiate or exhaust any rights, remedies or recourse against Publishing,
Hollinger International or any other Person;
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(ii) value, realize upon, or dispose of any security of Publishing or any
other Person held by the Trustee or the Holders; or
(iii) initiate or exhaust any other remedy which the Trustee or the Holders
may have in law or equity;
before requiring or becoming entitled to demand payment from Hollinger
International under this Guarantee.
SECTION 14.06. Hollinger International Remains Obligated in Event
Publishing Is No Longer Obligated to Discharge Indenture Obligations. It is
the express intention of the Trustee and Hollinger International that if for
any reason Publishing has no legal existence, is or becomes under no legal
obligation to discharge the Indenture Obligations owing to the Trustee or the
Holders by Publishing or if any of the Indenture Obligations owing by
Publishing to the Trustee or the Holders becomes irrecoverable from Publishing
by operation of law or for any reason whatsoever, this Guarantee and the
covenants, agreements and obligations of Hollinger International contained in
this Article XIV shall nevertheless be binding upon Hollinger International, as
principal debtor, until such time as all such Indenture Obligations have been
paid in full to the Trustee and all Indenture Obligations owing to the Trustee
or the Holders by Publishing have been discharged, or such earlier time as
Section 4.02 shall apply to the Securities and Hollinger International shall be
responsible for the payment thereof to the Trustee or the Holders upon demand.
SECTION 14.07. Waiver of Rights. Hollinger International agrees (to the
extent permitted by law) that it hereby waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, exoneration, contribution, indemnity or subrogation (whether
contractual, under Section 509 of Title Eleven of the United States Code, under
common law or otherwise) or any similar rights or "claims" (as such term is
defined under Title Eleven of the United States Code), against Publishing or
any Restricted Subsidiary arising from the existence of, or performance by,
Hollinger International under this Guarantee.
SECTION 14.08. Guarantee Is in Addition to Other Security. This Guarantee
shall be in addition to and not in substitution for any other guarantees or
other security
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which the Trustee may now or hereafter hold in respect of the Indenture
Obligations owing to the Trustee or the Holders by Publishing and (except as
may be required by law) the Trustee shall be under no obligation to marshal in
favor of Hollinger International any other guarantees or other security or any
moneys or other assets which the Trustee may be entitled to receive or upon
which the Trustee or the Holders may have a claim.
SECTION 14.09. Release of Security Interests. Without limiting the
generality of the foregoing and except as otherwise provided in this Indenture,
Hollinger International hereby consents and agrees, to the fullest extent
permitted by applicable law, that the rights of the Trustee hereunder, and the
liability of Hollinger International hereunder, shall not be affected by any
and all releases for any purpose of any Collateral, if any, from the Liens and
security interests created by any document relating thereto and that this
Guarantee shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Indenture Obligations is rescinded or
must otherwise be returned by the Trustee upon the insolvency, bankruptcy or
reorganization of Publishing or otherwise, all as though such payment had not
been made.
SECTION 14.10. No Bar to Further Actions. Except as provided by law, no
action or proceeding brought or instituted under Article XIV and this Guarantee
and no recovery or judgment in pursuance thereof shall be a bar or defense to
any further action or proceeding which may be brought under Article XIV and
this Guarantee by reason of any further default or defaults under Article XIV
and this Guarantee or in the payment of any of the Indenture Obligations owing
by Publishing.
SECTION 14.11. Failure to Exercise Rights Shall Not Operate as a Waiver; No
Suspension of Remedies. (a) No failure to exercise and no delay in
exercising, on the part of the Trustee or the Holders, any right, power,
privilege or remedy under this Article XIV and this Guarantee shall operate as
a waiver thereof, nor shall any single or partial exercise of any rights,
power, privilege or remedy preclude any other or further exercise thereof, or
the exercise of any other rights, powers, privileges or remedies. The rights
and remedies herein provided for are cumulative and not exclusive of any rights
or remedies provided in law or equity.
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(b) Nothing contained in this Article XIV shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Securities pursuant to Article V or to pursue any rights or remedies hereunder
or under applicable law.
SECTION 14.12. Trustee's Duties; Notice to Trustee. (a) Any provision in
this Article XIV or elsewhere in this Indenture allowing the Trustee to request
any information or to take any action authorized by, or on behalf of Hollinger
International, shall be permissive and shall not be obligatory on the Trustee
except as the Holders may direct in accordance with the provisions of this
Indenture.
(b) The Trustee shall not be required to inquire into the existence, powers
or capacities of Publishing, Hollinger International or the officers, directors
or agents acting or purporting to act on their respective behalf.
(c) Notwithstanding the provisions of this Article XIV or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from Hollinger International; and, prior
to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 6.01, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Responsible Officer of the
Trustee shall not have received any such notice from Hollinger International at
least three Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of, premium, if any, or interest on any Security),
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purpose for which such money was received and shall not be affected by
any notice to the contrary which may be received by it within three Business
Days prior to such date; nor shall the Trustee be charged with knowledge of the
curing of any such default or the elimination of the act or condition
preventing any such payment unless and until the Responsible Officer of the
Trustee shall have received an Officers' Certificate to such effect.
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(d) In the case at any time any Paying Agent other than the Trustee shall
have been appointed by Publishing and be then acting hereunder, the term
"Trustee" as used in this Article XIV shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article XIV in addition to or in place of the
Trustee; provided, however, that this Section 14.12 shall not apply to
Publishing or any Affiliate of Publishing if Publishing or such Affiliate acts
as Paying Agent.
SECTION 14.13. Successors and Assigns. All terms, agreements and
conditions of this Article XIV shall extend to and be binding upon Hollinger
International and its successors and permitted assigns and shall enure to the
benefit of and may be enforced by the Trustee and its successors and assigns;
provided, however, that Hollinger International may not assign any of its
rights or obligations hereunder other than in accordance with Article VIII.
SECTION 14.14. Release of Guarantee. Concurrently with the payment in full
of all of the Indenture Obligations, Hollinger International shall be released
from and relieved of its obligations under this Article XIV. Upon the delivery
by Publishing to the Trustee of an Officer's Certificate and, if requested by
the Trustee, an Opinion of Counsel to the effect that the transaction giving
rise to the release of this Guarantee was made by Publishing in accordance with
the provisions of this Indenture and the Securities, the Trustee shall execute
any documents reasonably required in order to evidence the release of Hollinger
International from its obligations under this Guarantee. If any of the
Indenture Obligations are revived and reinstated after the termination of this
Guarantee, then all of the obligations of Hollinger International under this
Guarantee shall be revived and reinstated as if this Guarantee had not been
terminated until such time as the Indenture Obligations are paid in full, and
Hollinger International shall enter into an amendment to this Guarantee,
reasonably satisfactory to the Trustee, evidencing such revival and
reinstatement.
This Guarantee shall terminate (a) upon a merger or consolidation of
Hollinger International with Publishing, in accordance with Article VIII or (b)
if after giving effect to a transaction or transactions permitted to be
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consummated pursuant to Article VIII, Hollinger International no longer owns
any Capital Stock of Publishing.
SECTION 14.15. Execution of Guarantee. To evidence the Guarantee,
Hollinger International hereby agrees to execute a guarantee substantially in
the form set forth in Section 2.05, to be endorsed on each Security
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of Hollinger International by its Chairman of the Board, its
President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or
facsimile.
SECTION 14.16. Guarantee Subordinate to Senior Guarantor Indebtedness.
Hollinger International covenants and agrees, and each Holder of a security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article, this Guarantee is hereby
made subordinate and subject in right of payment as provided in this Article to
the prior payment in full, in cash or Cash Equivalents of all Senior Guarantor
Indebtedness; provided, however, that the Indebtedness represented by this
Guarantee in all respects shall rank equally with, or prior to, all existing
and future unsecured Indebtedness of Hollinger International that is
subordinated to Senior Guarantor Indebtedness.
This Article XIV shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold Senior
Guarantor Indebtedness; and such provisions are made for the benefit of the
holders of Senior Guarantor Indebtedness; and such holders are made obligees
hereunder and they or each of them may enforce such provisions.
SECTION 14.17. Payment Over of Proceeds Upon Dissolution of Hollinger
International, etc. In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to Hollinger International
or to its creditors, as such, or to its assets, or (b) any liquidation,
dissolution or other winding up of Hollinger International, whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy, or (c)
any assignment for the benefit of
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creditors or any other marshaling of assets or liabilities of Hollinger
International, then and in any such event:
(1) the holders of Senior Guarantor Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents of all amounts due on or
in respect of all Senior Guarantor Indebtedness, before the Holders of the
Securities are entitled to receive any payment or distribution of any kind or
character (excluding Permitted Guarantor Junior Securities) on account of
principal of, premium, if any, or interest on the Securities (including any
payment or other distribution which may be received from the holders of
Subordinated Guarantor Indebtedness as a result of any payment on such
Subordinated Guarantor Indebtedness); and
(2) any payment or distribution of assets of Publishing of any kind or
character, whether in cash, property or securities (excluding Permitted
Junior Guarantor Securities), by set-off or otherwise, to which the Holders
or the Trustee would be entitled but for the provisions of this Article shall
be paid by the liquidating trustee or agent or other Person making such
payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of Senior Guarantor
Indebtedness or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any of
such Senior Guarantor Indebtedness may have been issued, ratably according to
the aggregate amounts remaining unpaid on account of the Senior Guarantor
Indebtedness held or represented by each, to the extent necessary to make
payment in full in cash or Cash Equivalents or in any other form acceptable
to the requisite holders of Designated Senior Guarantor Indebtedness, of all
Senior Guarantor Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Guarantor
Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of Publishing of any kind or character,
whether in cash, property or securities, in respect of principal, premium, if
any, and interest on the Securities before all Senior Guarantor Indebtedness
is paid in full, then and in
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such event such payment or distribution (excluding Permitted Guarantor Junior
Securities) (including any payment or other distribution which may be
received from the holders of Subordinated Indebtedness as a result of any
payment on such Subordinated Indebtedness) shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or distribution of
assets of Publishing for application to the payment of all Senior Guarantor
Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Guarantor Indebtedness in full in cash or Cash Equivalents after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Guarantor Indebtedness and until so paid shall be held in trust for
the benefit of the holders of Senior Guarantor Indebtedness.
The consolidation of Hollinger International with, or the merger of
Hollinger International with or into, another Person or the liquidation or
dissolution of Hollinger International following the conveyance, transfer or
lease of its properties and assets substantially as an entirety to another
Person upon the terms and conditions set forth in Article VIII shall not be
deemed a dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshaling of assets and liabilities of Hollinger
International for the purposes of this Section if the Person formed by such
consolidation or the surviving entity of such merger or the Person which
acquires by conveyance, transfer or lease such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance, transfer or lease, comply with the
conditions set forth in Article VIII.
SECTION 14.18. Default on Senior Guarantor Indebtedness. (a) Upon the
maturity of any Senior Guarantor Indebtedness by lapse of time, acceleration or
otherwise, all principal thereof and interest thereon and other amounts due in
connection therewith shall first be paid in full in cash or Cash Equivalents or
such payment duly provided for before any payment is made by Hollinger
International or any Person acting on behalf of Hollinger International in
respect of the Securities.
(b) No payment (excluding payments in the form of Permitted Guarantor
Junior Securities) shall be made by
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Hollinger International in respect of the Securities by Hollinger International
during the period in which Section 14.17 shall be applicable, during any
suspension of payments in effect under Section 12.03(a) of this Indenture or
during any Payment Blockage Period in effect under Section 12.03(b) of this
Indenture.
(c) In the event that, notwithstanding the foregoing, Hollinger
International shall make any payment to the Trustee or the Holder of any
Security prohibited by the foregoing provisions of this Section, then and in
such event such payment shall be paid over and delivered forthwith to the
representatives of Senior Guarantor Indebtedness or as a court of competent
jurisdiction shall direct and until so paid shall be held in trust for the
benefit of the holders of Senior Indebtedness.
SECTION 14.19. Payment Permitted by Hollinger International if No Default.
Nothing contained in this Article, elsewhere in this Indenture or in any of the
Securities shall prevent Hollinger International, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of Publishing referred to in Section 14.17 or under the conditions
described in Section 14.18, from making payments at any time of principal of,
premium, if any, or interest on the Securities.
SECTION 14.20. Subrogation to Rights of Holders of Senior Guarantor
Indebtedness. Subject to the payment in full of all Senior Guarantor
Indebtedness, the Holders of the Securities shall be subrogated to the rights
of the holders of such Senior Guarantor Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Senior
Guarantor Indebtedness until the principal of, premium, if any, and interest on
the Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of Senior Guarantor Indebtedness of
any cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Guarantor Indebtedness by Holders of the Securities or the Trustee,
shall, as among Hollinger International, its creditors other than holders of
Senior Guarantor Indebtedness, and the Holders of the Securities, be deemed to
be a payment or distribution by
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Hollinger International to or on account of the Senior Guarantor Indebtedness.
SECTION 14.21. Provisions Solely to Define Relative Rights. The provisions
of Sections 14.16 through 14.29 of this Indenture are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Guarantor Indebtedness on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among Hollinger
International, its creditors other than holders of Senior Guarantor
Indebtedness and the Holders of the Securities, the obligation of Hollinger
International, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of, premium, if any, and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against Hollinger International
of the Holders of the Securities and creditors of Hollinger International other
than the holders of Senior Guarantor Indebtedness; or (c) prevent the Trustee
or the Holder of any Security from exercising all remedies otherwise permitted
by applicable law upon default under this Indenture, subject to the rights, if
any, under this Article of the holders of Senior Guarantor Indebtedness (1) in
any case, proceeding, dissolution, liquidation or other winding up, assignment
for the benefit of creditors or other marshaling of assets and liabilities of
Hollinger International referred to in Section 14.17, to receive, pursuant to
and in accordance with such Section, cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder, or (2) under the
conditions specified in Section 14.18, to prevent any payment prohibited by
such Section or enforce their rights pursuant to Section 14.18(c).
SECTION 14.22. Trustee to Effectuate Subordination. Each Holder of a
Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of Hollinger
International whether in bankruptcy, insolvency, receivership proceedings, or
otherwise, the timely filing of a claim for the unpaid balance of the
indebtedness of
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Hollinger International owing to such Holder in the form required in such
proceedings and the causing of such claim to be approved. If the Trustee does
not file a proper claim at least 30 days before the expiration of the time to
file such claim, then the holders of Senior Guarantor Indebtedness, and their
agents, trustees or other representative are authorized to do so on behalf of
the Holders.
SECTION 14.23. No Waiver of Subordination Provisions. (a) No right of any
present or future holder of any Senior Guarantor Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of Publishing or by any act
or failure to act by any such holder, or by any noncompliance by Hollinger
International with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of Subsection (a) of this Section, the
holders of Senior Guarantor Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Securities to the holders of
Senior Guarantor Indebtedness, do any one or more of the following: (1) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, Senior Guarantor Indebtedness or any instrument evidencing the
same or any agreement under which Senior Guarantor Indebtedness is outstanding;
(2) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Guarantor Indebtedness; (3) release any
Person liable in any manner for the collection or payment of Senior Guarantor
Indebtedness; and (4) exercise or refrain from exercising any rights against
Hollinger International and any other Person; provided, however, that in no
event shall any such actions limit the right of the Holders of the Securities
to take any action to accelerate the maturity of the Securities in accordance
with provisions described under "Events of Default" and as set forth pursuant
to Article V in this Indenture or to pursue any rights or remedies hereunder or
under applicable laws if the taking of such action does not otherwise violate
the terms of this Article.
<PAGE> 170
170
SECTION 14.24. Notice to Trustee by Hollinger International. (a) Hollinger
International shall give prompt written notice to the Trustee of any fact known
to Hollinger International which would prohibit the making of any payment to or
by the Trustee in respect of the Guarantee. Notwithstanding the provisions of
this Article or any provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from Hollinger
International or a holder of Senior Guarantor Indebtedness or from a Senior
Guarantor Representative or any trustee, fiduciary or agent therefor; and,
prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects to assume that no such facts exist; provided, however, that if
the Trustee shall not have received the notice provided for in this Section at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of, premium, if any, or interest on any Security),
then, anything herein contained to the contrary notwithstanding but without
limiting the rights and remedies of the holders of Senior Guarantor
Indebtedness or any trustee, fiduciary or agent thereof, the Trustee shall have
full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it two Business Days prior to
such date; nor shall the Trustee be charged with knowledge of the curing of any
such default or the elimination of the act or condition preventing any such
payment unless and until the Trustee shall have received an officers'
certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and Hollinger International by a Person
representing himself to be a Senior Guarantor Representative or a holder of
Senior Guarantor Indebtedness (or a trustee, fiduciary or agent therefor) to
establish that such notice has been given by a Senior Guarantor Representative
or a holder of Senior Guarantor Indebtedness (or a trustee, fiduciary or agent
therefor); provided, however, that failure to give such notice to Publishing
shall not affect in any way the ability of the Trustee to rely on such notice.
In the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a
<PAGE> 171
171
holder of Senior Guarantor Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Guarantor Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 14.25. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of Hollinger International
referred to in this Article, the Trustee and the Holders of the Securities
shall be entitled to rely upon any order or decree entered by any court of
competent jurisdiction in which such insolvency, bankruptcy, receivership,
liquidation, reorganization, dissolution, winding up or similar case or
proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the Trustee or
to the Holders of Securities, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of Senior
Guarantor Indebtedness and other indebtedness of Hollinger International, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article; provided that
the foregoing shall apply only if such court has been fully apprised of the
provisions of this Article.
SECTION 14.26. Rights of Trustee as a Holder of Senior Guarantor
Indebtedness; Preservation of Trustee's Rights. The Trustee in its individual
capacity shall be entitled to all the rights set forth in this Article with
respect to any Senior Guarantor Indebtedness which may at any time be held by
it, to the same extent as any other holder of Senior Guarantor Indebtedness,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder. Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to the provisions in this Indenture regarding
compensation and indemnification of the Trustee.
<PAGE> 172
172
SECTION 14.27. Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by Publishing
and be then acting under this Indenture, the term "Trustee" as used in this
Article shall in such case (unless the context otherwise requires) be construed
as extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that Section 14.26
shall not apply to Publishing or any Affiliate of Publishing if it or such
Affiliate acts as Paying Agent.
SECTION 14.28. No Suspension of Remedies. Nothing contained in this
Article shall limit the right of the Trustee or the Holders of Securities to
take any action to accelerate the maturity of the Securities pursuant to
Article V of this Indenture or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article of the
holders, from time to time, of Senior Guarantor Indebtedness to receive the
cash, property or securities receivable upon the exercise of such rights or
remedies.
SECTION 14.29. Trustee's Relation to Senior Guarantor Indebtedness. With
respect to the holders of Senior Guarantor Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Guarantor Indebtedness shall be read into
this Article against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Guarantor Indebtedness an d the Trustee
shall not be liable to any holder of Senior Guarantor Indebtedness if it shall
mistakenly in the absence of gross negligence or wilful misconduct pay over or
deliver to Holders, Publishing or any other Person moneys or assets to which
any holder of Senior Guarantor Indebtedness shall be entitled by virtue of this
Article or otherwise.
* * * *
<PAGE> 173
173
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
HOLLINGER INTERNATIONAL
PUBLISHING INC.
by
-------------------------
Name:
Title:
Attest:
-------------------------
Name:
Title:
HOLLINGER INTERNATIONAL INC.,
solely in its capacity as
Guarantor
by
-------------------------
Name:
Title:
Attest:
-------------------------
Name:
Title:
FLEET NATIONAL BANK OF
CONNECTICUT
by
-------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 23.02
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Hollinger International Inc.
Hollinger International Publishing Inc.:
We consent to the use of our report dated February 27, 1996, relating to the
consolidated balance sheets of Hollinger International Inc. and subsidiaries as
of December 31, 1995 and 1994, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1995, incorporated herein by reference from
the Company's Annual Report on Form 10-K (as amended) for the year ended
December 31, 1995, and to the reference of our firm under the heading "Experts"
in the Prospectus.
/s/ KPMG Peat Marwick, LLP
Chicago, Illinois
February 27, 1997
<PAGE> 1
Exhibit 25.01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM T-1
--------------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
[ ] CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
FLEET NATIONAL BANK
----------------------------------------------------------
(Exact name of trustee as specified in its charter)
Not applicable 06-0850628
---------------------------- ------------------
(State of incorporation if (I.R.S. Employer
not a national bank) Identification No.)
777 Main Street, Hartford, Connecticut 06115
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Patricia Beaudry, 777 Main Street, Hartford, CT (860) 728-2065
------------------------------------------------------------------
(Name, address and telephone number of agent for service)
Hollinger International Publishing Inc., as Issuer
Hollinger International Inc., as Guarantor
------------------------------------------------------------------
(Exact name of obligor as specified in its charter)
Delaware 51-0370603
- - ------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
401 North Wabash Avenue, Chicago, Illinois 60611
------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
____% Senior Notes due 2005
------------------------------------------------------------------
(Title of the indenture securities)
<PAGE> 2
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject:
The Comptroller of the Currency,
Washington, D.C.
Federal Reserve Bank of Boston
Boston, Massachusetts
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers:
The trustee is so authorized.
Item 2. Affiliations with obligor. If the obligor is an affiliate of
the trustee, describe each such affiliation.
None with respect to the trustee; none with respect to Fleet
Financial Group, Inc. and its affiliates (the "affiliates").
Item 16. List of exhibits. List below all exhibits filed as a part of
this statement of eligibility and qualification.
1. A copy of the Articles of Association of the trustee as
now in effect.
2. A copy of the Certificate of Authority of the trustee
to do Business and the Certification of Fiduciary Powers.
3. A copy of the By-laws of the trustee as now in effect.
4. Consent of the trustee required by Section 321(b) of
the Act.
5. A copy of the latest Consolidated Report of Condition
and Income of the trustee, published pursuant to law or the requirements
of its supervising or examining authority.
<PAGE> 3
NOTES
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base its answer to Item 2, the answer to said
Item is based upon incomplete information. Said Item may, however, be
considered correct unless amended by an amendment to this Form T-1.
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Fleet National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Hartford, and State of
Connecticut, on the 28th day of February, 1997.
FLEET NATIONAL BANK,
Trustee
By /s/ Michael M. Hopkins
-------------------------------------
Name: Michael M. Hopkins
Title: Vice President
<PAGE> 5
EXHIBIT 1
ARTICLES OF ASSOCIATION
OF
FLEET NATIONAL BANK
FIRST. The title of this Association, which shall carry on the business of
banking under the laws of the United States, shall be "Fleet National Bank."
SECOND. The main office of the Association shall be in Springfield, Hampden
County Commonwealth of Massachusetts. The general business of the Association
shall be conducted at its main office and its branches.
THIRD. The board of directors of this Association shall consist of not less
than five (5) nor more than twenty-five (25) shareholders, the exact number of
directors within such minimum and maximum limits to be fixed and determined
from time to time by resolution of a majority of the full board of directors or
by resolution of the shareholders at any annual or special meeting thereof.
Unless otherwise provided by the laws of the United States, any vacancy in the
board of directors for any reason, including an increase in the number thereof,
may be filled by action of the board of directors.
FOURTH. The annual meeting of the shareholders for the election of directors
and the transaction of whatever other business may be brought before said
meeting shall be held at the main office or such other place as the board of
directors may designate, on the day of each year specified therefore in the
bylaws, but if no election is held on that day, it may be held on any
subsequent day according to the provisions of law; and all elections shall be
held according to such lawful regulations as may be prescribed by the board of
directors.
FIFTH. The authorized amount of capital stock of this Association shall be
eight million five hundred thousand (8,500,000) shares of which three million
five hundred thousand (3,500,000) shares shall be common stock with a
par value of six and 25/100 dollars ($6.25) each, and of which five million
(5,000,000) shares without par value shall be preferred stock. The capital
stock may be increased or decreased from time to time, in accordance with
the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any pre-emptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the board
of directors, in its discretion, may from time to time determine and at such
price as the board of directors may from time to time fix.
<PAGE> 6
The board of directors of the Association is authorized, subject to limitations
prescribed by law and the provisions of this Article, to provide for the
issuance from time to time in one or more series of any number of the preferred
shares, and to establish the number of shares be included in each series, and
to fix the designation, relative rights, preferences, qualifications and
limitations of the shares of each such series. The authority of the board of
directors with respect to each series shall include, but not be limited to,
determination of the following:
a. The number of shares constituting that series and the distinctive
designation of that series;
b. The dividend rate on the shares of that series, whether dividends shall be
cumulative, and, if so, from which date or dates, and whether they shall be
payable in preference to, or in another relation to, the dividends payable
to any other class or classes or series of stock;
c. Whether that series shall have voting rights, in addition to the voting
rights provided by law, and, if so, the terms of such voting rights;
d. Whether that series shall have conversion or exchange privileges, and,
if so, the terms and conditions of such conversion or exchange, including
provision for the adjustment of the conversion or exchange rate in such
events as the board of directors shall determine;
e. Whether or not the shares of that series shall be redeemable, and, if so,
the terms and conditions of such redemption, including the manner of
selecting shares for redemption if less than all shares are to be redeemed,
the date or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;
f. Whether that series shall be entitled to the benefit of a sinking fund to
be applied to the purchase or redemption of shares of that series, and, if
so, the terms and amounts of such sinking fund;
g. The right of the shares of that series to the benefit of conditions and
restrictions upon the creation of indebtedness of the Association or any
subsidiary, upon the issue of any additional stock (including additional
shares of such series or of any other series) and upon the payment of
dividends or the making of other distributions on, and the purchase,
redemption or other acquisition by the Association or any subsidiary of
any outstanding stock of the Association;
h. The right of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Association and
whether such rights shall be in preference to, or in another relation to,
the comparable rights of any other class or classes or series of stock; and
i. Any other relative, participating, optional or other special rights,
qualifications, limitations or restrictions of that series.
Shares of any series of preferred stock which have been redeemed (whether
through the operation of a sinking fund or otherwise) or which, if convertible
or exchangeable, have been converted into or exchanged for shares of stock of
any other class or classes shall have the status of authorized and unissued
shares of preferred stock of the same series and may be reissued as a part of
the series of which they were originally a part or may be reclassified and
reissued as part of a new series of preferred stock to be created by resolution
or resolutions of the board of directors or as part of any other series or
preferred stock, all subject to the conditions and the restrictions adopted by
the board of directors providing for the issue of any series of preferred
stock and by the provisions of any applicable law.
Subject to the provisions of any applicable law, or except as otherwise
provided by the resolution or resolutions providing for the issue of any series
of preferred stock, the holders of outstanding shares of common stock shall
exclusively possess voting power for the election of directors and for all
purposes, each holder of record of shares of common stock being entitled to one
vote for each share of common stock standing in his name on the books of the
Association.
Except as otherwise provided by the resolution or resolutions providing for the
issue of any series of preferred stock, after payment shall have been made to
the holders of preferred stock of the full amount of dividends to which they
shall be entitled pursuant to the resolution or resolutions providing for the
issue of any other series of preferred stock, the holders of common stock shall
be entitled, to the exclusion of the holders of preferred stock of any and all
series, to receive such dividends as from time to time may be declared by the
board of directors.
Except as otherwise provided by the resolution or resolutions for the issue
of any series of preferred stock, in the event of any liquidation, dissolution
or winding up of the Association, whether voluntary or involuntary, after
payment shall have been made to the holders of preferred stock of the full
amount to which they shall be entitled pursuant to the resolution or
resolutions providing for the issue of any series of preferred stock the
holders of common stock shall be entitled, to the exclusion of the holders of
preferred stock of any and all series, to share, ratable according to the
number of shares of common stock held by them, in all remaining assets of the
Association available for distribution to its shareholders.
The number of authorized shares of any class may be increased or decreased by
the affirmative vote of the holders of a majority of the stock of the
Association entitled to vote.
<PAGE> 7
SIXTH. The board of directors shall appoint one of its members president of
this Association, who shall be chairman of the board, unless the board appoints
another director to be the chairman. The board of directors shall have the
power to appoint one or more vice presidents; and to appoint a secretary and
such other officers and employees as may be required to transact the business
of this Association.
The board of directors shall have the power to define the duties of the
officers and employees of the Association; to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all bylaws that it may be lawful for them to make; and
generally to do and perform all acts that it may be legal for a board of
directors to do and perform.
SEVENTH. The board of directors shall have the power to change the location of
the main office to any other place within the limits of the City of Hartford,
Connecticut, without the approval of the shareholders but subject to the
approval of the Comptroller of the Currency; and shall have the power to
establish or change the location of any branch or branches of the Association
to any other location, without the approval of the shareholders but subject to
the approval of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH. The board of directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than ten percent (10%) of the
stock of this Association, may call a special meeting of shareholders at any
time. Unless otherwise provided by the laws of the United States, a notice of
the time, place and purpose of every annual and special meeting of the
shareholders shall be given by first class mail, postage prepaid, mailed at
least ten (10) days prior to the date of such meeting to each shareholder of
record at his address as shown upon the books of this Association.
TENTH. (a) Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to any threatened, pending or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she is or was a director, officer or employee of the Association or is or was
serving at the request of the Association as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, limited
liability company, trust, or other enterprise, including service with respect
to an employee benefit plan, shall be indemnified and held harmless by the
Association to the fullest extent authorized by the law of the state in which
the Association's ultimate parent company is incorporated, except as provided
in subsection (b). The aforesaid indemnity shall protect the indemnified
person against all expense, liability and loss (including attorney's fees,
judgements, fines ERISA excise taxes or penalties, and amounts paid in
settlement) reasonably incurred by such person in connection with such a
proceeding. Such indemnification shall continue as to a person who has ceased
to be a director, officer or employee and shall inure to the benefit of his or
her heirs, executors, and administrators, but shall only cover such person's
period of service with the Association. The Association may, by action of its
Board of Directors, grant rights to indemnification to agents of the
Association and to any director, officer, employee or agent of any of its
subsidiaries with the same scope and effect as the foregoing indemnification
of directors and officers.
(b) Restrictions on Indemnification. Notwithstanding the foregoing, (i) no
person shall be indemnified hereunder by the Association against expenses,
penalties, or other payments incurred in an administrative proceeding or action
instituted by a federal bank regulatory agency which proceeding or action
results in a final order assessing civil money penalties against that person,
requiring affirmative action by that person in the form of payments to the
Association, or removing or prohibiting that person from service with the
Association, and any advancement of expenses to that person in that proceeding
must be repaid; and (ii) no person shall be indemnified hereunder by the
Association and no advancement of expenses shall be made to any person
hereunder to the extent such indemnification or advancement of expenses would
violate or conflict with any applicable federal statute now or hereafter in
force or any applicable final regulation or interpretation now or hereafter
adopted by the Office of the Comptroller of the Currency ("OCC") or the Federal
Deposit Insurance Corporation ("FDIC"). The Association shall comply with any
requirements imposed on it by any such statue or regulation in connection with
any indemnification or advancement of expenses hereunder by the Association.
With respect to proceedings to enforce a claimant's rights to indemnification,
the Association shall indemnify any such claimant in connection with such a
proceeding only as provided in subsection (d) hereof.
(c) Advancement of Expenses. The conditional right to indemnification
conferred in this section shall be a contract right and shall include the
right to be paid by the Association the reasonable expenses (including
attorney's fees) incurred in defending a proceeding in advance of its final
disposition (an "advancement of expenses"); provided, however, that an
advancement of expenses shall be made only upon (i) delivery to the Association
of a binding written undertaking by or on behalf of the person receiving the
advancement to repay all amounts so advanced if it is ultimately determined
that such person is not entitled to be indemnified in such proceeding,
including if such proceeding results in a final order assessing civil money
penalties against that person, requiring affirmative action by that person
in the form of payments to the Association, or removing or prohibiting that
person from service with the Association, and (ii) compliance with any other
actions or determinations required by applicable law, regulation or OCC or FDIC
interpretation to be taken or made by the Board of Directors of the Association
<PAGE> 8
or other persons prior to an advancement of expenses. The Association shall
cease advancing expenses at any time its Board of Directors believes that any
of the prerequisites for advancement of expenses are no longer being met.
(d) Right of Claimant to Bring Suit. If a claim under subsection (a) of the
section is not paid in full by the Association within thirty (30) days after
written claim has been received by the Association, the claimant may at any time
thereafter bring suit against the Association to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a
suit brought by the Association to recover an advancement of expenses pursuant
to the terms of an undertaking, the claimant shall be entitled to be paid also
the expense of prosecuting or defending such claim. It shall be a defense to
any such action brought by the claimant to enforce a right to indemnification
hereunder (other than an action brought to enforce a claim for an advancement
of expenses where the required undertaking, if any, has been tendered to the
Association) that the claimant has not met any applicable standard for
indemnification under the law of the state in which the Association's ultimate
parent company is incorporated. In any suit brought by the Association to
recover an advancement of expenses pursuant to the terms of an undertaking, the
Association shall be entitled to recover such expenses upon a final
adjudication that the claimant has not met any applicable standard for
indemnification standard for indemnification under the law of the state in
which the Association's ultimate parent company is incorporated.
(e) Non-Exclusivity of Rights. The rights to indemnification and the
advancement of expenses conferred in this section shall not be exclusive of any
other right which any person may have or hereafter acquired under any statute,
agreement, vote of stockholders or disinterested directors or otherwise.
(f) Insurance. The Association may purchase, maintain, and make payment or
reimbursement for reasonable premiums on, insurance to protect itself and any
director, officer, employee or agent of the Association or another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Association would have the power to
indemnify such person against such expense, liability or loss under the law of
the state in which the Association's ultimate parent company is incorporated;
provided however, that such insurance shall explicitly exclude insurance
coverage for a final order of a federal bank regulatory agency assessing civil
money penalties against an Association director, officer, employee or agent.
ELEVENTH. These articles of association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount. The notice of any shareholders' meeting at
which an amendment to the articles of association of this Association is to be
considered shall be given as hereinabove set forth.
I hereby certify that the articles of association of this Association, in their
entirety, are listed above in items first through eleventh.
Secretary/Assistant Secretary
- - --------------------------------------------------
Dated at , as of .
--------------------------------------- --------------------
Revision of February 15, 1996
<PAGE> 9
EXHIBIT 2
AMENDED AND RESTATED BY-LAWS OF
FLEET NATIONAL BANK
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The regular annual meeting of the shareholders for
the election of Directors and the transaction of any other business that may
properly come before the meeting shall be held at the Main Office of the
Association, or such other place as the Board of Directors may designate, on
the fourth Thursday of April in each year at 1:15 o'clock in the afternoon
unless some other hour of such day is fixed by the Board of Directors.
If, from any cause, an election of Directors is not made on such day, the Board
of Directors shall order the election to be held on some subsequent day, of
which special notice shall be given in accordance with the provisions of law,
and of these bylaws.
Section 2. Special Meetings. Special meetings of the shareholders may be called
at any time by the Board of Directors, the President, or any shareholders
owning not less than twenty-five percent (25%) of the stock of the Association.
Section 3. Notice of Meetings of Shareholders. Except as otherwise provided
by law, notice of the time and place of annual or special meetings of the
shareholders shall be mailed, postage prepaid, at least ten (10) days before
the date of the meeting to each shareholder of record entitled to vote thereat
at his address as shown upon the books of the Association; but any failure to
mail such notice to any shareholder or any irregularity therein, shall not
affect the validity of such meeting or of any of the proceedings thereat.
Notice of a special meeting shall also state the purpose of the meeting.
Section 4. Quorum; Adjourned Meetings. Unless otherwise provided by law, a
quorum for the transaction of business at every meeting of the shareholders
shall consist of not less than two-fifths (2/5) of the outstanding capital
stock represented in person or by proxy; less than such quorum may adjourn the
meeting to a future time. No notice need be given of an adjourned annual or
special meeting of the shareholders if the adjournment be to a definite place
and time.
Section 5. Votes and Proxies. At every meeting of the shareholders, each
share of the capital stock shall be entitled to one vote except as otherwise
provided by law. A majority of the votes cast shall decide every question
or matter submitted to the shareholder at any meeting, unless otherwise
provided by law or by the Articles of Association or these By-laws. Share-
holders may vote by proxies duly authorized in writing and filed with the
Cashier, but no officer, clerk, teller or bookkeeper of the Association may act
as a proxy.
<PAGE> 10
Section 6. Nominations to Board of Directors. At any meeting of shareholders
held for the election of Directors, nominations for election to the Board of
Directors may be made, subject to the provisions of this section, by any share-
holder of record of any outstanding class of stock of the Association entitled
to vote for the election of Directors. No person other than those whose names
are stated as proposed nominees in the proxy statement accompanying the notice
of the meeting may be nominated as such meeting unless a shareholder shall have
given to the President of the Association and to the Comptroller of the
Currency, Washington, DC written notice of intention to nominate such other
person mailed by certified mail or delivered not less than fourteen (14) days
nor more than fifty (50) days prior to the meeting of shareholders at which
such nomination is to be made; provided, however, that if less than twenty-one
(21) days' notice of such meeting is given to shareholders, such notice of
intention to nominate shall be mailed by certified mail or delivered to said
President and said Comptroller on or before the seventh day following the day
on which the notice of such meeting was mailed. Such notice of intention to
nominate shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of the Association that will be voted for each proposed
nominee; (d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the Association owned by the
notifying shareholder. In the event such notice is given, the proposed nominee
may be nominated either by the shareholder giving such notice or by any other
shareholder present at the meeting at which such nomination is to be made.
Such notice may contain the names of more than one proposed nominee, and if
more than one is named, any one or more of those named may be nominated.
Section 7. Action Taken Without a Shareholder Meeting. Any action requiring
shareholder approval or consent may be taken without a meeting and without
notice of such meeting by written consent of the shareholders.
ARTICLE II
DIRECTORS
Section 1. Number. The Board of Directors shall consist of such number of
shareholders, not less than five (5) nor more than twenty-five (25), as from
time to time shall be determined by a majority of the votes to which all of its
shareholders are at the time entitled, or by the Board of Directors as
hereinafter provided.
Section 2. Mandatory Retirement for Directors. No person shall be elected a
director who has attained the age of 68 and no person shall continue to serve
as a director after the date of the first meeting of the stockholders of the
Association held on or after the date on which such person attains the age of
68; provided, however, that any director serving on the Board as of December
15, 1995 who has attained the age of 65 on or prior to such date shall be
permitted to continue to serve as a director until the date of the first
meeting of the stockholders of the Association held on or after the date on
which such person attains the age of 70.
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<PAGE> 11
Section 3. General Powers. The Board of Directors shall exercise all the
corporate powers of the Association, except as expressly limited by law, and
shall have the control, management, direction and disposition of all its
property and affairs.
Section 4. Annual Meeting. Immediately following a meeting of shareholders
held for the election of Directors, the Cashier shall notify the directors-
elect who may be present of their election and they shall then hold a meeting
at the Main Office of the Association, or such other place as the Board of
Directors may designate, for the purpose of taking their oaths, organizing the
new Board, electing officers and transacting any other business that may come
before such meeting.
Section 5. Regular Meeting. Regular meetings of the Board of Directors shall
be held without notice at the Main Office of the Association, or such other
place as the Board of Directors may designate, at such dates and times as the
Board shall determine. If the day designated for a regular meeting falls on a
legal holiday, the meeting shall be held on the next business day.
Section 6. Special Meetings. A special meeting of the Board of Directors may
be called at anytime upon the written request of the Chairman of the Board, the
President, or of two Directors, stating the purpose of the meeting. Notice of
the time and place shall be given not later than the day before the date of the
meeting, by mailing a notice to each Director at his last known address, by
delivering such notice to him personally, or by telephoning.
Section 7. Quorum; Votes. A majority of the Board of Directors at the time
holding office shall constitute a quorum for the transaction of all business,
except when otherwise provided by law, but less than a quorum may adjourn
a meeting from time to time, and the meeting may be held, as adjourned, without
further notice. If a quorum is present when a vote is taken, the affirmative
vote of a majority of Directors present is the act of the Board of Directors.
Section 8. Action by Directors Without a Meeting. Any action requiring
Director approval or consent may be taken without a meeting and without notice
of such meeting by written consent of all the Directors.
Section 9. Telephonic Participation in Directors' Meetings. A Director or
member of a Committee of the Board of Directors may participate in a meeting of
the Board or of such Committee may participate in a meeting of the Board or of
such Committee by means of a conference telephone or similar communications
equipment enabling all Directors participating in the meeting to hear one
another, and participation in such a meeting shall constitute presence in person
at such a meeting.
Section 10. Vacancies. Vacancies in the Board of Directors may be filled by
the remaining members of the Board at any regular or special meeting of the
Board.
Section 11. Interim Appointments. The Board of Directors shall, if the share-
holders at any meeting for the election of Directors have determined a number
of Directors less than twenty-five (25), have the power, by affirmative vote of
the majority of all the Directors, to increase such number of Directors to not
more than twenty-five (25) and to elect Directors to fill the resulting
vacancies and to serve until the next annual meeting of shareholders or the
next election of Directors; provided, however, that the number of Directors
shall not be so increased by more than two (2) if the number last determined
by shareholders was fifteen (15) or less, or increased by more than four (4) if
the number last determined by shareholders was sixteen (16) or more.
Section 12. Fees. The Board of Directors shall fix the amount and direct the
payment of fees which shall be paid to each Director for attendance at any
meeting of the Board of Directors or of any Committees of the Board.
ARTICLE III
COMMITTEES OF THE BOARD
Section 1. Executive Committee. The Board of Directors shall appoint from its
members an Executive Committee which shall consist of such number of persons as
the Board of Directors shall determine; the Chairman of the Board and the
President shall be members ex-officio of the Executive Committee with full
voting power. The Chairman of the Board or the President may from time to time
appoint from the Board of Directors as temporary additional members of the
Executive Committee, with full voting powers, not more than two members to serve
for such periods as the Chairman of the Board or the President may determine.
The Board of Directors shall designate a member of the Executive Committee to
serve as Chairman thereof. A meeting of the Executive Committee may be called
at any time upon the written request of the Chairman of the Board, the President
or the Chairman of the Executive Committee, stating the purpose of the meeting.
Not less than twenty four hours' notice of said meeting shall be given to each
member of the Committee personally, by telephoning, or by mail. The Chairman of
the Executive Committee or, in his absence, a member of the Committee chosen by
a majority of the members present shall preside at meetings of the Executive
Committee.
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<PAGE> 12
The Executive Committee shall possess and may exercise all the powers of the
Board when the Board is not in session except such as the Board, only, by law,
is authorized to exercise; it shall keep minutes of its acts and proceedings
and cause same to be presented and reported at every regular meeting and at any
special meeting of the Board including specifically, all its actions relating
to loans and discounts.
All acts done and powers and authority conferred by the Executive Committee,
from time to time, within the scope of its authority, shall be deemed to be,
and may be certified as being, the acts of and under the authority of the
Board.
Section 2. Risk Management Committee. The Board shall appoint from its
members a Risk Management Committee which shall consist of such number as the
Board shall determine. The Board shall designate a member of the Risk
Management Committee to serve as Chairman thereof. It shall be the duty of the
Risk Management Committee to (a) serve as the channel of communication with
management and the Board of Directors of Fleet Financial Group, Inc. to assure
that formal processes supported by management information systems are in place
for the identification, evaluation and management of significant risks inherent
in or associated with lending activities, the loan portfolio, asset-liability
management, the investment portfolio, trust and investment advisory activities,
the sale of nondeposit investment products and new products and services and
such additional activities or functions as the Board may determine from time
to time; (b) assure the formulation and adoption of policies approved by the
Risk Management Committee or Board governing lending activities, management of
the loan portfolio, the maintenance of an adequate allowance for loan and lease
losses, asset-liability management, the investment portfolio, the retail
sale of non-deposit investment products, new products and services and such
additional activities or functions as the Board may determine from time to time
(c) assure that a comprehensive independent loan review program is in place for
the early detection of problem loans and review significant reports of the loan
review department, management's responses to those reports and the risk
attributed to unresolved issues; (d) subject to control of the Board, exercise
general supervision over trust activities, the investment of trust funds, the
disposition of trust investments and the acceptance of new trusts and the terms
of such acceptance, and (e) perform such additional duties and exercise such
additional powers of the Board as the Board may determine from time to time.
Section 3. Audit Committee. The Board shall appoint from its members and
Audit Committee which shall consist of such number as the Board shall determine
no one of whom shall be an active officer or employee of the Association or
Fleet Financial Group, Inc. or any of its affiliates. In addition, members of
the Audit Committee must not (i) have served as an officer or employee of the
Association or any of its affiliates at any time during the year prior to their
appointment; or (ii) own, control, or have owned or controlled at any time
during the year prior to appointment, ten percent (10%) or more of any
outstanding class of voting securities of the Association. At least two (2)
members of the Audit Committee must have significant executive, professional,
educational or regulatory experience in financial, auditing, accounting,
or banking matters. No member of the Audit Committee may have significant
direct or indirect credit or other relationships with the Association, the
termination of which would materially adversely affect the Association's
financial condition or results of operations.
The Board shall designate a member of the Audit Committee to serve as Chairman
thereof. It shall be the duty of the Audit Committee to (a) cause a continuous
audit and examination to be made on its behalf into the affairs of the
Association and to review the results of such examination; (b) review
significant reports of the internal auditing department, management's responses
to those reports and the risk attributed to unresolved issues; (c) review the
basis for the reports issued under Section 112 of The Federal Deposit Insurance
Corporation Improvement Act of 1991; (d) consider, in consultation with the
independent auditor and an internal auditing executive, the adequacy of the
Association's internal controls, including the resolution of identified material
weakness and reportable conditions; (e) review regulatory communications
received from any federal or state agency with supervisory jurisdiction or
other examining authority and monitor any needed corrective action by
management; (f) ensure that a formal system of internal controls is in place
for maintaining compliance with laws and regulations; (g) cause an audit of the
Trust Department at least once during each calendar year and within 15 months
of the last such audit or, in lieu thereof, adopt a continuous audit system and
report to the Board each calendar year and within 15 months of the previous
report on the performance of such audit function; and (h) perform such
additional duties and exercise such additional powers of the Board as the Board
may determine from time to time.
The Audit Committee may consult with internal counsel and retain its own
outside counsel without approval (prior or otherwise) from the Board or
management and obligate the Association to pay the fees of such counsel.
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<PAGE> 13
Section 4. Community Affairs Committee. The Board shall appoint from its
members a Community Affairs Committee which shall consist of such number as the
Board shall determine. The Board shall designate a member of the Community
Affairs Committee to serve as Chairman thereof. It shall be the duty of the
Community Affairs Committee to (a) oversee compliance by the Association with
the Community Reinvestment Act of 1977, as amended, and the regulations
promulgated thereunder; and (b) perform such additional duties and exercise such
additional powers of the Board as the Board may determine from time to time.
Section 5. Regular Meetings. Except for the Executive Committee which shall
meet on an ad hoc basis as set forth in Section 1 of this Article, regular
meetings of the Committees of the Board of Directors shall be held, without
notice, at such time and place as the Committee or the Board of Directors may
appoint and as often as the business of the Association may require.
Section 6. Special Meetings. A Special Meeting of any of the Committees of
the Board of Directors may be called upon the written request of the Chairman
of the Board or the President, or of any two members of the respective
Committee, stating the purpose of the meeting. Not less than twenty-four
hours' notice of such special meeting shall be given to each member of the
Committee personally, by telephoning, or by mail.
Section 7. Emergency Meetings. An Emergency Meeting of any of the Committees
of the Board of Directors may be called at the request of the Chairman of the
Board or the President, who shall state that an emergency exists, upon not
less than one hour's notice to each member of the Committee personally or by
telephoning.
Section 8. Action Taken Without a Committee Meeting. Any Committee of the
Board of Directors may take action without a meeting and without notice of such
meeting by resolution assented to in writing by all members of such Committee.
Section 9. Quorum. A majority of a Committee of the Board of Directors shall
constitute a quorum for the transaction of any business at any meeting of such
Committee. If a quorum is not available, the Chairman of the Board or the
President shall have power to make temporary appointments to a Committee of-
members of the Board of Directors, to act in the place and stead of members who
temporarily cannot attend any such meeting; provided, however, that any
temporary appointment to the Audit Committee must meet the requirements for
members of that Committee set forth in Section 3 of this Article.
Section 10. Record. The committees of the Board of Directors shall keep a
record of their respective meetings and proceedings which shall be presented
at the regular meeting of the Board of Directors held in the calendar month
next following the meetings of the Committees. If there is no regular Board
of Directors meeting held in the calendar month next following the meeting of
a Committee, then such Committee's records shall be presented at the next
regular Board of Directors meeting held in a month subsequent to such Committee
meeting.
Section 11. Changes and Vacancies. The Board of Directors shall have power
to change the members of any Committee at any time and to fill vacancies on any
Committee; provided, however, that any newly appointed member of the Audit
Committee must meet the requirements for members of that Committee set forth in
Section 3 of this Article.
Section 12. Other Committees. The Board of Directors may appoint, from time
to time, other committees of one or more persons, for such purposes and with
such powers as the Board may determine.
ARTICLE IV
WAIVER OF NOTICE OF MEETINGS
Section 1. Waiver. Whenever notice is required to be given to any shareholder,
Director, or member of a Committee of the Board of Directors, such notice may
be waived in writing either before or after such meeting by any shareholder,
Director or Committee member respectively, as the case may be, who may be
entitled to such notice; and such notice will be deemed to be waived by
attendance at any such meeting.
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<PAGE> 14
ARTICLE V
OFFICERS AND AGENTS
Section 1. Officers. The Board shall appoint a Chairman of the Board and a
President, and shall have the power to appoint one or more Executive Vice
Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, a
Cashier, a Secretary, an Auditor, a Controller, one or more Trust Officers and-
such other officers as are deemed necessary or desirable for the proper
transaction of business of the Association. The Chairman of the Board and the
President shall be appointed from members of the Board of Directors. Any two
or more offices, except those of President and Cashier, or Secretary, may be
held by the same person. The Board may, from time to time, by resolution
passed by a majority of the entire Board, designate one or more officers of the
Association or of an affiliate or of Fleet Financial Group, Inc. with power to
appoint one or more Vice Presidents and such other officers of the Association
below the level of Vice President as the officer or officers designated in such
resolution deem necessary or desirable for the proper transaction of the
business of the Association.
Section 2. Chairman of the Board. The chairman of the Board shall preside at
all meetings of the Board of Directors. Subject to definition by the Board of
Directors, he shall have general executive powers and such specific powers and
duties as from time to time may be conferred upon or assigned to him by the
Board of Directors.
Section 3. President. The President shall preside at all meetings of the
Board of Directors if there be no Chairman or if the Chairman be absent.
Subject to definition by the Board of Directors, he shall have general
executive powers and such specific powers and duties as from time to time may
be conferred upon or assigned to him by the Board of Directors.
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<PAGE> 15
Section 4. Cashier and Secretary. The Cashier shall be the Secretary of the
Board and of the Executive Committee, and shall keep accurate minutes of their
meetings and of all meetings of the shareholders. He shall attend to the
giving of all notices required by these By-laws. He shall be custodian of the
corporate seal, records, documents and papers of the Association. He shall
have such powers and perform such duties as pertain by law or regulation to the
office of Cashier, or as are imposed by these By-laws, or as may be delegated
to him from time to time by the Board of Directors, the Chairman of the Board
or the President.
Section 5. Auditor. The Auditor shall be the chief auditing officer of the
Association. He shall continuously examine the affairs of the Association and
from time to time shall report to the Board of Directors. He shall have such
powers and perform such duties as are conferred upon, or assigned to him by
these By-laws, or as may be delegated to him from time to time by the Board
of Directors.
Section 6. Officers Seriatim. The Board of Directors shall designate from
time to time not less than two officers who shall in the absence or disability
of the Chairman or President or both, succeed seriatim to the duties and
responsibilities of the Chairman and President respectively.
Section 7. Clerks and Agents. The Board of Directors may appoint, from time
to time, such clerks, agents and employees as it may deem advisable for the
prompt and orderly transaction of the business of the Association, define
their duties, fix the salaries to be paid them and dismiss them. Subject to
the authority of the Board of Directors, the Chairman of the Board or the
President, or any other officer of the Association authorized by either of them
may appoint and dismiss all or any clerks, agents and employees and prescribe
their duties and the conditions of their employment, and from time to time
fix their compensation.
Section 8. Tenure. The Chairman of the Board of Directors and the President
shall, except in the case of death, resignation, retirement or disqualification
under these By-laws, or unless removed by the affirmative vote of at least two-
thirds of all of the members of the Board of Directors, hold office for the
term of one year or until their respective successors are appointed. Either
of such officers appointed to fill a vacancy occurring in an unexpired term
shall serve for such unexpired term of such vacancy. All other officers,
clerks, agents, attorneys-in-fact and employees of the Association shall hold
office during the pleasure of the Board of Directors or of the officer or
committee appointing them respectively.
ARTICLE VI
TRUST DEPARTMENT
Section 1. General Powers and Duties. All fiduciary powers of the Association
shall be exercised through the Trust Department, subject to such regulations as
the Comptroller of the Currency shall from time to time establish. The Trust
Department shall be to placed under the management and immediate supervision
of an officer or officers appointed by the Board of Directors. The duties of
all officers of the Trust Department shall be to cause the policies and
instructions of the Board and the Risk Management Committee with respect to the
trusts under their supervision to be carried out, and to supervise the due
performance of the trusts and agencies entrusted to the Association and under
their supervision, in accordance with law and in accordance with the terms of
such trusts and agencies.
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<PAGE> 16
ARTICLE VII
BRANCH OFFICES
Section 1. Establishment. The Board of Directors shall have full power to
establish, to discontinue, or, from time to time, to change the location of any
branch office, subject to such limitations as may be provided by law.
Section 2. Supervision and Control. Subject to the general supervision and
control of the Board of Directors, the affairs of branch offices shall be
under the immediate supervision and control of the President or of such other
officer or officers, employee or employees, or other individuals as the Board
of Directors may from time to time determine, with such powers and duties as
the Board of Directors may confer upon or assign to him or them.
ARTICLE VIII
SIGNATURE POWERS
Section 1. Authorization. The power of officers, employees, agents and
attorneys to sign on behalf of and to affix the seal of the Association shall
be prescribed by the Board of Directors or by the Executive Committee or by
both; provided that the President is authorized to restrict such power of any
officer, employee, agent or attorney to the business of a specific department
or departments, or to a specific branch office or branch offices. Facsimile
signatures may be authorized.
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<PAGE> 17
ARTICLE IX
STOCK CERTIFICATES AND TRANSFERS
Section 1. Stock Records. The Trust Department shall have custody of the
stock certificate books and stock ledgers of the Association, and shall make
all transfers of stock, issue certificates thereof and disburse dividends
declared thereon.
Section 2. Form of Certificate. Every shareholder shall be entitled to a
certificate conforming to the requirements of law and otherwise in such form
as the Board of Directors may approve. The certificates shall state on the
face thereof that the stock is transferable only on the books of the
Association and shall be signed by such officers as may be prescribed from time
to time by the Board of Directors or Executive Committee. Facsimile signatures
may be authorized.
Section 3. Transfers of Stock. Transfers of stock shall be made only on the
books of the Association by the holder in person, or by attorney duly
authorized in writing, upon surrender of the certificate therefor properly
endorsed, or upon the surrender of such certificate accompanied by a properly
executed written assignment of the same, or a written power of attorney to
sell, assign or transfer the same or the shares represented thereby.
Section 4. Lost Certificate. The Board of Directors or Executive Committee
may order a new certificate to be issued in place of a certificate lost or
destroyed, upon proof of such loss or destruction and upon tender to the
Association by the shareholder, of a bond in such amount and with or without
surety, as may be ordered, indemnifying the Association against all liability,
loss, cost and damage by reason of such loss or destruction and the issuance
of a new certificate.
Section 5. Closing Transfer Books. The Board of Directors may close the
transfer books for a period not exceeding thirty days preceding any regular
or special meeting of the shareholders, or the day designated for the payment
of a dividend or the allotment of rights. In lieu of closing the transfer
books the Board of Directors may fix a day and hour not more than thirty days
prior to the day of holding any meeting of the shareholders, or the day
designated for the payment of a dividend, or the day designated for the
allotment of rights, or the day when any change of conversion or exchange of
capital stock is to go into effect, as the day as of which shareholders
entitled to notice of and to vote at such meetings or entitled to such dividend
or to such allotment of rights or to exercise the rights in respect of any
such change, conversion or exchange of capital stock, shall be determined, and
only such shareholders as shall be shareholders of record on the day and hour
so fixed shall be entitled to notice of and to vote at such meeting or to
receive payment of such dividend or to receive such allotment of rights or to
exercise such rights, as the case may be.
ARTICLE X
THE CORPORATE SEAL
Section 1. Seal. The following is an impression of the seal of the
Association adopted by the Board of Directors.
ARTICLE XI
BUSINESS HOURS
Section 1. Business Hours. The main office of this Association and each
branch office thereof shall be open for business on such days, and for such
hours as the Chairman, or the President, or any Executive Vice President, or
such other officer as the Board of Directors shall from time to time
designate, may determine as to each office to conform to local custom and
convenience, provided that any one or more of the main and branch offices or
certain departments thereof may be open for such hours as the President, or
such other officer as the Board of Directors shall from time to time designate,
may determine as to each office or department on any legal holiday on which
work is not prohibited by law, and provided further that any one or more of
the main and branch offices or certain departments thereof may be ordered
closed or open on any day for such hours as to each office or department as
the President, or such other officer as the Board of Directors shall from time
to time designate, subject to applicable laws regulations, may determine when
such action may be required by reason of disaster or other emergency condition.
ARTICLE IX
CHANGES IN BY-LAWS
Section 1. Amendments. These By-laws may be amended upon vote of a majority
of the entire Board of Directors at any meeting of the Board, provided ten (10)
day's notice of the proposed amendment has been given to each member of the
Board of Directors. No amendment may be made unless the By-law, as amended, is
consistent with the requirements of law and of the Articles of Association.
These By-laws may also be amended by the Association's shareholders.
A true copy
Attest:
Secretary/Assistant Secretary
- - ---------------------------------------
Dated at , as of .
--------------------------------------- ----------------------
Revision of January 11, 1993
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<PAGE> 18
[LOGO] Exhibit 3
- - -------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- - -------------------------------------------------------------------------------
Washington, D.C. 20219
CERTIFICATE
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "Fleet National Bank," (Charter No. 1338) is a National Banking
Association formed under the laws of the United States and is authorized
thereunder to transact the business of banking and exercise Fiduciary Powers on
the date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of office
to be affixed to these presents at the Treasury
Department in the City of Washington and
[SEAL]
District of Columbia, this 23rd day of
December, 1996.
/s/
----------------------
Comptroller of the Currency
<PAGE> 19
EXHIBIT 4
CONSENT OF THE TRUSTEE
REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
The undersigned, as Trustee under an Indenture to be entered into
between Hollinger International Publishing Inc., as Issuer, Hollinger
International Inc., as Guarantor, and Fleet National Bank, Trustee, does
hereby consent that, pursuant to Section 321(b) of the Trust Indenture Act
of 1939, reports of examinations with respect to the undersigned by Federal,
State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.
FLEET NATIONAL BANK,
Trustee
By /s/ Michael M. Hopkins
Name: Michael M. Hopkins
Title: Vice President
EXHIBIT 5
Dated:
<PAGE> 20
[FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL LETTERHEAD]
- - -------------------------------------------------------------------------------
Please refer to page i,
[LOGO] Table of Contents, for 1
the required disclosure
of estimated burden.
- - -------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR A BANK WITH DOMESTIC AND
FOREIGN OFFICES - FFIEC 031
(961231)
REPORT AT THE CLOSE OF BUSINESS DECEMBER 31, 1996 -----------
(RCRI 9999)
This report is required by law: 12 U.S.C. Section 324 (State member banks); 12
U.S.C. Section 1817 (State nonmember banks); and 12 U.S.C. Section 161
(National banks).
This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
International Banking Facilities.
- - ------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National banks.
I, Giro S. DeRosa, Vice President
- - -----------------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and Income
(including the supporting schedules) have been prepared in conformance with
the instructions issued by the appropriate Federal regulatory authority and are
true to the best of my knowledge and belief.
/s/ Giro DeRosa
- - ----------------------------------------------
Signature of Officer Authorized to Sign Report
January 23, 1997
- - -----------------
Date of Signature
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions. NOTE: These instructions may in
some cases differ from generally accepted accounting principles.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) and declare that it
has been examined by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the appropriate Federal
regulatory authority and is true and correct.
/s/
- - ------------------
Director (Trustee)
/s/
- - ------------------
Director (Trustee)
/s/
- - -------------------
Director (Trustee)
- - -----------------------------------------------------------------------------
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
STATE MEMBER BANKS: Return the original and one copy to the appropriate Federal
Reserve District Bank.
STATE NONMEMBER BANKS: Return the original only in the special return address
envelope provided. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114.
NATIONAL BANKS: Return the original only in the special return address envelope
provided. If express mail is used in lieu of the special return address
envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127
Espey Court, Suite 204, Crofton, MD 21114.
- - -------------------------------------------------------------------------------
FDIC Certificate Number [02499] Banks should affix the address label in
----------- this space.
(RCRI 9050)
Fleet National Bank
---------------------------------------
Legal Title of Bank (TEXT 9010)
One Monarch Place
---------------------------------------
City (TEXT 9131)
Springfield, MA 01102
---------------------------------------
State Abbrev. Zip Code
(TEXT 9200) (TEXT 9220)
<PAGE> 21
FFIEC 031
Consolidated Reports of Condition and Income for a Bank With Page i
Domestic and Foreign Offices 2
- - -------------------------------------------------------------------------------
TABLE OF CONTENTS
SIGNATURE PAGE Cover
REPORT OF INCOME
Schedule RI--Income Statement........................... RI-1, 2, 3
Schedule RI-A--Changes in Equity Capital................ RI-4
Schedule RI-B--Charge-offs and Recoveries and Changes
in Allowance For Loan and Lease Losses................ RI-4, 5
Schedule RI-C--Applicable Income Taxes by Taxing
Authority............................................. RI-5
Schedule RI-D--Income from International Operations..... RI-6
Schedule RI-E--Explanations............................. RI-7, 8
REPORT OF CONDITION
Schedule RC--Balance Sheet.............................. RC-1, 2
Schedule RC-A--Cash and Balances Due from Depository
Institutions.......................................... RC-3
Schedule RC-B--Securities............................... RC-3, 4, 5
Schedule RC-C--Loans and Lease Financing
Receivables:
Part I. Loans and Leases............................. RC-6, 7
Part II. Loans to Small Businesses and Small
Farms (included in the forms for June 30
only).............................................. RC-7a, 7b
Schedule RC-D--Trading Assets and Liabilities (to
be completed only be selected banks).................. RC-8
Schedule RC-E--Deposit Liabilities...................... RC-9, 10, 11
Schedule RC-F--Other Assets............................. RC-11
Schedule RC-G--Other Liabilities........................ RC-11
Schedule RC-H--Selected Balance Sheet Items for
Domestic Offices...................................... RC-12
Schedule RC-I--Selected Assets and Liabilities of
IBFs.................................................. RC-13
Schedule RC-K--Quarterly Averages....................... RC-13
Schedule RC-L--Off-Balance Sheet Items.................. RC-14, 15, 16
Schedule RC-M--Memoranda................................ RC-17, 18
Schedule RC-N--Past Due and Nonaccrual Loans,
Leases, and Other Assets.............................. RC-19, 20
Schedule RC-O--Other Data for Deposit Insurance
Assessments........................................... RC-21, 22
Schedule RC-R--Regulatory Capital....................... RC-23, 24
Optional Narrative Statement Concerning the
Amounts Reported in the Reports of Condition
and Income............................................ RC-25
Special Report (TO BE COMPLETED BY ALL BANKS)
Schedule RC-J--Repricing Opportunities (sent only
to and to be completed by savings banks)
DISCLOSURE OF ESTIMATED BURDEN
The estimated average burden associated with this information collection is
32.2 hours per respondent and is estimated to vary from 15 to 230 hours per
response, depending on individual circumstances. Burden estimates include the
time for reviewing instructions, gathering and maintaining data in the
required form, and completing the information collection, but exclude the time
for compiling and maintaining business records in the normal course of a
respondent's activities. Comments concerning the accuracy of this burden
estimate and suggestions for reducing this burden should be directed to the
Office of Information and Regulatory Affairs, Office of Management and Budget,
Washington, D.C. 20503, and to one of the following:
Secretary
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Legislative and Regulatory Analysis Division
Office of the Comptroller of the Currency
Washington, D.C. 20219
Assistant Executive Secretary
Federal Deposit Insurance Corporation
Washington, D.C. 20429
For Information or assistance, National and State nonmember banks should
contact the FDIC's Call Reports Analysis Unit, 550 17th Street, NW, Washington,
D.C. 20429, toll free on (800) 688-FDIC(3342), Monday through Friday between
8:00 a.m. and 5:00 p.m., Eastern time. State member banks should contact their
Federal Reserve District Bank.
<PAGE> 22
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RI-1
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1996-DECEMBER 31, 1996
ALL REPORT OF INCOME SCHEDULES ARE TO BE REPORTED ON A CALENDAR YEAR-TO-DATE BASIS IN THOUSANDS OF DOLLARS.
SCHEDULE RI--INCOME STATEMENT
I480 <-
- - -------------------
Dollar Amounts in Thousands RIAD Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Interest income: //////////////////
a. Interest and fee income on loans: //////////////////
(1) In domestic offices: //////////////////
(a) Loans secured by real estate................................................. 4011 1,092,992 1.a.(1)(a)
(b) Loans to depository institutions............................................. 4019 1,482 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to farmers.......... 4024 501 1.a.(1)(c)
(d) Commercial and industrial loans.............................................. 4012 1,132,500 1.a.(1)(d)
(e) Acceptances of other banks................................................... 4026 264 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal expeditures: //////////////////
(1) Credit cards and related plans............................................ 4054 16,485 1.a.(1)(f)(1)
(2) Other.................................................................... 4055 189,926 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions....................... 4056 0 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and political //////////////////
subdivisions in the U.S.: //////////////////
(1) Taxable obligations...................................................... 4503 0 1.a.(1)(h)(1)
(2) Tax-exempt obligations................................................... 4504 10,381 1.a.(1)(h)(2)
(i) All other loans in domestic offices.......................................... 4058 147,087 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs.................... 4059 4,161 1.a.(2)
b. Income from lease financing receivables: //////////////////
(1) Taxable leases................................................................... 4505 152,848 1.b.(1)
(2) Tax-exempt leases................................................................ 4307 1,511 1.b.(2)
c. Interest income on balances due from depository instituions: (1) //////////////////
(1) In domestic offices.............................................................. 4105 1,644 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs.................... 4106 142 1.c.(2)
d. Interest and dividend income on securities: //////////////////
(1) U.S. Treasury securities and U.S. Government agency and corporation obligations.. 4027 422,212 1.d.(1)
(2) Securities issued by states and political subdivisions in the U.S.: //////////////////
(a) Taxable securities........................................................... 4506 0 1.d.(2)(a)
(b) Tax-Exempt securities........................................................ 4507 6,495 1.d.(2)(b)
(3) Other domestic debt securities................................................... 3657 12,976 1.d.(3)
(4) Foreign debt securities.......................................................... 3658 6,621 1.d.(4)
(5) Equity securities (including investments in mutual funds)........................ 3659 17,504 1.d.(5)
e. Interest income from trading assets.................................................. 4069 479 1.e.
- - ------------------
</TABLE>
- - ----------
(1) Includes interest income on time certificates of deposit not held for
trading.
<PAGE> 23
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RI-2
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI--CONTINUED
Dollar Amounts in Thousands Year-to-date
RIAD Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income (continued)
f. Interest income on federal funds sold and securities purchased under //////////////////
agreements to resell in domestic offices of the bank and of its Edge //////////////////
and Agreement subsidiaries, and in IBFs ............................. 4020 25,839 1.f.
g. Total interest income (sum of items 1.a through 1.f) ................ 4107 3,244,050 1.g.
2. Interest expense: //////////////////
a. Interest on deposits: //////////////////
(1) Interest on deposits in domestic offices: //////////////////
(a) Transaction accounts (NOW accounts, ATS accounts, and //////////////////
telephone and preauthorized transfer accounts) .............. 4508 13,070 2.a.(1)(a)
(b) Nontransaction accounts: //////////////////
(1) Money market deposit accounts (MMDAs) ................... 4509 257,330 2.a.(1)(b)(1)
(2) Other savings deposits .................................. 4511 48,169 2.a.(1)(b)(2)
(3) Time certificates of deposit of $100,000 or more ........ 4174 170,575 2.a.(1)(b)(3)
(4) All other time deposits ................................. 4512 403,831 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement //////////////////
subsidiaries, and IBFs .......................................... 4172 100,766 2.a.(2)
b. Expense of federal funds purchased and securities sold under //////////////////
agreements to repurchase in domestic offices of the bank and of its //////////////////
Edge and Agreement subsidiaries, and in IBFs ........................ 4180 282,599 2.b.
c. Interest on demand notes issued to the U.S. Treasury, trading //////////////////
liabilities, and other borrowed money ............................... 4185 161,582 2.c.
d. Interest on mortgage indebtedness and obligations under capitalized //////////////////
leases .............................................................. 4072 859 2.d.
e. Interest on subordinated notes and debentures ....................... 4200 69,434 2.e.
f. Total interest expense (sum of items 2.a through 2.e) ............... 4073 1,508,215 2.f.
3. Net interest income (item 1.g minus 2.f) .............................. ////////////////// RIAD 4074 1,735,835 3.
4. Provisions: //////////////////
a. Provision for loan and lease losses ................................. ////////////////// RIAD 4230 (6,834) 4.a.
b. Provision for allocated transfer risk ............................... ////////////////// RIAD 4243 0 4.b.
5. Noninterest income: //////////////////
a. Income from fiduciary activities .................................... 4070 295,272 5.a.
b. Service charges on deposit accounts in domestic offices ............. 4080 222,313 5.b.
c. TRADING REVENUE (MUST EQUAL SCHEDULE RI, SUM OF MEMORANDUM //////////////////
ITEMS 8.a THROUGH 8.d) .............................................. A220 25,253 5.c.
d. Other foreign transaction gains (losses) ............................ 4076 346 5.d.
e. Not applicable //////////////////
f. Other noninterest income: //////////////////
(1) Other fee income ................................................ 5407 797,631 5.f.(1)
(2) All other noninterest income* ................................... 5408 350,869 5.f.(2)
g. Total noninterest income (sum of items 5.a through 5.f) ............. ////////////////// RIAD 4079 1,691,684 5.g.
6. a. Realized gains (losses) on held-to-maturity securities .............. ////////////////// RIAD 3521 52 6.a.
b. Realized gains (losses) on available-for-sale securities ............ ////////////////// RIAD 3196 12,071 6.b.
7. Noninterest expense: //////////////////
a. Salaries and employee benefits ...................................... 4135 645,873 7.a.
b. Expenses of premises and fixed assets (net of rental income) //////////////////
(excluding salaries and employee benefits and mortgage interest ..... 4217 211,199 7.b.
c. Other noninterest expense* .......................................... 4092 1,243,839 7.c.
d. Total noninterest expense (sum of items 7.a through 7.c) ............ ////////////////// RIAD 4093 2,100,911 7.d.
8. Income (loss) before income taxes and extraordinary items and other //////////////////
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) ////////////////// RIAD 4301 1,345,565 8.
9. Applicable income taxes (on item 8) .................................... ////////////////// RIAD 4302 548,252 9.
10. Income (loss) before extraordinary items and other adjustments (item 8 //////////////////
minus 9) ............................................................... ////////////////// RIAD 4300 797,313 10.
- - ------------
*Describe on Schedule RI-E--Explanations.
</TABLE>
4
<PAGE> 24
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
Page RI-3
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI--CONTINUED
Year-to-date
------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
11. Extraordinary items and other adjustments: //////////////////
a. Extraordinary items and other adjustments, //////////////////
gross of income taxes*..................................... 4310 0 11.a.
b. Applicable income taxes (on item 11.a)*.................... 4315 0 11.b.
c. Extraordinary items and other adjustments, //////////////////
net of income taxes (item 11.a minus 11.b)................. ////////////////// RIAD 4320 0 11.c.
12. Net income (loss) (sum of items 10 and 11.c)................... ////////////////// RIAD 4340 797,313 12.
- - ----------------------------------------------------
</TABLE>
<TABLE>
I481 <-
- - ------------
Memoranda
Year-to-date
- - ------------
Dollar Amounts in Thousands RIAD Bil
Mil Thou
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after //////////////////
August 7, 1986, that is not deductible for federal income tax purposes....................... 4513 2,891 M.1.
2. Income from the sale and servicing of mutual funds and annuities in domestic offices //////////////////
(included in Schedule RI, item 8)............................................................ 8431 46,475 M.2.
3.-4. Not applicable //////////////////
5. Number of full-time equivalent employees on payroll at end of current period (round to
Number nearest whole number)................................................................. 4150 12,425 M.5.
6. Not applicable //////////////////
7. If the reporting bank has restated its balance sheet as a result of applying push down //// MM DD YY
accounting this calendar year, report the date of the bank's acquisition..................... 9106 00/00/00 M.7.
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments) //////////////////
(SUM OF MEMORANDUM ITEMS 8.a THROUGH 8.d MUST EQUAL SCHEDULE RI, ITEM 5.c): //// Bil Mil Thou
a. Interest rate exposures.................................................................. 8757 5,738 M.8.a.
b. Foreign exchange exposures............................................................... 8758 19,515 M.8.b.
c. Equity security and index exposures...................................................... 8759 0 M.8.c.
d. Commodity and other exposures............................................................ 8760 0 M.8.d.
9. Impact on income of off-balance sheet derivatives held for purposes other than trading: //////////////////
a. Net increase (decrease) to interest income............................................... 8761 2,698 M.9.a.
b. Net (increase) decrease to interest expense.............................................. 8762 (4,902) M.9.b.
c. Other (noninterest) allocations.......................................................... 8763 12 M.9.c.
10. CREDIT LOSSES ON OFF-BALANCE SHEET DERIVATIVES (SEE INSTRUCTIONS)............................ A251 0 M.10.
</TABLE>
- - -----------------
*Describe on Schedule RI-E--Explanations.
5
<PAGE> 25
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
Page RI-4
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-A--CHANGES IN EQUITY CAPITAL
Indicate decreases and losses in parentheses.
I483 <-
- - -----------
Dollar Amounts in Thousands RIAD
Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Total equity capital originally reported in the December 31, 1995, Reports of Condition //////////////////
and Income............................................................................... 3215 1,342,473 1.
2. Equity capital adjustments from amended Reports of Income, net*.......................... 3216 0 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2)..................... 3217 1,342,473 3.
4. Net income (loss) (must equal Schedule RI, item 12)...................................... 4340 797,313 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net....................... 4346 0 5.
6. Changes incident to business combinations, net........................................... 4356 4,161,079 6.
7. LESS: Cash dividends declared on preferred stock......................................... 4470 11,688 7.
8. LESS: Cash dividends declared on common stock............................................ 4460 761,473 8.
9. Cumulative effect of changes in accounting principles from prior years* (see instructions //////////////////
for this schedule)....................................................................... 4411 0 9.
10. Corrections of material accounting errors from prior years* (see instructions for this
schedule)................................................................................ 4412 0 10.
11. Change in net unrealized holding gains (losses) on available-for-sale securities......... 8433 (4,870) 11.
12. Foreign currency translation adjustments................................................. 4414 0 12.
13. Other transactions with parent holding company* (not included in items 5,7, or 8 above).. 4415 (1,003,722) 13.
14. Total equity capital end of current period (sum of items 3 through 13) (must equal //////////////////
Schedule RC, item 28).................................................................... 3210 4,519,112 14.
- - -------------------
</TABLE>
- - ---------------
*Describe on Schedule RI-E--Explanations.
<TABLE>
<CAPTION>
SCHEDULE RI-B--CHARGE-OFFS AND RECOVERIES AND CHANGES
IN ALLOWANCE FOR LOAN AND LEASE LOSSES
PART I. CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES
PART I EXCLUDES CHARGE-OFFS AND RECOVERIES THROUGH
THE ALLOCATED TRANSFER RISK RESERVE.
I486 <-
- - --------
(Column A)
(Column B)
Charge-offs
Recoveries
- - ----------------------------------------
Calendar year-to-date
- - ----------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil
Mil Thou
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Loans secured by real estate: ////////////////// //////////////////
a. To U.S. addressees (domicile)................................... 4651 65,946 4661 16,055 1.a.
b. To non-U.S. addressees (domicile)............................... 4652 0 4662 0 1.b.
2. Loans to depository institutions and acceptances of other banks: ////////////////// //////////////////
a. To U.S. banks and other U.S. depository institutions............ 4653 0 4663 0 2.a.
b. To foreign banks................................................ 4654 0 4664 0 2.b.
3. Loans to finance agricultural production and other loans to farmers. 4655 69 4665 105 3.
4. Commercial and industrial loans: ////////////////// //////////////////
a. To U.S. addressees (domicile)................................... 4645 73,869 4617 43,048 4.a.
b. To non-U.S. addressees (domicile)............................... 4646 0 4618 102 4.b.
5. Loans to individuals for household, family, and other personal ////////////////// //////////////////
expenditures: ////////////////// //////////////////
a. Credit cards and related plans.................................. 4656 2,356 4666 1,468 5.a.
b. Other (includes single payment, installment, and all student
loans).............................................................. 4657 29,089 4667 5,303 5.b.
6. Loans to foreign governments and official institutions.............. 4643 0 4627 0 6.
7. All other loans..................................................... 4644 5,253 4628 965 7.
8. Lease financing receivables: ////////////////// //////////////////
a. Of U.S. addressees (domicile)................................... 4658 12,926 4668 4,622 8.a.
b. Of non-U.S. addressees (domicile)............................... 4659 0 4669 0 8.b.
9. Total (sum of items 1 through 8).................................... 4635 189,508 4605 71,668 9.
</TABLE>
6
<PAGE> 26
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
Page RI-5
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-B--CONTINUED
PART I. CONTINUED
(Column A) (Column
B)
Charge-offs
Recoveries
- - -------------------------------------
Calendar-year-to-date
- - -------------------------------------
Memoranda
Dollar Amounts in Thousands RIAD BIL MIL THOU RIAD BIL
MIL THOU
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1-3. Not applicable ////////////////// //////////////////
4. Loans to finance commercial real estate, construction, and land ////////////////// //////////////////
development activities (NOT SECURED BY REAL ESTATE) included in ////////////////// //////////////////
Schedule RI-B, part I, items 4 and 7, above.......................... 5409 714 5410 1,374 M.4.
5. Loans secured by real estate in domestic offices (included in ////////////////// //////////////////
Schedule RI-B, part I, item 1, above): ////////////////// //////////////////
a. Construction and land development................................. 3582 266 3583 337 M.5.a.
b. Secured by farmland............................................... 3584 145 3585 304 M.5.b.
c. Secured by 1-4 family residential properties: ////////////////// //////////////////
(1) Revolving, open-end loans secured by 1-4 family residential ////////////////// //////////////////
properties and extended under lines of credit................. 5411 4,428 5412 619 M.5.c.(1)
(2) All other loans secured by 1-4 family residential properties.. 5413 31,124 5414 3,602 M.5.c.(2)
d. Secured by multifamily (5 or more) residential properties.......... 3588 5,579 3589 590 M.5.d.
e. Secured by nonfarm nonresidential properties...................... 3590 24,404 3591 10,603 M.5.e.
- - --------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PART II. CHANGES IN ALLOWANCE FOR LOAN AND LEASE LOSSES
Dollar Amounts in Thousands RIAD BIL
MIL THOU
- - -------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Balance originally reported in the December 31, 1995, Reports of Condition and Income....... 3124 266,943 1.
2. Recoveries (must equal part I, item 9, column B above)...................................... 4605 71,668 2.
3. LESS: Charge-offs (must equal part I, item 9, column A above)................................ 4635 189,508 3.
4. Provision for loan and lease losses (must equal Schedule RI, item 4.a)...................... 4230 (6,834) 4.
5. Adjustments* (see instructions for this schedule)........................................... 4815 634,542 5.
6. Balance end of current period (sum of items 1 through 5) (must equal Schedule RC, //////////////////
item 4.b)................................................................................... 3123 776,811 6.
- - ------------------
- - ------------
*Describe on Schedule RI-E--Explanations.
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE RI-C--APPLICABLE INCOME TAXES BY TAXING AUTHORITY
SCHEDULE RI-C IS TO BE REPORTED WITH THE DECEMBER REPORT OF INCOME.
I489
- - -----------------
Dollar Amounts in Thousands RIAD BIL
MIL THOU
- - -------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Federal................................................................................... 4780 461,184 1.
2. State and local........................................................................... 4790 87,068 2.
3. Foreign................................................................................... 4795 0 3.
4. Total (sum of items 1 through 3) (must equal sum of Schedule RI, items 9 and 11.b)........ 4770 548,252 4.
5. Deferred portion of item 4............................................ RIAD 4772 274,648 ////////////////// 5.
- - ------------------
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RI-6
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-D--INCOME FROM INTERNATIONAL OPERATIONS
FOR ALL BANKS WITH FOREIGN OFFICES, EDGE OR AGREEMENT SUBSIDIARIES, OR IBFs WHERE INTERNATIONAL OPERATIONS
ACCOUNT FOR MORE THAN
10 PERCENT OF TOTAL REVENUES, TOTAL ASSETS, OR NET INCOME.
PART I. ESTIMATED INCOME FROM INTERNATIONAL OPERATIONS
I492
- - -------------------
Year-to-date
- - -------------------
Dollar Amounts in Thousands RIAD Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Interest income and expense booked at foreign offices, Edge and Agreement subsidiaries, //////////////////
and IBFs
//////////////////
a. Interest income booked............................................................... 4837 N/A 1.a.
b. Interest expense booked.............................................................. 4038 N/A 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement subsidiaries, and //////////////////
IBFs (item 1.a minus 1.b)............................................................ 4839 N/A 1.c.
2. Adjustments for booking location of international operations: //////////////////
a. Net interest income attributable to international operations booked at domestic //////////////////
offices.............................................................................. 4840 N/A 2.a.
b. Net interest income attributable to domestic business booked at foreign offices...... 4841 N/A 2.b.
c. Net booking location adjustment (item 2.a minus 2.b)................................. 4842 N/A 2.c.
3. Noninterest income and expense attributable to international operations: //////////////////
a. Noninterest income attributable to international operations.......................... 4097 N/A 3.a.
b. Provision for loan and lease losses attributable to international operations......... 4235 N/A 3.b.
c. Other noninterest expense attributable to international operations................... 4239 N/A 3.c.
d. Net noninterest income (expense) attributable to international operations (item 3.a //////////////////
minus 3.b and 3.c).................................................................. 4843 N/A 3.d.
4. Estimated pretax income attributable to international operations before capital //////////////////
allocation adjustment (sum of items 1.c, 2.c, and 3.d)................................. 4844 N/A 4.
5. Adjustment to pretax income for internal allocations to international operations to //////////////////
reflect the effects of equity capital on overall bank funding costs.................... 4845 N/A 5.
6. Estimated pretax income attributable to international operations after //////////////////
capital allocation adjustment (sum of items 4 and 5)................................... 4846 N/A 6.
7. Income taxes attributable to income from international operations as estimated in //////////////////
item 6................................................................................. 4797 N/A 7.
8. Estimated net income attributable to international operations (item 6 minus 7)......... 4341 N/A 8.
</TABLE>
<TABLE>
<CAPTION>
memoranda Dollar Amounts in Thousands RIAD Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Intracompany interest income included in item 1.a above................................ 4847 N/A M.1.
2. Intracompany interest expense included in item 1.b above............................... 4848 N/A M.2.
</TABLE>
PART II. SUPPLEMENTARY DETAILS ON INCOME FROM INTERNATIONAL OPERATIONS REQUIRED
BY THE DEPARTMENTS OF COMMERCE AND TREASURY FOR PURPOSES OF THE U.S.
INTERNATIONAL ACCOUNTS AND THE U.S. NATIONAL INCOME AND PRODUCT ACCOUNTS
<TABLE>
<CAPTION>
Year-to-date
- - -------------------
Dollar Amounts in Thousands RIAD Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Interest income booked at IBFs......................................................... 4849 N/A 1.
2. Interest expense booked at IBFs........................................................ 4850 N/A 2.
3. Noninterest income attributable to international operations booked at domestic //////////////////
offices (excluding IBFs): //////////////////
a. Gains (losses) and extraordinary items.............................................. 5491 N/A 3.a.
b. Fees and other noninterest income................................................... 5492 N/A 3.b.
4. Provision for loan and lease losses attributable to international operations booked at //////////////////
domestic offices (excluding IBFs)...................................................... 4852 N/A 4.
5. Other noninterest expense attributable to international operations booked at domestic //////////////////
offices (excluding IBFs)............................................................... 4853 N/A 5.
</TABLE>
8
<PAGE> 28
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RI-7
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-E--EXPLANATIONS
SCHEDULE RI-E IS TO BE COMPLETED EACH QUARTER ON A CALENDER YEAR-TO-DATE BASIS.
Detail all adjustments in Schedule RI-A and RI-B, all extraordinary items and other adjustments in Schedule
RI, and all
significant items of other noninterest income and other noninterest expense in Schedule RI. (See
instructions for details.)
I495 <-
- - -------------------
Year-to-date
- - -------------------
Dollar Amounts in Thousands RIAD Bil Mil
Thou
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2)) //////////////////
Report amounts that exceed 10% of Schedule RI, item 5.f.(2): //////////////////
a. Net gains on other real estate owned................................................ 5415 0 1.a.
b. Net gains on sales of loans......................................................... 5416 0 1.b.
c. Net gains on sales of premises and fixed assets..................................... 5417 0 1.c.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI, //////////////////
item 5.f.(2): //////////////////
d. TEXT 4461 INCOME ON MORTGAGES HELD FOR RESALE 4461 147,813 1.d.
e. TEXT 4462 GAIN FROM BRANCH DIVESTITURES 4462 77,976 1.e.
f. TEXT 4463 4463 1.f.
2. Other noninterest expense (from Schedule RI, item 7.c): //////////////////
a. Amortization expense of intangible assets........................................... 4531
278,276 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c: //////////////////
b. Net losses on other real estate owned............................................... 5418 0 2.b.
c. Net losses on sales of loans........................................................ 5419 0 2.c.
d. Net losses on sales of premises and fixed assets.................................... 5420 0 2.d.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI, //////////////////
item 7.c: //////////////////
e. TEXT 4464 INTERCOMPANY CORPORATE SUPPORT FUNCTION CHARGES 4464 296,172 2.e.
f. TEXT 4467 INTERCOMPANY DATA PROCESSING & PROGRAMMING CHARGES 4467 315,897 2.f.
g. TEXT 4468 4468 2.g.
3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and applicable //////////////////
income tax effect (from Schedule RI, item 11.b) (itemize and describe all extraordinary //////////////////
items and other adjustments): //////////////////
a. (1) TEXT 4469 4469 3.a.(1)
(2) Applicable income tax effect RIAD 4486 ////////////////// 3.a.(2)
b. (1) TEXT 4487 4487 3.b.(1)
(2) Applicable income tax effect RIAD 4488 ////////////////// 3.b.(2)
c. (1) TEXT 4489 4489 3.c.(1)
(2) Applicable income tax effect RIAD 4491 ////////////////// 3.c.(2)
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, item 2) //////////////////
(itemize and describe all adjustments): //////////////////
a. TEXT 4492 4492 4.a.
b. TEXT 4493 4493 4.b.
5. Cumulative effect of changes in accounting principles from prior years (from Schedule //////////////////
RI-A, item 9) (itemize and describe all changes in accounting principles): //////////////////
a. TEXT 4494 4494 5.a.
b. TEXT 4495 4495 5.b.
6. Corrections of material accounting errors from prior years (from Schedule RI-A, item 10)//////////////////
(itemize and describe all corrections): //////////////////
a. TEXT 4496 4496 6.a.
b. TEXT 4497 4497 6.b.
</TABLE>
9
<PAGE> 29
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RI-8
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-E--CONTINUED
- - -------------------
Year-to-date
- - -------------------
Dollar Amounts in Thousands RIAD Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
7. Other transactions with parent holding company (from Schedule RI-A, item 13) //////////////////
(itemize and describe all such transactions): //////////////////
a. TEXT 4498 FLEET NATIONAL BANK SURPLUS DISTRIBUTION TO FFG .......................... 4498 (1,003,722) 7.a.
b. TEXT 4499 ........................................................................... 4499 7.b.
8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, part II, item 5) //////////////////
(itemize and describe all adjustments): //////////////////
a. TEXT 4521 12/31/95 ENDING BALANCE OF POOLED ENTITIES ............................... 4521 636,497 8.a.
b. TEXT 4522 DIVESTED ALLOWANCE RELATED TO SOLD LOANS ................................. 4522 (1,955) 8.b.
9. Other explanations (the space below is provided for the bank to briefly describe, at its
option, any other significant items affecting the Report of Income): I498 |
I499 <-
No comment [X] (RIAD 4769)
- - -------------------
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
10
<PAGE> 30
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-1
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise indicated,
report the amount outstanding as of the last business day of the quarter.
SCHEDULE RC -- BALANCE SHEET
C400
- - ------------------
Dollar Amounts in Thousands RCFD Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS //////////////////
1. Cash and balances due from depository institutions (from Schedule RC-A): //////////////////
a. Noninterest-bearing balances and currency and coin (1) ........................... 0081 3,923,408 1.a.
b. Interest-bearing balances(2) ..................................................... 0071 68,691 1.b.
2. Securities: //////////////////
a. Held-to-maturity securities (from Schedule RC-B, column A) ....................... 1754 261,390 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ..................... 1773 4,958,338 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic //////////////////
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: //////////////////
a. Federal funds sold .............................................................. 0276 25,709 3.a.
b. Securities purchased under agreements to resell .................................. 0277 0 3.b.
4. Loans and lease financing receivables: //////////////////
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 31,260,436 ////////////////// 4.a.
b. LESS: Allowance for loan and lease losses ................... RCFD 3123 776,811 ////////////////// 4.b.
c. LESS: Allocated transfer risk reserve ....................... RCFD 3128 0 ////////////////// 4.c.
d. Loans and leases, net of unearned income, //////////////////
allowance, and reserve (item 4.a minus 4.b and 4.c) .............................. 2125 30,483,625 4.d.
5. Trading assets (from Schedule RC-D) ................................................. 3545 73,333 5.
6. Premises and fixed assets (including capitalized leases) ............................ 2145 536,686 6.
7. Other real estate owned (from Schedule RC-M) ........................................ 2145 18,911 7.
8. Investments in unconsolidated subsidiaries and associated companies //////////////////
(from Schedule RC-M) ................................................................ 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding......................... 2155 6,380 9.
10. Intangible assets (from Schedule RC-M) .............................................. 2143 2,316,633 10.
11. Other assets (from Schedule RC-F) ................................................... 2160 3,907,689 11.
12. Total assets (sum of items 1 through 11) ............................................ 2170 46,580,793 12.
- - ------------------
</TABLE>
- - ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
11
<PAGE> 31
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-2
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC--CONTINUED
- - -----------------------
Dollar Amounts in Thousands ///////// Bil
Mil Thou
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES ///////////////////////
13. Deposits: ///////////////////////
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, ///////////////////////
part I) ........................................................................... RCON 2200 32,792,158 13.a.
(1) Noninterest-bearing(1) .............................. RCON 6631 10,359,674 /////////////////////// 13.a.(1)
(2) Interest-bearing .................................... RCON 6636 22,432,484 /////////////////////// 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from ///////////////////////
Schedule RC-E, part II ............................................................ RCFN 2200 2,414,427 13.b.
(1) Noninterest-bearing ................................. RCFN 6631 51,133 /////////////////////// 13.b.(1)
(2) Interest-bearing .................................... RCFN 6636 2,363,294 /////////////////////// 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase in domestic ///////////////////////
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: ///////////////////////
a. Federal funds purchased ........................................................... RCFD 0278 2,999,129 14.a.
b. Securities sold under agreements to repurchase .................................... RCFD 0279 119,013 14.b.
15. a. Demand notes issued to the U.S. Treasury .......................................... RCON 2840 2,393 15.a.
b. Trading liabilities (from Schedule RC-D) .......................................... RCFD 3548 60,855 15.b.
16. Other borrowed money: ///////////////////////
a. WITH A REMAINING MATURITY OF ONE YEAR OR LESS ..................................... RCFD 2332 304,551 16.a.
b. WITH A REMAINING MATURITY OF MORE THAN ONE YEAR ................................... RCFD 2333 631,435 16.b.
17. Mortgage indebtedness and obligations under capitalized leases ....................... RCFD 2910 11,267 17.
18. Bank's liability on acceptances executed and outstanding ............................. RCFD 2920 6,380 18.
19. Subordinated notes and debentures .................................................... RCFD 3200 1,213,219 19.
20. Other liabilities (from Schedule RC-G) ............................................... RCFD 2930 1,506,854 20.
21. Total liabilities (sum of items 13 through 20) ....................................... RCFD 2948 42,061,681 21.
22. Limited-life preferred stock and related surplus ..................................... RCFD 3282 0 22.
EQUITY CAPITAL ///////////////////////
23. Perpetual preferred stock and related surplus ........................................ RCFD 3838 125,000 23.
24. Common stock ......................................................................... RCFD 3230 19,487 24.
25. Surplus (exclude all surplus related to preferred stock) ............................. RCFD 3839 2,551,927 25.
26. a. Undivided profits and capital reserves ............................................ RCFD 3632 1,813,664 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ............ RCFD 8434 9,034 26.b.
27. Cumulative foreign currency translation adjustments .................................. RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27) .................................... RCFD 3210 4,519,112 28.
29. Total liabilities, limited-life preferred stock, and equity capital ///////////////////////
(sum of items 21, 22, and 28)......................................................... RCFD 3300 46,580,793 29.
Memorandum
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that best describes the
Number
most comprehensive level of auditing work performed for the bank by independent external
auditors as of any date during 1995 ..................................................
RCFD 6724 N/A M.1.
- - ---------------------
</TABLE>
1 - Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 - Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 - Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 - Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 - Review of the bank's financial statements by external auditors
6 - Compilation of the bank's financial statements by external auditors
7 - Other audit procedures (excluding tax preparation work)
8 - No external audit work
- - ------------
(1) Includes total demand deposits and noninterest-bearing time and
savings deposits.
12
<PAGE> 32
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-3
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-A--CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
Exclude assets held for trading.
- - --------
C405 <-
- - --------------------------------------
(Column A)
(Column B)
Consolidated
Domestic
Bank
Offices
- - --------------------------------------
Dollar Amounts in Thousands RCFD BIL MIL THOU RCFD BIL
MIL THOU
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and ////////////////// //////////////////
coin ................................................................... 0022 3,548,380 ////////////////// 1.
a. Cash items in process of collection and unposted debits.............. ////////////////// 0020 2,693,954 1.a.
b. Currency and coin ................................................... ////////////////// 0080 854,426 1.b.
2. Balances due from depository institutions in the U.S.................... ////////////////// 0082 87,601 2.
a. U.S. branches and agencies of foreign banks (including their IBFs)... 0083 0 ////////////////// 2.a.
b. Other commercial banks in the U.S. and other depository ////////////////// //////////////////
institutions in the U.S. (including their IBFs)...................... 0085 87,676 ////////////////// 2.b.
3. Balances due from banks in foreign countries and foreign central banks.. ////////////////// 0070 12,440 3.
a. Foreign branches of other U.S. banks................................. 0073 208 ////////////////// 3.a.
b. Other banks in foreign countries and foreign central banks........... 0074 12,491 ////////////////// 3.b.
4. Balances due from Federal Reserve Banks................................. 0090 343,344 0090 343,344 4.
5. Total (sum of items 1 through 4) (total of column A must equal ////////////////// //////////////////
Schedule RC, sum of items 1.a and 1.b).................................. 0010 3,992,099 0010 3,991,765 5.
- - --------------------------------------
- - -----------------
Memorandum Dollar Amounts in Thousands RCON BIL
MIL THOU
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Non interest-bearing balances due from commercial banks in the U.S. (included in item 2, //////////////////
column B above) ............................................................................ 0050 71,678 M.1.
- - ------------------
SCHEDULE RC-B--SECURITIES
Exclude assets held for trading.
- - --------
C410 <-
- - ------------------------------------------------------------------------------
Held-to-maturity Available-for-sale
- - ------------------------------------------------------------------------------
(Column A) (Column B) (Column C)
(Column D)
Amortized Cost Amortized Cost Amortized Cost
Amortized Cost
- - ------------------------------------------------------------------------------
Dollar Amounts in Thousands RCFD BIL MIL THOU RCFD BIL MIL THOU RCFD BIL MIL THOU RCFD BIL MIL THOU
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C>
1. U.S. Treasury securities......... 0211 250 0213 250 1286 715,535 1287 718,580 1.
2. U.S. Government agency ////////////////// ////////////////// ////////////////// //////////////////
and corporation obligations ////////////////// ////////////////// ////////////////// //////////////////
(exclude mortgage-backed ////////////////// ////////////////// ////////////////// //////////////////
securities): ////////////////// ////////////////// ////////////////// //////////////////
a. Issued by U.S. Govern- ////////////////// ////////////////// ////////////////// //////////////////
ment agencies(2).............. 1289 0 1290 0 1291 0 1293 0 2.a.
b. Issued by U.S. ////////////////// ////////////////// ////////////////// //////////////////
Government-sponsored ////////////////// ////////////////// ////////////////// //////////////////
agencies(3)................... 1294 0 1295 0 1297 500 1298 500 2.b.
(1) Includes equity securities without readily determinable fair values at historical cost in item 6.c, column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool Certificates," U.S. Maritime Administration obligations, and
Export-Import Bank participation certificates.
(3) Includes obligations (other than mortgage-backed securities) issued by the Farm Credit System, the Federal Home
Loan Bank System, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Financing
Corporation, Resolution Funding Corporation, the Student Loan Marketing Association, and the Tennessee Valley Authority.
</TABLE>
13
<PAGE> 33
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-4
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-B--Continued
Held-to-maturity
Available-for-sale
---------------------------------------
- - ---------------------------------------
(Column A) (Column B) (Column C)
(Column D)
Amortized Cost Fair Value Amortized Cost
Fair Value(1)
------------------ ------------------ ------------------
- - ------------------
Dollar Amounts in Thousands RFCD Bil Mil Thou RFCD Bil Mil Thou RFCD Bil Mil Thou RFCD
Bil Mil Thou
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3. Securities issued by states ////////////////// ////////////////// ////////////////// //////////////////
and political subdivisions in the ////////////////// ////////////////// ////////////////// //////////////////
U.S.: ////////////////// ////////////////// ////////////////// //////////////////
a. General obligations........... 1676 151,418 1677 151,394 1678 0 1679 0 3.a.
b. Revenue obligations........... 1681 12,415 1686 12,419 1690 0 1691 0 3.b.
c. Industrial development ////////////////// ////////////////// ////////////////// //////////////////
and similar obligations....... 1694 0 1695 0 1696 0 1697 0 3.c.
4. Mortage-backed ////////////////// ////////////////// ////////////////// //////////////////
securities (MBS): ////////////////// ////////////////// ////////////////// //////////////////
a. Pass-through securities ////////////////// ////////////////// ////////////////// //////////////////
(1) Guaranteed by ////////////////// ////////////////// ////////////////// //////////////////
GNMA..................... 1698 0 1699 0 1701 792,519 1702 790,901 4.a.(1)
(2) Issued by FNMA ////////////////// ////////////////// ////////////////// //////////////////
and FHLMC................ 1703 0 1705 0 1706 3,163,278 1707 3,176,341 4.a.(2)
(3) Other pass-through ////////////////// ////////////////// ////////////////// //////////////////
securities............... 1709 0 1710 0 1711 1 1713 1 4.a.(3)
b. Other mortgage-backed ////////////////// ////////////////// ////////////////// //////////////////
securities (include CMOs, ////////////////// ////////////////// ////////////////// //////////////////
REMICs, and stripped ////////////////// ////////////////// ////////////////// //////////////////
MBS): ////////////////// ////////////////// ////////////////// //////////////////
(1.) Issued or guaranteed ////////////////// ////////////////// ////////////////// //////////////////
by FNMA, FHLMC ////////////////// ////////////////// ////////////////// //////////////////
or GNMA................. 1714 0 1715 0 1716 0 1717 0 4.b.(1)
(2.) Collateralized ////////////////// ////////////////// ////////////////// //////////////////
by MBS issued or ////////////////// ////////////////// ////////////////// //////////////////
guaranteed by FNMA, ////////////////// ////////////////// ////////////////// //////////////////
FHLMC, or GNMA.......... 1718 0 1719 0 1731 0 1732 0 4.b.(2)
(3.) All other mortgage- ////////////////// ////////////////// ////////////////// //////////////////
backed securities....... 1733 0 1734 0 1735 453 1736 453 4.b.(3)
5. Other debt securities: ////////////////// ////////////////// ////////////////// //////////////////
a. Other domestic debt ////////////////// ////////////////// ////////////////// //////////////////
securities................... 1737 0 1738 0 1739 629 1741 621 5.a.
b. Foreign debt ////////////////// ////////////////// ////////////////// //////////////////
securities................... 1742 97,307 1743 87,332 1744 0 1746 0 5.b.
6. Equity securities: ////////////////// ////////////////// ////////////////// //////////////////
a. Investments in mutual ////////////////// ////////////////// ////////////////// //////////////////
funds........................ ////////////////// ////////////////// 1747 52,843 1748 52,843 6.a.
b. Other equity securities ////////////////// ////////////////// ////////////////// //////////////////
with readily determinable ////////////////// ////////////////// ////////////////// //////////////////
fair values.................. ////////////////// ////////////////// 1749 0 1751 0 6.b.
c. All other equity ////////////////// ////////////////// ////////////////// //////////////////
securities(1)................ ////////////////// ////////////////// 1752 218,098 1753 218,098 6.c.
7. Total (sum of items 1 ////////////////// ////////////////// ////////////////// //////////////////
through 6) (total of ////////////////// ////////////////// ////////////////// //////////////////
column A must equal ////////////////// ////////////////// ////////////////// //////////////////
Schedule RC, item 2.a) ////////////////// ////////////////// ////////////////// //////////////////
(total of column D must ////////////////// ////////////////// ////////////////// //////////////////
equal Schedule RC, ////////////////// ////////////////// ////////////////// //////////////////
item 2.b)....................... 1754 261,390 1771 251,395 1772 4,943,856 1773 4,958,338 7.
- - ----------------------------------------------------------------------------------
</TABLE>
- - -----------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.c, column D.
14
<PAGE> 34
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-5
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-B--CONTINUED
--------
C412 <-
- - ------------------
Memoranda Dollar Amounts in Thousands RCFD
Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Pledged securities(2).......................................................................... 0416 2,436,831 M.1.
2. Maturity and repricing data for debt securities(2), (3), (4) (excluding those in //////////////////
nonaccrual status): //////////////////
a. Fixed rate debt securities with a remaining maturity of: //////////////////
(1) Three months or less.................................................................... 0343 44,985 M.2.a.(1)
(2) Over three months through 12 months..................................................... 0344 105,214 M.2.a.(2)
(3) Over one year through five years........................................................ 0345 1,418,544 M.2.a.(3)
(4) Over five years ........................................................................ 0346 2,274,468 M.2.a.(4)
(5) Total fixed rate debt securities (sum of Memorandum items 2.a(1) through 2.a.(4)........ 0347 3,843,211 M.2.a.(5)
b. Floating rate debt securities with a repricing frequency of: //////////////////
(1) Quarterly or more frequently............................................................ 4544 302,855 M.2.b.(1)
(2) Annually or more frequently, but less frequently than quarterly......................... 4545 802,642 M.2.b.(2)
(3) Every five years or more frequently, but less frequently than annually.................. 4551 79 M.2.b.(3)
(4) Less frequently than every five years................................................... 4552 0 M.2.b.(4)
(5) Total floating rate debt securities (sum of Memorandum items 2.b.(1) through 2.b.(4))... 4553 1,105,576 M.2.b.(5)
c. Total debt securities (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal total //////////////////
debt securities from Schedule RC-B, sum of items 1 through 5, columns A and D, minus //////////////////
nonaccrual debt securities included in Schedule RC-N, item 9, column C)..................... 0393 4,948,787 M.2.c.
3. Not applicable //////////////////
4. Held-to-maturity debt securities restructured and in compliance with modified terms (included //////////////////
in Schedule RC-B, items 3 through 5, column A, above).......................................... 5365 0 M.4.
5. Not applicable //////////////////
6. Floating rate debt securities with a remaining maturity of one year or less(2), (4) (included in //////////////////
Memorandum items 2.b.(1) through 2.b.(4) above)................................................. 5519 4,000 M.6.
7. Amortized cost of held-to-maturity securities sold or transferred to available-for-sale or //////////////////
trading securities during the calendar year-to-date (report the amortized cost at date of sale //////////////////
or transfer)................................................................................... //////////////////
8. High-risk mortgage securities (included in the held-to-maturity and available-for-sale //////////////////
accounts in Schedule RC-B, item 4.b): //////////////////
a. Amortized cost.............................................................................. 8780 0 M.8.a.
b. Fair value.................................................................................. 8781 0 M.8.b.
9. Structured notes (included in the held-to-maturity and available-for-sale account in //////////////////
Schedule RC-B, items 2, 3, and 5): //////////////////
a. Amortized cost.............................................................................. 8782 0 M.9.a.
b. Fair value.................................................................................. 8783 0 M.9.b.
- - ----------------
(2) Includes held-to-maturity securities at amortized cost and available-for-sale securities at fair value.
(3) Exclude equity securities, e.g., investments in mutual funds, Federal Reserve stock, common stock, and
preferred stock.
(4) Memorandum items 2 and 6 are not applicable to savings banks that must complete supplemental Schedule
RC-J.
</TABLE>
15
<PAGE> 35
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-6
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-C--LOANS AND LEASE FINANCING RECEIVABLES
PART I. LOANS AND LEASES
Do not deduct the allowance for loan and lease losses from amounts
- - ------------
reported in this schedule. Report total loans and leases, net of unearned
C415 <-
income. Exclude assets held for trading.
- - --------------------------------------
(Column A)
(Column B)
Consolidated
Domestic
Bank
Offices
- - --------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RFCD
Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Loans secured by real estate............................................ 1410 11,606,306 ////////////////// 1.
a. Construction and land development.................................... ////////////////// 1415 599,823 1.a.
b. Secured by farmland (including farm residential and other ////////////////// //////////////////
improvements)........................................................ ////////////////// 1420 1,990 1.b.
c. Secured by 1-4 family residential properties: ////////////////// //////////////////
(1) Revolving, open-end loans secured by 1-4 family residential ////////////////// //////////////////
properties and extended under lines of credit.................... ////////////////// 1797 1,906,776 1.c.(1)
(2) All other loans secured by 1-4 family residential properties: ////////////////// //////////////////
(a) Secured by first liens....................................... ////////////////// 5367 4,239,378 1.c.(2)(a)
(b) Secured by junior liens...................................... ////////////////// 5368 616,562 1.c.(2)(b)
d. Secured by multifamily (5 or more) residential properties............ ////////////////// 1460 473,710 1.d.
e. Secured by nonfarm nonresidential properties......................... ////////////////// 1480 3,768,067 1.e.
2. Loans to depository institutions: ////////////////// //////////////////
a. To commercial banks in the U.S. ..................................... ////////////////// 1505 76,227 2.a.
(1) To U.S. branches and agencies of foreign banks................... 1506 0 ////////////////// 2.a.(1)
(2) To other commercial banks in the U.S. ........................... 1507 76,227 ////////////////// 2.a.(2)
b. To other depository institutions in the U.S. ........................ 1517 13,345 1517 13,345 2.b.
c. To banks in foreign countries........................................ ////////////////// 1510 928 2.c.
(1) To foreign branches of other U.S. banks.......................... 1513 160 ////////////////// 2.c.(1)
(2) To other banks in foreign countries.............................. 1516 768 ////////////////// 2.c.(2)
3. Loans to finance agricultural production and other loans to farmers..... 1590 4,351 1590 4,351 3.
4. Commercial and industrial loans: ////////////////// //////////////////
a. To U.S. addressees (domicile)........................................ 1763 12,626,132 1763 12,574,435 4.a.
b. To non-U.S. addressees (domicile).................................... 1764 78,513 1764 31,092 4.b.
5. Acceptances of other banks: ////////////////// //////////////////
a. Of U.S. banks........................................................ 1756 0 1756 0 5.a.
b. Of foreign banks..................................................... 1757 0 1757 0 5.b.
6. Loans to individuals for household, family, and other personal ////////////////// //////////////////
expenditures (i.e., consumer loans) (includes purchased paper).......... ////////////////// 1975 2,101,041 6.
a. Credit cards and related plans (includes check credit and other ////////////////// //////////////////
revolving credit plans).............................................. 2008 94,750 ////////////////// 6.a.
b. Other (includes single payment, installment, and all student loans).. 2011 2,006,291 ////////////////// 6.b.
7. Loans to foreign governments and official institutions (including ////////////////// //////////////////
foreign central banks).................................................. 2081 0 2081 0 7.
8. Obligations (other than securities and leases) of states and political ////////////////// //////////////////
subdivisions in the U.S. (includes nonrated industrial development ////////////////// //////////////////
obligations)............................................................ 2107 149,176 2107 149,176 8.
9. Other loans ............................................................ 1563 2,018,484 ////////////////// 9.
a. Loans for purchasing or carrying securities (secured and unsecured).. ////////////////// 1545 179,603 9.a.
b. All other loans (exclude consumer loans)............................. ////////////////// 1564 1,838,881 9.b.
10. Lease financing receivables (net of unearned income).................... ////////////////// 2165 2,585,933 10.
a. Of U.S. addressees (domicile) ....................................... 2182 2,585,933 ////////////////// 10.a.
b. Of non-U.S. addressees (domicile).................................... 2183 0 ////////////////// 10.b.
11. LESS: Any unearned income on loans reflected in items 1-9 above......... 2123 0 2123 0 11.
12. Total loans and leases, net of unearned income (sum of items 1 ////////////////// //////////////////
through 10 minus item 11) (total of column A must equal ////////////////// //////////////////
Schedule RC, item 4.a) ................................................. 2122 31,260,436 2122 31,161,318 12.
- - --------------------------------------
</TABLE>
16
<PAGE> 36
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-7
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-C--CONTINUED
PART I. CONTINUED
(Column A)
(Column B)
Consolidated
Domestic
Bank
Offices
Memoranda ------------------
- - ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
RCON Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Commercial paper included in Schedule RC-C, part I, above........................ 1496 0 1496 0 M.1.
2. Loans and leases restructured and in compliance with modified terms ////////////////// //////////////////
(included in Schedule RC-C, part I, above and not reported as past due ////////////////// //////////////////
or nonaccrual in Schedule RC-N, Memorandum item 1): ////////////////// //////////////////
a. Loans secured by real estate: ////////////////// //////////////////
(1) To U.S. addressees (domicile)............................................. 1687 1,681 M.2.a.(1)
(2) To non-U.S. addressees (domicile)......................................... 1689 0 M.2.a.(2)
b. All other loans and lease financing receivable (exclude loans to //////////////////
individuals for household, family, and other personal expenditures)........... 8691 0 M.2.b.
c. Commercial and industrial loans to and lease financing receivables //////////////////
of non-U.S. addressees (domicile) included in Memorandum item 2.b //////////////////
above......................................................................... 8692 0 M.2.c.
3. Maturity and repricing data for loans and leases(1) (excluding those in //////////////////
nonaccrual status): //////////////////
a. Fixed rate loans with a remaining maturity of: //////////////////
(1) Three months or less...................................................... 0348 690,294 M.3.a.(1)
(2) Over three months through 12 months....................................... 0349 566,523 M.3.a.(2)
(3) Over one year through five years.......................................... 0356 2,658,468 M.3.a.(3)
(4) Over five years........................................................... 0357 5,501,645 M.3.a.(4)
(5) Total fixed rate loans and leases (sum of Memorandum //////////////////
items 3.a.(1) through 3.a.(4))............................................ 0358 9,416,930 M.3.a.(5)
b. Floating rate loans with a repricing frequency of: //////////////////
(1) Quarterly or more frequently.............................................. 4554 17,235,629 M.3.b.(1)
(2) Annually or more frequently, but less frequently than quarterly........... 4555 3,186,865 M.3.b.(2)
(3) Every five years or more frequently, but less frequently than //////////////////
annually.................................................................. 4561 977,978 M.3.b.(3)
(4) Less frequently than every five years..................................... 4564 129,282 M.3.b.(4)
(5) Total floating rate loans (sum of Memorandum items 3.b.(1) //////////////////
through 3.b.(4)........................................................... 4567 21,529,754 M.3.b.(5)
c. Total loans and leases (sum of Memorandum items 3.a.(5) and //////////////////
3.b.(5)) (must equal the sum of total loans and leases, net, from //////////////////
Schedule RC-C, part I, item 12, plus unearned income from //////////////////
Schedule RC-C, part I, item 11, minus total nonaccrual loans and //////////////////
leases from Schedule RC-N, sum of items 1 through 8, column C)................ 1479 30,946,684 M.3.c.
d. FLOATING RATE LOANS WITH A REMAINING MATURITY OF ONE YEAR OR LESS //////////////////
(INCLUDED IN MEMORANDUM ITEMS 3.b.(1) THROUGH 3.b.(4) ABOVE).................. A246 0 M.3.d.
4. Loans to finance commercial real estate, construction, and land //////////////////
development activities (NOT SECURED BY REAL ESTATE) included in //////////////////
Schedule RC-C, part I, items 4 and 9, column A, page RC-6(2)..................... 2746 335,734 M.4.
5. Loans and leases held for sale (included in Schedule RC-C, part I, //////////////////
above)........................................................................... 5369 0 M.5.
6. Adjustable rate closed-end loans secured by first liens on 1-4 family //////////////////
residential properties (included in Schedule RC-C, part I, item 1.c.(2)(a), //////////////////
RCON Bil Mil Thou
column B, page RC-6)............................................................. ////////////////// 5370 1,841,822 M.6.
</TABLE>
(1) Memorandum item 3 is not applicable to savings banks that must complete
supplemental Schedule RC-J.
(2) Exclude loans secured by real estate that are included in RC-C, part I,
item 1, column A.
<PAGE> 37
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-8
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-D--TRADING ASSETS AND LIABILITIES
Schedule RC-D is to be completed only by banks with $1 billion or more in total assets or with $2 billion or
more in par/notional
amount of off-balance sheet derivative contracts (as reported in Schedule RC-L, items 14.a through 14.e,
columns A through D).
- - ---------
C420 <-
- - ----------------------
Dollar Amounts in Thousands //////// Bil
Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
//////////////////////
1. U.S. Treasury securities in domestic offices............................................. RCON 3531 0 1.
2. U.S. Government agency and corporation obligations in domestic offices (exclude mortgage- //////////////////////
backed securities)....................................................................... RCON 3532 0 2.
3. Securities issued by states and political subdivisions in the U.S. in domestic offices... RCON 3533 0 3.
4. Mortgage-backed securities (MBS) in domestic offices: //////////////////////
a. Pass-through securities issued or guaranteed by FNMA, FHLMC, or GNMA.................. RCON 3534 0 4.a.
b. Other mortgage-backed securities issued or guaranteed by FNMA, FHLMC, or GNMA //////////////////////
(include CMOs, REMICs, and stripped MBS).............................................. RCON 3535 0 4.b.
c. All other mortgage-backed securities.................................................. RCON 3536 0 4.c.
5. Other debt securities in domestic offices................................................ RCON 3537 0 5.
6. Certificates of deposit in domestic offices.............................................. RCON 3538 0 6.
7. Commercial paper in domestic offices..................................................... RCON 3539 0 7.
8. Bankers acceptances in domestic offices.................................................. RCON 3540 0 8.
9. Other trading assets in domestic offices................................................. RCON 3541 0 9.
10. Trading assets in foreign offices........................................................ RCFN 3542 0 10.
11. Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity //////////////////////
contracts: //////////////////////
a. In domestic offices................................................................... RCON 3543 64,043 11.a.
b. In foreign offices.................................................................... RCFN 3544 9,290 11.b.
12. Total trading assets (sum of items 1 through 11) (must equal Schedule RC, item 5)........ RCFD 3545 73,333 12.
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES //////// Bil Mil Thou
- - ----------------------
<S> <C>
13. Liability for short positions............................................................ RFCD 3546 0 13.
14. Revaluation losses on interest rate, foreign exchange rate, and other commodity and //////////////////////
equity contracts......................................................................... RFCD 3547 60,855 14.
15. Total trading liabilities (sum of items 13 and 14) (must equal Schedule RC, item 15.b)... RCFD 3548 60,855 15.
</TABLE>
18
<PAGE> 38
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: One Monarch Place
Page RC-9
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-E--DEPOSIT LIABILITIES
PART I. DEPOSITS IN DOMESTIC OFFICES
- - --------------
C425
- - --------------
Nontransaction
Transactions Accounts
Accounts
- - ---------------------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C)
Total transaction Memo: Total Total
accounts (including demand deposits nontransaction
total demand (included in accounts
deposits) column A) (including MMDAs)
- - ---------------------------------------------------------------------------------------------------------------------------
Dollar Amounts in Thousands RCON Bil Mil Thou RCON Bil Mil Thou RCON
Bil Mil Thou
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Deposits of: ////////////////// ////////////////// //////////////////
1. Individuals, partnerships, and corporations..... 2201 8,925,633 2240 8,417,538 2346 21,118,482 1.
2. U.S. Government................................. 2202 170,644 2280 170,617 2520 5,680 2.
3. States and political subdivisions in the U.S.... 2203 531,934 2290 508,362 2530 777,806 3.
4. Commercial banks in the U.S..................... 2206 836,406 2310 836,406 2550 397 4.
5. Other depository institutions in the U.S........ 2207 223,383 2312 223,383 2349 2,868 5.
6. Banks in foreign countries...................... 2213 23,850 2320 23,850 2236 0 6.
7. Foreign governments and official institutions ////////////////// ////////////////// //////////////////
(including foreign central banks)............... 2216 0 2300 0 2377 0 7.
8. Certified and official checks................... 2330 175,075 2330 175,075 ////////////////// 8.
9. Total (sum of items 1 through 8) (sum of columns ////////////////// ////////////////// //////////////////
A and C must equal Schedule RC, item 13.a....... 2215 10,886,925 2210 10,355,231 2385 21,905,233 9.
- - ----------------------------------------------------------------
</TABLE>
Memoranda
<TABLE>
Dollar Amounts in Thousands RCON Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Selected components of total deposits (i.e., sum of item 9, columns A and C): //////////////////
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts.................... 6835 2,607,397 M.1.a.
b. Total brokered deposits................................................................ 2365 1,415,235 M.1.b.
c. Fully insured brokered deposits (included in Memorandum item 1.b above): //////////////////
(1) Issued in denominations of less than $100,,000.................................... 2343 2,240 M.1.c.(1)
(2) Issued EITHER in denominations of $100,000 OR in denominations greater than //////////////////
$100,000 and participated out by the broker in shares of $100,000 or less......... 2344 1,412,995 M.1.c.(2)
D. MATURITY DATA FOR BROKERED DEPOSITS: //////////////////
(1) BROKERED DEPOSITS ISSUED IN DENOMINATIONS OF LESS THAN $100,000 WITH A REMAINING //////////////////
MATURITY OF ONE YEAR OR LESS (INCLUDED IN MEMORANDUM ITEM 1.C.(1) ABOVE).......... A243 20 M.1.d.(1)
(2) BROKERED DEPOSITS ISSUED IN DENOMINATIONS OF $100,000 OR MORE WITH A REMAINING //////////////////
MATURITY OF ONE YEAR OR LESS (INCLUDED IN MEMORANDUM ITEM 1.B ABOVE).............. A244 584,547 M.1.d.(2)
e. Preferred deposits (uninsured deposits of states and political subdivisions in the //////////////////
U.S. reported in item 3 above which are secured or collateralized as required under //////////////////
state law)............................................................................. 5590 346,573 M.1.e.
2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d //////////////////
must equal item 9, column C above): //////////////////
a. Savings deposits: //////////////////
(1) Money market deposit accounts (MMDAs)............................................. 6810 10,252,364 M.2.a.(1)
(2) Other savings deposits (excludes MMDAs).......................................... 0352 2,397,861 M.2.a.(2)
b. Total time deposits of less than $100,000.............................................. 6648 6,781,917 M.2.b.
c. Time certificates of deposit of $100,000 or more....................................... 6645 2,473,091 M.2.c.
d. Open-account time deposits of $100,000 or more......................................... 6646 0 M.2.d.
3. All NOW accounts (included in column A above).............................................. 2398 531,694 M.3.
4. Not applicable
</TABLE>
19
<PAGE> 39
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-10
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-E--CONTINUED
PART I. CONTINUED
Memoranda (continued)
- - ------------------
Dollar Amounts in Thousands RCON Bil
Mil Thou
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
5. Maturity and repricing data for time deposits of less than $100,000 (sum of //////////////////
Memorandum items 5.a.(1) through 5.b.(3) must equal Memorandum item 2.b above):(1) //////////////////
a. Fixed rate time deposits of less than $100,000 with a remaining maturity of: //////////////////
(1) Three months or less .............................................................. A225 1,722,551 M.5.a.(1)
(2) Over three months through 12 months ............................................... A226 3,024,143 M.5.a.(2)
(3) Over one year ..................................................................... A227 1,975,207 M.5.a.(3)
b. Floating rate time deposits of less than $100,000 with a repricing frequency of: //////////////////
(1) Quarterly or more frequently ...................................................... A228 60,016 M.5.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ................... A229 0 M.5.b.(2)
(3) Les frequently than annually ...................................................... A230 0 M.5.b.(3)
c. Floating rate time deposits of less than $100,000 with a remaining maturity of //////////////////
one year or less (included in Memorandum items 5.b.(1) through 5.b.(3) above) ......... A231 39,531 M.5.c.
6. Maturity and repricing data for time deposits of $100,000 or more (i.e., time certificates //////////////////
of deposit of $100,000 or more and open-account time deposits of $100,000 or more) //////////////////
(sum of Memorandum items 6.a.(1) through 6.b.(4) must equal the sum of Memorandum //////////////////
items 2.c and 2.d above): (1) //////////////////
a. Fixed rate time deposits of $100,000 or more with a remaining maturity of: //////////////////
(1) Three months or less .............................................................. A232 720,549 M.6.a.(1)
(2) Over three months through 12 months ............................................... A233 695,947 M.6.a.(2)
(3) Over one year through five years .................................................. A234 1,014,722 M.6.a.(3)
(4) Over five years ................................................................... A235 8,868 M.6.a.(4)
b. Floating rate time deposits of $100,000 or more with a repricing frequency of: //////////////////
(1) Quarterly or more frequently ...................................................... A236 33,005 M.6.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ................... A237 0 M.6.b.(2)
(3) Every five years or more frequently, but less frequently than annually ............ A238 0 M.6.b.(3)
(4) Less frequently than every five years ............................................. A239 0 M.6.b.(4)
c. Floating rate time deposits of $100,000 or more with a remaining maturity of //////////////////
one year or less (included in Memorandum items 6.b.(1) through 6.b.(4) above).......... A240 1,896 M.6.c.
- - ------------------
</TABLE>
- - ------------
(1) Memorandum items 5 and 6 are not applicable to savings banks that
must complete supplemental Schedule RC-J.
20
<PAGE> 40
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
Page RC-11
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-E--CONTINUED
PART II. DEPOSITS IN FOREIGN OFFICES (INCLUDING EDGE AND
AGREEMENT SUBSIDIARIES AND IBFS)
- - ------------------
Dollar Amounts in Thousands RCFN Bil Mil
Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deposits of:
1. Individuals, partnerships, and corporations.......................................... 2621 2,410,097 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks)....................... 2623 0 2.
3. Foreign banks (including U.S. branches and agencies of foreign banks, including
their IBFs).......................................................................... 2625 0 3.
4. Foreign governments and official institutions (including foreign central banks)...... 2650 0 4.
5. Certified and official checks........................................................ 2330 0 5.
6. All other deposits................................................................... 2668 4,330 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b)................. 2200 2,414,427 7.
</TABLE>
<TABLE>
<CAPTION>
- - ------------------
Memorandum Dollar Amounts in Thousands RCFN Bil Mil Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. TIME DEPOSITS WITH A REMAINING MATURITY OF ONE YEAR OR LESS (INCLUDED IN PART II, //////////////////
ITEM 7 ABOVE)........................................................................ A245 2,414,425 M.1.
</TABLE>
SCHEDULE RC-F--OTHER ASSETS
<TABLE>
<CAPTION>
- - ---------
C430
- - -----------------------
Dollar Amounts in Thousands ////////// Bil
Mil Thou
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Income earned, not collected on loans................................................ RCFD 2164 243,319 1.
2. Net deferred tax assets (1).......................................................... RCFD 2148 0 2.
3. Excess residential mortgage servicing fees receivable................................ RCFD 5371 173,148 3.
4. Other (itemize and describe amounts that exceed 25% of this item).................... RCFD 2168 3,491,222 4.
a. TEXT 3549 MORTGAGE HELD FOR RESALE RCFD 3549 1,517,133 /////////////////////// 4.a.
-------------------------------------------------------------
b. TEXT 3550 RCFD 3550 /////////////////////// 4.b.
-------------------------------------------------------------
c. TEXT 3551 RCFD 3551 /////////////////////// 4.c.
-------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11)................... RCFD 2160 3,907,689 5.
- - -----------------------
</TABLE>
<TABLE>
<CAPTION>
- - -------------------------
Memorandum Dollar Amounts in Thousands //////////// Bil Mil Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C>
1. Deferred tax assets disallowed for regulatory capital purposes.................. RFCD 5610 0 M.1.
</TABLE>
SCHEDULE RC-G--OTHER LIABILITIES
<TABLE>
<CAPTION>
- - -----------
C435
- - ------------------------
Dollar Amounts in thousands ////////// Bil
Mil Thou
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C>
1. a. Interest accrued and unpaid on deposits in domestic offices (2).................... RCON 3645 50,636 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable)......... RCFD 3646 509,357 1.b.
2. Net deferred tax liabilities(1)....................................................... RCFD 3049 434,426 2.
3. Minority interest in consolidated subsidiaries........................................ RCFD 3000 0 3.
4. Other (itemize and describe amounts that exceed 25% of this item)..................... RCFD 2938 512,435 4.
---------
a. TEXT 3552 RCFD 3552 /////////////////////// 4.a.
-------------------------------------------------------------
b. TEXT 3553 RCFD 3553 /////////////////////// 4.b.
-------------------------------------------------------------
c. TEXT 3554 RCFD 3554 /////////////////////// 4.c.
-------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20).................... RCFD 2930 1,506,854 5.
</TABLE>
- - ----------------
(1) See discussion of deferred income taxes in Glossary entry on "income taxes."
(2) For savings banks, include "dividends" accrued and unpaid on deposits.
21
<PAGE> 41
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
Page RC-12
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
---------------
SCHEDULE RC-H--SELECTED BALANCE SHEET ITEMS FOR DOMESTIC OFFICES
C440
- - ------------------
Domestic
Offices
- - ------------------
Dollar Amounts in Thousands RCON Bil Mil
Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Customers' liability to this bank on acceptances outstanding......................... 2155 6,380 1.
2. Bank's liability on acceptances executed and outstanding............................. 2920 6,380 2.
3. Federal funds sold and securities purchased under agreements to resell............... 1350 25,709 3.
4. Federal funds purchased and securities sold under agreements to repurchase........... 2800 3,118,142 4.
5. Other borrowed money................................................................. 3190 935,986 5.
EITHER //////////////////
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs.......... 2163 N/A 6.
OR //////////////////
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs............ 2941 2,311,663 7.
8. Total assets (excludes net due from foreign offices, Edge and Agreement subsidiaries, //////////////////
and IBFs)............................................................................ 2192 46,468,505 8.
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement //////////////////
subsidiaries, and IBFs).............................................................. 3129 39,637,730 9.
ITEMS 10-17 INCLUDE HELD-TO-MATURITY AND AVAILABLE-FOR-SALE SECURITIES IN DOMESTIC OFFICES.
</TABLE>
<TABLE>
<CAPTION>
- - ------------------
RCON Bil Mil Thou
- - ------------------
<S> <C> <C>
10. U.S. Treasury securities............................................................. 1779 718,830 10.
11. U.S. Government agency and corporation obligations (exclude mortgage-backed //////////////////
securities).......................................................................... 1785 500 11.
12. Securities issued by states and political subdivisions in the U.S.................... 1786 163,833 12.
13. Mortgage-backed securities (MBS): //////////////////
a. Pass-through securities: //////////////////
(1) Issued or guaranteed by FNMA, FHLMC, OR GNMA................................ 1787 3,967,242 13.a.(1)
(2) Other pass-through securities............................................... 1869 1 13.a.(2)
b. Other mortgage-backed securities (include CMOs, REMICs, and stripped MBS): //////////////////
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA................................ 1877 0 13.b.(1)
(2) All other mortgage-backed securities........................................ 2253 453 13.b.(2)
14. Other domestic debt securities....................................................... 3159 621 14.
15. Foreign debt securities.............................................................. 3160 97,307 15.
16. Equity securities: //////////////////
a. Investments in mutual funds...................................................... 3161 52,843 16.a.
b. Other equity securities with readily determinable fair values.................... 3162 0 16.b.
c. All other equity securities...................................................... 3169 218,098 16.c.
17. Total held-to-maturity and available-for-sale securities (sum of items 10 through 16) 3170 5,219,728 17.
</TABLE>
Memorandum (to be completed only by banks with IBFs and other "foreign" offices)
<TABLE>
<CAPTION>
- - ------------------
Dollar Amounts in Thousands RCON Bil Mil
Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EITHER //////////////////
1. Net due from the IBF of the domestic offices of the reporting bank................... 3051 0 M.1.
OR //////////////////
2. Net due to the IBF of the domestic offices of the reporting bank..................... 3059 N/A M.2.
</TABLE>
22
<PAGE> 42
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: One Monarch Place
Page RC-13
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-I--SELECTED ASSETS AND LIABILITIES OF IBFs
C445
- - ------------------
Dollar Amounts in Thousands RCFN Bil Mil
Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C>
1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12)........ 2133 0 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, part I, //////////////////
item 12, column A)................................................................... 2076 0 2.
3. IBF commercial and industrial loans (component of Schedule RC-C, part I, //////////////////
item 4, column A).................................................................... 2077 0 3.
4. Total IBF liabilities (component of Schedule RC, item 21)............................ 2898 0 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of Schedule //////////////////
RC-E, part II, items 2 and 3)........................................................ 2379 0 5.
6. Other IBF deposit liabilities (component of Schedule RC-E, part II, //////////////////
items 1,4,5, and 6................................................................... 2381 0 6.
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE RC-K--QUARTERLY AVERAGES (1)
C455
- - ------------------
Dollar Amounts in Thousands ///////// Bil Mil Thou
- - ---------------------------------------------------------------------------------------------------------------
ASSETS ///////////////////////
<S> <C> <C>
1. Interest-bearing balances due from depository institutions...................... RCFD 3381 28,972 1.
2. U.S. Treasury securities and U.S. Government agency and corporation
obligations (2)................................................................. RCFD 3382 5,849,801 2.
3. Securities issued by states and political subdivisions in the U.S. (2).......... RCFD 3383 171,480 3.
4. a. Other debt securities (2)................................................... RCFD 3647 98,635 4.a.
b. Equity securities (3) (includes investments in mutual funds and Federal ///////////////////////
Reserve stock).................................................................. RCFD 3648 290,211 4.b.
5. Federal funds sold and securities purchased under agreements to resell in ///////////////////////
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in ///////////////////////
IBFs............................................................................ RCFD 3365 34,073 5.
6. Loans:
a. Loans in domestic offices:
(1) Total loans............................................................ RCON 3360 28,772,871 6.a.(1)
(2) Loans secured by real estate........................................... RCON 3385 11,782,561 6.a.(2)
(3) Loans to finance agricultural production and other loans to ///////////////////////
farmers................................................................ RCON 3386 4,568 6.a.(3)
(4) Commercial and industrial loans........................................ RCON 3387 12,208,378 6.a.(4)
(5) Loans to individuals for household, family, and other personal ///////////////////////
expenditures........................................................... RCON 3388 2,106,517 6.a.(5)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs... RCFN 3360 93,116 6.b.
7. Trading assets.................................................................. RCFD 3401 70,398 7.
8. Lease financing receivables (net of unearned income)............................ RCFD 3484 2,414,362 8.
9. Total assets(4)................................................................. RCFD 3368 47,043,625 9.
LIABILITIES
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ATS ///////////////////////
accounts, and telephone and preauthorized transfer accounts) (exclude demand ///////////////////////
deposits)....................................................................... RCON 3485 554,831 10.
11. Nontransaction accounts in domestic offices: ///////////////////////
a. Money market deposit accounts (MMDAs)....................................... RCON 3486 10,212,141 11.a.
b. Other savings deposits...................................................... RCON 3487 2,477,260 11.b.
c. Time certificates of deposit of $100,000 or more............................ RCON 3345 2,533,067 11.c.
d. All other time deposits..................................................... RCON 3469 6,982,619 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries, ///////////////////////
and IBFs........................................................................ RCFN 3404 2,117,139 12.
13. Federal funds purchased and securities sold under agreements to repurchase in ///////////////////////
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in ///////////////////////
IBFs............................................................................ RCFD 3353 4,817,518 13.
14. Other borrowed money............................................................ RCFD 3355 985,125 14.
- - ---------------
(1) For all items, banks have the option of reporting either (1) an average of daily figures for the quarter, or (2) an average
of weekly figures (i.e., the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on amortized cost.
(3) Quarterly averages for all equity securities should be based on historical cost.
(4) The quarterly average for total assets should reflect all debt securities (not held for trading) at amortized
cost, equity securities with readily determinable fair values at the lower of cost or fair value, and
equity securities without readily determinable fair values at historical cost.
</TABLE>
<PAGE> 43
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-14
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-L--OFF BALANCE SHEET ITEMS
Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.
C460
Dollar Amounts in Thousands RCFD BIL MIL THOU
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Unused commitments: //////////////////
a. Revolving, open-end lines secured by 1-4 family residential properties, e.g., home equity //////////////////
lines....................................................................................... 3814 2,159,101 1.a.
b. Credit card lines........................................................................... 3815 37,038 1.b.
c. Commercial real estate, construction, and land development: //////////////////
(1) Commitments to fund loans secured by real estate........................................ 3816 538,163 1.c.(1)
(2) Commitments to fund loans not secured by real estate.................................... 6550 513,346 1.c.(2)
d. Securities underwriting..................................................................... 3817 0 1.d.
e. Other unused commitments.................................................................... 3818 20,572,462 1.e.
2. Financial standby letters of credit and foreign office guarantees.............................. 3819 2,322,445 2.
--------------------
a. Amount of financial standby letters of credit conveyed to others RCFD 3820 89,650 ////////////////// 2.a.
--------------------
3. Performance standby letters of credit and foreign office guarantees............................ 3821 179,230 3.
--------------------
a. Amount of performance standby letters of credit conveyed to others RCFD 3822 6,004 ////////////////// 3.a.
--------------------
4. Commercial and similar letters of credit....................................................... 3411 137,503 4.
5. Participations in acceptances (as described in the instructions) conveyed to others by the //////////////////
reporting bank................................................................................. 3428 112 5.
6. Participations in acceptances (as described in the instructions) acquired by the reporting //////////////////
(nonaccepting) bank............................................................................ 3429 12,837 6.
7. Securities borrowed............................................................................ 3432 0 7.
8. Securities lent (including customers' securities lent where the customer is indemnified against //////////////////
loss by the reporting bank).................................................................... 3433 965,792 8.
9. Loans transferred (i.e., sold or swapped) with recourse that have been treated as sold for //////////////////
Call Report purposes: //////////////////
a. FNMA and FHLMC residential mortgage loan pools: //////////////////
(1) Outstanding principal balance of mortgages transferred as or the report date............ 3650 298,423 9.a.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................... 3651 298,423 9.a.(2)
b. Private (nongovernment-issued or guaranteed) residential mortgage loan pools: //////////////////
(1) Outstanding principal balance of mortgages transferred as of the report date............ 3652 289,942 9.b.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................... 3653 289,942 9.b.(2)
c. Farmer Mac agricultural mortgage loan pools: //////////////////
(1) Outstanding principal balance of mortgages transferred as of the report date............ 3654 0 9.c.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................... 3655 0 9.c.(2)
d. Small business obligations transferred with recourse under Section 208 of the //////////////////
Riegle Community Development and Regulatory improvement Act of 1994: //////////////////
(1) Outstanding principal balance of small business obligations transferred //////////////////
as of the report date................................................................... A249 0 9.d.(1)
(2) Amount of retained recourse on these obligations as of the report date.................. A250 0 9.d.(2)
10. When-issued securities: //////////////////
a. Gross commitments to purchase............................................................... 3434 0 10.a
b. Gross commitments to sell................................................................... 3435 0 10.b.
11. Spot foreign exchange contracts................................................................ 8765 487,442 11.
12. All other off-balance sheet liabilities (exclude off-balance sheet derivatives) (itemize and //////////////////
describe each component of this item over 25% of Schedule RC, item 28, "Total equity capital") 3430 0 12.
------------------------------------------------------------------------------------------- //////////////////
a. TEXT 3555 ........................................................ RCFD 3555 ////////////////// 12.a.
b. TEXT 3556 ........................................................ RCFD 3556 ////////////////// 12.b.
c. TEXT 3557 ........................................................ RCFD 3557 ////////////////// 12.c.
d. TEXT 3558 ........................................................ RCFD 3558 ////////////////// 12.d.
- - ---------------------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE> 44
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-15
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-L--CONTINUED
Dollar Amounts in Thousands RCFD Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
13. All other off-balance sheet assets (exclude off-balance sheet derivatives) (itemize and //////////////////
describe each component of this item over 25% of Schedule RC, item 28, "Total equity capital") 5591 0 13.
a. TEXT 5592 RCFD 5592 ////////////////// 13.a.
b. TEXT 5593 RCFD 5593 ////////////////// 13.b.
c. TEXT 5594 RCFD 5594 ////////////////// 13.c.
d. TEXT 5595 RCFD 5595 ////////////////// 13.d.
C461 <-
----------------- ----------------- ----------------- ------------------
(Column A) (Column B) (Column C) (Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative Commodity and
- - ---------------------------------------- Contracts Contracts Contracts Other Contracts
Off-balance Sheet Derivatives ----------------- ----------------- ----------------- ------------------
Position Indicators Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou
---------------------------------------- ----------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
14. Gross amounts (e.g., notional ///////////////// ///////////////// ///////////////// /////////////////
amounts) (for each column, sum of ///////////////// ///////////////// ///////////////// /////////////////
items 14.a through 14.e must equal ///////////////// ///////////////// ///////////////// /////////////////
sum of items 15, 16.a, and 16.b): ///////////////// ///////////////// ///////////////// /////////////////
----------------- ----------------- ----------------- -----------------
a. Futures contracts ................ 0 0 0 39,037 14.a
----------------- ----------------- ----------------- -----------------
RCFD 8693 RCFD 8694 RCFD 8695 RCFD 8696
----------------- ----------------- ----------------- -----------------
b. Forward contracts ................ 2,684,800 2,284,466 0 45,604 14.b
----------------- ----------------- ----------------- -----------------
RCFD 8697 RCFD 8698 RCFD 8699 RCFD 8700
----------------- ----------------- ----------------- -----------------
c. Exchange-traded option contracts: ///////////////// ///////////////// ///////////////// /////////////////
----------------- ----------------- ----------------- -----------------
(1) Written options .............. 225,000 0 0 0 14.c.(1)
----------------- ----------------- ----------------- -----------------
RCFD 8701 RCFD 8702 RCFD 8703 RCFD 8704
----------------- ----------------- ----------------- -----------------
(2) Purchased options ............ 1,276,400 0 0 1,245 14.c.(2)
----------------- ----------------- ----------------- -----------------
RCFD 8705 RCFD 8706 RCFD 8707 RCFD 8708
----------------- ----------------- ----------------- -----------------
d. Over-the-counter option contracts: ///////////////// ///////////////// ///////////////// /////////////////
----------------- ----------------- ----------------- -----------------
(1) Written options .............. 5,051,792 5,200 0 0 14.d.(1)
----------------- ----------------- ----------------- -----------------
RCFD 8709 RCFD 8710 RCFD 8711 RCFD 8712
----------------- ----------------- ----------------- -----------------
(2) Purchased options ............ 19,427,829 5,200 0 0 14.d.(2)
----------------- ----------------- ----------------- -----------------
RCFD 8713 RCFD 8714 RCFD 8715 RCFD 8716
----------------- ----------------- ----------------- -----------------
e. Swaps ............................ 24,549,614 0 0 0 14.e
----------------- ----------------- ----------------- -----------------
RCFD 3450 RCFD 3826 RCFD 8719 RCFD 8720
----------------- ----------------- ----------------- -----------------
15. Total gross notional amount of ///////////////// ///////////////// ///////////////// /////////////////
derivative contracts held for trading. 5,289,505 2,294,866 0 l,245 15
----------------- ----------------- ----------------- -----------------
RCFD A126 RCFD A127 RCFD 8723 RCFD 8724
----------------- ----------------- ----------------- -----------------
l6. Total gross notional amount of ///////////////// ///////////////// ///////////////// /////////////////
derivative contracts held for ///////////////// ///////////////// ///////////////// /////////////////
purposes other than trading: ///////////////// ///////////////// ///////////////// /////////////////
----------------- ----------------- ----------------- -----------------
a. Contracts marked to market ...... 4,239,800 0 0 39,037 16.a.
----------------- ----------------- ----------------- -----------------
RCFD 8725 RCFD 8726 RCFD 8727 RCFD 8728
----------------- ----------------- ----------------- -----------------
b. Contracts not marked to market .. 43,686,130 0 0 45,604 16.b.
----------------- ----------------- ----------------- -----------------
RCFD 8729 RCFD 8730 RCFD 8731 RCFD 8732
----------------- ----------------- ----------------- -----------------
</TABLE>
25
<PAGE> 45
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-16
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-L--CONTINUED
(Column A) (Column B) (Column C) (Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative Commodity and
Off-balance Sheet Derivatives Contracts Contracts Contracts Other Contracts
Position Indicators ------------------ ------------------ ------------------ ------------------
RFCD Bil Mil Thou RFCD Bil Mil Thou RFCD Bil Mil Thou RFCD Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
17. Gross fair values of ////////////////// ////////////////// ////////////////// //////////////////
derivative contracts: ////////////////// ////////////////// ////////////////// //////////////////
a. Contracts held for ////////////////// ////////////////// ////////////////// //////////////////
trading: ////////////////// ////////////////// ////////////////// //////////////////
(1) Gross positive ////////////////// ////////////////// ////////////////// //////////////////
fair value................ 8733 31,626 8734 41,468 8736 0 8736 59 17.a.(1)
(2) Gross negative ////////////////// ////////////////// ////////////////// //////////////////
fair value................ 8737 22,099 8738 38,756 8739 0 8740 0 17.a.(2)
b. Contracts held for ////////////////// ////////////////// ////////////////// //////////////////
purposes other than ////////////////// ////////////////// ////////////////// //////////////////
trading that are marked ////////////////// ////////////////// ////////////////// //////////////////
to market: ////////////////// ////////////////// ////////////////// //////////////////
(1) Gross positive ////////////////// ////////////////// ////////////////// //////////////////
fair value................ 8741 2,258 8742 0 8743 0 8744 1,698 17.b.(1)
(2) Gross negative ////////////////// ////////////////// ////////////////// //////////////////
fair value................ 8745 1,417 8746 0 8747 0 8748 0 17.b.(2)
c. Contracts held for ////////////////// ////////////////// ////////////////// //////////////////
purposes other than ////////////////// ////////////////// ////////////////// //////////////////
trading that are not ////////////////// ////////////////// ////////////////// //////////////////
marked to market: ////////////////// ////////////////// ////////////////// //////////////////
(1) Gross positive ////////////////// ////////////////// ////////////////// //////////////////
fair value................ 8749 165,643 8750 0 8751 0 8752 169 17.c.(1)
(2) Gross negative ////////////////// ////////////////// ////////////////// //////////////////
fair value................ 8737 76,308 8754 0 8755 0 8756 0 17.c.(2)
- - ---------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Memoranda Dollar Amounts in Thousands RFCD Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C>
1.-2. Not applicable //////////////////
3. Unused commitments with an original maturity exceeding one year that are reported in //////////////////
Schedule RC-L, items 1.a through 1.e, above (report only the unused portions of commitments //////////////////
that are fee paid or otherwise legally binding).................................................. 3833 18,552,873 M.3.
a. Participations in commitments with an original maturity //////////////////
exceeding one year to be conveyed to others......................... RCFD 3834 | 1,789,549 ////////////////// M.3.a.
4. To be completed only by banks with $1 billion or more in total assets: //////////////////
Standby letters of credit and foreign office guarantees (both financial and performance) issued //////////////////
to non-U.S. addresses (domicile) included in Schedule RC-L, items 2 and 3, above................. 3377 360,019 M.4.
5. Installment loans to individuals for household, family, and other personal expenditures that //////////////////
have been securitized and sold without recourse (with servicing retained), amounts outstanding //////////////////
by type of loan: //////////////////
a. Loans to purchase private passenger automobiles (TO BE COMPLETED FOR THE //////////////////
SEPTEMBER REPORT ONLY)........................................................................ 2741 N/A M.5.a.
b. Credit cards and related plans (TO BE COMPLETED QUARTERLY).................................... 2742 0 M.5.b.
c. All other consumer installment credit (including mobile home loans)(TO BE COMPLETED FOR THE //////////////////
SEPTEMBER REPORT ONLY)........................................................................ 2743 N/A M.5.c.
</TABLE>
26
<PAGE> 46
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-17
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-M--MEMORANDA
--------
C465 <-
- - ------------------
Dollar Amounts in Thousands RFCD
Bil Mil Thou
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C>
<C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal //////////////////
shareholders, and their related interests as of the report date: //////////////////
a. Aggregate amount of all extensions of credit to all executive officers, directors, principal //////////////////
shareholders, and their related interests...................................................... 6164 552,349 1.a.
b. Number of executive officers, directors, and principal shareholders to whom the amount of //////////////////
all extensions of credit by the reporting bank (including extensions of credit to //////////////////
related interests) equals or exceeds the lesser of $500,000 or 5 percent Number //////////////////
of total capital as defined for this purpose in agency regulations. RFCD 6165 | 20 ////////////////// 1.b.
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches //////////////////
and agencies of FOREIGN BANKS(1) (included in Schedule RC, items 3.a and 3.b)..................... 3405 0 2.
3. Not applicable. //////////////////
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others //////////////////
(include both retained servicing and purchased servicing): //////////////////
a. Mortgages serviced under a GNMA contract....................................................... 5500 25,732,152 4.a.
b. Mortgages services under a FHLMC contract: //////////////////
(1) Serviced with recourse to servicer......................................................... 5501 48,720 4.b.(1)
(2) Serviced without recourse to servicer...................................................... 5502 34,857,978 4.b.(2)
c. Mortgages serviced under a FNMA contract: //////////////////
(1) Serviced under a regular option contract................................................... 5503 249,703 4.c.(1)
(2) Serviced under a special option contract................................................... 5504 41,105,444 4.c.(2)
d. Mortgages serviced under other servicing contracts............................................. 5505 11,267,486 4.d.
5. To be completed only by banks with $1 billion or more in total assets: //////////////////
Customers' liability to this bank on acceptances outstanding (sum of items 5.a and 5.b must //////////////////
equal Schedule RC, item 9): //////////////////
a. U.S. addresses (domicile)...................................................................... 2103 6,244 5.a.
b. Non-U.S. addresses (domicile).................................................................. 2104 136 5.b.
6. Intangible assets: //////////////////
a. Mortgage servicing rights...................................................................... 3164 1,563,176 6.a.
b. Other identifiable intangible assets //////////////////
(1) Purchased credit card relationships........................................................ 5506 0 6.b.(1)
(2) All other identifiable intangible assets................................................... 5507 105,984 6.b.(2)
c. Goodwill....................................................................................... 3163 647,473 6.c.
d. Total (sum of items 6.a through 6.c) (must equal Schedule RC, item 10)......................... 2143 2,316,633 6.d.
e. Amount of intangible assets (included in item 6.b.(2) above) that have been grandfathered or //////////////////
are otherwise qualifying for regulatory capital purposes....................................... 6442 0 6.e.
7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to //////////////////
redeem the debt................................................................................... 3295 75,000 7.
</TABLE>
- - -----------------
(1) Do not report federal funds sold and securities purchased under agreements
to resell with other commercial banks in the U.S. in this time.
27
<PAGE> 47
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-18
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-M--CONTINUED
- - ------------------
Dollar Amounts in Thousands
BIL MIL THOU
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
8. a. Other real estate owned: /////////////////////////
(1) Direct and indirect investments in real estate ventures......................... RCFD 5372 0 8.a.(1)
(2) All other real estate owned: /////////////////////////
(a) Construction and land development in domestic offices........................ RCON 5508 332 8.a.(2)(a)
(b) Farmland in domestic offices................................................. RCON 5509 0 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices........................ RCON 5510 9,789 8.a.(2)(c)
(d) Multifamily (5 or more) residential properties in domestic offices........... RCON 5511 347 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices........................ RCON 5512 8,443 8.a.(2)(e)
(f) In foreign offices........................................................... RCFN 5513 0 8.a.(2)(f)
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7)........ RCFD 2150 18,911 8.a.(3)
b. Investments in unconsolidated subsidiaries and associated companies: /////////////////////////
(1) Direct and indirect investments in real estate ventures.......................... RCFD 5374 0 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and associated companies.... RCFD 5375 0 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8)........ RCFD 2130 0 8.b.(3)
c. TOTAL ASSETS of unconsolidated subsidiaries and associated companies................. RCFD 5376 0 8.c.
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC, /////////////////////////
item 23, "Perpetual preferred stock and related surplus"................................ RCFD 3778 125,000 9.
10. Mutual fund and annuity sales in domestic offices during the quarter (include /////////////////////////
proprietary, private label, and third party products): /////////////////////////
a. Money market funds................................................................... RCON 6441 204,326 10.a.
b. Equity securities funds.............................................................. RCON 8427 116,418 10.b.
c. Debt securities funds................................................................ RCON 8428 12,837 10.c.
d. Other mutual funds................................................................... RCON 8429 0 10.d.
e. Annuities............................................................................ RCON 8430 103,868 10.e.
f. Sales of proprietary mutual funds and annuities (included in items 10.a. through /////////////////////////
10.e. above)......................................................................... RCON 8784 302,177 10.f.
- - -------------------------
- - ----------------------------------------------------------------------------------------------------------------------------------
Memorandum Dollar Amounts in Thousands RCFD Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------
1. Interbank holdings of capital instruments (TO BE COMPLETED FOR THE DECEMBER REPORT ONLY): //////////////////
a. Reciprocal holdings of banking organizations' capital instruments........................... 3836 0 M.1.a.
b. Nonreciprocal holdings of banking organizations' capital instruments........................ 3837 0 M.1.b.
- - ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
28
<PAGE> 48
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-19
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-N--PAST DUE AND NONACCRUAL LOANS, LEASES,
AND OTHER ASSETS
The FFIEC regards the information reported in
all of Memorandum item 1, in items 1 through 10,
column A, and in Memorandum items 2 through 4,
column A, as confidential.
--------
C470
- - ------------------------------------------------------------
(Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
------------------ ------------------ ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Loans secured by real estate: ////////////////// ////////////////// //////////////////
a. To U.S. addressees (domicile) .................... 1245 1246 65,607 1247 215,496 1.a.
b. To non-U.S. addressees (domicile) ................ 1248 1249 0 1250 0 1.b.
2. Loans to depository institutions and acceptances ////////////////// ////////////////// //////////////////
of other banks: ////////////////// ////////////////// //////////////////
a. To U.S. banks and other U.S. depository ////////////////// ////////////////// //////////////////
institutions ..................................... 5377 5378 0 5379 0 2.a.
b. To foreign banks ................................. 5380 5381 0 5382 0 2.b.
3. Loans to finance agricultural production and ////////////////// ////////////////// //////////////////
other loans to farmers ............................... 1594 1597 0 1583 625 3.
4. Commercial and industrial loans: ////////////////// ////////////////// //////////////////
a. To U.S. addressees (domicile) .................... 1251 1252 12,042 1253 76,393 4.a.
b. To non-U.S. addressees (domicile) ................ 1254 1255 0 1256 0 4.b.
5. Loans to individuals for household, family, and ////////////////// ////////////////// //////////////////
other personal expenditures: ////////////////// ////////////////// //////////////////
a. Credit cards and related plans ................... 5383 5384 1,574 5385 370 5.a.
b. Other (includes single payment, installment, ////////////////// ////////////////// //////////////////
and all student loans) ........................... 5386 5387 24,812 5388 7,184 5.b.
6. Loans to foreign governments and official ////////////////// ////////////////// //////////////////
institutions ......................................... 5389 5390 0 5391 0 6.
7. All other loans ...................................... 5459 5460 11,122 5461 9,921 7.
8. Lease financing receivables: ////////////////// ////////////////// //////////////////
a. Of U.S. addressees (domicile) .................... 1257 1258 21 1259 3,763 8.a
b. Of non-U.S. addressees (domicile) ................ 1271 1272 0 1791 0 8.b.
9. Debt securities and other assets (exclude other ////////////////// ////////////////// //////////////////
real estate owned and other repossessed assets) ...... 3506 3506 0 3507 32,566 9.
- - ---------------------------------------------------------------------------------------------------------------------------------
Amounts reported in items 1 through 8 above include guaranteed and unguaranteed portions of past due and nonaccrual loans and
leases. Report in item 10 below certain guaranteed loans and leases that have already been included in the amounts reported in
items 1 through 8.
------------------ ------------------ ------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD Bil Mil Thou
10. Loans and leases reported in items 1
through 8 above which are wholly or partially ////////////////// ////////////////// //////////////////
guaranteed by the U.S. Government .................... 5612 5613 17,347 5614 14,395 10.
a. Guaranteed portion of loans and leases ////////////////// ////////////////// //////////////////
included in item 10 above ........................ 5615 5616 17,056 5617 11,954 10.a.
</TABLE>
29
<PAGE> 49
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-20
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-N--CONTINUED
--------
C473
- - ------------------------------------------------------------
(Column A) (Column B) (Column C)
Past due Past due 90 Nonaccrual
30 through 89 days or more
and still and still
accruing accruing
Memoranda ------------------ ------------------ ------------------
Dollar Amounts in Thousands RFCD Bil Mil Thou RFCD Bil Mil Thou RFCD Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Restructured loans and leases included in ////////////////// ////////////////// //////////////////
Schedule RC-N, items 1 through 8, above (and not ////////////////// ////////////////// //////////////////
reported in Schedule RC-C, part I, Memorandum ////////////////// ////////////////// //////////////////
item 2)................................................ 1658 1659 1661 M.1.
2. Loans to finance commercial real estate, ////////////////// ////////////////// //////////////////
construction, and land development activities ////////////////// ////////////////// //////////////////
(NOT SECURED BY REAL ESTATE) included in ////////////////// ////////////////// //////////////////
Schedule RC-N, items 4 and 7 above..................... 6558 6559 105 6560 1,919 M.2.
3. Loans secured by real estate in domestic offices RCON Bil Mil Thou RCON Bil Mil Thou RCON Bil Mil Thou
(included in Schedule RC-N, item 1, above): ////////////////// ////////////////// //////////////////
a. Construction and land development................... 2759 2769 0 3492 19,990 M.3.a.
b. Secured by farmland................................. 3493 3494 0 3495 144 M.3.b.
c. Secured by 1-4 family residential properties: ////////////////// ////////////////// //////////////////
(1) Revolving, open-end loans secured by ////////////////// ////////////////// //////////////////
1-4 family residential properties and ////////////////// ////////////////// //////////////////
extended under lines of credit.................. 5398 5399 5,009 5400 10,700 M.3.c.(1)
(2) All other loans secured by 1-4 residential ////////////////// ////////////////// //////////////////
properties...................................... 5401 5402 49,978 5403 100,900 M.3.c.(2)
d. Secured by multifamily (5 or more) residential ////////////////// ////////////////// //////////////////
properties.......................................... 3499 3500 934 3501 9,456 M.3.d.
e. Secured by nonfarm nonresidential properties........ 3502 3503 9,886 3504 74,306 M.3.e.
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------
(Column A) (Column B)
Past due 30 Past due 90
through 89 days days or more
---------------------------------------
RFCD Bil Mil Thou RFCD Bil Mil Thou
---------------------------------------
<S> <C> <C>
4. Interest rate, foreign exchange rate, and other ////////////////// //////////////////
commodity and equity contracts: ////////////////// //////////////////
a. Book value of amounts carried as assets............. 3522 3528 0 M.4.a.
b. Replacement cost of contracts with a ////////////////// //////////////////
positive replacement cost........................... 3529 3530 0 M.4.b.
</TABLE>
30
<PAGE> 50
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-21
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-O--OTHER DATA FOR DEPOSIT INSURANCE ASSESSMENTS
--------
C475 <-
- - ------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Unposted debits (see instructions): //////////////////
a. Actual amount of all unposted debits........................................................ 0030
0 1.a
OR //////////////////
b. Separate amount of unposted debits: //////////////////
(1) Actual amount of unposted debits to demand deposits..................................... 0031 N/A 1.b.(1)
(2) Actual amount of unposted debits to time and savings deposits(1)........................ 0032 N/A 1.b.(2)
2. Unposted credits (see instructions): //////////////////
a. Actual amount of all unposted credits....................................................... 3510 0 2.a.
OR //////////////////
b. Separate amount of unposted credits: //////////////////
(1) Actual amount of unposted credits to demand deposits.................................... 3512 N/A 2.b.(1)
(2) Actual amount of unposted credits to time and savings deposits(1)....................... 3514 N/A 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department (not included in total //////////////////
deposits in domestic offices).................................................................. 3520 142,277 3.
4. Deposits of consolidated subsidiaries in domestic offices and in insured branches in Puerto //////////////////
Rico and U.S. territories and possessions (not included in total deposits): //////////////////
a. Demand deposits of consolidated subsidiaries................................................ 2211 196,951 4.a.
b. Time and savings deposits(1) of consolidated subsidiaries................................... 2351 15,807 4.b.
c. Interest accrued and unpaid on deposits of consolidated subsidiaries........................ 5514 0 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories and possessions: //////////////////
a. Demand deposits in insured branches (included in Schedule RC-E, Part II).................... 2229 0 5.a.
b. Time and savings deposits(1) in insured branches (included in Schedule RC-E, Part II)....... 2383 0 5.b.
c. Interest accrued and unpaid on deposits in insured branches //////////////////
(included in Schedule RC-G, item 1.b)....................................................... 5515 0 5.c.
Item 6 is not applicable to state nonmember banks that have not been authorized by the //////////////////
Federal Reserve to act as pass-through correspondents. //////////////////
6. Reserve balances actually passed through to the Federal Reserve by the reporting bank on //////////////////
behalf of its respondent depository institutions that are also reflected as deposit liabilities //////////////////
of the reporting bank: //////////////////
a. Amount reflected in demand deposits (included in Schedule RC-E, Part I, item 4 or 5, //////////////////
column B)................................................................................... 2314 0 6.a.
b. Amount reflected in time and savings deposits(1) (included in Schedule RC-E, Part I, //////////////////
item 4 or 5, column A or C, but not column B)............................................... 2315 0 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1) //////////////////
a. Unamortized premiums........................................................................ 5516 748 7.a.
b. Unamortized discounts....................................................................... 5517 0 7.b.
8. TO BE COMPLETED BY BANKS WITH "OAKAR DEPOSITS."
- - ------------------
Total "Adjusted Attributable Deposits" of all institutions acquired under Section 5(d)(3) of //////////////////
the Federal Deposit Insurance Act (from most recent FDIC Oakar Transaction Worksheet(s))....... 5518 1,395,996 8.
9. Deposits in lifeline accounts.................................................................. 5596///////////// 9.
10. Benefit-responsive "Depository Institution Investment Contracts" (included in total //////////////////
deposits in domestic offices).................................................................. 8432 0 10.
- - ----------------
(1) For FDIC insurance assessment purposes, "time and savings deposits" consists of nontransaction accounts
and all transaction accounts other than demand deposits.
</TABLE>
31
<PAGE> 51
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-22
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-O--CONTINUED
- - -------------------
Dollar Amounts in Thousands RCON Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
11. Adjustments to demand deposits in domestic offices reported in Schedule RC-E for //////////////////
certain reciprocal demand balances: //////////////////
a. Amount by which demand deposits will be reduced if reciprocal demand balances //////////////////
between the reporting bank and savings associations were reported on a net basis //////////////////
rather than a gross basis in Schedule RC-E........................................ 8785 0 11.a.
b. Amount by which demand deposits would be increased if reciprocal demand balances //////////////////
between the reporting bank and U.S. branches and agencies of foreign banks were //////////////////
reported on a gross basis rather than a net basis in Schedule RC-E................ A181 0 11.b.
c. Amount by which demand deposits would be reduced if cash items in process of //////////////////
collection were included in the calculation of net reciprocal demand balances //////////////////
between the reporting bank and the domestic offices of U.S. banks and savings //////////////////
associations in Schedule RC-E..................................................... A182 0 11.c.
- - -------------------
</TABLE>
<TABLE>
<CAPTION>
- - -------------------
Dollar Amounts in Thousands RCON Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Total deposits in domestic offices of the bank (sum of Memorandum items 1.a.(1) and //////////////////
1.b.(1) must equal Schedule RC, item 13.a): //////////////////
a. Deposit accounts of $100,000 or less: //////////////////
(1) Amount of deposit accounts of $100,000 or less.................................. 2702 18,219,759 M.1.a.(1)
(2) Number of deposit accounts of $100,000 or less (TO BE Number //////////////////
COMPLETED FOR THE JUNE REPORT ONLY)........................... RCON 3779 N/A ////////////////// M.1.a.(2)
b. Deposit accounts of more than $100,000: //////////////////
(1) Amount of deposit accounts of more than $100,000................................ 2710 14,572,399 M.1.b.(1)
Number //////////////////
(2) Number of deposit accounts of more than $100,000 ............. RCON 2772 28,722 ////////////////// M.1.b.(2)
2. Estimated amount of uninsured deposits in domestic offices of the bank:
a. An estimate of your bank's uninsured deposits can be determined by multiplying the
number of deposit accounts of more than $100,000 reported in Memorandum item 1.b.(2)
above by $100,000 and subtracting the result from the amount of deposit accounts of
more than $100,000 reported in Memorandum item 1.b.(1) above.
Indicate in the appropriate box at the right whether your bank has a method or
procedure for determining a better estimate of uninsured deposits than the YES NO
estimate described above.............................................................. 6861 // /X/ M.2.a.
b. If the box marked YES has been checked, report the estimate of uninsured deposits RCON Bil Mil Thou
determined by using your bank's method or procedure................................. 5597 N/A M.2.b.
</TABLE>
- - -------------------------------------------------------------------------------
Person to whom questions about the Reports of Condition and Income should be
directed: C477
PAMELA S. FLYNN, VICE PRESIDENT (401) 278-5194
- - ------------------------------- ----------------------
Name and Title (TEXT 8901) Area code/phone number/extension (TEXT 8902)
32
<PAGE> 52
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-23
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-R--REGULATORY CAPITAL
This schedule must be completed by all banks as follows: Banks that reported total assets of $1 billion or more in Schedule RC,
item 12, for June 30, 1995, must complete items 2 through 9 and Memoranda items 1 and 2. BANKS WITH ASSETS OF LESS THAN $1 BILLION
MUST COMPLETE ITEMS 1 THROUGH 3 BELOW OR SCHEDULE RC-R IN ITS ENTIRETY, DEPENDING ON THEIR RESPONSE TO ITEM 1 BELOW.
<S> <C>
---------------
C480
1. TEST FOR DETERMINING THE EXTENT TO WHICH SCHEDULE RC-R MUST BE COMPLETED. TO BE
COMPLETED ONLY BY BANKS WITH TOTAL ASSETS OF LESS THAN $1 BILLION. Indicate in the
appropriate box at the right whether the bank has total capital greater than or
equal to eight percent of adjusted total assets............................................ RCFD 6056
//// 1.
- - --------------------------------
</TABLE>
For purposes of this test, adjusted total assets equals total assets less
cash, U.S. Treasuries, U.S. Government agency obligations, and 80 percent of
U.S. Government-sponsored agency obligations plus the allowance for loan and
lease losses and selected off-balance sheet items as reported on Schedule
RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to complete
items 2 and 3 below. If the box marked NO has been checked, the bank must
complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual
risk-based capital ratio is less than eight percent or that the bank is not
in compliance with the risk-based capital guidelines.
<TABLE>
- - -------------------------------------------------------------------
NOTE: ALL BANKS ARE REQUIRED TO COMPLETE ITEMS 2 AND 3 BELOW.
SEE OPTIONAL WORKSHEET FOR ITEMS 3.a THROUGH 3.f.
- - -----------------------------------------
- - ----------------------------------------------------------------------------- (Column A)
(Column B)
Dollar Amounts in Thousands Subordinated Debt(1) Other
- - ----------------------------------------------------------------------------- and Intermediate Limited-Life
2. Subordinated debt(1) and other limited-life capital instruments (original Term Preferred Stock Capital
Instruments weighted average maturity of at least five years) with a remaining
maturity of: RCFD Bil Mil Thou RCFD Bil Mil Thou
<S> <C> <C> <C>
a. One year or less....................................................... 3780 25,737 3786 0 2.a.
b. Over one year through two years........................................ 3781 737 3787 0 2.b.
c. Over two years through three years..................................... 3782 10,745 3788 0 2.c.
d. Over three years through four years.................................... 3783 0 3789 0 2.d.
e. Over four years through five years..................................... 3784 341,000 3790 0 2.e.
f. Over five years........................................................ 3785 760,000 3791 0 2.f.
3. AMOUNTS USED IN CALCULATING REGULATORY CAPITAL RATIOS (REPORT AMOUNTS //////////////////
DETERMINED BY THE BANK FOR ITS OWN INTERNAL REGULATORY CAPITAL ANALYSES //////////////////
CONSISTENT WITH APPLICABLE CAPITAL STANDARDS):
RCFD Bil Mil Thou
a. TIER 1 CAPITAL................................................................................ 8274 3,756,621 3.a.
b. TIER 2 CAPITAL................................................................................ 8275 1,688,820 3.b.
c. TOTAL RISK-BASED CAPITAL...................................................................... 3792 5,445,441 3.c.
d. EXCESS ALLOWANCE FOR LOAN AND LEASE LOSSES.................................................... A222 200,236 3.d.
e. RISK-WEIGHTED ASSETS (NET OF ALL DEDUCTIONS, INCLUDING EXCESS ALLOWANCE)...................... A223 45,925,732 3.e.
f. "AVERAGE TOTAL ASSETS" (NET OF ALL ASSETS DEDUCTED FROM TIER 1 CAPITAL)(2).................... A224 46,290,168 3.f.
- - ------------------
</TABLE>
<TABLE>
- - -----------------------------------------
(Column A)
(Column B)
ITEMS 4-9 AND MEMORANDA ITEMS 1 AND 2 ARE TO BE COMPLETED Assets Credit Equiv-
BY BANKS THAT ANSWERED NO TO ITEM 1 ABOVE AND Recorded alent Amount
BY BANKS WITH TOTAL ASSETS OF $1 BILLION OR MORE. on the of Off-Balance
Balance Sheet Sheet Items(3)
- - -----------------------------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou
<S> <C> <C> <C>
4. Assets and credit equivalent amounts of off-balance sheet items
assigned to the Zero percent risk category: ////////////////// //////////////////
a. Assets recorded on the balance sheet: ////////////////// //////////////////
(1) Securities issued by, other claims on, and claims unconditionally ////////////////// //////////////////
guaranteed by, the U.S. Government and its agencies and ////////////////// //////////////////
other OECD central governments..................................... 3794 1,519,575 ////////////////// 4.a.(1)
(2) All other.......................................................... 3795 1,316,143 ////////////////// 4.a.(2)
b. Credit equivalent amount of off-balance sheet items.................... ////////////////// 3796 1,079,527 4.b
</TABLE>
- - -------------
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.
(2) Do not deduct excess allowance for loan and lease losses.
(3) Do not report in column B the risk-weighted amount of assets reported in
column A.
33
<PAGE> 53
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-24
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-R--CONTINUED
Column A) (Column B)
Assets Credit Equiv-
Recorded alent Amount
on the of Off-Balance
Balance Sheet Sheet Items(1)
Dollar Amounts in Thousands RCFD BIL MIL THOU RCFD BIL MIL THOU
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5. Assets and credit equivalent amounts of off-balance sheet items ////////////////// //////////////////
assigned to the 20 percent risk category: ////////////////// //////////////////
a. Assets recorded on the balance sheet: ////////////////// //////////////////
(1) Claims conditionally guaranteed by the U.S. Government and ////////////////// //////////////////
its agencies and other OECD central governments.................... 3798 726,530 ////////////////// 5.a.(1)
(2) Claims collateralized by securities issued by the U.S. Government ////////////////// //////////////////
and its agencies and other OECD central governments; by ////////////////// //////////////////
securities issued by U.S. Government-sponsored agencies; and ////////////////// //////////////////
by cash on deposit................................................. 3799 0 ////////////////// 5.a.(2)
(3) All other.......................................................... 3800 7,055,416 ////////////////// 5.a.(3)
b. Credit equivalent amount of off-balance sheet items.................... ////////////////// 3801 1,058,252 5.b.
6. Assets and credit equivalent amounts of off-balance sheet items ////////////////// //////////////////
assigned to the 50 percent risk category: ////////////////// //////////////////
a. Assets recorded on the balance sheet................................... 3802 5,371,795 ////////////////// 6.a.
b. Credit equivalent amount of off-balance sheet items.................... ////////////////// 3803 866,687 6.b.
7. Assets and credit equivalent amounts of off-balance sheet items ////////////////// //////////////////
assigned to the 100 percent risk category: ////////////////// //////////////////
a. Assets recorded on the balance sheet................................... 3804 31,276,374 ////////////////// 7.a.
b. Credit equivalent amount of off-balance sheet items.................... ////////////////// 3805 10,715,771 7.b.
8. On-balance sheet asset values excluded from the calculation of the ////////////////// //////////////////
risk-based capital ratio (2).............................................. 3806 91,771 ////////////////// 8.
9. Total assets recorded on the balance sheet (sum of ////////////////// //////////////////
items 4.a, 5.a, 6.a, 7.a, and 8, column A) (must equal Schedule RC, ////////////////// //////////////////
item 12 plus items 4.b and 4.c)........................................... 3807 47,357,604 ////////////////// 9.
- - --------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Memoranda
- - ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Current credit exposure across all off-balance sheet derivative contracts covered by the //////////////////
risk-based capital standards.................................................................. 8764 236,389 M.1.
- - ----------------------------------------------------------------------------------------------------------------------------
With a remaining maturity of
(Column A) (Column B) (Column C)
One year or less Over one year Over five years
through five years
2. Notional principal amounts of
- - ----------------------------------------------------------------------------------------------------------------------------
off-balance sheet derivative contracts(3): RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
a. Interest rate contracts................ 3809 7,502,891 8766 33,994,382 8767 779,970 M.2.a.
b. Foreign exchange contracts............. 3812 1,366,429 8769 84,993 8770 0 M.2.b.
c. Gold contracts......................... 8771 33,478 8772 0 8773 0 M.2.c.
d. Other precious metals contracts........ 8774 13,371 8775 0 8776 0 M.2.d.
e. Other commodity contracts.............. 8777 0 8778 0 8779 0 M.2.e.
f. Equity derivative contracts............ A000 0 A001 0 A002 0 M.2.f.
(1) Do not report in column B the risk-weighted amount of assets reported in
column A.
(2) Include the difference between the fair value and the amortized cost of
available-for-sale securities in item 8 and report the amortized cost of
these securities in items 4 through 7 above. Item 8 also includes
on-balance sheet asset values (or portions thereof) of off-balance sheet
interest rate, foreign exchange rate, and commodity contracts and those
contracts (e.g., futures contracts) not subject to risk-based capital.
Exclude from item 8 margin accounts and accrued receivables not included in
the calculation of credit equivalent amounts of off-balance sheet
derivatives as well as any portion of the allowance for loan and lease
losses in excess of the amount that may be included in Tier 2 capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days or
less and all futures contracts.
</TABLE>
34
<PAGE> 54
<TABLE>
<S> <C> <C>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: One Monarch Place
Page RC-25
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
</TABLE>
OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
at close of business on December 31, 1996
Fleet National Bank Springfield , Massachusetts
- - -----------------------------------------------------------------------------
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit a brief
narrative statement on the amounts reported in the Reports of Condition and
Income. This optional statement will be made available to the public, along
with the publicly available data in the Reports of Condition and Income, in
response to any request for individual bank report data. However, the
information reported in column A and in all of Memorandum item 1 of Schedule
RC-N is regarded as confidential and will not be released to the public. BANKS
CHOOSING TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT
DOES NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK
CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN
SCHEDULE RC-N, OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE
PUBLIC OR THAT WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing
not to make a statement may check the "No comment" box below and should make no
entries of any kind in the space provided for the narrative statement; i.e., DO
NOT enter in this space such phrases as "No statement," "Not applicable,"
"N/A," "No comment," and "None."
The optional statement must be entered on this sheet. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement
must not exceed 750 characters, including punctuation, indentation, and
standard spacing between words and sentences. If any submission should exceed
750 characters, as defined, it will be truncated at 750 characters with no
notice to the submitting bank and the truncated statement will appear as the
bank's statement both on agency computerized records and in computer-file
releases to the public.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who
thereby attests to its accuracy.
If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing
narrative statement will be deleted from the files, and from disclosure; the
bank, at its option, may replace it with a statement, under signature,
appropriate to the amended data.
The optional narrative statement will appear in agency records and in release
to the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
- - --------------------------------------------------------------------------------
No comment [X] (RCON 6979) C471 C472
--- ------------
BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)
/s/ Jan 23, 1997
------------------------ ------------------------
Signature of Executive Date of Signature
Officer of Bank
35
<PAGE> 1
Exhibit 25.02
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM T-1
--------------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
[ ] CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
FLEET NATIONAL BANK
----------------------------------------------------------
(Exact name of trustee as specified in its charter)
Not applicable 06-0850628
---------------------------- ------------------
(State of incorporation if (I.R.S. Employer
not a national bank) Identification No.)
777 Main Street, Hartford, Connecticut 06115
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Patricia Beaudry, 777 Main Street, Hartford, CT (860) 728-2065
------------------------------------------------------------------
(Name, address and telephone number of agent for service)
Hollinger International Publishing Inc., as Issuer
Hollinger International Inc., as Guarantor
------------------------------------------------------------------
(Exact name of obligor as specified in its charter)
Delaware 51-0370603
- - ------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
401 North Wabash Avenue, Chicago, Illinois 60611
------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
____% Senior Subordinated Notes due 2007
------------------------------------------------------------------
(Title of the indenture securities)
<PAGE> 2
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject:
The Comptroller of the Currency,
Washington, D.C.
Federal Reserve Bank of Boston
Boston, Massachusetts
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers:
The trustee is so authorized.
Item 2. Affiliations with obligor. If the obligor is an affiliate of
the trustee, describe each such affiliation.
None with respect to the trustee; none with respect to Fleet
Financial Group, Inc. and its affiliates (the "affiliates").
Item 16. List of exhibits. List below all exhibits filed as a part of
this statement of eligibility and qualification.
1. A copy of the Articles of Association of the trustee as
now in effect.
2. A copy of the Certificate of Authority of the trustee
to do Business and the Certification of Fiduciary Powers.
3. A copy of the By-laws of the trustee as now in effect.
4. Consent of the trustee required by Section 321(b) of
the Act.
5. A copy of the latest Consolidated Report of Condition
and Income of the trustee, published pursuant to law or the requirements
of its supervising or examining authority.
<PAGE> 3
NOTES
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base its answer to Item 2, the answer to said
Item is based upon incomplete information. Said Item may, however, be
considered correct unless amended by an amendment to this Form T-1.
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Fleet National Bank, a national banking association organized and
existing under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Hartford, and State of
Connecticut, on the 28th day of February, 1997.
FLEET NATIONAL BANK,
Trustee
By /s/ Michael M. Hopkins
-------------------------------------
Name: Michael M. Hopkins
Title: Vice President
<PAGE> 5
EXHIBIT 1
ARTICLES OF ASSOCIATION
OF
FLEET NATIONAL BANK
FIRST. The title of this Association, which shall carry on the business of
banking under the laws of the United States, shall be "Fleet National Bank."
SECOND. The main office of the Association shall be in Springfield, Hampden
County Commonwealth of Massachusetts. The general business of the Association
shall be conducted at its main office and its branches.
THIRD. The board of directors of this Association shall consist of not less
than five (5) nor more than twenty-five (25) shareholders, the exact number of
directors within such minimum and maximum limits to be fixed and determined
from time to time by resolution of a majority of the full board of directors or
by resolution of the shareholders at any annual or special meeting thereof.
Unless otherwise provided by the laws of the United States, any vacancy in the
board of directors for any reason, including an increase in the number thereof,
may be filled by action of the board of directors.
FOURTH. The annual meeting of the shareholders for the election of directors
and the transaction of whatever other business may be brought before said
meeting shall be held at the main office or such other place as the board of
directors may designate, on the day of each year specified therefore in the
bylaws, but if no election is held on that day, it may be held on any
subsequent day according to the provisions of law; and all elections shall be
held according to such lawful regulations as may be prescribed by the board of
directors.
FIFTH. The authorized amount of capital stock of this Association shall be
eight million five hundred thousand (8,500,000) shares of which three million
five hundred thousand (3,500,000) shares shall be common stock with a
par value of six and 25/100 dollars ($6.25) each, and of which five million
(5,000,000) shares without par value shall be preferred stock. The capital
stock may be increased or decreased from time to time, in accordance with
the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any pre-emptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the board
of directors, in its discretion, may from time to time determine and at such
price as the board of directors may from time to time fix.
<PAGE> 6
The board of directors of the Association is authorized, subject to limitations
prescribed by law and the provisions of this Article, to provide for the
issuance from time to time in one or more series of any number of the preferred
shares, and to establish the number of shares be included in each series, and
to fix the designation, relative rights, preferences, qualifications and
limitations of the shares of each such series. The authority of the board of
directors with respect to each series shall include, but not be limited to,
determination of the following:
a. The number of shares constituting that series and the distinctive
designation of that series;
b. The dividend rate on the shares of that series, whether dividends shall be
cumulative, and, if so, from which date or dates, and whether they shall be
payable in preference to, or in another relation to, the dividends payable
to any other class or classes or series of stock;
c. Whether that series shall have voting rights, in addition to the voting
rights provided by law, and, if so, the terms of such voting rights;
d. Whether that series shall have conversion or exchange privileges, and,
if so, the terms and conditions of such conversion or exchange, including
provision for the adjustment of the conversion or exchange rate in such
events as the board of directors shall determine;
e. Whether or not the shares of that series shall be redeemable, and, if so,
the terms and conditions of such redemption, including the manner of
selecting shares for redemption if less than all shares are to be redeemed,
the date or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;
f. Whether that series shall be entitled to the benefit of a sinking fund to
be applied to the purchase or redemption of shares of that series, and, if
so, the terms and amounts of such sinking fund;
g. The right of the shares of that series to the benefit of conditions and
restrictions upon the creation of indebtedness of the Association or any
subsidiary, upon the issue of any additional stock (including additional
shares of such series or of any other series) and upon the payment of
dividends or the making of other distributions on, and the purchase,
redemption or other acquisition by the Association or any subsidiary of
any outstanding stock of the Association;
h. The right of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Association and
whether such rights shall be in preference to, or in another relation to,
the comparable rights of any other class or classes or series of stock; and
i. Any other relative, participating, optional or other special rights,
qualifications, limitations or restrictions of that series.
Shares of any series of preferred stock which have been redeemed (whether
through the operation of a sinking fund or otherwise) or which, if convertible
or exchangeable, have been converted into or exchanged for shares of stock of
any other class or classes shall have the status of authorized and unissued
shares of preferred stock of the same series and may be reissued as a part of
the series of which they were originally a part or may be reclassified and
reissued as part of a new series of preferred stock to be created by resolution
or resolutions of the board of directors or as part of any other series or
preferred stock, all subject to the conditions and the restrictions adopted by
the board of directors providing for the issue of any series of preferred
stock and by the provisions of any applicable law.
Subject to the provisions of any applicable law, or except as otherwise
provided by the resolution or resolutions providing for the issue of any series
of preferred stock, the holders of outstanding shares of common stock shall
exclusively possess voting power for the election of directors and for all
purposes, each holder of record of shares of common stock being entitled to one
vote for each share of common stock standing in his name on the books of the
Association.
Except as otherwise provided by the resolution or resolutions providing for the
issue of any series of preferred stock, after payment shall have been made to
the holders of preferred stock of the full amount of dividends to which they
shall be entitled pursuant to the resolution or resolutions providing for the
issue of any other series of preferred stock, the holders of common stock shall
be entitled, to the exclusion of the holders of preferred stock of any and all
series, to receive such dividends as from time to time may be declared by the
board of directors.
Except as otherwise provided by the resolution or resolutions for the issue
of any series of preferred stock, in the event of any liquidation, dissolution
or winding up of the Association, whether voluntary or involuntary, after
payment shall have been made to the holders of preferred stock of the full
amount to which they shall be entitled pursuant to the resolution or
resolutions providing for the issue of any series of preferred stock the
holders of common stock shall be entitled, to the exclusion of the holders of
preferred stock of any and all series, to share, ratable according to the
number of shares of common stock held by them, in all remaining assets of the
Association available for distribution to its shareholders.
The number of authorized shares of any class may be increased or decreased by
the affirmative vote of the holders of a majority of the stock of the
Association entitled to vote.
<PAGE> 7
SIXTH. The board of directors shall appoint one of its members president of
this Association, who shall be chairman of the board, unless the board appoints
another director to be the chairman. The board of directors shall have the
power to appoint one or more vice presidents; and to appoint a secretary and
such other officers and employees as may be required to transact the business
of this Association.
The board of directors shall have the power to define the duties of the
officers and employees of the Association; to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all bylaws that it may be lawful for them to make; and
generally to do and perform all acts that it may be legal for a board of
directors to do and perform.
SEVENTH. The board of directors shall have the power to change the location of
the main office to any other place within the limits of the City of Hartford,
Connecticut, without the approval of the shareholders but subject to the
approval of the Comptroller of the Currency; and shall have the power to
establish or change the location of any branch or branches of the Association
to any other location, without the approval of the shareholders but subject to
the approval of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH. The board of directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than ten percent (10%) of the
stock of this Association, may call a special meeting of shareholders at any
time. Unless otherwise provided by the laws of the United States, a notice of
the time, place and purpose of every annual and special meeting of the
shareholders shall be given by first class mail, postage prepaid, mailed at
least ten (10) days prior to the date of such meeting to each shareholder of
record at his address as shown upon the books of this Association.
TENTH. (a) Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to any threatened, pending or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she is or was a director, officer or employee of the Association or is or was
serving at the request of the Association as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, limited
liability company, trust, or other enterprise, including service with respect
to an employee benefit plan, shall be indemnified and held harmless by the
Association to the fullest extent authorized by the law of the state in which
the Association's ultimate parent company is incorporated, except as provided
in subsection (b). The aforesaid indemnity shall protect the indemnified
person against all expense, liability and loss (including attorney's fees,
judgements, fines ERISA excise taxes or penalties, and amounts paid in
settlement) reasonably incurred by such person in connection with such a
proceeding. Such indemnification shall continue as to a person who has ceased
to be a director, officer or employee and shall inure to the benefit of his or
her heirs, executors, and administrators, but shall only cover such person's
period of service with the Association. The Association may, by action of its
Board of Directors, grant rights to indemnification to agents of the
Association and to any director, officer, employee or agent of any of its
subsidiaries with the same scope and effect as the foregoing indemnification
of directors and officers.
(b) Restrictions on Indemnification. Notwithstanding the foregoing, (i) no
person shall be indemnified hereunder by the Association against expenses,
penalties, or other payments incurred in an administrative proceeding or action
instituted by a federal bank regulatory agency which proceeding or action
results in a final order assessing civil money penalties against that person,
requiring affirmative action by that person in the form of payments to the
Association, or removing or prohibiting that person from service with the
Association, and any advancement of expenses to that person in that proceeding
must be repaid; and (ii) no person shall be indemnified hereunder by the
Association and no advancement of expenses shall be made to any person
hereunder to the extent such indemnification or advancement of expenses would
violate or conflict with any applicable federal statute now or hereafter in
force or any applicable final regulation or interpretation now or hereafter
adopted by the Office of the Comptroller of the Currency ("OCC") or the Federal
Deposit Insurance Corporation ("FDIC"). The Association shall comply with any
requirements imposed on it by any such statue or regulation in connection with
any indemnification or advancement of expenses hereunder by the Association.
With respect to proceedings to enforce a claimant's rights to indemnification,
the Association shall indemnify any such claimant in connection with such a
proceeding only as provided in subsection (d) hereof.
(c) Advancement of Expenses. The conditional right to indemnification
conferred in this section shall be a contract right and shall include the
right to be paid by the Association the reasonable expenses (including
attorney's fees) incurred in defending a proceeding in advance of its final
disposition (an "advancement of expenses"); provided, however, that an
advancement of expenses shall be made only upon (i) delivery to the Association
of a binding written undertaking by or on behalf of the person receiving the
advancement to repay all amounts so advanced if it is ultimately determined
that such person is not entitled to be indemnified in such proceeding,
including if such proceeding results in a final order assessing civil money
penalties against that person, requiring affirmative action by that person
in the form of payments to the Association, or removing or prohibiting that
person from service with the Association, and (ii) compliance with any other
actions or determinations required by applicable law, regulation or OCC or FDIC
interpretation to be taken or made by the Board of Directors of the Association
<PAGE> 8
or other persons prior to an advancement of expenses. The Association shall
cease advancing expenses at any time its Board of Directors believes that any
of the prerequisites for advancement of expenses are no longer being met.
(d) Right of Claimant to Bring Suit. If a claim under subsection (a) of the
section is not paid in full by the Association within thirty (30) days after
written claim has been received by the Association, the claimant may at any time
thereafter bring suit against the Association to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a
suit brought by the Association to recover an advancement of expenses pursuant
to the terms of an undertaking, the claimant shall be entitled to be paid also
the expense of prosecuting or defending such claim. It shall be a defense to
any such action brought by the claimant to enforce a right to indemnification
hereunder (other than an action brought to enforce a claim for an advancement
of expenses where the required undertaking, if any, has been tendered to the
Association) that the claimant has not met any applicable standard for
indemnification under the law of the state in which the Association's ultimate
parent company is incorporated. In any suit brought by the Association to
recover an advancement of expenses pursuant to the terms of an undertaking, the
Association shall be entitled to recover such expenses upon a final
adjudication that the claimant has not met any applicable standard for
indemnification standard for indemnification under the law of the state in
which the Association's ultimate parent company is incorporated.
(e) Non-Exclusivity of Rights. The rights to indemnification and the
advancement of expenses conferred in this section shall not be exclusive of any
other right which any person may have or hereafter acquired under any statute,
agreement, vote of stockholders or disinterested directors or otherwise.
(f) Insurance. The Association may purchase, maintain, and make payment or
reimbursement for reasonable premiums on, insurance to protect itself and any
director, officer, employee or agent of the Association or another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Association would have the power to
indemnify such person against such expense, liability or loss under the law of
the state in which the Association's ultimate parent company is incorporated;
provided however, that such insurance shall explicitly exclude insurance
coverage for a final order of a federal bank regulatory agency assessing civil
money penalties against an Association director, officer, employee or agent.
ELEVENTH. These articles of association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount. The notice of any shareholders' meeting at
which an amendment to the articles of association of this Association is to be
considered shall be given as hereinabove set forth.
I hereby certify that the articles of association of this Association, in their
entirety, are listed above in items first through eleventh.
Secretary/Assistant Secretary
- - --------------------------------------------------
Dated at , as of .
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Revision of February 15, 1996
<PAGE> 9
EXHIBIT 2
AMENDED AND RESTATED BY-LAWS OF
FLEET NATIONAL BANK
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The regular annual meeting of the shareholders for
the election of Directors and the transaction of any other business that may
properly come before the meeting shall be held at the Main Office of the
Association, or such other place as the Board of Directors may designate, on
the fourth Thursday of April in each year at 1:15 o'clock in the afternoon
unless some other hour of such day is fixed by the Board of Directors.
If, from any cause, an election of Directors is not made on such day, the Board
of Directors shall order the election to be held on some subsequent day, of
which special notice shall be given in accordance with the provisions of law,
and of these bylaws.
Section 2. Special Meetings. Special meetings of the shareholders may be called
at any time by the Board of Directors, the President, or any shareholders
owning not less than twenty-five percent (25%) of the stock of the Association.
Section 3. Notice of Meetings of Shareholders. Except as otherwise provided
by law, notice of the time and place of annual or special meetings of the
shareholders shall be mailed, postage prepaid, at least ten (10) days before
the date of the meeting to each shareholder of record entitled to vote thereat
at his address as shown upon the books of the Association; but any failure to
mail such notice to any shareholder or any irregularity therein, shall not
affect the validity of such meeting or of any of the proceedings thereat.
Notice of a special meeting shall also state the purpose of the meeting.
Section 4. Quorum; Adjourned Meetings. Unless otherwise provided by law, a
quorum for the transaction of business at every meeting of the shareholders
shall consist of not less than two-fifths (2/5) of the outstanding capital
stock represented in person or by proxy; less than such quorum may adjourn the
meeting to a future time. No notice need be given of an adjourned annual or
special meeting of the shareholders if the adjournment be to a definite place
and time.
Section 5. Votes and Proxies. At every meeting of the shareholders, each
share of the capital stock shall be entitled to one vote except as otherwise
provided by law. A majority of the votes cast shall decide every question
or matter submitted to the shareholder at any meeting, unless otherwise
provided by law or by the Articles of Association or these By-laws. Share-
holders may vote by proxies duly authorized in writing and filed with the
Cashier, but no officer, clerk, teller or bookkeeper of the Association may act
as a proxy.
<PAGE> 10
Section 6. Nominations to Board of Directors. At any meeting of shareholders
held for the election of Directors, nominations for election to the Board of
Directors may be made, subject to the provisions of this section, by any share-
holder of record of any outstanding class of stock of the Association entitled
to vote for the election of Directors. No person other than those whose names
are stated as proposed nominees in the proxy statement accompanying the notice
of the meeting may be nominated as such meeting unless a shareholder shall have
given to the President of the Association and to the Comptroller of the
Currency, Washington, DC written notice of intention to nominate such other
person mailed by certified mail or delivered not less than fourteen (14) days
nor more than fifty (50) days prior to the meeting of shareholders at which
such nomination is to be made; provided, however, that if less than twenty-one
(21) days' notice of such meeting is given to shareholders, such notice of
intention to nominate shall be mailed by certified mail or delivered to said
President and said Comptroller on or before the seventh day following the day
on which the notice of such meeting was mailed. Such notice of intention to
nominate shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of the Association that will be voted for each proposed
nominee; (d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the Association owned by the
notifying shareholder. In the event such notice is given, the proposed nominee
may be nominated either by the shareholder giving such notice or by any other
shareholder present at the meeting at which such nomination is to be made.
Such notice may contain the names of more than one proposed nominee, and if
more than one is named, any one or more of those named may be nominated.
Section 7. Action Taken Without a Shareholder Meeting. Any action requiring
shareholder approval or consent may be taken without a meeting and without
notice of such meeting by written consent of the shareholders.
ARTICLE II
DIRECTORS
Section 1. Number. The Board of Directors shall consist of such number of
shareholders, not less than five (5) nor more than twenty-five (25), as from
time to time shall be determined by a majority of the votes to which all of its
shareholders are at the time entitled, or by the Board of Directors as
hereinafter provided.
Section 2. Mandatory Retirement for Directors. No person shall be elected a
director who has attained the age of 68 and no person shall continue to serve
as a director after the date of the first meeting of the stockholders of the
Association held on or after the date on which such person attains the age of
68; provided, however, that any director serving on the Board as of December
15, 1995 who has attained the age of 65 on or prior to such date shall be
permitted to continue to serve as a director until the date of the first
meeting of the stockholders of the Association held on or after the date on
which such person attains the age of 70.
-2-
<PAGE> 11
Section 3. General Powers. The Board of Directors shall exercise all the
corporate powers of the Association, except as expressly limited by law, and
shall have the control, management, direction and disposition of all its
property and affairs.
Section 4. Annual Meeting. Immediately following a meeting of shareholders
held for the election of Directors, the Cashier shall notify the directors-
elect who may be present of their election and they shall then hold a meeting
at the Main Office of the Association, or such other place as the Board of
Directors may designate, for the purpose of taking their oaths, organizing the
new Board, electing officers and transacting any other business that may come
before such meeting.
Section 5. Regular Meeting. Regular meetings of the Board of Directors shall
be held without notice at the Main Office of the Association, or such other
place as the Board of Directors may designate, at such dates and times as the
Board shall determine. If the day designated for a regular meeting falls on a
legal holiday, the meeting shall be held on the next business day.
Section 6. Special Meetings. A special meeting of the Board of Directors may
be called at anytime upon the written request of the Chairman of the Board, the
President, or of two Directors, stating the purpose of the meeting. Notice of
the time and place shall be given not later than the day before the date of the
meeting, by mailing a notice to each Director at his last known address, by
delivering such notice to him personally, or by telephoning.
Section 7. Quorum; Votes. A majority of the Board of Directors at the time
holding office shall constitute a quorum for the transaction of all business,
except when otherwise provided by law, but less than a quorum may adjourn
a meeting from time to time, and the meeting may be held, as adjourned, without
further notice. If a quorum is present when a vote is taken, the affirmative
vote of a majority of Directors present is the act of the Board of Directors.
Section 8. Action by Directors Without a Meeting. Any action requiring
Director approval or consent may be taken without a meeting and without notice
of such meeting by written consent of all the Directors.
Section 9. Telephonic Participation in Directors' Meetings. A Director or
member of a Committee of the Board of Directors may participate in a meeting of
the Board or of such Committee may participate in a meeting of the Board or of
such Committee by means of a conference telephone or similar communications
equipment enabling all Directors participating in the meeting to hear one
another, and participation in such a meeting shall constitute presence in person
at such a meeting.
Section 10. Vacancies. Vacancies in the Board of Directors may be filled by
the remaining members of the Board at any regular or special meeting of the
Board.
Section 11. Interim Appointments. The Board of Directors shall, if the share-
holders at any meeting for the election of Directors have determined a number
of Directors less than twenty-five (25), have the power, by affirmative vote of
the majority of all the Directors, to increase such number of Directors to not
more than twenty-five (25) and to elect Directors to fill the resulting
vacancies and to serve until the next annual meeting of shareholders or the
next election of Directors; provided, however, that the number of Directors
shall not be so increased by more than two (2) if the number last determined
by shareholders was fifteen (15) or less, or increased by more than four (4) if
the number last determined by shareholders was sixteen (16) or more.
Section 12. Fees. The Board of Directors shall fix the amount and direct the
payment of fees which shall be paid to each Director for attendance at any
meeting of the Board of Directors or of any Committees of the Board.
ARTICLE III
COMMITTEES OF THE BOARD
Section 1. Executive Committee. The Board of Directors shall appoint from its
members an Executive Committee which shall consist of such number of persons as
the Board of Directors shall determine; the Chairman of the Board and the
President shall be members ex-officio of the Executive Committee with full
voting power. The Chairman of the Board or the President may from time to time
appoint from the Board of Directors as temporary additional members of the
Executive Committee, with full voting powers, not more than two members to serve
for such periods as the Chairman of the Board or the President may determine.
The Board of Directors shall designate a member of the Executive Committee to
serve as Chairman thereof. A meeting of the Executive Committee may be called
at any time upon the written request of the Chairman of the Board, the President
or the Chairman of the Executive Committee, stating the purpose of the meeting.
Not less than twenty four hours' notice of said meeting shall be given to each
member of the Committee personally, by telephoning, or by mail. The Chairman of
the Executive Committee or, in his absence, a member of the Committee chosen by
a majority of the members present shall preside at meetings of the Executive
Committee.
-3-
<PAGE> 12
The Executive Committee shall possess and may exercise all the powers of the
Board when the Board is not in session except such as the Board, only, by law,
is authorized to exercise; it shall keep minutes of its acts and proceedings
and cause same to be presented and reported at every regular meeting and at any
special meeting of the Board including specifically, all its actions relating
to loans and discounts.
All acts done and powers and authority conferred by the Executive Committee,
from time to time, within the scope of its authority, shall be deemed to be,
and may be certified as being, the acts of and under the authority of the
Board.
Section 2. Risk Management Committee. The Board shall appoint from its
members a Risk Management Committee which shall consist of such number as the
Board shall determine. The Board shall designate a member of the Risk
Management Committee to serve as Chairman thereof. It shall be the duty of the
Risk Management Committee to (a) serve as the channel of communication with
management and the Board of Directors of Fleet Financial Group, Inc. to assure
that formal processes supported by management information systems are in place
for the identification, evaluation and management of significant risks inherent
in or associated with lending activities, the loan portfolio, asset-liability
management, the investment portfolio, trust and investment advisory activities,
the sale of nondeposit investment products and new products and services and
such additional activities or functions as the Board may determine from time
to time; (b) assure the formulation and adoption of policies approved by the
Risk Management Committee or Board governing lending activities, management of
the loan portfolio, the maintenance of an adequate allowance for loan and lease
losses, asset-liability management, the investment portfolio, the retail
sale of non-deposit investment products, new products and services and such
additional activities or functions as the Board may determine from time to time
(c) assure that a comprehensive independent loan review program is in place for
the early detection of problem loans and review significant reports of the loan
review department, management's responses to those reports and the risk
attributed to unresolved issues; (d) subject to control of the Board, exercise
general supervision over trust activities, the investment of trust funds, the
disposition of trust investments and the acceptance of new trusts and the terms
of such acceptance, and (e) perform such additional duties and exercise such
additional powers of the Board as the Board may determine from time to time.
Section 3. Audit Committee. The Board shall appoint from its members and
Audit Committee which shall consist of such number as the Board shall determine
no one of whom shall be an active officer or employee of the Association or
Fleet Financial Group, Inc. or any of its affiliates. In addition, members of
the Audit Committee must not (i) have served as an officer or employee of the
Association or any of its affiliates at any time during the year prior to their
appointment; or (ii) own, control, or have owned or controlled at any time
during the year prior to appointment, ten percent (10%) or more of any
outstanding class of voting securities of the Association. At least two (2)
members of the Audit Committee must have significant executive, professional,
educational or regulatory experience in financial, auditing, accounting,
or banking matters. No member of the Audit Committee may have significant
direct or indirect credit or other relationships with the Association, the
termination of which would materially adversely affect the Association's
financial condition or results of operations.
The Board shall designate a member of the Audit Committee to serve as Chairman
thereof. It shall be the duty of the Audit Committee to (a) cause a continuous
audit and examination to be made on its behalf into the affairs of the
Association and to review the results of such examination; (b) review
significant reports of the internal auditing department, management's responses
to those reports and the risk attributed to unresolved issues; (c) review the
basis for the reports issued under Section 112 of The Federal Deposit Insurance
Corporation Improvement Act of 1991; (d) consider, in consultation with the
independent auditor and an internal auditing executive, the adequacy of the
Association's internal controls, including the resolution of identified material
weakness and reportable conditions; (e) review regulatory communications
received from any federal or state agency with supervisory jurisdiction or
other examining authority and monitor any needed corrective action by
management; (f) ensure that a formal system of internal controls is in place
for maintaining compliance with laws and regulations; (g) cause an audit of the
Trust Department at least once during each calendar year and within 15 months
of the last such audit or, in lieu thereof, adopt a continuous audit system and
report to the Board each calendar year and within 15 months of the previous
report on the performance of such audit function; and (h) perform such
additional duties and exercise such additional powers of the Board as the Board
may determine from time to time.
The Audit Committee may consult with internal counsel and retain its own
outside counsel without approval (prior or otherwise) from the Board or
management and obligate the Association to pay the fees of such counsel.
-4-
<PAGE> 13
Section 4. Community Affairs Committee. The Board shall appoint from its
members a Community Affairs Committee which shall consist of such number as the
Board shall determine. The Board shall designate a member of the Community
Affairs Committee to serve as Chairman thereof. It shall be the duty of the
Community Affairs Committee to (a) oversee compliance by the Association with
the Community Reinvestment Act of 1977, as amended, and the regulations
promulgated thereunder; and (b) perform such additional duties and exercise such
additional powers of the Board as the Board may determine from time to time.
Section 5. Regular Meetings. Except for the Executive Committee which shall
meet on an ad hoc basis as set forth in Section 1 of this Article, regular
meetings of the Committees of the Board of Directors shall be held, without
notice, at such time and place as the Committee or the Board of Directors may
appoint and as often as the business of the Association may require.
Section 6. Special Meetings. A Special Meeting of any of the Committees of
the Board of Directors may be called upon the written request of the Chairman
of the Board or the President, or of any two members of the respective
Committee, stating the purpose of the meeting. Not less than twenty-four
hours' notice of such special meeting shall be given to each member of the
Committee personally, by telephoning, or by mail.
Section 7. Emergency Meetings. An Emergency Meeting of any of the Committees
of the Board of Directors may be called at the request of the Chairman of the
Board or the President, who shall state that an emergency exists, upon not
less than one hour's notice to each member of the Committee personally or by
telephoning.
Section 8. Action Taken Without a Committee Meeting. Any Committee of the
Board of Directors may take action without a meeting and without notice of such
meeting by resolution assented to in writing by all members of such Committee.
Section 9. Quorum. A majority of a Committee of the Board of Directors shall
constitute a quorum for the transaction of any business at any meeting of such
Committee. If a quorum is not available, the Chairman of the Board or the
President shall have power to make temporary appointments to a Committee of-
members of the Board of Directors, to act in the place and stead of members who
temporarily cannot attend any such meeting; provided, however, that any
temporary appointment to the Audit Committee must meet the requirements for
members of that Committee set forth in Section 3 of this Article.
Section 10. Record. The committees of the Board of Directors shall keep a
record of their respective meetings and proceedings which shall be presented
at the regular meeting of the Board of Directors held in the calendar month
next following the meetings of the Committees. If there is no regular Board
of Directors meeting held in the calendar month next following the meeting of
a Committee, then such Committee's records shall be presented at the next
regular Board of Directors meeting held in a month subsequent to such Committee
meeting.
Section 11. Changes and Vacancies. The Board of Directors shall have power
to change the members of any Committee at any time and to fill vacancies on any
Committee; provided, however, that any newly appointed member of the Audit
Committee must meet the requirements for members of that Committee set forth in
Section 3 of this Article.
Section 12. Other Committees. The Board of Directors may appoint, from time
to time, other committees of one or more persons, for such purposes and with
such powers as the Board may determine.
ARTICLE IV
WAIVER OF NOTICE OF MEETINGS
Section 1. Waiver. Whenever notice is required to be given to any shareholder,
Director, or member of a Committee of the Board of Directors, such notice may
be waived in writing either before or after such meeting by any shareholder,
Director or Committee member respectively, as the case may be, who may be
entitled to such notice; and such notice will be deemed to be waived by
attendance at any such meeting.
-5-
<PAGE> 14
ARTICLE V
OFFICERS AND AGENTS
Section 1. Officers. The Board shall appoint a Chairman of the Board and a
President, and shall have the power to appoint one or more Executive Vice
Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, a
Cashier, a Secretary, an Auditor, a Controller, one or more Trust Officers and-
such other officers as are deemed necessary or desirable for the proper
transaction of business of the Association. The Chairman of the Board and the
President shall be appointed from members of the Board of Directors. Any two
or more offices, except those of President and Cashier, or Secretary, may be
held by the same person. The Board may, from time to time, by resolution
passed by a majority of the entire Board, designate one or more officers of the
Association or of an affiliate or of Fleet Financial Group, Inc. with power to
appoint one or more Vice Presidents and such other officers of the Association
below the level of Vice President as the officer or officers designated in such
resolution deem necessary or desirable for the proper transaction of the
business of the Association.
Section 2. Chairman of the Board. The chairman of the Board shall preside at
all meetings of the Board of Directors. Subject to definition by the Board of
Directors, he shall have general executive powers and such specific powers and
duties as from time to time may be conferred upon or assigned to him by the
Board of Directors.
Section 3. President. The President shall preside at all meetings of the
Board of Directors if there be no Chairman or if the Chairman be absent.
Subject to definition by the Board of Directors, he shall have general
executive powers and such specific powers and duties as from time to time may
be conferred upon or assigned to him by the Board of Directors.
-6-
<PAGE> 15
Section 4. Cashier and Secretary. The Cashier shall be the Secretary of the
Board and of the Executive Committee, and shall keep accurate minutes of their
meetings and of all meetings of the shareholders. He shall attend to the
giving of all notices required by these By-laws. He shall be custodian of the
corporate seal, records, documents and papers of the Association. He shall
have such powers and perform such duties as pertain by law or regulation to the
office of Cashier, or as are imposed by these By-laws, or as may be delegated
to him from time to time by the Board of Directors, the Chairman of the Board
or the President.
Section 5. Auditor. The Auditor shall be the chief auditing officer of the
Association. He shall continuously examine the affairs of the Association and
from time to time shall report to the Board of Directors. He shall have such
powers and perform such duties as are conferred upon, or assigned to him by
these By-laws, or as may be delegated to him from time to time by the Board
of Directors.
Section 6. Officers Seriatim. The Board of Directors shall designate from
time to time not less than two officers who shall in the absence or disability
of the Chairman or President or both, succeed seriatim to the duties and
responsibilities of the Chairman and President respectively.
Section 7. Clerks and Agents. The Board of Directors may appoint, from time
to time, such clerks, agents and employees as it may deem advisable for the
prompt and orderly transaction of the business of the Association, define
their duties, fix the salaries to be paid them and dismiss them. Subject to
the authority of the Board of Directors, the Chairman of the Board or the
President, or any other officer of the Association authorized by either of them
may appoint and dismiss all or any clerks, agents and employees and prescribe
their duties and the conditions of their employment, and from time to time
fix their compensation.
Section 8. Tenure. The Chairman of the Board of Directors and the President
shall, except in the case of death, resignation, retirement or disqualification
under these By-laws, or unless removed by the affirmative vote of at least two-
thirds of all of the members of the Board of Directors, hold office for the
term of one year or until their respective successors are appointed. Either
of such officers appointed to fill a vacancy occurring in an unexpired term
shall serve for such unexpired term of such vacancy. All other officers,
clerks, agents, attorneys-in-fact and employees of the Association shall hold
office during the pleasure of the Board of Directors or of the officer or
committee appointing them respectively.
ARTICLE VI
TRUST DEPARTMENT
Section 1. General Powers and Duties. All fiduciary powers of the Association
shall be exercised through the Trust Department, subject to such regulations as
the Comptroller of the Currency shall from time to time establish. The Trust
Department shall be to placed under the management and immediate supervision
of an officer or officers appointed by the Board of Directors. The duties of
all officers of the Trust Department shall be to cause the policies and
instructions of the Board and the Risk Management Committee with respect to the
trusts under their supervision to be carried out, and to supervise the due
performance of the trusts and agencies entrusted to the Association and under
their supervision, in accordance with law and in accordance with the terms of
such trusts and agencies.
-7-
<PAGE> 16
ARTICLE VII
BRANCH OFFICES
Section 1. Establishment. The Board of Directors shall have full power to
establish, to discontinue, or, from time to time, to change the location of any
branch office, subject to such limitations as may be provided by law.
Section 2. Supervision and Control. Subject to the general supervision and
control of the Board of Directors, the affairs of branch offices shall be
under the immediate supervision and control of the President or of such other
officer or officers, employee or employees, or other individuals as the Board
of Directors may from time to time determine, with such powers and duties as
the Board of Directors may confer upon or assign to him or them.
ARTICLE VIII
SIGNATURE POWERS
Section 1. Authorization. The power of officers, employees, agents and
attorneys to sign on behalf of and to affix the seal of the Association shall
be prescribed by the Board of Directors or by the Executive Committee or by
both; provided that the President is authorized to restrict such power of any
officer, employee, agent or attorney to the business of a specific department
or departments, or to a specific branch office or branch offices. Facsimile
signatures may be authorized.
-8-
<PAGE> 17
ARTICLE IX
STOCK CERTIFICATES AND TRANSFERS
Section 1. Stock Records. The Trust Department shall have custody of the
stock certificate books and stock ledgers of the Association, and shall make
all transfers of stock, issue certificates thereof and disburse dividends
declared thereon.
Section 2. Form of Certificate. Every shareholder shall be entitled to a
certificate conforming to the requirements of law and otherwise in such form
as the Board of Directors may approve. The certificates shall state on the
face thereof that the stock is transferable only on the books of the
Association and shall be signed by such officers as may be prescribed from time
to time by the Board of Directors or Executive Committee. Facsimile signatures
may be authorized.
Section 3. Transfers of Stock. Transfers of stock shall be made only on the
books of the Association by the holder in person, or by attorney duly
authorized in writing, upon surrender of the certificate therefor properly
endorsed, or upon the surrender of such certificate accompanied by a properly
executed written assignment of the same, or a written power of attorney to
sell, assign or transfer the same or the shares represented thereby.
Section 4. Lost Certificate. The Board of Directors or Executive Committee
may order a new certificate to be issued in place of a certificate lost or
destroyed, upon proof of such loss or destruction and upon tender to the
Association by the shareholder, of a bond in such amount and with or without
surety, as may be ordered, indemnifying the Association against all liability,
loss, cost and damage by reason of such loss or destruction and the issuance
of a new certificate.
Section 5. Closing Transfer Books. The Board of Directors may close the
transfer books for a period not exceeding thirty days preceding any regular
or special meeting of the shareholders, or the day designated for the payment
of a dividend or the allotment of rights. In lieu of closing the transfer
books the Board of Directors may fix a day and hour not more than thirty days
prior to the day of holding any meeting of the shareholders, or the day
designated for the payment of a dividend, or the day designated for the
allotment of rights, or the day when any change of conversion or exchange of
capital stock is to go into effect, as the day as of which shareholders
entitled to notice of and to vote at such meetings or entitled to such dividend
or to such allotment of rights or to exercise the rights in respect of any
such change, conversion or exchange of capital stock, shall be determined, and
only such shareholders as shall be shareholders of record on the day and hour
so fixed shall be entitled to notice of and to vote at such meeting or to
receive payment of such dividend or to receive such allotment of rights or to
exercise such rights, as the case may be.
ARTICLE X
THE CORPORATE SEAL
Section 1. Seal. The following is an impression of the seal of the
Association adopted by the Board of Directors.
ARTICLE XI
BUSINESS HOURS
Section 1. Business Hours. The main office of this Association and each
branch office thereof shall be open for business on such days, and for such
hours as the Chairman, or the President, or any Executive Vice President, or
such other officer as the Board of Directors shall from time to time
designate, may determine as to each office to conform to local custom and
convenience, provided that any one or more of the main and branch offices or
certain departments thereof may be open for such hours as the President, or
such other officer as the Board of Directors shall from time to time designate,
may determine as to each office or department on any legal holiday on which
work is not prohibited by law, and provided further that any one or more of
the main and branch offices or certain departments thereof may be ordered
closed or open on any day for such hours as to each office or department as
the President, or such other officer as the Board of Directors shall from time
to time designate, subject to applicable laws regulations, may determine when
such action may be required by reason of disaster or other emergency condition.
ARTICLE IX
CHANGES IN BY-LAWS
Section 1. Amendments. These By-laws may be amended upon vote of a majority
of the entire Board of Directors at any meeting of the Board, provided ten (10)
day's notice of the proposed amendment has been given to each member of the
Board of Directors. No amendment may be made unless the By-law, as amended, is
consistent with the requirements of law and of the Articles of Association.
These By-laws may also be amended by the Association's shareholders.
A true copy
Attest:
Secretary/Assistant Secretary
- - ---------------------------------------
Dated at , as of .
--------------------------------------- ----------------------
Revision of January 11, 1993
-9-
<PAGE> 18
[LOGO] Exhibit 3
- - -------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- - -------------------------------------------------------------------------------
Washington, D.C. 20219
CERTIFICATE
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "Fleet National Bank," (Charter No. 1338) is a National Banking
Association formed under the laws of the United States and is authorized
thereunder to transact the business of banking and exercise Fiduciary Powers on
the date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of office
to be affixed to these presents at the Treasury
Department in the City of Washington and
[SEAL]
District of Columbia, this 23rd day of
December, 1996.
/s/
----------------------
Comptroller of the Currency
<PAGE> 19
EXHIBIT 4
CONSENT OF THE TRUSTEE
REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
The undersigned, as Trustee under an Indenture to be entered into
between Hollinger International Publishing Inc., as Issuer, Hollinger
International Inc., as Guarantor, and Fleet National Bank, Trustee, does
hereby consent that, pursuant to Section 321(b) of the Trust Indenture Act
of 1939, reports of examinations with respect to the undersigned by Federal,
State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.
FLEET NATIONAL BANK,
Trustee
By /s/ Michael M. Hopkins
Name: Michael M. Hopkins
Title: Vice President
EXHIBIT 5
Dated:
<PAGE> 20
[FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL LETTERHEAD]
- - -------------------------------------------------------------------------------
Please refer to page i,
[LOGO] Table of Contents, for 1
the required disclosure
of estimated burden.
- - -------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR A BANK WITH DOMESTIC AND
FOREIGN OFFICES - FFIEC 031
(961231)
REPORT AT THE CLOSE OF BUSINESS DECEMBER 31, 1996 -----------
(RCRI 9999)
This report is required by law: 12 U.S.C. Section 324 (State member banks); 12
U.S.C. Section 1817 (State nonmember banks); and 12 U.S.C. Section 161
(National banks).
This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
International Banking Facilities.
- - ------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National banks.
I, Giro S. DeRosa, Vice President
- - -----------------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and Income
(including the supporting schedules) have been prepared in conformance with
the instructions issued by the appropriate Federal regulatory authority and are
true to the best of my knowledge and belief.
/s/ Giro DeRosa
- - ----------------------------------------------
Signature of Officer Authorized to Sign Report
January 23, 1997
- - -----------------
Date of Signature
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions. NOTE: These instructions may in
some cases differ from generally accepted accounting principles.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) and declare that it
has been examined by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the appropriate Federal
regulatory authority and is true and correct.
/s/
- - ------------------
Director (Trustee)
/s/
- - ------------------
Director (Trustee)
/s/
- - -------------------
Director (Trustee)
- - -----------------------------------------------------------------------------
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
STATE MEMBER BANKS: Return the original and one copy to the appropriate Federal
Reserve District Bank.
STATE NONMEMBER BANKS: Return the original only in the special return address
envelope provided. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114.
NATIONAL BANKS: Return the original only in the special return address envelope
provided. If express mail is used in lieu of the special return address
envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127
Espey Court, Suite 204, Crofton, MD 21114.
- - -------------------------------------------------------------------------------
FDIC Certificate Number [02499] Banks should affix the address label in
----------- this space.
(RCRI 9050)
Fleet National Bank
---------------------------------------
Legal Title of Bank (TEXT 9010)
One Monarch Place
---------------------------------------
City (TEXT 9131)
Springfield, MA 01102
---------------------------------------
State Abbrev. Zip Code
(TEXT 9200) (TEXT 9220)
<PAGE> 21
FFIEC 031
Consolidated Reports of Condition and Income for a Bank With Page i
Domestic and Foreign Offices 2
- - -------------------------------------------------------------------------------
TABLE OF CONTENTS
SIGNATURE PAGE Cover
REPORT OF INCOME
Schedule RI--Income Statement.....................RI-1, 2, 3
Schedule RI-A--Changes in Equity Capital................RI-4
Schedule RI-B--Charge-offs and Recoveries and Changes
in Allowance For Loan and Lease Losses.............RI-4, 5
Schedule RI-C--Applicable Income Taxes by Taxing
Authority.............................................RI-5
Schedule RI-D--Income from International Operations.....RI-6
Schedule RI-E--Explanations..........................RI-7, 8
REPORT OF CONDITION
Schedule RC--Balance Sheet...........................RC-1, 2
Schedule RC-A--Cash and Balances Due from Depository
Institutions..........................................RC-3
Schedule RC-B--Securities.........................RC-3, 4, 5
Schedule RC-C--Loans and Lease Financing
Receivables:
Part I. Loans and Leases..........................RC-6, 7
Part II. Loans to Small Businesses and Small
Farms (included in the forms for June 30
only).........................................RC-7a, 7b
Schedule RC-D--Trading Assets and Liabilities (to
be completed only be selected banks)..................RC-8
Schedule RC-E--Deposit Liabilities..............RC-9, 10, 11
Schedule RC-F--Other Assets............................RC-11
Schedule RC-G--Other Liabilities.......................RC-11
Schedule RC-H--Selected Balance Sheet Items for
Domestic Offices.....................................RC-12
Schedule RC-I--Selected Assets and Liabilities of
IBFs.................................................RC-13
Schedule RC-K--Quarterly Averages......................RC-13
Schedule RC-L--Off-Balance Sheet Items.........RC-14, 15, 16
Schedule RC-M--Memoranda...........................RC-17, 18
Schedule RC-N--Past Due and Nonaccrual Loans,
Leases, and Other Assets.........................RC-19, 20
Schedule RC-O--Other Data for Deposit Insurance
Assessments......................................RC-21, 22
Schedule RC-R--Regulatory Capital..................RC-23, 24
Optional Narrative Statement Concerning the
Amounts Reported in the Reports of Condition
and Income...........................................RC-25
Special Report (TO BE COMPLETED BY ALL BANKS)
Schedule RC-J--Repricing Opportunities (sent only
to and to be completed by savings banks)
DISCLOSURE OF ESTIMATED BURDEN
The estimated average burden associated with this information collection is
32.2 hours per respondent and is estimated to vary from 15 to 230 hours per
response, depending on individual circumstances. Burden estimates include the
time for reviewing instructions, gathering and maintaining data in the
required form, and completing the information collection, but exclude the time
for compiling and maintaining business records in the normal course of a
respondent's activities. Comments concerning the accuracy of this burden
estimate and suggestions for reducing this burden should be directed to the
Office of Information and Regulatory Affairs, Office of Management and Budget,
Washington, D.C. 20503, and to one of the following:
Secretary
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Legislative and Regulatory Analysis Division
Office of the Comptroller of the Currency
Washington, D.C. 20219
Assistant Executive Secretary
Federal Deposit Insurance Corporation
Washington, D.C. 20429
For Information or assistance, National and State nonmember banks should
contact the FDIC's Call Reports Analysis Unit, 550 17th Street, NW, Washington,
D.C. 20429, toll free on (800) 688-FDIC(3342), Monday through Friday between
8:00 a.m. and 5:00 p.m., Eastern time. State member banks should contact their
Federal Reserve District Bank.
<PAGE> 22
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RI-1
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1996-DECEMBER 31, 1996
ALL REPORT OF INCOME SCHEDULES ARE TO BE REPORTED ON A CALENDAR YEAR-TO-DATE BASIS IN THOUSANDS OF DOLLARS.
SCHEDULE RI--INCOME STATEMENT
I480 <-
- - -------------------
Dollar Amounts in Thousands RIAD Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Interest income: //////////////////
a. Interest and fee income on loans: //////////////////
(1) In domestic offices: //////////////////
(a) Loans secured by real estate................................................. 4011 1,092,992 1.a.(1)(a)
(b) Loans to depository institutions............................................. 4019 1,482 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to farmers.......... 4024 501 1.a.(1)(c)
(d) Commercial and industrial loans.............................................. 4012 1,132,500 1.a.(1)(d)
(e) Acceptances of other banks................................................... 4026 264 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal expeditures: //////////////////
(1) Credit cards and related plans............................................ 4054 16,485 1.a.(1)(f)(1)
(2) Other.................................................................... 4055 189,926 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions....................... 4056 0 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and political //////////////////
subdivisions in the U.S.: //////////////////
(1) Taxable obligations...................................................... 4503 0 1.a.(1)(h)(1)
(2) Tax-exempt obligations................................................... 4504 10,381 1.a.(1)(h)(2)
(i) All other loans in domestic offices.......................................... 4058 147,087 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs.................... 4059 4,161 1.a.(2)
b. Income from lease financing receivables: //////////////////
(1) Taxable leases................................................................... 4505 152,848 1.b.(1)
(2) Tax-exempt leases................................................................ 4307 1,511 1.b.(2)
c. Interest income on balances due from depository instituions: (1) //////////////////
(1) In domestic offices.............................................................. 4105 1,644 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs.................... 4106 142 1.c.(2)
d. Interest and dividend income on securities: //////////////////
(1) U.S. Treasury securities and U.S. Government agency and corporation obligations.. 4027 422,212 1.d.(1)
(2) Securities issued by states and political subdivisions in the U.S.: //////////////////
(a) Taxable securities........................................................... 4506 0 1.d.(2)(a)
(b) Tax-Exempt securities........................................................ 4507 6,495 1.d.(2)(b)
(3) Other domestic debt securities................................................... 3657 12,976 1.d.(3)
(4) Foreign debt securities.......................................................... 3658 6,621 1.d.(4)
(5) Equity securities (including investments in mutual funds)........................ 3659 17,504 1.d.(5)
e. Interest income from trading assets.................................................. 4069 479 1.e.
- - ------------------
</TABLE>
- - ----------
(1) Includes interest income on time certificates of deposit not held for
trading.
<PAGE> 23
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RI-2
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI--CONTINUED
Dollar Amounts in Thousands Year-to-date
RIAD Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income (continued)
f. Interest income on federal funds sold and securities purchased under //////////////////
agreements to resell in domestic offices of the bank and of its Edge //////////////////
and Agreement subsidiaries, and in IBFs ............................. 4020 25,839 1.f.
g. Total interest income (sum of items 1.a through 1.f) ................ 4107 3,244,050 1.g.
2. Interest expense: //////////////////
a. Interest on deposits: //////////////////
(1) Interest on deposits in domestic offices: //////////////////
(a) Transaction accounts (NOW accounts, ATS accounts, and //////////////////
telephone and preauthorized transfer accounts) .............. 4508 13,070 2.a.(1)(a)
(b) Nontransaction accounts: //////////////////
(1) Money market deposit accounts (MMDAs) ................... 4509 257,330 2.a.(1)(b)(1)
(2) Other savings deposits .................................. 4511 48,169 2.a.(1)(b)(2)
(3) Time certificates of deposit of $100,000 or more ........ 4174 170,575 2.a.(1)(b)(3)
(4) All other time deposits ................................. 4512 403,831 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement //////////////////
subsidiaries, and IBFs .......................................... 4172 100,766 2.a.(2)
b. Expense of federal funds purchased and securities sold under //////////////////
agreements to repurchase in domestic offices of the bank and of its //////////////////
Edge and Agreement subsidiaries, and in IBFs ........................ 4180 282,599 2.b.
c. Interest on demand notes issued to the U.S. Treasury, trading //////////////////
liabilities, and other borrowed money ............................... 4185 161,582 2.c.
d. Interest on mortgage indebtedness and obligations under capitalized //////////////////
leases .............................................................. 4072 859 2.d.
e. Interest on subordinated notes and debentures ....................... 4200 69,434 2.e.
f. Total interest expense (sum of items 2.a through 2.e) ............... 4073 1,508,215 2.f.
3. Net interest income (item 1.g minus 2.f) .............................. ////////////////// RIAD 4074 1,735,835 3.
4. Provisions: //////////////////
a. Provision for loan and lease losses ................................. ////////////////// RIAD 4230 (6,834) 4.a.
b. Provision for allocated transfer risk ............................... ////////////////// RIAD 4243 0 4.b.
5. Noninterest income: //////////////////
a. Income from fiduciary activities .................................... 4070 295,272 5.a.
b. Service charges on deposit accounts in domestic offices ............. 4080 222,313 5.b.
c. TRADING REVENUE (MUST EQUAL SCHEDULE RI, SUM OF MEMORANDUM //////////////////
ITEMS 8.a THROUGH 8.d) .............................................. A220 25,253 5.c.
d. Other foreign transaction gains (losses) ............................ 4076 346 5.d.
e. Not applicable //////////////////
f. Other noninterest income: //////////////////
(1) Other fee income ................................................ 5407 797,631 5.f.(1)
(2) All other noninterest income* ................................... 5408 350,869 5.f.(2)
g. Total noninterest income (sum of items 5.a through 5.f) ............. ////////////////// RIAD 4079 1,691,684 5.g.
6. a. Realized gains (losses) on held-to-maturity securities .............. ////////////////// RIAD 3521 52 6.a.
b. Realized gains (losses) on available-for-sale securities ............ ////////////////// RIAD 3196 12,071 6.b.
7. Noninterest expense: //////////////////
a. Salaries and employee benefits ...................................... 4135 645,873 7.a.
b. Expenses of premises and fixed assets (net of rental income) //////////////////
(excluding salaries and employee benefits and mortgage interest ..... 4217 211,199 7.b.
c. Other noninterest expense* .......................................... 4092 1,243,839 7.c.
d. Total noninterest expense (sum of items 7.a through 7.c) ............ ////////////////// RIAD 4093 2,100,911 7.d.
8. Income (loss) before income taxes and extraordinary items and other //////////////////
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) ////////////////// RIAD 4301 1,345,565 8.
9. Applicable income taxes (on item 8) .................................... ////////////////// RIAD 4302 548,252 9.
10. Income (loss) before extraordinary items and other adjustments (item 8 //////////////////
minus 9) ............................................................... ////////////////// RIAD 4300 797,313 10.
- - ------------
*Describe on Schedule RI-E--Explanations.
</TABLE>
4
<PAGE> 24
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
Page RI-3
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI--CONTINUED
Year-to-date
------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
11. Extraordinary items and other adjustments: //////////////////
a. Extraordinary items and other adjustments, //////////////////
gross of income taxes*..................................... 4310 0 11.a.
b. Applicable income taxes (on item 11.a)*.................... 4315 0 11.b.
c. Extraordinary items and other adjustments, //////////////////
net of income taxes (item 11.a minus 11.b)................. ////////////////// RIAD 4320
0 11.c.
12. Net income (loss) (sum of items 10 and 11.c)................... ////////////////// RIAD 4340 797,313 12.
- - ----------------------------------------------------
</TABLE>
<TABLE>
I481 <-
- - ------------
Memoranda
Year-to-date
- - ------------
Dollar Amounts in Thousands RIAD Bil
Mil Thou
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C>
<C> <C>
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after //////////////////
August 7, 1986, that is not deductible for federal income tax purposes....................... 4513 2,891 M.1.
2. Income from the sale and servicing of mutual funds and annuities in domestic offices
//////////////////
(included in Schedule RI, item 8)............................................................ 8431 46,475 M.2.
3.-4. Not applicable //////////////////
5. Number of full-time equivalent employees on payroll at end of current period (round to ////
Number
nearest whole number)........................................................................ 4150 12,425 M.5.
6. Not applicable //////////////////
7. If the reporting bank has restated its balance sheet as a result of applying push down //// MM DD YY
accounting this calendar year, report the date of the bank's acquisition..................... 9106 00/00/00 M.7.
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments) //////////////////
(SUM OF MEMORANDUM ITEMS 8.a THROUGH 8.d MUST EQUAL SCHEDULE RI, ITEM 5.c): //// Bil Mil Thou
a. Interest rate exposures.................................................................. 8757 5,738 M.8.a.
b. Foreign exchange exposures............................................................... 8758 19,515 M.8.b.
c. Equity security and index exposures...................................................... 8759 0 M.8.c.
d. Commodity and other exposures............................................................ 8760 0 M.8.d.
9. Impact on income of off-balance sheet derivatives held for purposes other than trading: //////////////////
a. Net increase (decrease) to interest income............................................... 8761 2,698 M.9.a.
b. Net (increase) decrease to interest expense.............................................. 8762 (4,902) M.9.b.
c. Other (noninterest) allocations.......................................................... 8763 12 M.9.c.
10. CREDIT LOSSES ON OFF-BALANCE SHEET DERIVATIVES (SEE INSTRUCTIONS)............................ A251 0 M.10.
</TABLE>
- - -----------------
*Describe on Schedule RI-E--Explanations.
5
<PAGE> 25
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
Page RI-4
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-A--CHANGES IN EQUITY CAPITAL
Indicate decreases and losses in parentheses.
I483 <-
- - -----------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Total equity capital originally reported in the December 31, 1995, Reports of Condition //////////////////
and Income............................................................................... 3215 1,342,473 1.
2. Equity capital adjustments from amended Reports of Income, net*.......................... 3216 0 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2)..................... 3217 1,342,473 3.
4. Net income (loss) (must equal Schedule RI, item 12)...................................... 4340 797,313 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net....................... 4346 0 5.
6. Changes incident to business combinations, net........................................... 4356 4,161,079 6.
7. LESS: Cash dividends declared on preferred stock......................................... 4470 11,688 7.
8. LESS: Cash dividends declared on common stock............................................ 4460 761,473 8.
9. Cumulative effect of changes in accounting principles from prior years* (see instructions //////////////////
for this schedule)....................................................................... 4411 0 9.
10. Corrections of material accounting errors from prior years* (see instructions for this
schedule)................................................................................ 4412 0 10.
11. Change in net unrealized holding gains (losses) on available-for-sale securities......... 8433 (4,870) 11.
12. Foreign currency translation adjustments................................................. 4414 0 12.
13. Other transactions with parent holding company* (not included in items 5,7, or 8 above).. 4415 (1,003,722) 13.
14. Total equity capital end of current period (sum of items 3 through 13) (must equal //////////////////
Schedule RC, item 28).................................................................... 3210 4,519,112 14.
- - -------------------
</TABLE>
- - ---------------
*Describe on Schedule RI-E--Explanations.
<TABLE>
<CAPTION>
SCHEDULE RI-B--CHARGE-OFFS AND RECOVERIES AND CHANGES
IN ALLOWANCE FOR LOAN AND LEASE LOSSES
PART I. CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES
PART I EXCLUDES CHARGE-OFFS AND RECOVERIES THROUGH
THE ALLOCATED TRANSFER RISK RESERVE.
I486 <-
- - --------
(Column A) (Column B)
Charge-offs Recoveries
- - ----------------------------------------
Calendar year-to-date
- - ----------------------------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou RIAD Bil Mil Thou
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Loans secured by real estate: ////////////////// //////////////////
a. To U.S. addressees (domicile)................................... 4651 65,946 4661 16,055 1.a.
b. To non-U.S. addressees (domicile)............................... 4652 0 4662 0 1.b.
2. Loans to depository institutions and acceptances of other banks: ////////////////// //////////////////
a. To U.S. banks and other U.S. depository institutions............ 4653 0 4663 0 2.a.
b. To foreign banks................................................ 4654 0 4664 0 2.b.
3. Loans to finance agricultural production and other loans to farmers. 4655 69 4665 105 3.
4. Commercial and industrial loans: ////////////////// //////////////////
a. To U.S. addressees (domicile)................................... 4645 73,869 4617 43,048 4.a.
b. To non-U.S. addressees (domicile)............................... 4646 0 4618 102 4.b.
5. Loans to individuals for household, family, and other personal ////////////////// //////////////////
expenditures: ////////////////// //////////////////
a. Credit cards and related plans.................................. 4656 2,356 4666 1,468 5.a.
b. Other (includes single payment, installment, and all student
loans).............................................................. 4657 29,089 4667 5,303 5.b.
6. Loans to foreign governments and official institutions.............. 4643 0 4627 0 6.
7. All other loans..................................................... 4644 5,253 4628 965 7.
8. Lease financing receivables: ////////////////// //////////////////
a. Of U.S. addressees (domicile)................................... 4658 12,926 4668 4,622 8.a.
b. Of non-U.S. addressees (domicile)............................... 4659 0 4669 0 8.b.
9. Total (sum of items 1 through 8).................................... 4635 189,508 4605 71,668 9.
</TABLE>
6
<PAGE> 26
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
Page RI-5
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-B--CONTINUED
PART I. CONTINUED
(Column A) (Column
B)
Charge-offs
Recoveries
- - -------------------------------------
Calendar-year-to-date
- - -------------------------------------
Memoranda
Dollar Amounts in Thousands RIAD BIL MIL THOU RIAD BIL
MIL THOU
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1-3. Not applicable ////////////////// //////////////////
4. Loans to finance commercial real estate, construction, and land ////////////////// //////////////////
development activities (NOT SECURED BY REAL ESTATE) included in ////////////////// //////////////////
Schedule RI-B, part I, items 4 and 7, above.......................... 5409 714 5410
1,374 M.4.
5. Loans secured by real estate in domestic offices (included in ////////////////// //////////////////
Schedule RI-B, part I, item 1, above): ////////////////// //////////////////
a. Construction and land development................................. 3582 266 3583
337 M.5.a.
b. Secured by farmland............................................... 3584 145 3585
304 M.5.b.
c. Secured by 1-4 family residential properties: ////////////////// //////////////////
(1) Revolving, open-end loans secured by 1-4 family residential ////////////////// //////////////////
properties and extended under lines of credit................. 5411 4,428 5412 619 M.5.c.(1)
(2) All other loans secured by 1-4 family residential properties.. 5413 31,124 5414 3,602 M.5.c.(2)
d. Secured by multifamily (5 or more) residential properties.......... 3588 5,579 3589 590 M.5.d.
e. Secured by nonfarm nonresidential properties...................... 3590 24,404 3591 10,603 M.5.e.
- - --------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PART II. CHANGES IN ALLOWANCE FOR LOAN AND LEASE LOSSES
Dollar Amounts in Thousands RIAD BIL MIL THOU
- - -------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Balance originally reported in the December 31, 1995, Reports of Condition and Income....... 3124 266,943 1.
2. Recoveries (must equal part I, item 9, column B above)...................................... 4605 71,668 2.
3. LESS: Charge-offs (must equal part I, item 9, column A above)................................ 4635 189,508 3.
4. Provision for loan and lease losses (must equal Schedule RI, item 4.a)...................... 4230 (6,834) 4.
5. Adjustments* (see instructions for this schedule)........................................... 4815 634,542 5.
6. Balance end of current period (sum of items 1 through 5) (must equal Schedule RC, //////////////////
item 4.b)................................................................................... 3123 776,811 6.
*Describe on Schedule RI-E--Explanations.
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE RI-C--APPLICABLE INCOME TAXES BY TAXING AUTHORITY
SCHEDULE RI-C IS TO BE REPORTED WITH THE DECEMBER REPORT OF INCOME.
I489
- - -----------------
Dollar Amounts in Thousands RIAD BIL MIL THOU
- - -------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Federal................................................................................... 4780 461,184 1.
2. State and local........................................................................... 4790 87,068 2.
3. Foreign................................................................................... 4795 0 3.
4. Total (sum of items 1 through 3) (must equal sum of Schedule RI, items 9 and 11.b)........ 4770 548,252 4.
5. Deferred portion of item 4............................................ RIAD 4772 274,648 ////////////////// 5.
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RI-6
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-D--INCOME FROM INTERNATIONAL OPERATIONS
FOR ALL BANKS WITH FOREIGN OFFICES, EDGE OR AGREEMENT SUBSIDIARIES, OR IBFs WHERE INTERNATIONAL OPERATIONS
ACCOUNT FOR MORE THAN
10 PERCENT OF TOTAL REVENUES, TOTAL ASSETS, OR NET INCOME.
PART I. ESTIMATED INCOME FROM INTERNATIONAL OPERATIONS
I492
- - -------------------
Year-to-date
- - -------------------
Dollar Amounts in Thousands RIAD Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest income and expense booked at foreign offices, Edge and Agreement subsidiaries, //////////////////
and IBFs //////////////////
a. Interest income booked............................................................... 4837 N/A 1.a.
b. Interest expense booked.............................................................. 4038 N/A 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement subsidiaries, and //////////////////
IBFs (item 1.a minus 1.b)............................................................ 4839
N/A 1.c.
2. Adjustments for booking location of international operations: //////////////////
a. Net interest income attributable to international operations booked at domestic //////////////////
offices.............................................................................. 4840 N/A 2.a.
b. Net interest income attributable to domestic business booked at foreign offices...... 4841 N/A 2.b.
c. Net booking location adjustment (item 2.a minus 2.b)................................. 4842 N/A 2.c.
3. Noninterest income and expense attributable to international operations: //////////////////
a. Noninterest income attributable to international operations.......................... 4097 N/A 3.a.
b. Provision for loan and lease losses attributable to international operations......... 4235 N/A 3.b.
c. Other noninterest expense attributable to international operations................... 4239 N/A 3.c.
d. Net noninterest income (expense) attributable to international operations (item 3.a //////////////////
minus 3.b and 3.c).................................................................. 4843 N/A 3.d.
4. Estimated pretax income attributable to international operations before capital //////////////////
allocation adjustment (sum of items 1.c, 2.c, and 3.d)................................. 4844 N/A 4.
5. Adjustment to pretax income for internal allocations to international operations to //////////////////
reflect the effects of equity capital on overall bank funding costs.................... 4845 N/A 5.
6. Estimated pretax income attributable to international operations after //////////////////
capital allocation adjustment (sum of items 4 and 5)................................... 4846 N/A 6.
7. Income taxes attributable to income from international operations as estimated in //////////////////
item 6................................................................................. 4797 N/A 7.
8. Estimated net income attributable to international operations (item 6 minus 7)......... 4341 N/A 8.
</TABLE>
<TABLE>
<CAPTION>
memoranda Dollar Amounts in Thousands RIAD Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Intracompany interest income included in item 1.a above................................ 4847 N/A M.1.
2. Intracompany interest expense included in item 1.b above............................... 4848 N/A M.2.
</TABLE>
PART II. SUPPLEMENTARY DETAILS ON INCOME FROM INTERNATIONAL OPERATIONS REQUIRED
BY THE DEPARTMENTS OF COMMERCE AND TREASURY FOR PURPOSES OF THE U.S.
INTERNATIONAL ACCOUNTS AND THE U.S. NATIONAL INCOME AND PRODUCT ACCOUNTS
<TABLE>
<CAPTION>
Year-to-date
- - -------------------
Dollar Amounts in Thousands RIAD Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Interest income booked at IBFs......................................................... 4849 N/A 1.
2. Interest expense booked at IBFs........................................................ 4850 N/A 2.
3. Noninterest income attributable to international operations booked at domestic //////////////////
offices (excluding IBFs): //////////////////
a. Gains (losses) and extraordinary items.............................................. 5491 N/A 3.a.
b. Fees and other noninterest income................................................... 5492 N/A 3.b.
4. Provision for loan and lease losses attributable to international operations booked at //////////////////
domestic offices (excluding IBFs)...................................................... 4852 N/A 4.
5. Other noninterest expense attributable to international operations booked at domestic //////////////////
offices (excluding IBFs)............................................................... 4853 N/A 5.
</TABLE>
8
<PAGE> 28
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RI-7
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-E--EXPLANATIONS
SCHEDULE RI-E IS TO BE COMPLETED EACH QUARTER ON A CALENDER YEAR-TO-DATE BASIS.
Detail all adjustments in Schedule RI-A and RI-B, all extraordinary items and other adjustments in Schedule
RI, and all
significant items of other noninterest income and other noninterest expense in Schedule RI. (See
instructions for details.)
I495 <-
- - -------------------
Year-to-date
- - -------------------
Dollar Amounts in Thousands RIAD Bil Mil
Thou
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2)) //////////////////
Report amounts that exceed 10% of Schedule RI, item 5.f.(2): //////////////////
a. Net gains on other real estate owned................................................ 5415 0 1.a.
b. Net gains on sales of loans......................................................... 5416 0 1.b.
c. Net gains on sales of premises and fixed assets..................................... 5417 0 1.c.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI, //////////////////
item 5.f.(2): //////////////////
d. TEXT 4461 INCOME ON MORTGAGES HELD FOR RESALE 4461 147,813 1.d.
e. TEXT 4462 GAIN FROM BRANCH DIVESTITURES 4462 77,976 1.e.
f. TEXT 4463 4463 1.f.
2. Other noninterest expense (from Schedule RI, item 7.c): //////////////////
a. Amortization expense of intangible assets........................................... 4531 278,276 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c: //////////////////
b. Net losses on other real estate owned............................................... 5418 0 2.b.
c. Net losses on sales of loans........................................................ 5419 0 2.c.
d. Net losses on sales of premises and fixed assets.................................... 5420 0 2.d.
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI, //////////////////
item 7.c: //////////////////
e. TEXT 4464 INTERCOMPANY CORPORATE SUPPORT FUNCTION CHARGES 4464 296,172 2.e.
f. TEXT 4467 INTERCOMPANY DATA PROCESSING & PROGRAMMING CHARGES 4467 315,897 2.f.
g. TEXT 4468 4468 2.g.
3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and applicable //////////////////
income tax effect (from Schedule RI, item 11.b) (itemize and describe all extraordinary //////////////////
items and other adjustments): //////////////////
a. (1) TEXT 4469 4469 3.a.(1)
(2) Applicable income tax effect RIAD 4486 ////////////////// 3.a.(2)
b. (1) TEXT 4487 4487
3.b.(1)
(2) Applicable income tax effect RIAD 4488 ////////////////// 3.b.(2)
c. (1) TEXT 4489 4489 3.c.(1)
(2) Applicable income tax effect RIAD 4491 ////////////////// 3.c.(2)
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, item 2) //////////////////
(itemize and describe all adjustments): //////////////////
a. TEXT 4492 4492
4.a.
b. TEXT 4493 4493
4.b.
5. Cumulative effect of changes in accounting principles from prior years (from Schedule //////////////////
RI-A, item 9) (itemize and describe all changes in accounting principles): //////////////////
a. TEXT 4494 4494 5.a.
b. TEXT 4495 4495 5.b.
6. Corrections of material accounting errors from prior years (from Schedule RI-A, item 10)//////////////////
(itemize and describe all corrections): //////////////////
a. TEXT 4496 4496 6.a.
b. TEXT 4497 4497 6.b.
</TABLE>
9
<PAGE> 29
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RI-8
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-E--CONTINUED
Year-to-date
Dollar Amounts in Thousands RIAD Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
7. Other transactions with parent holding company (from Schedule RI-A, item 13) //////////////////
(itemize and describe all such transactions): //////////////////
a. TEXT 4498 FLEET NATIONAL BANK SURPLUS DISTRIBUTION TO FFG .......................... 4498 (1,003,722) 7.a.
b. TEXT 4499 ........................................................................... 4499 7.b.
8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, part II, item 5) //////////////////
(itemize and describe all adjustments): //////////////////
a. TEXT 4521 12/31/95 ENDING BALANCE OF POOLED ENTITIES ............................... 4521 636,497 8.a.
b. TEXT 4522 DIVESTED ALLOWANCE RELATED TO SOLD LOANS ................................. 4522 (1,955) 8.b.
9. Other explanations (the space below is provided for the bank to briefly describe, at its
option, any other significant items affecting the Report of Income): I498 |
I499 <-
No comment [X] (RIAD 4769)
- - -------------------
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
10
<PAGE> 30
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-1
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise indicated,
report the amount outstanding as of the last business day of the quarter.
SCHEDULE RC -- BALANCE SHEET
C400
- - ------------------
Dollar Amounts in Thousands RCFD Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS //////////////////
1. Cash and balances due from depository institutions (from Schedule RC-A): //////////////////
a. Noninterest-bearing balances and currency and coin (1) ........................... 0081
3,923,408 1.a.
b. Interest-bearing balances(2) ..................................................... 0071
68,691 1.b.
2. Securities:
//////////////////
a. Held-to-maturity securities (from Schedule RC-B, column A) ....................... 1754
261,390 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ..................... 1773
4,958,338 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic
//////////////////
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
//////////////////
a. Federal funds sold .............................................................. 0276
25,709 3.a.
b. Securities purchased under agreements to resell .................................. 0277
0 3.b.
4. Loans and lease financing receivables:
//////////////////
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 31,260,436
////////////////// 4.a.
b. LESS: Allowance for loan and lease losses ................... RCFD 3123 776,811
////////////////// 4.b.
c. LESS: Allocated transfer risk reserve ....................... RCFD 3128 0
////////////////// 4.c.
d. Loans and leases, net of unearned income,
//////////////////
allowance, and reserve (item 4.a minus 4.b and 4.c) .............................. 2125
30,483,625 4.d.
5. Trading assets (from Schedule RC-D) ................................................. 3545
73,333 5.
6. Premises and fixed assets (including capitalized leases) ............................ 2145
536,686 6.
7. Other real estate owned (from Schedule RC-M) ........................................ 2145
18,911 7.
8. Investments in unconsolidated subsidiaries and associated companies
//////////////////
(from Schedule RC-M) ................................................................ 2130
0 8.
9. Customers' liability to this bank on acceptances outstanding......................... 2155
6,380 9.
10. Intangible assets (from Schedule RC-M) .............................................. 2143
2,316,633 10.
11. Other assets (from Schedule RC-F) ................................................... 2160
3,907,689 11.
12. Total assets (sum of items 1 through 11) ............................................ 2170
46,580,793 12.
- - ------------------
</TABLE>
- - ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
11
<PAGE> 31
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-2
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC--CONTINUED
- - -----------------------
Dollar Amounts in Thousands ///////// Bil
Mil Thou
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES
///////////////////////
13. Deposits:
///////////////////////
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E,
///////////////////////
part I) ........................................................................... RCON 2200
32,792,158 13.a.
(1) Noninterest-bearing(1) .............................. RCON 6631 10,359,674
/////////////////////// 13.a.(1)
(2) Interest-bearing .................................... RCON 6636 22,432,484
/////////////////////// 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from
///////////////////////
Schedule RC-E, part II ............................................................ RCFN 2200
2,414,427 13.b.
(1) Noninterest-bearing ................................. RCFN 6631 51,133
/////////////////////// 13.b.(1)
(2) Interest-bearing .................................... RCFN 6636 2,363,294
/////////////////////// 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase in domestic
///////////////////////
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs:
///////////////////////
a. Federal funds purchased ........................................................... RCFD 0278
2,999,129 14.a.
b. Securities sold under agreements to repurchase .................................... RCFD 0279
119,013 14.b.
15. a. Demand notes issued to the U.S. Treasury .......................................... RCON 2840
2,393 15.a.
b. Trading liabilities (from Schedule RC-D) .......................................... RCFD 3548
60,855 15.b.
16. Other borrowed money:
///////////////////////
a. WITH A REMAINING MATURITY OF ONE YEAR OR LESS ..................................... RCFD 2332
304,551 16.a.
b. WITH A REMAINING MATURITY OF MORE THAN ONE YEAR ................................... RCFD 2333
631,435 16.b.
17. Mortgage indebtedness and obligations under capitalized leases ....................... RCFD 2910
11,267 17.
18. Bank's liability on acceptances executed and outstanding ............................. RCFD 2920
6,380 18.
19. Subordinated notes and debentures .................................................... RCFD 3200
1,213,219 19.
20. Other liabilities (from Schedule RC-G) ............................................... RCFD 2930
1,506,854 20.
21. Total liabilities (sum of items 13 through 20) ....................................... RCFD 2948
42,061,681 21.
///////////////////////
22. Limited-life preferred stock and related surplus ..................................... RCFD 3282
0 22.
EQUITY CAPITAL
///////////////////////
23. Perpetual preferred stock and related surplus ........................................ RCFD 3838
125,000 23.
24. Common stock ......................................................................... RCFD 3230
19,487 24.
25. Surplus (exclude all surplus related to preferred stock) ............................. RCFD 3839
2,551,927 25.
26. a. Undivided profits and capital reserves ............................................ RCFD 3632
1,813,664 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ............ RCFD 8434
9,034 26.b.
27. Cumulative foreign currency translation adjustments .................................. RCFD 3284
0 27.
28. Total equity capital (sum of items 23 through 27) .................................... RCFD 3210
4,519,112 28.
29. Total liabilities, limited-life preferred stock, and equity capital
///////////////////////
(sum of items 21, 22, and 28)......................................................... RCFD 3300
46,580,793 29.
Memorandum
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that best describes the
Number
most comprehensive level of auditing work performed for the bank by independent external
- - ---------------------
auditors as of any date during 1995 ..................................................
RCFD 6724 N/A M.1.
- - ---------------------
</TABLE>
1 - Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 - Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 - Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 - Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 - Review of the bank's financial statements by external auditors
6 - Compilation of the bank's financial statements by external auditors
7 - Other audit procedures (excluding tax preparation work)
8 - No external audit work
- - ------------
(1) Includes total demand deposits and noninterest-bearing time and
savings deposits.
12
<PAGE> 32
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-3
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-A--CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
Exclude assets held for trading.
- - --------
C405 <-
- - --------------------------------------
(Column A)
(Column B)
Consolidated
Domestic
Bank
Offices
- - --------------------------------------
Dollar Amounts in Thousands RCFD BIL MIL THOU RCFD BIL
MIL THOU
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and //////////////////
//////////////////
coin ................................................................... 0022 3,548,380
////////////////// 1.
a. Cash items in process of collection and unposted debits.............. ////////////////// 0020
2,693,954 1.a.
b. Currency and coin ................................................... ////////////////// 0080
854,426 1.b.
2. Balances due from depository institutions in the U.S.................... ////////////////// 0082
87,601 2.
a. U.S. branches and agencies of foreign banks (including their IBFs)... 0083 0
////////////////// 2.a.
b. Other commercial banks in the U.S. and other depository //////////////////
//////////////////
institutions in the U.S. (including their IBFs)...................... 0085 87,676
////////////////// 2.b.
3. Balances due from banks in foreign countries and foreign central banks.. ////////////////// 0070
12,440 3.
a. Foreign branches of other U.S. banks................................. 0073 208
////////////////// 3.a.
b. Other banks in foreign countries and foreign central banks........... 0074 12,491
////////////////// 3.b.
4. Balances due from Federal Reserve Banks................................. 0090 343,344 0090
343,344 4.
5. Total (sum of items 1 through 4) (total of column A must equal //////////////////
//////////////////
Schedule RC, sum of items 1.a and 1.b).................................. 0010 3,992,099 0010
3,991,765 5.
- - --------------------------------------
- - -----------------
Memorandum Dollar Amounts in Thousands RCON BIL
MIL THOU
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Non interest-bearing balances due from commercial banks in the U.S. (included in item 2,
//////////////////
column B above) ............................................................................ 0050
71,678 M.1.
- - ------------------
SCHEDULE RC-B--SECURITIES
Exclude assets held for trading.
- - --------
C410 <-
- - ------------------------------------------------------------------------------
Held-to-maturity Available-for-sale
- - ------------------------------------------------------------------------------
(Column A) (Column B) (Column C)
(Column D)
Amortized Cost Amortized Cost Amortized Cost
Amortized Cost
- - ------------------------------------------------------------------------------
Dollar Amounts in Thousands RCFD BIL MIL THOU RCFD BIL MIL THOU RCFD BIL MIL THOU RCFD BIL
MIL THOU
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C>
1. U.S. Treasury securities......... 0211 250 0213 250 1286 715,535 1287
718,580 1.
2. U.S. Government agency ////////////////// ////////////////// //////////////////
//////////////////
and corporation obligations ////////////////// ////////////////// //////////////////
//////////////////
(exclude mortgage-backed ////////////////// ////////////////// //////////////////
//////////////////
securities): ////////////////// ////////////////// //////////////////
//////////////////
a. Issued by U.S. Govern- ////////////////// ////////////////// //////////////////
//////////////////
ment agencies(2).............. 1289 0 1290 0 1291 0 1293
0 2.a.
b. Issued by U.S. ////////////////// ////////////////// //////////////////
//////////////////
Government-sponsored ////////////////// ////////////////// //////////////////
//////////////////
agencies(3)................... 1294 0 1295 0 1297 500 1298
500 2.b.
- - ------------------------------------------------------------------------------
- - ------------
(1) Includes equity securities without readily determinable fair values at historical cost in item 6.c,
column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool Certificates," U.S. Maritime Administration
obligations, and
Export-Import Bank participation certificates.
(3) Includes obligations (other than mortgage-backed securities) issued by the Farm Credit System, the
Federal Home
Loan Bank System, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association,
the Financing
Corporation, Resolution Funding Corporation, the Student Loan Marketing Association, and the Tennessee
Valley Authority.
</TABLE>
13
<PAGE> 33
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-4
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-B--Continued
Held-to-maturity
Available-for-sale
---------------------------------------
- - ---------------------------------------
(Column A) (Column B) (Column C)
(Column D)
Amortized Cost Fair Value Amortized Cost
Fair Value(1)
------------------ ------------------ ------------------
- - ------------------
Dollar Amounts in Thousands RFCD Bil Mil Thou RFCD Bil Mil Thou RFCD Bil Mil Thou RFCD
Bil Mil Thou
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
3. Securities issued by states ////////////////// ////////////////// //////////////////
//////////////////
and political subdivisions in the ////////////////// ////////////////// //////////////////
//////////////////
U.S.: ////////////////// ////////////////// //////////////////
//////////////////
a. General obligations........... 1676 151,418 1677 151,394 1678 0 1679
0 3.a.
b. Revenue obligations........... 1681 12,415 1686 12,419 1690 0 1691
0 3.b.
c. Industrial development ////////////////// ////////////////// //////////////////
//////////////////
and similar obligations....... 1694 0 1695 0 1696 0 1697
0 3.c.
4. Mortage-backed ////////////////// ////////////////// //////////////////
//////////////////
securities (MBS): ////////////////// ////////////////// //////////////////
//////////////////
a. Pass-through securities ////////////////// ////////////////// //////////////////
//////////////////
(1) Guaranteed by ////////////////// ////////////////// //////////////////
//////////////////
GNMA..................... 1698 0 1699 0 1701 792,519 1702
790,901 4.a.(1)
(2) Issued by FNMA ////////////////// ////////////////// //////////////////
//////////////////
and FHLMC................ 1703 0 1705 0 1706 3,163,278 1707
3,176,341 4.a.(2)
(3) Other pass-through ////////////////// ////////////////// //////////////////
//////////////////
securities............... 1709 0 1710 0 1711 1 1713
1 4.a.(3)
b. Other mortgage-backed ////////////////// ////////////////// //////////////////
//////////////////
securities (include CMOs, ////////////////// ////////////////// //////////////////
//////////////////
REMICs, and stripped ////////////////// ////////////////// //////////////////
//////////////////
MBS): ////////////////// ////////////////// //////////////////
//////////////////
(1.) Issued or guaranteed ////////////////// ////////////////// //////////////////
//////////////////
by FNMA, FHLMC ////////////////// ////////////////// //////////////////
//////////////////
or GNMA................. 1714 0 1715 0 1716 0 1717
0 4.b.(1)
(2.) Collateralized ////////////////// ////////////////// //////////////////
//////////////////
by MBS issued or ////////////////// ////////////////// //////////////////
//////////////////
guaranteed by FNMA, ////////////////// ////////////////// //////////////////
//////////////////
FHLMC, or GNMA.......... 1718 0 1719 0 1731 0 1732
0 4.b.(2)
(3.) All other mortgage- ////////////////// ////////////////// //////////////////
//////////////////
backed securities....... 1733 0 1734 0 1735 453 1736
453 4.b.(3)
5. Other debt securities: ////////////////// ////////////////// //////////////////
//////////////////
a. Other domestic debt ////////////////// ////////////////// //////////////////
//////////////////
securities................... 1737 0 1738 0 1739 629 1741
621 5.a.
b. Foreign debt ////////////////// ////////////////// //////////////////
//////////////////
securities................... 1742 97,307 1743 87,332 1744 0 1746
0 5.b.
6. Equity securities: ////////////////// ////////////////// //////////////////
//////////////////
a. Investments in mutual ////////////////// ////////////////// //////////////////
//////////////////
funds........................ ////////////////// ////////////////// 1747 52,843 1748
52,843 6.a.
b. Other equity securities ////////////////// ////////////////// //////////////////
//////////////////
with readily determinable ////////////////// ////////////////// //////////////////
//////////////////
fair values.................. ////////////////// ////////////////// 1749 0 1751
0 6.b.
c. All other equity ////////////////// ////////////////// //////////////////
//////////////////
securities(1)................ ////////////////// ////////////////// 1752 218,098 1753
218,098 6.c.
7. Total (sum of items 1 ////////////////// ////////////////// //////////////////
//////////////////
through 6) (total of ////////////////// ////////////////// //////////////////
//////////////////
column A must equal ////////////////// ////////////////// //////////////////
//////////////////
Schedule RC, item 2.a) ////////////////// ////////////////// //////////////////
//////////////////
(total of column D must ////////////////// ////////////////// //////////////////
//////////////////
equal Schedule RC, ////////////////// ////////////////// //////////////////
//////////////////
item 2.b)....................... 1754 261,390 1771 251,395 1772 4,943,856 1773
4,958,338 7.
- - ----------------------------------------------------------------------------------
</TABLE>
- - -----------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.c, column D.
14
<PAGE> 34
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-5
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-B--CONTINUED
--------
C412 <-
- - ------------------
Memoranda Dollar Amounts in Thousands RCFD
Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Pledged securities(2) 0416 2,436,831 M.1.
2. Maturity and repricing data for debt securities(2), (3), (4) (excluding those in
/////////
nonaccrual status):
/////////
a. Fixed rate debt securities with a remaining maturity of:
/////////
(1) Three months or less 0343
44,985 M.2.a.(1)
(2) Over three months through 12 months 0344
105,214 M.2.a.(2)
(3) Over one year through five years 0345
1,418,544 M.2.a.(3)
(4) Over five years 0346
2,274,468 M.2.a.(4)
(5) Total fixed rate debt securities (sum of Memorandum items 2.a(1) through 2.a.(4) 0347
3,843,211 M.2.a.(5)
b. Floating rate debt securities with a repricing frequency of:
/////////
(1) Quarterly or more frequently 4544
302,855 M.2.b.(1)
(2) Annually or more frequently, but less frequently than quarterly 4545
802,642 M.2.b.(2)
(3) Every five years or more frequently, but less frequently than annually 4551
79 M.2.b.(3)
(4) Less frequently than every five years 4552
0 M.2.b.(4)
(5) Total floating rate debt securities (sum of Memorandum items 2.b.(1) through 2.b.(4)) 4553
1,105,576 M.2.b.(5)
c. Total debt securities (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal total
/////////
debt securities from Schedule RC-B, sum of items 1 through 5, columns A and D, minus
/////////
nonaccrual debt securities included in Schedule RC-N, item 9, column C) 0393
4,948,787 M.2.c.
3. Not applicable
/////////
4. Held-to-maturity debt securities restructured and in compliance with modified terms (included
/////////
in Schedule RC-B, items 3 through 5, column A, above) 5365
0 M.4.
5. Not applicable
/////////
6. Floating rate debt securities with a remaining maturity of one year or less(2), (4) (included in
/////////
Memorandum items 2.b.(1) through 2.b.(4) above) 5519
4,000 M.6.
7. Amortized cost of held-to-maturity securities sold or transferred to available-for-sale or
/////////
trading securities during the calendar year-to-date (report the amortized cost at date of sale
/////////
or transfer)
/////////
8. High-risk mortgage securities (included in the held-to-maturity and available-for-sale
/////////
accounts in Schedule RC-B, item 4.b):
/////////
a. Amortized cost 8780
0 M.8.a.
b. Fair value 8781
0 M.8.b.
9. Structured notes (included in the held-to-maturity and available-for-sale account in
/////////
Schedule RC-B, items 2, 3, and 5):
/////////
a. Amortized cost 8782
0 M.9.a.
b. Fair value 8783
0 M.9.b.
- - ----------------
(2) Includes held-to-maturity securities at amortized cost and available-for-sale securities at fair value.
(3) Exclude equity securities, e.g., investments in mutual funds, Federal Reserve stock, common stock, and
preferred stock.
(4) Memorandum items 2 and 6 are not applicable to savings banks that must complete supplemental Schedule
RC-J.
</TABLE>
15
<PAGE> 35
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-6
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-C--LOANS AND LEASE FINANCING RECEIVABLES
PART I. LOANS AND LEASES
Do not deduct the allowance for loan and lease losses from amounts
- - ------------
reported in this schedule. Report total loans and leases, net of unearned
C415 <-
income. Exclude assets held for trading.
- - --------------------------------------
(Column A)
(Column B)
Consolidated
Domestic
Bank
Offices
- - --------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RFCD
Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Loans secured by real estate............................................ 1410 11,606,306
////////////////// 1.
a. Construction and land development.................................... ////////////////// 1415
599,823 1.a.
b. Secured by farmland (including farm residential and other //////////////////
//////////////////
improvements)........................................................ ////////////////// 1420
1,990 1.b.
c. Secured by 1-4 family residential properties: //////////////////
//////////////////
(1) Revolving, open-end loans secured by 1-4 family residential //////////////////
//////////////////
properties and extended under lines of credit.................... ////////////////// 1797
1,906,776 1.c.(1)
(2) All other loans secured by 1-4 family residential properties: //////////////////
//////////////////
(a) Secured by first liens....................................... ////////////////// 5367
4,239,378 1.c.(2)(a)
(b) Secured by junior liens...................................... ////////////////// 5368
616,562 1.c.(2)(b)
d. Secured by multifamily (5 or more) residential properties............ ////////////////// 1460
473,710 1.d.
e. Secured by nonfarm nonresidential properties......................... ////////////////// 1480
3,768,067 1.e.
2. Loans to depository institutions: //////////////////
//////////////////
a. To commercial banks in the U.S. ..................................... ////////////////// 1505
76,227 2.a.
(1) To U.S. branches and agencies of foreign banks................... 1506 0
////////////////// 2.a.(1)
(2) To other commercial banks in the U.S. ........................... 1507 76,227
////////////////// 2.a.(2)
b. To other depository institutions in the U.S. ........................ 1517 13,345 1517
13,345 2.b.
c. To banks in foreign countries........................................ ////////////////// 1510
928 2.c.
(1) To foreign branches of other U.S. banks.......................... 1513 160
////////////////// 2.c.(1)
(2) To other banks in foreign countries.............................. 1516 768
////////////////// 2.c.(2)
3. Loans to finance agricultural production and other loans to farmers..... 1590 4,351 1590
4,351 3.
4. Commercial and industrial loans: //////////////////
//////////////////
a. To U.S. addressees (domicile)........................................ 1763 12,626,132 1763
12,574,435 4.a.
b. To non-U.S. addressees (domicile).................................... 1764 78,513 1764
31,092 4.b.
5. Acceptances of other banks: //////////////////
//////////////////
a. Of U.S. banks........................................................ 1756 0 1756
0 5.a.
b. Of foreign banks..................................................... 1757 0 1757
0 5.b.
6. Loans to individuals for household, family, and other personal //////////////////
//////////////////
expenditures (i.e., consumer loans) (includes purchased paper).......... ////////////////// 1975
2,101,041 6.
a. Credit cards and related plans (includes check credit and other //////////////////
//////////////////
revolving credit plans).............................................. 2008 94,750
////////////////// 6.a.
b. Other (includes single payment, installment, and all student loans).. 2011 2,006,291
////////////////// 6.b.
7. Loans to foreign governments and official institutions (including //////////////////
//////////////////
foreign central banks).................................................. 2081 0 2081
0 7.
8. Obligations (other than securities and leases) of states and political //////////////////
//////////////////
subdivisions in the U.S. (includes nonrated industrial development //////////////////
//////////////////
obligations)............................................................ 2107 149,176 2107
149,176 8.
9. Other loans ............................................................ 1563 2,018,484
////////////////// 9.
a. Loans for purchasing or carrying securities (secured and unsecured).. ////////////////// 1545
179,603 9.a.
b. All other loans (exclude consumer loans)............................. ////////////////// 1564
1,838,881 9.b.
10. Lease financing receivables (net of unearned income).................... ////////////////// 2165
2,585,933 10.
a. Of U.S. addressees (domicile) ....................................... 2182 2,585,933
////////////////// 10.a.
b. Of non-U.S. addressees (domicile).................................... 2183 0
////////////////// 10.b.
11. LESS: Any unearned income on loans reflected in items 1-9 above......... 2123 0 2123
0 11.
12. Total loans and leases, net of unearned income (sum of items 1 //////////////////
//////////////////
through 10 minus item 11) (total of column A must equal //////////////////
//////////////////
Schedule RC, item 4.a) ................................................. 2122 31,260,436 2122
31,161,318 12.
- - --------------------------------------
</TABLE>
16
<PAGE> 36
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-7
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-C--CONTINUED
PART I. CONTINUED
(Column A)
(Column B)
Consolidated
Domestic
Bank
Offices
Memoranda ------------------
- - ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
RCON Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Commercial paper included in Schedule RC-C, part I, above........................ 1496 0
1496 0 M.1.
2. Loans and leases restructured and in compliance with modified terms //////////////////
//////////////////
(included in Schedule RC-C, part I, above and not reported as past due //////////////////
//////////////////
or nonaccrual in Schedule RC-N, Memorandum item 1): //////////////////
//////////////////
a. Loans secured by real estate: //////////////////
//////////////////
(1) To U.S. addressees (domicile)............................................. 1687 1,681
M.2.a.(1)
(2) To non-U.S. addressees (domicile)......................................... 1689 0
M.2.a.(2)
b. All other loans and lease financing receivable (exclude loans to //////////////////
individuals for household, family, and other personal expenditures)........... 8691 0
M.2.b.
c. Commercial and industrial loans to and lease financing receivables //////////////////
of non-U.S. addressees (domicile) included in Memorandum item 2.b //////////////////
above......................................................................... 8692 0
M.2.c.
3. Maturity and repricing data for loans and leases(1) (excluding those in //////////////////
nonaccrual status): //////////////////
a. Fixed rate loans with a remaining maturity of: //////////////////
(1) Three months or less...................................................... 0348 690,294
M.3.a.(1)
(2) Over three months through 12 months....................................... 0349 566,523
M.3.a.(2)
(3) Over one year through five years.......................................... 0356 2,658,468
M.3.a.(3)
(4) Over five years........................................................... 0357 5,501,645
M.3.a.(4)
(5) Total fixed rate loans and leases (sum of Memorandum //////////////////
items 3.a.(1) through 3.a.(4))............................................ 0358 9,416,930
M.3.a.(5)
b. Floating rate loans with a repricing frequency of: //////////////////
(1) Quarterly or more frequently.............................................. 4554 17,235,629
M.3.b.(1)
(2) Annually or more frequently, but less frequently than quarterly........... 4555 3,186,865
M.3.b.(2)
(3) Every five years or more frequently, but less frequently than //////////////////
annually.................................................................. 4561 977,978
M.3.b.(3)
(4) Less frequently than every five years..................................... 4564 129,282
M.3.b.(4)
(5) Total floating rate loans (sum of Memorandum items 3.b.(1) //////////////////
through 3.b.(4)........................................................... 4567 21,529,754
M.3.b.(5)
c. Total loans and leases (sum of Memorandum items 3.a.(5) and //////////////////
3.b.(5)) (must equal the sum of total loans and leases, net, from //////////////////
Schedule RC-C, part I, item 12, plus unearned income from //////////////////
Schedule RC-C, part I, item 11, minus total nonaccrual loans and //////////////////
leases from Schedule RC-N, sum of items 1 through 8, column C)................ 1479 30,946,684
M.3.c.
d. FLOATING RATE LOANS WITH A REMAINING MATURITY OF ONE YEAR OR LESS //////////////////
(INCLUDED IN MEMORANDUM ITEMS 3.b.(1) THROUGH 3.b.(4) ABOVE).................. A246 0
M.3.d.
4. Loans to finance commercial real estate, construction, and land //////////////////
development activities (NOT SECURED BY REAL ESTATE) included in //////////////////
Schedule RC-C, part I, items 4 and 9, column A, page RC-6(2)..................... 2746 335,734
M.4.
5. Loans and leases held for sale (included in Schedule RC-C, part I, //////////////////
above)........................................................................... 5369 0
M.5.
6. Adjustable rate closed-end loans secured by first liens on 1-4 family //////////////////
residential properties (included in Schedule RC-C, part I, item 1.c.(2)(a), //////////////////
RCON Bil Mil Thou
column B, page RC-6)............................................................. //////////////////
5370 1,841,822 M.6.
</TABLE>
(1) Memorandum item 3 is not applicable to savings banks that must complete
supplemental Schedule RC-J.
(2) Exclude loans secured by real estate that are included in RC-C, part I,
item 1, column A.
<PAGE> 37
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-8
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-D--TRADING ASSETS AND LIABILITIES
Schedule RC-D is to be completed only by banks with $1 billion or more in total assets or with $2 billion or
more in par/notional
amount of off-balance sheet derivative contracts (as reported in Schedule RC-L, items 14.a through 14.e,
columns A through D).
- - ---------
C420 <-
- - ----------------------
Dollar Amounts in Thousands //////// Bil
Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
//////////////////////
1. U.S. Treasury securities in domestic offices............................................. RCON 3531
0 1.
2. U.S. Government agency and corporation obligations in domestic offices (exclude mortgage-
//////////////////////
backed securities)....................................................................... RCON 3532
0 2.
3. Securities issued by states and political subdivisions in the U.S. in domestic offices... RCON 3533
0 3.
4. Mortgage-backed securities (MBS) in domestic offices:
//////////////////////
a. Pass-through securities issued or guaranteed by FNMA, FHLMC, or GNMA.................. RCON 3534
0 4.a.
b. Other mortgage-backed securities issued or guaranteed by FNMA, FHLMC, or GNMA
//////////////////////
(include CMOs, REMICs, and stripped MBS).............................................. RCON 3535
0 4.b.
c. All other mortgage-backed securities.................................................. RCON 3536
0 4.c.
5. Other debt securities in domestic offices................................................ RCON 3537
0 5.
6. Certificates of deposit in domestic offices.............................................. RCON 3538
0 6.
7. Commercial paper in domestic offices..................................................... RCON 3539
0 7.
8. Bankers acceptances in domestic offices.................................................. RCON 3540
0 8.
9. Other trading assets in domestic offices................................................. RCON 3541
0 9.
10. Trading assets in foreign offices........................................................ RCFN 3542
0 10.
11. Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity
//////////////////////
contracts:
//////////////////////
a. In domestic offices................................................................... RCON 3543
64,043 11.a.
b. In foreign offices.................................................................... RCFN 3544
9,290 11.b.
12. Total trading assets (sum of items 1 through 11) (must equal Schedule RC, item 5)........ RCFD 3545
73,333 12.
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES //////// Bil
Mil Thou
- - ----------------------
<S> <C>
13. Liability for short positions............................................................ RFCD 3546
0 13.
14. Revaluation losses on interest rate, foreign exchange rate, and other commodity and
//////////////////////
equity contracts......................................................................... RFCD 3547
60,855 14.
15. Total trading liabilities (sum of items 13 and 14) (must equal Schedule RC, item 15.b)... RCFD 3548
60,855 15.
</TABLE>
18
<PAGE> 38
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: One Monarch Place
Page RC-9
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-E--DEPOSIT LIABILITIES
PART I. DEPOSITS IN DOMESTIC OFFICES
- - --------------
C425
- - --------------
Nontransaction
Transactions Accounts
Accounts
- - ---------------------------------------------------------------
(Column A) (Column B)
(Column C)
Total transaction Memo: Total
Total
accounts (including demand deposits
nontransaction
total demand (included in
accounts
deposits) column A)
(including MMDAs)
- - ----------------------------------------------------------------
Dollar Amounts in Thousands RCON Bil Mil Thou RCON Bil Mil Thou RCON
Bil Mil Thou
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Deposits of: ////////////////// //////////////////
//////////////////
1. Individuals, partnerships, and corporations..... 2201 8,925,633 2240 8,417,538 2346
21,118,482 1.
2. U.S. Government................................. 2202 170,644 2280 170,617 2520
5,680 2.
3. States and political subdivisions in the U.S.... 2203 531,934 2290 508,362 2530
777,806 3.
4. Commercial banks in the U.S..................... 2206 836,406 2310 836,406 2550
397 4.
5. Other depository institutions in the U.S........ 2207 223,383 2312 223,383 2349
2,868 5.
6. Banks in foreign countries...................... 2213 23,850 2320 23,850 2236
0 6.
7. Foreign governments and official institutions ////////////////// //////////////////
//////////////////
(including foreign central banks)............... 2216 0 2300 0 2377
0 7.
8. Certified and official checks................... 2330 175,075 2330 175,075
////////////////// 8.
9. Total (sum of items 1 through 8) (sum of columns ////////////////// //////////////////
//////////////////
A and C must equal Schedule RC, item 13.a....... 2215 10,886,925 2210 10,355,231 2385
21,905,233 9.
- - ----------------------------------------------------------------
</TABLE>
Memoranda
<TABLE>
Dollar Amounts in Thousands RCON
Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Selected components of total deposits (i.e., sum of item 9, columns A and C):
//////////////////
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts.................... 6835
2,607,397 M.1.a.
b. Total brokered deposits................................................................ 2365
1,415,235 M.1.b.
c. Fully insured brokered deposits (included in Memorandum item 1.b above):
//////////////////
(1) Issued in denominations of less than $100,,000.................................... 2343
2,240 M.1.c.(1)
(2) Issued EITHER in denominations of $100,000 OR in denominations greater than
//////////////////
$100,000 and participated out by the broker in shares of $100,000 or less......... 2344
1,412,995 M.1.c.(2)
D. MATURITY DATA FOR BROKERED DEPOSITS:
//////////////////
(1) BROKERED DEPOSITS ISSUED IN DENOMINATIONS OF LESS THAN $100,000 WITH A REMAINING
//////////////////
MATURITY OF ONE YEAR OR LESS (INCLUDED IN MEMORANDUM ITEM 1.C.(1) ABOVE).......... A243
20 M.1.d.(1)
(2) BROKERED DEPOSITS ISSUED IN DENOMINATIONS OF $100,000 OR MORE WITH A REMAINING
//////////////////
MATURITY OF ONE YEAR OR LESS (INCLUDED IN MEMORANDUM ITEM 1.B ABOVE).............. A244
584,547 M.1.d.(2)
e. Preferred deposits (uninsured deposits of states and political subdivisions in the
//////////////////
U.S. reported in item 3 above which are secured or collateralized as required under
//////////////////
state law)............................................................................. 5590
346,573 M.1.e.
2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d
//////////////////
must equal item 9, column C above):
//////////////////
a. Savings deposits:
//////////////////
(1) Money market deposit accounts (MMDAs)............................................. 6810
10,252,364 M.2.a.(1)
(2) Other savings deposits (excludes MMDAs).......................................... 0352
2,397,861 M.2.a.(2)
b. Total time deposits of less than $100,000.............................................. 6648
6,781,917 M.2.b.
c. Time certificates of deposit of $100,000 or more....................................... 6645
2,473,091 M.2.c.
d. Open-account time deposits of $100,000 or more......................................... 6646
0 M.2.d.
3. All NOW accounts (included in column A above).............................................. 2398
531,694 M.3.
4. Not applicable
</TABLE>
19
<PAGE> 39
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-10
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-E--CONTINUED
PART I. CONTINUED
Memoranda (continued)
- - ------------------
Dollar Amounts in Thousands RCON Bil
Mil Thou
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
5. Maturity and repricing data for time deposits of less than $100,000 (sum of //////////////////
Memorandum items 5.a.(1) through 5.b.(3) must equal Memorandum item 2.b above):(1) //////////////////
a. Fixed rate time deposits of less than $100,000 with a remaining maturity of: //////////////////
(1) Three months or less .............................................................. A225
1,722,551 M.5.a.(1)
(2) Over three months through 12 months ............................................... A226
3,024,143 M.5.a.(2)
(3) Over one year ..................................................................... A227
1,975,207 M.5.a.(3)
b. Floating rate time deposits of less than $100,000 with a repricing frequency of:
//////////////////
(1) Quarterly or more frequently ...................................................... A228
60,016 M.5.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ................... A229
0 M.5.b.(2)
(3) Les frequently than annually ...................................................... A230
0 M.5.b.(3)
c. Floating rate time deposits of less than $100,000 with a remaining maturity of
//////////////////
one year or less (included in Memorandum items 5.b.(1) through 5.b.(3) above) ......... A231
39,531 M.5.c.
6. Maturity and repricing data for time deposits of $100,000 or more (i.e., time certificates
//////////////////
of deposit of $100,000 or more and open-account time deposits of $100,000 or more)
//////////////////
(sum of Memorandum items 6.a.(1) through 6.b.(4) must equal the sum of Memorandum
//////////////////
items 2.c and 2.d above): (1)
//////////////////
a. Fixed rate time deposits of $100,000 or more with a remaining maturity of:
//////////////////
(1) Three months or less .............................................................. A232
720,549 M.6.a.(1)
(2) Over three months through 12 months ............................................... A233
695,947 M.6.a.(2)
(3) Over one year through five years .................................................. A234
1,014,722 M.6.a.(3)
(4) Over five years ................................................................... A235
8,868 M.6.a.(4)
b. Floating rate time deposits of $100,000 or more with a repricing frequency of:
//////////////////
(1) Quarterly or more frequently ...................................................... A236
33,005 M.6.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ................... A237
0 M.6.b.(2)
(3) Every five years or more frequently, but less frequently than annually ............ A238
0 M.6.b.(3)
(4) Less frequently than every five years ............................................. A239
0 M.6.b.(4)
c. Floating rate time deposits of $100,000 or more with a remaining maturity of
//////////////////
one year or less (included in Memorandum items 6.b.(1) through 6.b.(4) above).......... A240
1,896 M.6.c.
- - ------------------
</TABLE>
- - ------------
(1) Memorandum items 5 and 6 are not applicable to savings banks that
must complete supplemental Schedule RC-J.
20
<PAGE> 40
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
Page RC-11
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-E--CONTINUED
PART II. DEPOSITS IN FOREIGN OFFICES (INCLUDING EDGE AND
AGREEMENT SUBSIDIARIES AND IBFS)
- - ------------------
Dollar Amounts in Thousands RCFN Bil Mil
Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deposits of:
//////////////////
1. Individuals, partnerships, and corporations.......................................... 2621
2,410,097 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks)....................... 2623
0 2.
3. Foreign banks (including U.S. branches and agencies of foreign banks, including
their IBFs).......................................................................... 2625
0 3.
4. Foreign governments and official institutions (including foreign central banks)...... 2650
0 4.
5. Certified and official checks........................................................ 2330
0 5.
6. All other deposits................................................................... 2668
4,330 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b)................. 2200
2,414,427 7.
</TABLE>
<TABLE>
<CAPTION>
- - ------------------
Memorandum Dollar Amounts in Thousands RCFN
Bil Mil Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. TIME DEPOSITS WITH A REMAINING MATURITY OF ONE YEAR OR LESS (INCLUDED IN PART II,
//////////////////
ITEM 7 ABOVE)........................................................................ A245
2,414,425 M.1.
</TABLE>
SCHEDULE RC-F--OTHER ASSETS
<TABLE>
<CAPTION>
- - ---------
C430
- - -----------------------
Dollar Amounts in Thousands ////////// Bil
Mil Thou
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Income earned, not collected on loans................................................ RCFD 2164
243,319 1.
2. Net deferred tax assets (1).......................................................... RCFD 2148
0 2.
3. Excess residential mortgage servicing fees receivable................................ RCFD 5371
173,148 3.
4. Other (itemize and describe amounts that exceed 25% of this item).................... RCFD 2168
3,491,222 4.
--------- --------------------
a. TEXT 3549 MORTGAGE HELD FOR RESALE RCFD 3549 1,517,133
/////////////////////// 4.a.
-------------------------------------------------------------
b. TEXT 3550 RCFD 3550
/////////////////////// 4.b.
-------------------------------------------------------------
c. TEXT 3551 RCFD 3551
/////////////////////// 4.c.
-------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11)................... RCFD 2160
3,907,689 5.
- - -----------------------
</TABLE>
<TABLE>
<CAPTION>
- - -------------------------
Memorandum Dollar Amounts in Thousands //////////// Bil Mil
Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C>
1. Deferred tax assets disallowed for regulatory capital purposes.................. RFCD 5610
0 M.1.
</TABLE>
SCHEDULE RC-G--OTHER LIABILITIES
<TABLE>
<CAPTION>
- - -----------
C435
- - ------------------------
Dollar Amounts in thousands ////////// Bil
Mil Thou
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C>
1. a. Interest accrued and unpaid on deposits in domestic offices (2).................... RCON 3645
50,636 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable)......... RCFD 3646
509,357 1.b.
2. Net deferred tax liabilities(1)....................................................... RCFD 3049
434,426 2.
3. Minority interest in consolidated subsidiaries........................................ RCFD 3000
0 3.
4. Other (itemize and describe amounts that exceed 25% of this item)..................... RCFD 2938
512,435 4.
---------
a. TEXT 3552 RCFD 3552
/////////////////////// 4.a.
-------------------------------------------------------------
b. TEXT 3553 RCFD 3553
/////////////////////// 4.b.
-------------------------------------------------------------
c. TEXT 3554 RCFD 3554
/////////////////////// 4.c.
-------------------------------------------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20).................... RCFD 2930
1,506,854 5.
</TABLE>
- - ----------------
(1) See discussion of deferred income taxes in Glossary entry on "income taxes."
(2) For savings banks, include "dividends" accrued and unpaid on deposits.
21
<PAGE> 41
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
Page RC-12
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
---------------
SCHEDULE RC-H--SELECTED BALANCE SHEET ITEMS FOR DOMESTIC OFFICES
C440
- - ------------------
Domestic
Offices
- - ------------------
Dollar Amounts in Thousands RCON Bil Mil
Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Customers' liability to this bank on acceptances outstanding......................... 21556,380 1.
2. Bank's liability on acceptances executed and outstanding............................. 29206,380 2.
3. Federal funds sold and securities purchased under agreements to resell............... 135025,709 3.
4. Federal funds purchased and securities sold under agreements to repurchase........... 28003,118,142 4.
5. Other borrowed money................................................................. 3190935,986 5.
EITHER
//////////////////
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs.......... 2163N/A 6.
OR
//////////////////
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs............ 29412,311,663 7.
8. Total assets (excludes net due from foreign offices, Edge and Agreement subsidiaries,
//////////////////
and IBFs)............................................................................ 219246,468,505 8.
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement //////////////////
subsidiaries, and IBFs).............................................................. 312939,637,730 9.
ITEMS 10-17 INCLUDE HELD-TO-MATURITY AND AVAILABLE-FOR-SALE SECURITIES IN DOMESTIC OFFICES.
</TABLE>
<TABLE>
<CAPTION>
- - ------------------
RCON Bil Mil
Thou
- - ------------------
<S> <C> <C>
10. U.S. Treasury securities............................................................. 1779
718,830 10.
11. U.S. Government agency and corporation obligations (exclude mortgage-backed
//////////////////
securities).......................................................................... 1785
500 11.
12. Securities issued by states and political subdivisions in the U.S.................... 1786
163,833 12.
13. Mortgage-backed securities (MBS):
//////////////////
a. Pass-through securities:
//////////////////
(1) Issued or guaranteed by FNMA, FHLMC, OR GNMA................................ 1787
3,967,242 13.a.(1)
(2) Other pass-through securities............................................... 1869
1 13.a.(2)
b. Other mortgage-backed securities (include CMOs, REMICs, and stripped MBS):
//////////////////
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA................................ 1877
0 13.b.(1)
(2) All other mortgage-backed securities........................................ 2253
453 13.b.(2)
14. Other domestic debt securities....................................................... 3159
621 14.
15. Foreign debt securities.............................................................. 3160
97,307 15.
16. Equity securities:
//////////////////
a. Investments in mutual funds...................................................... 3161
52,843 16.a.
b. Other equity securities with readily determinable fair values.................... 3162
0 16.b.
c. All other equity securities...................................................... 3169
218,098 16.c.
17. Total held-to-maturity and available-for-sale securities (sum of items 10 through 16) 3170
5,219,728 17.
</TABLE>
Memorandum (to be completed only by banks with IBFs and other "foreign" offices)
<TABLE>
<CAPTION>
- - ------------------
Dollar Amounts in Thousands RCON Bil Mil
Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EITHER
//////////////////
1. Net due from the IBF of the domestic offices of the reporting bank................... 3051
0 M.1.
OR
//////////////////
2. Net due to the IBF of the domestic offices of the reporting bank..................... 3059
N/A M.2.
</TABLE>
22
<PAGE> 42
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: One Monarch Place
Page RC-13
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-I--SELECTED ASSETS AND LIABILITIES OF IBFs
C445
- - ------------------
Dollar Amounts in Thousands RCFN Bil Mil
Thou
- - ---------------------------------------------------------------------------------------------------------------
<S> <C>
1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12)........ 2133
0 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, part I,
//////////////////
item 12, column A)................................................................... 2076
0 2.
3. IBF commercial and industrial loans (component of Schedule RC-C, part I,
//////////////////
item 4, column A).................................................................... 2077
0 3.
4. Total IBF liabilities (component of Schedule RC, item 21)............................ 2898
0 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of Schedule
//////////////////
RC-E, part II, items 2 and 3)........................................................ 2379
0 5.
6. Other IBF deposit liabilities (component of Schedule RC-E, part II,
//////////////////
items 1,4,5, and 6................................................................... 2381
0 6.
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE RC-K--QUARTERLY AVERAGES (1)
C455
- - ------------------
Dollar Amounts in Thousands ///////// Bil Mil
Thou
- - ---------------------------------------------------------------------------------------------------------------
ASSETS
///////////////////////
<S> <C> <C>
1. Interest-bearing balances due from depository institutions...................... RCFD 3381
28,972 1.
2. U.S. Treasury securities and U.S. Government agency and corporation
obligations (2)................................................................. RCFD 3382
5,849,801 2.
3. Securities issued by states and political subdivisions in the U.S. (2).......... RCFD 3383
171,480 3.
4. a. Other debt securities (2)................................................... RCFD 3647
98,635 4.a.
b. Equity securities (3) (includes investments in mutual funds and Federal
///////////////////////
Reserve stock).................................................................. RCFD 3648
290,211 4.b.
5. Federal funds sold and securities purchased under agreements to resell in
///////////////////////
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in
///////////////////////
IBFs............................................................................ RCFD 3365
34,073 5.
6. Loans:
a. Loans in domestic offices:
(1) Total loans............................................................ RCON 3360
28,772,871 6.a.(1)
(2) Loans secured by real estate........................................... RCON 3385
11,782,561 6.a.(2)
(3) Loans to finance agricultural production and other loans to
///////////////////////
farmers................................................................ RCON 3386
4,568 6.a.(3)
(4) Commercial and industrial loans........................................ RCON 3387
12,208,378 6.a.(4)
(5) Loans to individuals for household, family, and other personal
///////////////////////
expenditures........................................................... RCON 3388
2,106,517 6.a.(5)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs... RCFN 3360
93,116 6.b.
7. Trading assets.................................................................. RCFD 3401
70,398 7.
8. Lease financing receivables (net of unearned income)............................ RCFD 3484
2,414,362 8.
9. Total assets(4)................................................................. RCFD 3368
47,043,625 9.
LIABILITIES
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ATS
///////////////////////
accounts, and telephone and preauthorized transfer accounts) (exclude demand
///////////////////////
deposits)....................................................................... RCON 3485
554,831 10.
11. Nontransaction accounts in domestic offices:
///////////////////////
a. Money market deposit accounts (MMDAs)....................................... RCON 3486
10,212,141 11.a.
b. Other savings deposits...................................................... RCON 3487
2,477,260 11.b.
c. Time certificates of deposit of $100,000 or more............................ RCON 3345
2,533,067 11.c.
d. All other time deposits..................................................... RCON 3469
6,982,619 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries,
///////////////////////
and IBFs........................................................................ RCFN 3404
2,117,139 12.
13. Federal funds purchased and securities sold under agreements to repurchase in
///////////////////////
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in
///////////////////////
IBFs............................................................................ RCFD 3353
4,817,518 13.
14. Other borrowed money............................................................ RCFD 3355
985,125 14.
- - ---------------
(1) For all items, banks have the option of reporting either (1) an average of daily figures for the
quarter, or
(2) an average of weekly figures (i.e., the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on amortized cost.
(3) Quarterly averages for all equity securities should be based on historical cost.
(4) The quarterly average for total assets should reflect all debt securities (not held for trading) at
amortized
cost, equity securities with readily determinable fair values at the lower of cost or fair value, and
equity
securities without readily determinable fair values at historical cost.
</TABLE>
<PAGE> 43
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-14
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-L--OFF BALANCE SHEET ITEMS
Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.
C460
Dollar Amounts in Thousands RCFD
BIL MIL THOU
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Unused commitments:
//////////////////
a. Revolving, open-end lines secured by 1-4 family residential properties, e.g., home equity
//////////////////
lines....................................................................................... 3814
2,159,101 1.a.
b. Credit card lines........................................................................... 3815
37,038 1.b.
c. Commercial real estate, construction, and land development:
//////////////////
(1) Commitments to fund loans secured by real estate........................................ 3816
538,163 1.c.(1)
(2) Commitments to fund loans not secured by real estate.................................... 6550
513,346 1.c.(2)
d. Securities underwriting..................................................................... 3817
0 1.d.
e. Other unused commitments.................................................................... 3818
20,572,462 1.e.
2. Financial standby letters of credit and foreign office guarantees.............................. 3819
2,322,445 2.
--------------------
a. Amount of financial standby letters of credit conveyed to others RCFD 3820 89,650
////////////////// 2.a.
--------------------
3. Performance standby letters of credit and foreign office guarantees............................ 3821
179,230 3.
--------------------
a. Amount of performance standby letters of credit conveyed to others RCFD 3822 6,004
////////////////// 3.a.
--------------------
4. Commercial and similar letters of credit....................................................... 3411
137,503 4.
5. Participations in acceptances (as described in the instructions) conveyed to others by the
//////////////////
reporting bank................................................................................. 3428
112 5.
6. Participations in acceptances (as described in the instructions) acquired by the reporting
//////////////////
(nonaccepting) bank............................................................................ 3429
12,837 6.
7. Securities borrowed............................................................................ 3432
0 7.
8. Securities lent (including customers' securities lent where the customer is indemnified against
//////////////////
loss by the reporting bank).................................................................... 3433
965,792 8.
9. Loans transferred (i.e., sold or swapped) with recourse that have been treated as sold for
//////////////////
Call Report purposes:
//////////////////
a. FNMA and FHLMC residential mortgage loan pools:
//////////////////
(1) Outstanding principal balance of mortgages transferred as or the report date............ 3650
298,423 9.a.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................... 3651
298,423 9.a.(2)
b. Private (nongovernment-issued or guaranteed) residential mortgage loan pools:
//////////////////
(1) Outstanding principal balance of mortgages transferred as of the report date............ 3652
289,942 9.b.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................... 3653
289,942 9.b.(2)
c. Farmer Mac agricultural mortgage loan pools:
//////////////////
(1) Outstanding principal balance of mortgages transferred as of the report date............ 3654
0 9.c.(1)
(2) Amount of recourse exposure on these mortgages as of the report date.................... 3655
0 9.c.(2)
d. Small business obligations transferred with recourse under Section 208 of the
//////////////////
Riegle Community Development and Regulatory improvement Act of 1994:
//////////////////
(1) Outstanding principal balance of small business obligations transferred
//////////////////
as of the report date................................................................... A249
0 9.d.(1)
(2) Amount of retained recourse on these obligations as of the report date.................. A250
0 9.d.(2)
10. When-issued securities:
//////////////////
a. Gross commitments to purchase............................................................... 3434
0 10.a
b. Gross commitments to sell................................................................... 3435
0 10.b.
11. Spot foreign exchange contracts................................................................ 8765
487,442 11.
12. All other off-balance sheet liabilities (exclude off-balance sheet derivatives) (itemize and
//////////////////
describe each component of this item over 25% of Schedule RC, item 28, "Total equity capital") 3430
0 12.
-------------------------------------------------------------------------------------------
//////////////////
a. TEXT 3555 ........................................................ RCFD 3555
////////////////// 12.a.
b. TEXT 3556 ........................................................ RCFD 3556
////////////////// 12.b.
c. TEXT 3557 ........................................................ RCFD 3557
////////////////// 12.c.
d. TEXT 3558 ........................................................ RCFD 3558
////////////////// 12.d.
- - ---------------------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE> 44
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-15
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-L--CONTINUED
Dollar Amounts in Thousands RCFD
Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C>
13. All other off-balance sheet assets (exclude off-balance sheet derivatives) (itemize and
//////////////////
describe each component of this item over 25% of Schedule RC, item 28, "Total equity capital") 5591
0 13.
--------- ------------------------------
//////////////////
a. TEXT 5592 RCFD 5592
////////////////// 13.a.
b. TEXT 5593 RCFD 5593
////////////////// 13.b.
c. TEXT 5594 RCFD 5594
////////////////// 13.c.
d. TEXT 5595 RCFD 5595
////////////////// 13.d.
- - --------------------------------------------------------------------------------------------------------------
C461 <-
----------------- ----------------- -----------------
- - ------------------
(Column A) (Column B) (Column C)
(Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative
Commodity and
- - ---------------------------------------- Contracts Contracts Contracts Other
Contracts
Off-balance Sheet Derivatives ----------------- ----------------- -----------------
- - ------------------
Position Indicators Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil Mil Thou Tril Bil
Mil Thou
---------------------------------------- ----------------- ----------------- -----------------
- - ------------------
<S> <C> <C> <C> C>
14. Gross amounts (e.g., notional ///////////////// ///////////////// /////////////////
/////////////////
amounts) (for each column, sum of ///////////////// ///////////////// /////////////////
/////////////////
items 14.a through 14.e must equal ///////////////// ///////////////// /////////////////
/////////////////
sum of items 15, 16.a, and 16.b): ///////////////// ///////////////// /////////////////
/////////////////
----------------- ----------------- -----------------
- - -----------------
a. Futures contracts ................ 0 0 0
39,037 14.a
----------------- ----------------- -----------------
- - -----------------
RCFD 8693 RCFD 8694 RCFD 8695 RCFD
8696
----------------- ----------------- -----------------
- - -----------------
b. Forward contracts ................ 2,684,800 2,284,466 0
45,604 14.b
----------------- ----------------- -----------------
- - -----------------
RCFD 8697 RCFD 8698 RCFD 8699 RCFD
8700
----------------- ----------------- -----------------
- - -----------------
c. Exchange-traded option contracts: ///////////////// ///////////////// /////////////////
/////////////////
----------------- ----------------- -----------------
- - -----------------
(1) Written options .............. 225,000 0 0
0 14.c.(1)
----------------- ----------------- -----------------
- - -----------------
RCFD 8701 RCFD 8702 RCFD 8703 RCFD
8704
----------------- ----------------- -----------------
- - -----------------
(2) Purchased options ............ 1,276,400 0 0
1,245 14.c.(2)
----------------- ----------------- -----------------
- - -----------------
RCFD 8705 RCFD 8706 RCFD 8707 RCFD
8708
----------------- ----------------- -----------------
- - -----------------
d. Over-the-counter option contracts: ///////////////// ///////////////// /////////////////
/////////////////
----------------- ----------------- -----------------
- - -----------------
(1) Written options .............. 5,051,792 5,200 0
0 14.d.(1)
----------------- ----------------- -----------------
- - -----------------
RCFD 8709 RCFD 8710 RCFD 8711 RCFD
8712
----------------- ----------------- -----------------
- - -----------------
(2) Purchased options ............ 19,427,829 5,200 0
0 14.d.(2)
----------------- ----------------- -----------------
- - -----------------
RCFD 8713 RCFD 8714 RCFD 8715 RCFD
8716
----------------- ----------------- -----------------
- - -----------------
e. Swaps ............................ 24,549,614 0 0
0 14.e
----------------- ----------------- -----------------
- - -----------------
RCFD 3450 RCFD 3826 RCFD 8719 RCFD
8720
----------------- ----------------- -----------------
- - -----------------
15. Total gross notional amount of ///////////////// ///////////////// /////////////////
/////////////////
derivative contracts held for trading. 5,289,505 2,294,866 0
l,245 15
----------------- ----------------- -----------------
- - -----------------
RCFD A126 RCFD A127 RCFD 8723 RCFD
8724
----------------- ----------------- -----------------
- - -----------------
l6. Total gross notional amount of ///////////////// ///////////////// /////////////////
/////////////////
derivative contracts held for ///////////////// ///////////////// /////////////////
/////////////////
purposes other than trading: ///////////////// ///////////////// /////////////////
/////////////////
----------------- ----------------- -----------------
- - -----------------
a. Contracts marked to market ...... 4,239,800 0 0
39,037 16.a.
----------------- ----------------- -----------------
- - -----------------
RCFD 8725 RCFD 8726 RCFD 8727 RCFD
8728
----------------- ----------------- -----------------
- - -----------------
b. Contracts not marked to market .. 43,686,130 0 0
45,604 16.b.
----------------- ----------------- -----------------
- - -----------------
RCFD 8729 RCFD 8730 RCFD 8731 RCFD
8732
----------------- ----------------- -----------------
- - -----------------
</TABLE>
25
<PAGE> 45
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-16
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-L--CONTINUED
(Column A) (Column B) (Column C)
(Column D)
Dollar Amounts in Thousands Interest Rate Foreign Exchange Equity Derivative
Commodity and
Off-balance Sheet Derivatives Contracts Contracts Contracts Other
Contracts
Position Indicators ------------------ ------------------ ------------------
- - ------------------
RFCD Bil Mil Thou RFCD Bil Mil Thou RFCD Bil Mil Thou RFCD
Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
17. Gross fair values of ////////////////// ////////////////// //////////////////
//////////////////
derivative contracts: ////////////////// ////////////////// //////////////////
//////////////////
a. Contracts held for ////////////////// ////////////////// //////////////////
//////////////////
trading: ////////////////// ////////////////// //////////////////
//////////////////
(1) Gross positive ////////////////// ////////////////// //////////////////
//////////////////
fair value................ 8733 31,626 8734 41,468 8736 0 8736
59 17.a.(1)
(2) Gross negative ////////////////// ////////////////// //////////////////
//////////////////
fair value................ 8737 22,099 8738 38,756 8739 0 8740
0 17.a.(2)
b. Contracts held for ////////////////// ////////////////// //////////////////
//////////////////
purposes other than ////////////////// ////////////////// //////////////////
//////////////////
trading that are marked ////////////////// ////////////////// //////////////////
//////////////////
to market: ////////////////// ////////////////// //////////////////
//////////////////
(1) Gross positive ////////////////// ////////////////// //////////////////
//////////////////
fair value................ 8741 2,258 8742 0 8743 0 8744
1,698 17.b.(1)
(2) Gross negative ////////////////// ////////////////// //////////////////
//////////////////
fair value................ 8745 1,417 8746 0 8747 0 8748
0 17.b.(2)
c. Contracts held for ////////////////// ////////////////// //////////////////
//////////////////
purposes other than ////////////////// ////////////////// //////////////////
//////////////////
trading that are not ////////////////// ////////////////// //////////////////
//////////////////
marked to market: ////////////////// ////////////////// //////////////////
//////////////////
(1) Gross positive ////////////////// ////////////////// //////////////////
//////////////////
fair value................ 8749 165,643 8750 0 8751 0 8752
169 17.c.(1)
(2) Gross negative ////////////////// ////////////////// //////////////////
//////////////////
fair value................ 8737 76,308 8754 0 8755 0 8756
0 17.c.(2)
- - ---------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Memoranda Dollar Amounts in Thousands RFCD
Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C>
1.-2. Not applicable
//////////////////
3. Unused commitments with an original maturity exceeding one year that are reported in
//////////////////
Schedule RC-L, items 1.a through 1.e, above (report only the unused portions of commitments
//////////////////
that are fee paid or otherwise legally binding).................................................. 3833
18,552,873 M.3.
a. Participations in commitments with an original maturity
//////////////////
exceeding one year to be conveyed to others......................... RCFD 3834 | 1,789,549
////////////////// M.3.a.
4. To be completed only by banks with $1 billion or more in total assets:
//////////////////
Standby letters of credit and foreign office guarantees (both financial and performance) issued
//////////////////
to non-U.S. addresses (domicile) included in Schedule RC-L, items 2 and 3, above................. 3377
360,019 M.4.
5. Installment loans to individuals for household, family, and other personal expenditures that
//////////////////
have been securitized and sold without recourse (with servicing retained), amounts outstanding
//////////////////
by type of loan:
//////////////////
a. Loans to purchase private passenger automobiles (TO BE COMPLETED FOR THE
//////////////////
SEPTEMBER REPORT ONLY)........................................................................ 2741
N/A M.5.a.
b. Credit cards and related plans (TO BE COMPLETED QUARTERLY).................................... 2742
0 M.5.b.
c. All other consumer installment credit (including mobile home loans)(TO BE COMPLETED FOR THE
//////////////////
SEPTEMBER REPORT ONLY)........................................................................ 2743
N/A M.5.c.
</TABLE>
26
<PAGE> 46
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-17
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-M--MEMORANDA
--------
C465 <-
- - ------------------
Dollar Amounts in Thousands RFCD
Bil Mil Thou
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal
//////////////////
shareholders, and their related interests as of the report date:
//////////////////
a. Aggregate amount of all extensions of credit to all executive officers, directors, principal
//////////////////
shareholders, and their related interests...................................................... 6164
552,349 1.a.
b. Number of executive officers, directors, and principal shareholders to whom the amount of
//////////////////
all extensions of credit by the reporting bank (including extensions of credit to
//////////////////
related interests) equals or exceeds the lesser of $500,000 or 5 percent Number
//////////////////
of total capital as defined for this purpose in agency regulations. RFCD 6165 | 20
////////////////// 1.b.
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches
//////////////////
and agencies of FOREIGN BANKS(1) (included in Schedule RC, items 3.a and 3.b)..................... 3405
0 2.
3. Not applicable.
//////////////////
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others
//////////////////
(include both retained servicing and purchased servicing):
//////////////////
a. Mortgages serviced under a GNMA contract....................................................... 5500
25,732,152 4.a.
b. Mortgages services under a FHLMC contract:
//////////////////
(1) Serviced with recourse to servicer......................................................... 5501
48,720 4.b.(1)
(2) Serviced without recourse to servicer...................................................... 5502
34,857,978 4.b.(2)
c. Mortgages serviced under a FNMA contract:
//////////////////
(1) Serviced under a regular option contract................................................... 5503
249,703 4.c.(1)
(2) Serviced under a special option contract................................................... 5504
41,105,444 4.c.(2)
d. Mortgages serviced under other servicing contracts............................................. 5505
11,267,486 4.d.
5. To be completed only by banks with $1 billion or more in total assets:
//////////////////
Customers' liability to this bank on acceptances outstanding (sum of items 5.a and 5.b must
//////////////////
equal Schedule RC, item 9):
//////////////////
a. U.S. addresses (domicile)...................................................................... 2103
6,244 5.a.
b. Non-U.S. addresses (domicile).................................................................. 2104
136 5.b.
6. Intangible assets:
//////////////////
a. Mortgage servicing rights...................................................................... 3164
1,563,176 6.a.
b. Other identifiable intangible assets
//////////////////
(1) Purchased credit card relationships........................................................ 5506
0 6.b.(1)
(2) All other identifiable intangible assets................................................... 5507
105,984 6.b.(2)
c. Goodwill....................................................................................... 3163
647,473 6.c.
d. Total (sum of items 6.a through 6.c) (must equal Schedule RC, item 10)......................... 2143
2,316,633 6.d.
e. Amount of intangible assets (included in item 6.b.(2) above) that have been grandfathered or
//////////////////
are otherwise qualifying for regulatory capital purposes....................................... 6442
0 6.e.
7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to
//////////////////
redeem the debt................................................................................... 3295
75,000 7.
</TABLE>
- - -----------------
(1) Do not report federal funds sold and securities purchased under agreements
to resell with other commercial banks in the U.S. in this time.
27
<PAGE> 47
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-18
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-M--CONTINUED
- - ------------------
Dollar Amounts in Thousands
BIL MIL THOU
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
8. a. Other real estate owned:
/////////////////////////
(1) Direct and indirect investments in real estate ventures......................... RCFD 5372
0 8.a.(1)
(2) All other real estate owned:
/////////////////////////
(a) Construction and land development in domestic offices........................ RCON 5508
332 8.a.(2)(a)
(b) Farmland in domestic offices................................................. RCON 5509
0 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices........................ RCON 5510
9,789 8.a.(2)(c)
(d) Multifamily (5 or more) residential properties in domestic offices........... RCON 5511
347 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices........................ RCON 5512
8,443 8.a.(2)(e)
(f) In foreign offices........................................................... RCFN 5513
0 8.a.(2)(f)
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7)........ RCFD 2150
18,911 8.a.(3)
b. Investments in unconsolidated subsidiaries and associated companies:
/////////////////////////
(1) Direct and indirect investments in real estate ventures.......................... RCFD 5374
0 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and associated companies.... RCFD 5375
0 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8)........ RCFD 2130
0 8.b.(3)
c. TOTAL ASSETS of unconsolidated subsidiaries and associated companies................. RCFD 5376
0 8.c.
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC,
/////////////////////////
item 23, "Perpetual preferred stock and related surplus"................................ RCFD 3778
125,000 9.
10. Mutual fund and annuity sales in domestic offices during the quarter (include
/////////////////////////
proprietary, private label, and third party products):
/////////////////////////
a. Money market funds................................................................... RCON 6441
204,326 10.a.
b. Equity securities funds.............................................................. RCON 8427
116,418 10.b.
c. Debt securities funds................................................................ RCON 8428
12,837 10.c.
d. Other mutual funds................................................................... RCON 8429
0 10.d.
e. Annuities............................................................................ RCON 8430
103,868 10.e.
f. Sales of proprietary mutual funds and annuities (included in items 10.a. through
/////////////////////////
10.e. above)......................................................................... RCON 8784
302,177 10.f.
- - -------------------------
- - ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Memorandum Dollar Amounts in Thousands RCFD
Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Interbank holdings of capital instruments (TO BE COMPLETED FOR THE DECEMBER REPORT ONLY):
//////////////////
a. Reciprocal holdings of banking organizations' capital instruments........................... 3836
0 M.1.a.
b. Nonreciprocal holdings of banking organizations' capital instruments........................ 3837
0 M.1.b.
- - ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
28
<PAGE> 48
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-19
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-N--PAST DUE AND NONACCRUAL LOANS, LEASES,
AND OTHER ASSETS
The FFIEC regards the information reported in
all of Memorandum item 1, in items 1 through 10,
column A, and in Memorandum items 2 through 4,
column A, as confidential.
--------
C470
- - ------------------------------------------------------------
(Column A) (Column B)
(Column C)
Past due Past due 90
Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
------------------ ------------------
- - ------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD
Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Loans secured by real estate: ////////////////// //////////////////
//////////////////
a. To U.S. addressees (domicile) .................... 1245 1246 65,607 1247
215,496 1.a.
b. To non-U.S. addressees (domicile) ................ 1248 1249 0 1250
0 1.b.
2. Loans to depository institutions and acceptances ////////////////// //////////////////
//////////////////
of other banks: ////////////////// //////////////////
//////////////////
a. To U.S. banks and other U.S. depository ////////////////// //////////////////
//////////////////
institutions ..................................... 5377 5378 0 5379
0 2.a.
b. To foreign banks ................................. 5380 5381 0 5382
0 2.b.
3. Loans to finance agricultural production and ////////////////// //////////////////
//////////////////
other loans to farmers ............................... 1594 1597 0 1583
625 3.
4. Commercial and industrial loans: ////////////////// //////////////////
//////////////////
a. To U.S. addressees (domicile) .................... 1251 1252 12,042 1253
76,393 4.a.
b. To non-U.S. addressees (domicile) ................ 1254 1255 0 1256
0 4.b.
5. Loans to individuals for household, family, and ////////////////// //////////////////
//////////////////
other personal expenditures: ////////////////// //////////////////
//////////////////
a. Credit cards and related plans ................... 5383 5384 1,574 5385
370 5.a.
b. Other (includes single payment, installment, ////////////////// //////////////////
//////////////////
and all student loans) ........................... 5386 5387 24,812 5388
7,184 5.b.
6. Loans to foreign governments and official ////////////////// //////////////////
//////////////////
institutions ......................................... 5389 5390 0 5391
0 6.
7. All other loans ...................................... 5459 5460 11,122 5461
9,921 7.
8. Lease financing receivables: ////////////////// //////////////////
//////////////////
a. Of U.S. addressees (domicile) .................... 1257 1258 21 1259
3,763 8.a
b. Of non-U.S. addressees (domicile) ................ 1271 1272 0 1791
0 8.b.
9. Debt securities and other assets (exclude other ////////////////// //////////////////
//////////////////
real estate owned and other repossessed assets) ...... 3506 3506 0 3507
32,566 9.
- - ---------------------------------------------------------------------------------------------------------------------------------
Amounts reported in items 1 through 8 above include guaranteed and unguaranteed portions of past due and
nonaccrual loans and
leases. Report in item 10 below certain guaranteed loans and leases that have already been included in the
amounts reported in
items 1 through 8.
------------------ ------------------
- - ------------------
RCFD Bil Mil Thou RCFD Bil Mil Thou RCFD
Bil Mil Thou
10. Loans and leases reported in items 1
- - ------------------------------------------------------------
through 8 above which are wholly or partially ////////////////// //////////////////
//////////////////
guaranteed by the U.S. Government .................... 5612 5613 17,347 5614
14,395 10.
a. Guaranteed portion of loans and leases ////////////////// //////////////////
//////////////////
included in item 10 above ........................ 5615 5616 17,056 5617
11,954 10.a.
</TABLE>
29
<PAGE> 49
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-20
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RI-N--CONTINUED
--------
C473
- - ------------------------------------------------------------
(Column A) (Column B)
(Column C)
Past due Past due 90
Nonaccrual
30 through 89 days or more
and still and still
accruing accruing
Memoranda ------------------ ------------------
- - ------------------
Dollar Amounts in Thousands RFCD Bil Mil Thou RFCD Bil Mil Thou RFCD
Bil Mil Thou
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Restructured loans and leases included in ////////////////// //////////////////
//////////////////
Schedule RC-N, items 1 through 8, above (and not ////////////////// //////////////////
//////////////////
reported in Schedule RC-C, part I, Memorandum ////////////////// //////////////////
//////////////////
item 2)................................................ 1658 1659 1661
M.1.
2. Loans to finance commercial real estate, ////////////////// //////////////////
//////////////////
construction, and land development activities ////////////////// //////////////////
//////////////////
(NOT SECURED BY REAL ESTATE) included in ////////////////// //////////////////
//////////////////
Schedule RC-N, items 4 and 7 above..................... 6558 6559 105 6560
1,919 M.2.
3. Loans secured by real estate in domestic offices RCON Bil Mil Thou RCON Bil Mil Thou RCON
Bil Mil Thou
(included in Schedule RC-N, item 1, above): ////////////////// //////////////////
//////////////////
a. Construction and land development................... 2759 2769 0 3492
19,990 M.3.a.
b. Secured by farmland................................. 3493 3494 0 3495
144 M.3.b.
c. Secured by 1-4 family residential properties: ////////////////// //////////////////
//////////////////
(1) Revolving, open-end loans secured by ////////////////// //////////////////
//////////////////
1-4 family residential properties and ////////////////// //////////////////
//////////////////
extended under lines of credit.................. 5398 5399 5,009 5400
10,700 M.3.c.(1)
(2) All other loans secured by 1-4 residential ////////////////// //////////////////
//////////////////
properties...................................... 5401 5402 49,978 5403
100,900 M.3.c.(2)
d. Secured by multifamily (5 or more) residential ////////////////// //////////////////
//////////////////
properties.......................................... 3499 3500 934 3501
9,456 M.3.d.
e. Secured by nonfarm nonresidential properties........ 3502 3503 9,886 3504
74,306 M.3.e.
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------
(Column A) (Column B)
Past due 30 Past due 90
through 89 days days or more
---------------------------------------
RFCD Bil Mil Thou RFCD Bil Mil Thou
---------------------------------------
<S> <C> <C> <C> <C>
4. Interest rate, foreign exchange rate, and other ////////////////// //////////////////
commodity and equity contracts: ////////////////// //////////////////
a. Book value of amounts carried as assets............. 3522 3528 0 M.4.a.
b. Replacement cost of contracts with a ////////////////// //////////////////
positive replacement cost........................... 3529 3530 0 M.4.b.
</TABLE>
30
<PAGE> 50
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-21
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-O--OTHER DATA FOR DEPOSIT INSURANCE ASSESSMENTS
--------
C475 <-
- - ------------------
Dollar Amounts in Thousands RCON
Bil Mil Thou
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Unposted debits (see instructions):
//////////////////
a. Actual amount of all unposted debits........................................................ 0030
0 1.a
OR
//////////////////
b. Separate amount of unposted debits:
//////////////////
(1) Actual amount of unposted debits to demand deposits..................................... 0031
N/A 1.b.(1)
(2) Actual amount of unposted debits to time and savings deposits(1)........................ 0032
N/A 1.b.(2)
2. Unposted credits (see instructions):
//////////////////
a. Actual amount of all unposted credits....................................................... 3510
0 2.a.
OR
//////////////////
b. Separate amount of unposted credits:
//////////////////
(1) Actual amount of unposted credits to demand deposits.................................... 3512
N/A 2.b.(1)
(2) Actual amount of unposted credits to time and savings deposits(1)....................... 3514
N/A 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department (not included in total
//////////////////
deposits in domestic offices).................................................................. 3520
142,277 3.
4. Deposits of consolidated subsidiaries in domestic offices and in insured branches in Puerto
//////////////////
Rico and U.S. territories and possessions (not included in total deposits):
//////////////////
a. Demand deposits of consolidated subsidiaries................................................ 2211
196,951 4.a.
b. Time and savings deposits(1) of consolidated subsidiaries................................... 2351
15,807 4.b.
c. Interest accrued and unpaid on deposits of consolidated subsidiaries........................ 5514
0 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories and possessions:
//////////////////
a. Demand deposits in insured branches (included in Schedule RC-E, Part II).................... 2229
0 5.a.
b. Time and savings deposits(1) in insured branches (included in Schedule RC-E, Part II)....... 2383
0 5.b.
c. Interest accrued and unpaid on deposits in insured branches
//////////////////
(included in Schedule RC-G, item 1.b)....................................................... 5515
0 5.c.
- - ------------------
- - ------------------
Item 6 is not applicable to state nonmember banks that have not been authorized by the
//////////////////
Federal Reserve to act as pass-through correspondents.
//////////////////
6. Reserve balances actually passed through to the Federal Reserve by the reporting bank on
//////////////////
behalf of its respondent depository institutions that are also reflected as deposit liabilities
//////////////////
of the reporting bank:
//////////////////
a. Amount reflected in demand deposits (included in Schedule RC-E, Part I, item 4 or 5,
//////////////////
column B)................................................................................... 2314
0 6.a.
b. Amount reflected in time and savings deposits(1) (included in Schedule RC-E, Part I,
//////////////////
item 4 or 5, column A or C, but not column B)............................................... 2315
0 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1)
//////////////////
a. Unamortized premiums........................................................................ 5516
748 7.a.
b. Unamortized discounts....................................................................... 5517
0 7.b.
- - ------------------
- - -----------------------------------------------------------------------------------------------------------------------
8. TO BE COMPLETED BY BANKS WITH "OAKAR DEPOSITS."
- - ------------------
Total "Adjusted Attributable Deposits" of all institutions acquired under Section 5(d)(3) of
//////////////////
the Federal Deposit Insurance Act (from most recent FDIC Oakar Transaction Worksheet(s))....... 5518
1,395,996 8.
- - ------------------
- - -----------------------------------------------------------------------------------------------------------------------
- - ------------------
9. Deposits in lifeline accounts.................................................................. 5596
///////////// 9.
10. Benefit-responsive "Depository Institution Investment Contracts" (included in total
//////////////////
deposits in domestic offices).................................................................. 8432
0 10.
- - ----------------
(1) For FDIC insurance assessment purposes, "time and savings deposits" consists of nontransaction accounts
and all transaction accounts other than demand deposits.
</TABLE>
31
<PAGE> 51
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-22
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-O--CONTINUED
- - -------------------
Dollar Amounts in Thousands RCON Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
11. Adjustments to demand deposits in domestic offices reported in Schedule RC-E for
//////////////////
certain reciprocal demand balances:
//////////////////
a. Amount by which demand deposits will be reduced if reciprocal demand balances
//////////////////
between the reporting bank and savings associations were reported on a net basis
//////////////////
rather than a gross basis in Schedule RC-E........................................ 8785
0 11.a.
b. Amount by which demand deposits would be increased if reciprocal demand balances
//////////////////
between the reporting bank and U.S. branches and agencies of foreign banks were
//////////////////
reported on a gross basis rather than a net basis in Schedule RC-E................ A181
0 11.b.
c. Amount by which demand deposits would be reduced if cash items in process of
//////////////////
collection were included in the calculation of net reciprocal demand balances
//////////////////
between the reporting bank and the domestic offices of U.S. banks and savings
//////////////////
associations in Schedule RC-E..................................................... A182
0 11.c.
- - -------------------
</TABLE>
<TABLE>
<CAPTION>
- - -------------------
Dollar Amounts in Thousands RCON Bil Mil
Thou
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Total deposits in domestic offices of the bank (sum of Memorandum items 1.a.(1) and
//////////////////
1.b.(1) must equal Schedule RC, item 13.a):
//////////////////
a. Deposit accounts of $100,000 or less:
//////////////////
(1) Amount of deposit accounts of $100,000 or less.................................. 2702
18,219,759 M.1.a.(1)
(2) Number of deposit accounts of $100,000 or less (TO BE Number
//////////////////
COMPLETED FOR THE JUNE REPORT ONLY)........................... RCON 3779 N/A
////////////////// M.1.a.(2)
b. Deposit accounts of more than $100,000:
//////////////////
(1) Amount of deposit accounts of more than $100,000................................ 2710
14,572,399 M.1.b.(1)
Number
//////////////////
(2) Number of deposit accounts of more than $100,000 ............. RCON 2772 28,722
////////////////// M.1.b.(2)
2. Estimated amount of uninsured deposits in domestic offices of the bank:
a. An estimate of your bank's uninsured deposits can be determined by multiplying the
number of deposit accounts of more than $100,000 reported in Memorandum item 1.b.(2)
above by $100,000 and subtracting the result from the amount of deposit accounts of
more than $100,000 reported in Memorandum item 1.b.(1) above.
Indicate in the appropriate box at the right whether your bank has a method or
procedure for determining a better estimate of uninsured deposits than the YES NO
estimate described above.............................................................. 6861 ///
X M.2.a.
b. If the box marked YES has been checked, report the estimate of uninsured deposits RCON Bil Mil
Thou
determined by using your bank's method or procedure................................. 5597
N/A M.2.b.
</TABLE>
- - -------------------------------------------------------------------------------
Person to whom questions about the Reports of Condition and Income should be
directed: C477
PAMELA S. FLYNN, VICE PRESIDENT (401) 278-5194
- - ------------------------------- ----------------------
Name and Title (TEXT 8901) Area code/phone number/extension (TEXT 8902)
32
<PAGE> 52
<TABLE>
<CAPTION>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96
ST-BK: 25-0590 FFIEC 031
Address: ONE MONARCH PLACE
PAGE RC-23
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-R--REGULATORY CAPITAL
This schedule must be completed by all banks as follows: Banks that reported total assets of $1 billion or
more in Schedule RC,
item 12, for June 30, 1995, must complete items 2 through 9 and Memoranda items 1 and 2. BANKS WITH ASSETS
OF LESS THAN $1 BILLION
MUST COMPLETE ITEMS 1 THROUGH 3 BELOW OR SCHEDULE RC-R IN ITS ENTIRETY, DEPENDING ON THEIR RESPONSE TO ITEM
1 BELOW.
<S> <C>
---------------
C480
1. TEST FOR DETERMINING THE EXTENT TO WHICH SCHEDULE RC-R MUST BE COMPLETED. TO BE
- - --------------------------------
COMPLETED ONLY BY BANKS WITH TOTAL ASSETS OF LESS THAN $1 BILLION. Indicate in the
YES NO
appropriate box at the right whether the bank has total capital greater than or
- - --------------------------------
equal to eight percent of adjusted total assets............................................ RCFD 6056
//// 1.
- - --------------------------------
</TABLE>
For purposes of this test, adjusted total assets equals total assets less
cash, U.S. Treasuries, U.S. Government agency obligations, and 80 percent of
U.S. Government-sponsored agency obligations plus the allowance for loan and
lease losses and selected off-balance sheet items as reported on Schedule
RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to complete
items 2 and 3 below. If the box marked NO has been checked, the bank must
complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual
risk-based capital ratio is less than eight percent or that the bank is not
in compliance with the risk-based capital guidelines.
<TABLE>
- - -------------------------------------------------------------------
NOTE: ALL BANKS ARE REQUIRED TO COMPLETE ITEMS 2 AND 3 BELOW.
SEE OPTIONAL WORKSHEET FOR ITEMS 3.a THROUGH 3.f.
- - -----------------------------------------
- - ----------------------------------------------------------------------------- (Column A)
(Column B)
Dollar Amounts in Thousands Subordinated Debt(1)
Other
- - ----------------------------------------------------------------------------- and Intermediate
Limited-Life
2. Subordinated debt(1) and other limited-life capital instruments (original Term Preferred Stock Capital
Instruments
weighted average maturity of at least five years) with a remaining
- - -----------------------------------------
maturity of: RCFD Bil Mil Thou RCFD
Bil Mil Thou
- - -----------------------------------------
<S> <C> <C> <C>
a. One year or less....................................................... 3780 25,737 3786
0 2.a.
b. Over one year through two years........................................ 3781 737 3787
0 2.b.
c. Over two years through three years..................................... 3782 10,745 3788
0 2.c.
d. Over three years through four years.................................... 3783 0 3789
0 2.d.
e. Over four years through five years..................................... 3784 341,000 3790
0 2.e.
f. Over five years........................................................ 3785 760,000 3791
0 2.f.
3. AMOUNTS USED IN CALCULATING REGULATORY CAPITAL RATIOS (REPORT AMOUNTS
//////////////////
DETERMINED BY THE BANK FOR ITS OWN INTERNAL REGULATORY CAPITAL ANALYSES
//////////////////
CONSISTENT WITH APPLICABLE CAPITAL STANDARDS):
- - -------------------------
RCFD
Bil Mil Thou
- - -------------------------
a. TIER 1 CAPITAL................................................................................ 8274
3,756,621 3.a.
b. TIER 2 CAPITAL................................................................................ 8275
1,688,820 3.b.
c. TOTAL RISK-BASED CAPITAL...................................................................... 3792
5,445,441 3.c.
d. EXCESS ALLOWANCE FOR LOAN AND LEASE LOSSES.................................................... A222
200,236 3.d.
e. RISK-WEIGHTED ASSETS (NET OF ALL DEDUCTIONS, INCLUDING EXCESS ALLOWANCE)...................... A223
45,925,732 3.e.
f. "AVERAGE TOTAL ASSETS" (NET OF ALL ASSETS DEDUCTED FROM TIER 1 CAPITAL)(2).................... A224
46,290,168 3.f.
- - ------------------
</TABLE>
<TABLE>
- - -----------------------------------------
(Column A)
(Column B)
ITEMS 4-9 AND MEMORANDA ITEMS 1 AND 2 ARE TO BE COMPLETED Assets
Credit Equiv-
BY BANKS THAT ANSWERED NO TO ITEM 1 ABOVE AND Recorded
alent Amount
BY BANKS WITH TOTAL ASSETS OF $1 BILLION OR MORE. on the of
Off-Balance
Balance Sheet
Sheet Items(3)
- - -----------------------------------------
RCFD Bil Mil Thou RCFD
Bil Mil Thou
- - -----------------------------------------
<S> <C> <C> <C>
4. Assets and credit equivalent amounts of off-balance sheet items
assigned to the Zero percent risk category: //////////////////
//////////////////
a. Assets recorded on the balance sheet: //////////////////
//////////////////
(1) Securities issued by, other claims on, and claims unconditionally //////////////////
//////////////////
guaranteed by, the U.S. Government and its agencies and //////////////////
//////////////////
other OECD central governments..................................... 3794 1,519,575
////////////////// 4.a.(1)
(2) All other.......................................................... 3795 1,316,143
////////////////// 4.a.(2)
b. Credit equivalent amount of off-balance sheet items.................... ////////////////// 3796
1,079,527 4.b
</TABLE>
- - -------------
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.
(2) Do not deduct excess allowance for loan and lease losses.
(3) Do not report in column B the risk-weighted amount of assets reported in
column A.
33
<PAGE> 53
<TABLE>
<CAPTION>
Legal Title of Bank : FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK: 25-0590
FFIEC 031
Address : ONE MONARCH PLACE
Page RC-24
City, State Zip: SPRINGFIELD, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
SCHEDULE RC-R--CONTINUED
Column A)
(Column B)
Assets Credit
Equiv-
Recorded alent
Amount
on the of
Off-Balance
Balance Sheet Sheet
Items(1)
- - --------------------------------------
Dollar Amounts in Thousands RCFD BIL MIL THOU RCFD
BIL MIL THOU
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5. Assets and credit equivalent amounts of off-balance sheet items //////////////////
//////////////////
assigned to the 20 percent risk category: //////////////////
//////////////////
a. Assets recorded on the balance sheet: //////////////////
//////////////////
(1) Claims conditionally guaranteed by the U.S. Government and //////////////////
//////////////////
its agencies and other OECD central governments.................... 3798 726,530
////////////////// 5.a.(1)
(2) Claims collateralized by securities issued by the U.S. Government //////////////////
//////////////////
and its agencies and other OECD central governments; by //////////////////
//////////////////
securities issued by U.S. Government-sponsored agencies; and //////////////////
//////////////////
by cash on deposit................................................. 3799 0
////////////////// 5.a.(2)
(3) All other.......................................................... 3800 7,055,416
////////////////// 5.a.(3)
b. Credit equivalent amount of off-balance sheet items.................... ////////////////// 3801
1,058,252 5.b.
6. Assets and credit equivalent amounts of off-balance sheet items //////////////////
//////////////////
assigned to the 50 percent risk category: //////////////////
//////////////////
a. Assets recorded on the balance sheet................................... 3802 5,371,795
////////////////// 6.a.
b. Credit equivalent amount of off-balance sheet items.................... ////////////////// 3803
866,687 6.b.
7. Assets and credit equivalent amounts of off-balance sheet items //////////////////
//////////////////
assigned to the 100 percent risk category: //////////////////
//////////////////
a. Assets recorded on the balance sheet................................... 3804 31,276,374
////////////////// 7.a.
b. Credit equivalent amount of off-balance sheet items.................... ////////////////// 3805
10,715,771 7.b.
8. On-balance sheet asset values excluded from the calculation of the //////////////////
//////////////////
risk-based capital ratio (2).............................................. 3806 91,771
////////////////// 8.
9. Total assets recorded on the balance sheet (sum of //////////////////
//////////////////
items 4.a, 5.a, 6.a, 7.a, and 8, column A) (must equal Schedule RC, //////////////////
//////////////////
item 12 plus items 4.b and 4.c)........................................... 3807 47,357,604
////////////////// 9.
- - --------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Memoranda
- - ------------------
Dollar Amounts in Thousands RCFD
Bil Mil Thou
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Current credit exposure across all off-balance sheet derivative contracts covered by the//////////////////
risk-based capital standards.................................................................. 8764 236,389 M.1.
- - ------------------
- - ----------------------------------------------------------------------
With a remaining maturity of
- - ----------------------------------------------------------------------
(Column A) (Column B)(Column C)
One year or less Over one year Over
five years
through five years
2. Notional principal amounts of
- - ----------------------------------------------------------------------
off-balance sheet derivative contracts(3): RCFD Tril Bil Mil Thou RCFD Tril Bil Mil Thou RCFD Tril
Bil Mil Thou
- - ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
a. Interest rate contracts................ 3809 7,502,891 8766 33,994,382 8767
779,970 M.2.a.
b. Foreign exchange contracts............. 3812 1,366,429 8769 84,993 8770
0 M.2.b.
c. Gold contracts......................... 8771 33,478 8772 0 8773
0 M.2.c.
d. Other precious metals contracts........ 8774 13,371 8775 0 8776
0 M.2.d.
e. Other commodity contracts.............. 8777 0 8778 0 8779
0 M.2.e.
f. Equity derivative contracts............ A000 0 A001 0 A002
0 M.2.f.
- - ----------------------------------------------------------------------
- - -----------------
(1) Do not report in column B the risk-weighted amount of assets reported in column A.
(2) Include the difference between the fair value and the amortized cost of available-for-sale securities in
item 8 and report
the amortized cost of these securities in items 4 through 7 above. Item 8 also includes on-balance
sheet asset values (or
portions thereof) of off-balance sheet interest rate, foreign exchange rate, and commodity contracts and
those contracts (e.g.,
futures contracts) not subject to risk-based capital. Exclude from item 8 margin accounts and accrued
receivables not included
in the calculation of credit equivalent amounts of off-balance sheet derivatives as well as any portion
of the allowance for
loan and lease losses in excess of the amount that may be included in Tier 2 capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days or less and all futures
contracts.
</TABLE>
34
<PAGE> 54
<TABLE>
<S> <C> <C>
Legal Title of Bank: FLEET NATIONAL BANK Call Date: 12/31/96 ST-BK:
25-0590 FFIEC 031
Address: One Monarch Place
Page RC-25
City, State Zip: Springfield, MA 01102
FDIC Certificate No.: [0][2][4][9][9]
</TABLE>
OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
at close of business on December 31, 1996
Fleet National Bank Springfield , Massachusetts
- - -----------------------------------------------------------------------------
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit a brief
narrative statement on the amounts reported in the Reports of Condition and
Income. This optional statement will be made available to the public, along
with the publicly available data in the Reports of Condition and Income, in
response to any request for individual bank report data. However, the
information reported in column A and in all of Memorandum item 1 of Schedule
RC-N is regarded as confidential and will not be released to the public. BANKS
CHOOSING TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT
DOES NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK
CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN
SCHEDULE RC-N, OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE
PUBLIC OR THAT WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing
not to make a statement may check the "No comment" box below and should make no
entries of any kind in the space provided for the narrative statement; i.e., DO
NOT enter in this space such phrases as "No statement," "Not applicable,"
"N/A," "No comment," and "None."
The optional statement must be entered on this sheet. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement
must not exceed 750 characters, including punctuation, indentation, and
standard spacing between words and sentences. If any submission should exceed
750 characters, as defined, it will be truncated at 750 characters with no
notice to the submitting bank and the truncated statement will appear as the
bank's statement both on agency computerized records and in computer-file
releases to the public.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who
thereby attests to its accuracy.
If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing
narrative statement will be deleted from the files, and from disclosure; the
bank, at its option, may replace it with a statement, under signature,
appropriate to the amended data.
The optional narrative statement will appear in agency records and in release
to the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
- - --------------------------------------------------------------------------------
No comment [X] (RCON 6979) C471 C472
--- ------------
BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)
/s/ Jan 23, 1997
------------------------ ------------------------
Signature of Executive Date of Signature
Officer of Bank
35
