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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)
Hollinger International Inc.
(Name of Issuer)
Class A Common Stock, par value $.01 per share
(Title of Class of Securities)
435569 10 8
--------------------------------------
(CUSIP Number)
Charles G. Cowan, Q.C.
Vice-President and Secretary
Hollinger Inc.
10 Toronto Street
Toronto, Ontario
Canada M5C 2B7
(416) 363-8721
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 7, 1996
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ] .
Check the following box if a fee is being paid with this
statement [ ]. (A fee is not required only if the filing person:
(1) has a previous statement on file reporting beneficial
ownership of more than five percent of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
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containing information which would alter the disclosures provided
in a prior cover page.
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D/A
CUSIP No. 435569 10 8
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Hollinger Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP*
a [ ]
b [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
7 SOLE VOTING POWER
NUMBER OF 54,391,797
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
54,391,797
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON
0
WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
54,391,797
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
60.2%
14 TYPE OF REPORTING PERSON*
HC (Hollinger Inc. is a parent holding
company. See Item 5.)
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SCHEDULE 13D/A
CUSIP No. 435569 10 8
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
The Ravelston Corporation Limited
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP*
a [ ]
b [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ontario, Canada
7 SOLE VOTING POWER
NUMBER OF 54,391,797
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
54,391,797
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON
0
WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
54,391,797
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
60.2%
14 TYPE OF REPORTING PERSON*
HC (The Ravelston Corporation Limited is a
parent holding company. See Item 4.)
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SCHEDULE 13D/A
CUSIP No. 435569 10 8
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Conrad M. Black
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
a [ ]
b [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
7 SOLE VOTING POWER
54,546,397
NUMBER OF
8 SHARED VOTING POWER
SHARES
0
BENEFICIALLY
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 54,546,397
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON
0
WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
54,546,397
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
60.3%
14 TYPE OF REPORTING PERSON*
IN
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SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 13D/A
(Amendment No. 4)
This Schedule 13D/A, Amendment No. 4 (the "Amendment"),
relates to the Class A Common Stock, par value $.01 per share
(CUSIP Number: 435569 10 8) ("Class A Common Stock"), of
Hollinger International Inc., a Delaware corporation (the
"Issuer"). On August 7, 1996 the Issuer completed a public
offering of 10,000,000 shares of its Class A Common Stock. The
underwriters' over-allotment option was exercised in full,
resulting in the issuance of an additional 1,500,000 shares of
Class A Common Stock on August 14, 1996. As a result, there are
69,565,754 shares of Class A Common Stock outstanding. This
Amendment restates in their entirety Items 4, 5, 6 and 7 of the
Schedule 13D of the filing persons dated October 20, 1995, as
amended by Amendment No. 1 thereto dated February 7, 1996,
Amendment No. 2 thereto dated March 7, 1996 and Amendment No. 3
thereto dated June 17, 1996 (collectively, the "Amended Schedule
13D"). No other Items of the Amended Schedule 13D are being
amended at this time. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the
Amended Schedule 13D.
Item 4. Purpose of Transaction.
Hollinger Inc. beneficially owns shares of both classes
of the Issuer's Common Stock representing approximately 83.6% of
the combined voting power of such classes (without giving effect
to the future issuance of Class A Common Stock in connection with
the Issuer's PRIDES (as defined below) or upon conversion of the
Series A Preferred Shares). As a result, Hollinger Inc. is in a
position to control the outcome of substantially all actions of
the Issuer requiring stockholder approval, including the election
of the entire Board of Directors of the Issuer. Subject to the
fiduciary responsibilities of the directors of the Issuer to all
stockholders and the terms of certain agreements defining the
ongoing relationships between Hollinger Inc. and the Issuer,
Hollinger Inc., through its ability to control the outcome of any
election of directors, is able to direct management policy,
strategic direction and financial decisions of the Issuer.
Ravelston effectively controls Hollinger Inc. through
its direct or indirect control or direction over 46.7% of the
outstanding common shares of Hollinger Inc. This percentage
includes Hollinger Inc. common shares held by the Ravelston Trust
and the following direct and indirect subsidiaries of Ravelston:
Argus Corporation Limited, 176264 Canada Limited, 2753430 Canada
Limited, 176268 Canada Limited and 176295 Canada Limited. The
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Ravelston Trust was formed pursuant to a Trust Agreement dated as
of October 31, 1991 among Ravelston, the Canadian Imperial Bank
of Commerce ("CIBC") and Mr. Black, J. A. Boultbee and R.
Geoffrey Browne, as trustees (the "Trustees"). The Trustees have
granted Ravelston an irrevocable proxy to vote all of the
Hollinger Inc. common shares held by the Ravelston Trust as long
as the Ravelston Trust holds such common shares. As the holder
of 100 units of the Ravelston Trust, Ravelston has the right to
direct the disposition of 100 of the Hollinger Inc. common shares
held by the Ravelston Trust. As the holder of the remaining
5,531,915 units of the Ravelston Trust, CIBC has the right to
direct the disposition of 5,531,915 of the Hollinger Inc. common
shares held by the Ravelston Trust. Conrad Black Capital
Corporation holds 65.3% of the common shares of Ravelston. Mr.
Black is the sole shareholder and Chairman of Conrad Black
Capital Corporation.
As a result of the performance of their duties as
directors and officers of the Issuer, certain directors and
officers of Hollinger Inc. and Ravelston, including Mr. Black,
expect to have continually under consideration various plans or
proposals which may relate to or might result in one or more of
the matters described in paragraphs (a) through (j), inclusive,
of Item 4 of Schedule 13D. Any such plans or proposals would,
however, be subject to consideration and approval by the Board of
Directors of the Issuer.
On May 24, 1996, a wholly owned Canadian subsidiary of
Hollinger Inc. purchased from a subsidiary of Power Corporation
of Canada ("Power") the 16,349,743 common shares (the "Power
Shares") of Southam Inc. ("Southam") held by Power, representing
approximately 21.5% of Southam's outstanding common shares, at a
price of Cdn.$18 per share. This purchase increases the Issuer's
and Hollinger Inc.'s combined holdings in Southam to
approximately 41% of Southam's outstanding common shares,
including 19.5% which is currently held indirectly by the Issuer.
Hollinger Inc. intends to further increase its holdings in
Southam through permissible transactions to or above 50% of
Southam's outstanding common shares and may also, subject to
market and other conditions, seek to acquire all Southam common
shares not owned or controlled by Hollinger Inc. or the Issuer
through an offer of the Issuer's Class A Common Stock or
securities convertible into or exchangeable for such stock.
Hollinger Inc. and the Issuer have agreed to combine their
interests in Southam so that the Issuer will hold indirectly non-
voting common shares and voting preference shares representing
one half of the voting power and all of the common equity of
their combined interests. Hollinger Inc. will hold voting
preference shares representing one half of the voting power and
with a nominal amount of paid-up capital which will not be
entitled to any payments, including dividends, other than a
liquidation preference on the nominal amount. Hollinger Inc. and
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the Issuer expect this transaction to occur promptly following
the July 22, 1996 Southam shareholders' meeting. In addition,
the Issuer intends to seek a ruling from Revenue Canada that
would permit the Issuer to hold indirectly 100% of the common
equity interests in Southam held by the Issuer and Hollinger Inc.
without affecting Southam's status as a Canadian publisher of
newspapers and periodicals. If such ruling is received and
approval is obtained under the Investment Act Canada, the full
ownership of the equity interests in Southam held by Hollinger
Inc. and the Issuer would be transferred to the Issuer. If the
Issuer obtains control of Southam (through share ownership or
otherwise), Southam's results of operation will be consolidated
for accounting purposes.
The purchase of the Power Shares was financed by the
Issuer through a short-term bank credit facility (the "Southam
Facility") in the amount of Cdn.$300 million between the Issuer
and CIBC, which assigned a portion of its interest in the loan to
The Bank of Nova Scotia. Approximately Cdn.$75 million of the
Southam Facility was repaid with net proceeds of the August 1996
Offerings (as defined below). The Southam Facility is guaranteed
by Hollinger Inc. and matures on November 25, 1996. The funds
under the Southam Facility were advanced by the Issuer to a
Canadian subsidiary of Hollinger Inc. as an intercompany loan.
The Hollinger Inc. guarantee of the Southam Facility is secured
by a pledge of the Power Shares, 7,539,028 shares of Class A
Common Stock of the Issuer held by Canada Limited and 14,990,000
shares of the Issuer's Class B Common Stock held by Ontario
Limited. Existing registration rights agreements and security
agreements entered into by Hollinger Inc. and its Canadian
lenders have been amended to reflect the pledges under the
Southam Facility. See Item 6.
On August 7, 1996 the Issuer completed a public
offering of 10,000,000 shares of its Class A Common Stock. The
underwriters' over-allotment option was exercised in full,
resulting in the issuance of an additional 1,500,000 shares of
Class A Common Stock on August 14, 1996. Concurrently, the
issuer completed a public offering of 20,700,000 Preferred
Redeemable Increased Dividend Equity Securities ("PRIDES")
(together with the August 1996 Class A Common Stock offering, the
"August 1996 Offerings"). Proceeds of the August 1996 Offerings
were used to, among other things, finance a portion of the
acquisition of the minority shares of The Telegraph plc by the
Issuer.
In addition, the Issuer has stated that it may, through
a subsidiary or an affiliate, issue high yield debt securities,
or other debt or equity securities, possibly including a security
which would allow the Issuer to monetize its interest in John
Fairfax Holdings Limited; however, no decision has been made as
to whether or not the Issuer will proceed, when to proceed or the
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specific type of instrument that it would use. The Issuer
anticipates that it would apply the net proceeds from any such
offering for one or more of the following: (i) the repayment of
bank indebtedness, (ii) the redemption of the DTH and the FDTH
preference shares, and (iii) other corporate purposes, including
capital expenditures and acquisitions.
In the first quarter of 1996 the Issuer increased its
quarterly dividend to $0.10 per share of Common Stock. As an
international holding company, the Issuer's ability to declare
and pay dividends in the future with respect to its Common Stock
will be dependent, among other factors, upon its results of
operations, financial condition and cash requirements, the
ability of its United States and foreign subsidiaries
(principally The Telegraph plc) to pay dividends and make other
payments to the Issuer under applicable law and subject to
restrictions contained in existing and future loan agreements,
the prior payment of dividends to holders of PRIDES and Series A
Preferred Stock, the preference share terms and other financing
obligations to third parties relating to such United States or
foreign subsidiaries of the Issuer, as well as foreign and United
States tax liabilities with respect to dividends and other
payments from those entities.
As stockholders, the filing persons intend to
periodically review and evaluate the market for the Issuer's
Common Stock, the Issuer's business, prospects and financial
condition, general economic conditions and other opportunities
available to the filing persons. On the basis of such periodic
reviews and evaluations, the filing persons may, subject to
certain restrictions imposed by the Share Exchange Agreement and
the Lock-up Agreements as described in Item 6 hereof, determine
to increase or decrease their investment in the Common Stock
through purchases, sales, gifts, or other means of acquisition or
disposition. Among other things, Hollinger Inc. may sell a
portion of the Class A Shares in a secondary offering or
otherwise. The filing persons do not currently anticipate that
any sales, if made, would reduce their beneficial ownership to
less than 50% of the combined voting power of the Issuer's Class
A and Class B Common Stock.
Item 5. Interest in Securities of the Issuer.
Hollinger Inc. and Ravelston
(a) Amount Beneficially Owned: 54,391,797 shares of Class
A Common Stock; 60.2% (calculated pursuant to Rule 13d-
3). Comprised of the following: (i) 10,121,726 shares
of Class A Common Stock held directly by Hollinger
Inc.; (ii) 7,539,028 shares of Class A Common Stock
held by 3184081 Canada Limited ("Canada Limited"), a
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wholly owned subsidiary of Hollinger Inc.; (iii)
15,950,000 shares of Class A Common Stock held by
1159670 Ontario Limited ("Ontario Limited"), an
indirect wholly owned subsidiary of Hollinger Inc.;
(iv) 14,990,000 shares of Class A Common Stock that may
be acquired at any time by the conversion of 14,990,000
shares of Class B Common Stock held by Ontario Limited;
and (v) at an initial conversion price of the Canadian
dollar equivalent of $14.00 per share, 5,791,043 shares
of Class A Common Stock that may be acquired at any
time by the conversion of 739,500 shares of Series A
Preferred Stock held directly by Hollinger Inc. (taking
each share of Series A Preferred Stock at Cdn.$146.625
and assuming an exchange rate of $1.00 per Cdn.$1.3374,
as in effect on October 13, 1995, the date on which
such shares were acquired). The number of shares of
Class A Common Stock into which the Series A Preferred
Shares may be converted will fluctuate from time to
time based on changes in the conversion rate and/or
exchange rate. Through its relationship with Hollinger
Inc. described in Item 4 hereof, Ravelston may be
deemed to beneficially own all of the securities of the
Issuer that are held by Hollinger Inc. and its
subsidiaries.
(b) Voting Power; Dispositive Power: Hollinger Inc. has
the sole power to vote or to direct the vote of and to
dispose of or direct the disposition of 54,391,797
shares of Class A Common Stock. Through its
relationship with Hollinger Inc. described in Item 4
hereof, Ravelston may also be deemed to have the sole
power to vote or to direct the vote of these shares.
(c) Not applicable.
(d) Right to Receive Dividends or Proceeds: Canada Limited
and Ontario Limited have the right to receive the
dividends from or the proceeds from the sale of the
securities which they hold. The shares of Class A
Common Stock held by Canada Limited constitute 10.8% of
the outstanding shares of Class A Common Stock. The
shares of Class A and Class B Common Stock held by
Ontario Limited constitute 36.6% of the outstanding
shares of Class A and Class B Common Stock.
(e) Not applicable.
The amount and percentage of Class A Common Stock
beneficially owned by Hollinger Inc. and Ravelston exclude
154,600 shares of Class A Common Stock beneficially owned by Mr.
Black. Pursuant to Rule 13d-4, Hollinger Inc. and Ravelston
hereby expressly disclaim beneficial ownership of such shares.
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Directors and Executive Officers of Hollinger Inc. and
Ravelston (Other Than Mr. Black):
Except as described below, the directors and executive
officers of Hollinger Inc. and Ravelston (other than Mr. Black)
do not beneficially own any shares of Class A Common Stock.
Barbara Amiel Black, Mr. Black's wife, disclaims beneficial
ownership of any shares of Class A Common Stock beneficially
owned by Mr. Black.
Number of Shares of
Name Class A Common Stock
Beneficially Owned*
J. A. Boultbee 6,000
Dixon S. Chant 17,500
Charles G. Cowan, Q.C. 6,000
F. David Radler 29,600
* Includes shares subject to presently exercisable
options or options exercisable within 60 days of August
7, 1996 under the Issuer's 1994 Stock Option Plan as
follows: Mr. Boultbee, 6,000 shares; Mr. Chant, 10,000
shares; Mr. Cowan, 6,000 shares; and Mr. Radler, 20,000
shares.
Mr. Black
(a) Amount Beneficially Owned: 54,546,397 shares of Class
A Common Stock; 60.3% of class (calculated pursuant to
Rule 13d-3). Comprised of the following: (i)
54,391,797 shares of Class A Common Stock beneficially
owned by Hollinger Inc. and Ravelston; (ii) 9,600
shares of Class A Common Stock held by Conrad Black
Capital Corporation; and (iii) 145,000 shares of Class
A Common Stock that may be acquired by Mr. Black upon
the exercise of all outstanding options held by him,
whether or not presently exercisable or exercisable
within 60 days of August 7, 1996.
(b) Voting Power; Dispositive Power: Through his
relationships with Hollinger Inc., Ravelston and Conrad
Black Capital Corporation described in Item 4 hereof,
and through his personal holdings, Mr. Black may be
deemed to have the sole power to vote or to direct the
vote of and to dispose of or direct the disposition of
54,546,397 shares of Class A Common Stock.
(c) Transactions During Past 60 Days: On August 1, 1996
Mr. Black was granted options to acquire 65,000 shares
of Class A Common Stock under the Issuer's 1994 Stock
Option Plan.
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(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
The Issuer's Restated Certificate of Incorporation, as
amended, provides that holders of Class B Common Stock are
entitled to ten votes per share and holders of Class A Common
Stock are entitled to one vote per share. The holders of Class A
Common Stock and Class B Common Stock vote together as a single
class on all matters on which stockholders may vote, except when
class voting is required by applicable law or on a vote to issue
or increase the authorized number of shares of Class B Common
Stock. Dividends must be paid on both the Class A Common Stock
and the Class B Common Stock at any time dividends are paid on
either.
Each share of Class B Common Stock is convertible at
any time at the option of the holder into one share of Class A
Common Stock and is transferable by Hollinger Inc. to a
subsidiary or an affiliate. In addition, each share of Class B
Common Stock is automatically convertible into a share of Class A
Common Stock at the time it is sold, transferred or otherwise
disposed of by Hollinger Inc. or a subsequent permitted
transferee to any third party (other than a subsidiary or an
affiliate of Hollinger Inc. or such subsequent permitted
transferee) unless 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 the holder of the Class B Common Stock (a "Permitted
Transaction").
Notwithstanding the foregoing paragraph, any holder of
Class B Common Stock may pledge his or its shares of Class B
Common Stock to a pledgee pursuant to a bona fide pledge of such
shares as collateral security for indebtedness due to the
pledgee, provided that such shares shall not be transferred to or
registered in the name of the pledgee and shall remain subject to
the transfer restrictions described in the foregoing paragraph.
In the event that shares of Class B Common Stock are so pledged,
the pledged shares shall not be converted automatically into
Class A Common Stock. However, if any such pledged shares become
subject to any foreclosure, realization or other similar action
of the pledgee, they shall be converted automatically into shares
of Class A Common Stock unless they are sold in a Permitted
Transaction.
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The Issuer's Restated Certificate of Incorporation, as
amended, also provides that no sale, transfer or other
disposition of the Series A Preferred Shares shall be valid
unless made to a subsidiary or affiliate of Hollinger Inc. or
unless the Issuer, by resolution adopted by its Board of
Directors, shall first have consented to the proposed transfer
and approved the proposed transferee (the "Series A Transfer
Restriction"). Notwithstanding the foregoing sentence, any
holder of Series A Preferred Shares may pledge such shares to a
pledgee pursuant to a bona fide pledge of such shares as
collateral security for indebtedness or other obligations due to
the pledgee, provided that such shares shall remain subject to,
and upon foreclosure, realization or other similar action by the
pledgee, shall be transferred only in accordance with, the Series
A Transfer Restriction.
Pursuant to the terms of the Hypothecation of Specific
Securities dated October 13, 1995 by Hollinger Inc. in favor of
CIBC, a copy of which is attached hereto as Exhibit 3, Hollinger
Inc. has pledged the Class A Shares, the Class B Shares and the
Series A Preferred Shares to CIBC as collateral security for the
obligations of Hollinger Inc. and certain affiliated companies
under a Cdn.$117,000,000 demand operating facility and a
Cdn.$75,000,000 364-day revolving debt facility (together, the
"CIBC Facilities"). The CIBC Facilities require compliance by
Hollinger Inc. with certain financial and other covenants and are
subject to standard default and other provisions.
On February 29, 1996 Hollinger Inc. transferred
15,950,000 Class A Shares and the Class B Shares, subject to the
pledge to secure the CIBC Facilities, to Ontario Limited.
Pursuant to the terms of a Securities Pledge Agreement dated
February 29, 1996 (the "February Securities Pledge Agreement"), a
copy of which is attached hereto as Exhibit 7, Ontario Limited
has pledged the 15,950,000 Class A Shares held by it as
collateral security for its obligations under a Cdn.$90,000,000
Credit Agreement dated February 29, 1996 (the "Credit Agreement")
among Ontario Limited, Hollinger Inc., CIBC, as agent for the
Lenders, and CIBC, The Toronto-Dominion Bank and The Bank of Nova
Scotia (collectively, the "Lenders"). The obligations of Ontario
Limited under the Credit Agreement are guaranteed by Hollinger
Inc. and certain of its Canadian subsidiaries. The Credit
Agreement requires compliance by Hollinger and Ontario Limited
with certain financial and other covenants and is subject to
standard default and other provisions.
On May 24, 1996 in connection with the guarantee (the
"Guarantee") by Hollinger Inc., Canada Limited and Ontario
Limited of the obligations of the Issuer under the Southam
Facility, Ontario Limited and Canada Limited entered into
securities pledge agreements with CIBC, copies of which are
attached hereto as Exhibits 9 and 10. On July 17, 1996
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supplemental securities pledge agreements, copies of which are
attached hereto as Exhibits 12 and 13, were entered into to
reflect the syndication of the Southam Facility. Pursuant to
these agreements, the 7,539,028 shares of Class A Common Stock
held by Canada Limited and the 14,990,000 shares of Class B
Common Stock held by Ontario Limited are pledged as security for
the guarantee. The Southam Facility contains covenants customary
in such transactions and is subject to standard default and other
provisions.
Certain registration rights agreements, attached hereto
as Exhibits 4, 8 and 11, were entered into in connection with the
above-described pledges. These agreements provide for
registration (either within a certain time period of execution of
the registration rights agreement or upon foreclosure) under the
Securities Act of 1933, as amended, of the pledged shares of
Class A Common Stock and the shares of Class A Common Stock into
which other pledged securities are convertible.
Under the Share Exchange Agreement, Hollinger Inc. and
the Issuer have agreed that if the Issuer 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 Issuer of the stock or assets of an unrelated corporation or
entity, at any time during the 24 months following the closing
date, the Issuer'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 Issuer's equity securities by
Hollinger Inc., unless a majority of the disinterested members of
an Independent Committee of the Issuer's Board of Directors shall
otherwise agree. For these purposes, an "Independent Committee"
means a committee of the Issuer's Board the majority of the
members of which are not employees or directors of Hollinger Inc.
or employees of the Issuer, or another committee of the Issuer's
Board whose membership satisfies any more restrictive
requirements of independence of any securities exchange or market
in which the Issuer'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 Issuer to be undertaken
within this period.
The Share Exchange Agreement also provides that, until
the second anniversary of the closing date, Hollinger Inc. shall
not, without the prior approval of the Independent Committee,
purchase outstanding shares of Class A Common Stock in the market
from time to time except in conformity with applicable rules and
regulations of the Securities and Exchange Commission or propose
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or undertake (or enter into an agreement or commitment to propose
or undertake) any transaction or series of transactions that
would constitute a Rule 13e-3 transaction (as such term is
defined in Rule 13e-3(a)(3) promulgated under the Securities
Exchange Act of 1934, as amended) with respect to the Issuer (a
"Going Private Transaction") unless Hollinger Inc., as a
condition to the consummation of such Going Private Transaction,
provides that a majority of the disinterested members of the
Independent Committee shall have (i) approved the terms and
conditions of the Going Private Transaction and shall have
recommended that the Issuer's stockholders vote in favor or
accept the terms thereof and (ii) received from its financial
advisor a written fairness opinion for inclusion in the proxy or
information statement (or other similar disclosure documents) to
be delivered to stockholders of the Issuer in connection with the
Going Private Transaction.
As a preliminary step to the Reorganization described
in Item 3 hereof, the HTH Shares (as defined below) were acquired
by FDTH. The HTH Shares are currently pledged by Hollinger Inc.
in connection with Cdn.$125 million of debentures issued by
Hollinger Inc. which mature on November 1, 1998. Pursuant to the
Share Exchange Agreement, Hollinger Inc. has agreed that its
redemption rights as a holder of the Series A Preferred Shares
(and the redemption rights of any subsequent transferee) are
conditional upon its delivery to FDTH of clear title to the HTH
Shares or common shares of Southam Inc., free of liens, pledges,
charges and encumbrances, subject to certain exceptions. For
these purposes, "HTH Shares" means FDTH's one-half ownership
interest in Hollinger-Telegraph Holdings Inc., a joint venture
company through which the Issuer and The Telegraph plc own
14,290,000 Southam common shares (18.9%). With respect to the
Series A Preferred Shares, the Share Exchange Agreement also
provides that so long as any of the Series A Preferred Shares are
held by Hollinger Inc. or any of its affiliates, the Issuer will
not with respect to such shares take any action to effect or
approve any reduction in the conversion price, redeem such shares
or amend or modify the terms of such shares, unless such action
has been approved by a majority of the disinterested members of
the Independent Committee.
In connection with the August 1996 Offerings, Hollinger
Inc., the Issuer and certain of the directors and officers of the
Issuer, including Mr. Black, entered into contractual lock-up
agreements (the Lock-Up Agreements") providing that they will not
sell, contract to sell or grant any option or warrant to purchase
or otherwise dispose of any shares of Class A Common Stock or
PRIDES or any securities convertible into or exercisable or
exchangeable for Class A Common Stock or PRIDES for a period of
90 days after August 1, 1996, without the prior written consent
of Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), other than the shares of Common Stock and PRIDES that
- 15 -
<PAGE>
were sold by the Issuer in the August 1996 Offerings and that are
issuable in connection with the PRIDES, the shares under a shelf
registration statement relating to the shares of Class A Common
Stock of the Issuer owned by Hollinger Inc. and pledged to
certain lenders, the issuance of securities in connection with
the formation of the entity that will hold Hollinger Inc.'s and
the Issuer's combined interests in Southam and related
intercompany transactions, and options to purchase shares under
the Issuer's 1994 Stock Option Plan.
Item 7. Materials to Be Filed as Exhibits.
Exhibit No. Description
1 Joint Filing Agreement dated October 20, 1995,
among Hollinger Inc., The Ravelston
Corporation Limited and The Hon. Conrad M.
Black, P.C., O.C. (individually and on behalf
of Conrad Black Capital Corporation).
2 Share Exchange Agreement dated as of July 19,
1995 between American Publishing Company and
Hollinger Inc. (incorporated by reference to
the definitive proxy statement of the Issuer
dated September 28, 1995).
3 Hypothecation of Specific Securities dated
October 13, 1995 by Hollinger Inc. in favor of
the Canadian Imperial Bank of Commerce.
4 Letter agreement dated October 13, 1995
between Hollinger Inc. and the Canadian
Imperial Bank of Commerce.
5 Letter agreements dated August 1, 1996 between
Hollinger Inc. and certain underwriters.
6 Letter agreements dated August 1, 1996 between
The Hon. Conrad M. Black, P.C., O.C. and
certain underwriters.
7 Securities Pledge Agreement dated February 29,
1996 by 1159670 Ontario Limited in favor of
the Canadian Imperial Bank of Commerce, as
agent for certain lenders.
8 Registration Rights Agreement dated February
29, 1996 among Hollinger Inc., 1159670 Ontario
Limited and certain lenders.
- 16 -
<PAGE>
9 Securities Pledge Agreement dated May 24, 1996
by 1159670 Ontario Limited in favor of the
Canadian Imperial Bank of Commerce.
10 Securities Pledge Agreement dated May 24, 1996
by 3184081 Canada Limited in favor of the
Canadian Imperial Bank of Commerce.
11 Letter agreement dated May 24, 1996 among
Hollinger Inc., Hollinger International Inc.,
1159670 Ontario Limited, 3184081 Canada
Limited and the Canadian Imperial Bank of
Commerce (omitting Schedules A and B).
12 Securities Pledge Agreement dated July 17,
1996 by 1159670 Ontario Limited in favor of
Canadian Imperial Bank of Commerce as agent
for certain lenders.
13 Securities Pledge Agreement dated July 17,
1996 by 3184081 Canada Limited in favor of the
Canadian Imperial Bank of Commerce as agent
for certain lenders.
- 17 -
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Date: August 28, 1996
HOLLINGER INC.
By: /s/ C.G. Cowan
---------------------------
Charles G. Cowan, Q.C.
Title: Vice-President and Secretary
THE RAVELSTON CORPORATION LIMITED
By: /s/ C.G. Cowan
---------------------------
Charles G. Cowan, Q.C.
Title: Vice-President and Secretary
By: /s/ Conrad M. Black
--------------------------
The Hon. Conrad M. Black, P.C.,
O.C., individually and on behalf of
Conrad Black Capital Corporation
Title: Chairman of Conrad Black
Capital Corporation
- 18 -
<PAGE>
EXHIBIT INDEX
Exhibit Description
No.
1 Joint Filing Agreement dated October 20,
1995, among Hollinger Inc., The
Ravelston Corporation Limited and The
Hon. Conrad M. Black, P.C., O.C.
(individually and on behalf of Conrad
Black Capital Corporation) (previously
filed).
2 Share Exchange Agreement dated as of
July 19, 1995 between American
Publishing Company and Hollinger Inc.
(incorporated by reference to the
definitive proxy statement of the Issuer
dated September 28, 1995).
3 Hypothecation of Specific Securities
dated October 13, 1995 by Hollinger Inc.
in favor of the Canadian Imperial Bank
of Commerce (previously filed).
4 Letter agreement dated October 13, 1995
between Hollinger Inc. and the Canadian
Imperial Bank of Commerce (previously
filed).
5 Letter agreements dated August 1, 1996
between Hollinger Inc. and certain
underwriters (filed herewith).
6 Letter agreements dated August 1, 1996
between The Hon. Conrad M. Black, P.C.,
O.C. and certain underwriters (filed
herewith).
7 Securities Pledge Agreement dated
February 29, 1996 by 1159670 Ontario
Limited in favor of the Canadian
Imperial Bank of Commerce, as agent for
certain lenders (previously filed).
8 Registration Rights Agreement dated
February 29, 1996 among Hollinger Inc.,
1159670 Ontario Limited and certain
lenders (previously filed).
- 19 -
<PAGE>
9 Securities Pledge Agreement dated May
24, 1996 by 1159670 Ontario Limited in
favor of the Canadian Imperial Bank of
Commerce (previously filed).
10 Securities Pledge Agreement dated May
24, 1996 by 3184081 Canada Limited in
favor of the Canadian Imperial Bank of
Commerce (previously filed).
11 Letter agreement dated May 24, 1996
among Hollinger Inc., Hollinger
International Inc., 1159670 Ontario
Limited, 3184081 Canada Limited and the
Canadian Imperial Bank of Commerce
(omitting Schedules A and B) (previously
filed).
12 Securities Pledge Agreement dated July
17, 1996 by 1159670 Ontario Limited in
favor of Canadian Imperial Bank of
Commerce as agent for certain lenders.
13 Securities Pledge Agreement dated July
17, 1996 by 3184081 Canada Limited in
favor of the Canadian Imperial Bank of
Commerce as agent for certain lenders.
- 20 -
<PAGE>
Exhibit 5
August 1, 1996
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
as Representatives of the several Underwriters
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
MERRILL LYNCH INTERNATIONAL LIMITED
BEAR, STEARNS INTERNATIONAL LIMITED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
CIBA WOOD GUNDY SECURITIES PLC
TD SECURITIES INC.
as Lead Manager of the several Managers
MERRILL LYNCH CANADA INC.
CIBC WOOD GUNDY SECURITIES INC.
as Sub-Underwriters
c/o Merrill Lynch International Limited
Ropemaker Place
25 Ropemaker Street
Lond ECZ4
9D4
England
Ladies and Gentlemen:
The undersigned understands that you and certain other
firms propose to enter into a U.S. Purchase Agreement and an
International Purchase Agreement providing for the purchase by
you and such other firms named in each such Purchase Agreement
(the "Underwriters") of shares (the "Shares") of Class A Common
Stock, par value $.01 per share (the "Class A Common Stock"), of
Hollinger International Inc. (the "Company").
In consideration of the execution of the Purchase
Agreements and the purchase of the Shares by the Underwriters and
for other good and valuable consideration, the undersigned hereby
irrevocably agrees that without the prior written consent of
Merrill Lynch, Pierce, Fenner & Smith Incorporated, the
undersigned will not sell, contract to sell or otherwise dispose
of any shares of Class A Common Stock or any securities
<PAGE>
convertible into or exercisable or exchangeable for Class A
Common Stock, or grant any options or warrants to purchase any
shares of Class A Common Stock or any securities convertible into
or exercisable or exchangeable for Class A Common Stock for a
period of 90 days after the date of the final prospectus relating
to the offering of the Shares to the public by the Underwriters,
except as provided in the Purchase Agreements, the Purchase
Agreement of even date herewith relating to the PRIDES offered by
the Company, the shelf Registration Statement on Form S-3 (No.
333-04697) relating to the shares of Class A Common Stock held by
Hollinger Inc., the issuance of securities in connection with the
formation of the entity that will hold Hollinger Inc.'s and the
Company's combined interests in Southam and related intercompany
transactions, and options to purchase shares under the Company's
1994 Stock Option Plan.
The undersigned agrees that the provisions of this
agreement shall be binding also upon the successors, assigns,
heirs and personal representatives of the undersigned.
In furtherance of the foregoing, the Company and First
Chicago Trust Company of New York, its Transfer Agent, are hereby
authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this letter
agreement.
It is understood that, if the Purchase Agreements do
not become effective, or if the Purchase Agreements (other than
the provisions thereof which survive termination) shall terminate
or be terminated prior to payment for any delivery of the Shares,
you will release us from our obligations under this letter
agreement.
Very truly yours,
HOLLINGER INC.
By: /s/ Peter Y. Atkinson
------------------------------
Name: Peter Y. Atkinson
Title: Vice President and General Counsel
<PAGE>
August 1, 1996
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
as Representatives of the several Underwriters
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:
The undersigned understands that you and certain other
firms propose to enter into a Purchase Agreement providing for
the purchase by you and such other firms named in each such
Purchase Agreement (the "Underwriters") of 9 3/4% Preferred
Redeemable Increased Dividend Equity Securities ("PRIDES") of
Hollinger International Inc. (the "Company").
In consideration of the execution of the Purchase
Agreement and the purchase of the PRIDES by the Underwriters and
for other good and valuable consideration, the undersigned hereby
irrevocably agrees that without the prior written consent of
Merrill Lynch, Pierce, Fenner & Smith Incorporated, the
undersigned will not sell, contract to sell or otherwise dispose
of any PRIDES or any securities convertible into or exercisable
or exchangeable for PRIDES, or grant any options or warrants to
purchase any shares of PRIDES or any securities convertible into
or exercisable or exchangeable for PRIDES for a period of 90 days
after the date of the final prospectus relating to the offering
of the Shares to the public by the Underwriters, except as
provided in the Purchase Agreement, the Purchase Agreements of
even date herewith relating to the shares of Class A Common Stock
offered by the Company, the shelf Registration Statement on Form
S-3 (No. 333-04697) relating to the shares of Class A Common
Stock held by Hollinger Inc., the issuance of securities in
connection with the formation of the entity that will hold
Hollinger Inc.'s and the Company's combined interests in Southam
and related intercompany transactions, and options to purchase
shares under the Company's 1994 Stock Option Plan.
The undersigned agrees that the provisions of this
agreement shall be binding also upon the successors, assigns,
heirs and personal representatives of the undersigned.
In furtherance of the foregoing, the Company and First
Chicago Trust Company of New York, its Transfer Agent, are hereby
<PAGE>
authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this letter
agreement.
It is understood that, if the Purchase Agreement does
not become effective, or if the Purchase Agreement (other than
the provisions thereof which survive termination) shall terminate
or be terminated prior to payment for any delivery of the PRIDES,
you will release us from our obligations under this letter
agreement.
Very truly yours,
HOLLINGER INC.
By: /s/ Peter Y. Atkinson
------------------------------
Name: Peter Y. Atkinson
Title: Vice President and General Counsel
<PAGE>
Exhibit 6
August 1, 1996
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
as Representatives of the several Underwriters
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
MERRILL LYNCH INTERNATIONAL LIMITED
BEAR, STEARNS INTERNATIONAL LIMITED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
CIBA WOOD GUNDY SECURITIES PLC
TD SECURITIES INC.
as Lead Manager of the several Managers
MERRILL LYNCH CANADA INC.
CIBC WOOD GUNDY SECURITIES INC.
as Sub-Underwriters
c/o Merrill Lynch International Limited
Ropemaker Place
25 Ropemaker Street
Lond ECZ4
9D4
England
Ladies and Gentlemen:
The undersigned understands that you and certain other
firms propose to enter into a U.S. Purchase Agreement and an
International Purchase Agreement providing for the purchase by
you and such other firms named in each such Purchase Agreement
(the "Underwriters") of shares (the "Shares") of Class A Common
Stock, par value $.01 per share (the "Class A Common Stock"), of
Hollinger International Inc. (the "Company").
In consideration of the execution of the Purchase
Agreements and the purchase of the Shares by the Underwriters and
for other good and valuable consideration, the undersigned hereby
irrevocably agrees that without the prior written consent of
Merrill Lynch, Pierce, Fenner & Smith Incorporated, the
undersigned will not sell, contract to sell or otherwise dispose
of any shares of Class A Common Stock or any securities
<PAGE>
convertible into or exercisable or exchangeable for Class A
Common Stock, or grant any options or warrants to purchase any
shares of Class A Common Stock or any securities convertible into
or exercisable or exchangeable for Class A Common Stock for a
period of 90 days after the date of the final prospectus relating
to the offering of the Shares to the public by the Underwriters,
except as provided in the Purchase Agreements, the Purchase
Agreement of even date herewith relating to the PRIDES offered by
the Company, the shelf Registration Statement on Form S-3 (No.
333-04697) relating to the shares of Class A Common Stock held by
Hollinger Inc., the issuance of securities in connection with the
formation of the entity that will hold Hollinger Inc.'s and the
Company's combined interests in Southam and related intercompany
transactions, and options to purchase shares under the Company's
1994 Stock Option Plan.
The undersigned agrees that the provisions of this
agreement shall be binding also upon the successors, assigns,
heirs and personal representatives of the undersigned.
In furtherance of the foregoing, the Company and First
Chicago Trust Company of New York, its Transfer Agent, are hereby
authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this letter
agreement.
It is understood that, if the Purchase Agreements do
not become effective, or if the Purchase Agreements (other than
the provisions thereof which survive termination) shall terminate
or be terminated prior to payment for any delivery of the Shares,
you will release us from our obligations under this letter
agreement.
Very truly yours,
/s/ Conrad M. Black
------------------------------
Name: Conrad M. Black
Title: Chairman and Chief Executive Officer
<PAGE>
August 1, 1996
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
as Representatives of the several Underwriters
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:
The undersigned understands that you and certain other
firms propose to enter into a Purchase Agreement providing for
the purchase by you and such other firms named in each such
Purchase Agreement (the "Underwriters") of 9 3/4% Preferred
Redeemable Increased Dividend Equity Securities ("PRIDES") of
Hollinger International Inc. (the "Company").
In consideration of the execution of the Purchase
Agreement and the purchase of the PRIDES by the Underwriters and
for other good and valuable consideration, the undersigned hereby
irrevocably agrees that without the prior written consent of
Merrill Lynch, Pierce, Fenner & Smith Incorporated, the
undersigned will not sell, contract to sell or otherwise dispose
of any PRIDES or any securities convertible into or exercisable
or exchangeable for PRIDES, or grant any options or warrants to
purchase any shares of PRIDES or any securities convertible into
or exercisable or exchangeable for PRIDES for a period of 90 days
after the date of the final prospectus relating to the offering
of the Shares to the public by the Underwriters, except as
provided in the Purchase Agreement, the Purchase Agreements of
even date herewith relating to the shares of Class A Common Stock
offered by the Company, the shelf Registration Statement on Form
S-3 (No. 333-04697) relating to the shares of Class A Common
Stock held by Hollinger Inc., the issuance of securities in
connection with the formation of the entity that will hold
Hollinger Inc.'s and the Company's combined interests in Southam
and related intercompany transactions, and options to purchase
shares under the Company's 1994 Stock Option Plan.
The undersigned agrees that the provisions of this
agreement shall be binding also upon the successors, assigns,
heirs and personal representatives of the undersigned.
<PAGE>
In furtherance of the foregoing, the Company and First
Chicago Trust Company of New York, its Transfer Agent, are hereby
authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this letter
agreement.
It is understood that, if the Purchase Agreement does
not become effective, or if the Purchase Agreement (other than
the provisions thereof which survive termination) shall terminate
or be terminated prior to payment for any delivery of the PRIDES,
you will release us from our obligations under this letter
agreement.
Very truly yours,
/s/ Conrad M. Black
------------------------------
Name: Conrad M. Black
Title: Chairman and Chief Executive Officer
<PAGE>
Exhibit 12
SECURITIES PLEDGE AGREEMENT
---------------------------
TO: CANADIAN IMPERIAL BANK OF COMMERCE
Commerce Court West - 7th Floor
Toronto, Ontario
M5L 1A2
WHEREAS in order to secure the due payment and performance
of the Obligations (as defined below), the undersigned (the
"Debtor") has agreed to pledge the Pledged Securities (as defined
below) to Canadian Imperial Bank of Commerce, as agent (in that
capacity, the "Agent") for the benefit of the lenders
(collectively, the "Lenders", the present Lenders being Canadian
Imperial Bank of Commerce and The Bank of Nova Scotia) from time
to time parties to the credit commitment agreement titled
"Summary of Terms and Conditions" dated May 24, 1996 among
Hollinger International Inc., Hollinger Inc., Canadian Imperial
Bank of Commerce and the Agent (as supplemented by an assignment
agreement dated as of July 17, 1996 among Hollinger International
Inc., Canadian Imperial Bank of Commerce and The Bank of Nova
Scotia and as further supplemented, amended or restated from time
to time, the "Credit Agreement").
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are conclusively acknowledged by the
parties hereto, the Debtor hereby agrees as follows:
1. DEFINED TERMS. In this Agreement, the following words have
the following meanings:
"Companies" means the corporations, companies, partnerships,
limited partnerships, trusts and other entities listed under the
heading "Companies" in Schedule "A" and their respective
successors;
"Default" means a failure to pay any of the Obligations when
due;
"Lien" means a mortgage, hypothec, title retention, pledge,
lien, charge, security interest or other encumbrance whatsoever,
whether fixed or floating and howsoever created or arising;
"Obligations" means all present and future indebtedness and
liabilities of every kind, nature and description (whether direct
or indirect, joint or several, absolute or contingent, matured or
unmatured) of the Debtor to the Agent and the Lenders under or
pursuant to the guarantee dated the date hereof made by the
- 1 -
<PAGE>
Debtor in favour of the Agent in respect of Hollinger
International Inc. and any unpaid balance thereof; and
"Pledged Securities" means the securities listed under the
heading "Pledged Securities" in Schedule "A", together with any
other securities in the capital of the Companies owned by the
Debtor from time to time.
2. PLEDGE. As general and continuing collateral security for
the payment and performance of all Obligations, the Debtor hereby
assigns and pledges to and in favour of the Agent, and the Debtor
hereby grants to the Agent a continuing security interest in the
following (collectively, the "Collateral"): (i) the Pledged
Securities, together with any replacements thereof and
substitutions therefor, and all certificates and instruments
evidencing or representing such securities; (ii) all dividends,
whether in cash, kind or stock, received or receivable upon or in
respect of any of the Pledged Securities and all moneys or other
property payable or paid on account of any return or repayment of
capital in respect of any of the Pledged Securities or otherwise
distributed in respect thereof or which will in any way be
charged to, or payable or paid out of, the capital of any of the
Companies on account of the Pledged Securities; (iii) all other
property that may at any time be received or receivable by or
otherwise distributed to the Debtor in respect of, or in
substitution for, or in exchange for, any of the foregoing; and
(iv) all cash, securities and other proceeds of the foregoing and
all rights and interests of the Debtor in respect thereof or
evidenced thereby, including all moneys received from time to
time by the Debtor in connection with the sale or other
disposition of any of the Pledged Securities; provided, however,
that the Debtor will not sell or otherwise dispose of any of the
Pledged Securities or purport to do any of the foregoing without
the prior written consent of the Agent.
3. DELIVERY OF PLEDGED SECURITIES. The certificates
representing the Pledged Securities duly endorsed by the
appropriate person in blank for transfer or accompanied by powers
of attorney satisfactory to the Agent will forthwith be delivered
to and remain in the custody of the Agent or its nominee. All
Pledged Securities may, at the option of the Agent, be registered
in the name of the Agent or its nominee. If the Agent so
requests, the certificates representing the Pledged Securities
will also be guaranteed by a Canadian chartered bank.
4. REPRESENTATIONS AND WARRANTIES. The Debtor hereby
represents and warrants to the Agent and acknowledges that the
Agent is relying thereon, notwithstanding any investigation by
the Agent or any Lender or otherwise, that: (i) the Debtor is
the lawful owner of the Collateral, free and clear of any and all
Liens or claims of others other than any Lien granted by the
Debtor to the Agent hereunder or Liens in favour of Canadian
- 2 -
<PAGE>
Imperial Bank of Commerce, with full right to deliver, assign,
pledge and charge the Collateral to the Agent pursuant hereto;
(ii) the Pledged Securities represent all of the issued and
outstanding shares in the capital of each of the Companies held
by the Debtor; (iii) the Pledged Securities are validly issued,
fully paid and non-assessable; (iv) there is no existing
agreement, option, right or privilege capable of becoming an
agreement or option pursuant to which the Debtor would be
required to sell or otherwise dispose of any of the Pledged
Securities; (v) except as otherwise agreed by the Agent in
writing, the Liens granted by the Debtor to the Agent pursuant to
this Agreement constitute Liens on the Collateral in favour of
the Agent which are prior to all other Liens on the Collateral
other than Liens in favour of Canadian Imperial Bank of Commerce,
whether created by the Debtor or any other Person, and in
existence on the date hereof; (vi) the Debtor has the power and
authority and the legal right to execute and deliver, to perform
its obligations under, and to grant the Lien on the Collateral
pursuant to, this Agreement and the Debtor has taken all
necessary corporate action to authorize its execution, delivery
and performance of, and grant of the Lien on the Collateral
pursuant to, this Agreement; (vii) this Agreement constitutes a
legal, valid and binding obligation of the Debtor, enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity; (viii) the
execution, delivery and performance of this Agreement will not
violate any provision or requirement of any law or contractual
obligation of the Debtor and will not result in the creation or
imposition of any Lien on any of the properties or revenues of
the Debtor pursuant to any requirement of law or contractual
obligation of the Debtor; (ix) no consent or authorization of,
filing with, or other act by or in respect of, any arbitrator or
governmental authority and no consent of any other person
(including any shareholder or creditor of the Debtor), is
required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, except for such as
have been obtained or made and are in full force and effect, and
the terms of which have been disclosed to the Agent; and (x) no
litigation, investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the
knowledge of the Debtor, threatened by or against the Debtor or
against any of its properties or revenues which may materially
adversely affect the business, property or financial or other
condition of the Debtor.
5. COVENANTS. The Debtor covenants and agrees with the Agent
that: (i) at any time and from time to time, upon the written
request of the Agent, and at the sole expense of the Debtor, the
Debtor will promptly and duly execute and deliver such further
instruments and documents and take such further action as the
- 3 -
<PAGE>
Agent may request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers
herein granted, including the filing or execution of any
financing or financing change statements under any applicable
legislation in effect in any jurisdiction with respect to the
Liens created hereby; (ii) the Debtor authorizes the Agent to
file any such financing or financing change statement without the
signature of the Debtor to the extent permitted by applicable
law; (iii) the Debtor will not create, incur or permit to exist,
but will defend the Collateral against, and will take such other
action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and Liens in
favour of Canadian Imperial Bank of Commerce and other than as
permitted in writing by the Agent; (iv) the Debtor will not sell,
transfer, lease or otherwise dispose of any of the Collateral
except as permitted in writing by the Agent; and (v) the Debtor
will ensure that at the request of the Agent, all Pledged
Securities are registered in the name of the Agent or its
nominee, that the certificates representing the Pledged
Securities will be forthwith delivered to and remain in the
custody of the Agent or its nominee, and that all certificates,
instruments or other documents representing or evidencing any
Pledged Securities acquired or issued subsequent to the date
hereof will be registered in the name of the Agent or its nominee
and will forthwith after issuance be delivered to, and remain in
the custody of, the Agent or its nominee.
6. RIGHTS AND DUTIES OF AGENT. The Agent will have and be
entitled to exercise all such powers hereunder as are
specifically delegated to the Agent by the terms hereof, together
with such powers as are incidental thereto. The Agent may
execute any of its duties hereunder by or through agents and will
be entitled to retain counsel and to act in reliance upon the
advice of such counsel concerning all matters pertaining to its
duties hereunder. The Agent and any nominee on its behalf will
be bound to exercise in the holding of the Pledged Securities and
other Collateral only the same degree of care as it would
exercise with respect to similar property of its own held in the
same place. Neither the Agent, nor any Lender, nor any nominee
acting on behalf of the Agent or any Lender, nor any director,
officer or employee of the Agent or any Lender or such nominee,
will be liable for any action taken or admitted to be taken by it
hereunder or in connection herewith except for its own gross
negligence or wilful misconduct.
7. VOTING RIGHTS. Unless a Default has occurred and is
continuing, the Debtor will be entitled to exercise all voting
power from time to time exercisable in respect of the Pledged
Securities and give consents, waivers and ratifications in
respect thereof. Immediately upon the occurrence and during the
continuance of any Default, all such rights of the Debtor to vote
and give consents, waivers and ratifications will cease and the
- 4 -
<PAGE>
Agent will be entitled to exercise all such voting rights and to
give all consents, waivers and ratifications as permitted by the
Agent.
8. DIVIDENDS. Unless a Default has occurred and is continuing,
the Debtor will, subject to any agreement with the Agent to the
contrary, be entitled to receive any and all cash dividends and
other distributions on the Pledged Securities which it is
otherwise entitled to receive. If a Default has occurred and is
continuing, the Agent will have the sole and exclusive right and
authority to receive and retain the dividends and other
distributions which the Debtor would otherwise be authorized to
receive. Any money and other property paid over to or received
by the Agent pursuant to the provisions of this Section 8 will be
retained by the Agent as additional Collateral hereunder and be
applied in accordance with the provisions hereof.
9. REMEDIES. If a Default has occurred and is continuing, the
Agent may, without notice to or the consent of the Debtor or any
other person (other than as required by applicable law), take all
or any of the following actions:
(a) transfer all or any part of the Collateral into the name of
the Agent or any Lender or any nominee on behalf of the
Agent or any Lender, with or without disclosing that such
Collateral is subject to the Lien hereunder;
(b) notify any parties obligated on any of the Collateral to
make payment to the Agent or any Lender of any amounts due
or to become due thereunder;
(c) exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options
pertaining to any of the Pledged Securities as if it were
the absolute owner thereof;
(d) from time to time realize upon, collect, sell, transfer,
assign, give options to purchase, or otherwise dispose of
and deliver the Pledged Securities and other Collateral, or
any part thereof, in such a manner as may seem to it
advisable, and for the purposes thereof each and every
requirement relating thereto and prescribed by law or
otherwise is hereby waived to the extent permitted by law;
(e) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any
part of any property in addition to the Collateral, securing
any of the Obligations, or compromise or extend or renew for
any period (whether or not longer than the original period)
any obligations of any nature of any party with respect to
any property; and
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<PAGE>
(f) to the extent permitted by applicable law, the Agent or any
Lender may purchase any or all of the Pledged Securities and
other Collateral, whether in connection with a sale made
under the power of sale herein contained or pursuant to
judicial proceedings or otherwise;
provided, however, that the Agent and the Lenders will not be
bound to deal with the Pledged Securities and other Collateral as
aforesaid, and will not be liable for any loss which may be
occasioned by any failure to do so and no action of the Agent or
any Lender permitted hereunder will impair or affect any rights
of the Agent or any Lender in and to the Collateral.
10. APPLICATION OF PROCEEDS. After payment of expenses as
provided in Section 11 hereof, the balance of any proceeds
received by the Agent in or in connection with realizing,
collecting, selling, transferring, delivering or obtaining
payment of the Collateral or any part thereof may be held by the
Agent and may, as and when the Agent thinks fit, be applied on
account of such part of the Obligations as to the Agent seems
best, without prejudice to the Agent's and the Lenders' claims
upon the Debtor for any deficiency.
11. PAYMENT OF EXPENSES. The Agent may charge on its own behalf
and also pay to others all out-of-pocket expenses of the Agent
and others retained by the Agent, incurred in connection with
realizing, collecting, selling, transferring, delivering or
obtaining payment of the Pledged Securities or any other
Collateral or any part thereof, or in connection with the
administration or amendment of this Agreement or incidental to
the care, safe keeping, or otherwise of any and all of the
Collateral, and may deduct the amount of such sums from any
proceeds of the Collateral. The Debtor agrees to indemnify and
hold harmless the Agent and the Lenders from and against any and
all liability incurred by the Agent, any Lender or any nominee,
agent or employees of the Agent or any Lender hereunder or in
connection herewith, unless such liability was due to wilful
misconduct or gross negligence on the part of the Agent or Lender
or such nominee or agent.
12. ASSIGNMENT. This Agreement will be binding upon the Debtor
and its successors and permitted assigns and will enure to the
benefit of and be enforceable by the Agent and the Lenders and
their respective successors and assigns. The Debtor will not
assign all or any part of this Agreement without the Agent's
prior written consent.
13. NO WAIVER; CUMULATIVE REMEDIES. Neither the Agent nor any
Lender will by any act, delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have
acquiesced in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on
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the part of the Agent or any Lender, any right, power or
privilege hereunder will operate as a waiver thereof.
14. COMMUNICATION. All communications provided for or permitted
hereunder shall be in writing, personally delivered to an officer
or other responsible employee of the addressee or sent by
registered mail, charges prepaid, or by telecopy, to the address
or telecopy number set forth opposite the name of the Debtor in
the execution pages of this Agreement, in the case of the Debtor,
and to Canadian Imperial Bank of Commerce, Head Office, Commerce
Court West, 7th Floor, Toronto, Ontario M5L 1A2 (Attention:
Vice-President, Global Media & Telecommunications) (Telecopy:
(416) 980-2801), in the case of the Agent and the Lenders, or to
such other address as the applicable party hereto may from time
to time designate to the other in such manner. Any communication
so personally delivered shall be deemed to have been validly and
effectively given on the date of such delivery. Communications
so sent by telecopy shall be deemed to have been validly and
effectively given on the business day next following the day on
which it is sent. Communications so sent by mail shall be deemed
to have been validly and effectively given on the fifth business
day next following the day on which it is sent.
15. DEALINGS BY AGENT AND LENDERS. The Agent and the Lenders
may grant extensions of time and other indulgences, take and give
up security, accept compositions, grant releases and discharges
and otherwise deal with the Debtor and any third party having
dealings with the Debtor, and with the Collateral or any part
thereof, and with other security and sureties, as the Agent and
the Lenders may see fit, all without prejudice to the Obligations
or to the rights of the Agent and the Lenders under this
Agreement. The Agent and the Lenders will be accountable only
for amounts that the Agent or any Lender actually receives as a
result of the exercise of such powers, and neither the Agent nor
any Lender nor any of their officers, directors, employees or
agents will be responsible to the Debtor for any act or failure
to act hereunder, except for its or their own gross negligence or
wilful misconduct.
16. NON-EXCLUSIVITY OF REMEDIES. This Agreement and the Liens
arising hereunder are in addition to and not in substitution for
any other security now or hereafter held by the Agent or any
Lender in respect of the Debtor, the Obligations or the
Collateral. No remedy for the enforcement of the rights of the
Agent and the Lenders hereunder will be exclusive of or dependent
on any other such remedy but any one or more of such remedies may
from time to time be exercised independently or in combination.
17. POWER OF ATTORNEY. The Debtor hereby irrevocably
constitutes and appoints the Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact, with full irrevocable power and authority in
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the place and stead of the Debtor and in the name of the Debtor
or in its own name, from time to time in the Agent's discretion,
for the purpose of carrying out the terms of this Agreement, to
take any and all appropriate action, to do, make and execute any
and all statements, acts, matters, documents, instruments and
things which may be necessary or desirable to accomplish the
purposes of this Agreement and from time to time to exercise all
rights and powers and to perform all acts of ownership in respect
to the Pledged Securities to the same extent as the Debtor might
have done were it not for this Agreement. The Debtor hereby
ratifies all that said attorneys will lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled
with an interest and will be irrevocable until the Obligations
have been paid and performed in full.
18. NO MERGER. Neither the taking and holding of the Pledged
Securities and other Collateral nor the obtaining of any judgment
by the Agent or any Lender will operate as a merger of any
Obligation or any other indebtedness or liability of the Debtor
to the Agent or any Lender or operate to prejudice the security
constituted by this Agreement.
19. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such
provision in any other jurisdiction.
20. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of Ontario.
21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements,
representations, warranties and covenants made by or on behalf of
the Debtor herein are material, will be considered to have been
relied upon by the Agent and the Lenders and will survive the
execution and delivery of this Agreement or any investigation
made at any time by or on behalf of the Agent or any Lender and
any disposition or payment of the Obligations until repayment in
full thereof.
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<PAGE>
22. ACKNOWLEDGEMENT OF RECEIPT. The Debtor acknowledges receipt
of an executed copy of this Agreement.
DATED: As of July 17, 1996.
ADDRESS 1159670 ONTARIO LIMITED
10 Toronto Street
Toronto, Ontario By: /s/ J. A. Boultbee
M5K 1N2 ---------------------------
Name: J. A. Boultbee
Title: Vice-President,
Finance & Treasury
Attention: President
Facsimile: (416) 364-2088
By: /s/ Peter Y. Atkinson c/s
--------------------------
Name: Peter Y. Atkinson
Title: Vice-President and
General Counsel
Schedule A - Pledged Securities
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SCHEDULE "A"
------------
Certificate
Companies Pledged Securities Number
--------- --------------------------- -----------
No. Class
---------------------------
1. Hollinger 14,990,000 Class B B0001
International Common
Inc. Stock
<PAGE>
Exhibit 13
SECURITIES PLEDGE AGREEMENT
---------------------------
TO: CANADIAN IMPERIAL BANK OF COMMERCE
Commerce Court West - 7th Floor
Toronto, Ontario
M5L 1A2
WHEREAS in order to secure the due payment and performance
of the Obligations (as defined below), the undersigned (the
"Debtor") has agreed to pledge the Pledged Securities (as defined
below) to Canadian Imperial Bank of Commerce, as agent (in that
capacity, the "Agent") for the benefit of the lenders
(collectively, the "Lenders", the present Lenders being Canadian
Imperial Bank of Commerce and The Bank of Nova Scotia) from time
to time parties to the credit commitment agreement titled
"Summary of Terms and Conditions" dated May 24, 1996 among
Hollinger International Inc., Hollinger Inc., Canadian Imperial
Bank of Commerce and the Agent (as supplemented by an assignment
agreement dated as of July 17, 1996 among Hollinger International
Inc., Canadian Imperial Bank of Commerce and The Bank of Nova
Scotia and as further supplemented, amended, restated or replaced
from time to time, the "Credit Agreement").
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are conclusively acknowledged by the
parties hereto, the Debtor hereby agrees as follows:
1. DEFINED TERMS. In this Agreement, the following words have
the following meanings:
"Companies" means the corporations, companies, partnerships,
limited partnerships, trusts and other entities listed under the
heading "Companies" in Schedule "A" and their respective
successors;
"Default" means a failure to pay any of the Obligations when
due;
"Lien" means a mortgage, hypothec, title retention, pledge,
lien, charge, security interest or other encumbrance whatsoever,
whether fixed or floating and howsoever created or arising;
"Obligations" means all present and future indebtedness and
liabilities of every kind, nature and description (whether direct
or indirect, joint or several, absolute or contingent, matured or
unmatured) of the Debtor to the Agent and the Lenders under or
pursuant to the guarantee dated the date hereof made by the
Debtor in favour of the Agent in respect of Hollinger
International Inc. and any unpaid balance thereof; and
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"Pledged Securities" means the securities listed under the
heading "Pledged Securities" in Schedule "A", together with any
other securities in the capital of the Companies owned by the
Debtor from time to time (other than 15,950,000 Class A Common
Stock of Hollinger International Inc. presently owned by the
Debtor and evidenced or represented by share certificate #A0358).
2. PLEDGE. As general and continuing collateral security for
the payment and performance of all Obligations, the Debtor hereby
assigns and pledges to and in favour of the Agent, and the Debtor
hereby grants to the Agent a continuing security interest in the
following (collectively, the "Collateral"): (i) the Pledged
Securities, together with any replacements thereof and
substitutions therefor, and all certificates and instruments
evidencing or representing such securities; (ii) all dividends,
whether in cash, kind or stock, received or receivable upon or in
respect of any of the Pledged Securities and all moneys or other
property payable or paid on account of any return or repayment of
capital in respect of any of the Pledged Securities or otherwise
distributed in respect thereof or which will in any way be
charged to, or payable or paid out of, the capital of any of the
Companies on account of the Pledged Securities; (iii) all other
property that may at any time be received or receivable by or
otherwise distributed to the Debtor in respect of, or in
substitution for, or in exchange for, any of the foregoing; and
(iv) all cash, securities and other proceeds of the foregoing and
all rights and interests of the Debtor in respect thereof or
evidenced thereby, including all moneys received from time to
time by the Debtor in connection with the sale or other
disposition of any of the Pledged Securities; provided, however,
that the Debtor will not sell or otherwise dispose of any of the
Pledged Securities or purport to do any of the foregoing without
the prior written consent of the Agent.
3. DELIVERY OF PLEDGED SECURITIES. The certificates
representing the Pledged Securities duly endorsed by the
appropriate person in blank for transfer or accompanied by powers
of attorney satisfactory to the Agent will forthwith be delivered
to and remain in the custody of the Agent or its nominee. All
Pledged Securities may, at the option of the Agent, be registered
in the name of the Agent or its nominee. If the Agent so
requests, the certificates representing the Pledged Securities
will also be guaranteed by a Canadian chartered bank.
4. REPRESENTATIONS AND WARRANTIES. The Debtor hereby
represents and warrants to the Agent and acknowledges that the
Agent is relying thereon, notwithstanding any investigation by
the Agent or any Lender or otherwise, that: (i) the Debtor is the
lawful owner of the Collateral, free and clear of any and all
Liens or claims of others other than any Lien granted by the
Debtor to the Agent hereunder or Liens in favour of Canadian
Imperial Bank of Commerce, with full right to deliver, assign,
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<PAGE>
pledge and charge the Collateral to the Agent pursuant hereto;
(ii) the Pledged Securities represent all of the issued and
outstanding shares in the capital of each of the Companies held
by the Debtor (other than 15,950,000 Class A Common Stock of
Hollinger International Inc. referred to in the definition of
"Pledged Securities"); (iii) the Pledged Securities are validly
issued, fully paid and non-assessable; (iv) there is no existing
agreement, option, right or privilege capable of becoming an
agreement or option pursuant to which the Debtor would be
required to sell or otherwise dispose of any of the Pledged
Securities; (v) except as otherwise agreed by the Agent in
writing, the Liens granted by the Debtor to the Agent pursuant to
this Agreement constitute Liens on the Collateral in favour of
the Agent which are prior to all other Liens on the Collateral
other than Liens in favour of Canadian Imperial Bank of Commerce,
whether created by the Debtor or any other Person, and in
existence on the date hereof; (vi) the Debtor has the power and
authority and the legal right to execute and deliver, to perform
its obligations under, and to grant the Lien on the Collateral
pursuant to, this Agreement and the Debtor has taken all
necessary corporate action to authorize its execution, delivery
and performance of, and grant of the Lien on the Collateral
pursuant to, this Agreement; (vii) this Agreement constitutes a
legal, valid and binding obligation of the Debtor, enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity; (viii) the
execution, delivery and performance of this Agreement will not
violate any provision or requirement of any law or contractual
obligation of the Debtor and will not result in the creation or
imposition of any Lien on any of the properties or revenues of
the Debtor pursuant to any requirement of law or contractual
obligation of the Debtor; (ix) no consent or authorization of,
filing with, or other act by or in respect of, any arbitrator or
governmental authority and no consent of any other person
(including any shareholder or creditor of the Debtor), is
required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, except for such as
have been obtained or made and are in full force and effect, and
the terms of which have been disclosed to the Agent; and (x) no
litigation, investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the
knowledge of the Debtor, threatened by or against the Debtor or
against any of its properties or revenues which may materially
adversely affect the business, property or financial or other
condition of the Debtor.
5. COVENANTS. The Debtor covenants and agrees with the Agent
that: (i) at any time and from time to time, upon the written
request of the Agent, and at the sole expense of the Debtor, the
Debtor will promptly and duly execute and deliver such further
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<PAGE>
instruments and documents and take such further action as the
Agent may request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers
herein granted, including the filing or execution of any
financing or financing change statements under any applicable
legislation in effect in any jurisdiction with respect to the
Liens created hereby; (ii) the Debtor authorizes the Agent to
file any such financing or financing change statement without the
signature of the Debtor to the extent permitted by applicable
law; (iii) the Debtor will not create, incur or permit to exist,
but will defend the Collateral against, and will take such other
action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and Liens in
favour of Canadian Imperial Bank of Commerce and other than as
permitted in writing by the Agent; (iv) the Debtor will not sell,
transfer, lease or otherwise dispose of any of the Collateral
except as permitted in writing by the Agent; and (v) the Debtor
will ensure that at the request of the Agent, all Pledged
Securities are registered in the name of the Agent or its
nominee, that the certificates representing the Pledged
Securities will be forthwith delivered to and remain in the
custody of the Agent or its nominee, and that all certificates,
instruments or other documents representing or evidencing any
Pledged Securities acquired or issued subsequent to the date
hereof will be registered in the name of the Agent or its nominee
and will forthwith after issuance be delivered to, and remain in
the custody of, the Agent or its nominee.
6. RIGHTS AND DUTIES OF AGENT. The Agent will have and be
entitled to exercise all such powers hereunder as are
specifically delegated to the Agent by the terms hereof, together
with such powers as are incidental thereto. The Agent may
execute any of its duties hereunder by or through agents and will
be entitled to retain counsel and to act in reliance upon the
advice of such counsel concerning all matters pertaining to its
duties hereunder. The Agent and any nominee on its behalf will
be bound to exercise in the holding of the Pledged Securities and
other Collateral only the same degree of care as it would
exercise with respect to similar property of its own held in the
same place. Neither the Agent, nor any Lender, nor any nominee
acting on behalf of the Agent or any Lender, nor any director,
officer or employee of the Agent or any Lender or such nominee,
will be liable for any action taken or admitted to be taken by it
hereunder or in connection herewith except for its own gross
negligence or wilful misconduct.
7. VOTING RIGHTS. Unless a Default has occurred and is
continuing, the Debtor will be entitled to exercise all voting
power from time to time exercisable in respect of the Pledged
Securities and give consents, waivers and ratifications in
respect thereof. Immediately upon the occurrence and during the
continuance of any Default, all such rights of the Debtor to vote
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<PAGE>
and give consents, waivers and ratifications will cease and the
Agent will be entitled to exercise all such voting rights and to
give all consents, waivers and ratifications as permitted by the
Agent.
8. DIVIDENDS. Unless a Default has occurred and is continuing,
the Debtor will, subject to any agreement with the Agent to the
contrary, be entitled to receive any and all cash dividends and
other distributions on the Pledged Securities which it is
otherwise entitled to receive. If a Default has occurred and is
continuing, the Agent will have the sole and exclusive right and
authority to receive and retain the dividends and other
distributions which the Debtor would otherwise be authorized to
receive. Any money and other property paid over to or received
by the Agent pursuant to the provisions of this Section 8 will be
retained by the Agent as additional Collateral hereunder and be
applied in accordance with the provisions hereof.
9. REMEDIES. If a Default has occurred and is continuing, the
Agent may, without notice to or the consent of the Debtor or any
other person (other than as required by applicable law), take all
or any of the following actions:
(a) transfer all or any part of the Collateral into the name of
the Agent or any Lender or any nominee on behalf of the
Agent or any Lender, with or without disclosing that such
Collateral is subject to the Lien hereunder;
(b) notify any parties obligated on any of the Collateral to
make payment to the Agent or any Lender of any amounts due
or to become due thereunder;
(c) exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options
pertaining to any of the Pledged Securities as if it were
the absolute owner thereof;
(d) from time to time realize upon, collect, sell, transfer,
assign, give options to purchase, or otherwise dispose of
and deliver the Pledged Securities and other Collateral, or
any part thereof, in such a manner as may seem to it
advisable, and for the purposes thereof each and every
requirement relating thereto and prescribed by law or
otherwise is hereby waived to the extent permitted by law;
(e) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any
part of any property in addition to the Collateral, securing
any of the Obligations, or compromise or extend or renew for
any period (whether or not longer than the original period)
any obligations of any nature of any party with respect to
any property; and
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<PAGE>
(f) to the extent permitted by applicable law, the Agent or any
Lender may purchase any or all of the Pledged Securities and
other Collateral, whether in connection with a sale made
under the power of sale herein contained or pursuant to
judicial proceedings or otherwise;
provided, however, that the Agent and the Lenders will not be
bound to deal with the Pledged Securities and other Collateral as
aforesaid, and will not be liable for any loss which may be
occasioned by any failure to do so and no action of the Agent or
any Lender permitted hereunder will impair or affect any rights
of the Agent or any Lender in and to the Collateral.
10. APPLICATION OF PROCEEDS. After payment of expenses as
provided in Section 11 hereof, the balance of any proceeds
received by the Agent in or in connection with realizing,
collecting, selling, transferring, delivering or obtaining
payment of the Collateral or any part thereof may be held by the
Agent and may, as and when the Agent thinks fit, be applied on
account of such part of the Obligations as to the Agent seems
best, without prejudice to the Agent's and the Lenders' claims
upon the Debtor for any deficiency.
11. PAYMENT OF EXPENSES. The Agent may charge on its own behalf
and also pay to others all out-of-pocket expenses of the Agent
and others retained by the Agent, incurred in connection with
realizing, collecting, selling, transferring, delivering or
obtaining payment of the Pledged Securities or any other
Collateral or any part thereof, or in connection with the
administration or amendment of this Agreement or incidental to
the care, safe keeping, or otherwise of any and all of the
Collateral, and may deduct the amount of such sums from any
proceeds of the Collateral. The Debtor agrees to indemnify and
hold harmless the Agent and the Lenders from and against any and
all liability incurred by the Agent, any Lender or any nominee,
agent or employees of the Agent or any Lender hereunder or in
connection herewith, unless such liability was due to wilful
misconduct or gross negligence on the part of the Agent or Lender
or such nominee or agent.
12. ASSIGNMENT. This Agreement will be binding upon the Debtor
and its successors and permitted assigns and will enure to the
benefit of and be enforceable by the Agent and the Lenders and
their respective successors and assigns. The Debtor will not
assign all or any part of this Agreement without the Agent's
prior written consent.
13. NO WAIVER; CUMULATIVE REMEDIES. Neither the Agent nor any
Lender will by any act, delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have
acquiesced in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on
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<PAGE>
the part of the Agent or any Lender, any right, power or
privilege hereunder will operate as a waiver thereof.
14. COMMUNICATION. All communications provided for or permitted
hereunder shall be in writing, personally delivered to an officer
or other responsible employee of the addressee or sent by
registered mail, charges prepaid, or by telecopy, to the address
or telecopy number set forth opposite the name of the Debtor in
the execution pages of this Agreement, in the case of the Debtor,
and to Canadian Imperial Bank of Commerce, Head Office, Commerce
Court West, 7th Floor, Toronto, Ontario M5L 1A2 (Attention:
Vice-President, Global Media & Telecommunications) (Telecopy:
(416) 980-2801), in the case of the Agent and the Lenders, or to
such other address as the applicable party hereto may from time
to time designate to the other in such manner. Any communication
so personally delivered shall be deemed to have been validly and
effectively given on the date of such delivery. Communications
so sent by telecopy shall be deemed to have been validly and
effectively given on the business day next following the day on
which it is sent. Communications so sent by mail shall be deemed
to have been validly and effectively given on the fifth business
day next following the day on which it is sent.
15. DEALINGS BY AGENT AND LENDERS. The Agent and the Lenders
may grant extensions of time and other indulgences, take and give
up security, accept compositions, grant releases and discharges
and otherwise deal with the Debtor and any third party having
dealings with the Debtor, and with the Collateral or any part
thereof, and with other security and sureties, as the Agent and
the Lenders may see fit, all without prejudice to the Obligations
or to the rights of the Agent and the Lenders under this
Agreement. The Agent and the Lenders will be accountable only
for amounts that the Agent or any Lender actually receives as a
result of the exercise of such powers, and neither the Agent nor
any Lender nor any of their officers, directors, employees or
agents will be responsible to the Debtor for any act or failure
to act hereunder, except for its or their own gross negligence or
wilful misconduct.
16. NON-EXCLUSIVITY OF REMEDIES. This Agreement and the Liens
arising hereunder are in addition to and not in substitution for
any other security now or hereafter held by the Agent or any
Lender in respect of the Debtor, the Obligations or the
Collateral. No remedy for the enforcement of the rights of the
Agent and the Lenders hereunder will be exclusive of or dependent
on any other such remedy but any one or more of such remedies may
from time to time be exercised independently or in combination.
17. POWER OF ATTORNEY. The Debtor hereby irrevocably
constitutes and appoints the Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact, with full irrevocable power and authority in
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<PAGE>
the place and stead of the Debtor and in the name of the Debtor
or in its own name, from time to time in the Agent's discretion,
for the purpose of carrying out the terms of this Agreement, to
take any and all appropriate action, to do, make and execute any
and all statements, acts, matters, documents, instruments and
things which may be necessary or desirable to accomplish the
purposes of this Agreement and from time to time to exercise all
rights and powers and to perform all acts of ownership in respect
to the Pledged Securities to the same extent as the Debtor might
have done were it not for this Agreement. The Debtor hereby
ratifies all that said attorneys will lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled
with an interest and will be irrevocable until the Obligations
have been paid and performed in full.
18. NO MERGER. Neither the taking and holding of the Pledged
Securities and other Collateral nor the obtaining of any judgment
by the Agent or any Lender will operate as a merger of any
Obligation or any other indebtedness or liability of the Debtor
to the Agent or any Lender or operate to prejudice the security
constituted by this Agreement.
19. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such
provision in any other jurisdiction.
20. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of Ontario.
21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements,
representations, warranties and covenants made by or on behalf of
the Debtor herein are material, will be considered to have been
relied upon by the Agent and the Lenders and will survive the
execution and delivery of this Agreement or any investigation
made at any time by or on behalf of the Agent or any Lender and
any disposition or payment of the Obligations until repayment in
full thereof.
- 8 -
<PAGE>
22. ACKNOWLEDGEMENT OF RECEIPT. The Debtor acknowledges receipt
of an executed copy of this Agreement.
DATED: As of July 17, 1996.
ADDRESS 3184081 CANADA LIMITED
10 Toronto Street
Toronto, Ontario By: /s/ J. A. Boultbee
M5K 1N2 -------------------------
Name: J. A. Boultbee
Title: Vice-President,
Finance & Treasury
Attention: President
Facsimile: (416) 364-2088
By: /s/ Peter Y. Atkinson c/s
------------------------
Name: Peter Y. Atkinson
Title: Vice-President and
General Counsel
Schedule A - Pledged Securities
- 9 -
<PAGE>
SCHEDULE "A"
------------
Certificate
COMPANIES PLEDGED SECURITIES NUMBER
--------- ------------------ -----------
NO. CLASS
------------------
1. Hollinger
International 7,539,028 Class A A0499
Inc. Common
Stock
<PAGE>
