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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): August 7, 1996
Hollinger International Inc.
(Exact name of registrant as specified in charter)
Delaware 0-24004 95-3518892
(State or other (Commission (IRS employer
Jurisdiction of incorp.) file number) identification no.)
401 North Wabash Avenue,
Chicago, Illinois 60611
(Address of principal executive officers) (Zip code)
Registrant's telephone number, including area code: (312) 321-2299
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ITEM 5. OTHER EVENTS
PUBLIC OFFERINGS. On August 7 and 14, 1996, Hollinger International Inc.
(the "Company") completed public offerings (the "Offerings") of 11,500,000
shares of Class A Common Stock, par value $.01 per share ("Class A Common
Stock"), at a price of $9.75 per share and 20,700,000 9-3/4% Preferred
Redeemable Increased Dividend Equity Securities ("PRIDES") at a price of $9.75
per PRIDES. The PRIDES are depository shares representing one half share of
Series B Convertible Preferred Stock, par value $.01 per share of the Company,
that will mandatorily convert on the mandatory conversion date of August 1, 2000
into one share of Class A Common Stock and the right to receive an amount in
cash equal to all accrued and unpaid dividends thereon, unless either previously
redeemed or converted at the option of the holder. The PRIDES will pay
cumulative quarterly dividends at a rate of 9-3/4% per annum (equivalent to
$0.9506 per PRIDES) and will have an aggregate liquidation preference equal to
their issue price plus any accrued and unpaid dividends thereon.
The aggregate net proceeds of the Offerings were $301.1 million. The
proceeds were used, first, to finance a portion of the Company's acquisition of
the minority interest in The Telegraph plc ("The Telegraph") (described below)
and pay outstanding indebtedness of The Telegraph and related transaction costs
(approximately $193 million), second, to pay a portion of the Southam Facility
indebtedness (described below) (approximately $55 million), with the balance
available to be used for general corporate purposes, including working capital.
ACQUISITION OF THE MINORITY INTEREST IN THE TELEGRAPH. On April 24, 1996,
the Boards of Directors of the Company and The Telegraph announced a recommended
proposal by the Company to acquire all of the outstanding ordinary shares of The
Telegraph not presently controlled by the Company (the "Telegraph Minority
Shares"). The acquisition of the Telegraph Minority Shares was completed on
August 8, 1996. The consideration paid to the holders of the Telegraph Minority
Shares consisted of (i) a cash payment of L5.60 per share (approximately $8.68);
(ii) a special cash dividend of 10p per share (approximately $0.15) (payable to
all shareholders of record of The Telegraph at the record date of July 30,
1996); (iii) a contingent cash payment to be made by First DT Holdings Limited,
an indirect subsidiary of the Company and the parent company of The Telegraph
("FDTH"), if The Telegraph's approximate 25% interest in John Fairfax Holdings
Limited ("Fairfax") is sold within two years at a price in excess of a specified
amount; and (iv) an option to purchase new preference shares of The Telegraph,
each as more fully described below. In addition, outstanding Telegraph options,
to the extent permitted by their terms, were exercised prior to the Scheme (as
defined below) becoming effective or, if not exercised, were canceled in
exchange for cash payments as provided under the
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Scheme. The total consideration payable by the Company (including the special
dividend to be paid to the holders of the Telegraph Minority Shares and the net
amount payable in respect of outstanding Telegraph options but not the
contingent cash payment) was approximately $455.1 million. The acquisition was
effected by means of a "scheme of arrangement" under Section 425 of the
Companies Act 1985 of Great Britain (the "Scheme"). As a result, The Telegraph
became an indirect wholly owned subsidiary of the Company. The Scheme became
effective on July 31, 1996 and payment of the cash consideration to holders of
Telegraph Minority Shares and the special dividend to all holders of Telegraph
shares (other than Company subsidiaries which waived their entitlement thereto)
was made on August 8, 1996. The Company entered into definitive agreements
(described below under "Financing Related to The Telegraph Acquisition") with
certain financial institutions for short-term bank credit facilities and bridge
financing in the aggregate amount of approximately $625.0 million to provide
the necessary financing for the Scheme and to repay outstanding bank
indebtedness of The Telegraph.
Upon completion of the Scheme, The Telegraph paid a special dividend of 10p
per share in place of its normal interim dividend of about half that amount. In
lieu of an immediate cash payment of L5.60 per share, the holders of the
Telegraph Minority Shares outside of the United States, Canada and Australia
were entitled to elect to receive payments under the Scheme over time through a
loan note due 2001 guaranteed by a financial institution as an alternative to
some or all of the cash consideration. The holders of the Telegraph Minority
Shares will be entitled to receive a further cash payment if The Telegraph's
approximate 25% interest in Fairfax is sold prior to the second anniversary of
the effective date of the Scheme (July 31, 1998) at a price (net of taxes and
certain other costs incurred in connection with the disposal of such Fairfax
shares) in excess of A$3.00 per share. Since the holders of Telegraph Minority
Shares own in the aggregate approximately 36% of the outstanding ordinary shares
of The Telegraph as of the effective date of the Scheme, they would be entitled
to receive approximately 36% of the aggregate net proceeds of such a disposal of
Fairfax shares, payable to each holder pro rata on the basis of that minority
holder's interest in The Telegraph as of the effective date of the Scheme. The
closing market price of the ordinary shares of Fairfax was A$2.90 per share on
April 23, 1996, the date prior to the announcement of the proposal to purchase
the Telegraph Minority Shares. The holders of the Telegraph Minority Shares
also will receive an option to purchase (the "Purchase Option"), exercisable on
the second anniversary of the effective date of the Scheme (the "Purchase
Date"), that number of new preference shares of The Telegraph as will provide
each shareholder with at least the same percentage of voting rights of The
Telegraph as each shareholder held prior to the Scheme becoming effective for a
cash exercise price of L16.80 per new preference share. FDTH will have the
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right to settle its obligations under any exercised Purchase Option in cash
rather than by delivery of new preference shares of The Telegraph. The cash
payment to be made by FDTH would be an amount per new preference share equal to
the product of (i) L5.60 and (ii) a fraction, the numerator of which would be
the weighted average of the closing prices of the Company's Class A Common
Stock on the New York Stock Exchange for the 21 trading days prior to the
Purchase Date and the denominator of which is $12.375 (the closing price of the
Company's Class A Common Stock on April 23, 1996). In light of the cash cost
to exercise the Purchase Option and the formula applicable to FDTH's cash
payment alternative described above, a holder of Telegraph Minority Shares
would not be able to receive an immediate cash profit from FDTH at the time of
exercise of the Purchase Option unless the weighted average market price of the
Class A Common Stock of the Company is above $37.125 (three times its market
value at April 23, 1996) and FDTH elects to settle its obligations under the
Purchase Option in cash. If FDTH does not elect to settle its obligations
under the Purchase Option in cash, any new preference shares received upon
exercise will be shares in an unlisted company and there will be no established
market in these shares.
FINANCING RELATED TO THE TELEGRAPH ACQUISITION. In connection with the
acquisition of the Telegraph Minority Shares, FDTH entered into a short term
credit facility (the "FDTH Credit Facility") on May 30, 1996, as amended on
August 6, 1996, with certain lenders, which consists of a secured,
non-amortizing revolving credit facility with a maximum of L250 million of
available credit to finance the Scheme, which was subsequently reduced to a
maximum of L201.22. The commitment of the lenders under the FDTH Credit
Facility expires on the date which is the earlier of six months from the closing
of the facility or upon the occurrence of an event of default. The FDTH Credit
Facility is more fully described in the Company's Prospectuses dated August 1,
1996.
Hollinger International Publishing Inc., a subsidiary of the Company
("Publishing"), entered into an amended Credit Facility (the "Amended Publishing
Credit Facility") on May 30, 1996, as amended August 6, 1996, with certain
lenders which consists of a secured non-amortizing revolving credit facility.
The Amended Publishing Credit Facility provides for a maximum of $150 million of
available credit which was used principally to finance Publishing's acquisition
of newly-issued Telegraph ordinary shares in connection with the Scheme and for
working capital. The commitment of the lenders under the Amended Publishing
Credit Facility expires on the date which is the earlier of six months from the
closing of the facility or upon the occurrence of an event of default. The
Amended Publishing Credit Facility is more fully described in the Company's
Prospectuses dated August 1, 1996.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial statements of businesses acquired. Not applicable.
(b) Pro forma financial information. Not applicable.
(c) Exhibits.
1.01 U.S. Purchase Agreement dated August 1, 1996
1.02 International Purchase Agreement dated August 1, 1996
1.03 Purchase Agreement with respect to PRIDES dated
August 1, 1996
3.01 Certificate of Designations for Series B Convertible
Preferred Stock
10.01 Deposit Agreement dated August 1, 1996
10.02 First DT Holdings Limited Credit Agreement dated
May 30, 1996
10.03 Amendment dated August 6, 1996 to First DT Holdings
Limited Credit Facility
10.04 Hollinger International Publishing Inc. Amended and
Restated Credit Agreement dated May 30, 1996
10.05 Amendment dated August 6, 1996 to Hollinger
International Publishing Inc. Amended and Restated
Credit Agreement
99.01 Press Release dated August 9, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HOLLINGER INTERNATIONAL INC.
By: /s/ KENNETH L. SEROTA
-----------------------------
Title: Vice President
Date: September 24, 1996
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EXHIBIT INDEX
Exhibit Description Page No.
1.01 U.S. Purchase Agreement dated August 1, 1996
1.02 International Purchase Agreement dated August 1, 1996
1.03 Purchase Agreement with respect to PRIDES dated August 1,
1996
3.01 Certificate of Designations for Series B Convertible
Preferred Stock
10.01 Deposit Agreement dated August 1, 1996
10.02 First DT Holdings Limited Credit Agreement dated May 30,
1996
10.03 Amendment dated August 6, 1996 to First DT Holdings Limited
Credit Facility
10.04 Hollinger International Publishing Inc. Amended and
Restated Credit Agreement dated May 30, 1996
10.05 Amendment dated August 6, 1996 to Hollinger International
Publishing Inc. Amended and Restated Credit Agreement
99.01 Press Release dated August 9, 1996
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Exhibit 1.01
HOLLINGER INTERNATIONAL INC.
(a Delaware corporation)
8,000,000 Shares of Class A Common Stock
U.S. PURCHASE AGREEMENT
August 1, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
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:
Hollinger International Inc., a Delaware corporation (the "Company") and
currently a majority-owned subsidiary of Hollinger Inc., a Canadian corporation
("Hollinger"), confirms its agreements with Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Bear, Stearns & Co. Inc. ("Bear,
Stearns"), Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and each
of the other Underwriters named in Schedule I hereto (collectively, the "U.S.
Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10), for whom Merrill Lynch, Bear, Stearns and
DLJ are acting as representatives (in such capacity, the "Representatives"),
with respect to (i) the sale by the Company and the purchase by the U.S.
Underwriters, acting severally and not jointly, of the respective numbers of
shares totalling 8,000,000 shares of Class A Common Stock, par value $.01 per
share, of the Company ("Common Stock") set forth in said Schedule I and (ii) the
grant by the
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Company to the U.S. Underwriters, acting severally and not jointly, of the
option described in Section 2(e) hereof to purchase all or any part of
1,200,000 additional shares of Common Stock (the "U.S. Option Securities") to
cover over-allotments. The Common Stock (the "U.S. Initial Securities") and
all or any part of the U.S. Option Securities to be purchased by the U.S.
Underwriters are collectively hereinafter called the "Securities".
It is understood that the Company is concurrently entering into an
International Purchase Agreement, dated the date hereof (the "International
Purchase Agreement"), providing for the sale by the Company of 2,000,000 shares
of the Common Stock (the "Initial International Securities") through
arrangements with certain underwriters outside the United Stated and Canada (the
"Managers"), for whom Merrill Lynch International, CIBC Wood Gundy Securities
plc and TD Securities Inc. are acting as lead Managers (the "Lead Managers"),
and the grant by the Company to the Managers of an option to purchase all or any
part of 300,000 additional shares of Common Stock (the "International Option
Securities") to cover over-allotments. The Initial International Securities and
the International Option Securities are hereinafter called the "International
Securities". The U.S. Securities and the International Securities are
hereinafter collectively referred to as the "Offered Securities".
The Company understands that the U.S. Underwriters will simultaneously
enter into an agreement with the Managers dated the date hereof (the
"Intersyndicate Agreement") providing for the coordination of certain
transactions among the U.S. Underwriters and the Managers, under the direction
of Merrill Lynch.
You have advised us that you and the other U.S. Underwriters, acting
severally and not jointly, desire to purchase the Securities, and that you have
been authorized by the other U.S. Underwriters to execute this Agreement and the
Price Determination Agreement referred to below on their behalf.
The public offering price per share for the Securities and the purchase
price per share to be paid by the several U.S. Underwriters shall be agreed upon
by the Company and the Representatives, acting on behalf of the several U.S.
Underwriters, and such agreement shall be set forth in a separate written
instrument substantially in the form of Exhibit A hereto (the "U.S. Price
Determination Agreement"). The U.S. Price Determination Agreement may take the
form of an exchange of any standard form of written telecommunication among the
Company and the Representatives and shall specify such applicable information as
is indicated in Exhibit A hereto. The offering of the
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Securities will be governed by this Agreement, as supplemented by the U.S.
Price Determination Agreement. From and after the date of the execution and
delivery of the U.S. Price Determination Agreement, this Agreement shall be
deemed to incorporate, and all references herein to "this Agreement" or
"herein" shall be deemed to include, the U.S. Price Determination Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-06075) and a related preliminary prospectus for the registration of the
Securities under the Securities Act of 1933 (the "1933 Act"), has filed such
amendments thereto, if any, and such amended preliminary prospectuses as may
have been required to the date hereof, and will file such additional amendments
thereto and such amended prospectuses as may hereafter be required. The term
"Registration Statement" as used in this Agreement means the registration
statement (including all financial schedules and exhibits), as amended at the
time it becomes effective, and as thereafter amended by post-effective
amendment, and any registration statement and any amendments thereto filed
pursuant to Rule 462(b) of the 1933 Act relating to the offering covered by the
initial registration statement (the "Rule 462(b) Registration Statement"). The
term "Prospectuses" as used in this Agreement means the prospectuses in the
forms included in the Registration Statement, or, if the prospectuses included
in the Registration Statement omit information in reliance on Rule 430A under
the 1933 Act and such information is included in prospectuses filed with the
Commission pursuant to Rule 424(b) under the 1933 Act, the term "Prospectuses"
as used in this Agreement means the prospectuses in the forms included in the
Registration Statement as supplemented by the addition of the Rule 430A
information contained in the prospectuses filed with the Commission pursuant to
Rule 424(b).
The Company understands that the U.S. Underwriters propose to make a public
offering of the Securities as soon as the U.S. Underwriters deem advisable after
the Registration Statement becomes effective and the U.S. Price Determination
Agreement has been executed and delivered.
SECTION 1. Representations and Warranties. (a) The Company represents
and warrants to the U.S. Underwriters as of the date hereof and as of the date
of the
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U.S. Price Determination Agreement (such latter date being hereinafter referred
to as the "Representation Date") as follows:
(i) The Registration Statement in the form in which it became or
becomes effective and also in such form as it may be when any
post-effective amendment thereto or any Rule 462(b) Registration Statement
or amendment thereto shall become effective, complied or will comply in all
material respects with the provisions of the 1933 Act and did not or will
not at any such times contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, except that this representation
and warranty does not apply to statements in or omissions from the
Registration Statement made in reliance upon and in conformity with
information relating to the U.S. Underwriters furnished to the Company in
writing by or on behalf of the U.S. Underwriters through you expressly for
use therein.
(ii) The Prospectus and any supplement or amendment thereto, when
filed with the Commission under Rule 424(b) under the 1933 Act, complied or
will comply in all material respects with the provisions of the 1933 Act
and did not or will not at any such times contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that this
representation and warranty does not apply to statements in or omissions
from the Prospectus made in reliance upon and in conformity with
information relating to the Managers furnished to the Company in writing by
or on behalf of the Managers through you expressly for use therein.
(iii) All the outstanding shares of common stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; and the authorized
capital stock of the Company conforms to the description thereof in the
Registration Statement and the Prospectus. Except as described in the
Prospectus or documents incorporated by reference therein, there are no
outstanding options, warrants or other rights issued by the Company calling
for the issuance of, nor
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any written agreement entered into by the Company or oral commitments of
the Company to issue, any shares of capital stock or any other security of
the Company or any security convertible into or exchangeable or
exercisable for capital stock or any other security of the Company.
(iv) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus.
(v) The only significant subsidiaries (as defined in the 1933 Act) of
the Company are the subsidiaries listed in Schedule II hereto (each a
"Subsidiary" and collectively the "Subsidiaries"). Each Subsidiary is a
corporation duly incorporated, validly existing and in good standing in the
jurisdiction of its incorporation, with corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus, and is duly
qualified as a foreign corporation for the transaction of business in and
is in good standing under the laws of each other jurisdiction where the
nature of its properties or the conduct of its business requires such
qualification, except where the failure so to qualify does not have a
material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of such Subsidiary; all the
outstanding shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and nonassessable, and,
except as set forth or described in the Registration Statement or
Prospectus, all shares of the capital stock of the Subsidiaries that are
owned directly or indirectly by the Company are owned free and clear of any
lien, adverse claim, security interest, equity, or other encumbrance.
(vi) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to
which any of their respective properties is subject, that are required to
be described in the Registration Statement or the
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Prospectus but are not described as required, or which might have a
material adverse effect on the condition (financial or other), properties,
net worth or results of operations of the Company and its subsidiaries
considered as one enterprise, or which might materially and adversely
affect the properties or assets thereof or which might materially and
adversely affect the consummation of this Agreement; all pending legal or
governmental proceedings to which the Company or any of the Subsidiaries is
a party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, are, considered in
the aggregate, not material; and there are no agreements, contracts,
indentures, leases or other instruments that are required to be described
in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that are not described or filed as
required by the 1933 Act.
(vii) Except as set forth in the Prospectus, neither the Company nor
any of the Subsidiaries (A) is in violation of its certificate or articles
of incorporation or by-laws, or other organizational documents, (B) is in
violation of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of any
decree of any court or governmental agency or body having jurisdiction over
the Company or any of the Subsidiaries, or (C) is in default in any
material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound,
except, in the case of clause (B) with respect to the Subsidiaries, where
such violation does not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and its subsidiaries considered as one
enterprise.
(viii) Neither the issuance and sale of the Securities, the
execution, delivery or performance of this Agreement and the U.S. Price
Determination
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Agreement by the Company, nor the consummation by the Company of the
transactions contemplated hereby (A) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency
or official (except such as may be required for the registration of the
Securities under the 1933 Act and the Securities Exchange Act of 1934 (the
"Exchange Act") and compliance with the securities or Blue Sky laws of
various jurisdictions, both of which have been or will be effected in
accordance with this Agreement) or violates or will violate the certificate
or articles of incorporation or by-laws, or other organizational documents,
of the Company or any of the Subsidiaries or (B) constitutes or will
constitute a breach of, or a default under, any material agreement,
indenture, lease or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound (except where consents or waivers as to such
default or breach have been obtained prior to the time of the execution of
the U.S. Price Determination Agreement (the "Pricing Time")), or violates
or will violate any statute, law, regulation or judgment, injunction, order
or decree applicable to the Company or any of the Subsidiaries or any of
their respective properties, or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to the terms of any agreement
or instrument to which any of them is a party or by which any of them may
be bound or to which any of the property or assets of any of them is
subject.
(ix) The Securities to be sold by the Company pursuant to this
Agreement have been duly authorized and, when issued and delivered by the
Company upon receipt of the payment therefor in accordance with this
Agreement, will be validly issued, fully paid and non-assessable; no holder
thereof will be subject to personal liability by reason of being such
holder; such Securities are not subject to the preemptive or other similar
rights of any stockholder of the Company arising by operation of law, under
the charter and by-laws of the Company or under any agreement to which the
Company or any of its Subsidiaries is a party.
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(x) KPMG Peat Marwick, who have audited or shall audit certain of
the financial statements included in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are independent public
accountants as required by the 1933 Act.
(xi) The consolidated financial statements of the Company and its
subsidiaries, together with related notes, included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), (A)
in the case of the historical financial statements present fairly the
consolidated financial position and the results of operations of the
Company and its subsidiaries and (B) in the case of the pro forma financial
statements present fairly, on a pro forma basis, the consolidated financial
position and the results of operations of the Company and its subsidiaries,
including The Telegraph plc ("Telegraph"), and its equity investments in
Southam Inc. ("Southam") and John Fairfax Holdings Limited ("Fairfax"), in
each case on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply. Such
financial statements, pro forma financial statements and related notes have
been prepared in accordance with U.S. generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and
data included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) are accurately presented in all material
respects and prepared on a basis consistent with such financial statements
and the books and records of the Company and its subsidiaries.
(xii) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement and the U.S. Price
Determination Agreement have been duly and validly authorized by the
Company, and this Agreement and the U.S. Price Determination Agreement have
been duly executed and delivered by the Company.
(xiii) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any
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amendment or supplement thereto), neither the Company nor any of the
Subsidiaries has incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Company and its subsidiaries considered
as one enterprise, and there has not been any change in the capital stock,
or material increase in the short-term debt or long-term debt, of the
Company or any of the Subsidiaries, or any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company and its
subsidiaries considered as one enterprise.
(xiv) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by them (excluding properties owned by West Ferry
Printers, Trafford Park Printers, Fairfax or Southam), free and clear of
all liens, claims, security interests or other encumbrances except to the
extent such are set forth or described in the Registration Statement and
the Prospectus or in a document filed as an exhibit to the Registration
Statement or are not material to the business of the Company and its
subsidiaries considered as one enterprise and all the property described in
the Prospectus as being held under lease by each of the Company and the
Subsidiaries is held by it under valid, subsisting and enforceable leases
with such exceptions as are not material to the business of the Company and
its subsidiaries considered as one enterprise and do not interfere with the
use made and proposed to be made of such properties by the Company and its
subsidiaries.
(xv) Neither the Company nor any of its affiliates has taken or will
take, directly or indirectly, any action designed to cause or result in
stabilization or manipulation of the price of the Common Stock or any
outstanding securities convertible into or exchangeable or exercisable for
the Common Stock; and neither the Company nor any of its affiliates has
distributed or will distribute any prospectus (as such term is defined in
the 1933 Act and the 1933 Act Regulations) in connection with the offering
and sale of the Securities other than any preliminary prospectus filed with
the
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Commission or the Prospectuses or other material permitted by the 1933 Act
or the 1933 Act Regulations.
(xvi) The Company and each of the Subsidiaries has such governmental
authorizations, approvals, orders, licenses, certificates, franchises and
permits of and from all governmental or regulatory officials and bodies
("permits") as are necessary to own its respective properties and to
conduct its business in the manner described in the Prospectus, with such
exceptions as are not material to the business of the Company and its
subsidiaries considered as one enterprise and do not interfere with the use
made and proposed to be made of such properties by the Company and its
subsidiaries or are otherwise disclosed; the Company and each of the
Subsidiaries has fulfilled and performed all its material obligations with
respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any
such permit, with such exceptions as are not material to the business of
the Company and its subsidiaries considered as one enterprise and do not
interfere with the use made and proposed to be made of such properties by
the Company and its subsidiaries or are otherwise disclosed; and, except as
described in the Prospectus, none of such permits contains any restriction
that is materially burdensome to the Company and its subsidiaries
considered as one enterprise.
(xvii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xviii) To the Company's knowledge, neither the Company nor any of
its Subsidiaries nor any employee or
<PAGE> 11
11
agent of the Company or any Subsidiary has made any payment of funds of the
Company or any Subsidiary or received or retained any funds in violation of
any law, rule or regulation, which payment, receipt or retention of funds
is of a character required to be disclosed in the Prospectus.
(xix) Except as described in the Registration Statement and the
Prospectus, the Company and each of the Subsidiaries have filed all tax
returns required to be filed, which returns are complete and correct, and
neither the Company nor any Subsidiary is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto, with such exceptions as are not material to the financial
position of the Company and its subsidiaries considered as one enterprise.
(xx) The Company and the Subsidiaries own, or possess adequate rights
to use, all patents, trademarks, service marks, trade names, copyrights,
licenses, and rights described in the Prospectus as being owned by them or
any of them or necessary for the conduct of their respective businesses,
and the Company is not aware of any claim to the contrary or any challenge
by any other person to the rights of the Company and the Subsidiaries with
respect to the foregoing.
(xxi) The Company is not now, and after sale of the Securities to be
sold by it hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds" will not
be, an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
(xxii) The Company has complied with all provisions of Florida
Statutes, Section 517.075, relating to issuers doing business with Cuba.
(xxiii) The Securities conform to the descriptions thereof contained
in the Prospectus.
(xxiv) Except as described in the Prospectus and except for the
registration rights granted to certain lenders and described in
Registration Statement No. 333-04697 of the Company and the registration
rights under the agreement dated as of
<PAGE> 12
12
May 30, 1996 among the Company, a wholly owned subsidiary of the Company
and Toronto Dominion Investments, Inc., no holder of any security of the
Company nor any other person has any right, contractual or otherwise, to
have any securities included in the Registration Statement or the right,
because of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement, to require registration of any
security of the Company under the Act.
(xxv) Except as set forth in the Prospectus, no labor dispute with
the employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent which might be expected to result in
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and its
subsidiaries considered as one enterprise.
(xxvi) Except as set forth in the Registration Statement and except
as would not result in a material effect on the condition (financial or
other), or business, properties, net worth or results of operations of the
Company and its subsidiaries considered as one enterprise, and which would
not materially and adversely affect the consummation of this Agreement, (i)
to the knowledge of the Company after reasonable inquiry, the Company is
not in violation of any applicable Federal, foreign, state or local
environmental law or any applicable order of any governmental authority
with respect thereto; (ii) the Company is not in violation of or subject to
any existing, or pending or, to the Company's knowledge, threatened action,
suit, investigation, inquiry or proceeding by any governmental authority
nor is the Company subject to any environmental claim by any citizens'
group or to remedial obligations under any applicable Federal, foreign,
state or local environmental law; (iii) the Company and its subsidiaries
are in compliance with all permits or similar authorizations, if any,
required to be obtained or filed in connection with their operations
including, without limitation, emissions, discharges, treatment, storage,
disposal or release of a Hazardous Material into the environment except
where any noncompliance could not reasonably be expected to have a material
adverse effect on the operations of the Company and its
<PAGE> 13
13
subsidiaries; and (iv) to the knowledge of the Company after reasonable
inquiry, no Hazardous Materials have been disposed of or released by the
Company or its subsidiaries at, under or on any property currently or
formerly owned or operated by the Company or its subsidiaries, except in
accordance with applicable environmental laws. The term "Hazardous
Material" means any oil (including petroleum products, crude oil and any
fraction thereof), chemical, contaminant, pollutant, solid or hazardous
waste or material, or Hazardous Substance (as defined in Section 101(14) of
the Comprehensive Environmental Response, Compensation and Liability Act
and regulations thereunder), that is regulated as toxic or hazardous to
human health or the environment under any Federal, foreign, state or local
environmental law.
(xxvii) The Company and each other person or entity that, together
with the Company, is treated as a single employer under Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code") (each such person or
entity being an "ERISA Affiliate"), complies in all material respects with
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code with respect to each pension plan (as defined in Section 3(2)
of ERISA) maintained by the Company or such ERISA Affiliate, and none of
the Company or any of its ERISA Affiliates has incurred any material
liability to any pension plan or to the Pension Benefit Guaranty
Corporation that has not been fully paid as of the date hereof (except as
disclosed in the Registration Statement and the Prospectus (or any
amendment or supplement thereto).
(b) Any certificate signed by an officer of the Company and delivered to
the U.S. Underwriters or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company to the U.S. Underwriters as to the
matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing. (a) On the
basis of the representations and warranties herein contained, and subject to the
terms and conditions herein set forth, the Company agrees to sell to the U.S.
Underwriters, and the U.S. Underwriters agrees to purchase from the Company, at
the purchase price per share set forth in the U.S. Price Determination
Agreement, the U.S. Initial Securities.
<PAGE> 14
14
(b) If the Company has elected not to rely upon Rule 430A under the 1933
Act Regulations, the initial public offering price and the purchase price per
share of Common Stock to be paid by the U.S. Underwriters shall be agreed upon
and set forth in the U.S. Price Determination Agreement, dated the date hereof,
and an amendment to the Registration Statement containing such information will
be filed with the Commission, before the Registration Statement becomes
effective.
(c) If the Company has elected to rely upon Rule 430A under the 1933 Act
Regulations, the initial public offering price and the purchase price per share
of Common Stock to be paid by the U.S. Underwriters shall be agreed upon and set
forth in the U.S. Price Determination Agreement. In the event that the U.S.
Price Determination Agreement has not been executed by the close of business on
the fourth business day following the date on which the Registration Statement
becomes effective, this Agreement shall terminate forthwith, without liability
of any party to any other party except that Sections 6, 7 and 8 shall remain in
effect.
(d) The Company will deliver the U.S. Initial Securities to the
Representatives, for the account of the U.S. Underwriters, at the offices of
Cravath, Swaine & Moore, 825 Eighth Avenue, New York, NY 10019, or at such other
place as shall be agreed upon by the Company and the Representatives, against
payment of the gross purchase price minus an amount equal to the underwriting
commission applicable to the Initial Securities as described in the Price
Determination Agreement by wire transfer to the Company in U.S. dollars, in
funds immediately available to the Company, at 9:00 a.m. either (i) on the third
business day following the date upon which the Company shall have fulfilled all
requirements which under the 1933 Act must be fulfilled to qualify the
Securities for distribution and the Registration Statement shall have become
effective or (ii) if the Company has elected to rely upon Rule 430A under the
1933 Act Regulations, on the third business day after execution of the U.S.
Price Determination Agreement, or at such other time not later than ten full
business days thereafter as the Representatives and the Company determine (such
time being herein referred to as the "Closing Date"). The U.S. Initial
Securities so to be delivered will be in definitive, fully registered form in
such denominations and registered in such names as the Representatives shall
request in writing at least two full business days prior to
<PAGE> 15
15
the Closing Date, and will be made available for checking and packaging at the
office of the Transfer Agent of the Company, not later than 10:00 a.m. on the
business day prior to the Closing Date.
(e) In addition, on the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, upon
written notice from the U.S. Underwriters given to the Company not more than 30
days after the date upon which the Registration Statement becomes effective or,
if the Company has elected to rely on Rule 430A under the 1933 Act Regulations,
the date of the U.S. Price Determination Agreement, the U.S. Underwriters may
purchase all or less than all of the U.S. Option Securities at the purchase
price per share to be paid for the U.S. Initial Securities. The Company agrees
to sell to the U.S. Underwriters the amount of U.S. Option Securities specified
in such notice and the U.S. Underwriters agree to purchase such U.S. Option
Securities. Such U.S. Option Securities may be purchased by the U.S.
Underwriters in whole or from time to time in part only for the purpose of
covering over-allotments made in connection with the sale of the U.S. Initial
Securities. No U.S. Option Securities shall be sold or delivered unless the
U.S. Initial Securities previously have been, or simultaneously are, sold and
delivered. The right to purchase the U.S. Option Securities or any portion
thereof will expire 30 days after the later of (i) the date upon which the
Registration Statement becomes effective and (ii) if the Company has elected to
rely upon Rule 430A under the 1933 Act Regulations, the date of the U.S. Price
Determination Agreement.
(f) Each time of delivery of and payment for the U.S. Option Securities,
being herein referred to as a "Date of Delivery" (which may be at, but not
earlier than, the Closing Date), shall be determined by the U.S. Underwriters
but shall be not later than three full business days after written notice of
election to purchase U.S. Option Securities is given. The Company will deliver
the U.S. Option Securities to the U.S. Underwriters, against payment of the
gross purchase price therefor by wire transfer to the Company in immediately
available funds. The U.S. Option Securities will be in definitive form, in
such denominations and registered in such names as the U.S. Underwriters
request. Concurrently with each payment by the U.S. Underwriters of the gross
purchase price for the U.S. Option Securities to be purchased upon the
applicable Date of
<PAGE> 16
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Delivery in the manner described in this Section 2(f), the Company will pay to
the U.S. Underwriters by certified or official bank check or checks in U.S.
dollars, in funds available the next succeeding business day drawn to the order
of Merrill Lynch, Pierce, Fenner & Smith Incorporated, North Tower, World
Financial Center, New York, New York 10281-1305, for the account of the U.S.
Underwriters, an amount equal to the underwriting commission applicable to such
U.S. Option Securities.
SECTION 3. Covenants of the Company. The Company covenants with the U.S.
Underwriters as follows:
(a) The Company will notify the U.S. Underwriters immediately, and confirm
the notice in writing, (i) of the effectiveness of the Registration Statement
and any amendment thereto (including any posteffective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Company will furnish to the Representatives, without charge, five
true and correct copies of the Registration Statement as originally filed with
the Commission and of each amendment thereto, including financial statements and
all exhibits to the Registration Statement, and of any Rule 462(b) Registration
Statement and any amendment thereto, and will also furnish to you, without
charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but without exhibits, and of any
Rule 462(b) Registration Statement and any amendment thereto, as you may
reasonably request.
(c) The Company will not (i) file any amendment to the Registration
Statement, any Rule 462(b) Registration Statement or amendment thereto, or make
any amendment or supplement to the Prospectuses of which you shall not
previously have been advised or to which you shall reasonably object in writing
after being so advised or (ii) so long as, in the written opinion of counsel for
the
<PAGE> 17
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U.S. Underwriters (a copy of which shall be delivered to the Company), a
Prospectus is required to be delivered in connection with sales by any
Underwriter or dealer, file any information, documents or reports pursuant to
the Exchange Act, without delivering a copy of such information, documents or
reports to you, as Representatives of the U.S. Underwriters, prior to such
filing.
(d) The Company will furnish to the U.S. Underwriters, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the Exchange Act, such number of copies of the Prospectus (as amended or
supplemented) as the U.S. Underwriters may reasonably request for the purposes
contemplated by the 1933 Act or the Exchange Act or the respective applicable
rules and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the U.S. Underwriters, to amend or supplement the
Prospectus in order to make the Prospectus not misleading, in the light of the
circumstances existing at the time it is delivered to a purchaser, the Company
will forthwith amend or supplement the Prospectus (in form and substance
satisfactory to counsel for the U.S. Underwriters so that as so amended or
supplemented, the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary) in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, and the Company will furnish to the U.S.
Underwriters a reasonable number of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the Representatives, to
qualify the Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions of the United States as the
Representatives may designate; provided, however, in each jurisdiction in which
the Securities have been so qualified the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement.
(g) The Company will make generally available to its security holders as
soon as practicable, but not later than 60 days after the close of the period
covered thereby,
<PAGE> 18
18
an earnings statement (in form complying with the provisions of Rule 158 of the
1933 Act Regulations) covering a 12-month period beginning not later than the
first day of the Company's fiscal quarter next following the "effective date"
(as defined in said Rule 158) of the Registration Statement.
(h) The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
(i) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A of the
1933 Act Regulations, then immediately following the execution of the U.S. Price
Determination Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A and Rule 424(b) of
the 1933 Act Regulations, copies of an amended Prospectus, or, if required by
such Rule 430A, a post-effective amendment of the Registration Statement
(including an amended Prospectus), containing all information so omitted.
(j) The Company will not sell, contract to sell or otherwise dispose of
any Securities or any securities convertible into or exercisable or exchangeable
for Securities, or grant any options or warrants to purchase Securities or any
securities convertible into or exercisable or exchangeable for Securities, for a
period of 90 days after the date of the Prospectus, without the prior written
consent of Merrill Lynch; provided, however, that the foregoing shall not apply
to Class A Common Stock issuable in connection with the Company's PRIDES, the
shares under a shelf registration statement relating to the shares of Class A
Common Stock of the Company 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 Company's combined interests in
Southam and related intercompany transactions, and options to purchase shares
under the Company's 1994 Stock Option Plan.
(k) For a period of three years after the Closing Date the Company will
furnish to the U.S. Underwriters copies of all reports and communications
delivered to the Company's stockholders or to holders of the Securities as a
class and will also furnish copies of all reports (excluding exhibits) filed
with the Commission on Form 8-K, 10-Q and 10-K, and all other reports and
information furnished to its
<PAGE> 19
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stockholders generally, at the time such reports are furnished to stockholders
generally.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement as originally filed,
and of each amendment thereto, (ii) the printing of this Agreement, the U.S.
Price Determination Agreement and any Legal Investment Survey, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
U.S. Underwriters, (iv) the fees and disbursements of the Company's counsel and
accountants, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f), including filing fees and the
fee and the disbursements of counsel for the U.S. Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey, (vi)
the printing and delivery to the U.S. Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of the preliminary
prospectus, and of the Prospectus and any amendments or supplements thereto,
(vii) the printing and delivery to the U.S. Underwriters of copies of the Blue
Sky Survey, (viii) the filing fee of the National Association of Securities
Dealers, Inc. and (ix) the fees incurred with the additional application for
listing of the Securities on the New York Stock Exchange.
If this Agreement is terminated by the U.S. Underwriters in accordance with
the provisions of Section 5, Section 9(a) or Section 11 hereof, the Company
shall reimburse the U.S. Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the U.S.
Underwriters.
SECTION 5. Conditions of the U.S. Underwriters' Obligations. The
obligations of the U.S. Underwriters hereunder are subject to the accuracy of
the representations and warranties of the Company herein contained, to the
performance by the Company of its obligations hereunder, and to the following
further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 p.m. on the date hereof, or with the consent of the Representatives, at a
later time and date, not later, however, than 5:30 p.m. on the first business
day following the date hereof or at such later time and date as may be approved
by the Representatives; and at
<PAGE> 20
20
the Closing Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission. If the Company has elected to rely
upon Rule 430A of the 1933 Act Regulations, the price of the Securities and any
price-related information previously omitted from the effective Registration
Statement pursuant to such Rule 430A shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations
within the prescribed time period, and prior to the Closing Date the Company
shall have provided evidence satisfactory to the Representatives of such timely
filing, or a post-effective amendment providing such information shall have
been promptly filed and declared effective in accordance with the requirements
of Rule 430A of the 1933 Act Regulations.
(b) At the Closing Date, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition (financial or
otherwise), or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the Vice President and Chief Financial Officer of the
Company, dated as of Closing Date, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section 1(a)
are true and correct with the same force and effect as though expressly made at
and as of the Closing Date, (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Date, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission. As used in this
Section 5, the term "Prospectus" means the Prospectus in the form first used to
confirm sales of Securities.
(c) You shall have received on the Closing Date an opinion of Kirkpatrick
& Lockhart LLP, counsel for the
<PAGE> 21
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Company, dated the Closing Date and addressed to you, as the Representatives
for the U.S. Underwriters, to the effect that:
(i) The Company and each of the United States Subsidiaries (the "U.S.
Subsidiaries") is a corporation duly incorporated and validly existing in
good standing under the laws of the jurisdiction of its organization, with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is duly qualified
as a foreign corporation for the transaction of business in and is in good
standing under the laws of each jurisdiction where the nature of its
properties or the conduct of its business requires such qualification,
except where the failure so to qualify would not have a material adverse
effect on the condition (financial or other), business, properties, net
worth or results of operations of the Company and its subsidiaries,
considered as one enterprise.
(ii) All the outstanding shares of capital stock of each of the U.S.
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable, and are owned of record by the Company directly, or
indirectly through one of the other U.S. Subsidiaries, and are not subject
to any perfected security interest, or, to the best knowledge of such
counsel after reasonable inquiry, any adverse claims within the meaning of
the Uniform Commercial Code, except, to the extent set forth or described
in the Registration Statement and the Prospectus, currently existing liens,
claims and security interests of creditors and liens, claims and security
interests pursuant to the terms of the Amended Publishing Credit Facility
and the AP-91 Senior Notes.
(iii) The authorized and outstanding capital stock of the Company to
be in effect as of the Closing is as set forth under the caption
"Capitalization" in the Prospectus; and the authorized capital stock of the
Company as of the Closing Date conforms in all material respects as to
legal matters to the description thereof contained in the Prospectus under
the caption "Description of Capital Stock".
<PAGE> 22
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(iv) All the shares of capital stock of the Company outstanding prior
to the issuance of the Securities have been duly authorized and validly
issued, and are fully paid and nonassessable.
(v) The Registration Statement and all post-effective amendments, if
any, have become effective under the 1933 Act and, to the best knowledge of
such counsel after reasonable inquiry, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule
424(b) has been made in accordance with Rule 424(b).
(vi) The Company has corporate power and authority to enter into this
Agreement and to issue, sell and deliver the Securities to the U.S.
Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company.
(vii) Neither the Company nor any of the U.S. Subsidiaries is in
violation of its certificate or articles of incorporation or its respective
by-laws or, to the best knowledge of such counsel after reasonable inquiry,
is in default in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or other evidence of
indebtedness to which the Company or any U.S. Subsidiary is a party and
that is included as an exhibit to, or otherwise described or summarized in,
the Registration Statement, except as may be disclosed in the Prospectus
and except for defaults under existing indebtedness of the Company or any
U.S. Subsidiary as to which consents or waivers have been obtained prior to
the Pricing Time.
(viii) Neither the offer, sale or delivery of the Securities, the
execution, delivery or performance of this Agreement, compliance by the
Company with the provisions of this Agreement, nor consummation by the
Company of the transactions contemplated hereby violates the certificate or
articles of incorporation or by-laws, or other organizational documents, of
the Company or any of the U.S. Subsidiaries or constitutes a breach of or
default under any agreement, indenture, lease or other instrument to which
the Company or any
<PAGE> 23
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of the U.S. Subsidiaries is a party or by which any of them or any of their
respective properties is bound that is an exhibit to the Registration
Statement (except for defaults under existing indebtedness of the Company
or any U.S. Subsidiary as to which consents or waivers have been obtained
prior to the Pricing Time), or is material and is known to such counsel
after reasonable inquiry, or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any of the U.S. Subsidiaries, nor will any such action violate any
existing law, regulation, ruling (assuming compliance with all applicable
state securities and Blue Sky laws), judgment, injunction, order or decree
known to such counsel after reasonable inquiry, that names the Company or
any of the U.S. Subsidiaries and is specifically directed to any of them or
any of their respective properties.
(ix) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on the
part of the Company (except as have been obtained under the 1933 Act or the
Exchange Act or such as may be required under state securities or Blue Sky
laws governing the purchase and distribution of the Securities) for the
valid issuance and sale of the Securities by the Company to the U.S.
Underwriters as contemplated by this Agreement.
(x) The Registration Statement and the Prospectus and any supplements
or amendments thereto (except for the financial statements and the notes
thereto and the schedules and other financial and statistical data included
therein, as to which such counsel need not express any opinion) comply as
to form in all material respects with the requirements of the 1933 Act.
(xi) To the best knowledge of such counsel after reasonable inquiry,
(A) other than as described or contemplated in the Prospectus (or any
supplement thereto), there are no legal or governmental proceedings pending
or threatened against the Company or any of the U.S. Subsidiaries, or to
which the Company or any of the U.S. Subsidiaries, or any of their
property, is subject, which are required to be described in the
Registration Statement or Prospectus
<PAGE> 24
24
(or any amendment or supplement thereto), and (B) there are no material
agreements, contracts, indentures, leases or other instruments to which the
Company or any U.S. Subsidiary is a party, that are required to be
described in the Registration Statement or the Prospectus (or any amendment
or supplement thereto) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required, as the case may be.
(xii) The statements in the Registration Statement and Prospectus,
insofar as they are descriptions or summaries of contracts, agreements or
other legal documents to which the Company or any U.S. Subsidiary is a
party, or are statements of law or legal conclusions (other than matters of
English, Canadian, Australian or Israeli law), are accurate in all material
respects and present fairly the information required to be shown.
(xiii) Except as described in the Prospectus or documents
incorporated by reference therein, there are no outstanding options,
warrants or other rights issued by the Company calling for the issuance of,
and to the best knowledge of such counsel after reasonable investigation
there are no written agreements entered into by the Company or binding oral
commitments by the Company to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable or exercisable for
capital stock of the Company.
(xiv) Except as described in the Prospectus and except for the
registration rights granted to certain lenders and described in
Registration Statement No. 333-04697 of the Company and the registration
rights under the agreement dated as of May 30, 1996 among the Company, a
wholly owned subsidiary of the Company and Toronto Dominion Investments,
Inc., there is no holder of any security of the Company or, to the best
knowledge of such counsel after reasonable inquiry, any other person has
any right, contractual or otherwise, to have any securities included in the
Registration Statement or the right, because of the filing of the
Registration Statement or consummation of the transactions contemplated by
this Agreement, to require registration of any security of the Company
under the Act. Except as described in the Prospectus,
<PAGE> 25
25
there is no holder of any security of the Company or, to the best knowledge
of such counsel after reasonable inquiry, any other person who has the
right, contractual or otherwise, to cause the Company to sell or otherwise
issue to them, or to permit them to underwrite the sale of, the Securities
or the right to have any securities of the Company included in the
registration statement or the right, as a result of the filing of the
registration statement, to require registration under the 1933 Act of any
securities of the Company.
(xv) Although counsel cannot opine as to factual matters, and the
character of determinations involved in the registration process is such
that counsel cannot pass upon and assume any responsibility for the
accuracy or completeness of the information contained in the Registration
Statement and the Prospectus, counsel shall advise the U.S. Underwriters
that on the basis of its review of the Registration Statement and the
Prospectus and its participation in the preparation thereof (relying as to
materiality to a large extent upon the statements of officers and other
representatives of the Company) that counsel has no reason to believe that
(A) the Registration Statement (except for the financial statements and
notes thereto and the schedules and other financial or statistical data
included therein or omitted therefrom, as to which counsel need express no
opinion), at the time the Registration Statement became effective,
contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or (B) the Prospectus (except for the
financial statements and notes thereto and the schedules and other
financial or statistical data included therein or omitted therefrom, as to
which counsel need express no opinion) at the time the Prospectus was
issued, includes an untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
also, that counsel has no reason to believe, based upon the procedures
described above, that either the Registration Statement or the Prospectus
(except for the financial statements and notes thereto and the schedules
and other financial or statistical data included therein or omitted
therefrom,
<PAGE> 26
26
as to which counsel need express no opinion) as of the date and time of
delivery of counsel's opinion contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading. Such counsel may state that they have, between the
effectiveness of the Registration Statement and the Closing Time,
participated in further discussions with representatives of the Company
regarding the contents of certain portions of the Prospectus and certain
related matters, and reviewed certificates of certain officers of the
Company, the opinions addressed to you from the Company's Canadian counsel
and United Kingdom counsel and a letter addressed to you by the Company's
independent accountants.
In rendering their opinion as aforesaid, counsel may rely upon an opinion
or opinions, each dated the Closing Date, of other counsel retained by them or
the Company as to laws of any jurisdiction other than the United States, the
Commonwealth of Pennsylvania or the Delaware General Corporation Law, provided
that (1) each such local counsel is acceptable to the Representatives, (2) such
reliance is expressly authorized by each opinion so relied upon and a copy of
each such opinion is delivered to the Underwriter and is, in form and substance
satisfactory to the Underwriter and its counsel, and (3) counsel shall state in
their opinion that they believe that they and the U.S. Underwriters are
justified in relying thereon. Counsel also may rely, to the extent they deem
such reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials. Copies of all such certificates shall be
furnished to counsel for the U.S. Underwriters on the Closing Date. Such
opinion may state that it is limited to the laws of the Commonwealth of
Pennsylvania (excluding the conflict of laws rules), the Delaware Business
Corporation Law and the Federal securities laws of the United States, and that
such counsel expresses no opinion as to any other laws and further that such
opinions are being given as if the Purchase Agreement was governed by
Pennsylvania law.
(d) You shall have received on the Closing Date an opinion of Cravath,
Swaine & Moore, counsel for the U.S. Underwriters, dated the Closing Date and
addressed to you, as the Representatives for the U.S. Underwriters, as to such
matters as the Representatives may reasonably request.
<PAGE> 27
27
(e) You shall have received on the Closing Date an opinion of Clifford,
Chance, special English counsel for the Company, dated the Closing Date and
addressed to you, as Representatives for the U.S. Underwriters, to the effect
that:
(i) Each of DTH, FDTH and Telegraph is a company duly incorporated
and validly existing under the laws of England, with corporate power and
authority to own, or lease its properties and to conduct its business as
described in the Prospectus;
(ii) All the issued shares in the capital of DTH, FDTH and Telegraph
have been duly authorized, validly issued credited as fully paid.
(iii) Neither the offer, sale or delivery of the Securities, the
execution, delivery or performance of the Purchase Agreement, compliance by
Hollinger International with the provisions of the Purchase Agreement, nor
consummation by Hollinger International of the transactions contemplated
hereby (i) violates the memorandum or articles of association of DTH, FDTH
or Telegraph or (ii) constitutes a breach of or default by FDTH, DTH or
Telegraph under any Scheduled Agreement (iii) nor does any such action
violate any existing English law, regulation, judgment, injunction, order
or decree known to such counsel that names DTH, FDTH or Telegraph and, in
the case of this subparagraph (iii), would have a material adverse effect
on the condition (financial or other) or business, properties, net worth or
results of operations of the Company and its subsidiaries considered as one
enterprise.
(iv) Argsub Limited is a company duly incorporated and validly
existing under the laws of England, with corporate power and authority to
own or lease its properties and to conduct its business as described in the
Prospectus; all the preference shares in the capital of Argsub Limited of
the series issued to DTH in exchange for the FDTH Preference Shares
previously held by DTH have been duly authorized and validly issued
credited as fully paid.
In rendering their opinion as aforesaid, counsel's opinion shall be limited
to the laws of England; provided that such counsel may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by them or
<PAGE> 28
28
the Company as to laws of any jurisdiction other than England, provided that
(1) each such local counsel is acceptable to the U.S. Underwriters, (2) such
reliance is expressly authorized by each opinion so relied upon and a copy of
each such opinion is delivered to the U.S. Underwriters and is, in form and
substance satisfactory to the U.S. Underwriters and their counsel, and (3)
counsel shall state in their opinion that they believe that they and the U.S.
Underwriters are justified in relying thereon.
(f) You shall have received letters addressed to you, as Representatives
for the U.S. Underwriters, dated the date hereof and the Closing Date from KPMG
Peat Marwick LLP, independent certified public accountants for the Company,
substantially in the forms heretofore approved by you.
(g) At the Closing Date and at each Date of Delivery, if any, counsel for
the U.S. Underwriters shall have been furnished with such documents and opinions
as they may require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the U.S. Underwriters and counsel
for the U.S. Underwriters.
(h) At the Closing Date, you shall have received agreements substantially
in the form of Exhibit B hereto, dated the Closing Date and signed by the
Company, Hollinger and certain executive officers and directors of the Company
named therein.
(i) You shall have received a letter from Hollinger, addressed to the U.S.
Underwriters and verifying that Hollinger believes, based on preliminary
calculations as of June 30, 1996, that it is in compliance at such date with the
Debt-to-Equity Ratio set forth in the DTH and FDTH Preference Shares (as such
term is defined in the Registration Statement).
(j) You shall have received evidence acceptable to counsel for the U.S.
Underwriters that the Company's Scheme (as such term is defined in the
Prospectus) for the acquisition of the Telegraph has received the approval of an
<PAGE> 29
29
English court of competent jurisdiction and consequently become effective.
(k) In the event that the U.S. Underwriters exercise their option provided
in Section 2(e) hereof to purchase all or any portion of the U.S. Option
Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company hereunder shall
be true and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Representatives shall have received:
(i) A certificate, dated such Date of Delivery, of the Company
confirming that the certificate delivered at the Closing Date pursuant to
Section 5(b) hereof remains true and correct as of such Date of Delivery.
(ii) The favorable opinion of Kirkpatrick & Lockhart LLP, counsel for
the Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S. Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.
(iii) The favorable opinion of Clifford Chance, special English
counsel for the Company, in form and substance satisfactory to counsel for
the U.S. Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(e).
(iv) The favorable opinion of Cravath, Swaine & Moore, counsel for
the U.S. Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Sections 5(d) hereof.
(v) A letter from KPMG Peat Marwick LLP, in form and substance
satisfactory to the U.S. Underwriters and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished to the
U.S. Underwriters pursuant to Section 5(f) hereof, except that the
"specified date" in the letter furnished
<PAGE> 30
30
pursuant to this Section 5(k)(v) shall be a date not more than five days
prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
U.S. Underwriters by notice to the Company at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party except as provided in Section 4.
SECTION 6. Indemnification. (a) The Company agrees to indemnify and hold
harmless the U.S. Underwriters and each person, if any, who controls the U.S.
Underwriters within the meaning of Section 15 of the 1933 Act to the extent and
in the manner set forth in clauses (i), (ii) and (iii) below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 430A of the 1933 Act
Regulations, if applicable, and any information contained in a Rule 462(b)
Registration Statement or any amendments thereto, or the omission or
alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading, or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
<PAGE> 31
31
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by the Representatives, reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) and (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
U.S. Underwriters expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and the parties agree that the statements set
forth in the last paragraph on the cover page, the legends on the inside cover
page (it being understood by the Company that the second legend was provided by
First Boston only), and the statements in the third paragraph under the caption
"Underwriting" in the Prospectus constitute the only information so furnished.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions made in the Registration Statement (or
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the U.S. Underwriters expressly for use
in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying
<PAGE> 32
32
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability which it may have otherwise
than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of any such action. In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which an indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company on the one hand
and the U.S. Underwriters on the other hand shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity incurred by the Company on the one hand and the U.S. Underwriters
on the other hand, as incurred, in such proportions that (a) the U.S.
Underwriters are responsible for that portion represented by the percentage that
the underwriting commission appearing on the cover page of the Prospectus bears
to the public offering price appearing thereon, and (b) the Company is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section, each person,
if any, who controls the U.S. Underwriters within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as the U.S.
Underwriters, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement and
the U.S. Price Determination Agreement, or contained in certificates of officers
of the Company submitted pursuant
<PAGE> 33
33
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company, and shall survive delivery of the Securities to
the U.S. Underwriters.
SECTION 9. Termination of Agreement. (a) The U.S. Underwriters may
terminate this Agreement by notice to the Company at any time at or prior to the
Closing Date (i) if there has been, since the date of this Agreement or since
the respective date as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any outbreak of
hostilities or escalation thereof or other calamity or crisis, the effect of
which on the financial markets of the United States is such as to make it, in
the judgment of the Representatives, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in the
Common Stock has been suspended by the Commission, or if trading generally on
either the American Stock Exchange or The New York Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said Exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by either Federal or New York authorities.
Notice of such termination may be given by telegram, telecopy or telephone and
shall be subsequently confirmed by letter. As used in this Section 10(a), the
term "Prospectus" means the Prospectus in the form first used to confirm sales
of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4. Notwithstanding any such termination, the provisions of
Sections 6 and 7 shall remain in effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
more of the U.S. Underwriters shall fail at the Closing Date to purchase the
Securities that it or they are obligated to purchase pursuant to this Agreement
(the "Defaulted Securities"), you shall have the right, within 24 hours
thereafter, to make arrangements for one or
<PAGE> 34
34
more of the non-defaulting U.S. Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms set forth in this Agreement;
if, however, you have not completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities, the non-defaulting U.S.
Underwriters shall be obligated to purchase the full amount thereof in the
proportions that their respective Securities underwriting obligation proportions
bear to the underwriting obligation proportions of all non-defaulting U.S.
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities, this Agreement shall terminate without
liability on the part of any non-defaulting U.S. Underwriters.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for a Underwriter under this Section 10.
SECTION 11. Default by the Company. If the Company shall fail at the
Closing Date or at the Date of Delivery to sell and deliver the number of
Securities which it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any non- defaulting party.
No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default.
SECTION 12. Notices. Unless otherwise specifically indicated herein, all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by
<PAGE> 35
35
any standard form of telecommunication. Notices to the U.S. Underwriters shall
be directed to Merrill Lynch at Merrill Lynch World Headquarters, North Tower,
World Financial Center, New York, New York 10281, attention of Syndicate
Operations; and notices to the Company shall be directed to it at 401 North
Wabash Avenue, Chicago, Illinois 60611, attention of President or Secretary.
SECTION 13. Parties. This Agreement and the U.S. Price Determination
Agreement shall each inure to the benefit of and be binding upon the U.S.
Underwriters and the Company and their respective successors, heirs and legal
representatives. Nothing expressed or mentioned in this Agreement or the U.S.
Price Determination Agreement is intended or shall be construed to give any
person, firm or corporation, other than the U.S. Underwriters and the Company
and their respective successors, heirs and legal representatives, and the
controlling persons and officers and directors referred to in Sections 6 and 7
hereof and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or the U.S. Price
Determination Agreement or any provision herein or therein contained. This
Agreement and the U.S. Price Determination Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the U.S. Underwriters and the Company and their respective
successors, heirs and legal representatives and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the U.S. Underwriters shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE U.S. PRICE
DETERMINATION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SAID STATE. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement
<PAGE> 36
36
among the U.S. Underwriters and the Company in accordance with its terms.
Very truly yours,
HOLLINGER INTERNATIONAL INC.
By /s/ F. DAVID RADLER
--------------------------
F. David Radler
President, Chief Operating
Officer and Director
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
BEAR, STEARNS & CO.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
By /s/ TERESA A. MILES
---------------------------
Teresa A. Miles
For themselves and
as Representatives of the
other U.S. Underwriters.
<PAGE> 37
Exhibit A
HOLLINGER INTERNATIONAL INC.
(a Delaware corporation)
Shares of Class A Common Stock
U.S. Price Determination AGREEMENT
, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
As Representatives of the several U.S. 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:
Reference is made to the Purchase Agreement dated , 1996 (the "Purchase
Agreement") among Hollinger International Inc., a Delaware corporation (the
"Company") and the several U.S. Underwriters named in Schedule I thereto or
hereto (the "U.S. Underwriters"), for whom Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc. and Donaldson,
Lufkin & Jenrette Securities Corporation are acting as representatives (the
"Representatives"). The Purchase Agreement provides for the purchase by the
U.S. Underwriters from the Company, subject to the terms and conditions set
forth therein, of an aggregate of shares (the "U.S. Initial Securities") of the
Company's Class A Common Stock, par value $.01 per share. This Agreement is
the U.S. Price Determination Agreement referred to in the Purchase Agreement.
<PAGE> 38
2
Pursuant to Section 2 of the Purchase Agreement, the undersigned agree with
the Representatives as follows:
1. The public offering price per share for the Initial International
Securities shall be $9.75.
2. The purchase price per share for the Initial International Securities
to be paid by the several Managers shall be $9.39, representing an
amount equal to the public offering price set forth above, less $0.46
per share.
The Company represents and warrants to each of the U.S. Underwriters that
the representations and warranties of the Company set forth in Section 1(a) of
the Purchase Agreement are accurate as though expressly made at and as of the
date hereof.
As contemplated by Section 2 of the Purchase Agreement, attached as
Schedule I is a completed list of the several U.S. Underwriters, which shall be
a part of this Agreement and the Purchase Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts and together with the Purchase Agreement
shall be a binding agreement among the
<PAGE> 39
3
U.S. Underwriters and the Company in accordance with its terms and the terms of
the Purchase Agreement.
Very truly yours,
HOLLINGER INTERNATIONAL INC.
By
----------------------------
F. David Radler,
President, Chief Operating
Officer and Director
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
By
---------------------------
For themselves and as Representatives of
the other U.S. Underwriters named in Schedule I
attached hereto.
<PAGE> 40
SCHEDULE I
[CAPTION]
<TABLE>
Shares
of Common Stock
U.S. Underwriters to Be Purchased
----------------- ---------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated . . . . . .
Bear,Stearns & Co. Inc. . . . . . . . . . . . . . . . . . . .
Donaldson, Lufkin & Jenrette Securities Corporation . . . . . .
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000,000
=========
</TABLE>
<PAGE> 41
SCHEDULE II
Significant Subsidiaries of Hollinger International Inc.
1. Hollinger International Publishing Holdings Inc. is incorporated in Delaware
and is a wholly owned subsidiary of Hollinger International Inc.
2. Hollinger International Publishing Inc. is incorporated in Delaware and is a
wholly owned subsidiary of Hollinger International Publishing Holdings Inc.
3. The Sun-Times Company is incorporated in Delaware and is a wholly owned
subsidiary of Hollinger International Publishing Inc.
4. Chicago Sun-Times, Inc. is incorporated in Delaware and is a wholly owned
subsidiary of The Sun-Times Company.
5. American Publishing Company is incorporated in Delaware and is a wholly
owned subsidiary of Hollinger International Publishing Inc.
6. American Publishing (1991) Inc. is incorporated in Delaware and is a wholly
owned subsidiary of American Publishing Company.
7. American Publishing Holdings Inc. is incorporated in Delaware and is a
wholly owned subsidiary of American Publishing Company.
8. APAC-95 Inc. is incorporated in Delaware and is a wholly owned subsidiary of
American Publishing Company.
9. TelHoldco Inc. is incorporated in Delaware and is a wholly owned subsidiary
of Hollinger International Publishing Inc.
10. DT Holdings Limited is an English company and is a wholly owned subsidiary
(excluding preference shares) of Hollinger International Publishing Inc.
11. First DT Holdings Limited is an English company and is a wholly owned
subsidiary (excluding preference shares) of DT Holdings Limited.
<PAGE> 42
2
12. The Telegraph plc is an English company and a subsidiary of First DT
Holdings Limited.
13. John Fairfax Holdings limited is an Australian company and is an indirect
subsidiary of The Telegraph plc.
<PAGE> 1
Exhibit 1.02
HOLLINGER INTERNATIONAL INC.
(a Delaware corporation)
2,000,000 Shares of Class A Common Stock
INTERNATIONAL PURCHASE AGREEMENT
August 1, 1996
MERRILL LYNCH INTERNATIONAL
CIBC WOOD GUNDY SECURITIES PLC
TD SECURITIES INC.
As Lead Managers of the several Managers
MERRILL LYNCH CANADA INC.
CIBC WOOD GUNDY SECURITIES INC.
As Canadian Dealers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Ladies and Gentlemen:
Hollinger International Inc., a Delaware corporation (the "Company") and
currently a majority-owned subsidiary of Hollinger Inc., a Canadian corporation
("Hollinger"), confirms its agreements with Merrill Lynch International
("Merrill Lynch"), CIBC Wood Gundy Securities plc ("CIBC"), TD Securities Inc.
("TDSI") and each of the other underwriters named in Schedule I hereto
(collectively, the "Managers", which term shall also include any underwriter
substituted as hereinafter provided in Section 10), for whom Merrill Lynch,
CIBC and TDSI are acting as lead Managers (in such capacity, the "Lead
Managers"), with respect to (i) the sale by the Company and the purchase by the
Managers, acting severally and not jointly, of the respective number of shares
totalling 2,000,000 shares of Class A Common Stock, par value $.01 per share,
of the Company (the "Common Stock") set forth in said Schedule I and (ii) the
grant by the Company to the Managers, acting severally and not jointly, of the
option described in section 2(e) hereof to purchase all or any part of 300,000
additional shares of Common Stock (the "International Option Securities") to
cover over-allotments. The Common Stock
<PAGE> 2
(the "Initial International Securities") and any or all part of the
International Option Securities to be purchased by the Managers are
collectively hereinafter called the "Securities".
It is understood that the Company is currently entering into a United
States Purchase Agreement, dated the date hereof (the "U.S. Purchase
Agreement"), providing for the sale by the Company of 8,000,000 shares of the
Common Stock (the "U.S. Initial Securities") through arrangements with certain
underwriters in the United States (the "U.S. Underwriters" and, together with
the Managers, the "Underwriters"), for whom Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch (NY)"), Bear, Stearns & Co. Inc. ("Bear,
Stearns") and Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") are
acting as representatives (the "U.S. Representatives") and the grant by the
Company to the U.S. Underwriters of an option to purchase any or all part of the
U.S. Underwriters' pro rata portion of 1,200,00 additional shares of Common
Stock (the "U.S. Option Securities") to cover over-allotments. The U.S. Initial
Securities and the U.S. Option Securities are hereinafter called the "U.S.
Securities". It is understood that the Company is not obligated to sell, and
the Managers are not obligated to purchase, any Initial International Securities
unless all of the U.S. Initial Securities are contemporaneously purchased by the
U.S. Underwriters. The International Securities and the U.S. Securities are
hereinafter collectively referred to as the "Offered Securities".
The Company understands that the U.S. Underwriters will simultaneously
enter into an agreement with the Managers dated the date hereof (the
"Intersyndicate Agreement") providing for the coordination of certain
transactions among the U.S. Underwriters and the Managers, under the direction
of Merrill Lynch.
You have advised us that you and the other Managers acting severally and
not jointly, desire to purchase the Securities, and that you have been
authorized by the other Managers to execute this Agreement and the Price
Determination Agreement referred to below on their behalf.
The public offering price per share for the Securities and the purchase
price per share to be paid by the several Managers shall be agreed upon by the
Company and the Lead Managers, acting on behalf of the several Managers, and
such agreement shall be set forth in a separate written instrument substantially
in the form of Exhibit A hereto (the "International Price Determination
Agreement"). The International Price Determination Agreement may take the form
of an exchange of any standard form of written
<PAGE> 3
3
telecommunication among the Company and the Lead Managers and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering
of the Securities will be governed by this Agreement, as supplemented by the
International Price Determination Agreement. From and after the date of the
execution and delivery of the International Price Determination Agreement, this
Agreement shall be deemed to incorporate, and all references herein to "this
Agreement" or "herein" shall be deemed to include, the International Price
Determination Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (No.
333-06075) and a related preliminary prospectus for the registration of the
Securities under the Securities Act of 1933 (the "1933 Act"), has filed such
amendments thereto, if any, and such amended preliminary prospectuses as may
have been required to the date hereof, and will file such additional amendments
thereto and such amended prospectuses as may hereafter be required. The term
"Registration Statement" as used in this Agreement means the registration
statement (including all financial schedules and exhibits), as amended at the
time it becomes effective, and as thereafter amended by post-effective
amendment, and any registration statement and any amendments thereto filed
pursuant to Rule 462(b) of the 1933 Act relating to the offering covered by the
initial registration statement (the "Rule 462(b) Registration Statement").
Except where the context indicates otherwise, the term "Prospectus" as used in
this Agreement means the prospectuses in the forms included in the Registration
Statement, including the prospectuses to be used in connection with the sale of
the Securities (the "International Prospectus"), the prospectus to be used in
connection with the U.S. Securities (the "U.S. Prospectus") and the Canadian
Prospectus (as defined below), or, if the prospectuses included in the
Registration Statement omit information in reliance on Rule 430A under the 1933
Act and such information is included in prospectuses filed with the Commission
pursuant to Rule 424(b) under the 1933 Act, the term "Prospectus" as used in
this Agreement means the prospectuses in the forms included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectuses filed with the Commission pursuant to Rule 424(b) ("Rule
430A Information").
<PAGE> 4
4
The Company has also prepared and filed with securities commissions and
securities regulatory authorities (the "Canadian Securities Commissions") in all
the Provinces of Canada except Quebec (the "Offering Provinces") a preliminary
prospectus (the "Canadian Preliminary Prospectus") relating to the Securities,
and either (A) has prepared and filed with the Canadian Securities Commissions a
final prospectus relating to the Securities (the "Canadian Final Prospectus") or
(B) if the Company has elected to rely on Rule 430A, has prepared and filed with
the Canadian Securities Commissions the Canadian Final Prospectus omitting the
Rule 430A Information and will prepare and file promptly after the execution and
delivery of the International Price Determination Agreement a supplemented
prospectus setting forth such Rule 430A Information, all in accordance with
National Policy Statement No. 45 - Multijurisdictional Disclosure System
("MJDS") of the Canadian Securities Administrators. The prospectuses relating
to the offering of the Securities in Canada (the "Canadian Offering") will be
identical to the Prospectuses relating to the offering of the Securities outside
of Canada except for certain substitute pages.
The Canadian Final Prospectus for which a National Policy No. 1 Receipt has
been obtained from the Canadian Securities Commissions is herein referred to as
the "Canadian Prospectus", except that, if a supplemented final prospectus
containing the Rule 430A Information is thereafter furnished for use in
connection with the offering of the Securities in the Offering Provinces, the
term "Canadian Prospectus" shall refer to such final supplemented prospectus.
Any amendment to the Canadian Prospectus, any amended or supplemental prospectus
or auxiliary material, information, evidence, return, report, application,
statement or document that may be filed by or on behalf of the Company under the
securities laws of the Offering Provinces prior to the Closing Date (as
hereinafter defined) or prior to the expiry of the period of distribution of the
Securities in the Offering Provinces is referred to herein collectively as the
"Supplementary Material".
The Company understands that the Canadian Dealers (defined below) propose
to make a public offering of the Securities in Canada as soon as Merrill Lynch
deems advisable after the Registration Statement becomes effective, a National
Policy No. 1 Receipt for the Canadian Final Prospectus is issued by the
appropriate Canadian
<PAGE> 5
5
Securities Commission and the International Price Determination Agreement has
been executed and delivered.
The Company further understands that a portion of the Securities may be
offered and sold in a public offering in the Offering Provinces by Merrill Lynch
Canada Inc., an affiliate of Merrill Lynch, and CIBC Wood Gundy Securities Inc.,
an affiliate of CIBC Wood Gundy Securities plc (collectively, the "Canadian
Dealers") and by TDSI (TDSI and the Canadian Dealers being collectively referred
to herein as the "Canadian Dealers and TDSI"). The Canadian Dealers, subject to
the terms and conditions set forth herein, severally and not jointly, agree with
the Company to use reasonable efforts to sell the Securities, if any, in the
Offering Provinces. Merrill Lynch and CIBC are entering into a selling
agreement (the "Selling Agreement") with the Canadian Dealers that will govern
the terms of the purchase and sale of Securities in Canada by the Canadian
Dealers.
SECTION 1. Representations and Warranties. (a) The Company represents
and warrants to the Managers and the Canadian Dealers as of the date hereof and
as of the date of the International Price Determination Agreement (such latter
date being hereinafter referred to as the "Representation Date") as follows:
(i) The Registration Statement in the form in which it became or
becomes effective and also in such form as it may be when any
post-effective amendment thereto or any Rule 462(b) Registration Statement
or amendment thereto shall become effective, complied or will comply in all
material respects with the provisions of the 1933 Act and did not or will
not at any such times contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, except that this representation
and warranty does not apply to statements in or omissions from the
Registration Statement made in reliance upon and in conformity with
information relating to the Managers furnished to the Company in writing by
or on behalf of the Managers through you expressly for use therein.
(ii) The Prospectus and any supplement or amendment thereto, when
filed with the Commission under Rule 424(b) under the 1933 Act, complied or
will comply in all material respects with the provisions of the
<PAGE> 6
6
1933 Act and did not or will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except
that this representation and warranty does not apply to statements in or
omissions from the Prospectus made in reliance upon and in conformity with
information relating to the Managers furnished to the Company in writing by
or on behalf of the Managers through you expressly for use therein.
(iii) (A) The Company satisfies the eligibility requirements in
order to use the MJDS to distribute the Securities in the Offering
Provinces.
(B) The Canadian Preliminary Prospectus and the Canadian Final Prospectus,
together with all documents incorporated therein by reference, have been filed
with the Canadian Securities Commissions in the Offering Provinces; the Canadian
Prospectus will conform to the Prospectus except for such deletions therefrom
and additions thereto as are permitted or required under MJDS and the applicable
rules of the Canadian Securities Commissions.
(C) Each document, if any, filed or to be filed pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by
reference in the Canadian Prospectus complied or will comply when so filed in
all material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder; (b) each part of the Registration
Statement, when such part became effective, did not contain and each such part,
as amended or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; (c) the
Registration Statement complies and, as amended and supplemented, if applicable,
will comply in all material respects with the 1933 Act and the applicable rules
and regulations of the Commission thereunder as interpreted and applied by the
Commission and the Canadian Prospectus complies and, as amended and
supplemented, if applicable, will comply in all material respects with the rules
of the MJDS; and (d) the Canadian Prospectus and any Supplementary
<PAGE> 7
7
Material, as of their respective date of filing, constitute and, as amended or
supplemented, if applicable, will constitute full, true and plain disclosure of
all material facts relating to the Securities and do not contain and, as amended
or supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that this representation and warranty does not apply to
statements in or omissions from the Canadian Prospectus made in reliance upon
and in conformity with information relating to the Managers or the Canadian
Dealers furnished to the Company in writing by or on behalf of the Managers or
the Canadian Dealers through you expressly on their behalf.
(D) No order having the effect of ceasing or suspending the distribution
of the Securities has been issued by a Canadian Securities Commission in any of
the Offering Provinces nor have any proceedings for any such purpose have been
threatened.
(iv) All the outstanding shares of common stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; and the authorized
capital stock of the Company conforms to the description thereof in the
Registration Statement, the Prospectus and the Canadian Prospectus. Except
as described in the Prospectus and the Canadian Prospectus or documents
incorporated by reference therein, there are no outstanding options,
warrants or other rights issued by the Company calling for the issuance of,
nor any written agreement entered into by the Company or oral commitments
of the Company to issue, any shares of capital stock or any other security
of the Company or any security convertible into or exchangeable or
exercisable for capital stock or any other security of the Company.
(v) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement, the
Prospectus and the Canadian Prospectus.
<PAGE> 8
8
(vi) The only significant subsidiaries (as defined in the 1933 Act)
of the Company are the subsidiaries listed in Schedule II hereto (each a
"Subsidiary" and collectively the "Subsidiaries") . Each Subsidiary is a
corporation duly incorporated, validly existing and in good standing in the
jurisdiction of its incorporation, with corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement, the Prospectus and the Canadian
Prospectus, and is duly qualified as a foreign corporation for the
transaction of business in and is in good standing under the laws of each
other jurisdiction where the nature of its properties or the conduct of its
business requires such qualification, except where the failure so to
qualify does not have a material adverse effect on the condition (financial
or other), business, properties, net worth or results of operations of such
Subsidiary; all the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable, and, except as set forth or described in the
Registration Statement or the Prospectus and the Canadian Prospectus, all
shares of the capital stock of the Subsidiaries that are owned directly or
indirectly by the Company are owned free and clear of any lien, adverse
claim, security interest, equity, or other encumbrance.
(vii) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to
which any of their respective properties is subject, that are required to
be described in the Registration Statement or the Prospectus and the
Canadian Prospectus but are not described as required, or which might have
a material adverse effect on the condition (financial or other),
properties, net worth or results of operations of the Company and its
subsidiaries considered as one enterprise, or which might materially and
adversely affect the properties or assets thereof or which might materially
and adversely affect the consummation of this Agreement; all pending legal
or governmental
<PAGE> 9
9
proceedings to which the Company or any of the Subsidiaries is a party or
of which any of their respective property or assets is the subject which
are not described in the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered in the aggregate,
not material; and there are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement or the Prospectus and the Canadian Prospectus or to be filed as
an exhibit to the Registration Statement that are not described or filed as
required by the 1933 Act.
(viii) Except as set forth in the Prospectus and the Canadian
Prospectus, neither the Company nor any of the Subsidiaries (A) is in
violation of its certificate or articles of incorporation or by-laws, or
other organizational documents, (B) is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the Company
or any of the Subsidiaries or of any decree of any court or governmental
agency or body having jurisdiction over the Company or any of the
Subsidiaries, or (C) is in default in any material respect in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or
any of their respective properties may be bound, except, in the case of
clause (B) with respect to the Subsidiaries, where such violation does not
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the Company and
its subsidiaries considered as one enterprise.
(ix) Neither the issuance and sale of the Securities, the execution,
delivery or performance of this Agreement and the International Price
Determination Agreement by the Company, nor the consummation by the Company
of the transactions contemplated hereby (A) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency
or official (except such as may be required for the registration of the
Securities under the 1933 Act and the Exchange Act,
<PAGE> 10
10
compliance with the securities or Blue Sky laws of various jurisdictions
and compliance with the securities laws of the Offering Provinces in
connection with the purchase and the distribution of the Securities in the
Offering Provinces by the Canadian Dealers and TDSI, all of which have been
or will be effected in accordance with this Agreement) or violates or will
violate the certificate or articles of incorporation or by-laws, or other
organizational documents, of the Company or any of the Subsidiaries or (B)
constitutes or will constitute a breach of, or a default under, any
material agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or
any of their respective properties may be bound (except where consents or
waivers as to such default or breach have been obtained prior to the time
of the execution of the International Price Determination Agreement (the
"Pricing Time")), or violates or will violate any statute, law, regulation
or judgment, injunction, order or decree applicable to the Company or any
of the Subsidiaries or any of their respective properties, or will result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant to
the terms of any agreement or instrument to which any of them is a party or
by which any of them may be bound or to which any of the property or assets
of any of them is subject.
(x) The Securities to be sold by the Company pursuant to this
Agreement have been duly authorized and, when issued and delivered by the
Company upon receipt of the payment therefor in accordance with this
Agreement, will be validly issued, fully paid and non-assessable; no holder
thereof will be subject to personal liability by reason of being such
holder; such Securities are not subject to the preemptive or other similar
rights of any stockholder of the Company arising by operation of law, under
the charter and by-laws of the Company or under any agreement to which the
Company or any of its Subsidiaries is a party.
(xi) KPMG Peat Marwick, who have audited or shall audit certain of
the financial statements included in the Registration Statement, the
Prospectus and the Canadian Prospectus (or any amendment or supplement
thereto), are independent public accountants as required by the 1933 Act.
<PAGE> 11
11
(xii) The consolidated financial statements of the Company and its
subsidiaries, together with related notes, included in the Registration
Statement, the Prospectus and the Canadian Prospectus (and any amendment or
supplement thereto), (A) in the case of the historical financial statements
present fairly the consolidated financial position and the results of
operations of the Company and its subsidiaries and (B) in the case of the
pro forma financial statements present fairly, on a pro forma basis, the
consolidated financial position and the results of operations of the
Company and its subsidiaries, including The Telegraph plc ("Telegraph"),
and its equity investments in Southam Inc. ("Southam") and John Fairfax
Holdings Limited ("Fairfax"), in each case on the basis stated in the
Registration Statement at the respective dates or for the respective
periods to which they apply. Such financial statements, pro forma
financial statements and related notes have been prepared in accordance
with U.S. generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data included in the Registration
Statement, the Prospectus and the Canadian Prospectus (and any amendment or
supplement thereto), including the reconciliation to Canadian generally
accepted accounting principles of the audited endorsed consolidated
financial statements of the Company, the unaudited condensed consolidated
financial statements of the Company and the unaudited pro forma condensed
consolidated financial statements of the Company included in the Canadian
Prospectus, are accurately presented in all material respects and prepared
on a basis consistent with such financial statements and the books and
records of the Company and its subsidiaries.
(xiii) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement and the International
Price Determination Agreement have been duly and validly authorized by the
Company, and this Agreement and the International Price Determination
Agreement have been duly executed and delivered by the Company.
<PAGE> 12
12
(xiv) Except as disclosed in the Registration Statement, the
Prospectus and the Canadian Prospectus (or any amendment or supplement
thereto), subsequent to the respective dates as of which such information
is given in the Registration Statement, the Prospectus and the Canadian
Prospectus (or any amendment or supplement thereto), neither the Company
nor any of the Subsidiaries has incurred any liability or obligation,
direct or contingent, or entered into any transaction, not in the ordinary
course of business, that is material to the Company and its subsidiaries
considered as one enterprise, and there has not been any change in the
capital stock, or material increase in the short-term debt or long-term
debt, of the Company or any of the Subsidiaries, or any material adverse
change, or any development involving or which may reasonably be expected to
involve, a prospective material adverse change, in the condition (financial
or other), business, net worth or results of operations of the Company and
its subsidiaries considered as one enterprise.
(xv) Each of the Company and the Subsidiaries has good and marketable
title to all property (real and personal) described in the Prospectus and
the Canadian Prospectus as being owned by them (excluding properties owned
by West Ferry Printers, Trafford Park Printers, Fairfax or Southam), free
and clear of all liens, claims, security interests or other encumbrances
except to the extent such are set forth or described in the Registration
Statement, the Prospectus and the Canadian Prospectus or in a document
filed as an exhibit to the Registration Statement or are not material to
the business of the Company and its subsidiaries considered as one
enterprise and all the property described in the Prospectus and the
Canadian Prospectus as being held under lease by each of the Company and
the Subsidiaries is held by it under valid, subsisting and enforceable
leases with such exceptions as are not material to the business of the
Company and its subsidiaries considered as one enterprise and do not
interfere with the use made and proposed to be made of such properties by
the Company and its subsidiaries.
(xvi) Neither the Company nor any of its affiliates has taken or will
take, directly or indirectly, any action designed to cause or result in
stabilization or manipulation of the price of the Common Stock or any
<PAGE> 13
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outstanding securities convertible into or exchangeable or exercisable for
the Common Stock; and neither the Company nor any of its affiliates has
distributed or will distribute any prospectus (as such term is defined in
the 1933 Act and the 1933 Act Regulations) in connection with the offering
and sale of the Securities other than any preliminary prospectus filed with
the Commission or the Prospectuses or the Canadian Prospectuses or other
material permitted by the 1933 Act or the 1933 Act Regulations or, in
Canada, permitted by the securities laws of the Offering Provinces.
(xvii) The Company and each of the Subsidiaries has such governmental
authorizations, approvals, orders, licenses, certificates, franchises and
permits of and from all governmental or regulatory officials and bodies
("permits") as are necessary to own its respective properties and to
conduct its business in the manner described in the Prospectus and the
Canadian Prospectus, with such exceptions as are not material to the
business of the Company and its subsidiaries considered as one enterprise
and do not interfere with the use made and proposed to be made of such
properties by the Company and its subsidiaries or are otherwise disclosed;
the Company and each of the Subsidiaries has fulfilled and performed all
its material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, with such
exceptions as are not material to the business of the Company and its
subsidiaries considered as one enterprise and do not interfere with the use
made and proposed to be made of such properties by the Company and its
subsidiaries or are otherwise disclosed; and, except as described in the
Prospectus and the Canadian Prospectus, none of such permits contains any
restriction that is materially burdensome to the Company and its
subsidiaries considered as one enterprise.
(xviii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements
<PAGE> 14
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in conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xix) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus and the Canadian Prospectus.
(xx) Except as described in the Registration Statement, the
Prospectus and the Canadian Prospectus, the Company and each of the
Subsidiaries have filed all tax returns required to be filed, which returns
are complete and correct, and neither the Company nor any Subsidiary is in
default in the payment of any taxes which were payable pursuant to said
returns or any assessments with respect thereto, with such exceptions as
are not material to the financial position of the Company and its
subsidiaries considered as one enterprise.
(xxi) The Company and the Subsidiaries own, or possess adequate
rights to use, all patents, trademarks, service marks, trade names,
copyrights, licenses, and rights described in the Prospectus and the
Canadian Prospectus as being owned by them or any of them or necessary for
the conduct of their respective businesses, and the Company is not aware of
any claim to the contrary or any challenge by any other person to the
rights of the Company and the Subsidiaries with respect to the foregoing.
(xxii) The Company is not now, and after sale of the Securities to be
sold by it hereunder and application of the net proceeds from such sale as
described in the Prospectus and the Canadian Prospectus under the caption
"Use of Proceeds" will not be, an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
<PAGE> 15
15
(xxiii) The Company has complied with all provisions of Florida
Statutes, Section 517.075, relating to issuers doing business with Cuba.
(xxiv) The Securities conform to the descriptions thereof contained
in the Prospectus and the Canadian Prospectus.
(xxv) Except as described in the Prospectus and except for the
registration rights granted to certain lenders and described in
Registration Statement No. 333-04697 of the Company and the registration
rights under the agreement dated as of May 30, 1996 among the Company, a
wholly owned subsidiary of the Company and Toronto Dominion Securities,
Inc., no holder of any security of the Company nor any other person has any
right, contractual or otherwise, to have any securities included in the
Registration Statement or the right, because of the filing of the
Registration Statement or consummation of the transactions contemplated by
this Agreement, to require registration of any security of the Company
under the Act.
(xxvi) Except as set forth in the Prospectus and the Canadian
Prospectus, no labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the knowledge of the Company, is imminent
which might be expected to result in a material adverse effect on the
condition (financial or other), business, properties, net worth or results
of operations of the Company and its subsidiaries considered as one
enterprise.
(xxvii) Except as set forth in the Registration Statement and except
as would not result in a material effect on the condition (financial or
other), or business, properties, net worth or results of operations of the
Company and its subsidiaries considered as one enterprise, and which would
not materially and adversely affect the consummation of this Agreement, (i)
to the knowledge of the Company after reasonable inquiry, the Company is
not in violation of any applicable Federal, foreign, state or local
environmental law or any applicable order of any governmental authority
with respect thereto; (ii) the Company is not in violation of or subject to
any existing, or pending or, to the Company's knowledge, threatened action,
suit, investigation, inquiry or
<PAGE> 16
16
proceeding by any governmental authority nor is the Company subject to any
environmental claim by any citizens' group or to remedial obligations under
any applicable Federal, foreign, state or local environmental law; (iii)
the Company and its subsidiaries are in compliance with all permits or
similar authorizations, if any, required to be obtained or filed in
connection with their operations including, without limitation, emissions,
discharges, treatment, storage, disposal or release of a Hazardous Material
into the environment except where any noncompliance could not reasonably be
expected to have a material adverse effect on the operations of the Company
and its subsidiaries; and (iv) to the knowledge of the Company after
reasonable inquiry, no Hazardous Materials have been disposed of or
released by the Company or its subsidiaries at, under or on any property
currently or formerly owned or operated by the Company or its subsidiaries,
except in accordance with applicable environmental laws. The term
"Hazardous Material" means any oil (including petroleum products, crude oil
and any fraction thereof), chemical, contaminant, pollutant, solid or
hazardous waste or material, or Hazardous Substance (as defined in Section
101(14) of the Comprehensive Environmental Response, Compensation and
Liability Act and regulations thereunder), that is regulated as toxic or
hazardous to human health or the environment under any Federal, foreign,
state or local environmental law.
(xxviii) The Company and each other person or entity that, together
with the Company, is treated as a single employer under Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code") (each such person or
entity being an "ERISA Affiliate"), complies in all material respects with
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code with respect to each pension plan (as defined in Section 3(2)
of ERISA) maintained by the Company or such ERISA Affiliate, and none of
the Company or any of its ERISA Affiliates has incurred any material
liability to any pension plan or to the Pension Benefit Guaranty
Corporation that has not been fully paid as of the date hereof (except as
disclosed in the Registration Statement, the Prospectus and the Canadian
Prospectus (or any amendment or supplement thereto).
<PAGE> 17
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(b) Any certificate signed by an officer of the Company and delivered to
the Managers or to the Canadian Dealers or to both or to counsel for the
Managers shall be deemed a representation and warranty by the Company to the
Managers and the Canadian Dealers as to the matters covered thereby.
SECTION 2. Sale and Delivery to Managers; Closing. (a) On the basis of
the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, the Company agrees to sell to the Managers, and
the Managers severally and not jointly agree to purchase from the Company, at
the purchase price per share set forth in the International Price Determination
Agreement, the Initial International Securities.
(b) If the Company has elected not to rely upon Rule 430A under the 1933
Act Regulations, the initial public offering price and the purchase price per
share of Common Stock to be paid by the Managers shall be agreed upon and set
forth in the International Price Determination Agreement, dated the date hereof,
and an amendment to the Registration Statement containing such information will
be filed with the Commission, before the Registration Statement becomes
effective.
(c) If the Company has elected to rely upon Rule 430A under the 1933 Act
Regulations, the initial public offering price and the purchase price per share
of Common Stock to be paid by the Managers shall be agreed upon and set forth in
the International Price Determination Agreement. In the event that the
International Price Determination Agreement has not been executed by the close
of business on the fourth business day following the date on which the
Registration Statement becomes effective, this Agreement shall terminate
forthwith, without liability of any party to any other party except that
Sections 6, 7 and 8 shall remain in effect.
(d) The Company will deliver the Initial International Securities to the
Lead Managers, for the account of the Managers, at the offices of Cravath,
Swaine & Moore, 825 Eighth Avenue, New York, NY 10019, or at such other place as
shall be agreed upon by the Company and the Lead Managers, against payment of
the gross purchase price minus an amount equal to the underwriting commission
applicable to the Initial Securities as described in the Price Determination
Agreement by wire transfer to the
<PAGE> 18
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Company in U.S. dollars, in funds immediately available to the Company, at 9:00
a.m. either (i) on the third business day following the date upon which the
Company shall have fulfilled all requirements which under the 1933 Act must be
fulfilled to qualify the Securities for distribution and the Registration
Statement shall have become effective or (ii) if the Company has elected to
rely upon Rule 430A under the 1933 Act Regulations, on the third business day
after execution of the International Price Determination Agreement, or at such
other time not later than ten full business days thereafter as the Lead
Managers and the Company determine (such time being herein referred to as the
"Closing Date"). The Initial International Securities so to be delivered will
be in definitive, fully registered form in such denominations and registered in
such names as the Lead Managers shall request in writing at least two full
business days prior to the Closing Date, and will be made available for
checking and packaging at the office of the Transfer Agent of the Company, not
later than 10:00 a.m. on the business day prior to the Closing Date.
(e) Each Canadian Dealer shall notify its Manager affiliate at least 48
hours prior to the Closing Date of the number of Securities for which offers to
purchase have been received by such Canadian Dealer and, subject to prior sale
and allocation of the Securities, when, as and if delivered to and accepted by
such Manager affiliate, and subject to the approval of legal matters by their
counsel and certain other terms and conditions, such Manager affiliate agrees to
sell to such Canadian Dealer, and such Canadian Dealer agrees to purchase from
such Manager affiliate, at a price per Security, determined in accordance with
the Selling Agreement, such number of Securities, if any, at the Closing Date.
(f) In addition, on the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, upon
written notice from the Managers given to the Company not more than 30 days
after the date upon which the Registration Statement becomes effective or, if
the Company has elected to rely on Rule 430A under the 1933 Act Regulations, the
date of the International Price Determination Agreement, the Managers may
purchase all or less than all of the International Option Securities at the
purchase price per share to be paid for the Initial International Securities.
The Company agrees to sell to the Managers the amount of International Option
Securities specified in such notice and the Managers
<PAGE> 19
19
agree to purchase such International Option Securities. Such International
Option Securities may be purchased by the Managers in whole or from time to
time in part only for the purpose of covering over-allotments made in
connection with the sale of the Initial International Securities. No
International Option Securities shall be sold or delivered unless the Initial
International Securities previously have been, or simultaneously are, sold and
delivered. The right to purchase the International Option Securities or any
portion thereof will expire 30 days after the later of (i) the date upon which
Registration Statement becomes effective and (ii) if the Company has elected to
rely upon Rule 430(A) under the 1933 Act Regulations, the date of the
International Price Determination Agreement.
(g) Each time of delivery of and payment for the International Option
Securities, being herein referred to as a "Date of Delivery" (which may be at,
but not earlier than, the Closing Date), shall be determined by the Managers but
shall be not later than three full business days after written notice of
election to purchase International Option Securities is given. The Company will
deliver the International Option Securities to the Managers, against payment of
the gross purchase price therefor by wire transfer to the Company in immediately
available funds. The International Option Securities will be in definitive
form, in such denominations and registered in such names as the Managers
request. Concurrently with each payment by the Managers of the gross purchase
price for the International Option Securities to be purchased upon the
applicable Date of Delivery in the manner described in this Section 2(f), the
Company will pay to the Managers by certified or official bank check or checks
in U.S. dollars, in funds available the next succeeding business day drawn to
the order of Merrill Lynch, Pierce, Fenner & Smith Incorporated, North Tower,
World Financial Center, New York, New York 10281-1305, for the account of the
Managers, an amount equal to the underwriting commission applicable to such
International Option Securities.
SECTION 3. Covenants of the Company. The Company covenants with the
Managers and the Canadian Dealers as follows:
(a) The Company will fulfill all requirements which under the securities
laws of the Offering Provinces that must be fulfilled to qualify the Securities
for distribution in the Offering Provinces, including the
<PAGE> 20
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preparation and filing of the supplemented prospectus pursuant to Rule 430A
under the 1933 Act as applied in Canada under MJDS, not later than 5:30 p.m.
(Toronto time) on August 5, 1996, and the filing with the Canadian Securities
Commissions of all documents that are incorporated by reference in the Canadian
Prospectuses (following the issuance of receipts for such Canadian
Prospectuses) as nearly as practicable contemporaneously with the filing of
such documents with the Commission; the Company will notify the Managers and
the Canadian Dealers immediately, and confirm the notice in writing, (i) of the
effectiveness of the Registration Statement and any amendment thereto
(including any posteffective amendment), (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
or for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose and will notify the Canadian
Dealers and TDSI immediately, and confirm the notice in writing, (v) of the
issuance of receipts for the Canadian Final Prospectus by the Canadian
Securities Commissions and when any supplement to the Canadian Prospectus or
any amended Canadian Prospectus or Supplementary Material shall have been
filed, (vi) of the receipt of any comments from any Canadian Securities
Commission, (vii) of any request by any Canadian Securities Commission to amend
or supplement the Canadian Final Prospectus or the Canadian Prospectus or for
additional information, or (viii) of the issuance by any Canadian Securities
Commission of any order having the effect of ceasing or suspending the
distribution of the Securities, or of the institution or, to the knowledge of
the Company, threatening of any proceedings for any such purpose. The Company
will make every reasonable effort to prevent the issuance of any stop order or
order having the effect of ceasing or suspending the distribution of the
Securities and, if any such order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Company will furnish to the Lead Managers, without charge, five
true and correct copies of the Registration Statement as originally filed with
the Commission and of each amendment thereto, including financial statements and
all exhibits to the Registration Statement, and of any Rule 462(b) Registration
Statement and any amendment thereto, and will also furnish to you, without
<PAGE> 21
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charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but without exhibits, and of
any Rule 462(b) Registration Statement and any amendment thereto, as you may
reasonably request.
(c) The Company will not (i) file any amendment to the Registration
Statement, any Rule 462(b) Registration Statement or amendment thereto, or make
any amendment or supplement to the Prospectuses, the Canadian Prospectuses or
any Supplementary Material of which you shall not previously have been advised
or to which you shall reasonably object in writing after being so advised or
(ii) so long as, in the written opinion of counsel for the Managers (a copy of
which shall be delivered to the Company), a Prospectus or Canadian Prospectus is
required to be delivered in connection with sales by any Underwriter, Canadian
Dealer or dealer, file any information, documents or reports pursuant to the
Exchange Act, without delivering a copy of such information, documents or
reports to you, as Lead Managers of the Managers, prior to such filing.
(d) The Company will furnish to the Managers, from time to time during the
period when the Prospectus is required to be delivered under the 1933 Act or
the Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of
the Prospectus (as amended or supplemented) as the Managers may reasonably
request for the purposes contemplated by the 1933 Act or the 1934 Act or the
respective applicable rules and regulations of the Commission thereunder.
(e) The Company will furnish to each Canadian Underwriter
contemporaneously with the filing thereof with the Canadian Securities
Commissions a copy of the Canadian Preliminary Prospectus, the Canadian Final
Prospectus, the Canadian Prospectus and any Supplementary Material, approved,
signed and certified as required by the securities laws of the Offering
Provinces, and shall cause commercial copies of the Canadian Prospectus and any
Supplementary Material to be delivered to each Canadian Underwriter without
charge in such cities in the Offering Provinces in such numbers as such
Canadian Dealers and TDSI may reasonably request as soon as possible and in any
event, with respect to the Canadian Prospectus or Supplementary Material,
within 24 hours of the time such material shall have been filed with the
Ontario Securities Commission.
<PAGE> 22
22
(f) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the Managers, to amend or supplement the Prospectus, the
Canadian Prospectus or any Supplementary Material in order to make such
document not misleading, in the light of the circumstances existing at the time
it is delivered to a purchaser, the Company will forthwith amend or supplement
the Prospectus, Canadian Prospectus or any Supplementary Material (in form and
substance satisfactory to counsel for the Managers so that as so amended or
supplemented, the Prospectus, Canadian Prospectus or any Supplementary Material
will not include an untrue statement of a material fact or omit to state a
material fact necessary) in order to make the statements therein, in the light
of the circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Company will furnish to the Managers or the Canadian
Dealers and TDSI, as the case may be, a reasonable number of copies of such
amendment or supplement.
(g) The Company will endeavor, in cooperation with the Lead Managers, to
qualify the Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions as the Lead Managers may designate;
provided, however, in each jurisdiction in which the Securities have been so
qualified the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the Registration
Statement.
(h) The Company will make generally available to its security holders as
soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions
of Rule 158 of the 1933 Act Regulations) covering a 12-month period beginning
not later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(i) The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus and the Canadian
Prospectus under "Use of Proceeds".
(j) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A of the
1933 Act
<PAGE> 23
23
Regulations, then immediately following the execution of the International
Price Determination Agreement, the Company will prepare, and file or transmit
for filing with the Commission in accordance with such Rule 430A and Rule
424(b) of the 1933 Act Regulations, copies of an amended Prospectus, or, if
required by such Rule 430A, a post-effective amendment of the Registration
Statement (including an amended Prospectus), containing all information so
omitted, and will fulfill all requirements which under the securities laws of
the Offering Provinces must be fulfilled to qualify the Securities for
distribution in the Offering Provinces, including the requirement to file a
supplemented prospectus with the Canadian Securities Commissions concurrently
with the filing of the amended Prospectus or post-effective amendment of the
Registration Statement. If the Company has elected to rely upon Rule 430A, the
Company will take such steps as it deems necessary to ascertain whether the
form of Canadian Prospectus containing the Rule 430A Information was received
for filing by the Canadian Securities Commissions and, in the event that any
such prospectuses were not received for filing, the Company will promptly file
any such prospectus not then received for filing.
(k) The Company will not sell, contract to sell or otherwise dispose of any
Securities or any securities convertible into or exercisable or exchangeable
for Securities, or grant any options or warrants to purchase Securities or any
securities convertible into or exercisable or exchangeable for Securities, for
a period of 90 days after the date of the Prospectus, without the prior written
consent of Merrill Lynch; provided, however, that the foregoing shall not apply
to Class A Common Stock issuable in connection with the Company's PRIDES, the
shares under a shelf registration statement relating to the shares of Class A
Common Stock of the Company 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 Company's combined interests in
Southam and related intercompany transactions, and options to purchase shares
under the Company's 1994 Stock Option Plan.
(l) For a period of three years after the Closing Date the Company will
furnish to the Managers and the Canadian Dealers copies of all reports and
communications delivered to the Company's stockholders or to holders of the
Securities as a class and will also furnish copies of all
<PAGE> 24
24
reports (excluding exhibits) filed with the Commission on Form 8-K, 10-Q and
10-K, and all other reports and information furnished to its stockholders
generally, at the time such reports are furnished to stockholders generally.
SECTION 4. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed, and of
each amendment thereto, (ii) the printing of this Agreement, the International
Price Determination Agreement and any Legal Investment Survey, (iii) the
preparation, issuance and delivery of the certificates for the Securities to
the Managers, (iv) the fees and disbursements of the Company's counsel and
accountants, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f), including filing fees and the
fee and the disbursements of counsel for the Managers in connection therewith
and in connection with the preparation of the Blue Sky Survey, (vi) the
printing and delivery to the Managers and the Canadian Dealers of copies of the
Registration Statement as originally filed and of each amendment thereto, the
preliminary prospectus, the Prospectus, the Canadian Preliminary Prospectus,
the Canadian Prospectus, and any Supplementary Material and any amendments or
supplements thereto, (vii) the printing and delivery to the Managers of copies
of the Blue Sky Survey, (viii) the filing fee of the National Association of
Securities Dealers, Inc. and (ix) the fees incurred with the additional listing
application for the Securities on the New York Stock Exchange.
If this Agreement is terminated by the Managers in accordance with the
provisions of Section 5, Section 9(a) or Section 11 hereof, the Company shall
reimburse the Managers and the Canadian Dealers for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Managers.
SECTION 5. Conditions of the Managers' Obligations. The obligations of the
Managers hereunder are subject to the accuracy of the representations and
warranties of the Company herein contained, to the performance by the Company
of its obligations hereunder, and to the following further conditions:
<PAGE> 25
25
(a) The Registration Statement shall have become effective not later than
5:30 p.m. on the date hereof, or with the consent of the Lead Managers, at a
later time and date, not later, however, than 5:30 p.m. on the first business
day following the date hereof or at such later time and date as may be approved
by the Lead Managers; the Canadian Final Prospectus shall have been filed with
the Canadian Securities Commissions and a National Policy No. 1 Receipt
obtained therefor not later than 5:30 p.m. (local time) on the second business
day following the day of this Agreement; and at the Closing Date no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by
the Commission and no order having the effect of ceasing or suspending the
distribution of the Securities shall have been issued by any Canadian
Securities Commission nor shall any proceedings for any such purpose have been
initiated or threatened by any of the Canadian Securities Commissions. If the
Company has elected to rely upon Rule 430A of the 1933 Act Regulations, the
price of the Securities and any price-related information previously omitted
from the effective Registration Statement pursuant to such Rule 430A shall have
been transmitted to the Commission for filing pursuant to Rule 424(b) of the
1933 Act Regulations within the prescribed time period, and prior to the
Closing Date the Company shall have provided evidence satisfactory to the Lead
Managers of such timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in accordance
with the requirements of Rule 430A of the 1933 Act Regulations, and a
supplemented prospectus containing such omitted information shall have been
filed with the Canadian Securities Commissions in accordance with the MJDS
procedures.
(b) At the Closing Date, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the Prospectus
and the Canadian Prospectus, any material adverse change in the condition
(financial or otherwise), or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Lead Managers
shall have received a certificate of the Vice President and Chief Financial
Officer of the Company, dated
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26
as of Closing Date, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1(a) are
true and correct with the same force and effect as though expressly made at and
as of the Closing Date, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior
to the Closing Date, (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission, and (v) no order having the
effect of ceasing or suspending the distribution of the Securities has been
issued by any Canadian Securities Commission and no proceedings for any such
purpose have been initiated or threatened by any of the Canadian Securities
Commissions. As used in this Section 5, the terms "Prospectus" and "Canadian
Prospectus" mean the Prospectus and the Canadian Prospectus, respectively, in
the forms first used to confirm sales of Securities.
(c) You shall have received on the Closing Date an opinion of Kirkpatrick
& Lockhart LLP, counsel for the Company, dated the Closing Date and addressed
to you, as the Lead Managers for the Managers, and to the Canadian Dealers to
the effect that:
(i) The Company and each of the United States Subsidiaries (the "U.S.
Subsidiaries") is a corporation duly incorporated and validly existing in
good standing under the laws of the jurisdiction of its organization, with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement, the
Prospectus and the Canadian Prospectus (and any amendment or supplement
thereto), and is duly qualified as a foreign corporation for the
transaction of business in and is in good standing under the laws of each
jurisdiction where the nature of its properties or the conduct of its
business requires such qualification, except where the failure so to
qualify would not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and its subsidiaries, considered as one
enterprise.
(ii) All the outstanding shares of capital stock of each of the U.S.
Subsidiaries have been duly authorized and validly issued, are fully paid
and
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nonassessable, and are owned of record by the Company directly, or
indirectly through one of the other U.S. Subsidiaries, and are not subject
to any perfected security interest, or, to the best knowledge of such
counsel after reasonable inquiry, any adverse claims within the meaning of
the Uniform Commercial Code, except, to the extent set forth in the
Registration Statement and the Prospectus, currently existing liens, claims
and security interests of creditors and liens, claims and security
interests pursuant to the terms of the Amended Publishing Credit Facility
and the AP-91 Senior Notes.
(iii) The authorized and outstanding capital stock of the Company to
be in effect as of the Closing is as set forth under the caption
"Capitalization" in the Prospectus and the Canadian Prospectus; and the
authorized capital stock of the Company as of the Closing Date conforms in
all material respects as to legal matters to the description thereof
contained in the Prospectus and the Canadian Prospectus under the caption
"Description of Capital Stock".
(iv) All the shares of capital stock of the Company outstanding prior
to the issuance of the Securities have been duly authorized and validly
issued, and are fully paid and nonassessable.
(v) The Registration Statement and all post-effective amendments, if
any, have become effective under the 1933 Act and, to the best knowledge of
such counsel after reasonable inquiry, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule
424(b) has been made in accordance with Rule 424(b).
(vi) The Company has corporate power and authority to enter into this
Agreement and to issue, sell and deliver the Securities to the Managers as
provided herein, and this Agreement has been duly authorized, executed and
delivered by the Company.
(vii) Neither the Company nor any of the U.S. Subsidiaries is in
violation of its certificate or articles of incorporation or its respective
by-laws or,
<PAGE> 28
28
to the best knowledge of such counsel after reasonable inquiry, is in
default in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or other evidence of
indebtedness to which the Company or any U.S. Subsidiary is a party and
that is included as an exhibit to, or otherwise described or summarized in,
the Registration Statement, except as may be disclosed in the Prospectus
and the Canadian Prospectus and except for defaults under existing
indebtedness of the Company or any U.S. Subsidiary as to which consents or
waivers have been obtained prior to the Pricing Time.
(viii) Neither the offer, sale or delivery of the Securities, the
execution, delivery or performance of this Agreement, compliance by the
Company with the provisions of this Agreement, nor consummation by the
Company of the transactions contemplated hereby violates the certificate or
articles of incorporation or by-laws, or other organizational documents, of
the Company or any of the U.S. Subsidiaries or constitutes a breach of or
default under any agreement, indenture, lease or other instrument to which
the Company or any of the U.S. Subsidiaries is a party or by which any of
them or any of their respective properties is bound that is an exhibit to
the Registration Statement (except for defaults under existing indebtedness
of the Company or any U.S. Subsidiary as to which consents or waivers have
been obtained prior to the Pricing Time), or is material and is known to
such counsel after reasonable inquiry, or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of the U.S. Subsidiaries, nor will any such action
violate any existing law, regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment, injunction, order
or decree known to such counsel after reasonable inquiry, that names the
Company or any of the U.S. Subsidiaries and is specifically directed to any
of them or any of their respective properties.
(ix) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official in the United States
is required on the part of the Company (except as have been obtained under
the 1933 Act or the
<PAGE> 29
29
Exchange Act or such as may be required under state securities or Blue Sky
laws governing the purchase and distribution of the Securities) for the
valid issuance and sale of the Securities by the Company to the Managers as
contemplated by this Agreement.
(x) The Registration Statement and the Prospectus and any supplements
or amendments thereto (except for the financial statements and the notes
thereto and the schedules and other financial and statistical data included
therein, as to which such counsel need not express any opinion) comply as
to form in all material respects with the requirements of the 1933 Act and
the Registration Statement, the Prospectus, the Canadian Prospectus and any
Supplementary Material have been prepared in accordance with U.S.
disclosure requirements as interpreted and applied by the Commission.
(xi) None of the documents incorporated by reference into the
Prospectus and the Canadian Prospectus (other than the Rule 430A
Information) is required under the laws of the United States to be
delivered to offerees or purchasers of the Securities.
(xii) To the best knowledge of such counsel after reasonable inquiry,
(A) other than as described or contemplated in the Prospectus and the
Canadian Prospectus (or any supplement thereto), there are no legal or
governmental proceedings pending or threatened against the Company or any
of the U.S. Subsidiaries, or to which the Company or any of the U.S.
Subsidiaries, or any of their property, is subject, which are required to
be described in the Registration Statement or Prospectus and the Canadian
Prospectus (or any amendment or supplement thereto), and (B) there are no
material agreements, contracts, indentures, leases or other instruments to
which the Company or any U.S. Subsidiary is a party, that are required to
be described in the Registration Statement or the Prospectus and the
Canadian Prospectus (or any amendment or supplement thereto) or to be filed
as an exhibit to the Registration Statement that are not described or filed
as required, as the case may be.
(xiii) The statements in the Registration Statement, the Prospectus
and the Canadian Prospectus, insofar as they are descriptions or summaries
of contracts,
<PAGE> 30
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agreements or other legal documents to which the Company or any U.S.
Subsidiary is a party, or are statements of law or legal conclusions (other
than matters of English, Canadian, Australian or Israeli law), are accurate
in all material respects and present fairly the information required to be
shown.
(xiv) Except as described in the Prospectus and except for the
registration rights granted to certain lenders and described in
Registration Statement No. 333-04697 of the Company and the registration
rights under the agreement dated as of May 30, 1996 among the Company, a
wholly owned subsidiary of the Company and Toronto Dominion Investments,
Inc., no holder of any security of the Company or, to the best knowledge of
such counsel after reasonable inquiry, any other person has any right,
contractual or otherwise, to have any securities included in the
Registration Statement or the right, because of the filing of the
Registration Statement or consummation of the transactions contemplated by
this Agreement, to require registration of any security of the Company
under the Act.
(xv) The section of the Canadian Prospectus captioned "Certain United
States Tax Considerations for Non-United States Holders" is accurate in all
material respects and fairly summarizes the information required to be
disclosed therein.
(xvi) Although counsel cannot opine as to factual matters, and the
character of determinations involved in the registration process is such
that counsel cannot pass upon and assume any responsibility for the
accuracy or completeness of the information contained in the Registration
Statement, the Prospectus and the Canadian Prospectus, counsel shall advise
the Managers that on the basis of its review of the Registration Statement,
the Prospectus and the Canadian Prospectus and its participation in the
preparation thereof (relying as to materiality to a large extent upon the
statements of officers and other representatives of the Company) that
counsel has no reason to believe that (A) the Registration Statement
(except for the financial statements and notes thereto and the schedules
and other financial or statistical data included therein or omitted
therefrom, as to which counsel need express no opinion), at the time the
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Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or (B)
the Prospectus and the Canadian Prospectus (except for the financial
statements and notes thereto and the schedules and other financial or
statistical data included therein or omitted therefrom, as to which counsel
need express no opinion) at the time each of the Prospectus and the
Canadian Prospectus was issued, includes an untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; also, that counsel has no reason to believe, based
upon the procedures described above, that any of the Registration
Statement, the Prospectus or the Canadian Prospectus (except for the
financial statements and notes thereto and the schedules and other
financial or statistical data included therein or omitted therefrom, as to
which counsel need express no opinion) as of the date and time of delivery
of counsel's opinion contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading. Such counsel
may state that they have, between the effectiveness of the Registration
Statement and the Closing Time, participated in further discussions with
representatives of the Company regarding the contents of certain portions
of the Prospectus and certain related matters, and reviewed certificates of
certain officers of the Company, the opinions addressed to you from the
Company's Canadian counsel and United Kingdom counsel and a letter
addressed to you by the Company's independent accountants.
In rendering their opinion as aforesaid, counsel may rely upon an opinion
or opinions, each dated the Closing Date, of other counsel retained by them or
the Company as to laws of any jurisdiction other than the United States, the
Commonwealth of Pennsylvania or the Delaware General Corporation Law, provided
that (1) each such local counsel is acceptable to the Lead Managers, (2) such
reliance is expressly authorized by each opinion so relied upon and a copy of
each such opinion is delivered to the Underwriter and is, in form and substance
satisfactory to the
<PAGE> 32
32
Underwriter and its counsel, and (3) counsel shall state in their opinion that
they believe that they and the Managers are justified in relying thereon.
Counsel also may rely, to the extent they deem such reliance proper, as to
matters of fact upon certificates of officers of the Company and of government
officials. Copies of all such certificates shall be furnished to counsel for
the Managers on the Closing Date. Such opinion may state that it is limited to
the laws of the Commonwealth of Pennsylvania (excluding the conflict of laws
rules), the Delaware Business Corporation Law and the Federal securities laws
of the United States, and that such counsel expresses no opinion as to any
other laws and further that such opinions are being given as if the Purchase
Agreement was governed by Pennsylvania law.
(d) You shall have received on the Closing Date an opinion of Cravath,
Swaine & Moore, counsel for the Managers, dated the Closing Date and addressed
to you, as the Lead Managers for the Managers, and to the Canadian Dealers as to
such matters as the Lead Managers may reasonably request.
(e) You shall have received on the Closing Date an opinion of Clifford,
Chance, special English counsel for the Company, dated the Closing Date and
addressed to you, as Lead Managers for the Managers, and to the Canadian
Dealers to the effect that:
(i) Each of DTH, FDTH and Telegraph is a company duly incorporated
and validly existing under the laws of England, with corporate power and
authority to own, or lease its properties and to conduct its business as
described in the Registration Statement and the Prospectus.
(ii) All the issued shares in the capital of DTH, FDTH and Telegraph
have been duly authorized, validly issued credited as fully paid.
(iii) Neither the offer, sale or delivery of the Securities, the
execution, delivery or performance of the Purchase Agreement, compliance by
the Company with the provisions of the Purchase Agreement, nor consummation
by the Company of the transactions contemplated hereby (i) violates the
memorandum or articles of association of DTH, FDTH or Telegraph or (ii)
constitutes a breach of or default by FDTH, DTH or Telegraph under any
Scheduled Agreement (iii) nor does
<PAGE> 33
33
any such action violate any existing English law, regulation, judgment,
injunction, order or decree known to such counsel that names DTH, FDTH or
Telegraph and, in the case of this subparagraph (iii), would have a
material adverse effect on the condition (financial or other) or business,
properties, net worth or results of operations of the Company and its
subsidiaries considered as one enterprise.
(iv) Argsub Limited is a company duly incorporated and validly
existing under the laws of England, with corporate power and authority to
own or lease its properties and to conduct its business as described in the
Prospectus; all the preference shares in the capital of Argsub Limited of
the series issued to DTH in exchange for the FDTH Preference Shares
previously held by DTH have been duly authorized and validly issued
credited as fully paid.
In rendering their opinion as aforesaid, counsel's opinion shall be limited
to the laws of England; provided that such counsel may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by them or the
Company as to laws of any jurisdiction other than England, provided that (1)
each such local counsel is acceptable to the Managers, (2) such reliance is
expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Managers and is, in form and substance satisfactory
to the Managers and their counsel, and (3) counsel shall state in their opinion
that they believe that they and the Managers are justified in relying thereon.
(f) The Canadian Dealers and TDSI shall have received on the Closing Date
an opinion of Tory Tory DesLauriers & Binnington, Canadian counsel for the
Company, dated the Closing Date and addressed to the Canadian Dealers and TDSI,
to the effect that:
(i) The Canadian Prospectus, the Supplementary Material, and any
supplements or amendments thereto (including the Rule 430A Information, but
excluding the financial statements and the notes thereto and the other
financial and statistical data included therein, as to which such counsel
need not express any opinion) comply as to form in all material respects
with the requirements of the MJDS.
<PAGE> 34
34
(ii) Receipts have been obtained in respect of the Canadian Final
Prospectus from the Canadian Securities Commissions and all necessary
documents have been filed, all necessary proceedings have been taken and
all necessary authorizations, approvals, permits and consents have been
obtained under the securities laws of the Offering Provinces to permit the
Securities to be offered, sold and delivered in the Offering Provinces by
or through persons registered under such applicable legislation.
(iii) The Insurance Companies Act (Canada) and the Regulations
thereunder would not, subject to compliance with the prudent investment
standards contained therein and the general investment provisions thereof,
preclude a foreign company regulated by Part XIII of that Act from vesting
in trust, as of the Closing Date, the Securities, provided that such
foreign company has established investment and lending policies, standards
and procedures pursuant to that Act and that vesting in trust the
Securities is in conformity with the trust deed creating the trust in
respect of such assets and is in conformity with such investment and
lending policies, standards and procedures.
(iv) The Trust and Loan Companies Act (Canada) and the Regulations
thereunder, would not, subject to compliance with the prudent investment
standards contained therein and the general investment provisions thereof,
preclude an investment in the Securities as of the Closing Date by a
company (as defined in section 2 thereof), provided that such company has
established investment and lending policies, standards and procedures
pursuant to that Act and that an investment in the Securities is in
conformity with such investment and lending policies, standards and
procedures.
(v) The Pension Benefits Standards Act, 1985 (Canada) and the
Regulations thereunder would not, subject to compliance with the general
investment provisions thereof, preclude the funds of a pension plan
registered under that Act from being invested in the Securities as of the
Closing Date, provided that if and when a written statement of investment
policies and procedures in respect of such plan's portfolio of loans and
investments has been established in accordance with such Regulations, the
investment by such person plan is in accordance with such statement of
investment policies and procedures.
<PAGE> 35
35
(vi) The Loan and Trust Corporations Act (Ontario) and the
Regulations thereunder would not, subject to compliance with prudent
investment standards contained therein and the general investment provision
thereof, preclude the funds received as deposits under section 155 of that
Act by loan corporations and trust corporations registered under that Act
from being invested in the Securities as of the Closing Date, without
resorting to the provisions of section 166 of that Act.
(vii) The Pension Benefits Act (Ontario) and the Regulations
thereunder would not, subject to compliance with the prudent investment
standards contained therein and the general investment provisions thereof,
preclude the funds of a pension plan registered under that Act from being
invested in the Securities as of the Closing Date provided that the
Securities are within a category or sub-category of investment specifically
permitted and for which guidelines are established in the statement of
investment policies and goals filed under that Act for such plan and the
investment complies with such guidelines.
(viii) The Pension Benefits Standards Act (British Columbia) and the
regulations thereunder (collectively, the "PBSA") would not, subject to
compliance with prudent investment standards contained therein and the
general investment provisions thereof, preclude a pension plan (as defined
in the PBSA) from making an investment in the Securities, provided that
such pension plan has established written investment policies and
procedures in respect of the pensions plan's portfolio of investments and
loans which complies with the PBSA and the investment in the Securities by
such pension plan complies with such investment policies and procedures.
(ix) The Financial Institutions Act (British Columbia and the
regulations thereunder (collectively, the "FIA") would not, subject to
compliance with prudent investment standards contained therein and the
general investment provisions thereof, preclude a financial institution (as
defined in the FIA) from making an investment in the Class A Common Stock
<PAGE> 36
36
provided that such financial institution has established a written
investment and lending policy which complies with the FIA and the
investment in the Securities complies with that investment and lending
policy.
(x) The Insurance Act (Manitoba) would not, subject to compliance
with the prudent investment standards and general investment provisions
contained therein applicable to a company which has obtained an order under
section 53 of the Insurance Companies Act, 1985 (Canada) and its
Regulations (the "Federal Legislation"), preclude an insurer incorporated
and licensed under that Act from investing its surplus funds and reserves
in the Securities as of the Closing Date, provided that such insurer has
established investment and lending policies, standards and procedures
pursuant to the Federal Legislation and that an investment in the
Securities is in conformity with such investment and lending policies,
standards and procedures.
(xi) The Pension Benefits Act, 1992 (Saskatchewan) and the
Regulations thereunder (including the Regulations under the Pension
Benefits Standards Act, 1985 (Canada) incorporated therein) (the "PBA")
would not preclude a pension plan regulated or registered under the PBA
from investing its funds in the Securities, subject to compliance with the
prudent investment standards and the general investment provisions of the
PBA, and, provided that such an investment is in conformity with the
investment policies and procedures established and filed by the
administrator of the pension plan pursuant to the PBA.
(xii) The Loan and Trust Corporations Act (Alberta) would not preclude
a provincial corporation (as defined in such Act) from investing the funds
it receives as deposits (excluding funds, other than deposits, held by it
as a fiduciary) in the Securities, subject to the general investment
provisions and restrictions and compliance with the prudent investment
standards of such Act, including, without limitation, applicable
quantitative limits and provided that such investment is consistent with
the policies and procedures adopted by such provincial corporation in
accordance with such Act.
<PAGE> 37
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(xiii) As of the Closing Date, the Securities will be qualified
investments for a trust governed by a registered retirement savings plan, a
deferred profit savings plan or a registered retirement income fund
(collectively, "deferred income plans") under the Income Tax Act (Canada).
(xiv) The Securities will be foreign property (as defined in the
Income Tax Act (Canada)) for the purposes of Part XI of that Act, which
imposes a special tax on deferred income plans, registered investments and
other tax-exempt entities, including most registered pension funds or
plans. A deferred income plan or tax-exempt entity will be subject to a
tax if, at the end of any month, the aggregate cost amount of all its
foreign property exceeds 20% of the aggregate cost amount of all its
property and an amount in respect of its investment in prescribed small
businesses.
In rendering their opinion as aforesaid, counsel's opinion shall be limited
to the laws of Ontario and the federal laws of Canada applicable therein;
provided that such counsel may rely upon an opinion or opinions, each dated the
Closing Date, of other counsel retained by them or the Company as to laws of any
jurisdiction other than Ontario, provided that (1) each such local counsel is
acceptable to the Canadian Dealers and TDSI, (2) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such opinion is
delivered to the Canadian Dealers and TDSI and is, in form and substance,
satisfactory to the Canadian Dealers and TDSI and their counsel, and (3) counsel
shall state in their opinion that they believe that they and the Canadian
Dealers and TDSI are justified in relying thereon. In addition, such counsel
may rely upon an opinion of Kirkpatrick & Lockhard LLP, counsel to the Company,
to the effect that the Registration Statement, the Prospectus, the Canadian
Prospectus and any Supplementary Material have been prepared in accordance with
U.S. disclosure requirements as interpreted and applied by the Commission.
(g) The Canadian Dealers and TDSI shall have received on the Closing Date
an opinion of McMillan Binch, special Canadian counsel for the Managers and
certain of their affiliates, dated the Closing Date and addressed to the
Canadian Dealers and TDSI, as to such matters as the Canadian Dealers and TDSI
may reasonably request.
<PAGE> 38
38
In rendering their opinion as aforesaid, counsel's opinion shall be limited
to the laws of Ontario and the federal laws of Canada applicable therein;
provided that such counsel may rely upon an opinion or opinions, each dated the
Closing Date, of other counsel retained by them or the Company as to laws of any
jurisdiction other than Ontario, provided that (1) each such local counsel is
acceptable to the Canadian Dealers and TDSI, (2) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such opinion is
delivered to the Canadian Dealers and TDSI and is, in form and substance,
satisfactory to the Canadian Dealers and TDSI, and (3) counsel shall state in
their opinion that they believe that they and the Canadian Dealers and TDSI are
justified in relying thereon. In addition, such counsel may rely upon an
opinion of Cravath, Swaine & Moore, counsel to the Managers, to the effect that
the Registration Statement, the Prospectus, the Canadian Prospectus and any
Supplementary Material have been prepared in accordance with U.S. disclosure
requirements as interpreted and applied by the Commission.
(h) You shall have received letters addressed to you, as Lead Managers for
the Managers, and to the Canadian Dealers dated the date hereof and the Closing
Date from KPMG Peat Marwick LLP, independent certified public accountants for
the Company, substantially in the forms heretofore approved by you.
(i) At the Closing Date and at each Date of Delivery, if any, counsel for
the Managers shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and sale
of the Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Managers and counsel for the
Managers.
(j) At the Closing Date, you shall have received agreements substantially
in the form of Exhibit B hereto, dated the Closing Date and signed by the
Company, Hollinger and certain executive officers and directors of the Company
named therein.
<PAGE> 39
39
(k) You shall have received a letter from Hollinger, addressed to the
Managers and the Canadian Dealers and verifying that Hollinger believes, based
on preliminary calculations as of June 30, 1996, that it is in compliance at
such date with the Debt-to-Equity Ratio set forth in the DTH and FDTH
Preference Shares (as such term is defined in the Registration Statement).
(l) You shall have received evidence acceptable to counsel for the
Managers that the Company's Scheme (as such term is defined in the Prospectus)
for the acquisition of the Telegraph has received the approval of an English
court of competent jurisdiction and consequently become effective.
(m) In the event that the Managers and the Canadian Dealers exercise their
option provided in Section 2(e) hereof to purchase all or any portion of the
International Option Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by the
Company hereunder shall be true and correct as of each Date of Delivery and, at
the relevant Date of Delivery, the Lead Managers and the Canadian Dealers shall
have received:
(i) A certificate, dated such Date of Delivery, of the Company
confirming that the certificate delivered at the Closing Date pursuant to
Section 5(b) hereof remains true and correct as of such Date of Delivery.
(ii) The favorable opinion of Kirkpatrick & Lockhart LLP, counsel for
the Company, in form and substance satisfactory to counsel for the
Managers, dated such Date of Delivery, relating to the International Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.
(iii) The favorable opinion of Clifford Chance, special English
counsel for the Company, in form and substance satisfactory to counsel for
the Managers, dated such Date of Delivery, relating to the International
Option Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(e).
<PAGE> 40
40
(iv) The favorable opinion of Cravath, Swaine & Moore, counsel for
the Managers, dated such Date of Delivery, relating to the International
Option Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Sections 5(d) hereof.
(v) The favorable opinion of Tory Tory DesLauriers & Binnington,
Canadian counsel for the Company, in form and substance satisfactory to
counsel for the Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section 5(f)
hereof.
(vi) The favorable opinion of McMillan Binch, Canadian counsel for
the Managers and the Canadian Dealers, dated such Date of Delivery,
relating to the International Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion required
by Section 5(g) hereof.
(vii) A letter from KPMG Peat Marwick LLP, in form and substance
satisfactory to the Managers and dated such Date of Delivery, substantially
the same in form and substance as the letter furnished to the Managers
pursuant to Section 5(h) hereof, except that the "specified date" in the
letter furnished pursuant to this Section 5(m)(vii) shall be a date not
more than five days prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Managers and the Canadian Dealers by notice to the Company at any time at or
prior to the Closing Date, and such termination shall be without liability of
any party to any other party except as provided in Section 4.
SECTION 6. Indemnification. (a) The Company agrees to indemnify and hold
harmless the Managers and the Canadian Dealers and each person, if any, who
controls the Managers and the Canadian Dealers within the meaning of
<PAGE> 41
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Section 15 of the 1933 Act to the extent and in the manner set forth in clauses
(i), (ii) and (iii) below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information, if
applicable, and any information contained in a Rule 462(b) Registration
Statement or any amendments thereto, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Prospectus, the Canadian Prospectus or any
Supplementary Material (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by the Lead Managers, reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) and (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission
<PAGE> 42
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or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary
prospectus, the Prospectus, the Canadian Prospectus or any Supplementary
Material (or any amendment or supplement thereto); and the parties agree
that the statements set forth in the last paragraph on the cover page, the
legends on the inside cover page, the statements in the third paragraph
under the caption "Underwriting" in the U.S. Prospectus.
(b) Each Manager and Canadian Dealer severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in the Registration
Statement (or amendment thereto) or any preliminary prospectus, the Prospectus,
the Canadian Prospectus or any Supplementary Material (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by the Managers or the Canadian Dealers expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus, the Prospectus, the Canadian Prospectus or any Supplementary
Material (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
<PAGE> 43
43
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which an indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company on the one hand
and the Managers and the Canadian Dealers on the other hand shall contribute to
the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity incurred by the Company on the one hand and the
Managers and the Canadian Dealers on the other hand, as incurred, in such
proportions that (a) the Managers and the Canadian Dealers are responsible for
that portion represented by the percentage that the underwriting commission
appearing on the cover page of the Prospectus bears to the public offering price
appearing thereon, and (b) the Company is responsible for the balance; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls the Managers and the
Canadian Dealers within the meaning of Section 15 of the 1933 Act shall have the
same rights to contribution as the Managers and the Canadian Dealers, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement and
the International Price Determination Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Manager, Canadian Dealer or controlling person, or by or on behalf of the
Company, and shall survive delivery of the Securities to the Managers.
SECTION 9. Termination of Agreement. (a) The Managers may terminate this
Agreement by notice to the Company at any time at or prior to the Closing Date
(i) if there has been, since the date of this Agreement or since the respective
date as of which information is given in the Prospectus, any material adverse
change in the condition,
<PAGE> 44
44
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any outbreak of hostilities or escalation thereof or other calamity or
crisis, the effect of which on the financial markets of the United States or
internationally is such as to make it, in the judgment of the Lead Managers,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in the Common Stock has been suspended by
the Commission or any of the Canadian Securities Commissions, or if trading
generally on either the American Stock Exchange or The New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by either of
said Exchanges or by order of the Commission, the Canadian Securities
Commissions or any other governmental authority, or if a banking moratorium has
been declared by either Federal or New York authorities. Notice of such
termination may be given by telegram, telecopy or telephone and shall be
subsequently confirmed by letter. As used in this Section 10(a), the term
"Prospectus" means the Prospectus or the Canadian Prospectus, as applicable, in
the form first used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except
as provided in Section 4. Notwithstanding any such termination, the provisions
of Sections 6 and 7 shall remain in effect.
SECTION 10. Default by One or More of the Managers. If one or more of the
Managers shall fail at the Closing Date to purchase the Securities that it or
they are obligated to purchase pursuant to this Agreement (the "Defaulted
Securities"), you shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Managers, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms set forth
in this Agreement; if, however, you have not completed such arrangements within
such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities, the non-defaulting Managers shall
be obligated
<PAGE> 45
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to purchase the full amount thereof in the proportions that their respective
Securities underwriting obligation proportions bear to the underwriting
obligation proportions of all non-defaulting Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities, this Agreement shall terminate without
liability on the part of any non-defaulting Managers.
No action taken pursuant to this Section 10 shall relieve any defaulting
Manager from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement, Prospectus or Canadian
Prospectus or in any other documents or arrangements. As used herein, the term
Manager includes any person substituted for a Manager under this Section 10.
SECTION 11. Default by the Company. If the Company shall fail at the
Closing Date or at the Date of Delivery to sell and deliver the number of
Securities which it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any non-defaulting party.
No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default.
SECTION 12. Notices. Unless otherwise specifically indicated herein, all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Managers shall be directed to Merrill Lynch
at Merrill Lynch World Headquarters, North Tower, World Financial Center, New
York, New York 10281, attention of Syndicate Operations; notices to the
Canadian Dealers shall be directed to Merrill Lynch Canada at Merrill Lynch
Canada Tower, 200 King Street West, Toronto, Ontario, M5H 3W3, attention of
Secretary; and notices to the Company shall be directed to it at 401 North
Wabash Avenue, Chicago, Illinois 60611, attention of President or Secretary.
<PAGE> 46
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SECTION 13. Parties. This Agreement and the International Price
Determination Agreement shall each inure to the benefit of and be binding upon
the Managers, its Canadian Dealers and the Company and their respective
successors, heirs and legal representatives. Nothing expressed or mentioned in
this Agreement or the International Price Determination Agreement is intended
or shall be construed to give any person, firm or corporation, other than the
Managers, the Canadian Dealers and the Company and their respective successors,
heirs and legal representatives, and the controlling persons and officers and
directors referred to in Sections 6 and 7 hereof and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or the International Price Determination Agreement or
any provision herein or therein contained. This Agreement and the
International Price Determination Agreement and all conditions and provisions
hereof and thereof are intended to be for the sole and exclusive benefit of the
Managers, the Canadian Dealers and the Company and their respective successors,
heirs and legal representatives and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from the
Managers shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE INTERNATIONAL
PRICE DETERMINATION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SAID STATE. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement
<PAGE> 47
47
among the Managers, the Canadian Dealers and the Company in accordance with its
terms.
Very truly yours,
HOLLINGER INTERNATIONAL INC.
by /s/ F. DAVID RADLER
---------------------------
President, Chief Operating
Officer and Director
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH INTERNATIONAL
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
CIBC WOOD GUNDY SECURITIES PLC
TD SECURITIES INC.
MERRILL LYNCH CANADA INC.
CIBC WOOD GUNDY SECURITIES INC.
By: MERRILL LYNCH INTERNATIONAL
By /s/ TERESA A. MILES
-------------------------
For themselves and as
Attorney-in-Fact for the other
Managers and the Canadian Dealers.
<PAGE> 48
Exhibit A
HOLLINGER INTERNATIONAL INC.
(a Delaware corporation)
Shares of Class A Common Stock
International Price Determination Agreement
, 1996
MERRILL LYNCH INTERNATIONAL
CIBC WOOD GUNDY SECURITIES PLC
TD SECURITIES INC.
As Lead Managers for the several Managers
MERRILL LYNCH CANADA INC.
CIBC WOOD GUNDY SECURITIES INC.
As Canadian Dealers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC1M 3NH
9D4
England
Ladies and Gentlemen:
Reference is made to the Purchase Agreement dated , 1996 (the
"International Purchase Agreement") among Hollinger International Inc., a
Delaware corporation (the "Company") and the several Managers named in Schedule
I thereto or hereto (the "Managers"), for whom Merrill Lynch International, CIBC
Wood Gundy Securities plc and TD Securities Inc. are acting as representatives
(the "Lead Managers"), and the Canadian Dealers (as defined below). The
International Purchase Agreement provides for the purchase by the Managers from
the Company, subject to the terms and conditions set forth therein, of an
aggregate of shares (the "Initial International Securities") of the Company's
Class A Common Stock, par value $.01 per share. The Company understands that a
portion of the Securities may be offered and sold by Merrill Lynch Canada Inc.
and CIBC Wood Gundy Securities Inc. (collectively, the "Canadian Dealers") in
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Canada. This Agreement is the International Price Determination Agreement
referred to in the Purchase Agreement.
Pursuant to Section 2 of the International Purchase Agreement, the
undersigned agree with the Lead Managers as follows:
1. The public offering price per share for the Initial International
Securities shall be $9.75.
2. The purchase price per share for the Initial International Securities
to be paid by the several Managers shall be $9.39, representing an amount equal
to the public offering price set forth above, less $0.46 per share.
The Company represents and warrants to each of the Managers and the
Canadian Dealers that the representations and warranties of the Company set
forth in Section 1(a) of the International Purchase Agreement are accurate as
though expressly made at and as of the date hereof.
As contemplated by Section 2 of the International Purchase Agreement,
attached as Schedule I is a completed list of the several Managers, which shall
be a part of this Agreement and the International Purchase Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts and together with the Purchase Agreement
shall be a binding agreement among the Managers, the Canadian Dealers and the
Company in accordance with its terms and the terms of the Purchase Agreement.
Very truly yours,
HOLLINGER INTERNATIONAL INC.
By ___________________________
F. David Radler,
President, Chief Operating
Officer and Director
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Confirmed and accepted as of
the date first above written:
MERRILL LYNCH INTERNATIONAL
CIBC WOOD GUNDY SECURITIES PLC
TD SECURITIES INC.
MERRILL LYNCH CANADA INC.
CIBC WOOD GUNDY SECURITIES INC.
By: MERRILL LYNCH INTERNATIONAL
By _______________________
For themselves and as Attorney-in-Fact
for the other Managers named in Schedule I
attached hereto and for the Canadian Dealers.
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SCHEDULE I
Shares
of Common Stock
Managers to Be Purchased
-------- ---------------
Merrill Lynch International . . . . . . . .
CIBC Wood Gundy Securities plc . . . . . . .
_________
Toronto Dominion Securities Inc. . . . . .
Total . . . . . . . . . . . . . . . . . . . 2,000,000
=========
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SCHEDULE II
Significant Subsidiaries of Hollinger International Inc.
1. Hollinger International Publishing Holdings Inc. is incorporated in Delaware
and is a wholly owned subsidiary of Hollinger International Inc.
2. Hollinger International Publishing Inc. is incorporated in Delaware and is a
wholly owned subsidiary of Hollinger International Publishing Holdings Inc.
3. The Sun-Times Company is incorporated in Delaware and is a wholly owned
subsidiary of Hollinger International Publishing Inc.
4. Chicago Sun-Times, Inc. is incorporated in Delaware and is a wholly owned
subsidiary of The Sun-Times Company.
5. American Publishing Company is incorporated in Delaware and is a wholly
owned subsidiary of Hollinger International Publishing Inc.
6. American Publishing (1991) Inc. is incorporated in Delaware and is a wholly
owned subsidiary of American Publishing Company.
7. American Publishing Holdings Inc. is incorporated in Delaware and is a
wholly owned subsidiary of American Publishing Company.
8. APAC-95 Inc. is incorporated in Delaware and is a wholly owned subsidiary of
American Publishing Company.
9. TelHoldco Inc. is incorporated in Delaware and is a wholly owned subsidiary
of Hollinger International Publishing Inc.
10. DT Holdings Limited is an English company and is a wholly owned subsidiary
(excluding preference shares) of Hollinger International Publishing Inc.
11. First DT Holdings Limited is an English company and is a wholly owned
subsidiary (excluding preference shares) of DT Holdings Limited.
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12. The Telegraph plc is an English company and a subsidiary of First DT
Holdings Limited.
13. John Fairfax Holdings limited is an Australian company and is an indirect
subsidiary of The Telegraph plc.
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Exhibit 1.03
HOLLINGER INTERNATIONAL INC.
(a Delaware corporation)
18,000,000 PREFERRED REDEEMABLE INCREASED
DIVIDEND EQUITY SECURITIES (PRIDES)
EACH REPRESENTING ONE HALF SHARE OF
SERIES B CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
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, NY 10281-1201
Ladies and Gentlemen:
Hollinger International Inc., a Delaware corporation (the "Company") and
currently a majority-owned subsidiary of Hollinger Inc., a Canadian corporation
("Hollinger"), confirms its agreements with Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Bear, Stearns & Co., Inc. ("Bear,
Stearns"), Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and each
of the other underwriters named in Schedule I hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10), for whom Merrill Lynch, Bear, Stearns and
DLJ are acting as representatives (in such capacity, the "Representatives"),
with respect to (i) the sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective number of
93/4% Preferred Redeemable Increased Dividend Equity Securities totalling
18,000,000 (both singularly and collectively, the "PRIDES") set forth in said
Schedule I and (ii) the grant by the Company to the Underwriters, acting
severally and not jointly, of the option described in
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section 2(e) hereof to purchase all or any part of 2,700,000 additional PRIDES
(the "Option Securities") to cover over-allotments. Each PRIDES is a
depositary share representing one half share of the Company's Series B
Convertible Preferred Stock, par value $.01 per share. The PRIDES (the
"Initial Securities") and any or all part of the Option Securities to be
purchased by the Underwriters are collectively hereinafter called the
"Securities".
You have advised us that you and the other Underwriters, acting severally
and not jointly, desire to purchase the Securities, and that you have been
authorized by the other Underwriters to execute this Agreement and the PRIDES
Price Determination Agreement referred to below on their behalf.
The public offering price per Security for the Securities and the purchase
price per Security to be paid by the several Underwriters shall be agreed upon
by the Company and the Representatives, acting on behalf of the several
Underwriters, and such agreement shall be set forth in a separate written
instrument substantially in the form of Exhibit A hereto (the "PRIDES Price
Determination Agreement"). The PRIDES Price Determination Agreement may take
the form of an exchange of any standard form of written telecommunication among
the Company and the Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Securities
will be governed by this Agreement, as supplemented by the PRIDES Price
Determination Agreement. From and after the date of the execution and delivery
of the PRIDES Price Determination Agreement, this Agreement shall be deemed to
incorporate, and all references herein to "this Agreement" or "herein" shall be
deemed to include, the PRIDES Price Determination Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-06619) and a related preliminary prospectus for the registration of the
Securities under the Securities Act of 1933 (the "1933 Act"), has filed such
amendments thereto, if any, and such amended preliminary prospectuses as may
have been required to the date hereof, and will file such additional amendments
thereto and such amended prospectuses as may hereafter be required. The term
"Registration Statement" as used in this Agreement means the registration
statement (including all financial schedules and exhibits), as amended at the
time it becomes effective, and as thereafter amended by post-effective
amendment, and any registration statement and any amendments thereto filed
pursuant to Rule 462(b) of the 1933 Act relating to the offering covered by the
initial registration statement (the "Rule 462(b) Registration Statement"). The
term "Prospectuses" as used in this
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Agreement means the prospectuses in the forms included in the Registration
Statement, or, if the prospectuses included in the Registration Statement omit
information in reliance on Rule 430A under the 1933 Act and such information is
included in prospectuses filed with the Commission pursuant to Rule 424(b)
under the 1933 Act, the term "Prospectuses" as used in this Agreement means the
prospectuses in the forms included in the Registration Statement as
supplemented by the addition of the Rule 430A information contained in the
prospectuses filed with the Commission pursuant to Rule 424(b).
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after the
Registration Statement becomes effective and the PRIDES Price Determination
Agreement has been executed and delivered.
SECTION 1. Representations and Warranties. (a) The Company represents
and warrants to the Underwriters as of the date hereof and as of the date of the
PRIDES Price Determination Agreement (such latter date being hereinafter
referred to as the "Representation Date") as follows:
(i) The Registration Statement in the form in which it became or
becomes effective and also in such form as it may be when any
post-effective amendment thereto or any Rule 462(b) Registration Statement
or amendment thereto shall become effective and the Prospectus and any
supplement or amendment thereto when filed with the Commission under Rule
424(b) under the 1933 Act, complied or will comply in all material respects
with the provisions of the 1933 Act and did not or will not at any such
times contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except that this representation and
warranty does not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information relating to the Underwriters furnished to the Company in
writing by or on behalf of the Underwriters through you expressly for use
therein.
(ii) The Prospectus and any supplement or amendment thereto, when
filed with the Commission under Rule 424(b) under the 1933 Act, complied or
will comply
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in all material respects with the provisions of the 1933 Act and did not or
will not at any such times contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that this representation and
warranty does not apply to statements in or omissions from the Prospectus
made in reliance upon and in conformity with information relating to the
Managers furnished to the Company in writing by or on behalf of the
Managers through you expressly for use therein.
(iii) All the outstanding shares of common stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; and the authorized
capital stock of the Company conforms to the description thereof in the
Registration Statement and the Prospectus. Except as described in the
Prospectus or documents incorporated by reference therein, there are no
outstanding options, warrants or other rights issued by the Company calling
for the issuance of, nor any written agreement entered into by the Company
or oral commitments of the Company to issue, any shares of capital stock or
any other security of the Company or any security convertible into or
exchangeable or exercisable for capital stock or any other security of the
Company.
(iv) All the shares of the Series B Convertible Preferred Stock of
the Company has been duly authorized, are validly issued, fully paid and
nonassessable, are free from any preemptive or similar rights and will
remain subject to the obligations of the Deposit Agreement dated as of
August , 1996 (the "Deposit Agreement") as described in the Prospectus.
(v) The Securities have been duly authorized, are validly issued,
fully paid and nonassessable, are free from any preemptive or similar
rights and will remain subject to the obligations of the Deposit Agreement
as described in the Prospectus.
(vi) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its
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properties and to conduct its business as described in the Registration
Statement and the Prospectus.
(vii) The only significant subsidiaries (as defined in the 1933 Act)
of the Company are the subsidiaries listed in Schedule II hereto (each a
"Subsidiary" and collectively the "Subsidiaries") . Each Subsidiary is a
corporation duly incorporated, validly existing and in good standing in the
jurisdiction of its incorporation, with corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus, and is duly
qualified as a foreign corporation for the transaction of business in and
is in good standing under the laws of each other jurisdiction where the
nature of its properties or the conduct of its business requires such
qualification, except where the failure so to qualify does not have a
material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of such Subsidiary; all the
outstanding shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and nonassessable, and,
except as set forth or described in the Registration Statement or
Prospectus, all shares of the capital stock of the Subsidiaries that are
owned directly or indirectly by the Company are owned free and clear of any
lien, adverse claim, security interest, equity, or other encumbrance.
(viii) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to
which any of their respective properties is subject, that are required to
be described in the Registration Statement or the Prospectus but are not
described as required, or which might have a material adverse effect on the
condition (financial or other), properties, net worth or results of
operations of the Company and its subsidiaries considered as one
enterprise, or which might materially and adversely affect the properties
or assets thereof or which might materially and adversely affect the
consummation of this Agreement; all pending legal or governmental
proceedings to which the Company or any of the Subsidiaries is a party or
of which any of their respective property or assets is the subject which
are
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not described in the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered in the aggregate,
not material; and there are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the
1933 Act.
(ix) Except as set forth in the Prospectus, neither the Company nor
any of the Subsidiaries (A) is in violation of its certificate or articles
of incorporation or by-laws, or other organizational documents, (B) is in
violation of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of any
decree of any court or governmental agency or body having jurisdiction over
the Company or any of the Subsidiaries, or (C) is in default in any
material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound,
except, in the case of clause (B) with respect to the Subsidiaries, where
such violation does not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and its subsidiaries considered as one
enterprise.
(x) Neither the issuance and sale of the Securities, the execution,
delivery or performance of this Agreement and the PRIDES Price
Determination Agreement by the Company, nor the consummation by the Company
of the transactions contemplated hereby (A) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency
or official (except such as may be required for the registration of the
Securities under the 1933 Act and the Securities Exchange Act of 1934 (the
"Exchange Act") and compliance with the securities or Blue Sky laws of
various jurisdictions, both of which have been or will be effected in
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accordance with this Agreement) or violates or will violate the certificate
or articles of incorporation or by-laws, or other organizational documents,
of the Company or any of the Subsidiaries or (B) constitutes or will
constitute a breach of, or a default under, any material agreement,
indenture, lease or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound (except where consents or waivers as to such
default or breach have been obtained prior to the time of the execution of
the PRIDES Price Determination Agreement (the "Pricing Time")), or violates
or will violate any statute, law, regulation or judgment, injunction, order
or decree applicable to the Company or any of the Subsidiaries or any of
their respective properties, or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to the terms of any agreement
or instrument to which any of them is a party or by which any of them may
be bound or to which any of the property or assets of any of them is
subject.
(xi) The Securities to be sold by the Company pursuant to this
Agreement have been duly authorized and, when issued and delivered by the
Company upon receipt of the payment therefor in accordance with this
Agreement, will be validly issued, fully paid and non-assessable; no holder
thereof will be subject to personal liability by reason of being such
holder; such Securities are not subject to the preemptive or other similar
rights of any stockholder of the Company arising by operation of law, under
the charter and by-laws of the Company or under any agreement to which the
Company or any of its Subsidiaries is a party.
(xii) KPMG Peat Marwick, who have audited or shall audit certain of
the financial statements included in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are independent public
accountants as required by the 1933 Act.
(xiii) The consolidated financial statements of the Company and its
subsidiaries, together with related notes, included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), (A)
in the case of the historical financial statements
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present fairly the consolidated financial position and the results of
operations of the Company and its subsidiaries and (B) in the case of the
pro forma financial statements present fairly, on a pro forma basis, the
consolidated financial position and the results of operations of the
Company and its subsidiaries, including The Telegraph plc ("Telegraph"),
and its equity investments in Southam Inc. ("Southam") and John Fairfax
Holdings Limited ("Fairfax"), in each case on the basis stated in the
Registration Statement at the respective dates or for the respective
periods to which they apply. Such financial statements, pro forma
financial statements and related notes have been prepared in accordance
with U.S. generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) are
accurately presented in all material respects and prepared on a basis
consistent with such financial statements and the books and records of the
Company and its subsidiaries.
(xiv) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement and the PRIDES Price
Determination Agreement have been duly and validly authorized by the
Company, and this Agreement and the PRIDES Price Determination Agreement
have been duly executed and delivered by the Company.
(xv) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
neither the Company nor any of the Subsidiaries has incurred any liability
or obligation, direct or contingent, or entered into any transaction, not
in the ordinary course of business, that is material to the Company and its
subsidiaries considered as one enterprise, and there has not been any
change in the capital stock, or material increase in the short-term debt or
long-term debt, of the Company or any of the Subsidiaries, or any material
adverse change, or any development involving or which may reasonably be
expected to involve, a
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prospective material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company and its
subsidiaries considered as one enterprise.
(xvi) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by them (excluding properties owned by West Ferry
Printers, Trafford Park Printers, Fairfax or Southam), free and clear of
all liens, claims, security interests or other encumbrances except to the
extent such are set forth or described in the Registration Statement and
the Prospectus or in a document filed as an exhibit to the Registration
Statement or are not material to the business of the Company and its
subsidiaries considered as one enterprise and all the property described in
the Prospectus as being held under lease by each of the Company and the
Subsidiaries is held by it under valid, subsisting and enforceable leases
with such exceptions as are not material to the business of the Company and
its subsidiaries considered as one enterprise and do not interfere with the
use made and proposed to be made of such properties by the Company and its
subsidiaries.
(xvii) Neither the Company nor any of its affiliates has taken or
will take, directly or indirectly, any action designed to cause or result
in stabilization or manipulation of the price of the Class A Common Stock
(the "Common Stock") or any outstanding securities convertible into or
exchangeable or exercisable for the Common Stock, including, without
limitation, the Securities; and neither the Company nor any of its
affiliates has distributed or will distribute any prospectus (as such term
is defined in the 1933 Act and the 1933 Act Regulations) in connection with
the offering and sale of the Securities other than any preliminary
prospectus filed with the Commission or the Prospectuses or other material
permitted by the 1933 Act or the 1933 Act Regulations.
(xviii) The Company and each of the Subsidiaries has such
governmental authorizations, approvals, orders, licenses, certificates,
franchises and permits of and from all governmental or regulatory officials
and bodies ("permits") as are necessary to own its respective properties
and to conduct its business in the manner described in the Prospectus, with
such
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exceptions as are not material to the business of the Company and its
subsidiaries considered as one enterprise and do not interfere with the use
made and proposed to be made of such properties by the Company and its
subsidiaries or are otherwise disclosed; the Company and each of the
Subsidiaries has fulfilled and performed all its material obligations with
respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any
such permit, with such exceptions as are not material to the business of
the Company and its subsidiaries considered as one enterprise and do not
interfere with the use made and proposed to be made of such properties by
the Company and its subsidiaries or are otherwise disclosed; and, except as
described in the Prospectus, none of such permits contains any restriction
that is materially burdensome to the Company and its subsidiaries
considered as one enterprise.
(xix) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xx) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(xxi) Except as described in the Registration Statement and the
Prospectus, the Company and each of the Subsidiaries have filed all tax
returns required to
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be filed, which returns are complete and correct, and neither the Company
nor any Subsidiary is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect thereto,
with such exceptions as are not material to the financial position of the
Company and its subsidiaries considered as one enterprise.
(xxii) The Company and the Subsidiaries own, or possess adequate
rights to use, all patents, trademarks, service marks, trade names,
copyrights, licenses, and rights described in the Prospectus as being owned
by them or any of them or necessary for the conduct of their respective
businesses, and the Company is not aware of any claim to the contrary or
any challenge by any other person to the rights of the Company and the
Subsidiaries with respect to the foregoing.
(xxiii) The Company is not now, and after sale of the Securities to
be sold by it hereunder and application of the net proceeds from such sale
as described in the Prospectus under the caption "Use of Proceeds" will not
be, an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
(xxiv) The Company has complied with all provisions of Florida
Statutes, Section 517.075, relating to issuers doing business with Cuba.
(xxv) The Securities conform to the descriptions thereof contained in
the Prospectus.
(xxvi) Except as described in the Prospectus and except for the
registration rights granted to certain lenders and described in
Registration Statement No. 333-04697 of the Company and the registration
rights under the agreement dated as of May 30, 1996 among the Company, a
wholly owned subsidiary of the Company and Toronto Dominion Investments,
Inc., no holder of any security of the Company nor any other person has any
right, contractual or otherwise, to have any securities included in the
Registration Statement or the right, because of the filing of the
Registration Statement or consummation of the transactions contemplated by
this Agreement, to require registration of any security of the Company
under the Act.
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(xxvii) Except as set forth in the Prospectus, no labor dispute with
the employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent which might be expected to result in
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and its
subsidiaries considered as one enterprise.
(xxviii) Except as set forth in the Registration Statement and except
as would not result in a material effect on the condition (financial or
other), or business, properties, net worth or results of operations of the
Company and its subsidiaries considered as one enterprise, and which would
not materially and adversely affect the consummation of this Agreement, (i)
to the knowledge of the Company after reasonable inquiry, the Company is
not in violation of any applicable Federal, foreign, state or local
environmental law or any applicable order of any governmental authority
with respect thereto; (ii) the Company is not in violation of or subject to
any existing, or pending or, to the Company's knowledge, threatened action,
suit, investigation, inquiry or proceeding by any governmental authority
nor is the Company subject to any environmental claim by any citizens'
group or to remedial obligations under any applicable Federal, foreign,
state or local environmental law; (iii) the Company and its subsidiaries
are in compliance with all permits or similar authorizations, if any,
required to be obtained or filed in connection with their operations
including, without limitation, emissions, discharges, treatment, storage,
disposal or release of a Hazardous Material into the environment except
where any noncompliance could not reasonably be expected to have a material
adverse effect on the operations of the Company and its subsidiaries; and
(iv) to the knowledge of the Company after reasonable inquiry, no Hazardous
Materials have been disposed of or released by the Company or its
subsidiaries at, under or on any property currently or formerly owned or
operated by the Company or its subsidiaries, except in accordance with
applicable environmental laws. The term "Hazardous Material" means any oil
(including petroleum products, crude oil and any fraction thereof),
chemical, contaminant, pollutant, solid or hazardous waste or material, or
Hazardous Substance (as defined in Section 101(14) of
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the Comprehensive Environmental Response, Compensation and Liability Act
and regulations thereunder), that is regulated as toxic or hazardous to
human health or the environment under any Federal, foreign, state or local
environmental law.
(xxix) The Company and each other person or entity that, together
with the Company, is treated as a single employer under Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code") (each such person or
entity being an "ERISA Affiliate"), complies in all material respects with
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code with respect to each pension plan (as defined in Section 3(2)
of ERISA) maintained by the Company or such ERISA Affiliate, and none of
the Company or any of its ERISA Affiliates has incurred any material
liability to any pension plan or to the Pension Benefit Guaranty
Corporation that has not been fully paid as of the date hereof (except as
disclosed in the Registration Statement and the Prospectus (or any
amendment or supplement thereto).
(b) Any certificate signed by an officer of the Company and delivered to
the Underwriters or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing. (a) On the basis
of the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, the Company agrees to sell to the Underwriters,
and the Underwriters agrees to purchase from the Company, at the purchase price
per share set forth in the PRIDES Price Determination Agreement, the Initial
Securities.
(b) If the Company has elected not to rely upon Rule 430A under the 1933
Act Regulations, the initial public offering price and the purchase price per
share of Common Stock to be paid by the Underwriters shall be agreed upon and
set forth in the PRIDES Price Determination Agreement, dated the date hereof,
and an amendment to the Registration Statement containing such information will
be filed with the Commission, before the Registration Statement becomes
effective.
<PAGE> 14
14
(c) If the Company has elected to rely upon Rule 430A under the 1933 Act
Regulations, the initial public offering price and the purchase price per
Security of the PRIDES to be paid by the Underwriters shall be agreed upon and
set forth in the PRIDES Price Determination Agreement. In the event that the
PRIDES Price Determination Agreement has not been executed by the close of
business on the fourth business day following the date on which the Registration
Statement becomes effective, this Agreement shall terminate forthwith, without
liability of any party to any other party except that Sections 6, 7 and 8 shall
remain in effect.
(d) The Company will deliver the Initial Securities to the
Representatives, for the account of the Underwriters, at the offices of Cravath,
Swaine & Moore, 825 Eighth Avenue, New York, NY 10019, or at such other place as
shall be agreed upon by the Company and the Representatives, against payment of
the gross purchase price minus an amount equal to the underwriting commission
applicable to the Initial Securities as described in the PRIDES Price
Determination Agreement by wire transfer to the Company in U.S. dollars, in
funds immediately available to the Company, at 9:00 a.m. either (i) on the third
business day following the date upon which the Company shall have fulfilled all
requirements which under the 1933 Act must be fulfilled to qualify the
Securities for distribution and the Registration Statement shall have become
effective or (ii) if the Company has elected to rely upon Rule 430A under the
1933 Act Regulations, on the third business day after execution of the PRIDES
Price Determination Agreement, or at such other time not later than ten full
business days thereafter as the Representatives and the Company determine (such
time being herein referred to as the "Closing Date"). The Initial Securities so
to be delivered will be in definitive, fully registered form in such
denominations and registered in such names as the Representatives shall request
in writing at least two full business days prior to the Closing Date, and will
be made available for checking and packaging at the office of the Transfer Agent
of the Company, not later than 10:00 a.m. on the business day prior to the
Closing Date.
(e) In addition, on the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, upon
written notice from the Underwriters given to the Company not more than 30 days
after the date upon which the Registration Statement becomes effective or, if
the Company has elected to rely on Rule 430A under the 1933 Act Regulations, the
<PAGE> 15
15
date of the PRIDES Price Determination Agreement, the Underwriters may purchase
all or less than all of the Option Securities at the purchase price per
security to be paid for the Initial Securities. The Company agrees to sell to
the Underwriters the amount of Option Securities specified in such notice and
the Underwriters agree to purchase such Option Securities. Such Option
Securities may be purchased by the Underwriters in whole or from time to time
in part only for the purpose of covering over-allotments made in connection
with the sale of the Initial Securities. No Option Securities shall be sold or
delivered unless the Initial Securities previously have been, or simultaneously
are, sold and delivered. The right to purchase the Option Securities or any
portion thereof will expire 30 days after the later of (i) the date upon which
the Registration Statement becomes effective and (ii) if the Company has
elected to rely upon Rule 430A under the 1933 Act Regulations, the date of the
PRIDES Price Determination Agreement.
(f) Each time of delivery of and payment for the Option Securities, being
herein referred to as a "Date of Delivery" (which may be at, but not earlier
than, the Closing Date), shall be determined by the Underwriters but shall be
not later than three full business days after written notice of election to
purchase Option Securities is given. The Company will deliver the Option
Securities to the Underwriters, against payment of the gross purchase price
minus an amount equal to the underwriting commission applicable to the Option
Securities described in the PRIDES Price Determination Agreement by wiring
transfer to the Company in immediately available funds. The Option Securities
will be in definitive form, in such denominations and registered in such names
as the Underwriters request. Concurrently with each payment by the Underwriters
of the gross purchase price for the Option Securities to be purchased upon the
applicable Date of Delivery in the manner described in this Section 2(f), the
Company will pay to the Underwriters by certified or official bank check or
checks in U.S. dollars, in funds available the next succeeding business day
drawn to the order of Merrill Lynch, Pierce, Fenner & Smith Incorporated, North
Tower, World Financial Center, New York, New York 10281-1305, for the account of
the Underwriters, an amount equal to the underwriting commission applicable to
such Option Securities.
SECTION 3. Covenants of the Company. The Company covenants with the
Underwriters as follows:
<PAGE> 16
16
(a) The Company will notify the Underwriters immediately, and confirm the
notice in writing, (i) of the effectiveness of the Registration Statement and
any amendment thereto (including any posteffective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Company will furnish to the Representatives, without charge, five
true and correct copies of the Registration Statement as originally filed with
the Commission and of each amendment thereto, including financial statements and
all exhibits to the Registration Statement, and of any Rule 462(b) Registration
Statement and any amendment thereto, and will also furnish to you, without
charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but without exhibits, and of any
Rule 462(b) Registration Statement and any amendment thereto, as you may
reasonably request.
(c) The Company will not (i) file any amendment to the Registration
Statement, any Rule 462(b) Registration Statement or amendment thereto, or make
any amendment or supplement to the Prospectuses of which you shall not
previously have been advised or to which you shall reasonably object in writing
after being so advised or (ii) so long as, in the written opinion of counsel for
the Underwriters (a copy of which shall be delivered to the Company), a
Prospectus is required to be delivered in connection with sales by any
Underwriter or dealer, file any information, documents or reports pursuant to
the Exchange Act, without delivering a copy of such information, documents or
reports to you, as Representatives of the Underwriters, prior to such filing.
(d) The Company will furnish to the Underwriters, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act or
the Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of
the Prospectus (as amended or
<PAGE> 17
17
supplemented) as the Underwriters may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable rules
and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the Underwriters, to amend or supplement the Prospectus
in order to make the Prospectus not misleading, in the light of the
circumstances existing at the time it is delivered to a purchaser, the Company
will forthwith amend or supplement the Prospectus (in form and substance
satisfactory to counsel for the Underwriters so that as so amended or
supplemented, the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary) in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, and the Company will furnish to the Underwriters
a reasonable number of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the Representatives, to
qualify the Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions as the Representatives may
designate; provided, however, in each jurisdiction in which the Securities have
been so qualified the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of the
Registration Statement.
(g) The Company will make generally available to its security holders as
soon as practicable, but not later than 60 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a 12-month period beginning not
later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(h) The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
(i) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A of the
1933 Act
<PAGE> 18
18
Regulations, then immediately following the execution of the PRIDES Price
Determination Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A and Rule 424(b) of
the 1933 Act Regulations, copies of an amended Prospectus, or, if required by
such Rule 430A, a post-effective amendment of the Registration Statement
(including an amended Prospectus), containing all information so omitted.
(j) The Company will not sell, contract to sell or otherwise dispose of
any Securities or any securities convertible into or exercisable or exchangeable
for Securities, or grant any options or warrants to purchase Securities or any
securities convertible into or exercisable or exchangeable for Securities, for a
period of 90 days after the date of the Prospectus, without the prior written
consent of Merrill Lynch; provided, however, that the foregoing shall not apply
to Class A Common Stock issuable in connection with the Company's PRIDES, the
shares under a shelf registration statement relating to the shares of Class A
Common Stock of the Company 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 Company's combined interests in
Southam and related intercompany transactions, and options to purchase shares
under the Company's 1994 Stock Option Plan.
(k) For a period of three years after the Closing Date the Company will
furnish to the Underwriters copies of all reports and communications delivered
to the Company's stockholders or to holders of the Securities as a class and
will also furnish copies of all reports (excluding exhibits) filed with the
Commission on Form 8-K, 10-Q and 10-K, and all other reports and information
furnished to its stockholders generally, at the time such reports are furnished
to stockholders generally.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement as originally filed,
and of each amendment thereto, (ii) the printing of this Agreement, the PRIDES
Price Determination Agreement and any Legal Investment Survey, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel and
accountants, (v) the qualification of
<PAGE> 19
19
the Securities under securities laws in accordance with the provisions of
Section 3(f), including filing fees and the fee and the disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey, (vi) the printing and delivery to the
Underwriters of copies of the Registration Statement as originally filed and of
each amendment thereto, of the preliminary prospectus, and of the Prospectus
and any amendments or supplements thereto, (vii) the printing and delivery to
the Underwriters of copies of the Blue Sky Survey, (viii) the filing fee of the
National Association of Securities Dealers, Inc. and (ix) the fees incurred
with the additional listing application for the Securities on the New York
Stock Exchange.
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section 5, Section 9(a) or Section 11 hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of the Underwriters' Obligations. The obligations
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company herein contained, to the performance by the
Company of its obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 p.m. on the date hereof, or with the consent of the Representatives, at a
later time and date, not later, however, than 5:30 p.m. on the first business
day following the date hereof or at such later time and date as may be approved
by the Representatives; and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission. If
the Company has elected to rely upon Rule 430A of the 1933 Act Regulations, the
price of the Securities and any price-related information previously omitted
from the effective Registration Statement pursuant to such Rule 430A shall have
been transmitted to the Commission for filing pursuant to Rule 424(b) of the
1933 Act Regulations within the prescribed time period, and prior to the Closing
Date the Company shall have provided evidence satisfactory to the
Representatives of such timely filing, or a post-effective amendment providing
such
<PAGE> 20
20
information shall have been promptly filed and declared effective in accordance
with the requirements of Rule 430A of the 1933 Act Regulations.
(b) At the Closing Date, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition (financial or
otherwise), or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the Vice President and Chief Financial Officer of the
Company, dated as of Closing Date, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section 1(a)
are true and correct with the same force and effect as though expressly made at
and as of the Closing Date, (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Date, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission. As used in this
Section 5, the term "Prospectus" means the Prospectus in the form first used to
confirm sales of Securities.
(c) You shall have received on the Closing Date an opinion of Kirkpatrick
& Lockhart LLP, counsel for the Company, dated the Closing Date and addressed to
you, as the Representatives for the Underwriters, to the effect that:
(i) The Company and each of the United States Subsidiaries (the "U.S.
Subsidiaries") is a corporation duly incorporated and validly existing in
good standing under the laws of the jurisdiction of its organization, with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is duly qualified
as a foreign corporation for the transaction of business in and is in good
standing under the laws of each jurisdiction where the nature of its
properties or the conduct of its business requires such qualification,
except where the failure so to qualify would not have a material adverse
effect on the condition (financial or other), business, properties,
<PAGE> 21
21
net worth or results of operations of the Company and its subsidiaries,
considered as one enterprise.
(ii) All the outstanding shares of capital stock of each of the U.S.
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable, and are owned of record by the Company directly, or
indirectly through one of the other U.S. Subsidiaries, and are not subject
to any perfected security interest, or, to the best knowledge of such
counsel after reasonable inquiry, any adverse claims within the meaning of
the Uniform Commercial Code except, to the extent set forth or described in
the Registration Statement and the Prospectus, currently existing liens,
claims and security interests of creditors and liens, claims and security
interests pursuant to the terms of the Amended Publishing Credit Facility
and the AP-91 Senior Notes.
(iii) The authorized and outstanding capital stock of the Company to
be in effect as of the Closing is as set forth under the caption
"Capitalization" in the Prospectus; and the authorized capital stock of the
Company as of the Closing Date conforms in all material respects as to
legal matters to the description thereof contained in the Prospectus under
the caption "Description of Capital Stock".
(iv) All the shares of the Series B Convertible Preferred Stock of
the Company have been duly authorized, are validly issued, fully paid and
nonassessable, are free from any preemptive or similar rights and will
remain subject to the obligations of the Deposit Agreement as described in
the Prospectus.
(v) The Securities have been duly authorized, are validly issued,
fully paid and nonassessable, are free from any preemptive or similar
rights and will remain subject to the obligations of the Deposit Agreement
as described in the Prospectus.
(vi) All the shares of capital stock of the Company outstanding prior
to the issuance of the Securities have been duly authorized and validly
issued, and are fully paid and nonassessable.
(vii) The Registration Statement and all post-effective amendments,
if any, have become
<PAGE> 22
22
effective under the 1933 Act and, to the best knowledge of such counsel
after reasonable inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
are pending before or contemplated by the Commission; and any required
filing of the Prospectus pursuant to Rule 424(b) has been made in
accordance with Rule 424(b).
(viii) The Company has corporate power and authority to enter into
this Agreement and to issue, sell and deliver the Securities to the
Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company.
(ix) Neither the Company nor any of the U.S. Subsidiaries is in
violation of its certificate or articles of incorporation or its respective
by-laws or, to the best knowledge of such counsel after reasonable inquiry,
is in default in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or other evidence of
indebtedness to which the Company or any U.S. Subsidiary is a party and
that is included as an exhibit to, or otherwise described or summarized in,
the Registration Statement, except as may be disclosed in the Prospectus
and except for defaults under existing indebtedness of the Company or any
U.S. Subsidiary as to which consents or waivers have been obtained prior to
the Pricing Time.
(x) Neither the offer, sale or delivery of the Securities, the
execution, delivery or performance of this Agreement, compliance by the
Company with the provisions of this Agreement, nor consummation by the
Company of the transactions contemplated hereby violates the certificate or
articles of incorporation or by-laws, or other organizational documents, of
the Company or any of the U.S. Subsidiaries or constitutes a breach of or
default under any agreement, indenture, lease or other instrument to which
the Company or any of the U.S. Subsidiaries is a party or by which any of
them or any of their respective properties is bound that is an exhibit to
the Registration Statement (except for defaults under existing indebtedness
of the Company or any U.S. Subsidiary as to which consents or waivers have
been obtained prior to the Pricing Time), or is material and is known to
such counsel after
<PAGE> 23
23
reasonable inquiry, or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of the U.S. Subsidiaries, nor will any such action violate any existing
law, regulation, ruling (assuming compliance with all applicable state
securities and Blue Sky laws), judgment, injunction, order or decree known
to such counsel after reasonable inquiry, that names the Company or any of
the U.S. Subsidiaries and is specifically directed to any of them or any of
their respective properties.
(xi) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on the
part of the Company (except as have been obtained under the 1933 Act or the
Exchange Act or such as may be required under state securities or Blue Sky
laws governing the purchase and distribution of the Securities) for the
valid issuance and sale of the Securities by the Company to the
Underwriters as contemplated by this Agreement.
(xii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements and
the notes thereto and the schedules and other financial and statistical
data included therein, as to which such counsel need not express any
opinion) comply as to form in all material respects with the requirements
of the 1933 Act.
(xiii) To the best knowledge of such counsel after reasonable
inquiry, (A) other than as described or contemplated in the Prospectus (or
any supplement thereto), there are no legal or governmental proceedings
pending or threatened against the Company or any of the U.S. Subsidiaries,
or to which the Company or any of the U.S. Subsidiaries, or any of their
property, is subject, which are required to be described in the
Registration Statement or Prospectus (or any amendment or supplement
thereto), and (B) there are no material agreements, contracts, indentures,
leases or other instruments to which the Company or any U.S. Subsidiary is
a party, that are required to be described in the Registration Statement or
the Prospectus (or any amendment or supplement thereto) or to be filed as
an exhibit to the Registration Statement
<PAGE> 24
24
that are not described or filed as required, as the case may be.
(xiv) The statements in the Registration Statement and Prospectus,
insofar as they are descriptions or summaries of contracts, agreements or
other legal documents to which the Company or any U.S. Subsidiary is a
party, or are statements of law or legal conclusions (other than matters of
English, Canadian, Australian or Israeli law), are accurate in all material
respects and present fairly the information required to be shown.
(xv) Except as described in the Prospectus or documents incorporated
by reference therein, there are no outstanding options, warrants or other
rights issued by the Company calling for the issuance of, and to the best
knowledge of such counsel after reasonable investigation there are no
written agreements entered into by the Company or binding oral commitments
by the Company to issue, any shares of capital stock of the Company or any
security convertible into or exchangeable or exercisable for capital stock
of the Company.
(xvi) Except as described in the Prospectus and except for the
registration rights granted to certain lenders and described in
Registration Statement No. 333-04697 of the Company and the registration
rights under the agreement dated as of May 30, 1996 among the Company, a
wholly owned subsidiary of the Company and Toronto Dominion Investments,
Inc., no holder of any security of the Company or, to the best knowledge of
such counsel after reasonable inquiry, any other person has any right,
contractual or otherwise, to have any securities included in the
Registration Statement or the right, because of the filing of the
Registration Statement or consummation of the transactions contemplated by
this Agreement, to require registration of any security of the Company
under the Act.
(xvii) Although counsel cannot opine as to factual matters, and the
character of determinations involved in the registration process is such
that counsel cannot pass upon and assume any responsibility for the
accuracy or completeness of the information contained in the Registration
Statement and the Prospectus,
<PAGE> 25
25
counsel shall advise the Underwriters that on the basis of its review of
the Registration Statement and the Prospectus and its participation in the
preparation thereof (relying as to materiality to a large extent upon the
statements of officers and other representatives of the Company) that
counsel has no reason to believe that (A) the Registration Statement
(except for the financial statements and notes thereto and the schedules
and other financial or statistical data included therein or omitted
therefrom, as to which counsel need express no opinion), at the time the
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or (B)
the Prospectus (except for the financial statements and notes thereto and
the schedules and other financial or statistical data included therein or
omitted therefrom, as to which counsel need express no opinion) at the time
the Prospectus was issued, includes an untrue statement of a material fact
or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; also, that counsel has no reason to believe, based
upon the procedures described above, that either the Registration Statement
or the Prospectus (except for the financial statements and notes thereto
and the schedules and other financial or statistical data included therein
or omitted therefrom, as to which counsel need express no opinion) as of
the date and time of delivery of counsel's opinion contain an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances in which they
were made, not misleading. Such counsel may state that they have, between
the effectiveness of the Registration Statement and the Closing Time,
participated in further discussions with representatives of the Company
regarding the contents of certain portions of the Prospectus and certain
related matters, and reviewed certificates of certain officers of the
Company, the opinions addressed to you from the Company's Canadian counsel
and United Kingdom counsel and a letter addressed to you by the Company's
independent accountants.
<PAGE> 26
26
In rendering their opinion as aforesaid, counsel may rely upon an opinion
or opinions, each dated the Closing Date, of other counsel retained by them or
the Company as to laws of any jurisdiction other than the United States, the
Commonwealth of Pennsylvania or the Delaware General Corporation Law, provided
that (1) each such local counsel is acceptable to the Representatives, (2) such
reliance is expressly authorized by each opinion so relied upon and a copy of
each such opinion is delivered to the Underwriter and is, in form and substance
satisfactory to the Underwriter and its counsel, and (3) counsel shall state in
their opinion that they believe that they and the Underwriters are justified in
relying thereon. Counsel also may rely, to the extent they deem such reliance
proper, as to matters of fact upon certificates of officers of the Company and
of government officials. Copies of all such certificates shall be furnished to
counsel for the Underwriters on the Closing Date. Such opinion may state that
it is limited to the laws of the Commonwealth of Pennsylvania (excluding the
conflict of laws rules), the Delaware Business Corporation Law and the Federal
securities laws of the United States, and that such counsel expresses no opinion
as to any other laws and further that such opinions are being given as if the
Purchase Agreement was governed by Pennsylvania law.
(d) You shall have received on the Closing Date an opinion of Cravath,
Swaine & Moore, counsel for the Underwriters, dated the Closing Date and
addressed to you, as the Representatives for the Underwriters, as to such
matters as the Representatives may reasonably request.
(e) You shall have received on the Closing Date an opinion of Clifford,
Chance, special English counsel for the Company, dated the Closing Date and
addressed to you, as Representatives for the Underwriters, to the effect that:
(i) Each of DT Holdings Limited ("DTH"), First DT Holdings Limited
("FDTH") and Telegraph, is a company duly incorporated and validly existing
under the laws of England, with corporate power and authority to own or
lease its properties and to conduct its business as described in the
Prospectus.
(ii) All the issued shares in the capital of DTH, FDTH and Telegraph
have been duly authorized and validly issued credited as fully paid.
<PAGE> 27
27
(iii) Neither the offer, sale or delivery of the Common Stock, the
execution, delivery or performance of the Purchase Agreement, compliance by
the Company with the provisions of the Purchase Agreement nor consummation
by the Company of the transactions contemplated by the Purchase Agreement
(i) violates the memorandum or articles of association of DTH, FDTH or
Telegraph or (ii) constitutes a breach of or default by FDTH, DTH or
Telegraph under any Scheduled Agreement (iii) nor does any such action
violate any existing English law, regulation, judgment, injunction, order
or decree known to such counsel that names DTH, FDTH or Telegraph or is
specifically directed to DTH, FDTH or Telegraph or their properties in
England and, in the case of this sub-paragraph (iii), would have a material
adverse effect on the condition (financial or other) or business,
properties, net worth or results of operations of the Company and its
subsidiaries considered as one enterprise;
(iv) Argsub Limited is a company duly incorporated and validly
existing under the laws of England, with corporate power and authority to
own or lease its properties and to conduct its business as described in the
Prospectus; all the preference shares in the capital of Argsub Limited of
the series issued to DTH in exchange for the FDTH Preference Shares
previously held by DTH have been duly authorized and validly issued
credited as fully paid.
In rendering their opinion as aforesaid, counsel's opinion shall be limited
to the laws of England; provided that such counsel may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by them or the
Company as to laws of any jurisdiction other than England, provided that (1)
each such local counsel is acceptable to the Underwriters, (2) such reliance is
expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Underwriters and is, in form and substance
satisfactory to the Underwriters and their counsel, and (3) counsel shall state
in their opinion that they believe that they and the Underwriters are justified
in relying thereon.
(f) You shall have received letters addressed to you, as Representatives
for the Underwriters, dated the date hereof and the Closing Date from KPMG Peat
Marwick LLP,
<PAGE> 28
28
independent certified public accountants for the Company, substantially in the
forms heretofore approved by you.
(g) At the Closing Date and at each Date of Delivery, if any, counsel for
the Underwriters shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(h) At the Closing Date, you shall have received agreements substantially
in the form of Exhibit B hereto, dated the Closing Date and signed by the
Company, Hollinger and certain executive officers and directors of the Company
named therein.
(i) You shall have received a letter from Hollinger, addressed to the
Underwriters and verifying that Hollinger believes, based on preliminary
calculations as of June 30, 1996, that it is in compliance at such date with the
Debt-to-Equity Ratio set forth in the DTH and FDTH Preference Shares (as such
term is defined in the Registration Statement).
(j) You shall have received evidence acceptable to counsel for the
Underwriters that the Company's Scheme (as such term is defined in the
Prospectus) for the acquisition of the Telegraph has received the approval of an
English court of competent jurisdiction and consequently become effective.
(k) In the event that the Underwriters exercise their option provided in
Section 2(e) hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of each Date of
<PAGE> 29
29
Delivery and, at the relevant Date of Delivery, the Representatives shall have
received:
(i) A certificate, dated such Date of Delivery, of the Company
confirming that the certificate delivered at the Closing Date pursuant to
Section 5(b) hereof remains true and correct as of such Date of Delivery.
(ii) The favorable opinion of Kirkpatrick & Lockhart LLP, counsel for
the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.
(iii) The favorable opinion of Clifford Chance, special English
counsel for the Company, in form and substance satisfactory to counsel for
the Managers, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(e).
(iv) The favorable opinion of Cravath, Swaine & Moore, counsel for
the Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Sections 5(d) hereof.
(v) A letter from KPMG Peat Marwick LLP, in form and substance
satisfactory to the Underwriters and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished to the
Underwriters pursuant to Section 5(f) hereof, except that the "specified
date" in the letter furnished pursuant to this Section 5(k)(v) shall be a
date not more than five days prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriters by notice to the Company at any time at or prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Section 4.
<PAGE> 30
30
SECTION 6. Indemnification. (a) The Company agrees to indemnify and hold
harmless the Underwriters and each person, if any, who controls the Underwriters
within the meaning of Section 15 of the 1933 Act to the extent and in the manner
set forth in clauses (i), (ii) and (iii) below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 430A of the 1933 Act
Regulations, if applicable, and any information contained in a Rule 462(b)
Registration Statement or any amendments thereto, or the omission or
alleged omission therefrom of a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by the Representatives, reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or
<PAGE> 31
31
omission, to the extent that any such expense is not paid under (i) and
(ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Underwriters expressly for use in the Registration Statement (or
any amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and the parties agree that the statements set
forth in the last paragraph on the cover page, the legends on the inside cover
page, and the statements in the third paragraph under the caption "Underwriting"
in the Prospectus constitute the only information so furnished.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions made in the Registration Statement (or
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Underwriters expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the
<PAGE> 32
32
same jurisdiction arising out of the same general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which an indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company on the one hand
and the Underwriters on the other hand shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity incurred by the Company on the one hand and the Underwriters on the
other hand, as incurred, in such proportions that (a) the Underwriters are
responsible for that portion represented by the percentage that the underwriting
commission appearing on the cover page of the Prospectus bears to the public
offering price appearing thereon, and (b) the Company is responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Underwriters within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Underwriters, and each director of
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement and
the PRIDES Price Determination Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement. (a) The Underwriters may terminate
this Agreement by notice to the Company at any time at or prior to the Closing
Date (i) if there has been, since the date of this Agreement or since the
respective date as of which information is given in the
<PAGE> 33
33
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
outbreak of hostilities or escalation thereof or other calamity or crisis, the
effect of which on the financial markets of the United States or is such as to
make it, in the judgment of the Representatives, impracticable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in the Common Stock has been suspended by the Commission, or if trading
generally on either the American Stock Exchange or The New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by either of
said Exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal or
New York authorities. Notice of such termination may be given by telegram,
telecopy or telephone and shall be subsequently confirmed by letter. As used
in this Section 10(a), the term "Prospectus" means the Prospectus in the form
first used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4. Notwithstanding any such termination, the provisions of
Sections 6 and 7 shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Date to purchase the Securities that
it or they are obligated to purchase pursuant to this Agreement (the "Defaulted
Securities"), you shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms set forth in
this Agreement; if, however, you have not completed such arrangements within
such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities, the non-defaulting Underwriters
shall be obligated to purchase the full amount thereof in the
<PAGE> 34
34
proportions that their respective Securities underwriting obligation proportions
bear to the underwriting obligation proportions of all non- defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriters.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for a Underwriter under this Section 10.
SECTION 11. Default by the Company. If the Company shall fail at the
Closing Date or at the Date of Delivery to sell and deliver the number of
Securities which it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any non- defaulting party.
No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default.
SECTION 12. Notices. Unless otherwise specifically indicated herein, all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to Merrill
Lynch at Merrill Lynch World Headquarters, North Tower, World Financial Center,
New York, New York 10281, attention of Syndicate Operations; and notices to the
Company shall be directed to it at 401 North Wabash Avenue, Chicago, Illinois
60611, attention of President or Secretary.
SECTION 13. Parties. This Agreement and the PRIDES Price Determination
Agreement shall each inure to the benefit of and be binding upon the
Underwriters and the
<PAGE> 35
35
Company and their respective successors, heirs and legal representatives.
Nothing expressed or mentioned in this Agreement or the PRIDES Price
Determination Agreement is intended or shall be construed to give any person,
firm or corporation, other than the Underwriters and the Company and their
respective successors, heirs and legal representatives, and the controlling
persons and officers and directors referred to in Sections 6 and 7 hereof and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or the PRIDES Price Determination
Agreement or any provision herein or therein contained. This Agreement and the
PRIDES Price Determination Agreement and all conditions and provisions hereof
and thereof are intended to be for the sole and exclusive benefit of the
Underwriters and the Company and their respective successors, heirs and legal
representatives and said controlling persons and officers and directors and
their heirs and legal representatives, and for the benefit of no other person,
firm or corporation. No purchaser of Securities from the Underwriters shall be
deemed to be a successor by reason merely of such purchase.
SECTION 14. Governing Law and Time. This Agreement and the PRIDES Price
Determination Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State. Specified times of day refer to New York City time.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement
<PAGE> 36
36
among the Underwriters and the Company in accordance with its terms.
Very truly yours,
HOLLINGER INTERNATIONAL INC.
by /s/ F. David Radler
--------------------------
President, Chief Operating
Officer and Director
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & Co.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
BEAR, STEARNS & CO., INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: MERRILL LYNCH & Co.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
By /s/ Teresa A. Miles
-------------------------
For themselves and
as Representatives for the
other Underwriters.
<PAGE> 37
Exhibit A
HOLLINGER INTERNATIONAL INC.
(a Delaware corporation)
Shares of Class A Common Stock
PRIDES Price Determination Agreement
, 1996
MERRILL LYNCH & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
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, NY 10281-1201
Ladies and Gentlemen:
Reference is made to the Purchase Agreement dated , 1996 (the "Purchase
Agreement") among Hollinger International Inc., a Delaware corporation (the
"Company") and the several Underwriters named in Schedule I thereto or hereto
(the "Underwriters"), for whom Merrill Lynch & Co., Bear, Stearns & Co.,
Donaldson, Lufkin & Jenrette Securities Corporation, CIBC Wood Gundy Securities
plc and TD Securities Inc. are acting as representatives (the
"Representatives"). The Purchase Agreement provides for the purchase by the
Underwriters from the Company, subject to the terms and conditions set forth
therein, of an aggregate of 18,000,000 Preferred Redeemable Increased Dividend
Equity Securities (the "Initial Securities" and the "PRIDES") each of which is a
depositary share representing one half share of the Company's Series B Preferred
Stock, par value $.01 per share. This Agreement is the PRIDES
<PAGE> 38
2
Price Determination Agreement referred to in the Purchase Agreement.
Pursuant to Section 2 of the Purchase Agreement, the undersigned agree
with the Representatives as follows:
1. The public offering price per security for the Initial Securities
shall be $9.75.
2. The purchase price per security for the Initial Securities to be
paid by the several Underwriters shall be $9.4575, representing an amount
equal to the public offering price set forth above, less $0.2925 per
security.
3. The dividend rate on the Initial Securities shall be 9.75% per
annum.
The Company represents and warrants to each of the Underwriters that the
representations and warranties of the Company set forth in Section 1(a) of the
Purchase Agreement are accurate as though expressly made at and as of the date
hereof.
As contemplated by Section 2 of the Purchase Agreement, attached as
Schedule I is a completed list of the several Underwriters, which shall be a
part of this Agreement and the Purchase Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts and together with the Purchase Agreement
shall be a binding agreement among the Underwriters and the Company in
accordance with its terms and the terms of the Purchase Agreement.
Very truly yours,
HOLLINGER INTERNATIONAL INC.
By___________________________
F. David Radler,
President, Chief Operating
Officer and Director
<PAGE> 39
3
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & Co.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
BEAR, STEARNS & CO., INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: MERRILL LYNCH & Co.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
By _______________________
For themselves and as Representatives of
the other Underwriters named in Schedule I
attached hereto.
<PAGE> 40
SCHEDULE I
Shares
of Common
Stock to Be
Underwriters Purchased
------------ -----------
Merrill Lynch & Co. . . . . . . . . . . . . . . . . . . . . . . .
Bear,Stearns & Co., Inc. . . . . . . . . . . . . . . . . . . . .
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . . . .
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000
==========
<PAGE> 41
SCHEDULE II
Significant Subsidiaries of Hollinger International Inc.
1. Hollinger International Publishing Holdings Inc. is incorporated in Delaware
and is a wholly owned subsidiary of Hollinger International Inc.
2. Hollinger International Publishing Inc. is incorporated in Delaware and is a
wholly owned subsidiary of Hollinger International Publishing Holdings Inc.
3. The Sun-Times Company is incorporated in Delaware and is a wholly owned
subsidiary of Hollinger International Publishing Inc.
4. Chicago Sun-Times, Inc. is incorporated in Delaware and is a wholly owned
subsidiary of The Sun-Times Company.
5. American Publishing Company is incorporated in Delaware and is a wholly
owned subsidiary of Hollinger International Publishing Inc.
6. American Publishing (1991) Inc. is incorporated in Delaware and is a wholly
owned subsidiary of American Publishing Company.
7. American Publishing Holdings Inc. is incorporated in Delaware and is a
wholly owned subsidiary of American Publishing Company.
8. APAC-95 Inc. is incorporated in Delaware and is a wholly owned subsidiary of
American Publishing Company.
9. TelHoldco Inc. is incorporated in Delaware and is a wholly owned subsidiary
of Hollinger International Publishing Inc.
10. DT Holdings Limited is an English company and is a wholly owned subsidiary
(excluding preference shares) of Hollinger International Publishing Inc.
11. First DT Holdings Limited is an English company and is a wholly owned
subsidiary (excluding preference shares) of DT Holdings Limited.
<PAGE> 42
2
12. The Telegraph plc is an English company and a subsidiary of First DT
Holdings Limited.
13. John Fairfax Holdings limited is an Australian company and is an indirect
subsidiary of The Telegraph plc.
<PAGE> 1
Exhibit 3.01
HOLLINGER INTERNATIONAL INC.
__________
CERTIFICATE OF DESIGNATIONS
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
__________
SERIES B CONVERTIBLE PREFERRED STOCK
__________
HOLLINGER INTERNATIONAL INC., a Delaware corporation (the "Corporation"),
certifies that, pursuant to the authority contained in Article IV of its
Restated Certificate of Incorporation, as amended, and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, its Board of Directors has adopted the following resolution creating a
series of its Preferred Stock, par value $.01 per share, designated as Series B
Convertible Preferred Stock:
RESOLVED, that a series of the class of authorized Preferred Stock, par
value $.01 per share, of the Corporation is hereby created, and that the
designation and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof, are as follows:
SECTION 1. Designation and Amount. The shares of such series shall be
designated as "Series B Convertible Preferred Stock", and the number of whole
shares constituting such series shall be 10,350,000. Shares of Series B
Convertible Preferred Stock may be issued in half share increments.
SECTION 2. Dividends. (a) The holders of outstanding shares of Series B
Convertible Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available therefor,
cumulative dividends from the date of initial issuance thereof at the rate of
9.75% per annum of the Stated Liquidation Amount per half share (equivalent to
$0.9506 per annum, and no more, payable in equal quarterly amounts of $0.2377
for each half share of Series B
<PAGE> 2
Convertible Preferred Stock), in arrears on the first day of each February,
May, August and November, respectively (each such date being hereinafter
referred to as a "Dividend Payment Date"), or, if any Dividend Payment Date is
not a business day, then the Dividend Payment Date shall be the next succeeding
business day; provided, however, that, with respect to any dividend period
during which a redemption occurs, the Corporation may, at its option, declare
accrued dividends to, and pay such dividends on, the redemption date, in which
case such dividends would be payable on the redemption date in cash to the
holders of the shares of Series B Convertible Preferred Stock as of the record
date for such dividend payment and such accrued dividends would not be included
in the calculation of the related Call Price (as hereinafter defined). Each
dividend on the shares of Series B Convertible Preferred Stock shall be payable
to holders of record as they appear on the stock register of the Corporation on
such record date, not less than 10 (except as otherwise provided below with
respect to the first dividend payment) nor more than 60 days preceding the
payment date thereof, as shall be fixed by the Board of Directors. The first
dividend payment shall be for the period from August 7, 1996 to and including
October 31, 1996 and the first dividend will be payable on November 1, 1996 to
holders of record at the close of business on August 7, 1996. Dividends (or
amounts equal to accrued and unpaid dividends) payable on shares of Series B
Convertible Preferred Stock for any period less than a full quarterly dividend
period will be computed on the basis of a 360-day year of twelve 30-day months
and the actual number of days elapsed in any period less than one month.
Dividends on the shares of Series B Convertible Preferred Stock will accrue
whether or not there are funds legally available for the payment of such
dividends and whether or not such dividends are declared on a daily basis from
the previous Dividend Payment Date or the date of initial issuance if prior to
the first Dividend Payment Date. Accumulated unpaid dividends shall not bear
interest. Dividends will cease to accrue in respect of shares of Series B
Convertible Preferred Stock on the Mandatory Conversion Date (as hereinafter
defined) or on the date of their earlier conversion or redemption.
The shares of Series B Convertible Preferred Stock will rank junior, both
as to payment of dividends and distribution of assets upon liquidation, to the
outstanding shares of Series A Preferred Stock and any future series of
preferred stock ranking senior to the Series B Convertible Preferred Stock as to
the payment of dividends or the distribution of assets upon liquidation ("Senior
Stock"), and will rank on a parity, both as to payment of dividends and
distribution of assets upon liquidation, with any future preferred stock issued
by the Corporation that by its terms ranks on a parity with the Series B
Convertible Preferred Stock ("Parity Stock").
- 2 -
<PAGE> 3
(b) As long as any shares of Series B Convertible Preferred Stock are
outstanding, no dividends for any dividend period (other than dividends payable
in shares of, or warrants, rights or options exercisable for or convertible into
shares of, Common Stock or any other capital stock of the Corporation ranking
junior to the Series B Convertible Preferred Stock as to the payment of
dividends and the distribution of assets upon liquidation ("Junior Stock") and
cash in lieu of fractional shares of such Junior Stock in connection with any
such dividend) will be paid in cash or otherwise, nor will any other
distribution be made (other than a distribution payable in Junior Stock and cash
in lieu of fractional shares of such Junior Stock in connection with any such
distribution), on any Junior Stock unless (i) full dividends on the Series B
Convertible Preferred Stock and any Parity Stock have been paid, or declared and
set aside for payment, for all dividend periods terminating on or prior to the
date of such Junior Stock dividend or distribution payment to the extent such
dividends are cumulative; (ii) dividends in full, in the case of a dividend
payment with respect to Junior Stock, for any Series B Convertible Preferred
Stock and Parity Stock dividend periods commencing on or prior to the date of
such Junior Stock dividend payment or, in the case of any other distribution
with respect to Junior Stock, for the current Series B Convertible Preferred
Stock and Parity Stock dividend periods, have been paid, or declared and set
aside for payment, on all Series B Convertible Preferred Stock and Parity Stock
to the extent such dividends are cumulative; (iii) the Corporation has paid or
set aside all amounts, if any, then or theretofore required to be paid or set
aside for all purchase, retirement, and sinking funds, if any, for the Series B
Convertible Preferred Stock and any Parity Stock; and (iv) the Corporation is
not in default on any of its obligations to redeem the Series B Convertible
Preferred Stock and any Parity Stock.
In addition, as long as any shares of Series B Convertible Preferred Stock
are outstanding, no shares of Junior Stock may be purchased, redeemed, or
otherwise acquired by the Corporation or any of its subsidiaries (except in
connection with the reclassification or exchange of any Junior Stock through the
issuance of other Junior Stock (and cash in lieu of fractional shares of such
Junior Stock in connection therewith) or the purchase, redemption, or other
acquisition of any Junior Stock with any Junior Stock (and cash in lieu of
fractional shares of such Junior Stock in connection therewith)) nor may any
funds be set aside or made available for any sinking fund for the purchase or
redemption of any Junior Stock unless: (i) full dividends on the Series B
Convertible Preferred Stock and any Parity Stock have been paid, or declared and
set aside for payment, for all dividend periods terminating on or prior to the
date of such purchase, redemption or acquisition to the extent such dividends
are cumulative; (ii) the Corporation has paid or set aside all amounts, if any,
then or theretofore required to be paid or set
- 3 -
<PAGE> 4
aside for all purchase, retirement, and sinking funds, if any, for the Series B
Convertible Preferred Stock and any Parity Stock; and (iii) the Corporation is
not in default on any of its obligations to redeem the Series B Convertible
Preferred Stock and any Parity Stock.
Subject to the provisions described above, such dividends or other
distributions (payable in cash, property or Junior Stock) as may be determined
by the Board of Directors may be declared and paid on the shares of any Junior
Stock from time to time and Junior Stock may be purchased, redeemed or otherwise
acquired by the Corporation or any of its subsidiaries from time to time. In
the event of the declaration and payment of any such dividends or other
distributions, the holders of such Junior Stock will be entitled, to the
exclusion of holders of the Series B Convertible Preferred Stock and any Parity
Stock, to share therein according to their respective interests.
As long as any shares of Series B Convertible Preferred Stock are
outstanding, dividends for any dividend period or other distributions may not be
paid on any Parity Stock (other than dividends or other distributions payable in
Junior Stock and cash in lieu of fractional shares of such Junior Stock in
connection therewith), unless either: (a)(i) full dividends on the Series B
Convertible Preferred Stock and any Parity Stock have been paid, or declared and
set aside for payment, for all dividend periods terminating on or prior to the
date of such Parity Stock dividend or distribution payment to the extent such
dividends are cumulative; (ii) full dividends, in the case of a dividend payment
with respect to Parity Stock, for any Series B Convertible Preferred Stock and
any Parity Stock dividend periods commencing on or prior to the date of such
Parity Stock dividend payment or, in the case of any other distribution with
respect to Parity Stock, for the current Series B Convertible Preferred Stock
and Parity Stock dividend periods, have been paid, or declared and set aside for
payment, on all Series B Convertible Preferred Stock and any Parity Stock to the
extent such dividends are cumulative; (iii) the Corporation has paid or set
aside all amounts, if any, then or theretofore required to be paid or set aside
for all purchase, retirement, and sinking funds, if any, for the Series B
Convertible Preferred Stock and any Parity Stock; and (iv) the Corporation is
not in default on any of its obligations to redeem the Series B Convertible
Preferred Stock and any Parity Stock, or (b) any such dividends are declared and
paid pro rata so that the amounts of any dividends declared and paid per share
of Series B Convertible Preferred Stock and each share of such Parity Stock will
in all cases bear to each other the same ratio that accrued and unpaid dividends
(including any accumulation with respect to unpaid dividends for prior dividend
periods, if such dividends are cumulative) per share of Series B Convertible
Preferred Stock and such shares of Parity Stock bear to each other.
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<PAGE> 5
In addition, as long as any shares of Series B Convertible Preferred Stock
are outstanding, the Corporation may not purchase, redeem or otherwise acquire
any Parity Stock (except with any Junior Stock and cash in lieu of fractional
shares of such Junior Stock in connection therewith) unless: (i) full dividends
on the Series B Convertible Preferred Stock and any Parity Stock have been paid,
or declared and set aside for payment, for all dividend periods terminating on
or prior to the date of such Parity Stock purchase, redemption or other
acquisition payment to the extent such dividends are cumulative; (ii) the
Corporation has paid or set aside all amounts, if any, then or theretofore
required to be paid or set aside for all purchase, retirement, and sinking
funds, if any, for the Series B Convertible Preferred Stock and any Parity
Stock; and (iii) the Corporation is not in default on any of its obligations to
redeem any Series B Convertible Preferred Stock or Parity Stock.
SECTION 3. Redemption and Conversion. (a) Mandatory Conversion. On
August 1, 2000 (the "Mandatory Conversion Date"), each half share of Series B
Convertible Preferred Stock shall convert automatically (the "Mandatory
Conversion") into (i) shares of Class A Common Stock at the Common Equivalent
Rate (as hereinafter defined) in effect on the Mandatory Conversion Date, (ii)
cash in lieu of fractional shares and (iii) the right to receive an amount in
cash equal to all accrued and unpaid dividends thereon (other than previously
declared dividends payable to a holder of record as of a prior date) to the
Mandatory Conversion Date, whether or not declared, out of funds legally
available for the payment of dividends, subject to the right of the Corporation
to redeem the shares of Series B Convertible Preferred Stock on or after August
1, 1999 (the "Initial Redemption Date") and prior to the Mandatory Conversion
Date, as described below, and subject to the conversion of the shares of Series
B Convertible Preferred Stock at the option of the holder at any time prior to
the Mandatory Conversion Date, as described below. The Common Equivalent Rate
is initially one share of Class A Common Stock for each half share of Series B
Convertible Preferred Stock and is subject to adjustment as set forth below.
Dividends on the shares of Series B Convertible Preferred Stock shall cease to
accrue and such shares shall cease to be outstanding on the Mandatory Conversion
Date. The Corporation shall make such arrangements as it deems appropriate for
the issuance of certificates representing shares of Class A Common Stock and for
the payment of cash in respect of such accrued and unpaid dividends, if any, or
cash in lieu of fractional shares, if any, in exchange for and contingent upon
surrender of certificates representing the shares of Series B Convertible
Preferred Stock, and the Corporation may defer the payment of dividends on such
shares of Class A Common Stock and the voting thereof until, and make such
payment and voting contingent upon, the surrender of such certificates
representing the shares of Series B Convertible Preferred Stock, provided that
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<PAGE> 6
the Corporation shall give the holders of the shares of Series B Convertible
Preferred Stock such notice of any such actions as the Corporation deems
appropriate and upon such surrender such holders shall be entitled to receive
such dividends declared and paid to holders of shares of Class A Common Stock
as of a record date subsequent to the Mandatory Conversion Date. Amounts
payable in cash in respect of the shares of Series B Convertible Preferred
Stock or in respect of such shares of Class A Common Stock shall not bear
interest.
(b) Redemption by the Corporation.
(i) Right to Redeem. Shares of Series B Convertible Preferred Stock
are not redeemable by the Corporation prior to the Initial Redemption Date.
At any time and from time to time on or after the Initial Redemption Date
until immediately prior to the Mandatory Conversion Date, the Corporation
shall have the right to redeem, in whole or in part, the outstanding shares
of Series B Convertible Preferred Stock. Upon any such redemption, the
Corporation shall deliver to the holders of shares of Series B Convertible
Preferred Stock, in accordance with the provisions hereof, in exchange for
each half share so redeemed, the greater of (A) a number of shares of Class
A Common Stock equal to the Call Price (as hereinafter defined) in effect
on the redemption date divided by the Current Market Price (as hereinafter
defined) of the Class A Common Stock determined as of the second Trading
Date immediately preceding the Notice Date (as hereinafter defined) or (B)
.8439 of a share of Class A Common Stock (subject to adjustment in the same
manner as the Optional Conversion Rate (as hereinafter defined) is
adjusted). The public announcement of any call for redemption shall be
made (by press release to the Dow Jones News Service) prior to, or at the
time of, the mailing of the notice of such call to holders of shares of
Series B Convertible Preferred Stock as described below. If fewer than all
the outstanding shares (including any half share increments) of Series B
Convertible Preferred Stock are to be redeemed, shares of Series B
Convertible Preferred Stock to be redeemed shall be selected by the
Corporation from outstanding shares of Series B Convertible Preferred Stock
not previously redeemed by lot or pro rata (as nearly as may be
practicable) or by any other method determined by the Board of Directors in
its sole discretion to be equitable. As used in this subsection (b), the
term "Notice Date" with respect to any notice given by the Corporation in
connection with a redemption of shares of Series B Convertible Preferred
Stock means the date on which first occurs either the public announcement
of such redemption or the commencement of mailing of such notice to the
holders of shares of Series B Convertible Preferred Stock.
(ii) Notice of Redemption. The Corporation shall provide notice of
any call for redemption of the shares of Series B Convertible Preferred
Stock to holders of record of Series B
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<PAGE> 7
Convertible Preferred Stock to be called for redemption not less than 15
nor more than 60 days prior to the date fixed for such redemption; provided
that so long as the Series B Convertible Preferred Stock shall be
represented by depositary shares, such notice shall be provided to the
depositary sufficiently in advance of the mailing so that a notice of
redemption may be simultaneously mailed to holders of depositary shares.
Such notice shall be provided by mailing notice of such redemption, first
class postage prepaid, to each holder of record of shares of Series B
Convertible Preferred Stock to be redeemed, at such holder's address as it
appears on the stock register of the Corporation; provided, however, that
neither failure to give such notice nor any defect therein shall affect the
validity of the proceeding for the redemption of any shares of Series B
Convertible Preferred Stock to be redeemed except as to the holders to whom
the Corporation has failed to give said notice or whose notice was
defective.
Each such notice shall state, as appropriate, the following and may contain
such other information as the Corporation deems advisable:
(A) the redemption date;
(B) that all outstanding shares of Series B Convertible Preferred Stock
are to be redeemed or, in the case of a call for redemption of fewer than all
outstanding shares of Series B Convertible Preferred Stock, the number of such
shares (or half shares) held by such holder to be redeemed;
(C) the number of shares of Class A Common Stock deliverable upon
redemption of each half share of Series B Convertible Preferred Stock to be
redeemed and, if applicable, the Call Price and the Current Market Price used to
calculate such number of shares of Class A Common Stock;
(D) the place or places where certificates for such shares are to be
surrendered for redemption; and
(E) that the dividends on the shares of Series B Convertible Preferred
Stock to be redeemed shall cease to accrue on such redemption date (except as
otherwise provided herein).
(iii) Deposit of Shares and Funds. The Corporation's obligation to
deliver shares of Class A Common Stock and provide funds upon redemption in
accordance with this Section 3(b) shall be deemed fulfilled if, on or
before a redemption date, the Corporation shall irrevocably deposit, with a
bank or trust company, or an affiliate of a bank or trust company, having
an
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<PAGE> 8
office or agency in New York City and having a capital and surplus of at
least $100 million or shall set aside or make other reasonable provision
for the issuance of such number of shares of Class A Common Stock as are
required to be delivered by the Corporation pursuant to this Section 3(b)
upon the occurrence of the related redemption (and for the payment of cash
in lieu of the issuance of fractional share amounts and accrued and unpaid
dividends payable in cash on the shares to be redeemed as and to the extent
provided by this Section 3). Any interest accrued on such funds shall be
paid to the Corporation from time to time. Any shares of Class A Common
Stock or funds so deposited and unclaimed at the end of two years from such
redemption date shall be repaid and released to the Corporation, after
which the holder or holders of such shares of Series B Convertible
Preferred Stock so called for redemption shall look only to the Corporation
for delivery of such shares of Class A Common Stock or funds.
(iv) Surrender of Certificates; Status. Each holder of shares of
Series B Convertible Preferred Stock to be redeemed shall surrender the
certificates evidencing such shares (properly endorsed or assigned for
transfer, if the Board of Directors shall so require and the notice shall
so state) to the Corporation at the place designated in the notice of such
redemption and shall thereupon be entitled to receive certificates
evidencing shares of Class A Common Stock and to receive any funds payable
pursuant to this Section 3 following such surrender and following the date
of such redemption. In case fewer than all the half shares represented by
any such surrendered certificate are called for redemption, a new
certificate shall be issued at the expense of the Corporation representing
the unredeemed shares (or half shares). If such notice of redemption shall
have been given, and if on the date fixed for redemption, shares of Class A
Common Stock and funds necessary for the redemption shall have been
irrevocably either set aside by the Corporation separate and apart from its
other funds or assets in trust for the account of the holders of the shares
to be redeemed or converted (and so as to be and continue to be available
therefor) or deposited with a bank or a trust company or an affiliate
thereof as provided herein or the Corporation shall have made other
reasonable provision therefor, then, notwithstanding that the certificates
evidencing any shares of Series B Convertible Preferred Stock so called for
redemption or subject to conversion shall not have been surrendered, the
shares represented thereby so called for redemption shall be deemed no
longer outstanding, dividends with respect to the shares so called for
redemption shall cease to accrue on the date fixed for redemption (except
that holders of shares of Series B Convertible Preferred Stock at the close
of business on a record date for any payment of dividends shall be entitled
to receive the dividend payable on such shares on the corresponding
Dividend Payment Date notwithstanding the redemption of such shares
following such record date and prior to such Dividend Payment
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<PAGE> 9
Date) and all rights with respect to the shares so called for redemption
shall forthwith after such date cease and terminate, except for the rights
of the holders to receive the shares of Class A Common Stock and funds, if
any, payable pursuant to this Section 3 without interest upon surrender of
their certificates therefor (unless the Corporation defaults on the
delivery of such shares or the payment of such funds). Holders of shares
of Series B Convertible Preferred Stock that are redeemed shall not be
entitled to receive dividends declared and paid on such shares of Class A
Common Stock, and such shares of Class A Common Stock shall not be entitled
to vote, until such shares of Class A Common Stock are issued upon the
surrender of the certificates representing such shares of Series B
Convertible Preferred Stock and upon such surrender such holders shall be
entitled to receive such dividends declared and paid to holders of Class A
Common Stock as of a record date subsequent to such redemption date without
interest thereon.
(c) Conversion at Option of Holder. Shares of Series B Convertible
Preferred Stock are convertible, in whole or in part, at the option of the
holders thereof, at any time prior to the Mandatory Conversion Date, unless
previously redeemed, into shares of Class A Common Stock at a rate of .8439 of a
share of Class A Common Stock for each half share of Series B Convertible
Preferred Stock (the "Optional Conversion Rate") (equivalent to a conversion
price of $11.55 per share of Class A Common Stock based on the Stated
Liquidation Amount), subject to adjustment as set forth below. The right to
convert shares of Series B Convertible Preferred Stock called for redemption
shall terminate immediately prior to the close of business on the redemption
date.
Conversion of shares of Series B Convertible Preferred Stock at the option
of the holder may be effected by delivering certificates evidencing such shares,
together with written notice of conversion (and, if applicable, cash payment of
an amount equal to the dividend attributable to the current quarterly dividend
accrued on such shares) to the office or agency to be maintained by the
Corporation for that purpose and otherwise in accordance with conversion
procedures established by the Corporation. Each optional conversion shall be
deemed to have been effected immediately prior to the close of business on the
date on which the foregoing requirements shall have been satisfied. The
conversion shall be at the Optional Conversion Rate in effect at such time and
on such date.
Holders of shares of Series B Convertible Preferred Stock at the close of
business on a record date for any payment of declared dividends shall be
entitled to receive the dividend payable on such shares on the corresponding
Dividend Payment Date notwithstanding the optional conversion of such shares
following such record date and prior to the corresponding Dividend Payment
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<PAGE> 10
Date. However, shares of Series B Convertible Preferred Stock surrendered for
conversion after the close of business on a record date for any payment of
dividends and before the opening of business on the next succeeding Dividend
Payment Date must be accompanied by payment in cash of an amount equal to the
dividend thereon which is to be paid on such Dividend Payment Date (unless such
shares have been called for redemption on a redemption date between such record
date and such Dividend Payment Date). A holder on the relevant record date of
shares of Series B Convertible Preferred Stock called for redemption on August
1, 1999 or any other Dividend Payment Date thereafter will receive the dividend
on such shares payable on that date and will be able to convert the shares of
Series B Convertible Preferred Stock after the record date for such dividend
without paying an amount equal to such dividend to the Corporation upon
conversion. Except as provided above, upon any optional conversion of shares
of Series B Convertible Preferred Stock, the Corporation shall make no payment
or allowance for unpaid dividends, whether or not in arrears, on converted
shares of Series B Convertible Preferred Stock or for previously declared
dividends or distributions on the shares of Class A Common Stock issued upon
such conversion.
(d) Common Equivalent Rate and Optional Conversion Rate Adjustments. The
Common Equivalent Rate and the Optional Conversion Rate shall each be subject to
adjustment from time to time as provided below in this subsection (d).
(i) If the Corporation shall, after the date of initial issuance of
shares of this Series:
(A) pay a stock dividend or make a distribution with respect to its Class
A Common Stock in shares of capital stock of the Corporation,
(B) subdivide or split its outstanding Class A Common Stock into a
greater number of shares,
(C) combine its outstanding shares of Class A Common Stock into a smaller
number of shares, or
(D) issue by reclassification of its shares of Class A Common Stock any
shares of capital stock of the Corporation,
then, in any such event, the Common Equivalent Rate and the Optional Conversion
Rate in effect immediately prior to such event shall each be adjusted so that
the holder of any shares of Series B Convertible Preferred Stock thereafter
shall be entitled to receive, upon Mandatory Conversion or upon conversion at
the option of the holder, the number of shares of Class A Common Stock or other
capital stock of the Corporation which such holder would have owned or been
entitled to receive immediately
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<PAGE> 11
following any event described above had such shares of Series B Convertible
Preferred Stock been converted immediately prior to such event or any record
date with respect thereto. Such adjustment shall become effective as of the
opening of business on the business day next following the record date for
determination of stockholders entitled to receive such dividend or
distribution, in the case of a dividend or distribution, and shall become
effective immediately after the effective date, in the case of a subdivision,
split, combination or reclassification. Such adjustments shall be made
successively.
(ii) If the Corporation shall, after the initial date of issuance of
shares of this Series, issue rights or warrants to all holders of its Class
A Common Stock entitling them (for a period not exceeding 45 days from the
date of such issuance) to subscribe for or purchase shares of Class A
Common Stock at a price per share less than the Current Market Price of the
Class A Common Stock, on the record date for the determination of
stockholders entitled to receive such rights or warrants, then, in any such
event unless such rights or warrants are issued to holders of shares of
Series B Convertible Preferred Stock on a pro rata basis with the shares of
Class A Common Stock based on the Common Equivalent Rate on such record
date, the Common Equivalent Rate and Optional Conversion Rate shall each be
adjusted by multiplying the Common Equivalent Rate and the Optional
Conversion Rate in effect at the opening of business on the business day
following such record date, by a fraction, of which the numerator shall be
the number of shares of Class A Common Stock outstanding at the close of
business on such record date, plus the number of additional shares of Class
A Common Stock offered for subscription or purchase pursuant to such rights
or warrants, and of which the denominator shall be the number of shares of
Class A Common Stock outstanding at the close of business on such record
date, plus the number of additional shares of Class A Common Stock which
the aggregate offering price of the total number of shares of Class A
Common Stock so offered for subscription or purchase pursuant to such
rights or warrants would purchase at such Current Market Price (determined
by multiplying such total number of shares by the exercise price of such
rights or warrants and dividing the product so obtained by such Current
Market Price). Such adjustment shall become effective immediately after
the opening of business on the business day next following the record date
for the determination of stockholders entitled to receive such rights or
warrants. To the extent that shares of Class A Common Stock are not
delivered after the expiration of such rights or warrants, the Common
Equivalent Rate and the Optional Conversion Rate shall each be readjusted
to the Common Equivalent Rate and the Optional Conversion Rate which would
then be in effect had the adjustments been made upon the issuance of such
rights or warrants upon the basis of delivery of only the number of shares
of Class A Common
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<PAGE> 12
Stock actually delivered. Such adjustments shall be made successively.
(iii) If the Corporation shall, after the date of initial issuance of
shares of this Series, pay a dividend or make a distribution to all holders
of its Class A Common Stock of evidences of its indebtedness, cash or other
assets (including capital stock of the Corporation but excluding any cash
dividends or distributions, other than Extraordinary Cash Distributions (as
hereinafter defined) and dividends referred to in clause (i)(A) above) or
shall issue to all holders of its Class A Common Stock rights or warrants
to subscribe for or purchase any of its securities (other than those
referred to in clause (ii) above), then unless such dividend is paid or
distribution is made or rights or warrants are issued to each holder of
shares of Series B Convertible Preferred Stock on a pro rata basis with the
shares of Class A Common Stock based on the Common Equivalent Rate on the
record date for the determination of stockholders entitled to receive such
payment or distribution or issuance, in any such event, the Common
Equivalent Rate and the Optional Conversion Rate shall each be adjusted by
multiplying the Common Equivalent Rate and the Optional Conversion Rate, in
effect on such record date, by a fraction, of which the numerator shall be
the Current Market Price per share of Class A Common Stock on such record
date, and of which the denominator shall be such Current Market Price per
share of Class A Common Stock as of such record date less the fair market
value (as determined by the Board of Directors, whose determination shall
be conclusive, and described in a resolution adopted with respect thereto)
of the portion of the assets or evidences of indebtedness so distributed or
of such subscription rights or warrants applicable to one share of Class A
Common Stock. Such adjustment shall become effective on the opening of
business on the business day next following the record date for the
determination of stockholders entitled to receive such dividend or
distribution or rights or warrants. Such adjustments shall be made
successively. As used in this clause (iii) the term "Extraordinary Cash
Distributions" means, with respect to any cash dividend or distribution
paid on any date, the amount, if any, by which all cash dividends and cash
distributions on the Class A Common Stock paid during the consecutive
12-month period ending on and including such date (other than cash
dividends and cash distributions for which an adjustment to the Common
Equivalent Rate and the Optional Conversion Rate was previously made)
exceeds, on a per share of Class A Common Stock basis, 15% of the average
of the daily Closing Prices of the Class A Common Stock over such
consecutive 12-month period.
(iv) For purposes of calculating the number of outstanding shares of
Class A Common Stock under clause (ii) of this subsection (d), (A) any
shares of Class A Common Stock issuable in payment of a dividend shall be
deemed to have been
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<PAGE> 13
issued immediately prior to the close of business on the record date for
such dividend, and (B) all shares of Class A Common Stock issuable upon
conversion, redemption or exchange of any securities or upon exercise of
any options, warrants or other rights to acquire Class A Common Stock that
are outstanding immediately prior to the issuance of any rights or warrants
referred to in such clause (ii) shall be deemed to be outstanding.
(v) The Corporation shall also be entitled (but will not be
required) to make upward adjustments in the Common Equivalent Rate, the
Optional Conversion Rate and the Call Price, as it in its sole discretion
shall determine to be advisable, in order that any stock dividends,
subdivisions or splits of shares, distribution of rights to purchase stock
or securities, or distribution of securities convertible into or
exchangeable for stock (or any transaction which could be treated as any of
the foregoing transactions pursuant to Section 305 of the Internal Revenue
Code of 1986, as amended) made by the Corporation to its stockholders after
the date of initial issuance of shares of this series shall not be taxable.
(vi) In any case in which subsection 3(d) shall require that an
adjustment as a result of any event become effective at or as of the
opening of business on the business day next following a record date and
the date fixed for conversion pursuant to subsection 3(a) or 3(c) or
redemption pursuant to subsection 3(b) occurs after such record date, but
before the occurrence of such event, the Corporation may, in its sole
discretion, elect to defer the following until after the occurrence of such
event: (A) issuing to the holder of any converted or redeemed shares of
Series B Convertible Preferred Stock the additional shares of Class A
Common Stock issuable upon such conversion or redemption over the shares of
Class A Common Stock issuable before giving effect to such adjustments and
(B) paying to such holder any amount in cash in lieu of a fractional share
of Class A Common Stock pursuant to subsection 3(i).
(vii) All adjustments to the Common Equivalent Rate and the Optional
Conversion Rate shall be calculated to the nearest 1/100th of a share of
Class A Common Stock. No adjustment in the Class A Common Equivalent Rate
or the Optional Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent in the Common
Equivalent Rate; provided, however, that any adjustment which by reason of
this clause (vii) is not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
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<PAGE> 14
(e) Adjustment for Consolidation or Merger. In the case of (i) any
consolidation or merger to which the Corporation is a party (other than a merger
or consolidation in which the Corporation is the surviving or continuing
corporation and in which the Class A Common Stock outstanding immediately prior
to the merger or consolidation remains unchanged), (ii) any sale or transfer to
another corporation of the property of the Corporation as an entirety or
substantially as an entirety, or (iii) any statutory exchange of securities with
another corporation (other than in connection with a merger or acquisition),
proper provision shall be made so that each share of Series B Convertible
Preferred Stock shall, after consummation of such transaction, be subject to (A)
conversion at the option of the holder into the kind and amount of securities,
cash or other property receivable upon consummation of such transaction by a
holder of the number of shares of Class A Common Stock into which such share of
Series B Convertible Preferred Stock might have been converted immediately prior
to consummation of such transaction; (B) conversion on the Mandatory Conversion
Date into the kind and amount of securities, cash or other property receivable
upon consummation of such transaction by a holder of the number of shares of
Class A Common Stock into which such share of Series B Convertible Preferred
Stock would have been converted if the conversion on the Mandatory Conversion
Date had occurred immediately prior to the date of consummation of such
transaction, plus the right to receive cash in an amount equal to all accrued
and unpaid dividends on such shares of Series B Convertible Preferred Stock
(other than previously declared dividends payable to a holder of record as of a
prior date); and (C) redemption on any redemption date in exchange for the kind
and amount of securities, cash or other property receivable upon consummation of
such transaction by a holder of the number of shares of Class A Common Stock
that would have been issuable at the Call Price in effect on such redemption
date upon a redemption of such share immediately prior to consummation of such
transaction, assuming that, if the Notice Date for such redemption is not prior
to such transaction, the Notice Date had been the date of such transaction and
assuming in each case that such holder of Class A Common Stock failed to
exercise rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon consummation of such transaction
(provided that if the kind or amount of securities, cash or other property
receivable upon consummation of such transaction is not the same for each
non-electing share, then the kind and amount of securities, cash or other
property receivable upon consummation of such transaction for each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). The kind and amount of securities into
or for which the shares of Series B Convertible Preferred Stock shall be
convertible or redeemable after consummation of such transaction shall be
subject to adjustment as described in subsection (d) of this Section 3 following
the date of
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<PAGE> 15
consummation of such transaction. The Corporation may not become a party to
any such transaction unless the terms thereof are consistent with the foregoing
or consistent with clause (iii) of subsection 7(c).
For purposes of the immediately preceding paragraph and subsection
3(g)(iii), any sale or transfer to another corporation of property of the
Corporation which did not account for at least 50% of the consolidated net
income of the Corporation for its most recent fiscal year ending prior to the
consummation of such transaction shall not in any event be deemed to be a sale
or transfer of the property of the Corporation as an entirety or substantially
as an entirety.
(f) Notice of Adjustments. Whenever the Common Equivalent Rate and
Optional Conversion Rate are adjusted as herein provided, the Corporation shall:
(i) forthwith compute the adjusted Common Equivalent Rate and Optional
Conversion Rate in accordance herewith and prepare a certificate signed by
an officer of the Corporation setting forth the adjusted Common Equivalent
Rate and the Optional Conversion Rate, the method of calculation thereof in
reasonable detail and the facts requiring such adjustment and upon which
such adjustment is based, which certificate shall be conclusive, final and
binding evidence of the correctness of the adjustment, and file such
certificate forthwith with the transfer agent for the shares of Series B
Convertible Preferred Stock and the Class A Common Stock or at such other
office or agency maintained by the Corporation for the purpose of
conversion of the Series B Convertible Preferred Stock; and
(ii) make a prompt public announcement and mail a notice to the
holders of the outstanding shares of Series B Convertible Preferred Stock
stating that the Common Equivalent Rate and the Optional Conversion Rate
have been adjusted, the facts requiring such adjustment and upon which such
adjustment is based and setting forth the adjusted Common Equivalent Rate
and Optional Conversion Rate, such notice to be mailed at or prior to the
time the Corporation mails an interim statement to its stockholders
covering the fiscal quarter during which the facts requiring such
adjustment occurred, but in any event within 45 days of the end of such
fiscal quarter.
(g) Notices. In case, at any time while any of the shares of Series B
Convertible Preferred Stock are outstanding:
(i) the Corporation shall declare a dividend (or any other
distribution) on its Class A Common Stock, excluding any cash dividends; or
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<PAGE> 16
(ii) the Corporation shall authorize the issuance to all holders of
its Class A Common Stock of rights or warrants to subscribe for or purchase
shares of its Class A Common Stock or of any other subscription rights or
warrants; or
(iii) the Corporation shall authorize any reclassification of its
Class A Common Stock (other than a subdivision or combination thereof) or
any consolidation or merger to which the Corporation is a party and for
which approval of any stockholders of the Corporation is required (except
for a merger of the Corporation into one of its subsidiaries solely for the
purpose of changing the corporate domicile of the Corporation to another
state of the United States and in connection with which there is no
substantive change in the rights or privileges of any securities of the
Corporation other than changes resulting from differences in the corporate
statutes of the then existing and the new state of domicile), or the sale
or transfer to another corporation of the property of the Corporation as an
entirety or substantially as an entirety; or
(iv) the Corporation shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of the shares of Series B Convertible
Preferred Stock, and shall cause to be mailed to the holders of shares of
Series B Convertible Preferred Stock at their last addresses as they shall
appear on the stock register, at least 10 days before the date hereinafter
specified (or the earlier of the dates hereinafter specified, in the event that
more than one date is specified), a notice stating (A) the date on which a
record is to be taken for the purpose of such dividend, distribution, rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Class A Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (B) the date on which
any such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective and the date as of
which it is expected that holders of Class A Common Stock of record shall be
entitled to exchange their Class A Common Stock for securities or other
property (including cash), if any, deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
The failure to give or receive the notice required by this subsection (g) or
any defect therein shall not affect the legality or validity of such dividend,
distribution, right or warrant or other action.
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<PAGE> 17
(h) Effect of Conversions and Redemptions. The person or persons in whose
name or names any certificate or certificates for shares of Class A Common Stock
shall be issuable upon any conversion or redemption shall be deemed to have
become on the date of any such conversion or redemption the holder or holders of
record of the shares represented thereby; provided, however, that any such
surrender on any date when the stock transfer books of the Corporation shall be
closed shall constitute the Person or Persons in whose name or names the
certificate or certificates for such shares are to be issued as the record
holder or holders thereof for all purposes at the opening of business on the
next succeeding day on which such stock transfer books are open.
(i) Fractional Shares. No fractional shares or scrip representing
fractional shares of Class A Common Stock shall be issued upon the redemption or
conversion of any shares of Series B Convertible Preferred Stock. In lieu of
any fractional share otherwise issuable in respect of the aggregate number of
shares of Series B Convertible Preferred Stock of any holder which are redeemed
or converted on any redemption date or upon Mandatory Conversion or any optional
conversion, such holder shall be entitled to receive an amount in cash (computed
to the nearest cent) equal to the same fraction of the (i) Current Market Price
per share of Class A Common Stock as of the second Trading Date immediately
preceding the Notice Date, in the case of redemption, or (ii) Closing Price of
the Class A Common Stock determined (A) as of the fifth Trading Date immediately
preceding the Mandatory Conversion Date, in the case of Mandatory Conversion, or
(B) as of the second Trading Date immediately preceding the effective date of
conversion, in the case of any optional conversion by a holder. If more than
one half share shall be surrendered for conversion or redemption at one time by
or for the same holder, the number of full shares of Class A Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of Series B Convertible Preferred Stock so surrendered or
redeemed.
(j) Reissuance. Shares of Series B Convertible Preferred Stock that have
been issued and reacquired in any manner, including shares purchased, exchanged,
redeemed or converted, shall not be reissued as part of Series B Convertible
Preferred Stock and shall (upon compliance with any applicable provisions of the
laws of the State of Delaware) have the status of authorized and unissued shares
of the Preferred Stock undesignated as to series and may be redesignated and
reissued as part of any series of Preferred Stock.
(k) Payment of Taxes. The Corporation shall pay any and all documentary,
stamp or similar issue or transfer taxes payable in respect of the issue or
delivery of shares of Class A Common Stock on the redemption or conversion of
shares of Series B Convertible Preferred Stock pursuant to this Section 3;
- 17 -
<PAGE> 18
provided, however, that the Corporation shall not be required to pay any tax
which may be payable in respect of any registration of transfer involved in the
issue or delivery of shares of Class A Common Stock in a name other than that
of the registered holder of shares of Series B Convertible Preferred Stock
redeemed or converted or to be redeemed or converted, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
(l) Reservation of Class A Common Stock. The Corporation shall at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Class A Common Stock and/or its issued
Class A Common Stock held in its treasury, for the purpose of effecting any
Mandatory Conversion of the shares of Series B Convertible Preferred Stock or
any conversion of the shares of Series B Convertible Preferred Stock at the
option of the holder, the full number shares of Class A Common Stock then
deliverable upon any such conversion of all outstanding shares of Series B
Convertible Preferred Stock.
SECTION 4. Liquidation Rights. (a) In the event of the liquidation,
dissolution, or winding up of the business of the Corporation, whether voluntary
or involuntary, the holders of shares of Series B Convertible Preferred Stock
then outstanding, after payment or provision for payment of the debts and other
liabilities of the Corporation and the payment or provision for payment of any
distribution on any shares of the Corporation having a preference and a priority
over the shares of Series B Convertible Preferred Stock on liquidation, and
before any distribution to the holders of Junior Stock, shall be entitled to be
paid out of the assets of the Corporation available for distribution to its
stockholders an amount per half share of Series B Convertible Preferred Stock in
cash equal to the sum of (i) $9.75 (the "Stated Liquidation Amount") plus (ii)
all accrued and unpaid dividends thereon. In the event the assets of the
Corporation available for distribution to the holders of the shares of Series B
Convertible Preferred Stock upon any dissolution, liquidation or winding up of
the Corporation shall be insufficient to permit payment of the full preferential
amounts payable to the holders of outstanding shares of Series B Convertible
Preferred Stock and of all other series of Parity Stock, the holders of shares
of Series B Convertible Preferred Stock and of all other series of Parity Stock
shall share ratably in such distribution of assets in proportion to the amount
which would be payable on such distribution if the amounts to which the holders
of outstanding shares of Series B Convertible Preferred Stock and the holders of
outstanding shares of such Parity Stock were paid in full. Except as provided
in this Section 4, holders of Series B Convertible Preferred Stock shall not be
entitled to
- 18 -
<PAGE> 19
any distribution in the event of liquidation, dissolution or winding up of the
affairs of the Corporation.
(b) For the purposes of this Section 4, none of the following shall be
deemed to be a voluntary or involuntary liquidation, dissolution or winding up
of the Corporation:
(i) the sale, lease, transfer or exchange of all or substantially all
of the assets of the Corporation; or
(ii) the consolidation or merger of the Corporation with one or more
other corporations (whether or not the Corporation is the corporation
surviving such consolidation or merger).
SECTION 5. No Preemptive Rights. The holders of shares of Series B
Convertible Preferred Stock shall have no preemptive rights, including
preemptive rights with respect to any shares of capital stock or other
securities of the Corporation convertible into or carrying rights or options to
purchase any such shares.
SECTION 6. Voting Rights. (a) The holders of shares of Series B
Convertible Preferred Stock shall have the right with the holders of Common
Stock to vote in the election of directors and upon each other matter coming
before any meeting of the stockholders on the basis of 4/5 of a vote for each
half share held. The holders of shares of Series B Convertible Preferred Stock
and the holders of Common Stock shall vote together as one class except as
otherwise set forth herein or as otherwise provided by law or elsewhere in the
Restated Certificate of Incorporation of the Corporation, as amended.
(b) If at any time dividends payable on the shares of Series B Convertible
Preferred Stock or any other series of Preferred Stock, other than the Series A
Redeemable Convertible Preferred Stock, to the extent owned by Hollinger Inc. or
any other Affiliate of the Company, and any other Preferred Stock owned by an
Affiliate of the Company, are in arrears and unpaid in an aggregate amount equal
to or exceeding the aggregate amount of dividends payable on all such series for
six quarterly dividend periods, or if any other series of Preferred Stock shall
be entitled for any other reason to exercise voting rights, separate from the
Common Stock, to elect any Directors of the Corporation ("Preferred Stock
Directors"), the holders of the shares of Series B Convertible Preferred Stock,
voting separately as a class with the holders of all other series of Preferred
Stock upon which like voting rights have been conferred and are exercisable,
with each share of Series B Convertible Preferred Stock entitled to one vote on
this and other matters upon which Preferred Stock votes as a group, shall have
the right to vote for the election of two Preferred Stock Directors of the
- 19 -
<PAGE> 20
Corporation, such Preferred Stock Directors to be in addition to the number of
Directors constituting the Board of Directors of the Corporation immediately
prior to the accrual of such right. Such right of the holders of shares of
Series B Convertible Preferred Stock to vote for the election of two Preferred
Stock Directors shall, when vested, continue until all dividends in arrears on
the shares of Series B Convertible Preferred Stock and such other series of
Preferred Stock shall have been paid in full and the right of any other series
of Preferred Stock to exercise voting rights, separate from the Common Stock,
to elect Preferred Stock Directors shall terminate or have terminated and, when
so paid, and any such termination occurs or has occurred, such right of the
holders of shares of Series B Convertible Preferred Stock to vote for the
election of two Preferred Stock Directors shall cease, subject always to the
same provisions for the vesting of such right of the holders of the shares of
Series B Convertible Preferred Stock to vote for the election of two Preferred
Stock Directors in the case of future dividend defaults.
The term of office of any Preferred Stock Director elected pursuant to the
preceding paragraph shall terminate on the earliest of (i) the next annual
meeting of stockholders at which a successor shall have been elected and
qualified or (ii) the termination of the right of the holders of shares of
Series B Convertible Preferred Stock and such other series of Preferred Stock to
vote for Preferred Stock Directors pursuant to the preceding paragraph.
Vacancies on the Board of Directors resulting from the death, resignation or
other cause of any such Preferred Stock Director shall be filled by no less than
a majority of the remaining Directors and the Director so elected shall hold
office until a successor is elected and qualified.
(c) For as long as any shares of Series B Convertible Preferred Stock
remain outstanding, the affirmative vote or consent of the holders of at least
66 2/3% of the shares thereof actually voting (voting separately as a class) in
person or by proxy at any annual meeting or special meeting of the shareholders
called for such purpose, or by written consent, shall be necessary to (i) amend,
alter or repeal any of the provisions of the Restated Certificate of
Incorporation of the Corporation, as amended, which would adversely affect the
powers, preferences or rights of the holders of the shares of Series B
Convertible Preferred Stock then outstanding or reduce the minimum time required
for any notice to which holders of shares of Series B Convertible Preferred
Stock then outstanding may be entitled; provided, however, that any such
amendment, alteration or repeal that would authorize, create or increase the
authorized amount of any additional shares of Junior Stock or of Parity Stock
(whether or not already authorized) shall not be deemed to affect adversely such
powers, preferences or rights and shall not be subject to approval by the
holders of shares of Series B Convertible Preferred Stock; and provided further
that clause (i)
- 20 -
<PAGE> 21
shall not be applicable to the amendment, alteration or repeal of any
provisions of the Restated Certificate of Incorporation of the Corporation, as
amended, prior to the issuance of any shares of Series B Convertible Preferred
Stock; (ii) authorize or create, or increase the authorized amount of, any
Senior Stock, or any security convertible into Senior Stock; or (iii) merge or
consolidate with or into any other corporation, unless each holder of the
shares of Series B Convertible Preferred Stock immediately preceding such
merger or consolidation shall have the right either to (A) receive or continue
to hold in the resulting corporation the same number of shares, with
substantially the same rights and preferences, as corresponds to the shares of
Series B Convertible Preferred Stock so held or (B) convert into shares of
Class A Common Stock at the Common Equivalent Rate in effect on the date
immediately preceding the announcement of any such merger or consolidation.
There is no limitation on the issuance by the Corporation of Junior Stock
or Parity Stock.
Notwithstanding the provisions set forth in the first paragraph of this
subsection (c), however, no such approval described therein of the holders of
the shares of Series B Convertible Preferred Stock shall be required if, at or
prior to the time when such amendment, alteration, or repeal is to take effect
or when such consolidation or merger is to take effect, as the case may be,
provision is made for the redemption of all shares of Series B Convertible
Preferred Stock at the time outstanding.
SECTION 7. Definitions. As used in this Certificate of Designations:
(a) The term "Affiliate" means with respect to any specified Person, (i)
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person or (ii) any other
Person that owns, directly or indirectly, 10% or more of such Person's equity
ownership or Voting Stock or any officer or director of any such Person or other
Person or with respect to any natural Person, any Person having a relationship
with such Person by blood, marriage or adoption not more remote than first
cousin. For the purposes of this definition, (x) "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings relative to the foregoing, (y) "Person" means any
individual, corporation, limited liability company, limited or general
partnership, unincorporated organization or government or any agency or
political subdivision thereof,
- 21 -
<PAGE> 22
and (z) "Voting Stock" means stock of the class or classes pursuant to which
the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors,
managers or trustees of a Person (irrespective of whether or not at the time
stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
(b) The term "business day" means any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close or are closed because of a banking
moratorium or otherwise.
(c) The term "Call Price" of each half share of Convertible Preferred Stock
represented by a PRIDES means the sum of (i) $9.988 on and after August 1, 1999,
to and including October 31, 1999, $9.928 on and after November 1, 1999, to and
including January 31, 2000, $9.869 on and after February 1, 2000, to and
including April 30, 2000, $9.810 on and after May 1, 2000, to and including July
31, 2000, and $9.750 (being the per share price to the public of the PRIDES
appearing on the cover page of this Prospectus) on the Mandatory Conversion
Date, and (ii) all accrued and unpaid dividends thereon to but not including the
date fixed for redemption (other than previously declared dividends payable to a
holder of record as of a prior date).
(d) The term "Class A Common Stock" means the Class A Common Stock, par
value $.01 per share, of the Corporation.
(e) The term "Class B Common Stock" means the Class B Common Stock, par
value $.01 per share, of the Corporation.
(f) The term "Closing Price" on any day means the last reported sales price
on the New York Stock Exchange or, if not listed thereon, the Nasdaq National
Market or the average of the bid and asked prices on the over the counter
market, as appropriate.
(g) The term "Common Stock" means the Class A Common Stock and the Class B
Common Stock, neither of which has any preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and neither of which is subject to
redemption by the Corporation. However, shares of Class A Common Stock issuable
upon conversion of shares of Series B Convertible Preferred Stock shall include
only shares of the class designated as Class A Common Stock as of the date of
initial issuance of shares of this Series, or shares of the Corporation of any
class or classes resulting from any reclassification or reclassifications
- 22 -
<PAGE> 23
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation and which are not subject to redemption by
the Corporation; provided, however, that, if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from such reclassification bears to the total number of
shares of all classes resulting from all such reclassifications.
(h) The term "Current Market Price" per share of Class A Common Stock at
any date means the lesser of (x) the average of the daily Closing Prices of the
Class A Common Stock for the fifteen consecutive Trading Dates ending on and
including the date in question and (y) the Closing Price of the Class A Common
Stock for such date; provided, however, if any event that results in an
adjustment of the Common Equivalent Rate occurs during such fifteen-day period,
the Current Market Price as determined pursuant to the foregoing shall be
appropriately adjusted to reflect the occurrence of such event.
(i) The term "Trading Date" means a date on which the New York Stock
Exchange (or any successor thereto) is open for the transaction of business.
SECTION 8. Construction. It is intended that the holders of half share
increments of Series B Convertible Preferred Stock be entitled to all of the
rights, powers and preferences conferred upon holders of the Series B
Convertible Preferred Stock pursuant to this Certificate of Designations, and
nothing herein shall be construed to require that any holder own a full share of
Series B Convertible Preferred Stock, or increments of full shares, in order to
exercise or to be entitled to such rights, powers and preferences.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
- 23 -
<PAGE> 24
IN WITNESS WHEREOF, Hollinger International Inc. has caused this Certificate
of Designations of Series B Convertible Preferred Stock to be signed and
attested this 5th day of August, 1996.
ATTEST: HOLLINGER INTERNATIONAL INC.
By: /s/ LINDA LOYE By: /s/ KENNETH L. SEROTA
------------------- --------------------------
Linda Loye Kenneth L. Serota
Assistant Secretary Vice President - Law and
Finance and Secretary
<PAGE> 1
Exhibit 10.01
================================================================================
HOLLINGER INTERNATIONAL INC.
AND
FIRST CHICAGO TRUST COMPANY
As Depositary and on Behalf of
HOLDERS OF
PREFERRED REDEEMABLE INCREASED
DIVIDEND EQUITY SECURITIES
____________________
DEPOSIT AGREEMENT
____________________
Dated as of August 7, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
<TABLE>
<CAPTION>
DEFINITIONS
Page
----
<S> <C> <C>
SECTION 1.01 "Authorizing Resolutions" . . . . . . . . . . . . . . . . . 1
SECTION 1.02 "Certificate of Incorporation" . . . . . . . . . . . . . . . 2
SECTION 1.03 "Class A Common Stock" . . . . . . . . . . . . . . . . . . . 2
SECTION 1.04 "Company" . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.05 "Convertible Preferred Stock" . . . . . . . . . . . . . . . 2
SECTION 1.06 "corporate trust office" . . . . . . . . . . . . . . . . . . 2
SECTION 1.07 "Deposit Agreement" . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.08 "Depositary" . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.09 "Depositary's Agent" . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.10 "Mandatory Conversion Date" . . . . . . . . . . . . . . . . 3
SECTION 1.11 "PRIDES" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.12 "record holder" . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.13 "Registrar" . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.14 "Securities Act of 1933" . . . . . . . . . . . . . . . . . . 3
SECTION 1.15. Terms Generally . . . . . . . . . . . . . . . . . . . . . . . 3
</TABLE>
ARTICLE II
FORM OF PRIDES CERTIFICATES, DEPOSIT OF CONVERTIBLE
PREFERRED STOCK, EXECUTION AND DELIVERY,
TRANSFER, SURRENDER, REDEMPTION
AND CONVERSION OF PRIDES
<TABLE>
<S> <C> <C>
SECTION 2.01 Form and Transferability of PRIDES Certificates . . . . . . .
3
SECTION 2.02 Deposit of Convertible Preferred Stock; Execution and
Delivery of PRIDES Certificates in Respect Thereof . . . 5
SECTION 2.03 Conversion . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.04 Mandatory Conversion . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.05 Redemption by Company . . . . . . . . . . . . . . . . . . . 9
SECTION 2.06 Fractional Shares . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.07 Transfer of PRIDES Certificates . . . . . . . . . . . . . . . 12
SECTION 2.08 Combinations and Split-Ups of
PRIDES . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.09 Surrender of PRIDES Certificates
and Withdrawal of Convertible Preferred Stock . . . . . . . 12
</TABLE>
<PAGE> 3
Contents, p. 3
<TABLE>
<CAPTION>
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----
<S> <C> <C>
SECTION 2.10 Limitations on Execution and Delivery, Transfer, Surrender,
Redemption and Conversion of PRIDES or PRIDES Certificates. 14
SECTION 2.11 Lost PRIDES Certificates, etc. . . . . . . . . . . . . . . . 15
SECTION 2.12 Cancelation and Destruction of
Surrendered PRIDES Certificates . . . . . . . . . . . . . . 15
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF PRIDES
SECTION 3.01 Filing Proofs, Certificates and Other Information . . . . . . 15
SECTION 3.02 Payment of Taxes or Other Governmental Charges . . . . . . . 16
SECTION 3.03 Warranties as to Convertible Preferred Stock . . . . . . . . 16
ARTICLE IV
THE DEPOSITED SECURITIES; NOTICES
SECTION 4.01 Cash Distributions . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.02 Distributions Other Than Cash . . . . . . . . . . . . . . . . 17
SECTION 4.03 Notice of Dividends, Fixing of Record Date for PRIDES
Holders, Coordination of Notices . . . . . . . . . . . . 17
SECTION 4.04 Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.05 Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc. . . . . . . . 19
SECTION 4.06 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.07 Lists of PRIDES Holders . . . . . . . . . . . . . . . . . . . 20
ARTICLE V
THE DEPOSITARY, THE REGISTRAR AND THE COMPANY
SECTION 5.01 Maintenance of Offices, Agencies, Transfer Books by the
Depositary and the Registrar . . . . . . . . . . . . . . 20
SECTION 5.02 Prevention or Delay in Performance by the Depositary, the
Registrar or the Company . . . . . . . . . . . . . . . . 20
</TABLE>
<PAGE> 4
Contents, p. 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5.03 Obligations of the Depositary, the Depositary's Agents, the
Registrar and the Company . . . . . . . . . . . . . . . .
21
SECTION 5.04 Resignation and Removal of the Depositary; Appointment of
Successor Depositary . . . . . . . . . . . . . . . . . .
22
SECTION 5.05 Corporate Notices and Reports . . . . . . . . . . . . . . . 23
SECTION 5.06 Deposit of Convertible Preferred Stock by the Company . . . .
23
SECTION 5.07 Indemnification by the Company . . . . . . . . . . . . . . . 24
SECTION 5.08 Charges and Expenses . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.02 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.03 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.02 Exclusive Benefit of Parties . . . . . . . . . . . . . . . . 27
SECTION 7.03 Invalidity of Provisions . . . . . . . . . . . . . . . . . . 27
SECTION 7.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.05 Depositary Agents . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.06 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.07 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
Exhibit A Form of PRIDES Certificate
Exhibit B Authorizing Resolutions
<PAGE> 5
DEPOSIT AGREEMENT dated as of August 1, 1996,
between HOLLINGER INTERNATIONAL INC. (the "Company"),
a corporation duly incorporated and existing under
the laws of the State of Delaware, and FIRST CHICAGO
TRUST COMPANY, a Delaware corporation, as Depositary
and on behalf of all holders from time to time of
PRIDES issued hereunder.
W I T N E S S E T H :
WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit
Agreement, for the deposit of shares of the Company's Convertible Preferred
Stock (as hereinafter defined), with First Chicago Trust Company, as Depositary,
for the purposes set forth in this Deposit Agreement and for the issuance
hereunder of PRIDES (as hereinafter defined) in respect of the Convertible
Preferred Stock so deposited; and
WHEREAS, the PRIDES certificates are to be substantially in the form set
forth in Exhibit A hereto, with appropriate insertions, modifications and
omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises and agreements contained
herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, it is agreed by and among the parties hereto
as follows:
ARTICLE I
Definitions
-----------
The following definitions shall for all purposes, unless otherwise clearly
indicated, apply to the respective terms used in this Deposit Agreement:
SECTION 1.01. The term "Authorizing Resolutions" shall mean the
resolutions adopted by the Board of Directors of the Company or a duly
authorized committee thereof establishing and setting forth the rights,
preferences and privileges of the Convertible Preferred Stock and filed in the
form of a certificate of the voting powers, designations, preferences and
relative participating,
<PAGE> 6
6
optional or other special rights, and qualifications, limitations and
restrictions thereof, of the Convertible Preferred Stock with the Secretary of
State of the State of Delaware pursuant to Section 151 of the General
Corporation Law of the State of Delaware, attached hereto as Exhibit .
SECTION 1.02. The term "Certificate of Incorporation" shall mean the
Restated Certificate of Incorporation of the Company, as from time to time
amended and restated, including the Authorizing Resolutions with respect to the
Convertible Preferred Stock.
SECTION 1.03. The term "Class A Common Stock" shall mean the Class A
Common Stock, par value $.01 per share, of the Company. The term "Class A
Common Stock" shall also include each other security or item of property into
which a half-share of Convertible Preferred Stock may become convertible.
SECTION 1.04. The term "Company" shall mean Hollinger International Inc.,
a Delaware corporation, and its successors.
SECTION 1.05. The term "Convertible Preferred Stock" shall mean the Series
B Convertible Preferred Stock, par value, $.01 per share, of the Company.
SECTION 1.06. The term "corporate trust office" or "corporate office",
when used with respect to the Depositary, shall mean the office of the
Depositary, which at the date of this Agreement is , and
the term "corporate office", when used with respect to the Registrar, shall mean
the office of the Registrar, which at the date of this Agreement is .
SECTION 1.07. The term "Deposit Agreement" shall mean this Agreement, as
the same may be amended or supplemented from time to time in accordance with the
terms hereof.
SECTION 1.08. The term "Depositary" shall mean First Chicago Trust
Company, and any successor as depositary hereunder.
SECTION 1.09. The term "Depositary's Agent" shall mean an agent appointed
by the Depositary as provided in Section 7.05 hereof.
<PAGE> 7
7
SECTION 1.10. The term "Mandatory Conversion Date" shall mean August 1,
2000.
SECTION 1.11. The term "PRIDES" shall mean the Preferred Redeemable
Increased Dividend Equity Securities, % PRIDES, represented by the
certificates in the form of Exhibit A hereto, as the same may be amended from
time to time in accordance with the terms hereof.
SECTION 1.12. The term "record holder" as applied to a PRIDES shall mean
the person in whose name a PRIDES is registered on the books of the Registrar
maintained for such purpose.
SECTION 1.13. The term "Registrar" shall mean any bank or trust company
which shall be appointed to register PRIDES as herein provided.
SECTION 1.14. The term "Securities Act of 1933" shall mean the Securities
Act of 1933 (15 U.S. Code Secs. 77a-77aa), as from time to time amended.
SECTION 1.15. Terms Generally. The definitions in this Article I shall
apply equally to both the singular and plural forms of the terms defined.
ARTICLE II
Forms of PRIDES Certificates,
Deposit of Convertible Preferred Stock,
Execution and Delivery, Transfer, Surrender, Redemption
and Conversion of PRIDES
SECTION 2.01. Form and Transferability of PRIDES Certificates. PRIDES
certificates shall be engraved or printed or lithographed with steel-engraved
borders and shall be substantially in the form set forth in Exhibit A hereto, in
each case with appropriate insertions, modifications and omissions, as
hereinafter provided. No PRIDES certificate shall be entitled to any benefits
under this Deposit Agreement or be valid or obligatory for any purpose, unless
it shall have been executed by the manual signature of a duly authorized officer
of the Depositary or, if a Registrar for PRIDES certificates (other than the
Depositary) shall have been appointed, by the Depositary by the facsimile
signature of a duly authorized officer of the Depositary and, if executed by a
facsimile signature of a
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duly authorized officer of the Depositary, countersigned by the Registrar by
the manual signature of a duly authorized officer of the Registrar. If a
facsimile signature is used, PRIDES certificates executed as provided in this
Section 2.01 may be issued notwithstanding that any authorized officer of the
Depositary signing such PRIDES certificates shall have ceased to hold office at
the time of issuance of such PRIDES certificates. The Registrar shall record
on its books each PRIDES certificates so signed and delivered as hereinafter
provided.
Except as the Depositary may otherwise determine, PRIDES certificates shall
be in denominations of any number of whole PRIDES.
All PRIDES certificates shall be dated the date of their execution. Each
whole PRIDES shall represent one half-share of Convertible Preferred Stock
deposited pursuant hereto.
The PRIDES certificates may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes as may be required by the
Depositary not inconsistent with the provisions of this Deposit Agreement or as
may be required to comply with any applicable law or any regulation thereunder
or with the rules and regulations of any securities exchange upon which the
PRIDES or the Convertible Preferred Stock may be listed or to conform with any
usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular PRIDES certificates are subject by reason
of any limitations or restrictions on the issuance or transfer of the
Convertible Preferred Stock represented thereby or the underlying Class A Common
Stock.
Title to a PRIDES certificate (and the interest in the Convertible
Preferred Stock evidenced thereby), when properly endorsed or accompanied by a
properly executed instrument of transfer, shall be transferable by delivery with
the same effect as in the case of a negotiable instrument; provided, however,
that until a PRIDES certificate shall be transferred on the books of the
Depositary as provided in Section 2.06 hereof, the Depositary, each Depositary's
Agent and the Company may, notwithstanding any notice to the contrary, treat the
record holder thereof at such time as the absolute owner thereof for the purpose
of determining the person entitled to distribution of dividends or other
distributions or payments with respect
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to the Convertible Preferred Stock, to exercise voting or conversion rights
with respect to the Convertible Preferred Stock, or to receive any notice
provided for in this Deposit Agreement and for all other purposes.
Until the definitive PRIDES certificates are ready for delivery, temporary
PRIDES certificates shall be utilized. Temporary PRIDES certificates shall be
in substantially the form of definitive PRIDES certificates but may have
variations that the Company considers appropriate for temporary PRIDES
certificates. Without unreasonable delay, the Company shall prepare and the
Depositary shall execute definitive PRIDES certificates in exchange for
temporary PRIDES certificates. Holders of temporary PRIDES certificates shall
have the same rights as holders of definitive PRIDES certificates.
SECTION 2.02. Deposit of Convertible Preferred Stock; Execution and
Delivery of PRIDES Certificates in Respect Thereof. Subject to the terms and
conditions of this Deposit Agreement, any holder of Convertible Preferred Stock
may deposit such Convertible Preferred Stock under this Deposit Agreement by
delivery to the Depositary of a certificate or certificates for such Convertible
Preferred Stock to be deposited, properly endorsed or accompanied, if required
by law, by a duly executed instrument of transfer or endorsement, in form
satisfactory to the Depositary, together with all such certifications as may be
required by the Depositary in accordance with the provisions of this Deposit
Agreement, and together with a written order directing the Depositary to execute
and deliver to, or upon the written order of, the person or persons stated in
such order a PRIDES certificate for the number of PRIDES attributable to such
Convertible Preferred Stock.
Simultaneously with the execution and delivery hereof, the Company, on
behalf of each initial purchaser of an interest in the Convertible Preferred
Stock that is to be represented by the PRIDES, is depositing under this Deposit
Agreement certificates representing all outstanding shares of Convertible
Preferred Stock, together with a written order directing the Depositary to
execute and deliver PRIDES representing such Convertible Preferred Stock
registered in such names as have been designated in writing by Merrill Lynch &
Co., as the representative of the underwriters for the PRIDES that are to
represent such Convertible Preferred Stock.
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Upon each delivery to the Depositary of a certificate or certificates for
Convertible Preferred Stock to be deposited hereunder, together with the other
documents above specified, the Depositary shall, as soon as transfer and
recordation can be accomplished, present such certificate or certificates to the
transfer agent for transfer and recordation of such Convertible Preferred Stock
being deposited in the name of the Depositary or its nominee. Deposited
Convertible Preferred Stock shall be held by the Depositary in trust for the
benefit of the holders from time to time of the PRIDES at the principal office
of the Depositary or at such other place or places as the Depositary shall
determine, such deposited Convertible Preferred Stock (and any dividends or
other distributions thereon) to be at all times segregated, separate and apart
from the property of the Depositary.
Upon receipt by the Depositary of a certificate or certificates for
Convertible Preferred Stock deposited in accordance with the provisions of this
Section 2.02, together with the other documents required as above specified and
upon recordation of such Convertible Preferred Stock on the books of the Company
in the name of the Depositary or its nominee, the Depositary, subject to the
terms and conditions of this Deposit Agreement, shall execute and deliver to or
upon the order of the person or persons named in the written order referred to
above in this Section 2.02, one or more PRIDES for the number of PRIDES
attributable to such Convertible Preferred Stock so deposited and registered in
such name or names as requested by such person or persons. The Depositary shall
execute and deliver any such PRIDES at its corporate office and at such other
offices as it may hereafter designate. Delivery at other offices shall be at the
risk and expense of the person requesting such delivery. However, in each case
subsequent to the initial deposit hereunder, such delivery will be made only
upon payment to the Depositary of all taxes and governmental charges and fees
payable in connection with such deposit and the transfer of the deposited
Convertible Preferred Stock. The Depositary shall not issue any PRIDES
certificates other than PRIDES certificates for PRIDES representing Convertible
Preferred Stock actually deposited with the Depositary.
SECTION 2.03. Conversion at the Option of Holders. Subject to the terms
and conditions of this Deposit Agreement and the Authorizing Resolutions, PRIDES
may be surrendered at any time by the holders thereof with
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written instructions to the Depositary to convert any specified number of
shares of Convertible Preferred Stock (or half share fractions thereof)
represented by such PRIDES into shares of Class A Common Stock (and cash in
lieu of fractional shares of Class A Common Stock) at the conversion rate in
respect thereof determined in accordance with the Authorizing Resolutions. A
holder of PRIDES may surrender such PRIDES at such office as the Depositary may
from time to time designate for such purpose, together with a notice of
conversion thereof duly completed and executed, thereby instructing the
Depositary to cause the conversion of the number of shares of Convertible
Preferred Stock (or half-share fractions thereof) specified in such notice of
conversion into shares of Class A Common Stock.
Upon receipt by the Depositary of a PRIDES certificate, together with
notice of conversion instructing the Depositary to convert a specified number of
shares of Convertible Preferred Stock (or half-shares thereof) duly completed
and executed, the Depositary shall (a) give written notice to the transfer agent
for the Convertible Preferred Stock of the number of shares of Convertible
Preferred Stock (or half-shares thereof) surrendered for conversion and the
number of shares of Class A Common Stock to be delivered upon conversion of such
shares of Convertible Preferred Stock (or half shares thereof) and the amount of
immediately available funds, if any, to be delivered to the holder of such
PRIDES in payment of any fractional shares of Class A Common Stock otherwise
issuable, (b) cancel such PRIDES certificate or, if a Registrar for PRIDES
certificates (other than the Depositary) shall have been appointed, cause such
Registrar to cancel such PRIDES certificate and (c) deliver to the transfer
agent for the Convertible Preferred Stock or any other authorized agent of the
Company certificates for the Convertible Preferred Stock represented by such
PRIDES, which certificates shall thereupon be canceled by such transfer agent or
other authorized agent. As promptly as practicable after such transfer agent or
other authorized agent of the Company has received such certificates from the
Depositary, (a) the Company shall cause to be furnished to the Depositary a
certificate or certificates evidencing such number of shares of Class A Common
Stock, and such amount of immediately available funds, if any, as specified in a
written notice to the Company and (b) subject to the next succeeding sentence,
the Depositary shall deliver at its office designated for such purpose or such
other place as may be requested by any holder surrendering PRIDES as
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provided in this Section 2.03 (i) a certificate or certificates evidencing the
number of shares of Class A Common Stock into which the Convertible Preferred
Stock represented by the PRIDES has been converted, (ii) a PRIDES certificate
evidencing the number of PRIDES, if any, evidenced by such PRIDES certificate
in excess of the number of PRIDES representing the Convertible Preferred Stock
which has been so converted, (iii) cash in lieu of receiving fractional shares
of Class A Common Stock in accordance with Section 2.06 and (iv)the right to
receive cash in an amount in an amount equal to all accrued and unpaid
dividends on such shares of Convertible Preferred Stock to the extent provided
in the Certificate of Designations for the Convertible Preferred Stock.
Upon any optional conversion of the Convertible Preferred Stock represented
by the PRIDES, no allowance, adjustment or payment shall be made with respect to
dividends upon such Convertible Preferred Stock or shares of Class A Common
Stock issued upon the conversion thereof, except as set forth in the Authorizing
Resolutions. If PRIDES representing shares of Convertible Preferred Stock
(other than PRIDES called for redemption within such period in connection with a
redemption of Convertible Preferred Stock) are surrendered for conversion
between the close of business on the record date with respect to any dividend
payment on such Convertible Preferred Stock and the opening of business on the
next succeeding dividend payment date, any holder of PRIDES surrendered with
instructions to the Depositary for conversion of the Convertible Preferred Stock
represented thereby shall remit to the Depositary with such PRIDES an amount of
funds equal to the dividend payable on the underlying Convertible Preferred
Stock on such dividend payment date computed and paid as set forth in the
Authorizing Resolutions.
Delivery of Class A Common Stock and other property may be made by the
delivery of certificates and other proper documents of title, which, if required
by law, shall be properly endorsed or accompanied by proper instruments of
transfer. If such delivery is to be made otherwise than at the Depositary's
corporate trust office in New York City, such delivery shall be made, as
hereinafter provided, without unreasonable delay, at the risk of any holder
surrendering PRIDES, and for the account of such holder, to such place
designated in writing by such holder.
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SECTION 2.04. Mandatory Conversion. Unless previously redeemed by the
Company or converted at the option of the holder into Class A Common Stock, on
the Mandatory Conversion Date, each half share of Convertible Preferred Stock
represented by a PRIDES will mandatorily convert into (i) Class A Common Stock
at the rate prescribed in the Authorizing Resolutions, (ii) cash in lieu of
fractional shares in accordance with Section 2.06 and (iii) the right, upon
surrender thereof, to receive cash in an amount equal to all accrued and unpaid
dividends thereon (other than previously declared dividends payable to a holder
of record as of a prior date) to the Mandatory Conversion Date, as prescribed in
the Authorizing Resolutions. On and after the Mandatory Conversion Date, each
PRIDES certificate shall represent the right to receive the consideration
payable upon such mandatory conversion of the Convertible Preferred Stock
represented thereby, without interest, but including any dividends on the Class
A Common Stock issued in such conversion and for which the record date occurred
after the Mandatory Conversion Date (provided that the Company shall not be
required to pay any dividend prior to its scheduled dividend payment date). On
the Mandatory Conversion Date, the Depositary shall surrender all shares of
Convertible Preferred Stock then held by it and shall promptly deliver to each
holder of PRIDES, upon the surrender by such holder of a PRIDES certificate, the
Class A Common Stock and any other consideration received by the Depositary in
respect of the Convertible Preferred Stock formerly represented by such PRIDES
certificate.
SECTION 2.05. Redemption by Company. The Convertible Preferred Stock
represented by the PRIDES shall not be redeemable by the Company prior to
August 1, 1999. At any time and from time to time on or after that date until
immediately prior to the Mandatory Conversion Date, the Company will have the
right to redeem, in whole or in part, the Convertible Preferred Stock
represented by the PRIDES, at the price per half share of Convertible Preferred
Stock specified pursuant to the Authorizing Resolutions. Whenever the Company
shall elect under the Authorizing Resolutions to redeem shares of Convertible
Preferred Stock, the Depositary shall effect a simultaneous redemption, from the
proceeds of such redemption by the Company, of a number of PRIDES representing a
number of half shares of Convertible Preferred Stock equal to the number of half
shares of Convertible Preferred Stock being redeemed. In the case of any such
redemption, the Company shall give the Depositary not less than 15 nor more than
60 days' notice of
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the date of such proposed redemption (the "redemption date"), the number of
half shares of the Convertible Preferred Stock held by the Depositary to be so
redeemed, the number of PRIDES to be simultaneously redeemed and the applicable
redemption price, including the amount of any accrued and unpaid dividends to
the date of such redemption computed as provided in the Authorizing
Resolutions. The Depositary shall mail notice of such redemption (which shall
also constitute a notice of redemption of PRIDES), by first-class mail, postage
prepaid, not less than 15 nor more than 60 days prior to the redemption date,
to the holders of record of PRIDES representing a number of half shares of
Convertible Preferred Stock equal to the number of half shares of Convertible
Preferred Stock held by the Depositary that are to be redeemed by the Company,
at the addresses of such holders as the same appear on the records of the
Depositary; but neither failure to mail any such notice, nor any defect in any
notice, to one or more holders shall affect the validity of the proceedings for
redemption except as to any holder to whom the Depositary has failed to give
said notice or whose notice was defective. Each such notice shall state the
redemption date, the number of shares of Convertible Preferred Stock and number
of PRIDES to be redeemed, and, if less than all the shares of Convertible
Preferred Stock represented by PRIDES are to be redeemed, the number of PRIDES
to be redeemed from such holder; the applicable redemption price; that
dividends in respect of the Convertible Preferred Stock represented by such
PRIDES to be redeemed will cease to accrue as of the date specified in the
notice of redemption from the Company; that the conversion rights with respect
to such shares of Convertible Preferred Stock will cease as of the redemption
date (except as described below), and instructions for the surrender of the
certificates representing the PRIDES to be redeemed. Any notice that is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given whether or not the holder receives the notice. The Company shall make a
public announcement (by press release to the Dow Jones News Service) of any
call for redemption prior to or at the time of, the mailing of such notice of
redemption. In case less than all the outstanding shares of Convertible
Preferred Stock represented by PRIDES are to be called for redemption, the
PRIDES to be redeemed (which shall represent a number of half shares of
Convertible Preferred Stock equal to the total number of half shares of
Convertible Preferred Stock being held by the Depositary that are to be
redeemed) shall be selected by the Depositary in the same manner as that
determined by the Company with respect to the
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redemption by the Company of the shares of Convertible Preferred Stock.
Notice having been mailed by the Depositary as aforesaid, on and after the
redemption date, the PRIDES to be redeemed shall no longer be deemed outstanding
and all rights of the holders of such PRIDES including any accrued and unpaid
dividends shall cease, except the right to receive a distribution of the
redemption price, without interest as provided herein, (unless the Company
defaults in payment of the redemption price). As of the close of business on
the redemption date, if the Company shall have redeemed the shares of
Convertible Preferred Stock called for redemption, upon surrender in accordance
with such notice of the certificates representing the PRIDES being redeemed from
the proceeds of such redemption (properly endorsed or assigned for transfer, if
required and stated in such notice), the holders of such PRIDES shall be
entitled to receive, for each PRIDES surrendered, an amount equal to the
redemption price per half-share of Convertible Preferred Stock redeemed plus all
money and other property, if any, attributable thereto pursuant to the
Authorizing Resolutions, including cash in lieu of any fractional shares of
Class A Common Stock in accordance with Section 2.06. On or promptly following
the redemption date, the Depositary shall surrender all shares of Convertible
Preferred Stock held by it that have been redeemed.
If less than all of the PRIDES represented by a PRIDES certificate are
called for redemption, the Depositary will deliver to the holder of the PRIDES
certificate upon the later of (i) the surrender of the PRIDES certificate to the
Depositary and (ii) the redemption date, a new PRIDES certificate representing
the PRIDES not called for redemption together with the redemption payment.
If a notice of redemption of any shares of Convertible Preferred Stock
represented by PRIDES has been given pursuant to this Section 2.05, the right to
convert the shares of Convertible Preferred Stock represented by such PRIDES
will terminate immediately prior to the close of business on the relevant
redemption date.
SECTION 2.06. Fractional Shares. No fractional shares of Class A Common
Stock shall be issuable upon redemption or conversion of the Convertible
Preferred Stock represented by the PRIDES. In lieu of any fractional share
otherwise issuable in respect of the aggregate number of
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shares of Convertible Preferred Stock of any holder which are redeemed or
converted on any redemption date or upon Mandatory Conversion or any optional
conversion, such holder shall be entitled to receive an amount in cash equal to
the same fraction of the (i) Current Market Price per share of the Class A
Common Stock, determined as of the second trading date immediately preceding
the Notice Date, in the case of redemption, or (ii) Closing Price of the Class
A Common Stock determined (A) as of the fifth trading day immediately preceding
the Mandatory Conversion Date, in the case of mandatory conversion, or (B) as
of the second trading day immediately preceding the effective date of
conversion, in the case of an optional conversion by a holder.
SECTION 2.07. Transfer of PRIDES Certificates. Subject to the terms and
conditions of this Deposit Agreement, the Depositary shall transfer on its books
from time to time PRIDES certificates upon any surrender thereof by the holder
in person or by such holder's duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer, and duly stamped as
may be required by law. Thereupon the Depositary shall execute a new PRIDES
certificate and deliver the same to or upon the order of the person entitled
thereto evidencing the same aggregate number of PRIDES as those evidenced by the
PRIDES certificate or PRIDES certificates surrendered.
SECTION 2.08. Combinations and Split-Ups of PRIDES. Upon surrender of one
or more PRIDES certificates at the Depositary's corporate trust office in New
York City, or at such other offices as it may designate, for the purpose of
effecting a split-up or combination of any such PRIDES certificates by the
holder in person or by such holder's duly authorized attorney, properly endorsed
or accompanied by a properly executed instrument of transfer, together with
written instructions specifying the number of PRIDES certificates to be received
upon such split-up or combination, the Depositary shall execute and deliver one
or more new PRIDES certificates in the denominations requested by such holder
and authorized by the Company, representing the same aggregate number of
half-shares of Convertible Preferred Stock as the PRIDES certificates
surrendered.
SECTION 2.09. Surrender of PRIDES and Withdrawal of Convertible Preferred
Stock. Any holder of PRIDES may withdraw Convertible Preferred Stock that has
not previously been converted or called for redemption in authorized
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denominations and all money and other property, if any, represented by such
PRIDES by surrendering PRIDES certificates at such office as the Depositary may
designate for such purpose, and the holder of such PRIDES shall thereafter be
entitled to delivery, to him or upon his order, of such Convertible Preferred
Stock and such money and other property, if any, at the time underlying such
PRIDES. The Depositary shall also deliver to such holder or his order one or
more PRIDES certificates representing the Convertible Preferred Stock and a
proportionate amount of the money and other property, if any, which such holder
does not wish to withdraw. Delivery of such Convertible Preferred Stock and
such money and other property, if any, may be made by the delivery of
certificates and other proper documents of title, which if required by law,
shall be properly endorsed or accompanied by proper instruments of transfer.
Such delivery shall be made, as hereinafter provided, without unreasonable
delay.
A PRIDES certificate surrendered for such purpose may be required by the
Depositary to be properly endorsed in blank or accompanied by one or more
properly executed instruments of transfer in blank, and the holder thereof shall
execute and deliver to the Depositary a written order directing the Depositary
to cause the Convertible Preferred Stock and money and other property, if any,
being withdrawn to be delivered to or upon the written order of the person or
persons designated in such order. Thereupon the Depositary shall deliver at its
corporate trust office in New York City, subject to the terms and conditions of
this Deposit Agreement, to or upon the written order of the person or persons
designated in the order delivered to the Depositary as above provided, whole
shares of Convertible Preferred Stock on the basis of one share of Convertible
Preferred Stock for every two PRIDES surrendered and (unless the Company
determines to distribute Convertible Preferred Stock in half share
denominations) PRIDES for any fractional interests in denominations of one half
of a share of Convertible Preferred Stock and integral multiples thereof, and
cash for fractional interests other than in the foregoing denominations and
integral multiples thereof, except that the Depositary may make delivery to such
person or persons at such other place as may be designated in the written order,
of any dividends or distributions with respect to the Convertible Preferred
Stock represented by such PRIDES certificate.
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At the request and risk of any holder so surrendering a PRIDES certificate,
and for the account of such holder, the Depositary shall forward the certificate
or certificates and other proper documents of title for the number of shares of
Convertible Preferred Stock and any money or other property, if any, represented
by such PRIDES certificate to be withdrawn for delivery at such place as may be
designated by the holder.
SECTION 2.10. Limitations on Execution and Delivery, Transfer, Surrender,
Redemption, and Conversion of PRIDES or PRIDES Certificates. As a condition
precedent to the execution and delivery, transfer, split-up, combination, or
surrender of any PRIDES certificates, or the exercise of any right of
conversion, redemption or withdrawal, the Depositary may require payment of a
sum sufficient for the payment (or, in the event that the Depositary or the
Company shall have made such payment, the reimbursement to it) of any tax or
other governmental charge with respect thereto (including any such tax or charge
with respect to Convertible Preferred Stock being deposited or withdrawn,
converted or redeemed) except if such tax or charge is required to be paid by
the Company pursuant to the Authorizing Resolutions, may require proof
satisfactory to it as to the identity and genuineness of any signature and may
also require compliance with such regulations, if any, as the Depositary may
establish consistent with the provisions of this Deposit Agreement.
The deposit of Convertible Preferred Stock may be refused, or the delivery
of PRIDES against Convertible Preferred Stock may be suspended or the transfer
of PRIDES may be refused, or the exercise of any conversion right relating to
the PRIDES as specified in Section 2.03 hereof may be suspended if the
conversion rights in respect of Convertible Preferred Stock are also lawfully
suspended, and the transfer, surrender or exchange of outstanding PRIDES may be
suspended (a) during any period when the register of stockholders of the Company
is closed, or (b) if any such action is deemed necessary or advisable by the
Depositary, any of the Depositary's Agents or the Company at any time or from
time to time because of any requirement of law or of any government or
governmental body or commission, or under any provision of this Deposit
Agreement or, with the approval of the Company, for any other reason. Without
limitation of the foregoing, the Depositary shall not knowingly accept for
deposit under this Deposit Agreement any Convertible Preferred Stock in
connection with a
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distribution of PRIDES which is required to be registered under the Securities
Act of 1933, unless a registration statement under such Act is in effect as to
such PRIDES and such Convertible Preferred Stock.
SECTION 2.10. Lost PRIDES Certificates, etc. In case any PRIDES
certificate shall be mutilated or be destroyed or lost or stolen, the Depositary
will execute and deliver a PRIDES certificate of like form and tenor in exchange
and substitution for such mutilated PRIDES certificate, or in lieu of and in
substitution for such destroyed, lost or stolen PRIDES certificate, upon the
holder thereof filing with the Registrar evidence satisfactory to the Depositary
of such destruction, loss or theft of such PRIDES certificate and the
authenticity thereof and of his ownership thereof and furnishing the Depositary
with reasonable indemnification satisfactory to it.
SECTION 2.11. Cancellation and Destruction of Surrendered PRIDES
Certificates. All PRIDES certificates surrendered to the Depositary or any
Depositary's Agent shall be canceled by the Depositary. Except as prohibited by
applicable law, the Depositary is authorized to destroy such PRIDES certificates
so canceled.
ARTICLE III
Certain Obligations of Holders of PRIDES
----------------------------------------
SECTION 3.01. Filing Proofs, Certificates and Other Information. Any
person presenting Convertible Preferred Stock for deposit or any holder of
PRIDES may be required from time to time to file such proof of residence, or
other matters or other information, or to execute such certificates and to make
such representations and warranties, as the Depositary or the Company may
reasonably deem necessary or proper. The Depositary may withhold the delivery,
transfer or exchange of any PRIDES or the distribution of any dividend or other
distribution or of the proceeds of the exercise of any conversion right
specified in Section 2.03 or the mandatory conversion pursuant to Section 2.04
or the redemption pursuant to Section 2.05 until such proof or other information
is filed or such certificates are executed or such representations and
warranties are made.
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SECTION 3.02. Payment of Taxes or Other Governmental Charges. If any tax
or other governmental charge shall become payable by or on behalf of the
Depositary, the Registrar or any Depositary's Agent with respect to any PRIDES,
or with respect to the exercise of any conversion right referred to in Section
2.03, or any mandatory conversion pursuant to Section 2.04 or any redemption
pursuant to Section 2.05, such tax (including transfer taxes, if any) or
governmental charge shall be payable by the holder of such PRIDES, except if
such tax or charge is required to be paid by the Company pursuant to the
Authorizing Resolutions. Transfer of such PRIDES or any withdrawal of
Convertible Preferred Stock and all money and other property, if any, underlying
such PRIDES may be refused until such payment is made, and any dividends or
other distributions may be withheld, and such conversion right may be refused,
and such exchange withheld or any part or all of the Convertible Preferred Stock
or other property represented by such PRIDES and not theretofore sold may be
sold for the account of the holder thereof (after attempting by reasonable means
to notify such holder prior to such sale), and such dividends or other
distributions or the proceeds of any such sale may be applied to any payment of
such tax or other governmental charge, the holder of such PRIDES remaining
liable for any deficiency.
SECTION 3.03. Warranties as to Convertible Preferred Stock. The Company
hereby represents, with respect to the initial deposit of Convertible Preferred
Stock, and each subsequent depositor shall be deemed to represent, with respect
to any deposit made by such person, that each certificate for such Convertible
Preferred Stock so deposited is valid, and that the person making such deposit
is duly authorized so to do. The Company hereby further represents and warrants
that the Convertible Preferred Stock, when issued, will be validly issued, fully
paid and nonassessable. Such representations and warranties shall survive the
deposit of the Convertible Preferred Stock and the issuance of PRIDES.
ARTICLE IV
The Deposited Securities; Notices
SECTION 4.01. Cash Distributions. Whenever the Depositary shall receive
any cash dividend or other cash distribution on the Convertible Preferred Stock,
the
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Depositary shall, as promptly as practicable, subject to Sections 3.01 and 3.02
hereof, distribute the amount of such dividend or distribution to record
holders of PRIDES on the record date fixed pursuant to Section 4.03 hereof in
proportion, insofar as practicable, to the number of PRIDES owned by such
holders; provided, however, that, in case the Company, the Depositary, the
Registrar or any Depositary's Agent shall be required to withhold and does
withhold from any cash dividend or other cash distribution in respect of the
Convertible Preferred Stock an amount on account of taxes, the amount made
available for distribution or distributed on the PRIDES issued in respect of
such Convertible Preferred Stock shall be reduced accordingly.
SECTION 4.02. Distributions Other Than Cash. Whenever the Depositary
shall receive any distribution other than cash upon the Convertible Preferred
Stock, the Depositary shall, as promptly as practicable, subject to Sections
3.01 and 3.02 hereof, distribute the amount of the property received by it to
the record holders of PRIDES as of the record date fixed pursuant to Section
4.03 hereof, in any manner that the Depositary may deem equitable and
practicable for accomplishing such distribution. If in the opinion of the
Depositary such distribution cannot be made proportionately among the record
holders of PRIDES entitled thereto, or if for any other reason (including any
requirement that the Company, the Depositary or any Depositary's Agent withhold
an amount on account of taxes) the Depositary deems, after consultation with the
Company, such distribution not to be feasible, the Depositary may, with the
approval of the Company, adopt such method as it deems equitable and practicable
for the purpose of effecting such distribution, including the sale (at public or
private sale) of the property thus received, or any part thereof, at such place
or places and upon such terms as it may deem proper. The net proceeds of any
such sale shall, subject to Sections 3.01 and 3.02 hereof, be distributed or
made available for distribution, as the case may be, by the Depositary to the
holders of PRIDES entitled thereto as in the case of a distribution received in
cash.
SECTION 4.03. Notice of Dividends, Fixing of Record Date for PRIDES
Holders, Coordination of Notices. Whenever any cash dividend or other cash
distribution shall become payable or any distribution other than cash shall be
made with respect to the Convertible Preferred Stock, or whenever the Depositary
shall receive notice of any meeting at which holders of Convertible Preferred
Stock are entitled
<PAGE> 22
22
to vote or of which holders of Convertible Preferred Stock are entitled to
notice or any request for action by written consent of the holders of
Convertible Preferred Stock, the Depositary shall fix a record date (which
shall be the same record date fixed by the Company with respect to the
Convertible Preferred Stock) for the determination of the holders of PRIDES who
shall be entitled to receive such dividend or distribution, or to give
instructions for the exercise of voting rights at any such meeting or who shall
be entitled to notice of such meeting or request for action by written consent.
The Company and the Depositary shall cooperate with one another to ensure
that any notice given by the Company to record holders of the Convertible
Preferred Stock shall promptly be given by the Depositary to record holders of
the PRIDES in accordance with Section 5.05 hereof.
SECTION 4.04. Voting Rights. The Company shall cause the Depositary to
notify holders of PRIDES of the occurrence of any event that, pursuant to the
Authorizing Resolutions, entitles the holders of Convertible Preferred Stock to
vote or act by written consent. Upon receipt of notice of any meeting at which
the holders of Convertible Preferred Stock are entitled to vote or upon receipt
of any request for action by written consent of the holders of Convertible
Preferred Stock, the Depositary shall, as soon as practicable thereafter, mail
to the record holders of PRIDES a notice in form satisfactory to the Company
which shall contain (a) such information as is contained in such notice of
meeting or request for action by written consent and any additional information
that may be required under the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder and (b) a statement that the
holders of PRIDES at the close of business on a specified record date (which
shall be the record date fixed by the Company with respect to the Convertible
Preferred Stock) will be entitled, subject to any applicable provisions of law
and of the Authorizing Resolutions, to instruct the Depositary as to the
exercise of the voting rights or the execution of written consents pertaining to
the Convertible Preferred Stock represented by their respective PRIDES, and a
brief statement as to the manner in which such instructions may be given
(including an express indication that instructions may be given to the
Depositary to give a discretionary proxy to a person designated by the Company).
Upon the written request of a holder of PRIDES on such record date, the
Depositary shall
<PAGE> 23
23
endeavor insofar as practicable to vote or cause to be voted, or to execute and
deliver a written consent or a proxy or proxies with respect to, the
Convertible Preferred Stock represented by such PRIDES in accordance with the
instructions set forth in such request. The Company hereby agrees to take all
action (including, if so requested by the Depositary, the tabulation of
instructions received from holders of PRIDES) which may be deemed necessary by
the Depositary in order to enable the Depositary to vote such Convertible
Preferred Stock or cause such Convertible Preferred Stock to be voted or to
execute and deliver written consents or proxies with respect thereto. In the
absence of specific instructions from the holder of PRIDES, the Depositary will
abstain from voting or executing written consents or proxies to the extent of
the Convertible Preferred Stock underlying such PRIDES. Any voting
instructions given hereunder shall be revocable to the same extent as a proxy
granted with respect to the Convertible Preferred Stock represented thereby.
SECTION 4.05. Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc. Upon any change in par value,
split-up, consolidation or any other reclassification of the Convertible
Preferred Stock, or upon any recapitalization, reorganization, merger,
amalgamation or consolidation or sale of substantially all of the assets of the
Company affecting the Company or to which it is a party, the Depositary may in
its discretion (with the approval of the Company) and shall (on the instructions
of the Company) and, in either such case, in such manner as the Depositary may
deem equitable, treat any securities which shall be received by the Depositary
in exchange for or in respect of the Convertible Preferred Stock as new
deposited securities under this Deposit Agreement, and PRIDES then outstanding
shall thenceforth represent interests in the new deposited securities so
received in exchange for or upon conversion or in respect of such Convertible
Preferred Stock. In any such case, the Depositary may in its discretion with
the approval of the Company, execute and deliver additional PRIDES, or may call
for the surrender of all outstanding PRIDES to be exchanged for new PRIDES
specifically describing such new deposited securities.
SECTION 4.06. Reports. The Depositary will make available for inspection
by owners of the PRIDES at its corporate trust offices, copies of the Deposit
Agreement and of all reports and communications from the Company which are
<PAGE> 24
24
made generally available to the holders of the shares of Convertible Preferred
Stock. The Registrar for the PRIDES will keep books for the transfer of the
PRIDES. At all reasonable times such books will be open for inspection by
holders of the PRIDES to the same extent as a record holder of the shares of
Convertible Preferred Stock may inspect books for the transfer thereof.
SECTION 4.07. Lists of PRIDES Holders. Promptly upon request from time to
time by the Company, the Depositary shall furnish to it a list, as of a recent
date, of the names, addresses and holdings of all persons in whose names PRIDES
are registered on the books of the Depositary.
ARTICLE V
The Depositary, the Registrar and the Company
---------------------------------------------
SECTION 5.01. Maintenance of Offices, Agencies, Transfer Books by the
Depositary and the Registrar. Until termination of this Deposit Agreement in
accordance with its terms, the Depositary shall maintain at its corporate office
facilities for the execution and delivery, transfer, surrender and exchange of
PRIDES, and shall cause a facility to be maintained in the City of New York,
Borough of Manhattan, meeting the requirements of the rules of the New York
Stock Exchange, Inc., for the receipt and delivery of PRIDES. The Depositary
may cause to be maintained at its offices or at the offices of any Depositary's
Agent, facilities for the delivery, transfer, and/or surrender of PRIDES, all in
accordance with the provisions of this Deposit Agreement.
The Depositary shall maintain, or cause one of the Depositary's Agents to
maintain, appropriate records which shall reflect registrations, registrations
of transfers, exchanges and split-ups and combinations of PRIDES. Such records
shall be open for inspection by the Company and shall also be open for
inspection by the record holders of PRIDES to the same extent as a record holder
of Convertible Preferred Stock may inspect books for the transfer of Convertible
Preferred Stock.
SECTION 5.02. Prevention or Delay in Performance by the Depositary, the
Registrar or the Company. None of the Depositary, any Depositary's Agent, the
Registrar, or the Company shall incur any liability to any holder of any
<PAGE> 25
25
PRIDES, if by reason of any provision of any present or future law of the
United States of America, or of any other governmental authority, or, in the
case of the Depositary or the Depositary's Agents or the Registrar, by reason
of any provision, present or future, of the Authorizing Resolutions, or by
reason of any act of God or war or other circumstance beyond their control, the
Depositary, any Depositary's Agent, the Registrar or the Company shall be
prevented or forbidden from doing or performing an act or thing which by the
terms of this Deposit Agreement it is provided shall be done or performed; nor
shall the Depositary, any Depositary's Agent, the Registrar or the Company
incur any liability to any holder of PRIDES by reason of any nonperformance or
delay, caused as aforesaid, in the performance of any act or thing which by the
terms of this Deposit Agreement it is provided shall or may be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Deposit Agreement and shall perform such duties
and otherwise act hereunder on behalf of the holders of PRIDES.
SECTION 5.03. Obligations of the Depositary, the Depositary's Agents, the
Registrar and the Company. None of the Depositary, any Depositary's Agent, the
Registrar or the Company assumes any obligation or shall be subject to any
liability under this Deposit Agreement to holders of PRIDES other than that each
of them agrees to use its best judgment and good faith in the performance of
such duties as are specifically set forth in this Deposit Agreement and shall
perform such duties and otherwise act hereunder on behalf of the holders of
PRIDES.
None of the Depositary, any Depositary's Agent, the Registrar or the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of the Convertible Preferred Stock
or in respect of the PRIDES, which in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
None of the Depositary, any Depositary's Agent, the Registrar or the
Company shall be liable for any action or nonaction by it in reliance upon the
advice of or information from legal counsel, accountants, any person presenting
Convertible Preferred Stock for deposit, any holder of PRIDES or any other
person believed by it in good faith to be competent to give such advice or
information.
<PAGE> 26
26
The Depositary, any Depositary's Agent, the Registrar or the Company may rely
and shall be protected in acting upon any written notice, request, direction or
other document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
The Depositary will indemnify the Company and the Registrar against any
liability which may arise out of acts performed or omitted by the Depositary
(including without limitation in its capacity as Registrar, if applicable) or
its agents due to wilful misconduct, negligence or bad faith. Such
indemnification obligations shall survive the termination of this Deposit
Agreement.
The Depositary and Depositary's Agents may own and deal in any class of
securities of the Company and its affiliates and in PRIDES. The Depositary and
any Registrar may also act as transfer agent or registrar of any of the
securities of the Company and its affiliates, may loan money to the Company and
its affiliates and may engage in any other business with or for the Company and
its affiliates.
SECTION 5.04. Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by written notice of its election to do so delivered to the Company,
such resignation to take effect upon the appointment of a successor depositary
and its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by written notice
of such removal delivered to the Depositary, such removal becoming effective
upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 90 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary. If
within such 90-day period no successor depositary shall have been so appointed
by the Company and accepted appointment in the manner hereinafter provided, the
Depositary may appoint a successor depositary who shall be qualified to so act
as hereinbefore provided. Every successor depositary shall execute and deliver
to its predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such
<PAGE> 27
27
successor depositary, without any further act or deed, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor;
but such predecessor, nevertheless, upon payment of all sums due it and on the
written request of the Company shall execute and deliver an instrument
transferring to such successor all rights and powers of such predecessor
here-under, shall duly assign, transfer and deliver all right, title and
interest in the Convertible Preferred Stock to such successor, and shall
deliver to such successor a list in computer readable form of the record
holders of all outstanding PRIDES. Any successor depositary shall promptly
mail notice of its appointment to the record holders of PRIDES.
Any corporation into or with which the Depositary may be merged or
consolidated, or to which all or substantially all of the assets of the
Depositary shall have been transferred, shall be the successor of such
Depositary without the execution or filing of any document or any further act.
SECTION 5.05. Corporate Notices and Reports. The Company shall deliver to
the Depositary, and the Depositary shall, promptly after receipt thereof,
transmit to the record holders of the PRIDES, in each case at the address
recorded in the Depositary's books, copies of all notices and reports furnished,
required by law, by the rules of any national securities exchange upon which the
Convertible Preferred Stock or the PRIDES are listed or by the Company's
Certificate of Incorporation and the Authorizing Resolutions, to be furnished,
by the Company to its stockholders or to holders of the Convertible Preferred
Stock. Such transmission will be at the Company's expense and the Company will
provide the Depositary with such number of copies of such documents as the
Depositary may reasonably request for such purpose. In addition, the Depositary
will transmit to the holders of PRIDES (at Company expense) such other documents
as may be requested by the Company.
SECTION 5.06. Deposit of Convertible Preferred Stock by the Company. The
Company agrees with the Depositary that neither the Company nor any company
controlled by the Company will at any time deposit any Convertible Preferred
Stock if such Convertible Preferred Stock is required to be registered under the
provisions of the Securities Act of 1933 unless a registration statement is in
effect as to such Convertible Preferred Stock.
<PAGE> 28
28
SECTION 5.07. Indemnification by the Company. The Company agrees to
indemnify the Depositary and each Depositary's Agent against, and hold each of
them harmless from, any liability which may arise out of acts performed or
omitted in accordance with the provisions of this Deposit Agreement and of the
PRIDES, (a) by the Depositary, any Registrar or any of their agents (including
Depositary's Agents), except for any liability arising out of their own wilful
misconduct, negligence or bad faith, or (b) by the Company or any of its agents
(other than the Depositary, the Depositary's Agents, the Registrar or any of
their agents).
SECTION 5.08. Charges and Expenses. The Company agrees to pay all
reasonable charges and expenses of the Depositary hereunder, and those of the
Registrar, other than taxes and other governmental charges. Such charges and
expenses of the Depositary and any Depositary's Agent hereunder and of the
Registrar (including fees and expenses of counsel) will be paid upon
consultation and agreement between the Depositary and the Company as to the
amount and nature of such charges and expenses. The Depositary shall present
its statement for such charges and expenses to the Company each quarter. If, at
the election of a holder of Convertible Preferred Stock or PRIDES, any delivery
or communication from the Depositary to such holder is by telegram or telex or
if the Depositary incurs charges or expenses for which it is not otherwise
liable hereunder at the election of such holder, such holder will be liable for
such charges and expenses.
ARTICLE VI
Amendment and Termination
-------------------------
SECTION 6.01. Amendment. The form of the PRIDES certificates and any
provisions of this Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Depositary in any respect which
they may deem necessary or desirable. Upon the execution of any such agreement
to so amend this Deposit Agreement, except as hereinafter provided, such
amendment shall become effective and shall form a part of this Deposit Agreement
for all purposes. Any amendment, however, which shall impose any fees or
charges (other than taxes, fees and charges provided for herein) upon holders of
PRIDES, shall not become effective as to outstanding PRIDES until the expiration
of three months after notice of such amendment
<PAGE> 29
29
shall have been given to the record holders of outstanding PRIDES. If any
other such amendment shall be prejudicial to any substantial existing right of
holders of PRIDES, it shall not become effective as to outstanding PRIDES until
the holders of record of PRIDES evidencing at least 66 2/3% of the number of
PRIDES then outstanding, voting separately as a single class, shall have
consented thereto in writing or by voting therefor in person or by proxy at a
meeting held on notice for such purpose or any adjournment or adjournments
thereof; provided, however, that such consent of holders of PRIDES shall not be
necessary if the terms of such amendment to this Deposit Agreement correspond
to, or are substantially the same as, the terms of an amendment to the
provisions of the Certificate of Incorporation of the Company pertaining to the
Convertible Preferred Stock which is authorized and effected. Every holder of
an outstanding PRIDE at the time any such amendment so becomes effective shall
be deemed, by continuing to hold such PRIDE, to consent and agree to such
amendment and to be bound by the Deposit Agreement as amended thereby. In no
event shall any amendment impair the right, subject to the applicable
provisions hereof, of any owner of PRIDES to withdraw the Convertible Preferred
Stock represented by the PRIDES or to convert the shares of Convertible
Preferred Stock represented thereby into Class A Common Stock, except as
provided in the Authorizing Resolutions or in order to comply with mandatory
provisions of applicable law.
SECTION 6.02. Termination. The Company shall be entitled to terminate
this Deposit Agreement at any time in its discretion, if fractional shares of
Convertible Preferred Stock (in fractions which are no greater than the
fractional interest represented by one PRIDES) are listed or admitted for
trading on any national securities exchange on which the PRIDES are listed.
Whenever the Company shall be entitled to terminate this Deposit Agreement, the
Depositary, when so directed by the Company, will terminate this Deposit
Agreement by mailing notice of such termination to the record holders of all
PRIDES then outstanding at least 60 days prior to the date fixed in such notice
for such termination.
If any PRIDES shall remain outstanding after the date of termination, the
Depositary and the Registrar thereafter shall discontinue the transfer of the
PRIDES, shall suspend the distribution of dividends to the holders thereof, and
shall not give any further notices (other than notice of such termination) or
perform any further acts
<PAGE> 30
30
under this Deposit Agreement, except that the Depositary shall continue to
collect dividends and other distributions pertaining to the Convertible
Preferred Stock, and shall continue to deliver or cause to be delivered
Convertible Preferred Stock together with any dividends or other distributions
received with respect thereto in exchange for PRIDES surrendered to the
Depositary. At any time after the expiration of one year from the date of
termination, the Depositary may deliver all shares of Convertible Preferred
Stock then held by it and all records pertaining to outstanding PRIDES to such
person as shall be designated by the Company. Upon the termination of this
Deposit Agreement, the Company shall be discharged from all obligations under
this Deposit Agreement except for its obligations to the Depositary, any
Depositary's Agent and any Registrar under Sections 5.07 and 5.08 hereof.
SECTION 6.03. Consents. Consents of holders of PRIDES required by this
Article VI may be evidenced by one or more instruments signed by such holder or
by his agent duly appointed in writing, and shall be effective when delivered to
the Depositary. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Deposit
Agreement and conclusive in favor of the Depositary, the Registrar and the
Company, if made in the manner herein provided.
The execution of any proxy, consent or other instrument by the holder of
PRIDES or his agent or proxy shall be revocable, except as otherwise
specifically provided, and be deemed sufficient and conclusive for all purposes
of this Deposit Agreement if (a) the Depositary, Registrar or Company, as the
case may be, shall have mailed or delivered to the holder at his address as
shown on the books of the Depositary such proxy, consent or other instrument,
(b) the proxy, consent or other instrument shall have been returned to the
Depositary, Registrar or Company, as the case may be, bearing a signature
purporting and reasonably appearing to be that of the holder, his agent or
proxy, and (c) the person receiving the executed proxy, consent or other
instrument shall have no actual knowledge or notice of any irregularity or of
any fact or circumstance, which, if substantiated, would impair the validity of
such proxy, consent or other instrument. The matters referred to in clauses
(a), (b) and (c) above may be evidenced by a certificate of the Depositary,
Registrar or Company, as the case may be.
<PAGE> 31
31
The ownership of PRIDES shall be proved by the books of the Depositary or,
if a Registrar for PRIDES (other than the Depositary) shall have been appointed,
the Registrar or by a certificate of the Depositary or Registrar, as applicable.
The Depositary shall not be bound to recognize any person as a holder
unless and until his title to the PRIDES held by him is proved in the manner
provided herein.
Any such consent of the holder of any PRIDES shall bind every future holder
of the same PRIDES including the holder of every PRIDES issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not notation of such consent is made upon any such PRIDES.
ARTICLE VII
Miscellaneous
-------------
SECTION 7.01. Counterparts. This Deposit Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and all such
counterparts shall constitute one and the same instrument. Copies of this
Deposit Agreement shall be filed with the Depositary and Depositary's Agent and
shall be open to inspection during business hours at the corporate offices of
the Depositary and any Depositary's Agent by any holder of PRIDES.
SECTION 7.02. Exclusive Benefit of Parties. This Deposit Agreement is for
the exclusive benefit of the parties hereto and the holders from time to time of
PRIDES, and their respective successors hereunder, and shall not be deemed to
give any legal or equitable right, remedy or claim to any other person
whatsoever.
SECTION 7.03. Invalidity of Provisions. In case any one or more of the
provisions contained in this Deposit Agreement or in the PRIDES should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
<PAGE> 32
32
SECTION 7.04. Notices. Any and all notices to be given to the Company
shall be deemed to have been duly given if personally delivered or sent by mail
or by telegram, telex or facsimile confirmed by letter, addressed to the Company
at Hollinger International Inc., 401 North Wabash Avenue, Chicago, Illinois
60611, Attention: Vice President-Law and Finance, or any other place to which
the Company may have transferred its principal executive office and provided
notice to the Depositary thereof.
Any and all notices to be given to the Depositary shall be deemed to have
been duly given when personally delivered or sent by mail or telecopier, or by
telegram, telex or facsimile confirmed by letter, addressed to the Depositary,
at .
Any and all notices to be given to the Registrar shall be deemed to have
been duly given if personally delivered or sent by mail or telecopier or by
telegram or telex confirmed by letter, addressed to the Registrar, at .
Any and all notices to be given to any record holder of PRIDES shall be
deemed to have been duly given if personally delivered or sent by mail or by
telegram or telex confirmed by letter, addressed to such record holder at the
address of such record holder as it appears on the books of the Depositary, or,
if such holder shall have filed with the Depositary a written request that
notices intended for such holder be mailed to some other address, at the address
designated in such request.
Delivery of a notice sent by mail or by telegram or telex shall be deemed
to be effected at the time when a duly addressed letter containing the same (or
a confirmation thereof in the case of telegram or telex message) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company
may, however, act upon any telegram or telex message received by it from the
other or from any holder of PRIDES, notwithstanding that such telegram or telex
message shall not subsequently be con-firmed by letter as aforesaid.
SECTION 7.05. Depositary Agents. The Depositary may from time to time
appoint Depositary's Agents (which may include the Company) for the purposes of
this Deposit Agreement and may at any time appoint additional Depositary's
Agents and vary or terminate the appointment of
<PAGE> 33
33
such Depositary's Agents. The Depositary will notify the Company of any such
action and shall not take any such action of which the Company shall
disapprove.
SECTION 7.06. GOVERNING LAW. THIS DEPOSIT AGREEMENT AND THE PRIDES
CERTIFICATES AND ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND
THEREOF SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
SECTION 7.07. Headings. The headings of articles and sections in this
Deposit Agreement and in the form of the PRIDES certificate set forth in Exhibit
A hereto have been inserted for convenience only and are not to be regarded as a
part of this Deposit Agreement or to have any bearing upon the meaning or
interpretation of any provisions contained herein or in the PRIDES.
IN WITNESS WHEREOF, Hollinger International Inc. and First Chicago Trust
Company, have duly executed this Agreement as of the day and year first above
set forth.
HOLLINGER INTERNATIONAL INC.
by /s/ Kenneth L. Serota
--------------------------
Vice-President - Law and
Finance and Secretary
FIRST CHICAGO TRUST COMPANY, as
Depositary and on behalf of
all holders from time to time
of PRIDES
by /s/ Michael R. Phalen
--------------------------
Vice-President
<PAGE> 34
[Form of PRIDES Certificate]
EXHIBIT A
PREFERRED REDEEMABLE INCREASED DIVIDEND EQUITY SECURITIES
9 3/4% PRIDES(SM) ("PRIDES")
OF
HOLLINGER INTERNATIONAL INC.
(Incorporated under the laws of the State of Delaware)
_________________
This Certificate is (Each PRIDES represents
Transferable in New York, 1/2 of a share of the
New York Convertible Preferred
Stock referred to below
of Hollinger International Inc.)
CUSIP
1. [Depositary], a corporation organized under the laws of the State of
New York, as depositary ("Depositary"), hereby certifies that [name of
registered holder] is the registered owner of [number] PRIDES, each initially
representing one-half of one share of Series B Convertible Preferred Stock, par
value $.01 per share ("Convertible Preferred Stock"), of Hollinger International
Inc., a Delaware corporation (the "Company"), deposited with, and held by, the
Depositary. The interest in the Convertible Preferred Stock represented by each
PRIDES is subject to adjustment from time to time in the event of certain
amendments to the resolutions adopted by the Board of Directors of the Company
or a duly authorized committee thereof establishing and setting forth the
rights, preferences and privileges of the Convertible Preferred Stock. The
rights, preferences and limitations of the Convertible Preferred Stock are set
forth in such resolutions, and filed in the form of a Certificate of
Designations of the Convertible Preferred Stock as filed with the Secretary of
State of the State of Delaware pursuant to Section 151 of the General
Corporation Law of the State of Delaware, copies of which are on file at the
Depositary's corporate trust office at 14 Wall Street, New York, New York (such
resolutions and Certificate of Designations are collectively referred to herein
as the "Authorizing Resolutions").
2. The Deposit Agreement. The PRIDES certificates, of which this PRIDES
certificate is one, are made available upon the terms and conditions set forth
in the Deposit Agreement dated as of August 7, 1996 (as the
<PAGE> 35
35
same may be amended from time to time, "Deposit Agreement"), between the
Company and the Depositary, as depositary and on behalf of all holders from
time to time of PRIDES. The Deposit Agreement (copies of which are on file at
the Depositary's corporate trust office in New York City) sets forth the rights
of holders of the PRIDES and the rights and duties of the Depositary in respect
of the Convertible Preferred Stock deposited, and any and all other property
and cash from time to time held thereunder. The statements made on the face
and the reverse of this PRIDES certificate are summaries of certain provisions
of the Deposit Agreement and are subject in all respects to the detailed
provisions thereof, to which reference is hereby made. Defined terms used but
not defined in this PRIDES certificate shall have the same meanings as ascribed
to them in the Deposit Agreement.
3. Conversion at the Option of Holders. Subject to the terms and
conditions of the Deposit Agreement and the Authorizing Resolutions, PRIDES may
be surrendered at any time by the holders thereof with written instructions to
the Depositary to convert any specified number of shares of Convertible
Preferred Stock (or half-share fractions thereof) represented by such PRIDES
into shares of Class A Common Stock (and cash in lieu of fractional shares of
Class A Common Stock) at the conversion rate in respect thereof determined in
accordance with the Authorizing Resolutions. The right to convert shares of
Convertible Preferred Stock represented by PRIDES called for redemption will
terminate immediately prior to the close of business on the relevant redemption
date.
4. Mandatory Conversion. Unless previously redeemed by the Company or
converted at the option of the holder into Class A Common Stock, on August 1,
2000 (the "Mandatory Conversion Date"), each half share of Convertible Preferred
Stock represented by a PRIDES will mandatorily convert into (i) Class A Common
Stock at the rate prescribed in the Authorizing Resolutions, (ii) cash in lieu
of fractional shares of Class A Common Stock and (iii) the right to receive cash
in an amount equal to all accrued and unpaid dividends thereon (other than
previously declared dividends payable to a holder of record as of a prior date)
to the Mandatory Conversion Date, as prescribed in the Authorizing Resolutions.
5. Redemption by Company. The shares of Convertible Preferred Stock
represented by the PRIDES will
<PAGE> 36
36
not be redeemable by the Company prior to August 1, 1999. At any time and from
time to time on or after that date until immediately prior to the Mandatory
Conversion Date, the Company will have the right to redeem, in whole or in
part, the Convertible Preferred Stock represented by the PRIDES at the price
per half share of Convertible Preferred Stock specified pursuant to the
Authorizing Resolutions. Whenever the Company shall elect under the
Authorizing Resolutions to redeem shares of Convertible Preferred Stock, the
Depositary shall effect a simultaneous redemption of a number of PRIDES
representing a number of half shares of Convertible Preferred Stock equal to
the number of half shares of Convertible Preferred Stock being redeemed. In
the case of any such redemption, the Depositary shall be required to give
notice of such redemption, by first class mail postage prepaid, not less than
15 nor more than 60 days prior to the redemption date to the holders of PRIDES
representing a number of half shares of Convertible Preferred Stock equal to
the number of half shares of Convertible Preferred Stock held by the Depositary
that are to be redeemed by the Company. In case less than all the outstanding
shares of Convertible Preferred Stock represented by PRIDES are to be called
for redemption, the PRIDES to be redeemed (which shall represent a number of
half shares of Convertible Preferred Stock equal to the total number of half
shares of Convertible Preferred Stock held by the Depositary that are being
redeemed) shall be selected by the Depositary in the same manner as that
determined by the Company with respect to the redemption of the Convertible
Preferred Stock. Subject to the terms of the Deposit Agreement, notice having
been mailed by the Depositary as aforesaid, the PRIDES to be redeemed shall no
longer be deemed outstanding and all rights of the holders of such PRIDES,
except the right to receive a proportionate distribution of the redemption
price of such Convertible Preferred Stock without interest as provided herein,
shall cease (including any right to receive any dividend otherwise payable on
any dividend payment date with respect to the Convertible Preferred Stock to be
redeemed after the redemption date) from and after the redemption date. If
less than all of the PRIDES evidenced by this PRIDES certificate are called for
redemption, the Depositary will deliver to the holder of this PRIDES
certificate upon the later of (i) the surrender of this PRIDES certificate to
the Depositary and (ii) the redemption date, a new PRIDES certificate
representing the PRIDES not called for redemption together with the redemption
payment.
<PAGE> 37
37
6. Dividends and Distributions. Whenever the Depositary receives any cash
dividend or other cash distribution with respect to the Convertible Preferred
Stock, the Depositary will, subject to the provisions of the Deposit Agreement,
promptly distribute the amount of such dividends or distribution to the record
holders of PRIDES on the record date (determined in accordance with paragraph 15
below) in proportion, insofar as practicable, to the respective numbers of
PRIDES held by them; provided, however, that the amount distributed will be
reduced by any amounts required to be withheld by the Company or the Depositary
on account of taxes. Other distributions received on the Convertible Preferred
Stock will be distributed to holders of PRIDES as provided in the Deposit
Agreement.
7. Surrender of PRIDES and Withdrawal of Convertible Preferred Stock.
Upon surrender of this PRIDES certificate to the Depositary at its corporate
trust office in New York City or at such other offices as may be designated in
accordance with the Deposit Agreement, and, subject to the terms and conditions
of the Deposit Agreement (unless the PRIDES evidenced hereby have been
theretofore converted or called for redemption), the holder hereof is entitled
to withdraw, and to obtain delivery, to or upon his order, of Convertible
Preferred Stock in authorized denominations and all money and other property, if
any, at the time represented by this PRIDES certificate.
8. Transfers, Split-Ups, Combinations. This PRIDES certificate is
transferable on the books of the Depositary upon surrender of this PRIDES
certificate to the Depositary, properly endorsed or accompanied by a properly
executed instrument of transfer, and duly stamped as may be required by law and
upon such transfer the Depositary shall sign and deliver a PRIDES certificate to
or upon the order of the person entitled thereto, as provided in the Deposit
Agreement. This PRIDES certificate may be split into other PRIDES certificates
or combined with other PRIDES certificates into one PRIDES certificate,
evidencing the same aggregate number of PRIDES surrendered.
9. Limitations on Execution and Delivery Transfer, etc. of PRIDES. Prior
to the execution and delivery, transfer, split-up, combination, delivery for
purposes of conversion or withdrawal of the underlying Convertible Preferred
Stock, surrender or exchange of this PRIDES certificate, the Depositary, or any
of the
<PAGE> 38
38
Depositary's Agents, or the Company, may require payment to it of a sum
sufficient for the payment (or, in the event that the Depositary or the Company
shall have made such payment, the reimbursement to it) of any tax or other
governmental charge with respect thereto (including any such tax or charge with
respect to Convertible Preferred Stock being deposited or withdrawn, converted
or redeemed) except if such tax or charge is required to be paid by the Company
pursuant to the Authorizing Resolutions, may require proof satisfactory to it
as to the identity and genuineness of any signature and may also require
compliance with such regulations, if any, as the Depositary may establish
pursuant to the Deposit Agreement. Any person presenting Convertible Preferred
Stock for deposit, or any holder of this PRIDES certificate, may be required to
file such information, and to execute such certificates, as the Depositary or
the Company may reasonably deem necessary or proper.
10. Suspension of Delivery, Transfer, etc. The deposit of Convertible
Preferred Stock may be refused, or the delivery of this PRIDES certificate
against Convertible Preferred Stock may be suspended, or the transfer,
surrender, conversion (provided the conversion rights in respect of the
Convertible Preferred Stock are also suspended) or exchange of this PRIDES
certificate may be suspended (a) during any period when the register of
stockholders of the Company is closed or (b) if any such action is deemed
necessary or advisable by the Depositary, the Depositary's Agents or the Company
at any time or from time to time because of any requirement of law or of any
government or governmental body or commission, or under any provision of the
Deposit Agreement or with the approval of the Company for any other reason.
11. Payment of Taxes or Other Governmental Charges. If any tax or other
governmental charge shall become payable by or on behalf of the Depositary, the
Registrar or any Depositary's Agent with respect to this PRIDES certificate or
with respect to the PRIDES evidenced hereby or with respect to the Convertible
Preferred Stock represented by such PRIDES, such tax (including transfer taxes,
if any) or governmental charge shall be payable by the holder hereof, except if
such tax or charge is required to be paid by the Company pursuant to the
Authorizing Resolutions. Transfer of this PRIDES certificate, or any withdrawal
of Convertible Preferred Stock and all money and other property, if any,
underlying the PRIDES represented
<PAGE> 39
39
hereby, may be refused until such payment, if any, is made, and any dividends
or other distributions may be withheld, or any part or all of the Convertible
Preferred Stock and other property underlying the PRIDES and not theretofore
sold may be sold for the account of the holder hereof, and such dividends or
other distributions or the proceeds of any such sale may be applied to any
payment of such tax or other governmental charge, the holder of this PRIDES
certificate remaining liable for any deficiency.
12. Amendment. The form of the PRIDES certificates and any provisions of
the Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect which they may
deem necessary or desirable. Any amendment which imposes any fees or charges
(other than taxes, fees and charges provided for in the Deposit Agreement) upon
holders of PRIDES shall not become effective as to outstanding PRIDES until the
expiration of three months after notice of such amendment has been given to the
record holders of outstanding PRIDES. If any other such amendment shall be
prejudicial to any substantial existing right of holders of PRIDES, it shall not
become effective as to outstanding PRIDES until the holders of record of PRIDES
evidencing at least 66 2/3% of the number of PRIDES then outstanding, voting
separately as a single class, shall have consented thereto in writing or by
voting therefor in person or by proxy at a meeting held on notice for such
purpose or any adjournment or adjournments thereof; provided, however, that such
consent of holders of PRIDES shall not be necessary if the terms of such
amendment to the Deposit Agreement correspond to, or are substantially the same
as, the terms of an amendment to the provisions of the Restated Certificate of
Incorporation of the Company, as amended, pertaining to the Convertible
Preferred Stock which is authorized and effected. The holder of this PRIDES
certificate at the time any such amendment so becomes effective shall be deemed,
by continuing to hold this PRIDES certificate, to consent and agree to such
amendment and to be bound by the Deposit Agreement as amended thereby. In no
event shall any amendment impair, subject to the applicable provisions of the
Deposit Agreement, the rights of the owner of the PRIDES represented by this
certificate to withdraw the Convertible Preferred Stock represented by the
PRIDES certificate or to convert the shares of Convertible Preferred Stock
represented thereby, except as provided in the Authorizing Resolutions or in
order to comply with mandatory provisions of applicable law.
<PAGE> 40
40
13. Charges of Depositary. The Company will pay all reasonable charges
and expenses of the Depositary and the Registrar, except for taxes and other
governmental charges, and such telegram, telex and delivery charges as are
expressly provided in the Deposit Agreement to be at the expense of persons
depositing Convertible Preferred Stock or holders of PRIDES.
14. Title to PRIDES Certificates. It is a condition of this PRIDES
certificate, and every successive holder hereof by accepting or holding the same
consents and agree, that title to this PRIDES certificate (and to the PRIDES
evidenced hereby), when properly endorsed or accompanied by a properly executed
instrument of transfer, is transferable by delivery with the same effect as in
the case of a negotiable instrument; provided, however, that, until this PRIDES
certificate shall be transferred on the books of the Depositary, the Depositary,
each Depositary's Agent and the Company may, notwithstanding any notice to the
contrary, treat the record holder hereof at such time as the absolute owner
hereof for the purpose of determining the person entitled to distribution of
dividends or other distributions or payments with respect to the Convertible
Preferred Stock, to exercise voting or conversion rights with respect to the
Convertible Preferred Stock or to receive any notice provided for in the Deposit
Agreement and for all other purposes.
15. Fixing of Record Date. Whenever any cash dividend or other cash
distribution shall become payable or any distribution other than cash shall be
made with respect to the Convertible Preferred Stock, or whenever the Depositary
shall receive notice of any meeting at which holders of Convertible Preferred
Stock are entitled to vote or of which holders of Convertible Preferred Stock
are entitled to notice or any request for action by written consent of the
holders of Convertible Preferred Stock, the Depositary shall fix a record date
(which shall be the record date fixed by the Company with respect to the
Convertible Preferred Stock) for the determination of holders of PRIDES who
shall be entitled to receive such dividend or distribution, or to give
instructions for the exercise of voting rights at any such meeting, or who shall
be entitled to notice of such meeting or request for action by written consent.
16. Voting Rights. The Company shall cause the Depositary to notify
holders of PRIDES of the occurrence of
<PAGE> 41
41
any event that, pursuant to the Authorizing Resolutions, entitles the holders
of Convertible Preferred Stock to vote or act by written consent. Upon receipt
of notice of any meeting at which the holders of Convertible Preferred Stock
are entitled to vote or upon receipt of any request for action by written
consent of the holders of Convertible Preferred Stock, the Depositary shall, as
soon as practicable thereafter, mail to the record holders of PRIDES a notice
in form satisfactory to the Company which shall contain (a) such information as
is contained in such notice of meeting or request for action by written consent
and any additional information that may be required under the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder and (b) a statement that the holders of PRIDES at the close of
business on a specified record date (which shall be the record date fixed by
the Company with respect to the Convertible Preferred Stock) will be entitled,
subject to any applicable provisions of law and of the Authorizing Resolutions,
to instruct the Depositary as to the exercise of the voting rights pertaining
to the Convertible Preferred Stock represented by their respective PRIDES, and
a brief statement as to the manner in which such instructions may be given.
Upon the written request of a holder of PRIDES on such record date, the
Depositary shall endeavor insofar as practicable to vote or cause to be voted,
or to execute and deliver a written consent or a proxy or proxies with respect
to, the Convertible Preferred Stock represented by such PRIDES in accordance
with the instructions set forth in such request. In the absence of specific
instructions from the holder of PRIDES, the Depositary will abstain from voting
or executing written consents or proxies to the extent of the Convertible
Preferred Stock underlying such PRIDES. Any voting instructions given
hereunder shall be revocable to the same extent as a proxy granted with respect
to the underlying Convertible Preferred Stock.
17. Changes Affecting Deposited Securities. upon any change in par value,
split-up, consolidation or any other reclassification of the Convertible
Preferred Stock, or upon any recapitalization, reorganization, merger,
amalgamation or consolidation or sale of substantially all the assets of the
Company affecting the Company or to which it is a party, the Depositary may in
its discretion (with approval of the Company) and shall (upon the instructions
of the Company) and, in either such case, in such manner as the Depositary may
deem equitable, treat any securities which shall be received by the Depositary
in exchange for or in
<PAGE> 42
42
respect of the Convertible Preferred Stock as new deposited securities under
the Deposit Agreement, and PRIDES then outstanding shall thenceforth represent
interests in the new deposited securities so received in exchange for or upon
conversion or in respect of such Convertible Preferred Stock. In any such
case, the Depositary may in its discretion, with the approval of the Company,
execute and deliver additional PRIDES, or may call for the surrender of all
outstanding PRIDES to be exchanged for new PRIDES specifically describing such
new deposited securities.
18. Reports; Inspection of Transfer Books. The Depositary will make
available for inspection by holders of PRIDES at its corporate trust office in
New York City and at such other places as it may deem advisable, any reports and
communications received from the Company which are made generally available by
the Company to the holders of such Convertible Preferred Stock. The Depositary
will also send to record holders of PRIDES copies of such other reports and
financial statements furnished by the Company. The Depositary will keep books
for the transfer of PRIDES, which at all reasonable times will be open for
inspection by the record holders of PRIDES to the same extent as a record holder
of Convertible Preferred Stock may inspect books for the transfer of Convertible
Preferred Stock.
19. Liability of the Depositary, the Depositary's Agents, Registrar or the
Company. None of the Depositary, any Depositary's Agent, the Registrar or the
Company shall incur liability to any holder of PRIDES if by reason of any
provision of law or any other governmental authority, or, in the case of the
Depositary, any Depositary's Agent or the Registrar, by reason of any provision,
present or future, of the Authorizing Resolutions, or by reason of any act of
God or war or other circumstance beyond their control, the Depositary, any
Depositary's Agent, the Registrar or the Company shall be prevented or forbidden
from doing or performing any act or thing which by the terms of the Deposit
Agreement it is provided shall be done or performed; nor shall the Depositary,
any Depositary's Agent, the Registrar or the Company incur any liability to any
holder of PRIDES by reason of any non-performance or delay, caused as aforesaid,
in the performance of any act or thing which by the terms of the Deposit
Agreement it is provided shall or may be done or performed, or by reason of any
exercise of, or failure to exercise, any discretion provided for in the Deposit
Agreement and shall perform such duties and otherwise act thereunder on behalf
of the holders of PRIDES.
<PAGE> 43
43
20. Obligations of the Depositary, the Depositary's Agents, the Registrar
and the Company. None of the Depositary, any Depositary's Agent, the Registrar
or the Company assumes any obligation or shall be subject to any liability under
the Deposit Agreement to holders of PRIDES other than that each of them agrees
to use its best judgment and good faith in the performance of such duties as are
specifically set forth in the Deposit Agreement and shall perform such duties
and otherwise act thereunder on behalf of the holders of PRIDES.
None of the Depositary, any Depositary's Agent, the Registrar or the
Company will be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of the Convertible Preferred Stock
or in respect of the PRIDES, which in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
None of the Depositary, any Depositary's Agent, the Registrar or the
Company will be liable for any action or nonaction by it in reliance upon the
advice of or information from legal counsel, accountants, any person presenting
Convertible Preferred Stock for deposit, any holder of PRIDES or any other
person believed by it in good faith to be competent to give such advice or
information.
The Company will indemnify the Depositary and each Depositary's Agent
against, and hold each of them harmless from, any liability which may arise out
of acts performed or omitted in accordance with the provisions of the Deposit
Agreement and the PRIDES (a) by the Depositary, any Registrar, or any of their
agents (including the Depositary's Agents), except for any liability arising out
of their own wilful misconduct, negligence or bad faith, or (b) by the Company
or any of its agents (other than the Depositary, the Depositary's Agents, the
Registrar or any of their agents). The Depositary will indemnify the Company
and the Registrar against any liability which may arise out of the acts
performed or omitted by the Depositary or its agents due to negligence or bad
faith.
21. Resignation and Removal of Depositary. The Depositary may at any time
(a) resign by written notice of its election to do so delivered to the Company,
such resignation to take effect upon the appointment of a successor depositary
and its acceptance of such appointment,
<PAGE> 44
44
or (b) be removed by the Company by written notice delivered to the Depositary,
effective upon the appointment of a successor depositary and its acceptance of
such appointment, all as provided in the Deposit Agreement.
22. Termination of Deposit Agreement. The Company shall be entitled to
terminate the Deposit Agreement at any time in its discretion, as long as
fractional shares of Convertible Preferred Stock (in fractions that are no
greater than the fractional interest underlying one PRIDES) are listed or
admitted for trading on any national securities exchange on which the PRIDES are
listed. Whenever the Company shall be entitled to terminate the Deposit
Agreement, the Depositary, when so directed by the Company, will terminate the
Deposit Agreement by mailing notice of such termination to the record holders of
all PRIDES then outstanding at least 60 days prior to the date fixed in such
notice for such termination.
If any PRIDES remain outstanding after the date of termination, the
Depositary and any Registrar thereafter shall discontinue all functions under
the Deposit Agreement, except as specifically provided therein. At any time
after the expiration of one year from the date of termination, the Depositary
may deliver all shares of Convertible Preferred Stock and cash or other property
then held by it and all records pertaining to outstanding PRIDES to such person
as shall be designated by the Company.
23. GOVERNING LAW. THE DEPOSIT AGREEMENT AND THIS CERTIFICATE AND ALL
RIGHTS THEREUNDER AND HEREUNDER AND PROVISIONS THEREOF AND HEREOF SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
This PRIDES certificate shall not be entitled to any benefits under the
Deposit Agreement or be valid or obligatory for any purpose, unless this PRIDES
certificate shall have been executed by the Depositary by the manual signature
of a duly authorized officer of the Depositary or, if a Registrar for PRIDES
Certificates (other than the Depositary) shall have been appointed, by the
Depositary by the facsimile signature of a duly authorized officer of the
Depositary and, if executed by a facsimile signature of a duly authorized
officer of the Depositary, countersigned by the Registrar by the manual
signature of a duly authorized officer of the Registrar.
<PAGE> 45
45
Dated:
, Depositary
by _______________________
Authorized Officer
THE COMPANY WILL FURNISH TO ANY HOLDER OF ONE OR MORE PRIDES UPON REQUEST AND
WITHOUT CHARGE, A FULL STATEMENT OF THE CERTIFICATE OF THE DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND/OR OTHER SPECIAL RIGHTS
OF THE SERIES B CONVERTIBLE PREFERRED STOCK (THE "CONVERTIBLE PREFERRED
STOCK"). SUCH REQUEST MAY BE MADE TO THE COMPANY.
FORM OF NOTICE OF CONVERSION
The undersigned holder of this PRIDES certificate hereby exercises the
option to convert the number specified below of shares of the Series B
Convertible Preferred Stock, par value $.01 per share of Hollinger International
Inc., a Delaware corporation (the "Company"), represented by this PRIDES
certificate into shares of the Company's Class A Common Stock, par value $.01
per share ("Class A Common Stock") (as further defined in the Deposit Agreement
referred to below), and any other applicable property in accordance with the
terms of and conditions of the Convertible Preferred Stock and further as
provided in the Deposit Agreement, dated as of , between the Company
and , as Depositary and on behalf of the holders from time to time
of the PRIDES referred to in such Deposit Agreement (the "Deposit Agreement")
and directs that the securities deliverable upon such conversion be registered
in the name of and delivered, together with a check in payment for any
fractional share and any other property deliverable upon such conversion, to the
undersigned unless a different name has been indicated below. If securities are
to be registered in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto. If the
number of shares of Convertible Preferred Stock to be converted indicated below
is less than the number of shares of such Convertible Preferred Stock
represented by this PRIDES certificate, the undersigned directs that the
Depositary issue to the undersigned, unless a different name
<PAGE> 46
46
is indicated below, a new PRIDES certificate evidencing PRIDES for the balance
of the Convertible Preferred Stock not to be converted.
Dated: Signature______________________________
______________________________
NOTE: The above signature(s)
should correspond exactly with
the name(s) on the face of this
PRIDES certificate or with the
name(s) of the assignee(s)
appearing in the assignment
form below.
_________________ Number of shares of Convertible Preferred Stock
underlying this PRIDES certificate to be converted
(in 1/2 of a share or any integral multiple thereof).
(PLEASE PRINT NAME(S) AND ADDRESSES OF REGISTERED HOLDER(S))
Name
________________________________________________________________________________
Address
________________________________________________________________________________
(PLEASE INDICATE OTHER DELIVERY INSTRUCTION, IF APPLICABLE)
Name
________________________________________________________________________________
Address
________________________________________________________________________________
Tax I.D. Number
___________________________________________________
<PAGE> 47
47
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto __________________________________________ the within PRIDES
certificate and all rights and interests associated therewith, and hereby
irrevocably constitutes and appoints
___________________________________________ attorney, to transfer the same on
the books of the within-named Depositary or, if a Registrar shall have been
appointed, the within-named Registrar, with full power of substitution in the
premises.
Dated: Signature_____________________________
_____________________________________
NOTE: The above signature(s) should
correspond exactly with the name(s)
on the face of this PRIDES
certificate.
<PAGE> 1
Exhibit 10.02
=============================================================================
CREDIT AGREEMENT
dated as of May 30, 1996
among
FIRST DT HOLDINGS LIMITED,
VARIOUS FINANCIAL INSTITUTIONS,
THE TORONTO-DOMINION BANK,
as Issuing Bank and Administrative Agent
==============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2 COMMITMENTS OF THE LENDERS; LETTERS OF CREDIT; BORROWING PROCEDURES . . . . . . . . . . . . . . . . . . . . . 26
2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.2 Groups of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.3 Borrowing Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.4 Letter of Credit Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.5 Participations in Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.6 Reimbursement Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.7 Limitation on the Issuing Bank's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.8 Funding by Lenders to the Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.9 Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.10 Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.11 Commitments Several . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3 NOTES EVIDENCING LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.1 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.2 Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.1 Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.2 Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.3 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.4 Setting and Notice of LIBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.5 Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5 FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.1 Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.3 Additional Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS; REPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.1 Reduction or Termination of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.1.1 Voluntary Reduction or Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.1.2 Mandatory Commitment Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.2 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2.1 Mandatory Prepayments due to Commitment
Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2.2 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2.3 All Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2.4 Commitment Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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SECTION 7 MAKING AND PRORATION OF PAYMENTS;
SETOFF; TAXES .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.1 Making of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.2 Application of Certain Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.3 Due Date Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.4 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.5 Proration of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.6 Net Payments; Tax Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.1 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.2 Basis for Determining Interest Rate
Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.3 Changes in Law Rendering Loans Unlawful . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.4 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.5 Right of Lenders to Fund through Other Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.6 Discretion of Lenders as to Manner of Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.7 Mitigation of Circumstances; Replacement
of Affected Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.8 Conclusiveness of Statements; Survival
of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9 WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.1 Organization, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.2 Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.3 Validity and Binding Nature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.4 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.5 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.6 Litigation and Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.7 Ownership of Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.8 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.9 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.11 Solvency, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.13 Contracts; Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.14 Environmental and Safety and Health Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.15 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9.16 Financial Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 10 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.1 Reports, Certificates and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.1.1 Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.1.2 Quarterly Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.1.3 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.1.4 Reports to Securities Exchange
and to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.1.5 Notice of Default, Litigation and
Employee Benefit Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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10.1.6 Management Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.1.7 Insurance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.1.8 Annual Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.1.9 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.2 Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.4 Compliance with Laws; Maintenance of Property;
Payment of Taxes and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.5 Maintenance of Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.6 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
10.6.1 Asset Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
10.6.2 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
10.6.3 Computation of Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
10.7 Limitations on Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
10.8 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
10.9 Limitation on Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.10 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.11 Mergers, Consolidations, Sales, Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.12 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.13 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.14 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.15 Environmental Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.15.1 Environmental Response Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.15.2 Environmental Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.16 Unconditional Purchase Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.17 Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.18 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.19 Amendments to Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.20 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.21 Limitations on Sale and Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.22 Tax Indemnity Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.23 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.24 Holding Company Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.25 Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.26 New Subsidiaries, Investments and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.27 Operating Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.28 Scheme Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.29 Post-Scheme Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.30 Post-Closing Guarantees and Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
10.31 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.32 Scheme Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 11 CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
11.1 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
11.1.1 Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
11.1.2 Consents, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
11.1.3 Incumbency and Signature Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
11.1.4 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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11.1.5 Opinion of Counsel for the Company and the
Obligors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11.1.6 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11.1.7 Publishing Letter Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11.1.8 No Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11.1.9 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11.1.10 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11.1.11 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
11.2 Conditions to Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
11.2.1 Documentary Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(a) Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(b) Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(c) Consents, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(d) Incumbency and Signature
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(e) Pledge Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(f) Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11.2.2 Holdco Facility; Publishing Credit
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11.2.3 Amendment of Corporate Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11.2.4 Debt to be Repaid, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11.2.5 No Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11.2.6 Approval of the Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.2.7 Scheme Sanction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.2.8 No Litigation Re: Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.2.9 Consummation of Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.2.10 Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.2.11 Capital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.2.12 U.K. Procedural Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.2.13 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.2.14 Publishing/Telegraph Subscription Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.2.15 Hollinger Subordination Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.2.16 FDTH/Holdco Subordination Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.2.17 Process Agent Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.2.18 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.2.19 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.3 All Loans and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.3.1 No Default, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.3.2 Confirmatory Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.1.1 Non-Payment of the Loans, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.1.2 Default under Other Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.1.3 Other Material Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.1.4 Bankruptcy, Insolvency, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
12.1.5 Non-Compliance with Provisions of This Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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12.1.6 Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
12.1.7 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.1.8 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.1.9 Invalidity of Guaranty, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.1.10 Invalidity of Collateral Documents, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.1.11 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
12.1.12 Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.1.13 Ownership and Designation of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.2 Effect of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.3 Effect of Event of Default Paid to Scheme
Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 13 THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
13.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
13.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
13.3 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
13.4 Credit Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
13.5 Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
13.6 Action on Instructions of the Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
13.7 Funding Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
13.8 Collateral Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
13.9 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 14 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
14.1 Waiver; Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
14.2 Confirmations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14.4 Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14.5 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
14.6 Subsidiary References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
14.7 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
14.8 Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
14.8.1 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
14.8.2 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
14.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
14.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
14.11 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
14.12 Indemnification by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
14.13 Survival of Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
14.14 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
14.15 Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
14.16 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
14.17 American Legal Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
14.18 Telegraph Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
</TABLE>
v
<PAGE> 7
EXHIBIT A Form of Note
EXHIBIT B Form of Compliance Certificate
EXHIBIT C-1 Form of Subsidiary Guaranty
EXHIBIT C-2 Form of Hollinger International Guaranty
EXHIBIT D Form of Publishing Letter Agreement
EXHIBIT E-1 Form of Publishing Pledge Agreement
EXHIBIT E-2 Form of Company Pledge Agreement
EXHIBIT E-3 Form of DTH Pledge Agreement
EXHIBIT E-4 Form of Subsidiary Pledge Agreement
EXHIBIT E-5 Form of Dutch Pledge Agreement
EXHIBIT E-6 Form of Fairfax Pledge Agreement
EXHIBIT F-1 Form of Opinion of Kirkpatrick & Lockhart LLP
EXHIBIT F-2 Form of Opinion of Clifford Chance
EXHIBIT G Form of Assignment Agreement
EXHIBIT H Form of FDTH/Holdco Subordinated Note
EXHIBIT I Form of FDTH/Holdco Subordination Agreement
EXHIBIT J Form of Scheme Certificate
SCHEDULE 1.1 Commitments and Percentages
SCHEDULE 9.5 Recent Developments
SCHEDULE 9.6 Litigation and Contingent Liabilities
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.9 Employee Benefit Plans
SCHEDULE 9.12 Insurance
SCHEDULE 9.13 Contracts; Labor Matters
SCHEDULE 9.14 Environmental and Safety and Health Matters
SCHEDULE 10.7 Debt
SCHEDULE 10.8 Liens
SCHEDULE 10.10 Investments
SCHEDULE 14.3 Addresses for Notices
vi
<PAGE> 8
CREDIT AGREEMENT
This CREDIT AGREEMENT, dated as of May 30, 1996 (as amended, supplemented
or otherwise modified from time to time, this "Agreement"), is entered into
among FIRST DT HOLDINGS LIMITED, a limited liability company incorporated under
the laws of England and Wales (the "Company"), the undersigned financial
institutions (together with their respective successors and assigns,
collectively the "Lenders" and individually each a "Lender") and THE
TORONTO-DOMINION BANK (in its individual capacity, "Toronto-Dominion") as
issuing bank and as administrative agent for the Lenders.
WHEREAS, the Company has made a proposal for the acquisition by the Company
of the publicly held shares in The Telegraph plc, a public limited liability
company incorporated under the laws of England and Wales ("Telegraph") not owned
by the Company or any of its Affiliates to be effected by way of a "Scheme of
Arrangement" under Section 425 of the Companies Act 1985 (the "Scheme");
WHEREAS, the Company has requested the Lenders to provide financing for the
acquisition of the Telegraph shares pursuant to the Scheme and repayment of
certain Telegraph indebtedness and the cancellation of all options over shares
in Telegraph as set out in pages 20 to 21 of the Circular dated May 31, 1996,
together with any modifications, additions or conditions approved or imposed by
the Court and consented to by the Company, Telegraph and the Administrative
Agent;
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 DEFINITIONS.
When used herein the following terms shall have the following meaning (such
definitions to be applicable to both the singular and plural forms of such
terms);
Acceleration Right means a right, which at the time is immediately
exercisable (without further notice or lapse of time), by the holders or a
trustee to cause the acceleration of the maturity of Debt of the Company or a
Subsidiary having an aggregate principal amount outstanding of at least
L5,000,000.
Acquisition means (a) any acquisition or merger by the Company or any of
its Subsidiaries of or with any other Person or (b) any acquisition by the
Company or any of its Subsidiaries
<PAGE> 9
of the assets of any Person regardless of whether such assets constitute a
substantial portion of such Person's assets.
Administrative Agent means Toronto-Dominion in its capacity as
administrative agent for the Lenders hereunder and any successor thereto in such
capacity.
Affected Lender means any Lender that has given notice to the Company
(which has not been rescinded) of (a) any obligation by the Company to pay any
amount pursuant to Section 7.6 or 8.1 or (b) the occurrence of any circumstances
of the nature described in Section 8.2 or 8.3.
Affected Loan - see Section 8.3.
Affiliate means, with respect to any specified Person, (a) any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person or (b) any other Person that owns,
directly or indirectly, 10% or more of such Person's equity ownership or Voting
Stock or any officer or director of any such Person or other Person or with
respect to any natural Person, any Person having a relationship with such Person
by blood, marriage or adoption not more remote than first cousin. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person
directly or indirectly, whether through ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
Agents means the Administrative Agent and any co-agents which may be named
from time to time by the Administrative Agent and the Company.
Agreement- see the Preamble.
Amortization Expense of any Person means, for any period, amounts
recognized during such period as (a) amortization of goodwill or (b)
amortization of any other intangible assets with an original life of ten years
or more, in each case in accordance with GAAP and to the extent reflected in the
Consolidated Net Income (Loss) of the Company and its Subsidiaries.
Applicable Commitment Fee Rate means (a) for the period commencing on April
23, 1996 through but excluding the Closing Date, .10% and (b) from and after the
Closing Date, .50%.
Applicable Margin means 2.5%.
2
<PAGE> 10
Asset Coverage Ratio means, as of any date, the ratio of (a) the sum of
(i) 5.5 multiplied by the Operating Cash Flow for the immediately preceding four
Fiscal Quarters excluding any dividends received from Fairfax or Southam plus
(ii) 88% of the Dollar Equivalent of the Closing Price of the Fairfax Shares as
of the most recent trading date on the Australian Stock Exchange to (b) the
aggregate amount of the Commitments, the Capital Leases and the Guarantee
Obligations.
Asset Sale means (a) any sale, lease, transfer or other disposition
(including by way of merger or consolidation) by the Company or any Subsidiary
of any asset (including the sale of the Capital Stock of any Subsidiary or any
Capital Stock of Fairfax or Southam) outside the ordinary course of business to
a Person other than the Company or a Subsidiary, or (b) any sale or assignment
with or without recourse of accounts receivable of the Company or any
Subsidiary. For purposes of this definition, the term "Asset Sale" shall not
include any transfer of property and assets (i) having a market value of less
than L1,000,000 (it being understood that if the market value of the properties
or assets being transferred exceeds L1,000,000, the entire value and not just
the portion in excess of L1,000,000 shall be deemed to have been the subject of
an Asset Sale), (ii) which are obsolete (in the case of equipment) to the
Company's and its Subsidiaries' businesses, (iii) consisting of any transfer of
common shares of HTH by the Company to Hollinger Inc. pursuant to the provisions
of the HTH/FDTH Share Exchange Agreement and (iv) consisting of any transfer of
Telegraph Ordinary Shares pursuant to the FDTH Publishing/Telegraph Subscription
Agreement.
Assignee - see Section 14.8.1.
Assignment Agreement - see Section 14.8.1.
Associated Costs means, with respect to any Loan, a rate per annum equal
to the percentage rate applicable to the Lending Office of the Administrative
Agent according to the following formula:
Associated Costs = BY + L(Y-X) + S(Y-Z)
per annum --------------------
100 - (B+S)
where:
"B" = The percentage of the Administrative Agent's eligible
liabilities which the Bank of England requires the
Administrative Agent to hold in a non-interest-bearing
deposit account in accordance with its cash ratio
requirements;
3
<PAGE> 11
"Y" = The interest rate at which Sterling deposits in an
amount comparable to the aggregate principal amount
of Toronto-Dominion's relevant Loan are offered by
the Administrative Agent to leading banks in the
London interbank market at or about 11:00 a.m.
(London time) on the first day of the Relevant Period
for a period comparable to the Relevant Period;
"L" = The percentage of eligible liabilities which (as a
result of the requirements of the Bank of England),
the Administrative Agent maintains as secured money
with members of the London Discount Market
Association and/or in certain marketable or callable
securities approved by the Bank of England which
percentage shall (in the absence of evidence that any
other figure is appropriate) be conclusively presumed
to be 5%;
"X" = The rate at which secured Sterling deposits in an
amount comparable to the aggregate principal amount
of Toronto-Dominion's relevant Loan may be placed by
the Administrative Agent with members of the London
Discount Market Association and/or in certain
marketable or callable securities approved by the
Bank of England at or about 11:00 a.m. (London time)
on the first day of the Relevant Period for a period
comparable to the Relevant Period;
"S" = The percentage of the Administrative Agent's eligible
liabilities which the Bank of England requires the
Administrative Agent to place as a special deposit
with the Bank of England; and
"Z" = The interest rate per annum allowed by the Bank of
England on special deposits.
(a) For the purposes of this definition:
(i) "eligible liabilities" and "special deposits" shall have the
meanings given to them at the time of application of the formula by the
Bank of England; and
(ii) "Relevant Period" means the duration of such Interest Period.
(b) In the application of the above formula, B, Y, L, X, S and Z are
included in the formula as figures and not as percentages (e.g. if B = 0.5% and
Y = 15%, then BY will be calculated as 0.5 x 15 and not as 0.5% x 15%).
4
<PAGE> 12
(c) (i) The formula is applied on the first day of each Relevant Period.
(ii) Each rate calculated in accordance with the formula is, if
necessary, rounded upward to the nearest 1/16 of 1%.
(d) If the Administrative Agent determines that a change in circumstances
has rendered, or will render, the formula inappropriate, the Administrative
Agent (after consultation with the Lenders) shall notify the Company of the
matter in which the Associated Costs will subsequently be calculated. The
manner of calculation so notified by the Administrative Agent shall, in the
absence of manifest error, be binding on the Company and the Lenders.
Board of Directors means the board of directors of a Person or any duly
authorized committee of such board.
Business Day means any day on which commercial banks are open for
commercial banking business in Chicago, New York and London.
Capital Expenditures means all expenditures which, in accordance with GAAP,
would be required to be capitalized and shown on the consolidated balance sheet
of the Company, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed (a)
from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored or (b) with awards of
compensation arising from the taking by seizure, compulsory purchases, eminent
domain or condemnation of the assets being replaced.
Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person which, in conformity with GAAP, is accounted for as a capital lease on
the balance sheet of such Person.
Capital Stock of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock.
Cash Equivalent Investment means, at any time:
(a) securities issued or fully guaranteed or insured by the government of
a country which is a member of the Organization for Economic Cooperation and
Development or any agency thereof having maturities of six months or less from
the date of acquisition;
5
<PAGE> 13
(b) commercial paper, Euro-commercial paper and any other marketable
securities, in each case maturing within twelve months after the relevant date
of determination, which is issued by either;
(i) a corporation (except an Affiliate) rated at least A-1 by S&P or
P-1 by Moody's, at the time of investment, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers' acceptance or eurocurrency time
deposit, maturing not more than one year after the date of issue, which is
issued by either
(i) a financial institution authorized to issue such investments
under the Banking Act 1987 whose short-term debt securities are rated at
least A-1 by S&P or P-1 by Moody's at the time of investment, or
(ii) any Lender;
(d) any repurchase agreement with a term of one year or less which
(i) is entered into with
(A) any Lender, or
(B) any other commercial banking institution of the
stature referred to in clause (c)(i),
(ii) is secured by a fully perfected Lien on any obligation of the
type described in any of clauses (a) through (c), and
(iii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of such Lender
(or other commercial banking institution) thereunder; or
(e) investments in money market funds that invest solely in Cash
Equivalent Investments described in clauses (a) through (d).
Change in Control means the occurrence of any of the following after the
Effective Date:
(a) there is a report filed on Schedule 13D, 14D-1 or 14D-1F (or any
successor schedule, form or report) pursuant to the
6
<PAGE> 14
Exchange Act, disclosing that any person (for purposes of this definition,
as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act or any successor provision to either of the foregoing), other
than any person consisting solely of Conrad M. Black (or his heirs,
executors or legal representatives) and his Affiliates, has become the
beneficial owner (as the term "beneficial owner" is defined under Rule
13d-3 or any successor rule or regulation promulgated under the Exchange
Act) of Voting Stock representing 50% or more of the total voting power
attached to all Voting Stock of Hollinger Inc. or Hollinger International
then outstanding; provided, however, that a person shall not be deemed to
be the beneficial owner of, or to own beneficially, (i) any securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such person or any of such person's Affiliates until such tendered
securities are accepted for purchase or exchange thereunder, or (ii) any
securities if such beneficial ownership (A) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation
made pursuant to applicable law, and (B) is not also then reportable on
Schedule 13D (or any successor schedule) under the Exchange Act;
(b) there is a report filed or required to be filed with any
securities commission or securities regulatory authority in Canada,
disclosing that any offeror (as the term "offeror" is defined in Section
89(1) of Securities Act (Ontario) for the purpose of Section 101 of such
Securities Act or any successor provision of the foregoing) other than any
person consisting solely of Conrad M. Black (or his heirs, executors or
legal representatives) and his Affiliates, has acquired beneficial
ownership (within the meaning of the Securities Act (Ontario)) of, or the
power to exercise control or direction over, or securities convertible
into, any voting or equity shares of Hollinger Inc. that together with such
offeror's securities (as the term "offeror's securities" is defined in
Section 89(1) of the Securities Act (Ontario) or any successor provision
thereto in relation to the voting or equity shares of Hollinger Inc.) would
constitute Voting Stock of Hollinger Inc. representing 50% or more of the
total voting power attached to all Voting Stock of Hollinger Inc. then
outstanding;
(c) Hollinger International shall cease to own, directly or
indirectly, 100% of the Voting Stock of the Company (other than the DTH
Preference Shares and the FDTH Preference Shares owned by third parties as
of the Effective Date) or TelHoldco, or, on and after the Closing Date,
Telegraph (other than the Telegraph Ordinary Shares issued pursuant to
Put/Call Options or any New Preference Shares issued pursuant to the
Purchase Option); or
(d) Conrad M. Black (or his heirs, executors and legal
representatives) and his Affiliates cease to beneficially own and
7
<PAGE> 15
control the voting of, directly or indirectly, Voting Stock of Hollinger
International representing a greater percentage of the total voting power
attached to the Voting Stock of Hollinger International than the percentage
beneficially owned and controlled, directly or indirectly, by any other single
shareholder of Hollinger International together with its Affiliates.
CIBC Credit Facility means the Cdn$300,000,000 credit facility described in
the Summary of Terms and Conditions dated May 24, 1996 among Hollinger
International, certain financial institutions and Canadian Imperial Bank of
Commerce, as administrative agent.
Closing Date means the date the conditions precedent in Section 11.2 have
been satisfied or waived and the initial Loans have been funded.
Closing Price means, with respect to an ordinary share of Fairfax, the
closing price per share of Fairfax ordinary shares on such day as reported by
the Australian Stock Exchange.
Collateral means, collectively, all of the property and assets that are
from time to time subject to the Collateral Documents.
Collateral Document means each Pledge Agreement and each Subsidiary Note.
Commitment means as to any Lender the commitment of such Lender to make
Loans to and to issue or participate in Letters of Credit for the account of the
Company pursuant to Section 2.1. The initial amount of the Commitment of each
Lender is set forth on Schedule 1.1.
Commitment Termination Date means (i) September 30, 1996 if the Closing
Date has not occurred on or prior to such date or (ii) the date which is the
earlier of six months from the Closing Date or such other date on which the
Commitments shall terminate pursuant to Section 12.
Company - see the Preamble.
Company Pledge Agreement - see Section 11.2.1(e).
Consolidated Net Income (Loss) of the Company and its Subsidiaries means,
for any period, the consolidated net income (or loss) of the Company and its
Subsidiaries for such period as determined in accordance with GAAP, adjusted, to
the extent included in calculating such consolidated net income (or loss), by
excluding, without duplication, (a) all extraordinary gains
8
<PAGE> 16
and losses, (b) the portion of consolidated net income (or loss) of the Company
and its Subsidiaries allocable to Investments in Fairfax or Southam and
unconsolidated Persons to the extent that cash dividends or distributions have
not actually been received by such Person or one of its consolidated
Subsidiaries, (c) the portion of consolidated net income (or loss) of a Person
combined with the Company or any of its Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(d) any gain or loss, net of taxes, realized upon the termination of any
employee pension benefit plan, (e) aggregate net gains and losses (less all
fees and expenses relating thereto) in respect of dispositions of assets
(including sales of shares of unconsolidated Persons) other than in the
ordinary course of business, (f) the net income of any Subsidiary to the extent
that the declaration of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulations applicable to that
Subsidiary or its stockholders; (g) any restoration to income of any
contingency reserve, except to the extent that provision for such reserve was
made out of income accrued at any time following the date of this Agreement,
(h) any net gain from the collection of proceeds of life insurance policies,
(i) any gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Debt of the Company or (j) aggregate net
gains or losses relating to foreign currency transactions or translations.
Debt of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money (including Debt to Affiliates, the FDTH Loan Notes and
the Fairfax Loan Notes), whether or not evidenced by bonds, debentures, notes or
similar instruments, (b) all obligations of such Person as lessee under Capital
Leases which have been recorded as liabilities on a balance sheet of such
Person, (c) all obligations of such Person to pay the deferred purchase price of
property or services (other than current accounts payable in the ordinary course
of business), (d) all indebtedness secured by a Lien on the property of such
Person, whether or not such indebtedness shall have been assumed by such Person
(it being understood that if such Person has not assumed or otherwise become
personally liable for any such indebtedness, the amount of the Debt of such
Person in connection therewith shall be limited to the lesser of the face amount
of such indebtedness or the fair market value of all property of such Person
securing such indebtedness), (e) all obligations, contingent or otherwise, with
respect to the face amount of all letters of credit (whether or not drawn) and
banker's acceptances issued for the account of such Person (including, without
limitation, the Letters of Credit) and in connection with any agreement to
purchase, redeem, exchange,
9
<PAGE> 17
convert or otherwise acquire for value any Capital Stock of such Person, or any
warrants, rights or options to acquire such Capital Stock now or hereafter
outstanding, (f) all liabilities of such Person in respect of Hedging
Agreements, (g) all Debt referred to in clauses (a) through (d) above of other
Persons and all dividends of other Persons, the payment of which is secured by
(or for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien (other than the Lien in favor of Montreal
Trust Company of Canada on the shares of HTH owned by FDTH), upon or with
respect to property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt, (h) all Guarantee Obligations of such
Person (excluding the Tax Indemnity Agreements), (i) all Redeemable Capital
Stock valued at the greater of its voluntary or involuntary maximum fixed
repurchase price plus accrued and unpaid dividends and (k) any amendment,
supplement, modification, deferral, renewal, extension, refunding or
refinancing or any Debt of the types referred to in clauses (a) through (i)
above. For purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which Debt shall be
required to be determined pursuant to this Agreement, and if such price is
based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value to be determined in good faith by the Board of
Directors of such Person. Debt shall not include the obligations of any Person
related to deferred taxes or severance obligations of any nature payable by
such Person.
Debt/Equity Proceeds means the aggregate Net Cash Proceeds from the
issuance of any equity or Debt by Hollinger International, Holdco or any
Subsidiary of Hollinger International or Holdco formed on or after the Effective
Date.
Dollar Equivalent means, with respect to Australian Dollars or Sterling, at
any time for the determination thereof, the equivalent amount of U.S. Dollars
obtained by converting Australian Dollars, as the case may be, involved in such
computation into U.S. Dollars at the spot rate quoted by the Administrative
Agent for the purchase of U.S. Dollars with Australian Dollars or Sterling, as
the case may be, at its foreign exchange trading center located in New York, New
York, or such other location as the Administrative Agent may designate from time
to time.
DTH means DT Holdings Limited, a limited liability company incorporated
under the laws of England and Wales.
10
<PAGE> 18
DTH Pledge Agreement - see Section 11.1.6.
DTH Preference Shares means (a) the 2,540,000 8.086% Cumulative Redeemable
Preference Shares, Series 1 and (b) the 1,100,000 7.127% Cumulative Redeemable
Preference Shares, Series 2, each issued by DTH.
Dutch Pledge Agreement means a pledge agreement dated the S.155 Date
executed by Telegraph Australian Holdings Limited and Deedtask Holding B.V.
substantially in the form attached hereto as Exhibit E-5, as amended,
supplemented or otherwise modified from time to time.
Effective Date - see Section 11.1.
Employee Benefit Plan means any employee benefit plan, pension plan or
welfare plan which is maintained or contributed to for the benefit of the
employees of the Company or any of its Subsidiaries which, under applicable law,
(a) is required to be funded through a trust or similar funding vehicle or (b)
creates or could result in a Lien on any property of the Company or any of its
Subsidiaries.
Environmental Laws means any applicable federal, state or local statute,
law, ordinance, code, rule, regulation, order, decree or other
officially-promulgated and legally binding policy regulating, relating to, or
imposing liability or standards of conduct (including, but not limited to,
permit requirements and emission or effluent restrictions) concerning any
Regulated Materials, as now or at any time hereafter in effect and applicable to
the Company or any of its Subsidiaries.
Event of Default means any of the events described in Section 12.1.
Excess Cash Flow means, as of the last day of any Fiscal Quarter, the
difference between (a) Operating Cash Flow for such Fiscal Quarter and (b) the
sum of (i) Total Interest Expense for such Fiscal Quarter plus (ii) scheduled
principal payments on Funded Debt for such Fiscal Quarter plus (iii) all
federal, state, local and foreign income taxes of the Company and its
Subsidiaries paid during such Fiscal Quarter plus (iv) Restricted Payments and
Permitted Payments under Sections 10.9(b)(i) and (ii) paid during such Fiscal
Quarter plus (v) Capital Expenditures during such Fiscal Quarter plus (vi)
payments made under the Option Tax Indemnity Agreements during such Fiscal
Quarter minus (vii) scheduled principal payments on Funded Debt other than the
Loans during such Fiscal Quarter.
Excess Debt/Equity Proceeds means 50% of the aggregate Debt/Equity Proceeds
after any mandatory repayment of the Holdco
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<PAGE> 19
Facility, the mandatory commitment reduction pursuant to Section 6.1.2(d) of
this Agreement and repayment of the CIBC Credit Facility.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Excluded Taxes - see definition of "Taxes".
Exemption Agreement - see Section 7.6.
Exemption Representation - see Section 7.6.
Existing Debt Facilities means, collectively, (a) the Loan Agreement dated
February 17, 1992 between Toronto-Dominion and the Telegraph, as amended, (b)
the Loan Agreement dated April 13, 1993 between The Bank of Nova Scotia, London
Branch and the Telegraph, as amended, (c) the Loan Agreement dated June 29, 1993
between The Bank of Nova Scotia, London Branch and the Telegraph, as amended,
(d) the Revolving Credit Facility and Acceptance Facility between The Bank of
Nova Scotia, London Branch and the Telegraph dated November 4, 1993, as amended
and renewed on November 1, 1995, (e) the Revolving Credit Facility between The
Royal Bank of Scotland and the Telegraph dated February 22, 1995, as amended and
renewed on February 2, 1996, (f) the Revolving Acceptance Credit Facility and
Spot and Forward Exchange Transactions Facility between Barclays Bank and the
Telegraph dated February 21, 1996, as amended, and (g) the On Demand Overdraft
Facility between the Royal Bank of Scotland and the Telegraph.
Extraordinary Cash Dividends means in respect of the Southam Interests:
(a) a cash dividend in respect of a particular calendar year representing
the excess, if any, of (i) the aggregate of all cash dividends declared and paid
on such securities during the calendar year over (ii) the greatest of (x) 200%
of the aggregate of all cash dividends declared and paid on such securities
during the immediately preceding calendar year, (y) 300% of the average of the
aggregate of all cash dividends declared and paid on such securities during the
immediately preceding three calendar years; and (z) 100% of the aggregate
consolidated net income of the issuer of such securities, before extraordinary
items, for its immediately preceding fiscal year; and
(b) any cash dividend declared by Southam on its common shares which the
directors of Southam by resolution determine to be extraordinary, taking into
account the amount of the dividend, the effect of the dividend on the
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<PAGE> 20
market value of such securities after payment thereof, the form of payment, the
financial position of Southam, economic conditions, business practices and such
other factors as the directors of Southam considered to be relevant.
Fairfax means John Fairfax Holdings Limited, a company incorporated under
the laws of the Australian Capital Territory.
Fairfax Loan Notes has the meaning ascribed thereto in the Scheme
Documents.
Fairfax Pledge Agreement means the pledge agreement dated the S.155 Date
executed by Daily Telegraph Holdings B.V. and Telegraph Australian Holdings
Limited. substantially in the form of Exhibit E-6, as amended, supplemented or
otherwise modified from time to time.
Fairfax Shares means the Capital Stock of Fairfax owned by the Company or
its Subsidiaries which is pledged to the Administrative Agent pursuant to the
Fairfax Pledge Agreement.
FDTH Loan Notes has the meaning ascribed thereto in the Scheme Documents.
FDTH Preference Shares means (a) the 200 Floating Rate Cumulative
Redeemable Retractable Preference Shares, Series A, Cdn $500,000 each (b) the
200 Floating Rate Cumulative Redeemable Retractable Preference Shares, Series B
Cdn $500,000 each, (c) the 165,000,000 Second Preference Shares, and (d) the
23,801,420 Third Preference Shares, each issued by the Company.
FDTH/Holdco Subordinated Note means the U.S.$100,000,000 unsecured
promissory note dated as of the Closing Date issued by the Company in favor of
Holdco and subordinated to the obligations of the Company pursuant to this
Agreement and the Loan Documents substantially in the form of Exhibit H, as
amended, supplemented or otherwise modified from time to time.
FDTH/Holdco Subordination Agreement means the Subordination Agreement
between Holdco and the Administrative Agent relating to the FDTH/Holdco
Subordinated Note substantially in the form of Exhibit I, as amended,
supplemented or otherwise modified from time to time.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of the Company and its Subsidiaries,
which period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year
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<PAGE> 21
1995") refer to the Fiscal Year ending on December 31 of such calendar year.
Funded Debt means the sum of (a) all Debt of the Company and its
Subsidiaries pursuant to clauses (a), (b), (d), and (h) of the definition of
Debt, minus (b) Debt of the Company to its Subsidiaries and Debt of its
Subsidiaries to the Company or to other Subsidiaries and the FDTH/Holdco
Subordinated Note.
GAAP means generally accepted accounting principles in the United Kingdom,
as in effect from time to time.
Group - see Section 2.2.
Guarantee Obligation means any agreement, undertaking or arrangement by
which any Person guarantees or endorses (by direct or indirect agreement,
contingent or otherwise, to provide funds for payment, to supply funds to or
otherwise to invest in a debtor, or otherwise to assure a creditor against loss)
any indebtedness, obligation or other liability of any other Person (other than
by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Guarantee Obligation shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount of the debt, obligation or other liability guaranteed thereby.
Guarantor means (a) as of the Effective Date, Hollinger International and
TelHoldco; and (b) as of the S.155 Date, Hollinger International, TelHoldco and
each of the Company's Subsidiaries listed on Schedule 9.8 other than HTH and,
thereafter, each other person which from time to time executes and delivers a
counterpart of either Guaranty.
Guaranties means the Hollinger International Guaranty and the Subsidiary
Guaranty.
Hedging Agreement means any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designed to protect a Person against fluctuations in
interest rates, currency exchange rates or commodity prices.
Holdco means Hollinger International Publishing Holdings Inc., a Delaware
corporation and Wholly-Owned Subsidiary of Hollinger International.
Holdco Facility means the Securities Purchase Agreement dated as of May 30,
1996 between Holdco and Toronto Dominion Investments, Inc. providing for a
secured senior exchangeable
14
<PAGE> 22
note facility in the maximum principal amount of U.S. $100,000,000, as amended,
modified or supplemented from time to time.
Hollinger Inc. means Hollinger Inc., a corporation continued under the laws
of Canada.
Hollinger Inc. Subordination Agreement means an agreement between Hollinger
Inc. and the Administrative Agent in form and substance satisfactory to the
Administrative Agent whereby Hollinger Inc. subordinates its Lien on the HTH
shares owned by Deedtask Limited pursuant to the Joint Venture Agreement
referred to in Section 10.19(h) and the Pledge Agreement dated April 15, 1993
from Deedtask Limited to Hollinger Inc. to the Lien of the Administrative Agent.
Hollinger International means Hollinger International Inc., a Delaware
corporation.
Hollinger International Guaranty - see Section 11.1.4.
HTH means Hollinger-Telegraph Holdings, Inc., a corporation continued under
the laws of Alberta.
HTH/FDTH Share Exchange Agreement means the share exchange agreement dated
as of July 19, 1995 between Hollinger Inc. and FDTH.
HTH Pledge Agreement means a pledge agreement dated the S.155 Date executed
by Deedtask Limited substantially in the form of Exhibit E- 7, as amended,
supplemented or otherwise modified from time to time.
Indemnified Liability - see Section 14.12.
Interest Coverage Ratio means, as of the last day of any Fiscal Quarter,
the ratio of (a) Operating Cash Flow for such Fiscal Quarter to (b) Total
Interest Expense for such Fiscal Quarter plus Permitted Payments under Section
10.9(b)(i) made during such Fiscal Quarter. For purposes of determining
Operating Cash Flow for such Fiscal Quarter, Operating Cash Flow shall only
include an amount equal to one-half of the most recently received Fairfax
dividend (regardless of whether such dividend was received in such Fiscal
Quarter).
Interest Period - see Section 4.3.
Interest/Restricted Payment Coverage Ratio means, as of the last day of any
Fiscal Quarter, the ratio of (a) Operating Cash Flow for such Fiscal Quarter to
(b) the sum of (i) Total Interest Expense for such Fiscal Quarter plus (ii)
Permitted Payments
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<PAGE> 23
under Sections 10.9(b)(i) and (ii) made during such Fiscal Quarter plus (iii)
Restricted Payments made during such Fiscal Quarter pursuant to Section
10.9(a)(1) plus (iv) payments made under the Option Tax Indemnity Agreements
during such Fiscal Quarter.
Investment means, with respect to any Person:
(a) any loan or advance made by such Person to any other Person; and
(b) any ownership or similar interest held by such Person in any other
Person.
The amount of any Investment shall be the original principal or capital
amount thereof less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other Person) and shall,
if made by the transfer or exchange of property other than cash, be deemed to
have been made in an original principal or capital amount equal to the fair
market value of such property.
Issuing Bank means Toronto-Dominion in its capacity as issuer of Letters
of Credit.
Lender - see the Preamble.
Lender Party - see Section 14.12.
Lending Office means with respect to any Lender the office or offices of
such Lender which shall be making or maintaining the Loans of such Lender
hereunder or such other office or offices through which such Lender determines
LIBOR. A Lending Office of any Lender may be, at the option of such Lender,
either a domestic or foreign office.
Letter of Credit means either (a) a standby letter of credit or (b)
guaranty, in each case issued to guarantee the FDTH Loan Notes having terms and
provisions which are permitted by this Agreement and which otherwise are
reasonably satisfactory to the Issuing Bank.
Letter of Credit Application means a letter of credit application in the
form then used by the Issuing Bank for standby letters of credit or guaranties,
as the case may be (with appropriate adjustments to indicate that any letter of
credit or guaranty issued thereunder is to be issued pursuant to, and subject to
the terms and conditions of, this Agreement).
LIBOR means (a) with respect to any Loan for any Interest Period, the rate
of interest (rounded, if necessary, to the next
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<PAGE> 24
higher 1/16 of one percent) equal to the rate at which Sterling deposits in
immediately available funds are offered by the Administrative Agent to prime
lending banks in the London interbank market as at or about 11:00 a.m. (London
time) on the first day of such Interest Period in the approximate amount of
Toronto-Dominion's relevant Loan and having a maturity approximately equal to
such Interest Period and (b) with respect to any other determination of LIBOR
under this Agreement, unless specified otherwise, the rate of interest
(rounded, if necessary, to the next higher 1/16th of one percent) equal to the
rate at which Sterling deposits in immediately available funds are offered by
the Administrative Agent to prime lending banks in the London interbank market
as or about 11 a.m. (London time) on the date of calculation in the approximate
amount of the amount which remains unpaid or unreimbursed, as the case may be,
and having a maturity of one week.
LIBOR (Reserve Adjusted) means, relative to any Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:
LIBOR = LIBOR + Associated Costs
(Reserve Adjusted)
Lien means, when used with respect to any Person, any interest of any other
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Loans - see Section 2.1.
Loan Documents means this Agreement, the Notes, the Guaranties, the Letter
of Credit Applications, the Collateral Documents and the Publishing Letter
Agreement.
Management Fees means any management, consulting, non-competition, advisory
or other similar fees or payments, or any interest thereon, payable by the
Company or any of its Subsidiaries to Hollinger, Hollinger International,
Publishing or any other Affiliate other than the Company or any Subsidiary.
Material Adverse Effect means a material adverse effect on (a) the
condition (financial or otherwise), operations, business, prospects, properties
or assets of the Company and its Subsidiaries taken as a whole; or (b) the
ability of the Company and its Subsidiaries taken as a whole to timely and fully
perform
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<PAGE> 25
any of their payment or other material obligations under this Agreement or any
other Loan Document to which they are a party.
Minority Dutch Shares - see Section 10.18.
Moody'smeans Moody's Investors Service, Inc. or any successor rating
agency.
Net Cash Proceeds means (a) with respect to any Asset Sale by any Person,
the proceeds thereof in the form of cash or cash equivalents including payments
of principal and interest in respect of deferred payment obligations when
received in the form of, or stock or other assets when disposed of for, cash or
cash equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Subsidiary) net of (i) brokerage
commissions and other reasonable fees and expenses (including fees and expenses
of counsel and investment bankers) related to such Asset Sale, (ii) provisions
for all taxes payable as a result of such Asset Sale, (iii) payments made to
retire indebtedness where payment of such indebtedness is secured by the assets
or properties the subject of such Asset Sale, (iv) amounts required to be paid
to any Person (other than the Company or any Subsidiary) owning a beneficial
interest in the assets subject to the Asset Sale and (v) appropriate amounts to
be provided by the Company or any Subsidiary, as the case may be, as a reserve,
in accordance with GAAP, against any liabilities associated with such Asset Sale
and retained by the Company or any Subsidiary, as the case may be, after such
Asset Sale, including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale, all as reflected in an Officers' Certificate delivered to the
Administrative Agent, (b) with respect to any issuance or sale by the Company or
DTH of Capital Stock or options, warrants or rights to purchase Capital Stock,
or debt securities or Capital Stock that have been converted into or exchanged
for Capital Stock, the proceeds of such issuance or sale in the form of cash or
cash equivalents, including payments in respect of deferred payment obligations
when received in the form of, or stock or other assets when disposed of for,
cash or cash equivalents (except to the extent that such obligations are
financed or sold with recourse to the Company or any Subsidiary), net of
attorneys' fees, accountants' fees and brokerage, consultation, underwriting and
other fees and expenses actually incurred in connection with such issuance or
sale and net of taxes paid or payable as a result thereof, and (c) with respect
to the issuance by the Company or DTH of Subordinated Debt (other than the
FDTH/Holdco Subordinated Note), the proceeds of such issuance net of attorneys'
fees, accountants' fees and brokerage, consultation, underwriting and
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<PAGE> 26
other fees and expenses actually incurred in connection with such issuance.
Newspaper Business means the business of publishing and distributing
(including distributing by electronic means) newspapers, magazines and other
paid or free publications having national, regional, local or targeted markets,
including publications having limited or no news or editorial content such as
shoppers or other "total market coverage" publications and similar publications.
New Preference Shares has the meaning set out in the Scheme Documents.
Notes - see Section 3.1.
Obligor means, as the context may require, the Company, Hollinger
International and each other Person (other than any Agent, the Issuing Bank or
any Lender) obligated under any Loan Document.
Occupational Safety and Health Law means any federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to or imposing liability or standards of conduct concerning employee
health and/or safety.
Operating Cash Flow means, as of the last day of any Fiscal Quarter, the
sum, without duplication, of
(a) Consolidated Net Income (Loss) for such Fiscal Quarter,
plus
(b) the consolidated interest expense and other financing costs of the
Company and its Subsidiaries deducted in determining Consolidated Net Income
(Loss) for such Fiscal Quarter,
plus
(c) all depreciation and amortization of assets (including goodwill and
other intangible assets) of the Company and its Subsidiaries deducted in
determining Consolidated Net Income (Loss) for such Fiscal Quarter,
plus
(d) all federal, state, local and foreign income taxes (whether paid or
deferred) of the Company and its
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<PAGE> 27
Subsidiaries deducted in determining Consolidated Net Income (Loss) for such
Fiscal Quarter,
plus
(e) other non-cash expenses and all extraordinary and non-recurring
expenses (including all one-time, non-recurring transaction expenses associated
with the Scheme, to the extent such expenses are included in determining
Consolidated Net Income (Loss)) deducted in determining Consolidated Net Income
(Loss) for such Fiscal Quarter.
Optionholders has the meaning set out in the Scheme Circular.
Options Proposals has the meaning set out in the Scheme Circular.
Option Tax Indemnity Agreements means (a) the Deed of Indemnity dated May
31, 1996 between the Company and Telegraph relating to tax indemnification in
connection with the Purchase Option and (b) the letter agreement dated May 31,
1996 between the Company and West Ferry Printers Limited relating to tax
indemnification in connection with the Options Proposals.
Participant - see Section 14.8.2.
Percentage means as to any Lender the percentage which (a) the amount of
such Lender's Commitment is of (b) the aggregate amount of Commitments of all
Lenders; provided that after the Commitments have been terminated, "Percentage"
shall mean as to any Lender the percentage which the aggregate principal amount
of such Lender's Loans is of the aggregate principal amount of all Loans. The
initial Percentage for each Lender is set forth opposite such Lender's name on
Schedule 1.1.
Permitted Payments - see Section 10.9(b).
Person means any natural person, corporation, partnership, limited
liability company, trust, association, governmental authority or unit, or any
other entity, whether acting in an individual, fiduciary or other capacity.
Pledge Agreements means the Company Pledge Agreement, the Fairfax Pledge
Agreement, the HTH Pledge Agreement, the DTH Pledge Agreement, the Publishing
Pledge Agreement, the Dutch Pledge Agreement, the Southam Pledge Agreement and
the Subsidiary Pledge Agreement.
Preferred Stock means, with respect to any Person, any Capital Stock of any
class or classes (however designated) which is preferred as to the payment of
dividends or distributions, or
20
<PAGE> 28
as to the distribution of assets upon any voluntary or involuntary liquidation
or dissolution of such Person, over the Capital Stock of any other class in
such Person.
Publishing means Hollinger International Publishing Inc., a Delaware
corporation and Wholly-Owned Subsidiary of Hollinger International.
Publishing Credit Agreement means the Amended and Restated Credit Agreement
dated as of May 30, 1996 among Publishing, certain financial institutions and
Toronto Dominion (Texas), Inc. as administrative agent and issuing bank
providing for a secured revolving facility in the maximum principal amount of
U.S. $125,000,000, as amended, modified or supplemented from time to time.
Publishing Letter Agreement see Section 11.1.7.
Publishing Pledge Agreement see Section 11.1.6.
Publishing/Telegraph Subscription Agreement means the Subscription
Agreement between Publishing and Telegraph relating to the subscription by
Publishing of approximately 15,000,000 Telegraph Ordinary Shares on the Closing
Date (assuming a subscription price of $8.40) in form and substance satisfactory
to the Administrative Agent.
Put/Call Options means the Optionholders' rights to purchase Telegraph
Ordinary Shares which remain outstanding after the Scheme becomes effective
which are subject to puts and calls as outlined in the Options Proposals.
Qualified Capital Stockof any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
Rating Agency means S&P and Moody's.
Redeemable Capital Stock means any Capital Stock that, either by its terms,
by the terms of any security into which it is convertible or exchangeable or
otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed prior to any stated maturity of the principal of the
Senior Subordinated Notes or is redeemable at the option of the holder thereof
at any time prior to any such stated maturity, or is convertible into or
exchangeable for debt securities at any time prior to any such stated maturity
at the option of the holder thereof.
Regulated Materials means any toxic substance, hazardous substance,
hazardous material, hazardous chemical or hazardous
21
<PAGE> 29
waste defined or qualifying as such in (or for the purposes of) any
Environmental Law, or any pollutant or contaminant, and shall include, but not
be limited to, petroleum, including crude oil or any fraction thereof which is
liquid at standard conditions of temperature or pressure (60 degrees fahrenheit
and 14.7 pounds per square inch absolute), any radioactive material,
polychlorinated biphenyls and asbestos in any form or condition.
Restricted Payments - see Section 10.9(a).
Required Lenders means Lenders having an aggregate Percentage of more than
66-2/3 but in any event not less than two Lenders.
S.155 Date - see Section 10.30.
Scheme - see the Recitals.
Scheme Circular means the documents to be despatched inter alia to
Telegraph's shareholders describing the Scheme and including the explanatory
statement required by Section 426 of the Companies Act 1985.
Scheme Documents means the Scheme Circular and the documents to be
despatched to the Optionholders in connection with the Options Proposal.
Senior Subordinated Indenture means that certain Indenture dated as of
February 1, 1996 between Publishing and Fleet National Bank of Connecticut, as
Trustee, relating to the Senior Subordinated Notes, as the same may hereafter be
amended, amended and restated, supplemented or otherwise modified in accordance
with the terms thereof and hereof and in effect.
Senior Subordinated Notes means the 9.25% Senior Subordinated Notes due
February 1, 2006 of Publishing issued under the Senior Subordinated Indenture.
Series A Preferred Shares means the Series A Redeemable Convertible
Preferred Stock of Hollinger International, as in effect on the date of this
Agreement.
Southam means Southam Inc., a corporation continued under the laws of
Canada.
Southam Dividend Amount means the lesser of (a) the aggregate amount paid
or payable by Hollinger International in respect of regularly scheduled periodic
dividends on the Series A Preferred Shares and (b) the aggregate amount of the
Southam Interests Dividends received by the Company since the date hereof
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<PAGE> 30
on account of its ownership interest (whether direct or indirect) in Southam.
Southam Interests means the aggregate of (a) 7,145,000 Southam common
shares, being one-half the shares held by HTH and (b) 250,000 Southam common
shares held by the Company; provided, however, that if Southam shall pay a
dividend, or make a distribution, on its common shares in the form of Capital
Stock of the same or another corporation, or subdivide its outstanding common
shares into a greater number of common shares, or combine its outstanding common
shares into a smaller number of common shares, or effect a reorganization or
reclassification of its Capital Stock, or amalgamate, enter into an arrangement
or consolidation or merge with or into another entity (other than an
amalgamation, arrangement, consolidation or merger which does not result in a
reclassification or change of the outstanding common shares of Southam), the
"Southam Interests" shall thereafter include any securities distributed with
respect to any such shares or into which any such shares shall be converted,
changed or reclassified or for which any such shares shall be exchanged.
Southam Interests Dividend means a dividend or other distribution paid on
or with respect to the Southam Interests on or prior to the earlier of (a) the
redemption date for the redemption of all the Series A Preferred Shares
outstanding as of such redemption date or (b) the date of final distribution to
the holders of the Series A Preferred Shares of the full preferential amount
provided under the terms thereof; provided, however, that the term "Southam
Interests Dividend" does not mean or include (x) any part of any dividend or
distribution that is payable otherwise than in cash or that constitutes an
Extraordinary Cash Dividend as applied to the Southam Interests, or (y) any
dividend or distribution on or with respect to the 250,000 Southam common shares
of which Deedtask Limited is the direct owner or the 7,145,000 Southam common
shares which constitute the balance of the Southam common shares held by HTH in
which Telegraph has a 50% indirect equity interest.
Southam Pledge Agreement means the pledge agreement dated the S.155 Date
executed by the Company and Deedtask Limited, in form and substance satisfactory
to the Administrative Agent, as amended, supplemented or otherwise modified from
time to time.
S&P means Standard & Poor's Corporation, or any successor rating agency.
Stated Amount means, with respect to any Letter of Credit at any date of
determination, the maximum aggregate amount available thereunder at any time
during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the
23
<PAGE> 31
aggregate amount of all unreimbursed payments and disbursements under such
Letter of Credit.
Sterling and L mean the lawful currency of the United Kingdom of Great
Britain and Northern Ireland.
Subordinated Debt means (a) the FDTH/Holdco Subordinated Note and (b) any
unsecured Debt of the Company in amounts which, when added to Funded Debt, would
not cause the Company on a pro forma basis as of the date of such incurrence to
violate the provisions of Section 10.6, does not require any amortization prior
to the date which is one year after the Commitment Termination Date and has
maturities and terms, and which is subordinated to the obligations of the
Company hereunder in a manner, satisfactory to the Lenders.
Subsidiary means, with respect to any Person, a corporation of which such
Person and/or its other Subsidiaries own, directly or indirectly, such number of
outstanding shares as have more than 50% of the ordinary voting power for the
election of directors or their equivalents. Unless the context otherwise
requires, each reference to Subsidiaries herein shall be a reference to
Subsidiaries of the Company provided that none of West Ferry Printers Limited,
Trafford Park Printers Limited, Telegraph Connections Limited, The Newspaper
Licensing Agency Limited Brand Movers Limited, Lamponions Limited and Telegraph
Events Limited and its Subsidiaries shall be deemed a Subsidiary of the Company
for purposes of this Agreement.
Subsidiary Guaranty means a guaranty substantially in the form of Exhibit
C-2, as amended, supplemented or otherwise modified from time to time.
Subsidiary Notes means, collectively, any promissory note issued, now or in
the future, by any Subsidiary of the Company in favor of the Company or another
Subsidiary, as the case may be, each substantially in form and substance
satisfactory to the Administrative Agent.
Subsidiary Pledge Agreement means a pledge agreement substantially in the
form of Exhibit E-4, as amended, supplemented or otherwise modified from time to
time.
Taxes relative to any Person means taxes, assessments or other governmental
charges or levies imposed upon such Person, its income or any of its properties,
franchises or assets (excluding, in the case of payments made to a Lender or an
Agent, the following taxes (all of the following taxes being "Excluded Taxes"):
taxes imposed upon the overall net income of such Lender or such Agent,
franchise taxes imposed upon such Lender or such Agent with respect to its net
income by the jurisdiction under
24
<PAGE> 32
the laws of which such Lender or such Agent, as the case may be, is organized
or any political subdivision thereof, and franchise taxes imposed upon such
Lender or such Agent with respect to its net income by the jurisdiction in
which such Lender's or such Agent's Lending Office is located or any political
subdivision thereof).
Tax Indemnity Agreements - see Section 10.22.
Telegraph - see the Recitals.
Telegraph Assumption - see Section 14.18.
Telegraph Ordinary Shares means ordinary shares and options to acquire
ordinary shares of Telegraph.
Telegraph Preference Shares means the 5,000,000 non-voting Redeemable
Preference Shares issued by Telegraph.
TelHoldco means TelHoldco Inc., a Delaware corporation.
Toronto-Dominion - see the Preamble.
Total Interest Expense means, for any period, the sum of (a) the
consolidated interest expense and commitment fees of the Company and its
Subsidiaries for such period accrued on Funded Debt plus (b) amounts paid by
Telegraph with respect to Redeemable Capital Stock issued by West Ferry Printers
Limited. For purposes of calculating consolidated interest expense and
commitment fees for any period or portion thereof ending on or before the date
the initial Loans are made hereunder (the "Pre-Funding Period"), Funded Debt
shall be determined by assuming that the Existing Debt Facilities had been
repaid and Loans in an amount equal to the Commitment had been outstanding for
the entire Pre-Funding Period which Loans accrued interest at a rate per annum
equal to LIBOR (Reserve Adjusted) as of the date of calculation plus the
Applicable Margin. Funded Debt for any period or portion thereof commencing on
or after the date the initial Loans are made hereunder (the "Funding Period")
shall be based on the actual Funded Debt outstanding and the interest accrued
thereon during the Funding Period.
Unmatured Event of Default means any event which if it continues uncured
will, with lapse of time or notice or lapse of time and notice, constitute an
Event of Default.
Voting Stock means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of any other class
or classes
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shall have or might have voting power by reason of the happening of any
contingency).
Wholly-Owned Subsidiary means a Subsidiary of which the Company and/or
another of its Wholly-Owned Subsidiaries own, directly or indirectly, all of the
outstanding shares of Capital Stock (other than directors' qualifying shares).
SECTION 2 COMMITMENTS OF THE LENDERS; LETTERS OF CREDIT; BORROWING
PROCEDURES.
2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each of the Lenders, severally and for itself alone, agrees (a) to
make loans to the Company on a revolving basis ("Loans") from time to time
during the period and commencing on the Closing Date and ending on the
Commitment Termination Date in such Lender's Percentage of such aggregate
amounts as the Company may from time to time request from all Lenders under the
Commitments, provided that the aggregate principal amount of all Loans which all
Lenders shall be committed to have outstanding at any one time shall not exceed
an amount equal to (x) the aggregate amount of the Commitments minus (y) the
Stated Amount of all outstanding Letters of Credit; and (b) the Issuing Bank
agrees to issue Letters of Credit at the request of and for the account of the
Company from time to time before the Commitment Termination Date and, as more
fully set forth in Section 2.5, each Lender agrees to purchase a participation
in each such Letter of Credit, provided that the aggregate Stated Amount of all
Letters of Credit shall not at any time exceed an amount equal to (A) the
aggregate amount of the Commitments minus (B) the aggregate principal amount of
all outstanding Loans.
2.2 Groups of Loans. Each Loan shall be divided into tranches as the
Company shall specify in the related notice of borrowing pursuant to Section
2.3. Loans having the same Interest Period are sometimes called a "Group" or
collectively "Groups". Different Groups of Loans may be outstanding at the same
time, provided that (i) not more than eight different Groups of Loans shall be
outstanding at any one time and (ii) the aggregate principal amount of each
Group of Loans shall at all times be at least L1,000,000 and an integral
multiple of L500,000. All borrowings and repayments of Loans shall be effected
so that each Lender will have a pro rata share (according to its Percentage) of
all Groups of Loans.
2.3 Borrowing Procedures. The Company shall give telephonic notice
(promptly, but in any event by the close of business on such date) followed by
written notice) to the Administrative Agent of its proposed borrowing not later
than 10:00 a.m., London time, on the proposed date of such borrowing.
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Each such notice shall be effective upon receipt by the Administrative Agent,
shall be irrevocable, and shall specify the date, amount and the initial
Interest Periods therefor. Promptly upon receipt of such notice, the
Administrative Agent shall advise each Lender thereof. Not later than 1:00
p.m., London time, on the date of a proposed borrowing, each Lender shall
provide the Administrative Agent by wire transfer in London with immediately
available funds covering such Lender's Percentage of such borrowing and,
subject to the satisfaction of the conditions precedent set forth in Section 11
with respect to such borrowing, the Administrative Agent shall pay over the
requested amount to the Company on the requested borrowing date. Each
borrowing shall be on a Business Day. Each borrowing shall only be in Sterling
and shall be in an aggregate amount of at least L1,000,000 and an integral
multiple of L500,000. To the extent funds are received from the Lenders, the
Administrative Agent shall make such funds available to the Company at the
Administrative Agent's office in London and by wire transfer to the accounts
the Company shall have specified in its borrowing request.
2.4 Letter of Credit Procedures. The Company shall give notice to the
Issuing Bank of the proposed issuance of each Letter of Credit on a Business Day
which is at least three Business Days (or such lesser period as to which the
Issuing Bank may agree) prior to the proposed date of issuance of such Letter of
Credit. Each such notice shall be accompanied by a Letter of Credit
Application, duly executed by the Company and in all respects satisfactory to
the Issuing Bank, together with such other documentation as the Issuing Bank may
reasonably request in support thereof, it being understood that each Letter of
Credit Application shall specify, among other things, the amount of the Letter
of Credit, the date on which the proposed Letter of Credit is to be issued, the
expiration date of such Letter of Credit (which shall not be later than February
1, 2002) and whether such Letter of Credit is to be transferable in whole or in
part. Subject to the satisfaction of the conditions precedent set forth in
Section 11 with respect to the issuance of such Letter of Credit, the Issuing
Bank shall issue such Letter of Credit on the requested issuance date.
2.5 Participations in Letters of Credit. Concurrently with the issuance
of each Letter of Credit, the Issuing Bank shall be deemed to have sold and
transferred to each other Lender, and each other Lender shall be deemed
irrevocably and unconditionally to have purchased and received from the Issuing
Bank, without recourse or warranty, an undivided interest and participation, to
the extent of such other Lender's Percentage, in such Letter of Credit and the
Company's reimbursement obligations with respect thereto. For the purposes of
this Agreement, the unparticipated portion of each Letter of Credit shall be
deemed to be the
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Issuing Bank's "participation" therein. The Issuing Bank hereby agrees, upon
request of any Lender, to deliver to such Lender a list of all outstanding
Letters of Credit, together with such information related thereto as such other
Lender may reasonably request.
2.6 Reimbursement Obligations. The Company hereby unconditionally and
irrevocably agrees to reimburse the Issuing Bank for each payment or
disbursement made by the Issuing Bank under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on the
date of such payment or distribution shall bear interest from and including the
date of such payment or disbursement to but not including the date that the
Issuing Bank is reimbursed by the Company therefor, payable on demand, at a rate
per annum equal to LIBOR (Reserve Adjusted) from time to time in effect plus the
Applicable Margin (plus, at any time an Event of Default exists, 2%). The
Issuing Bank shall notify the Company and the Administrative Agent whenever any
demand for payment is made under any Letter of Credit by the beneficiary
thereunder; provided, however, that the failure of the Issuing Bank to so notify
the Company or the Administrative Agent shall not affect the rights of the
Issuing Bank or the Lenders in any manner whatsoever.
2.7 Limitation on the Issuing Bank's Obligations. In determining whether
to pay under any Letter of Credit, the Issuing Bank shall have no obligation to
the Company or any Lender other than to confirm that any documents required to
be delivered under such Letter of Credit appear to have been delivered and
appear to comply on their face with the requirements of such Letter of Credit.
Any action taken or omitted to be taken by the Issuing Bank under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence and willful misconduct, shall not impose upon the Issuing Bank
any liability to the Company or any Lender and shall not reduce or impair the
Company's reimbursement obligations set forth in Section 2.6 or the obligations
of the Lenders pursuant to Section 2.8.
2.8 Funding by Lenders to the Issuing Bank. If the Issuing Bank makes any
payment or disbursement under any Letter of Credit and the Company has not
reimbursed the Issuing Bank in full for such payment or disbursement by 10:00
a.m., London time, on the date of such payment or disbursement or if any
reimbursement received by the Issuing Bank from the Company is or must be
returned or rescinded upon or during any insolvency, bankruptcy or
reorganization of the Company or otherwise, each Lender shall be obligated to
pay to the Issuing Bank, in full or partial payment of the purchase price of its
participation in such Letter
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of Credit, its pro rata share (according to its Percentage) of such payment or
disbursement (but no such payment shall diminish the obligations of the Company
under Section 2.6), and the Administrative Agent shall promptly notify each
Lender thereof. Each Lender irrevocably and unconditionally agrees, severally
and for itself alone, to so pay to the Administrative Agent in immediately
available funds for the Issuing Bank's account the amount of such Lender's
Percentage of such payment or disbursement. If and to the extent any Lender
shall not have made such amount available to the Administrative Agent by 2:00
p.m., London time, on the Business Day on which such Lender receives notice
from the Administrative Agent of such payment or disbursement (it being
understood that any such notice received after noon, London time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Lender agrees to pay interest on such amount to the
Administrative Agent for the Issuing Bank's account forthwith on demand for
each day from and including the date such amount was to have been delivered to
the Administrative Agent to but excluding the date such amount is paid, at a
rate per annum equal to (a) for the first three days after demand, LIBOR
(Reserve Adjusted) from time to time in effect and (b) thereafter, LIBOR
(Reserve Adjusted) from time to time in effect plus the Applicable Margin. Any
Lender's failure to make available to the Administrative Agent its Percentage
of any such payment or disbursement shall not relieve any other Lender of its
obligation hereunder to make available to the Administrative Agent such other
Lender's Percentage of such payment, but no Lender shall be responsible for the
failure of any other Lender to make available to the Administrative Agent such
other Lender's Percentage of any such payment or disbursement.
2.9 Warranty. Each notice of borrowing pursuant to Section 2.3, and the
delivery of each Letter of Credit Application pursuant to Section 2.4 shall
automatically constitute a warranty by the Company to the Administrative Agent
and each Lender to the effect that on the date of such requested borrowing or
conversion or the issuance of the requested Letter of Credit, as the case may
be, (a) the warranties contained in Section 9 (excluding, except in the case of
Loans made or Letters of Credit issued on the Closing Date, Sections 9.4, 9.6
and 9.12 through 9.14) of this Agreement shall be true and correct as of such
requested date as though made on the date thereof and (b) no Event of Default or
Unmatured Event of Default shall have then occurred and be continuing or will
result therefrom.
2.10 Conditions. Notwithstanding any other provision of this Agreement,
(a) no Lender shall be obligated to make any Loan, and (b) no Lender shall be
obligated to permit the continuation at the end of the applicable Interest
Period of any Loan, and (c) the Issuing Bank shall not be obligated to issue
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any Letter of Credit if, in any such case, an Event of Default or Unmatured
Event of Default exists or would result therefrom.
2.11 Commitments Several. The failure of any Lender to make a requested
Loan on any date shall not relieve any other Lender of its obligation to make a
Loan on such date, but no Lender shall be responsible for the failure of any
other Lender to make any Loan to be made by such other Lender.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Lender shall be evidenced by a promissory
note (as amended, supplemented, replaced or otherwise modified from time to
time, individually each a "Note" and collectively for all Lenders the "Notes")
substantially in the form of Exhibit A, with appropriate insertions, dated the
Closing Date (or such earlier date as shall be satisfactory to the
Administrative Agent) and payable to the order of such Lender in an amount equal
to the sum of such Lender's Commitment (or, if less, in the aggregate unpaid
principal amount of all of such Lender's Loans) as follows: (a) prior to the
Commitment Termination Date, Loans may be borrowed, repaid and, subject to
compliance with Section 10.12, reborrowed and (b) all outstanding Loans shall be
repaid in full on the Commitment Termination Date.
3.2 Recordkeeping. Each Lender shall record in its records the date and
amount of each Loan made by such Lender, each repayment and the dates on which
each Interest Period for such Loan shall begin and end. The aggregate unpaid
principal amount so recorded shall be rebuttable presumptive evidence of the
principal amount owing and unpaid on such Lender's Notes. The failure to so
record any such amount or information or any error in so recording any such
amount or information shall not, however, limit or otherwise affect the
obligations of the Company hereunder or under any Note to repay when due the
principal amount of the Loans evidenced by such Note together with all interest
accruing thereon.
SECTION 4 INTEREST.
4.1 Interest Rates. The Company promises to pay interest on the unpaid
principal amount of each of its respective Loans for the period commencing on
the date of such Loan until such Loan is paid in full, at a rate per annum equal
to the sum of LIBOR (Reserve Adjusted) applicable to each Interest Period for
such Loan plus the Applicable Margin; provided, however, that at any time an
Event of Default has occurred and is continuing, the interest rate applicable to
each Loan shall be the sum of (A) LIBOR (Reserve Adjusted) (based on an Interest
Period of three months) plus (B) the Applicable Margin plus (C) 2%.
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4.2 Interest Payment Dates. Accrued interest on each Loan shall be
payable on the last day of each Interest Period relating to such Loan. After
maturity, accrued interest on all Loans shall be payable on demand.
4.3 Interest Periods. Each "Interest Period" for a Loan shall commence on
the date such Loan is made or (if such Loan is a continuation of a prior Loan)
on the expiration of the immediately preceding Interest Period for such
continued Loan, and shall end on the date which is one, two or three months, as
the Company may specify:
(a) in the case of an Interest Period which commences on the date a Loan
is made in the related notice of borrowing pursuant to Section 2.3, or
(b) in the case of a succeeding Interest Period with respect to any
continued Loan, by telephonic notice (promptly followed by written notice) to
the Administrative Agent not later than 10:00 a.m., London time, at least three
Business Days prior to the first day of such succeeding Interest Period, it
being understood that (i) each such notice shall be effective upon receipt by
the Administrative Agent and (ii) if the Company fails to give such notice, such
Loan, shall automatically become a Loan with an Interest Period of one month at
the end of its then-current Interest Period.
Each Interest Period that begins on the last day of a calendar month (or on a
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the immediately
succeeding Business Day (unless such immediately succeeding Business Day is the
first Business Day of a calendar month, in which case such Interest Period
shall end on the immediately preceding Business Day). The Company may not
select any Interest Period which would end after the Commitment Termination
Date.
4.4 Setting and Notice of LIBOR. LIBOR for each Interest Period shall be
determined by the Administrative Agent and notice thereof shall be given by the
Administrative Agent promptly to the Company and each Lender. Each determination
of LIBOR by the Administrative Agent shall be conclusive and binding upon the
parties hereto, in the absence of demonstrable error. The Administrative Agent
shall, upon written request of the Company or any Lender, deliver to the Company
or such Lender a statement showing the computations used by the Administrative
Agent in determining LIBOR hereunder.
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4.5 Computation of Interest. Interest shall be computed on Loans for the
actual number of days elapsed on the basis of a year of 365 or 366 days, as the
case may be.
SECTION 5 FEES.
5.1 Commitment Fees. The Company shall pay to the Administrative Agent
for the account of each Lender a commitment fee equal to the Applicable
Commitment Fee Rate on the daily average of the unused amount of such Lender's
Commitment. Such commitment fee shall accrue from April 23, 1996 to but
excluding the Commitment Termination Date. Such commitment fee shall be payable
in arrears on the Effective Date, the Closing Date, on the last Business Day of
each Fiscal Quarter and on the Commitment Termination Date, in each case for the
period then ending for which such commitment fee shall not have been theretofore
paid. The commitment fee shall be computed for the actual number of days
elapsed on the basis of a year of 365 or 366 days, as the case may be.
5.2 Letter of Credit Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of the Lenders pro rata according to their
respective Percentages a letter of credit fee for each Letter of Credit in an
amount per annum of the daily average of the aggregate Stated Amount of such
Letter of Credit (excluding any unreimbursed payment or disbursement thereunder)
equal to the Applicable Margin for Loans from time to time.
(b) The Company agrees to pay to the Issuing Bank a fronting fee in an
amount equal to 1/8 of 1% per annum of the daily average of the aggregate Stated
Amount of each Letter of Credit (excluding any unreimbursed payment or
disbursement thereunder).
(c) The fees payable pursuant to clauses (a) and (b) above shall be
computed for the actual number of days elapsed on the basis of a year of 365 or
366 days, as the case may be, and shall be payable in arrears on the last
Business Day of each Fiscal Quarter and on the date any Letter of Credit expires
or is terminated for the period from and including the date of the issuance of
the applicable Letter of Credit to but excluding the date such payment is due
or, if earlier, the date on which such Letter of Credit expired or was
terminated.
(d) In addition, with respect to each Letter of Credit, the Company
agrees to pay to the Issuing Bank such fees and expenses as the Issuing Bank
customarily requires in connection with the issuance, amendment, transfer,
negotiation, processing and/or administration of letters of credit.
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5.3 Additional Fees. The Company agrees to pay to the Administrative
Agent such additional fees at such times and in such amounts as are mutually
agreed upon in writing by the Company and the Administrative Agent.
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS;
REPAYMENTS.
6.1 Reduction or Termination of the Commitments.
6.1.1 Voluntary Reduction or Termination. The Company may from time to
time after the Closing Date but prior to the Commitment Termination Date, on at
least three Business Days' prior written notice received by the Administrative
Agent (which shall promptly advise each Lender thereof), permanently reduce the
amount of the Commitments to an amount not less than the sum of (i) the
aggregate principal amount of all outstanding Loans and (ii) the Stated Amount
of all outstanding Letters of Credit. Any such reduction shall be in an
aggregate amount of L1,000,000 or integral multiples thereof. The Company may
at any time on like notice prior to the Commitment Termination Date terminate
the Commitments upon payment in full of the Loans and all other obligations of
the Company hereunder and the expiration, cancellation or cash collateralization
(on terms satisfactory to the Administrative Agent and the Issuing Bank) of all
outstanding Letters of Credit. Upon any termination of the Commitment in whole
all of the Loans shall become immediately due and payable. All reductions of
the Commitments shall be pro rata among the Lenders according to their
Percentages.
6.1.2 Mandatory Commitment Reduction. (a) On each date that is one
Business Day after the receipt by the Company or any of its Subsidiaries or DTH
of Net Cash Proceeds, the Commitment shall, without further action,
automatically and permanently be reduced by an amount equal to such Net Cash
Proceeds.
(b) On each date that is three Business Days after the date on which
the Asset Coverage Ratio has been below 1.5:1.0 for three consecutive Business
Days, the Commitment shall, without further action, automatically and
permanently be reduced by an amount necessary to insure that the Asset Coverage
Ratio, after giving effect to such reduction, is 1.5:1.0.
(c) On each date that is one Business Day after the date on which the
Company receives proceeds from an exercise of the Purchase Option, the
Commitment shall, without further action, automatically and permanently be
reduced by an amount equal to such proceeds minus any cash payment made by FDTH
in connection with such exercise.
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(d) On each date that is one Business Day after the receipt of any
Debt/Equity Proceeds, the Commitment shall, without further action,
automatically and permanently be reduced by an amount equal to such Debt/Equity
Proceeds (after giving effect to any mandatory prepayment event under the Holdco
Facility); provided that the aggregate Commitment reductions pursuant to this
Section 6.1.2(d) shall not exceed $75,000,000.
(e) On each date that is one Business Day after the receipt of any Excess
Debt/Equity Proceeds, the Commitment shall, without further action,
automatically and permanently be reduced by an amount equal to such Excess
Debt/Equity Proceeds; provided that the Commitment reductions pursuant to this
Section 6.1.2(e) shall not be required from and after the date that the ratio of
(a) Operating Cash Flow for the immediately preceding four Fiscal Quarters
excluding any dividends received from Fairfax or Southam to (b) Funded Debt as
of such date is 4.5:1.0 or less.
6.2 Prepayments.
6.2.1 Mandatory Prepayments due to Commitment Reductions. If, after
giving effect to any reduction of the Commitments pursuant to Section 6.1, (a)
the sum of the aggregate principal amount of all outstanding Loans plus the
Stated Amount of all outstanding Letters of Credit exceeds (b) the aggregate
amount of the Commitments, the Company will make an immediate repayment of Loans
in an amount equal to such excess (rounded upward, if necessary, to an integral
multiple of L250,000).
6.2.2 Voluntary Prepayments. The Company may from time to time prepay its
Loans in whole or in part, provided that (a) the Company shall give the
Administrative Agent (which shall promptly advise each Lender) not less than
three Business Days' prior written notice thereof, specifying the Loans to be
prepaid and the date and amount of prepayment and (b) each partial prepayment of
Loans shall be in a principal amount of at least L1,000,000 and an integral
multiple of L500,000.
6.2.3 All Prepayments. All prepayments of Loans shall be pro rata among
the Lenders according to their Percentages and any prepayment of a Loan shall
include accrued interest to the date of prepayment on the principal amount being
repaid. Any prepayment of a Loan on a day other than the last day of an
Interest Period therefor shall be subject to Section 8.4.
6.2.4 Commitment Termination Date. The Company shall repay to the Lenders
on the Commitment Termination Date the aggregate principal amount of its Loans
outstanding on such date and shall deliver to the Administrative Agent cash
collateral consisting of Cash Equivalent Investments or other cash collateral
acceptable to the Issuing Bank in an amount equal to the Stated Amount of
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all Letters of Credit which have an expiry date which is later than three days
prior to the Commitment Termination Date.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. (a) All payments of principal of or interest on
the Loans, and of all fees, shall be made by the Company to the Administrative
Agent in immediately available funds at its principal office in London, England
not later than 2:00 p.m., London time, on the date due; and funds received
after that hour shall be deemed to have been received by the Administrative
Agent on the next following Business Day. The Administrative Agent shall
promptly remit to each Lender its share of all such payments received in
collected funds by the Administrative Agent for the account of such Lender.
(b) All payments under Sections 8.1 and 8.4 shall be made by the Company
directly to the Lender or Lenders entitled thereto.
7.2 Application of Certain Payments. Except as otherwise expressly
provided herein, each payment of principal shall be applied to such Loans as the
Company shall direct by notice to be received by the Administrative Agent on or
before the date of such payment or, in the absence of such notice, as the
Administrative Agent shall determine in its reasonable discretion. Concurrently
with each remittance to any Lender of its share of any such payment, the
Administrative Agent shall advise such Lender as to the application of such
payment.
7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Notes, or of any fees, falls due on a day which is not a
Business Day, then, except as provided in Section 4.3, such due date shall be
extended to the next following Business Day and, in the case of principal,
additional interest shall accrue and be payable for the period of any such
extension.
7.4 Setoff. The Company agrees that the Administrative Agent and each
Lender have all rights of set-off and bankers' lien provided by applicable law,
and in addition thereto, the Company agrees that at any time any Event of
Default has occurred and is continuing, the Administrative Agent and each Lender
may apply to any obligation of the Company hereunder, whether or not then due,
any and all balances, credits, deposits, accounts or moneys of the Company then
or thereafter with the Administrative Agent or such Lender.
7.5 Proration of Payments. If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of or
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interest on any Loan (or on account of its participation in any Letter of
Credit) in excess of its pro rata share of payments and other recoveries
obtained by all Lenders on account of principal of and interest on Loans (or
such participations) then held by them (other than any non-pro rata interest
payment resulting from a Loan being an Affected Loan or any payment resulting
from replacement of a Lender pursuant to Section 8.7), such Lender shall
purchase from the other Lenders such participation in the Loans (or
sub-participations in Letters of Credit) held by them as shall be necessary to
cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; provided, however, that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery.
7.6 Net Payments; Tax Exemptions.
(a) All payments by the Company of principal, interest, fees, indemnities
and other amounts payable hereunder and under the Notes shall be made to the
recipient thereof without setoff or counterclaim and free and clear of, and
without withholding or deduction for or on account of, any present or future
Taxes (other than Excluded Taxes) now or hereafter imposed on such recipient or
its income, property, assets or franchises (such recipient's "Recipient Taxes"),
except to the extent that such withholding or deduction (i) is required by
applicable law, (ii) results from the breach by such recipient of its Exemption
Agreement (as defined below) or (iii) would not be required if such recipient's
Exemption Representation (as defined below) were true. If any such withholding
or deduction is required by applicable law, the Company will:
(A) pay to the relevant authorities the full amount so required to be
withheld or deducted;
(B) promptly forward to the Administrative Agent an official receipt or
other documentation satisfactory to the Administrative Agent evidencing such
payment to such authorities; and
(C) except to the extent that such withholding or deduction would not be
required if such recipient's Exemption Representation were true, pay to the
Administrative Agent for the account of the relevant recipient such additional
amount as is necessary to ensure that the net amount actually received by such
recipient will equal the full amount such recipient would have received had no
such withholding or deduction been required.
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(b) In consideration of the Company's agreements in clause (a) of this
Section 7.6, each Lender which is not organized under the laws of the United
Kingdom or any political subdivision thereof hereby agrees (such Lender's
"Exemption Agreement"), to the extent permitted by applicable law (including any
applicable double taxation treaty of the jurisdiction of its incorporation and
the jurisdiction in which its Lending Office is located), to execute and deliver
to the Company and the Administrative Agent (i) on or before the first scheduled
payment date after the Effective Date, such forms or certificates, properly
completed and claiming a complete exemption, as the case may be, from
withholding or deduction for or on account of Recipient Taxes of such Lender,
and (ii) a new or successor form or certificate, as appropriate, upon the
expiration or obsolescence of any previously delivered form or certificate.
(c) Each Lender hereby represents and warrants (such Lender's "Exemption
Representation") to the Company that on the Effective Date (or, if later, the
date it becomes a party to this Agreement) it is entitled to receive payments of
principal of, and interest on, Loans made by such Lender without withholding or
deduction for or on account of such Lender's Recipient Taxes imposed by the
United Kingdom or any political subdivision thereof.
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any Lending Office of such Lender) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency
(i) shall subject any Lender (or any Lending Office of such Lender)
to any tax, duty or other charge with respect to its Loans, its Note or its
obligation to make Loans, or shall change the basis of taxation of payments
to any Lender of the principal of or interest on its Loans or any other
amounts due under this Agreement in respect of its Loans or its obligation
to make Loans (except for changes in the rate of tax on the overall net
income of such Lender or its Lending Office imposed by the jurisdiction in
which such Lender's principal executive office or Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed
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by the Board of Governors of the Bank of England or the Federal Reserve
System, but excluding any reserve included in the determination of interest
rates pursuant to Section 4), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by any Lender (or any Lending Office of such Lender); or
(iii) shall impose on any Lender (or its Lending Office) any other
condition affecting its Loans, its Note or its obligation to make Loans;
and the result of any of the foregoing is to increase the cost to (or to impose
a cost on) such Lender (or any Lending Office of such Lender) of making or
maintaining any Loan, or to reduce the amount of any sum received or receivable
by such Lender (or its Lending Office) under this Agreement or under its Note
with respect thereto, then within 10 days after demand by such Lender (which
demand shall be accompanied by a statement setting forth in reasonable detail
the basis for and a calculation of the amount of such demand, a copy of which
shall be furnished to the Administrative Agent), the Company shall pay directly
to such Lender such additional amount or amounts as will compensate such Lender
for such increased cost or such reduction.
(b) If any Lender shall reasonably determine that the adoption or phase-in
of any applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Lending Office) or any Person controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's or such controlling
Person's capital as a consequence of such Lender's obligations hereunder
(including, without limitation, such Lender's obligations under the Commitment)
to a level below that which such Lender or such controlling Person could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such controlling Person's policies with respect to capital
adequacy) by an amount deemed by such Lender or such controlling Person to be
material, then from time to time, within 10 days after demand by such Lender
(which demand shall be accompanied by a statement setting forth in reasonable
detail the basis for and a calculation of the amount of such demand, a copy of
which shall be furnished to the Administrative Agent), the Company shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such controlling Person for such reduction.
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8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
respect to any Interest Period:
(a) deposits in Sterling (in the applicable amounts) are not being offered
to the Administrative Agent in the London interbank market for such Interest
Period, or the Administrative Agent otherwise reasonably determines (which
determination shall be binding and conclusive on the Company) that by reason of
circumstances affecting the London interbank market adequate and reasonable
means do not exist for ascertaining LIBOR;
(b) two or more Lenders having an aggregate Percentage of 30% or more
advise the Administrative Agent that LIBOR (Reserve Adjusted) as determined by
the Administrative Agent will not as determined in good faith by such Lenders
adequately and fairly reflect the cost to such Lenders of maintaining or funding
such Loans for such Interest Period (taking into account any amount to which
such Lenders may be entitled under Section 8.1); or
(c) Lenders having an aggregate Percentage of 30% or more advise the
Administrative Agent that the making or funding of Loans has become
impracticable as a result of an event occurring after the date of this Agreement
which in the opinion of such Lenders materially affects such Loans;
then the Administrative Agent shall promptly notify the other parties hereto
and, so long as such circumstances shall continue, (i) no Lender shall be under
any obligation to make Loans and (ii) on the last day of the current Interest
Period for each Loan, such Loan shall be repaid in full.
8.3 Changes in Law Rendering Loans Unlawful. In the event that any change
in (including the adoption of any new) applicable laws or regulations, or any
change in the interpretation of applicable laws or regulations by any
governmental or other regulatory body charged with the administration thereof,
should make it (or in the good faith judgment of any Lender cause a substantial
question as to whether it is) unlawful for any Lender to make, maintain or fund
Loans, then such Lender shall promptly notify each of the other parties hereto
and, so long as such circumstances shall continue, (a) such Lender shall have no
obligation to make any, and (b) on the last day of the current Interest Period
for each Loan of such Lender (or, in any event, on such earlier date as may be
required by the relevant law, regulation or interpretation), such Loan shall be
repaid in full.
8.4 Funding Losses. The Company hereby agrees that upon demand by any
Lender (which demand shall be accompanied by a statement setting forth the basis
for the calculations of the
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amount being claimed, a copy of which shall be furnished to the Administrative
Agent) the Company will indemnify such Lender against any net loss or expense
which such Lender may sustain or incur (including, without limitation, any net
loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain any Loan of
the Company), as reasonably determined by such Lender, as a result of (a) any
payment or prepayment of any Loan of the Company of such Lender on a date other
than the last day of an Interest Period for such Loan (including, without
limitation, any payment pursuant to Section 8.3) or (b) any failure of the
Company to borrow any Loans on a date specified therefor in a notice of
borrowing pursuant to this Agreement. For this purpose, all notices to the
Administrative Agent pursuant to this Agreement shall be deemed to be
irrevocable.
8.5 Right of Lenders to Fund through Other Offices. Each Lender may, if
it so elects, fulfill its commitment as to any Loan by causing a foreign branch
or Affiliate of such Lender to make such Loan, provided that in such event for
the purposes of this Agreement such Loan shall be deemed to have been made by
such Lender and the obligation of the Company to repay such Loan shall
nevertheless be to such Lender and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or Affiliate.
8.6 Discretion of Lenders as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Lender shall be entitled to
fund and maintain its funding of all or any part of its Loans in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder shall be made as if such Lender had actually funded
and maintained each Loan during each Interest Period for such Loan through the
purchase of deposits having a maturity corresponding to such Interest Period and
bearing an interest rate equal to LIBOR for such Interest Period.
8.7 Mitigation of Circumstances; Replacement of Affected Lender. (a) Each
Lender shall promptly notify the Company and the Administrative Agent of any
event of which it has knowledge which will result in, and will use reasonable
commercial efforts available to it (and not, in such Lender's good faith
judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, (i)
any obligation by the Company to pay any amount pursuant to Section 7.6 or 8.1
and (ii) the occurrence of any circumstances of the nature described in Section
8.2 or 8.3 (and, if any Lender has given notice of any such event described in
clause (i) or (ii) above and thereafter such event ceases to exist, such Lender
shall promptly so notify the Company and the Administrative Agent). Without
limiting the foregoing, each Lender will designate a different funding office if
such designation will
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avoid (or reduce the cost to the Company of) any event described in clause
(i) or (ii) of the preceding sentence and such designation will not, in such
Lender's sole judgment, be otherwise disadvantageous to such Lender.
(b) At any time any Lender is an Affected Lender, the Company may replace
such Affected Lender as a party to this Agreement with one or more other bank(s)
or financial institution(s) reasonably satisfactory to the Administrative Agent
and the Issuing Bank and, upon notice from the Company, such Affected Lender
shall assign pursuant to an Assignment Agreement, and without recourse or
warranty, its Commitment, if any, its Loans, its Note, its participation in
Letters of Credit, if any, and all of its other rights and obligations hereunder
to such replacement bank(s) or other financial institution(s) for a purchase
price equal to the sum of the principal amount of the Loans so assigned, all
accrued and unpaid interest thereon, its ratable share of all accrued and unpaid
commitment fees and Letter of Credit fees, any amounts payable under Section 8.4
as a result of such Lender receiving payment of any Loan prior to the end of an
Interest Period therefor and all other obligations owed to such Affected Lender
hereunder.
8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
and statements of any Lender pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
conclusive absent demonstrable error. Lenders may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, cancellation or expiration of the Letters of Credit
and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce the Agents and the Lenders to enter into this Agreement, the
Issuing Bank to issue Letters of Credit and the Lenders to make Loans and
purchase participations in Letters of Credit hereunder, the Company warrants to
the Agents, the Issuing Bank and the Lenders that:
9.1 Organization, etc. The Company and each Subsidiary is a corporation
duly organized and validly existing under the jurisdiction of its incorporation;
the Company and each Subsidiary is duly qualified to do business in each
jurisdiction where the nature of its business makes such qualification
necessary, except where the failure to be so qualified would not have a Material
Adverse Effect; and the Company and each Subsidiary has full corporate power and
authority to own its property and conduct its business as presently conducted by
it.
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9.2 Authorization; No Conflict. The execution and delivery by the Company
of this Agreement and each other Loan Document to which it is a party, the
borrowings hereunder, the execution and delivery by each Obligor of each Loan
Document to which it is a party and the performance by the Company and each
Obligor of its obligations under each Loan Document to which it is a party are
within the corporate powers of the Company and each Obligor, as applicable, as
of the date of execution of a Loan Document have been duly authorized by all
necessary corporate action on the part of the Company and each Obligor
(including any necessary shareholder action), have received all necessary
governmental approval (if any shall be required), and do not and will not (a)
violate any provision of law or any order, decree or judgment of any court or
other government agency which is binding on the Company or except as set forth
in Section 9.16 any Subsidiary or other Obligor, (b) contravene or conflict
with, or result in a breach of, any provision of the Memorandum and Articles of
Association, the Certificate of Incorporation, By-Laws or other organizational
documents of the Company or any Subsidiary or other Obligor or of any agreement,
indenture, instrument or other document, or any judgment, order or decree, which
is binding on the Company or any Subsidiary or other Obligor or (c) result in,
or require, the creation or imposition of any Lien on any property of the
Company or any Subsidiary or other Obligor (other than pursuant to the Loan
Documents).
9.3 Validity and Binding Nature. This Agreement is, and upon the
execution and delivery thereof each other Loan Document to which the Company is
a party will be, the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in equity or at law); and each Loan Document to
which an Obligor is a party will be, upon the execution and delivery thereof by
such Obligor, the legal, valid and binding obligation of such Obligor,
enforceable against such Obligor in accordance with its terms, except that
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally by general
principles of equity (regardless of whether enforcement is sought in equity or
at law).
9.4 Financial Information. (a) The audited supplemental consolidated
financial statements of Telegraph and its Subsidiaries as at December 31, 1995
and the unaudited consolidated financial statements of Telegraph and its
Subsidiaries as at March 31, 1996, copies of which have been
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delivered to the Lenders, in each case (i) are true and correct in all material
respects, (ii) have been prepared in accordance with GAAP consistently applied
throughout the periods involved (except as disclosed therein and, in the case
of interim financial statements, for the absence of footnotes disclosures and
normal year-end adjustments) and (iii) present a true and fair view of the
consolidated financial condition of Telegraph and its Subsidiaries at such
dates and the results of their operations for the periods then ended.
(b) The forecasted consolidating balance sheet, profits and loss
statement and cash flow statement of the Company and its Subsidiaries (after
giving effect to the Scheme), together with supporting details and statement of
underlying assumptions dated May 30, 1996, copies of which have been delivered
to each Lender, have been prepared by the Company in light of the past
operations of the business of the Company and its Subsidiaries and represent, as
of the date of this Agreement, the good faith estimate of the Company and its
senior management of the most probable course of the business of the Company and
its subsidiaries after giving effect to the Scheme.
9.5 No Material Adverse Change. Except as disclosed in Schedule 9.5,
since December 31, 1995, no event or events have occurred which, individually or
in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.
9.6 Litigation and Contingent Liabilities. No litigation (including,
without limitation, derivative actions), arbitration proceeding or governmental
proceeding is pending or, to the Company's knowledge, threatened against the
Company or any Subsidiary which, if adversely determined, might have a Material
Adverse Effect, except as set forth in Schedule 9.6. Other than any liability
incident to such litigation or proceedings, neither the Company nor any
Subsidiary has any material contingent liabilities not provided for or disclosed
in the financial statements referred to in clause (a) of Section 9.4 or listed
in Schedule 9.6.
9.7 Ownership of Properties; Liens. Each of the Company and each
Subsidiary owns good and marketable title to, or a valid leasehold interest in,
all of its properties and assets, real and personal, tangible and intangible, of
any nature whatsoever (including patents, trademarks, trade names, service marks
and copyrights), free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, copyrights and the
like) except as permitted pursuant to Section 10.8.
9.8 Subsidiaries. The Company has no Subsidiaries except those listed in
Schedule 9.8
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9.9 Employee Benefit Plans. Each Employee Benefit Plan is in compliance
in all material respects with all laws, regulations and rules applicable thereto
and the respective requirements of the governing documents for such Plan, except
for any non-compliance the consequences of which, in the aggregate, would not
result in a material obligation to pay money. The aggregate of the accumulated
benefit obligations under all Employee Benefit Plans does not exceed the current
fair market value of the assets held in the trusts or similar funding vehicles
for such Plans. With respect to any Employee Benefit Plan maintained or
contributed to by the Company or any of its Subsidiaries, reasonable reserves
have been established in accordance with prudent business practice or where
required by ordinary accounting practices in the jurisdiction in which such Plan
is maintained. There are no material actions, suits or claims (other than
routine claims for benefits) pending or, to the knowledge of the Company,
threatened against it or any of its Subsidiaries with respect to any Employee
Benefit Plan.
9.10 Taxes. Each of the Company and each Subsidiary has filed all income
tax and other material tax returns and reports required by law to have been
filed by it and has paid all income taxes and other material taxes and
governmental charges thereby shown to be owing, except (a) as disclosed on
Schedule 9.6 and (b) for any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
9.11 Solvency, etc. On the Closing Date (or, in the case of any Person
which becomes an Obligor after the Closing Date, on the date such Person becomes
an Obligor), and immediately prior to and after giving effect to the issuance of
each Letter of Credit, each borrowing hereunder and the use of the proceeds
thereof, (a) the assets of each of the Company and each Subsidiary which is a
Guarantor will exceed its liabilities and (b) each of the Company and each
Subsidiary which is a Guarantor will be solvent, will be able to pay its debts
as they mature, will own property with fair saleable value greater than the
amount required to pay its debts and will have capital sufficient to carry on
its business as then constituted.
9.12 Insurance. Set forth on Schedule 9.12 is a complete and accurate
summary of the property, casualty and business interruption insurance program
carried by the Company and its Subsidiaries on the date of this Agreement,
including the insurer's(s') name(s), policy number(s), expiration date(s),
amount(s) of coverage, type(s) of coverage, the annual premium(s), exclusions,
deductibles and self-insured retention and a description in reasonable detail of
(a) any retrospective rating plan, fronting arrangement or other self-insurance
or risk
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assumption agreed to by the Company or any Subsidiary or imposed upon the
Company or any Subsidiary by any such insurer and (b) any self-insurance
program that is in effect.
9.13 Contracts; Labor Matters. Except as disclosed on Schedule 9.13: (a)
neither the Company nor any Subsidiary is a party to any contract or agreement,
or is subject to any charge, corporate restriction, judgment, decree or order,
which has a Material Adverse Effect; (b) no labor contract to which the Company
or any Subsidiary is a party or is otherwise subject is scheduled to expire
prior to the Commitment Termination Date; (c) neither the Company nor any
Subsidiary has, within the two-year period preceding the date of this Agreement,
taken any action which would have constituted or resulted in a plant closing,
mass layoff or redundancy on a large scale and the Company has no reasonable
expectation that any such action is or will be required at any time prior to the
Commitment Termination Date; and (d) on the Closing Date there are no strikes or
walkouts relating to any labor contracts to which the Company or any Subsidiary
is a party or is otherwise subject.
9.14 Environmental and Safety and Health Matters. Except as disclosed on
Schedule 9.14, the Company and each of its Subsidiaries and each property,
operation and facility that the Company or any Subsidiary may own, operate or
control (i) complies in all material respects with (A) all applicable
Environmental Laws and (B) all applicable Occupational Safety and Health Laws;
(ii) is not subject to any judicial or administrative proceeding alleging the
violation of any Environmental Law or Occupational Safety and Health Law; (iii)
has not received any notice (A) that it may be in violation of any Environmental
Law or Occupational Safety and Health Law, or (B) threatening the commencement
of any proceeding relating to allegedly unlawful, unsafe or unhealthy conditions
or (C) alleging that it is or may be responsible for any response, cleanup, or
corrective action, including, but not limited to, any remedial
investigation/feasibility study, under any Environmental Law or Occupational
Safety and Health Law; (iv) has not received any notice that it is the subject
of federal or state investigation evaluating whether any investigation, remedial
action or other response is needed to respond to (A) a spillage, disposal or
release or threatened release into the environment of any Regulated Material, or
(B) any alleged violation of any Occupational Safety and Health Law; (v) has not
filed any notice under or relating to any Environmental Law or Occupational
Safety and Health Law indicating or reporting (A) any past or present spillage,
disposal or release (other than permitted releases) into the environment of, or
treatment, storage or disposal of (other than permitted releases), any Regulated
Material in excess of quantities requiring notification under any Environmental
Law, or (B) any violation of any Occupational Safety and Health Law
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and (vi) to the best knowledge of the Company has no material contingent
liability in connection with (A) any actual or potential spillage, disposal or
release into the environment of, or otherwise with respect to, any Regulated
Material, whether on any premises owned or occupied by the Company or any
Subsidiary or on any other premises or (B) any unsafe or unhealthful condition.
Except as disclosed on Schedule 9.14, there are no Regulated Materials on, in
or under any property or facilities, owned, operated or controlled by the
Company or any Subsidiary (except Regulated Materials used in the ordinary
course of the business of the Company and its Subsidiaries and used, stored,
handled, treated and disposed of in all material respects in accordance with
all applicable Environmental Laws and Occupational Safety and Health Laws)
that, under applicable Environmental Laws or Occupational Safety and Health
Laws (A) impose or could reasonably be expected to impose a liability for
removal, remediation, or other cleanup or damage to natural resources, in an
amount equal to or greater than L500,000; (B) could reasonably be expected to
have a Material Adverse Effect; or (C) could reasonably be expected to result
in the imposition of a Lien on the property or other assets of the Company or
its Subsidiaries.
9.15 Information. All written information heretofore or contemporaneously
herewith furnished by or on behalf of the Company or any Subsidiary to any Agent
or any Lender for purposes of or in connection with this Agreement and the
transactions contemplated hereby is, and all written information hereafter
furnished by or on behalf of the Company or any Subsidiary to any Agent or any
Lender pursuant hereto or in connection herewith will be, true and accurate in
every material respect on the date as of which such information is dated or
certified, and none of such information is or will be incomplete by omitting to
state any material fact necessary to make such information not misleading.
9.16 Financial Assistance. Save for the granting of the security
interests and the giving of the guarantees by the Subsidiaries as contemplated
by the Loan Documents, the Telegraph Assumption and the making of Bonus Payments
and Early Termination Payments as defined and described in the Scheme Documents,
the implementation and consummation of any part of the Scheme or any of the
transactions contemplated herein has not constituted or involved, and will not
constitute or involve, any arrangement amounting to unlawful financial
assistance for the acquisition of shares within the meaning of Section 151 of
the Companies Act 1985.
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SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Company hereunder and under the other Loan Documents are
paid in full and all Letters of Credit have been terminated or expired
(regardless of whether such Letters of Credit have been cash collateralized),
the Company agrees that, unless at any time the Required Lenders shall otherwise
expressly consent in writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the
Administrative Agent and each Lender at its respective office:
10.1.1 Annual Report. Promptly when available and in any event within 90
days after the close of each Fiscal Year, (a) a copy of the annual report of the
Company and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such Fiscal Year and consolidated statements of earnings and cash flow of the
Company and its Subsidiaries for such Fiscal Year, which report (i) shall be
prepared in accordance with GAAP and certified by independent auditors of
recognized national standing selected by the Company and reasonably acceptable
to the Required Lenders, in an audit report which shall be without qualification
as to going concern or scope and (ii) shall be accompanied by a written
statement from such auditors to the effect that in making the examination
necessary for the signing of such audit report they have not become aware of any
Event of Default or Unmatured Event of Default that has occurred and is
continuing or, if they have become aware of any such event, describing it in
reasonable detail; and (b) a copy of the consolidating balance sheets of the
Company and its Subsidiaries as of the end of such Fiscal Year and consolidating
statements of earnings for the Company and its Subsidiaries for such Fiscal
Year, together with a certificate signed by one of the chief executive officer,
the chief financial officer, the chief operating officer or the controller of
the Company certifying that such financial statements fairly present the
financial condition and results of operations of the Company and its
Subsidiaries as of the dates and periods indicated.
10.1.2 Quarterly Reports. Promptly when available and in any event within
45 days after the end of the first three Fiscal Quarters of each Fiscal Year,
(a) consolidated balance sheets of the Company and its Subsidiaries as of the
end of such Fiscal Quarter and consolidated statements of earnings and
consolidated statements of cash flow for such Fiscal Quarter and for the period
beginning with the first day of such Fiscal Year and ending on the last day of
such Fiscal Quarter, including a comparison with the corresponding Fiscal
Quarter and period of the previous Fiscal Year and prepared in accordance with
GAAP,
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and (b) consolidating balance sheets of the Company and its Subsidiaries as of
the end of such Fiscal Quarter and consolidating statements of earnings for the
Company and its Subsidiaries for such Fiscal Quarter, together with a
certificate signed by one of the chief executive officer, the chief financial
officer, the chief operating officer or the controller of the Company to the
effect that such financial statements fairly present the financial condition
and results of operations of the Company and its Subsidiaries as of the dates
and periods indicated, subject to changes resulting from normal year-end
adjustments.
10.1.3 Certificates. Contemporaneously with the furnishing of a copy of
each annual audit report pursuant to Section 10.1.1, and each set of statements
pursuant to Section 10.1.2, a duly completed certificate in the form of Exhibit
B, with appropriate insertions, dated the date of such annual report or such
quarterly statements and signed by one of the chief executive officer, the chief
financial officer, the chief operating officer or the controller of the Company,
containing a computation of each of the financial ratios and restrictions set
forth in this Section 10 and to the effect that such officer has not become
aware of any Event of Default or Unmatured Event of Default that has occurred
and is continuing or, if there is any such event, describing it and the steps,
if any, being taken to cure it.
10.1.4 Reports to Securities Exchange and to Shareholders. Promptly upon
the filing or sending thereof, a copy of (a) any annual, periodic or special
report or registration statement (inclusive of exhibits thereto) filed by the
Company or any Subsidiary with any securities exchange and (b) any report, proxy
statement or similar communication to the Company's or such Subsidiary's public
shareholders, if any.
10.1.5 Notice of Default, Litigation and Employee Benefit Matters.
Promptly (and in any event within one Business Day in the case of clause (a) and
within five days in the case of clauses (b) through (e)) after any officer of
the Company learns of any of the following, written notice describing the same
and the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto: (a) the occurrence of an Event of Default or an Unmatured
Event of Default; (b) any litigation, arbitration or governmental investigation
or proceeding not previously disclosed by the Company to the Lenders which has
been instituted or, to the knowledge of the Company, is threatened against the
Company or any Subsidiary or to which any of the properties of any thereof is
subject which has had or is reasonably likely to have a Material Adverse Effect;
(c) any material adverse development which occurs in any litigation, arbitration
or governmental investigation or proceeding previously disclosed on Schedule 9.6
or pursuant to clause (b);
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(d) the institution of any steps by the Company, any of its Subsidiaries or any
other Person to terminate any Employee Benefit Plan, or the failure to make a
required contribution to any Employee Benefit Plan if such failure is
sufficient to give rise to a Lien, or the taking of any action with respect to
a Employee Benefit Plan which could result in the requirement that the Company
or any of its Subsidiaries furnish a bond or other security, or the occurrence
of any event with respect to any Employee Benefit Plan which could result in
the incurrence by the Company or any of its Subsidiaries of any material
liability, fine or penalty, or any material increase in the contingent
liability of the Company or such Subsidiary with respect to any post-retirement
Employee Benefit Plan benefit; and (e) the occurrence of any other event or
circumstance which has had or is reasonably likely to have a Material Adverse
Effect.
10.1.6 Management Reports. Promptly upon the request of the
Administrative Agent or any Lender, copies of all detailed financial and
management reports submitted to the Company or any of its Subsidiaries by
independent auditors in connection with any annual or interim audit made by such
auditors of the books of the Company and its Subsidiaries.
10.1.7 Insurance Information. Not later than 90 days after the end of
each Fiscal Year, a complete and accurate summary of the property, business
interruption and casualty insurance program of the Company and its Subsidiaries,
containing substantially the same information with respect to such insurance
program as the information set forth on Schedule 9.12; and promptly upon the
occurrence thereof, a written report of any change in the Company's insurance
program which will materially reduce the amount or scope of coverage of any type
of insurance.
10.1.8 Annual Budget. Not later than the earlier of (a) the date the
annual report is required to be delivered pursuant to Section 10.1.1 and (b) the
date on which preparation of such budget is completed, a copy of the Company's
annual budget for the next succeeding Fiscal Year.
10.1.9 Other Information. Promptly from time to time, such other
information concerning the Company and its Subsidiaries as any Lender or the
Administrative Agent may reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
keep, proper books and records in which full and correct entries shall be made
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, on reasonable notice and at
reasonable times and intervals any Lender, the Administrative Agent or any
representative thereof to (a) visit and inspect the properties of the Company or
any of its Subsidiaries during
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normal business hours, (b) inspect and make extracts from and copies of their
respective books and records, and (c) discuss with their respective principal
officers their respective businesses, operations and financial matters. The
Company and each of its Subsidiaries will (i) after the occurrence and during
the continuance of any Event of Default and (ii) otherwise with the consent of
the Company, which consent shall not be unreasonably withheld, also permit any
Lender, the Administrative Agent or any representative thereof to discuss with
the Company's independent auditors their respective businesses, operations and
financial matters, provided that the Company is given reasonable prior notice
of and an opportunity to attend any meeting between such auditors and any
Lender, the Administrative Agent or any representative thereof at which such
issues will be discussed. All visits, discussions, and examinations by the
Administrative Agent shall be at the Company's expense.
10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
reputable, financially sound insurance companies, insurance to such extent and
against such hazards and liabilities as is customarily maintained by companies
similarly situated (and, in any event, such insurance as may be required by any
law or governmental regulation or any court order or decree); and, upon request
of the Administrative Agent or any Lender, furnish to the Administrative Agent
or such Lender a certificate setting forth in reasonable detail the nature and
extent of all insurance maintained by the Company and its Subsidiaries.
10.4 Compliance with Laws; Maintenance of Property; Payment of Taxes and
Liabilities. (a) Comply, and cause each Subsidiary to comply, in all material
respects with all applicable laws, rules, regulations and orders the
noncompliance with which would be reasonably likely to have a Material Adverse
Effect; (b) maintain or cause to be maintained, and cause each Subsidiary to
maintain or cause to be maintained, in good repair, working order and condition
all material properties used in its business, and make, and cause each
Subsidiary to make, all appropriate repairs, renewals and replacements of such
properties; (c) pay, and cause each Subsidiary to pay, prior to delinquency, all
taxes and other governmental charges against it or any of its property;
provided, however, that the foregoing shall not require the Company or any
Subsidiary to pay any such tax or charge so long as it shall contest the
validity thereof in good faith by appropriate proceedings and shall set aside on
its books adequate reserves with respect thereto; and (d) not, and not permit
any Subsidiary to, file or consent to the filing of any consolidated income tax
return with any Person other than the Company and its Subsidiaries.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject
to Section 10.11) cause each Subsidiary to maintain
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and preserve, (a) its existence and good standing in the jurisdiction of its
incorporation, (b) its qualification and good standing as a foreign corporation
in each jurisdiction where the nature of its business makes such qualification
necessary (except in those instances in which the failure to be qualified or in
good standing would not be reasonably likely to result in a Material Adverse
Effect), and (c) each other corporate franchise the failure or absence of which
would have a Material Adverse Effect.
10.6 Financial Covenants.
10.6.1 Asset Coverage Ratio. Not permit the Asset Coverage Ratio to be
less than (a) 1.25:1:0 prior to the Closing Date and (b) 1.5:1.0 on or after the
Closing Date, in each case for three consecutive Business Days at any time
unless within three Business Days of such failure the Company has made any
payment required as a result of the Commitment reduction required pursuant to
Section 6.1.2(b).
10.6.2 Interest Coverage Ratio. Not permit the Interest Coverage Ratio to
be less than 1.5:1.0 as of any Fiscal Quarter.
10.6.3 Computation of Financial Covenants. For purposes of calculating
any financial covenant contained in this Section 10.6, any accounting
adjustments or the reversal of any reserves established in connection therewith
shall not affect the calculation of such financial covenant. Upon the
implementation of any accounting adjustments, the financial statements delivered
hereunder and the financial covenants shall be prepared without regard to such
adjustments until a mutually satisfactory amendment to the financial covenants
has been implemented.
10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
incur, assume or suffer to exist any Debt, except (a) obligations arising under
the Loan Documents; (b) Debt of Subsidiaries under the Subsidiary Notes; (c)
Debt of the Company under the FDTH/Holdco Subordinated Note, provided such Debt
shall not exceed U.S.$100,000,000 in the aggregate at any time; (d) unsecured
Debt of the Company to its Wholly-Owned Subsidiaries provided such debt is
subordinated to the Loans on terms and conditions satisfactory to the Required
Lenders; (e) Hedging Agreements entered into by the Company; (f) Guarantee
Obligations in respect of any obligation of the Company or any Subsidiary
permitted under this Agreement; (g) Debt in respect of taxes, assessments or
governmental charges to the extent that payment thereof shall not at the time be
required to be made in accordance with Section 10.4; (h) Debt of Telegraph
outstanding on the Effective Date not exceeding L45,000,000 and listed on
Schedule 10.7 under the heading "Continuing Debt" and other Debt hereafter
incurred by Subsidiaries in connection with Liens
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permitted by Section 10.8, and extensions, renewals and refinancings of any
Debt described in this clause (h) so long as the permitted or available
principal amount thereof is not increased; (i) Debt of Wholly-Owned
Subsidiaries to or from Wholly-Owned Subsidiaries; (j) Debt under the Existing
Debt Facilities (provided that all such Debt shall be paid on or before the
Closing Date); (k) Debt under the FDTH Loan Notes and the Fairfax Loan Notes;
(l) Subordinated Debt under clause (b) of the definition of Subordinated Debt
and (m) Redeemable Capital Stock of the Company and Telegraph outstanding on
the Effective Date.
10.8 Liens. Not, and not permit any Subsidiary to, create or permit to
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except (a) Liens
for taxes or other governmental charges not at the time delinquent or thereafter
payable without penalty or being contested in good faith by appropriate
proceedings and, in each case, for which it maintains adequate reserves in
accordance with GAAP; (b) Liens arising in the ordinary course of business (such
as (i) Liens of carriers, warehousemen, mechanics and materialmen and other
similar Liens imposed by law and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under Employee Benefit Plans) or in connection with
surety and appeal bonds, bids, performance bonds and similar obligations for
sums not overdue or being contested in good faith by appropriate proceedings and
not involving any deposits or advances or borrowed money or the deferred
purchase price of property or services, and, in each case, for which it
maintains adequate reserves; (c) Liens identified on Schedule 10.8; (d) any Lien
arising in connection with the acquisition, construction or improvement of
tangible personal property by a Subsidiary and attaching only to the property
being acquired, constructed or improved, if the Lien and the Debt secured
thereby does not exceed 100% of the cost of such acquisition, cost or
improvement, as the case may be, nor L2,000,000 in the aggregate of all such
Debt of the Company and its Subsidiaries at any one time outstanding; (e)
attachments, judgments and other similar Liens, for sums not exceeding
L1,500,000 (L350,000 with respect to any Subsidiary other than Telegraph)
(excluding any portion thereof which is covered by insurance so long as the
insurer is reasonably likely to be able to pay) arising in connection with court
proceedings, provided the execution or other enforcement of such Liens is
effectively stayed and claims secured thereby are being actively contested in
good faith and by appropriate proceedings and have been bonded off or for which
adequate reserves are maintained; (f) easements, party wall agreements, rights
of way, restrictions, minor defects or irregularities in title and other similar
Liens not interfering in any material
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respect with the ordinary conduct of the business of the Company and its
Subsidiaries taken as a whole; (g) leases or subleases granted by the Company
or any Subsidiary in the ordinary course of its business; (h) extensions,
renewals or replacements of any Lien permitted by the foregoing provisions of
this Section 10.8, but only if the principal amount of the Debt secured thereby
immediately prior to such extension, renewal or replacement is not increased
and such Lien is not extended to any other property; (i) Liens securing the
Existing Debt Facilities (provided that such Liens shall be terminated on or
before the Effective Date); (j) Liens pursuant to the Subsidiary Security
Agreements; and (k) Liens in favor of the Administrative Agent.
10.9 Limitation on Restricted Payments. (a) The Company will not, and
will not permit any Subsidiary to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution or
payment on or in respect of the Company's Capital Stock, or make any
payment or other distribution to (including dividends or distributions of
the Capital Stock of any Subsidiary), or make any other payment to the
direct or indirect holders (in their capacities as such) of, the Company's
Capital Stock (other than dividends or distributions payable in shares of
the Company's Qualified Capital Stock or in options, warrants or other
rights to acquire such Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any Capital Stock of the Company or any Capital
Stock of any Affiliate of the Company (other than Capital Stock of any
Wholly-Owned Subsidiary or Capital Stock of a Person that, immediately
following such repurchase, will become a Wholly-Owned Subsidiary) or
options, warrants or other rights to acquire such Capital Stock;
(iii) make any principal payment on, or repurchase, redeem, defease,
retire or otherwise acquire for value, prior to any scheduled principal
payment, sinking fund payment or maturity, any Subordinated Debt;
(iv) declare or pay any dividend or distribution on any Capital Stock
of any Subsidiary to any Person (other than (x) with respect to any Capital
Stock held by the Company or any of its Wholly-Owned Subsidiaries or (y)
with respect to Capital Stock held by any other Person (other than an
Affiliate of the Company or an Affiliate of such Affiliate) made on a pro
rata basis consistent with the ownership interests in such Capital Stock to
the owners of such Capital Stock, except that, in the case of the Capital
Stock
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of a Subsidiary that is a Guarantor, (i) no Unmatured Event of Default or
Event of Default shall have occurred and be continuing and (ii) no holders
of any other Debt of the Company or any Subsidiary shall have an
Acceleration Right);
(v) incur, create or assume any guarantee of Debt of any Affiliate of
the Company (other than a Wholly-Owned Subsidiary of the Company);
(vi) make any Investment in any Person (other than any Investments
permitted under Section 10.10); or
(vii) pay any Management Fees;
(any of the payments described in paragraphs (i) through (vii) above, other
than any such action that is a Permitted Payment (as defined below),
collectively, "Restricted Payments"). Notwithstanding the foregoing, (1) the
Company may make Restricted Payments pursuant to paragraphs (i) and (iii) above
in an amount equal to the sum of (x) regular quarterly dividends payable on the
DTH Preference Shares and the Series A and Series B FDTH Preference Shares and
(y) the amount of interest due on the Holdco Facility provided (A) no Unmatured
Event of Default or Event of Default shall have occurred and be continuing or
shall result from the payment of such Restricted Payment; (B) no holders of any
other Debt of the Company or any Subsidiary shall have an Acceleration Right;
and (C) after giving effect to such payment, the Interest/Restricted Payment
Coverage Ratio is 1.0:1.0 or greater and (2) each Fiscal Quarter the Company
may make Restricted Payments pursuant to paragraph (vii) above and Restricted
Payments pursuant to paragraph (i) above in excess of the Restricted Payments
permitted pursuant to clause (1) above, in an amount equal to the lesser of (x)
Excess Cash Flow and (y) US $3,750,000 provided (A) no Unmatured Event of
Default or Event of Default shall have occurred and be continuing or shall
result from the payment of such Restricted Payment and (B) no holders of any
other Debt of the Company or any Subsidiary shall have an Acceleration Right.
(b) Notwithstanding the foregoing so long as (1) no Unmatured Event of
Default or Event of Default has occurred and is continuing or would result
therefrom and (2) no holders of any other Debt of the Company or any Subsidiary
have an Acceleration Right, the foregoing provisions will not prohibit the
following actions (clauses (i) and (ii) being referred to as "Permitted
Payments"):
(i) dividends paid to the extent not in excess of the Southam Dividend
Amount;
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(ii) loans, advances, dividends or distributions by any Subsidiary to
Publishing or any Wholly-Owned Subsidiary of Publishing and by the Company
or, to the extent it has received such funds directly or indirectly from
the Company, DTH or Publishing to Hollinger International for the purpose
of redeeming shares of Series A Preferred Stock not exceeding in the
aggregate any payments made by Hollinger Inc. to the Company pursuant to
the provisions of the HTH/FDTH Share Exchange Agreement;
(iii) payments and dividends required under the Scheme Documents;
(iv) payments under the Tax Indemnity Agreements; and
(v) redemption of Telegraph Ordinary Shares owned by the Company
in connection with the Telegraph Assumption.
10.10 Investments. Not, and not permit any Subsidiary to, make, incur,
assume or suffer to exist any Investment in any other Person, except:
(a) Investments existing on the Effective Date and identified in Schedule
10.10;
(b) Cash Equivalent Investments;
(c) Investments by the Company in its Subsidiaries (subject to the
limitation in Section 10.7(b)) or by any Subsidiary in its Wholly-Owned
Subsidiary, in the form of contributions to capital or loans or advances;
provided that, (i) any loans are evidenced by Subsidiary Notes and Subsidiary
Security Agreements which have been pledged pursuant to a Pledge Agreement and
(ii) immediately before and after giving effect to such Investment, no Unmatured
Event of Default or Event of Default shall have occurred and be continuing;
(d) Investments by the Company or any Subsidiary in any Subsidiary, in the
form of capital contributions or loans and advances existing on the Effective
Date;
(e) loans or advances made by any Subsidiary to the Company;
(f) loans or advances to officers and employees of the Company or of any
Subsidiary for travel or other ordinary business expenses not in excess of
L250,000 in the aggregate at any time;
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(g) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale of goods and services in the ordinary course of
business;
(h) shares of stock, obligations or other securities received in
settlement of claims arising in the ordinary course of business; and
(i) Investments by the Company in Telegraph Ordinary Shares on the Closing
Date.
10.11 Mergers, Consolidations, Sales, Acquisitions. Not, and not permit
any Subsidiary to, be a party to any merger, consolidation, Asset Sale or
Acquisition except for (a) any such merger or consolidation, sale, transfer,
conveyance, lease or assignment of or by any Wholly-Owned Subsidiary into the
Company or into, with or to any Wholly-Owned Subsidiary, (b) any Acquisition by
the Company or any Wholly-Owned Subsidiary of the assets or stock of any
Wholly-Owned Subsidiary and (c) acquisition of Telegraph Ordinary Shares
pursuant to the Scheme and issuance of Telegraph Ordinary Shares pursuant to the
Publishing/Telegraph Subscription Agreement and issuance and the sale of New
Preference Shares pursuant to the Purchase Option.
10.12 Use of Proceeds. The Company will use the proceeds of Loans and
Letters of Credit:
(a) to refinance the Existing Debt Facilities;
(b) to pay in part the cash portion of the purchase price obligations in
connection with the Scheme;
(c) to pay the transaction costs and expenses associated with the Scheme,
including but not limited to payments under the Tax Indemnity Agreements;
(d) in the case of Letters of Credit, for issuing Letters of Credit in
connection with the FDTH Loan Notes issued in connection with the Scheme;
(e) to make Restricted Payments and Permitted Payments; and
(f) for working capital needs and general corporate purposes of each of the
Company and its Subsidiaries (subject to any limitations hereunder).
10.13 Transactions with Affiliates. Not, and not permit any Subsidiary
to, enter into or cause, suffer or permit to exist any transaction, arrangement
or contract with any of its other Affiliates which is on terms which are less
favorable than are
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obtainable from any Person which is not one of its Affiliates. Without
limiting the foregoing, the Company will not, and will not permit any
Subsidiary to, pay any management, consulting or similar fee to any Affiliate
other than Management Fees to the extent permitted under Section 10.9(a).
10.14 Employee Benefit Plans. Maintain, and cause each Subsidiary to
maintain, each Employee Benefit Plan in compliance in all material respects with
all applicable requirements of law and regulations.
10.15 Environmental Covenants.
10.15.1 Environmental Response Obligation. (a) Comply, and cause each
Subsidiary to comply, with any federal or state judicial or administrative order
requiring the performance at any real property owned, operated or leased by the
Company or any Subsidiary (or in which such Person has a direct or indirect
interest) of activities in response to the release or threatened release of a
Regulated Material, except for the period of time that the Company or such
Subsidiary is diligently in good faith contesting such order; (b) notify the
Administrative Agent within ten days of the receipt of any written claim,
demand, proceeding, action or notice of liability by any Person arising out of
or relating to the release or threatened release of a Regulated Material which
are reasonably likely to give rise to cleanup or remediation liabilities under
Environmental Laws; and (c) notify the Administrative Agent within ten days of
any release, threat of release, or disposal of Regulated Material reported by
the Company or any Subsidiary to any governmental or regulatory authority at any
real property owned, operated, or leased by the Company or any Subsidiary (or in
which such Person has a direct or indirect interest) which are reasonably likely
to give rise to cleanup or remediation liabilities under Environmental Laws.
10.15.2 Environmental Liabilities. (a) Comply, and cause each Subsidiary
to comply, in all material respects with all Environmental Laws the
noncompliance with which would be reasonably likely to have a Material Adverse
Effect; (b) without limiting clause (a), not commence disposal of any Regulated
Material into or onto any real property owned, operated or leased by the Company
or any Subsidiary in violation of any Environmental Law; and (c) without
limiting clause (a), not allow any Lien imposed pursuant to any law, regulation
or order relating to Regulated Materials or the disposal thereof to remain on
any real property owned, operated or leased by the Company or any Subsidiary.
10.16 Unconditional Purchase Obligations. Not, and not permit any
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other
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property or services, if such contract requires that payment be made by it
regardless of whether or not delivery is ever made of such materials, supplies
or other property or services.
10.17 Inconsistent Agreements. Not, and not permit any Subsidiary to,
enter into any agreement containing any provision which would be violated or
breached by any borrowing by the Company hereunder or by the performance by the
Company or any Subsidiary of any of its obligations hereunder or under any other
Loan Document.
10.18 Further Assurances. Take, and cause each Subsidiary to take, such
actions as the Administrative Agent may reasonably request from time to time
(including, without limitation, the execution and delivery of guaranties,
security agreements, pledge agreements, stock powers, financing statements and
other documents, the filing or recording of any of the foregoing, and the
delivery of stock certificates and other collateral with respect to which
perfection is obtained by possession) to ensure that (a) the obligations of the
Company hereunder and under the other Loan Documents are secured by (i) all the
Telegraph Ordinary Shares owned by FDTH and TelHoldco but in any event not less
than 88% of the issued and outstanding Telegraph Ordinary Shares, (ii) 100% of
the Telegraph Preference Shares, (iii) 100% of the issued and outstanding common
stock of the Company and all FDTH Preference Shares owned by DTH and (iv) on and
after the S.155 Date, 100% of the Capital Stock of all other Subsidiaries
(except .0004% of the Capital Stock of each of Deedtask Holding BV and Daily
Telegraph Holdings BV (the "Minority Dutch Shares") and HTH) (including,
promptly upon the acquisition or creation thereof, any Subsidiary created or
acquired after the date hereof), (v) the Capital Stock of HTH owned by Deedtask
Limited, (vi) all shares of Fairfax owned by the Company or any Subsidiary and
(vii) all shares of Southam owned by the Company or any Subsidiary other than
HTH, and, (b) on and after the S.155 Date, the obligations of the Company
hereunder and under the other Loan Documents are guaranteed by all its
Subsidiaries (other than HTH).
10.19 Amendments to Certain Documents. Not make or agree to any amendment
to or modification of, or waive any of its rights under, any of the terms of (a)
the documents relating to the Subordinated Debt, (b) the Subsidiary Notes, (c)
the DTH Preference Shares, the FDTH Preference Shares and the Telegraph
Preference Shares, (d) the HTH/FDTH Share Exchange Agreement, (e) the
Publishing/Telegraph Subscription Agreement, (f) the Co-Operation Agreement
dated June 23, 1992 between Hollinger Inc. and Telegraph, (g) the Joint Venture
Agreement dated April 13, 1993 among Hollinger Inc., Telegraph, HTH and Deedtask
Limited, (h) the Custodial Agreement dated April 15, 1993 among Hollinger Inc.,
Telegraph, Deedtask Limited, HTH and Stikeman, Elliott, (j)
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the Pledge Agreement dated April 15, 1993 by Hollinger Inc. in favor of
Telegraph, (j) the FDTH Loan Notes, the FDTH Loan Note Deed Poll, the Fairfax
Loan Notes, or the Fairfax Loan Note Deed Poll, (k) the terms of the Purchase
Option (as defined in the Scheme Documents) (l) the Scheme Documents, (m) the
Option Tax Indemnity Agreements, (n) the Deed of Indemnity dated May 31, 1996
between the Company and Telegraph relating to tax indemnification in connection
with the Purchase Option and (o) the Tax Indemnification Agreements.
10.20 Conduct of Business. Not, and not permit any Subsidiary to, engage
in any business other than the Newspaper Business.
10.21 Limitations on Sale and Leaseback Transactions. Not, and not
permit any Subsidiary to, enter into any arrangement with any Person providing
for the leasing by the Company or any Subsidiary of any real or tangible
personal property, which property has been or is to be sold or transferred by
the Company or such Subsidiary to such Person in contemplation of such leasing.
10.22 Tax Indemnity Agreements. Not, and not permit any Subsidiary to,
enter into any tax sharing or similar agreement or arrangement other than (a)
the DT Holdings Limited Group Relief Agreement dated June 23, 1992 among DTH,
the Company and Telegraph, (b) the Deed of Indemnity dated June 23, 1992 entered
into by Hollinger Inc., DTH and the Company in favor of Telegraph (c) the
Agreement Relating to the Surrender of Advance Corporation Tax dated June 23,
1992 among DTH, the Company and Telegraph and (d) the Option Tax Indemnity
Agreements (collectively, the "Tax Indemnity Agreements").
10.23 Fiscal Year. Not, and not permit any Subsidiary to, change its
Fiscal Year.
10.24 Holding Company Status. The Company shall not own any material
assets other than stock of Subsidiaries and shall not permit HTH, Creditscheme
Limited or Deedtask Limited to own any Subsidiaries other than the Subsidiaries
owned by such Person on the Effective Date.
10.25 Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries. The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to (a) pay dividends or make any other distribution on its Capital Stock to the
Company or any other Subsidiary, (b) pay any Debt owed to the Company or any
other Subsidiary, (c) make any Investment in the Company or (d)
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transfer any of its properties or assets to the Company or any Subsidiary,
except (i) any encumbrance or restriction, with respect to a Subsidiary that is
not a Subsidiary of the Company on the Effective Date, in existence at the time
such Person becomes a Subsidiary of the Company and not incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary, (ii) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Company or any Subsidiary or (iii) any encumbrance or
restriction existing under any agreement that extends, renews, refinances or
replaces the agreements containing the encumbrances or restrictions in the
foregoing clause (i); provided that the terms and conditions of any such
encumbrances or restrictions are not materially less favorable to the Lenders
than those under or pursuant to the agreement evidencing the Debt so extended,
renewed, refinanced or replaced.
10.26 New Subsidiaries, Investments and Acquisitions. As soon as
available and in any event within thirty (30) days after the date of any
Acquisition or Investment or the formation of any new Subsidiary of the Company
or any of its Subsidiaries permitted under this Agreement, the Company and its
Subsidiaries, as appropriate, shall (a) if applicable, cause such Subsidiary to
execute and deliver (i) a Subsidiary Note and Subsidiary Security Agreement, if
applicable, and (ii) a counterpart of the Subsidiary Guaranty; (b) pledge and
assign to the Administrative Agent for the benefit of the Lenders such
Subsidiary Note and each Subsidiary Security Agreement, if applicable, and all
of the issued and outstanding shares of Capital Stock or other instruments or
securities evidencing ownership of such Subsidiary beneficially owned by the
Company or any of the Company's Subsidiaries, as the case may be, as additional
collateral for the obligations hereunder, to constitute part of the Collateral
and to be held by the Administrative Agent on behalf of the Lenders in
accordance with the terms of the Company Pledge Agreement (together with such
stock transfers, endorsements, instruments, financial statements and other
documentation as in the opinion of the Administrative Agent are appropriate);
and (c) provide evidence of necessary authorizations and one or more opinions of
counsel in form and substance reasonably satisfactory to the Required Lenders
which in the opinion of the Required Lenders is appropriate with respect to such
Acquisition, Investment or new Subsidiary. Any such document or agreement
executed or issued pursuant to this Section 10.26 shall be a "Loan Document" for
purposes of this Agreement.
10.27 Operating Leases. The Company shall not, and shall not permit any
Subsidiary to, create or suffer to exist any obligations for the payment of rent
for any property under lease or agreement to lease if the aggregate annual
rental payments for all such operating leases for the four Fiscal Quarters
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immediately following such date of determination shall exceed L5,000,000.
10.28 Scheme Matters. The Company shall cause Telegraph to:
(a) not issue and despatch the Scheme Documents without the prior written
consent of the Administrative Agent (such consent shall not be withheld where
the Administrative Agent is satisfied as to the terms and conditions of the
Scheme);
(b) not vary, extend, revise, waive or supplement the terms or conditions
of the Scheme or the Options Proposal without the prior written consent of the
Administrative Agent;
(c) comply with all laws, regulations and procedural requirements in
relation to and in connection with the Scheme;
(d) take all steps necessary for the implementation of the Scheme as soon
as practicable and in a diligent and expeditious manner;
(e) procure that no publicity materials, press releases or announcements
intended to be published in relation to the Scheme (or the funding thereof) or
the Scheme Documents by or on behalf of Telegraph, the Company or any of its
Affiliates shall be made without the consent of the Administrative Agent, such
consent not to be unreasonably withheld or delayed;
(f) provide full written disclosure to the Administrative Agent, as soon
as reasonably practicable, of all information which (i) is material to the
Scheme and (ii) is material to the decision to waive any conditions set out in
the Scheme Documents or this Agreement; and
10.29 Post-Scheme Matters. The Company shall:
(a) procure that Telegraph shall, as soon as possible, but in any event
within 7 days of the Scheme being consummated, be re-registered as a private
limited company;
(b) procure that, as soon as possible and in any event within 7 days of
the Scheme being consummated, Telegraph and its Subsidiaries, where applicable,
implement and consummate the provisions and procedures contained in Sections
155-158 of the Companies Act 1985 for the purposes of enabling such
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companies to grant the security interests and give the guarantees contemplated
hereby;
(c) procure that each of the Subsidiaries, where applicable shall deliver
to the Administrative Agent evidence satisfactory to the Administrative Agent
(including auditors' net asset letters addressed to the Administrative Agent)
that each of such companies has complied with the provisions and procedures
required by Sections 155-158 of the Companies Act 1985; and
(d) in connection with the Put/Call Options, elect to pay cash to any
Option holder exercising its option after the Scheme becomes effective.
10.30 Post-Closing Guarantees and Security Interests.
On the date on which the provisions and procedures contained in Sections
155-158 of the Companies Act 1985 have been consummated by each of the
applicable Subsidiaries (the "S.155 Date") the Company shall (a) cause each of
the Subsidiaries to execute and deliver the Subsidiary Guaranty dated the S.155
Date, (b) cause (i) each of such Subsidiaries that in turn has any Subsidiaries
organized under the laws of the United Kingdom to execute and deliver a
Subsidiary Pledge Agreement, (ii) Telegraph Australian Holdings Limited and
Deedtask Holding B.V. to execute a Dutch Pledge Agreement, (iii) Daily
Telegraph Holdings B.V. and Telegraph Australian Holdings Ltd. to execute the
Fairfax Pledge Agreement, (iv) Deedtask Limited to execute the HTH Pledge
Agreement, and (v) the Company and Deedtask Limited to execute the Southam
Pledge Agreement, in each case dated the S.155 Date together with (x)
certificates evidencing all of the pledged shares of Capital Stock, which
certificates shall in each case be accompanied by undated stock powers or stock
transfer forms duly executed in blank, or, if any securities pledged pursuant to
such Pledge Agreements are uncertificated securities, confirmation and evidence
satisfactory to the Administrative Agent that appropriate book entries have been
made in the relevant books or records of a financial intermediary or the issuer
of such securities, as the case may be, under applicable law resulting in the
perfection of the security interest granted in favor of the Administrative Agent
pursuant to the terms of such Pledge Agreements, and (y) all Subsidiary Notes,
if any, duly endorsed to the order of the Administrative Agent, together with
such documents and instruments in respect of such Subsidiary Notes executed by
the Company or such Subsidiary to be filed in such jurisdictions as the
Administrative Agent shall reasonably request, (c) deliver the items referred to
in Sections 11.1.1, 11.1.2, 11.1.3 with respect to the Obligors executing the
Loan Documents referred to herein and opinions of counsel (including,
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English, Dutch, Canadian and Australian counsel) satisfactory to the
Administrative Agent.
10.31 Capital Expenditures. Not, and not permit any Subsidiary other than
Telegraph to, make or commit to make any Capital Expenditure provided that after
giving effect to such Capital Expenditure, the aggregate amount of all Capital
Expenditures made by Telegraph during any Fiscal Quarter commencing with the
Fiscal Quarter ended June 30, 1996 shall not exceed L2,000,000.
10.32 Scheme Certificate. Upon request of the Administrative Agent in
connection with the Administrative Agent's issuance of any confirmatory letter
required under the Scheme Documents, execute and deliver to the Administrative
Agent a Certificate substantially in the form of Exhibit J.
SECTION 11 CONDITIONS OF LENDING
11.1 Effective Date. This Agreement shall be and become effective on the
date (the "Effective Date") on which the Company, the Lenders and the
Administrative Agent shall have executed and delivered this Agreement and the
Administrative Agent shall have received all of the following, each duly
executed and dated the Effective Date (or such earlier date as shall be
satisfactory to the Administrative Agent) in form and substance satisfactory to
the Administrative Agent and each in sufficient number of signed counterparts to
provide one for each Lender:
11.1.1 Resolutions. Certified copies of resolutions of the Board of
Directors of each Obligor executing Loan Documents on the Effective Date (the
"Effective Date Obligors") authorizing or ratifying the execution, delivery and
performance by such Obligor of the Loan Documents to which such Obligor is or
will be a party.
11.1.2 Consents, etc. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance of the Loan Documents by
the Effective Date Obligors.
11.1.3 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary of each Effective Date Obligor certifying
the names of the officer or officers of such Person authorized to sign the Loan
Documents to which such Person is a party, together with a sample of the true
signature of each such officer (it being understood that the Administrative
Agent and each Lender may conclusively rely on
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each such certificate until formally advised by a like certificate of any
changes therein).
11.1.4 Guaranties. A guaranty, substantially in the form of Exhibit C-1,
executed by Hollinger International and TelHoldco (as amended, supplemented or
otherwise modified from time to time, the "Hollinger International Guaranty").
11.1.5 Opinion of Counsel for the Company and the Obligors. (a) The
opinion of Kirkpatrick & Lockhart LLP, counsel for the Company and certain
Obligors in the form of Exhibit F-1.
(b) The opinion of Clifford Chance, counsel for the Company and certain
Obligors in the form of Exhibit F-2.
11.1.6 Pledge Agreement. A pledge agreement, substantially in the form of
Exhibit E-1 issued by Publishing (such pledge agreement, as amended,
supplemented or otherwise modified from time to time, the "Publishing Pledge
Agreement") and a pledge agreement substantially in the form of Exhibit E-3,
issued by DTH (such pledge agreement, as amended, supplemented or otherwise
modified from time to time, the "DTH Pledge Agreement"), together with the stock
certificates to be pledged thereunder and allonges and stock powers or stock
transfer forms executed in blank.
11.1.7 Publishing Letter Agreement. A letter agreement substantially in
the form of Exhibit L (as amended, supplemented, or otherwise modified from time
to time the "Publishing Letter Agreement") executed by Publishing, relating to
designation of Subsidiaries, etc.
11.1.8 No Material Adverse Effect. Except as disclosed on Schedule 9.5,
since December 31, 1995, no event or events have occurred which, individually or
in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.
11.1.9 Compliance Certificate. A duly completed certificate in the form
of Exhibit B, with appropriate insertions, dated the Effective Date, based on
the most recently ended Fiscal Quarter and signed by one of the chief executive
officers, the chief financial officer, the chief operating officer or the
controller of the Company, containing a computation of each of the financial
ratios and restrictions set forth in Section 10 and to the effect that such
officer has not become aware of any Event of Default or Unmatured Event of
Default that has occurred and is continuing.
11.1.10 Fees. The Company shall have paid all fees and expenses then due
and payable to the Agents or any Lender
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(including, to the extent then billed, all amounts payable pursuant to Section
14.5).
11.1.11 Other. Such other documents as the Administrative Agent or any
Lender may reasonably request.
11.2 Conditions to Closing Date. The obligation of each Lender to make
its initial Loan pursuant to the Commitment and of the Issuing Bank to issue
Letters of Credit is, in addition to the conditions precedent specified in
Sections 11.1, and 11.3, subject to the prior or concurrent satisfaction of each
of the conditions set forth in this Section 11.2.
11.2.1 Documentary Conditions. The Administrative Agent shall have
received all of the following, each duly executed and dated the Closing Date (or
such earlier date as shall be satisfactory to the Administrative Agent) in form
and substance satisfactory to the Administrative Agent, and each (except for the
Notes of which only the originals shall be signed) in sufficient number of
signed counterparts to provide one for each Lender:
(a) Notes. The Notes.
(b) Resolutions. Certified copies of resolutions of the Board of
Directors of each Obligor executing Loan Documents after the Effective Date but
on or prior to Closing Date (the "Closing Date Obligors") authorizing or
ratifying the execution, delivery and performance by such Obligors of the Loan
Documents to which such Obligor is a party.
(c) Consents, etc. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance of the Loan Documents by
the Closing Date Obligors.
(d) Incumbency and Signature Certificates. A certificate of the Secretary
or an Assistant Secretary of each Closing Date Obligor certifying the names of
the officer or officers of each Closing Date Obligor authorized to sign the Loan
Documents to which such Obligor is a party, together with a sample of the true
signature of each such officer (it being understood that the Administrative
Agent and each Lender may conclusively rely on each such certificate until
formally advised by a like certificate of any changes therein).
(e) Pledge Agreements. A pledge agreement, substantially in the form of
Exhibit E-2, issued by the
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Company and TelHoldco (such Pledge Agreement, as amended, supplemented or
otherwise modified from time to time, the "Company Pledge Agreement"), together
with the stock certificates or instruments (including without limitation any
Pledged Notes) to be pledged thereunder and allonges and stock powers or stock
transfer forms executed in blank.
(f) Opinions of Counsel. An opinion of (i) Kirkpatrick & Lockhart LLP,
Clifford Chance, counsel for the Company and certain Obligors, (ii) Australian
counsel, (iii) Dutch counsel and (iv) Canadian counsel, each in form and
substance satisfactory to the Administrative Agent.
11.2.2 Holdco Facility; Publishing Credit Agreement. The Administrative
Agent shall have received evidence, reasonably satisfactory to the
Administrative Agent, that the Holdco Facility and the Publishing Credit
Agreement have closed on terms and conditions reasonably satisfactory to the
Administrative Agent and that sufficient cash will be available to the Company
to consummate the Scheme and to repay the Existing Debt Facilities, taking into
account the Loans hereunder and the loans under the Holdco Facility and the
Publishing Credit Agreement.
11.2.3 Amendment of Corporate Articles. The Administrative Agent shall
have received satisfactory evidence that (a) either the rights attaching to the
FDTH Preference Shares and the Telegraph Preference Shares have been amended to
prevent the holders of such Preference Shares from requiring that such
Preference Shares be redeemed prior to March, 2006 or any Affiliate of the
Company which owns such Preference Shares shall have entered into an agreement
with the Administrative Agent, for the benefit of the Lenders, to such effect
and (b) the Articles of Deedtask Holding B.V. and Daily Telegraph Holdings B.V.
have been amended to permit the pledge required under the Dutch Pledge
Agreement.
11.2.4 Debt to be Repaid, etc. The Administrative Agent shall have
received evidence, reasonably satisfactory to the Administrative Agent, that (a)
all outstanding Debt under the Existing Debt Facilities has been, or
concurrently with the making of such Loans will be, paid in full; and (b) all
commitments under the agreements relating to such Debt, and all Liens securing
such Debt, have been or concurrently with the making of such Loans will be,
terminated.
11.2.5 No Material Adverse Effect. Except as disclosed on Schedule 9.5,
since December 31, 1995, no event or events have occurred which, individually or
in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.
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11.2.6 Approval of the Scheme. The Administrative Agent shall have been
satisfied with the terms and conditions of the Scheme, the Scheme Documents and
any related document, (including, without limitation, (a) the form of
recommendation from the Board of Telegraph, (b) the provision for the
acquisition of 100% of the Telegraph Ordinary Shares not owned by TelHoldco or
the Company and (c) the maximum, per share price which will be paid for the
shares of Telegraph and the terms of any share or loan note alternatives.
11.2.7 Scheme Sanction. The Administrative Agent shall have received
evidence and confirmation satisfactory to it and its counsel that (a) the Scheme
has been sanctioned by the English courts, (b) either the Scheme has been
sanctioned by the English courts without any variation, amendment or revision to
the Scheme as described in the Scheme Documents or that the Administrative Agent
has consented in writing to any such variation, amendment or revision, (c)
either none of the conditions to the Scheme have been waived or other
forbearance given by Hollinger International, the Company or Telegraph or that
the Administrative Agent has consented in writing to any such waiver or
forbearance and (d) that an office copy of the court order in form reasonably
satisfactory to the Administrative Agent has been delivered to the Registrar of
Companies of England and Wales in compliance with the provisions of Section
425(3) of the Companies Act 1985.
11.2.8 No Litigation Re: Scheme. There shall not exist any litigation or
claims with respect to any aspect of the Scheme, any related transaction or any
other transaction contemplated thereby or hereby or the financing thereof, which
the Administrative Agent reasonably considers to be material.
11.2.9 Consummation of Other Transactions. There shall have occurred
prior or contemporaneous consummation of the Scheme and all related transactions
and other transactions contemplated hereunder including, without limitation,
approval by shareholders and optionholders of Telegraph in general meeting and
by the requisite majorities of resolutions reducing the share capital of
Telegraph, authorizing the Directors to allot a sufficient number of new
Telegraph shares to implement the Scheme and to alter the Articles of
Association of Telegraph to permit the adoption of put and call option
arrangements in respect of Telegraph shares issued to Telegraph employees on
exercise of options under the terms of Telegraph's share option schemes.
11.2.10 Capital Structure. The Administrative Agent and its counsel shall
be satisfied with Hollinger International's and the Company's existing and
proposed capital structure (both debt and equity) and corporate structure and
all other matters relating to the financial and operating condition of each of
the
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Company and its Subsidiaries and with the terms and provisions of the Company's
and its Subsidiaries' material contracts.
11.2.11 Capital Markets. Prior to the meetings of the shareholders of
Telegraph to approve the Scheme, there shall not have been any material
disruption in the capital markets generally which could, in the reasonable good
faith determination of the Administrative Agent, have a materially adverse
effect on the ability to extend, or maintain any commitment to extend, at the
time contemplated hereby, senior secured bank financing of the type contemplated
hereby.
11.2.12 U.K. Procedural Requirements. The Administrative Agent shall have
received a certificate dated as of the Closing Date from the chief executive or
chief financial Authorized Officer of each of the applicable Subsidiaries
certifying that, as of the Closing Date, each of the applicable Subsidiaries
would, but for the fact that the Telegraph is a public limited company, be able
to implement and consummate the provisions and procedures set out in Sections
155-158 of the Companies Act 1985 and certifying that, save as disclosed, the
granting of the security interests and the giving of the guarantees contemplated
by the Loan Documents will not, following compliance with the provisions and
procedures of Sections 155-158 of the Companies Act 1985, constitute unlawful
financial assistance within the meaning of Section 151 of the Companies Act
1985, which certificate shall be reasonably acceptable in form, scope and
substance to the Administrative Agent and its counsel.
11.2.13 Compliance Certificate. A duly completed certificate in the form
of Exhibit B, with appropriate insertions, dated the Closing Date, based on the
most recently ended Fiscal Quarter and signed by one of the chief executive
officers, the chief financial officer, the chief operating officer or the
controller of the Company, containing a computation of each of the financial
ratios and restrictions set forth in Section 10 and to the effect that such
officer has not become aware of any Event of Default or Unmatured Event of
Default that has occurred and is continuing.
11.2.14 Publishing/Telegraph Subscription Agreement. The
Publishing/Telegraph Subscription Agreement shall have been executed and
Publishing shall have paid for the Telegraph shares subject to such agreement.
11.2.15 Hollinger Subordination Agreement. A duly executed Hollinger
Subordination Agreement, together with the terms referred to in Section 11.2.1
(b),(c),(d) and (f) with respect to Hollinger Inc.
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11.2.16 FDTH/Holdco Subordination Agreement. A duly executed FDTH/Holdco
Subordination Agreement.
11.2.17 Process Agent Letter. The Administrative Agent shall have
received with counterparts for each Lender a letter from CT Corporation Systems,
in form and substance satisfactory to the Administrative Agent, dated the
Closing Date or a date reasonably close to the Closing Date, whereby CT
Corporation Systems acknowledges and accepts its appointment by each of the
Company and each of the other Obligors, as agent for service of process.
11.2.18 Fees. The Company shall have paid (or shall have made
arrangements to pay with the proceeds of the initial Loan) all fees and expenses
then due and payable to the Agents or any Lender (including, to the extent then
billed, all amounts payable pursuant to Section 14.5).
11.2.19 Other. Such other documents as the Administrative Agent or any
Lender may reasonably request.
11.3 All Loans and Letters of Credit. The obligation of each Lender to
make each Loan and of the Issuing Bank to issue each Letter of Credit is subject
to the following further conditions precedent that:
11.3.1 No Default, etc. (a) No Event of Default or Unmatured Event of
Default has occurred and is continuing or will result from the making of such
Loan, (b) the warranties of the Company contained in Section 9 (excluding, in
the case of all Loans other than the Loans made on the Closing Date, Sections
9.4, 9.6 and 9.12 through 9.14) are true and correct as of the date of such
requested Loan or the issuance of such Letter of Credit, with the same effect as
though made on such date and (c) except as disclosed in Schedule 9.5, since the
date of the financial statements described in Section 9.4 or, if later, the date
of the most recent financial statements delivered to the Lenders pursuant to
Section 10.1.1 or 10.1.2, no event (including, without limitation, any labor
controversy, litigation, arbitration, governmental investigation or proceeding
or environmental matter) has occurred which, in the reasonable good faith
judgment of the Required Lenders, may have a Material Adverse Effect.
11.3.2 Confirmatory Certificate. If requested by the Administrative Agent
or any Lender, the Administrative Agent shall have received (in sufficient
counterparts to provide one to each Lender) a certificate dated the date of such
requested Loan or Letter of Credit and signed by a duly authorized
representative of the Company as to the matters set out in clauses (a) and (b)
of Section 11.3.1 (it being understood that
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each request by the Company for the making of a Loan or the issuance of a
Letter of Credit shall be deemed to constitute a warranty by the Company that
the conditions precedent set forth in Section 11.3.1 will be satisfied at the
time of the making of such Loan or issuing such Letter of Credit), together
with such other documents as the Administrative Agent or any Lender may
reasonably request in support thereof.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event
of Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
the principal of any Loan; or default, and continuance thereof for five Business
Days, in the payment when due of any interest on any Loan, any reimbursement
obligation with respect to any Letter of Credit or any fee or other amount
payable by the Company hereunder or under any other Loan Document.
12.1.2 Default under Other Debt. (a) Default in the payment when due
(subject to any applicable grace period), whether by acceleration or otherwise,
of any other Debt of Hollinger International, the Company or any Subsidiary, or,
in the case of Hollinger International, the Company and Telegraph (b) default in
the performance or observance of any obligation or condition (subject to any
applicable grace period) with respect to any such other Debt of Hollinger
International, the Company or any Subsidiary, if, in the case of either clause
(a) or (b) above, the effect of such default is to permit the holder of such
Debt to accelerate the maturity of (or there is matured and unpaid) such other
Debt aggregating L2,000,000, in the case of Hollinger International, the Company
and Telegraph (L500,000 with respect to any other Subsidiary) or more.
12.1.3 Other Material Obligations. Default in the payment when due,
whether by acceleration or otherwise, or in the performance or observance of,
any material obligation of, or condition agreed to by, the Company or any
Subsidiary with respect to any material purchase or lease of goods or services
(except only to the extent that the existence of any such default is being
contested by the Company or such Subsidiary in good faith and by appropriate
proceedings and appropriate reserves have been made in respect of such default)
but only if the aggregate liability of the Company and the Subsidiaries in
respect of all such purchases and leases so affected shall exceed L2,000,000 in
the case of the Company and Telegraph (L500,000 with respect to any other
Subsidiary).
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12.1.4 Bankruptcy, Insolvency, etc. Hollinger International, the Company
or any other Obligor becomes insolvent or generally fails to pay, or admits in
writing its inability or refusal to pay, debts as they become due; or Hollinger
International, the Company or any other Obligor applies for, consents to, or
acquiesces in the appointment of a trustee, receiver, administrator or
liquidator or other custodian for Hollinger International, the Company or such
other Obligor or any property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver, administrator or liquidator or other
custodian is appointed for Hollinger International, the Company or any other
Obligor or for a substantial part of the property of any thereof and is not
discharged within 60 days; or any bankruptcy, insolvency, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution, winding-up or liquidation proceeding (except the voluntary
dissolution, not under any bankruptcy or insolvency law, of any other Obligor),
is commenced in respect of Hollinger International, the Company or any other
Obligor if such case or proceeding is not commenced by Hollinger International,
the Company or such other Obligor, it is consented to or acquiesced in by
Hollinger International, the Company or such other Obligor, or remains for 60
days undismissed; Hollinger International, the Company or any other Obligor
takes any corporate action to authorize, or in furtherance of, any of the
foregoing.
12.1.5 Non-Compliance with Provisions of This Agreement. Failure by the
Company to comply with or to perform any covenant set forth in Section 10.3,
10.5, 10.6., 10.7 through 10.13, 10.19, 10.26, 10.28, 10.29, 10.30 or 10.31;
failure by the Company to comply with or to perform any covenant set forth in
Section 10.18 and continuance of such failure for five days after notice thereof
to the Company from the Administrative Agent or any Lender (or, if such failure
cannot be cured with reasonable diligence within said five day period, such
longer period up to a total of 60 days after notice thereof provided the Company
promptly commence a cure within such five day period and diligently pursues the
same); or failure by the Company to comply with or to perform any other
provision of this Agreement (and not constituting an Event of Default under any
of the other provisions of this Section 12) and continuance of such failure for
30 days after notice thereof to the Company from the Administrative Agent or any
Lender (or, if such failure cannot be cured with reasonable diligence within
said 30 day period, such longer period up to a total of 60 days after notice
thereof provided the Company promptly commence a cure within such 30 day period
and diligently pursues the same).
12.1.6 Warranties. Any warranty made by the Company herein is breached or
is false or misleading in any material respect, or
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any schedule, certificate, financial statement, report, notice or other writing
furnished by the Company or any Guarantor to any Agent or any Lender is false
or misleading in any material respect on the date as of which the facts therein
set forth are stated or certified.
12.1.7 Employee Benefit Plans. (a) Institution of any steps by the
Company or any of its Subsidiaries or any other Person to terminate an Employee
Benefit Plan if as a result of such termination the Company or such Subsidiary
could be required to make a contribution to such Employee Benefit Plan, or could
incur a liability or obligation to such Employee Benefit Plan, in excess of
L2,000,000 or (b) a contribution failure occurs with respect to any Employee
Benefit Plan sufficient to give rise to a Lien under applicable law.
12.1.8 Judgments. Final judgments which exceed an aggregate of L2,000,000
in the case of Hollinger International, the Company or Telegraph (L500,000 with
respect to any other Subsidiary) (excluding any portion thereof which is covered
by insurance so long as the insurer is reasonably likely to be able to pay)
shall be rendered against Hollinger International, the Company or any Subsidiary
and shall not have been discharged or vacated or had execution thereof stayed
pending appeal within 30 days after entry or filing of such judgments.
12.1.9 Invalidity of Guaranty, etc. Any Guaranty shall cease to be in
full force and effect with respect to any Guarantor (other than as expressly
permitted hereunder); any Guarantor shall fail (subject to any applicable grace
period) to comply with or to perform any applicable provision of such Guaranty,
or any Guarantor (or any Person by, through or on behalf of such Guarantor)
shall contest in any manner the validity, binding nature or enforceability of
such Guaranty with respect to such Guarantor.
12.1.10 Invalidity of Collateral Documents, etc. Any Collateral Document
shall cease to be in full force and effect with respect to the Company or any
Obligor (other than as expressly permitted hereunder); or the Company or any
Obligor shall fail (subject to any applicable grace period) to comply with or to
perform any applicable provision of any Collateral Document, or the Company or
any Obligor (or any Person by, through or on behalf of the Company or any
Obligor) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
12.1.11 Change in Control. A Change in Control shall occur.
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12.1.12 Material Adverse Change. The Required Lenders shall have
reasonably determined in good faith that an event has occurred or a condition
exists that has had or will have a Material Adverse Effect.
12.1.13 Ownership and Designation of Subsidiaries. Except as expressly
permitted hereunder, the Company shall fail to own directly or indirectly, free
and clear of all Liens (except the Lien of the Administrative Agent), 100% of
the issued and outstanding Capital Stock (other than the Telegraph Ordinary
Shares owned by Publishing and TelHoldco and the Minority Dutch Shares) of the
Subsidiaries in existence on the Closing Date for any reason or the Company or
any of its Subsidiaries or TelHoldco is designated a "Restricted Subsidiary" (as
such term is defined in the Publishing Credit Agreement) under the Publishing
Credit Agreement or the Senior Subordinated Indenture.
12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Notes and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to deliver to the Administrative Agent cash collateral in
an amount equal to the outstanding face amount of all Letters of Credit, all
without presentment, demand, protest or notice of any kind; and, in the case of
any other Event of Default, the Administrative Agent may (and upon written
request of the Required Lenders shall) declare the Commitments (if they have not
theretofore terminated) to be terminated and/or declare all Notes and all other
obligations hereunder to be due and payable, and/or demand that the Company
immediately deliver to the Administrative Agent cash collateral in an amount
equal to the outstanding face amount of all Letters of Credit, whereupon the
Commitments (if they have not theretofore terminated) shall immediately
terminate and/or all Notes and all other obligations hereunder shall become
immediately due and payable and/or the Company shall immediately become
obligated to deliver to the Administrative Agent cash and Cash Equivalent
Investments or other cash collateral acceptable to the Issuing Bank in an amount
equal to the face amount of all Letters of Credit, all without presentment,
demand, protest or notice of any kind. The Administrative Agent shall promptly
advise the Company of any such declaration, but failure to do so shall not
impair the effect of such declaration. Notwithstanding the foregoing, the
effect as an Event of Default of any event described in Section 12.1.1 or
Section 12.1.4 may be waived by the written concurrence of all of the Lenders,
and the effect as an Event of Default of any other event described in this
Section 12 may be waived by the written concurrence of the Required Lenders.
Any cash collateral delivered hereunder shall be held by the Administrative
Agent and applied to obligations arising in connection with any drawing
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under a Letter of Credit. After the expiration or termination of all Letters
of Credit, such cash collateral shall be applied by the Administrative Agent to
any remaining obligations hereunder and any excess shall be delivered to the
Company or as a court of competent jurisdiction may direct.
12.3 Effect of Event of Default Paid to Scheme Effectiveness. In the
event that any Event of Default occurs or arises prior to the Scheme being
consummated then the Company shall become immediately obligated to deliver to
the Administrative Agent cash collateral in respect of the Letter of Credit to
be delivered by the Issuing Bank in respect of the FDTH Loan Notes in an amount
satisfactory to the Issuing Bank failing which the Company shall take all
necessary steps to withdraw the Scheme or amend the Scheme to reflect that this
Agreement, the Publishing Credit Agreement and the Holdco Facility will not be
available to finance the Scheme and that the Letter of Credit will not be
provided in respect of the FDTH Loan Notes.
SECTION 13 THE AGENTS.
13.1 Authorization. Each Lender authorizes the Administrative Agent to
act on behalf of such Lender to the extent provided herein or in any other Loan
Document or any other document or instrument delivered hereunder or in
connection herewith, and to take such other action as may be reasonably
incidental thereto.
13.2 Indemnification. Each Lender agrees to reimburse and indemnify each
Agent for, and hold each Agent harmless against, a share (determined in
accordance with its respective Percentage) of any loss, damage, penalty, action,
judgment, obligation, cost, disbursement, liability or expense (including
attorneys' fees) incurred without gross negligence or willful misconduct on the
part of each Agent arising out of or in connection with the performance of its
respective obligations or the exercise of its respective powers hereunder or
under any other Loan Document or any other document or instrument delivered
hereunder or in connection herewith, as well as the costs and expenses of
defending against any claim against such Agent arising hereunder or thereunder.
13.3 Exculpation. Each Agent shall be entitled to rely upon advice of
counsel concerning legal matters, and upon this Agreement, any other Loan
Document and any schedule, certificate, statement, report, notice or other
writing which it believes to be genuine or to have been presented by a proper
Person. None of the Agents nor any of their respective directors, officers,
employees or agents shall (a) be responsible for any recitals, representations
or warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of, this
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Agreement, any other Loan Document or any other instrument or document
delivered hereunder or in connection herewith, (b) be responsible for the
validity, genuineness, perfection, effectiveness, enforceability, existence,
value or enforcement of any collateral security, (c) be under any duty to
inquire into or pass upon any of the foregoing matters, or to make any inquiry
concerning the performance by the Company or any other obligor of its
obligations, or (d) in any event, be liable as such for any action taken or
omitted by it or them, except for its or their own gross negligence or willful
misconduct. The agency hereby created shall in no way impair or affect any of
the rights and powers of, or impose any duties or obligations upon, either
Agent in its individual capacity.
13.4 Credit Investigation. Each Lender acknowledges that it has made such
inquiries and taken such care on its own behalf as would have been the case had
such Lender's Commitments been granted, the Letters of Credit been issued and
such Lender's Loans been made directly by such Lender to the Company without the
intervention of the Agents or any other Lender. Each Lender agrees and
acknowledges that the Agents make no representations or warranties about the
creditworthiness of the Company or any other party to this Agreement or any
other Loan Document or with respect to the legality, validity, sufficiency or
enforceability of this Agreement or any other Loan Document or the value of any
security therefor.
13.5 Agent and Affiliates. Each Agent in its individual capacity shall
have the same rights and powers hereunder as any other Lender and may exercise
or refrain from exercising the same as though it were not an Agent, and each
Agent and its Affiliates may accept deposits from, make loans to and generally
engage in any kind of business with the Company or any Affiliate thereof as if
it were not an Agent hereunder.
13.6 Action on Instructions of the Lenders. As to any matters not
expressly provided for by this Agreement (including, without limitation,
enforcement of any Loan Document or collection of the Loans), the Agents shall
not be required to exercise any discretion or take any action, but the Agents
shall in all cases be fully protected in acting or refraining from acting upon
the written instructions from the Lenders. In no event will any Agent be
required to take any action which exposes such Agent to personal liability or
which is contrary to this Agreement, any other Loan Document or applicable law.
The relationship between the Agents and the Lenders is and shall be that of
agent and principal only and nothing herein contained shall be construed to
constitute any Agent a trustee for any Lender or any holder of a participation
in any Loan nor to impose on any Agent duties and obligations other than those
expressly provided for herein.
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13.7 Funding Reliance. (a) Unless the Administrative Agent receives
notice from a Lender by 11:00 a.m., London time, on the day of a proposed
borrowing that such Lender will not make available to the Administrative Agent
the amount which would constitute its Percentage of such borrowing in accordance
with Section 2.3, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent and, in reliance upon such
assumption, make a corresponding amount available to the Company. If and to the
extent such Lender has not made any such amount available to the Administrative
Agent, such Lender and the Company jointly and severally agree to repay such
amount to the Administrative Agent forthwith on demand, together with interest
thereon at the interest rate applicable to Loans comprising such borrowing (or,
in the case of any Lender which repays such amount within three Business Days,
the applicable interest rate less the Applicable Margin). Nothing set forth in
this clause (a) shall relieve any Lender of any obligation it may have to make
any Loan hereunder.
(b) Unless the Administrative Agent receives notice from the Company
prior to the due date for any payment hereunder that the Company does not intend
to make such payment, the Administrative Agent may assume that the Company has
made such payment and, in reliance upon such assumption, make available to each
Lender its share of such payment. If and to the extent that the Company has not
made any such payment to the Administrative Agent, each Lender which received a
share of such payment shall repay such share (or the relevant portion thereof)
to the Administrative Agent forthwith on demand, together with interest thereon
at the applicable interest rate less the Applicable Margin. Nothing set forth
in this clause (b) shall relieve the Company of any obligation it may have to
make any payment hereunder.
13.8 Collateral Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any Lien
granted to or held by the Administrative Agent upon any Collateral (a) upon
termination of the Commitments and any Hedging Agreements with any Lender and
payment in full of all Loans and all other obligations of the Company under this
Agreement and under any other Loan Document and any Hedging Agreements with any
Lender; (b) constituting property sold or to be sold or disposed of as part of
or in connection with any disposition permitted hereunder; (c) constituting
property in which the Company or any Subsidiary owned no interest at the time
the Lien was granted or at any time thereafter; (d) constituting property leased
to the Company or any Subsidiary under a lease which has expired or been
terminated in a transaction permitted under this Agreement or is about to expire
and which has not been, and is not intended by the Company or such Subsidiary to
be, renewed or extended; or (e) subject to the third sentence of
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Section 14.1, if approved, authorized or ratified in writing by the Required
Lenders. Upon request by the Administrative Agent at any time, the Lenders
will confirm in writing the Administrative Agent's authority to release
particular types or items of Collateral pursuant to this Section 13.8.
13.9 Resignation. The Administrative Agent may resign as such at any time
upon at least 30 days' prior notice to the Company and the Lenders. The Lenders
shall (with, so long as no Event of Default or Unmatured Event of Default
exists, the prior written consent of the Company, which shall not be
unreasonably withheld or delayed) as promptly as practicable appoint a successor
Administrative Agent. If no successor shall have been so appointed, and shall
have accepted such appointment, within 30 days after the giving of notice of
such resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which shall be a commercial
bank having an office in London, England and having a combined capital, surplus
and undivided profits of at least L350,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all further duties and obligations under this Agreement. After any
resignation pursuant to this Section 13.9, the provisions of this Section 13
shall inure to the benefit of the retiring Administrative Agent as to any
actions taken or omitted to be taken by it while it was Administrative Agent
hereunder.
SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of any Agent or any Lender
in the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any of them of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent
with respect to, any provision of this Agreement or the Notes shall in any event
be effective unless the same shall be in writing and signed and delivered by the
Company and by Lenders having an aggregate Percentage of not less than the
aggregate Percentage expressly designated herein with respect thereto or, in the
absence of such designation as to any provision of this Agreement or the Notes,
by the Required Lenders, and then any such amendment, modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, modification, waiver or consent (a)
shall amend, modify or waive any condition precedent to any Loan without the
consent of
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Lenders holding 100% of the Commitments or (b) shall (i) extend or increase the
amount of any Commitment, (ii) extend the date for payment of any principal of
or interest on the Loans or any fees payable hereunder, (iii) reduce the
principal amount of any Loan, the rate of interest thereon or any fees payable
hereunder, (iv) release any Person from its obligations under any Guaranty or
release any substantial part of the collateral granted under the Collateral
Documents except Collateral having a fair market value of less than L5,000,000
in the aggregate or as otherwise permitted under this Agreement or the
Collateral Documents or (v) change the definition of Required Lenders or the
aggregate Percentage required to effect an amendment, modification, waiver or
consent or amend this Section 14.1 without, in each case, the consent of all
Lenders. No provisions of Section 13 shall be amended, modified or waived
without the consent of the Administrative Agent. No provision relating to
Section 2.4, 2.5, 2.6, 2.7, 2.8, 2.10(c) or 5.2(b) shall be amended, modified
or waived without the consent of the Issuing Bank.
14.2 Confirmations. The Company and each holder of a Note agree from time
to time, upon written request received by it from the other, to confirm to the
other in writing (with a copy of each such confirmation to the Administrative
Agent) the aggregate unpaid principal amount of the Loans then outstanding under
such Note.
14.3 Notices. Except as otherwise provided in Sections 2.3 and 4.3, all
notices hereunder shall be in writing (including, without limitation, facsimile
transmission) and shall be sent to the applicable party at its address shown on
Schedule 14.3 or at such other address as such party may, by written notice
received by the other parties hereto, have designated as its address for such
purpose. Notices sent by facsimile transmission shall be deemed to have been
given when sent; notices sent by mail shall be deemed to have been given three
Business Days after the date when sent by registered or certified mail, postage
prepaid; and notices sent by hand delivery shall be deemed to have been given
when received. For purposes of Sections 2.3 and 4.3, the Administrative Agent
shall be entitled to rely on telephonic instructions from any person that the
Administrative Agent in good faith believes is an authorized officer or employee
of the Company, and the Company shall hold the Administrative Agent and each
Lender harmless from any loss, cost or expense resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in
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accordance with GAAP applied on a basis consistent with those used in the
preparation of the Company's audited financial statements referred to in clause
(a) of Section 9.4.
14.5 Costs, Expenses and Taxes. The Company agrees to pay on demand (a)
all reasonable out-of-pocket costs and expenses of the Administrative Agent
(including the fees and charges of counsel for the Administrative Agent and of
local counsel, if any, who may be retained by said counsel) in connection with
the preparation, execution, delivery and administration of this Agreement, the
other Loan Documents and all other documents provided for herein or delivered or
to be delivered hereunder or in connection herewith (including, without
limitation, any amendment, supplement or waiver to any Loan Document), and (b)
all reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees, court costs and other legal expenses) incurred by the Administrative Agent
and each Lender after an Event of Default in connection with the enforcement of
this Agreement, the other Loan Documents or any such other documents. Each
Lender agrees to reimburse the Administrative Agent for such Lender's pro rata
share (based on its respective Percentage) of any such costs and expenses of the
Administrative Agent not paid by the Company. In addition, the Company agrees
to pay, and to save the Administrative Agent and the Lenders harmless from all
liability for, any stamp or other taxes which may be payable in connection with
the execution and delivery of this Agreement, the borrowings hereunder, the
issuance of the Notes or the execution and delivery of any other Loan Document
or any other document provided for herein or delivered or to be delivered
hereunder or in connection herewith. All obligations provided for in this
Section 14.5 shall survive repayment of the Loans, cancellation of the Notes and
any termination of this Agreement.
14.6 Subsidiary References. The provisions of this Agreement relating to
Subsidiaries of the Company shall apply only during such times as the Company
has one or more Subsidiaries.
14.7 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
14.8 Assignments; Participations.
14.8.1 Assignments. Any Lender may, with the prior written consent of the
Company (at all times other than during the existence of an Event of Default),
the Issuing Bank and the Administrative Agent (which consents shall not be
unreasonably delayed or withheld), at any time assign and delegate to one or
more commercial banks or other Persons (any Person to whom such an assignment
and delegation is to be made being herein called an
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"Assignee"), all or any fraction of such Lender's Loans and Commitment
hereunder and under the Publishing Credit Agreement (which assignment and
delegation shall be of a constant, and not a varying, percentage of all the
assigning Lender's Commitment, participation in Letters of Credit and Loans
hereunder and under the Publishing Credit Agreement) in a minimum aggregate
amount equal to the lesser of (a) the sum of the assigning Lender's remaining
Loans, participation in Letters of Credit and (to the extent not used)
Commitment hereunder and under the Publishing Credit Agreement and (b)
U.S.$10,000,000 in the aggregate; provided, however, that (i) no assignment and
delegation may be made to any Person if, at the time of such assignment and
delegation, the Company would be obligated to pay any greater amount under
Section 7.6 or Section 8 to the Assignee than the Company are then obligated to
pay to the assigning Lender under such Section and (ii) the Company, the
Issuing Bank and the Administrative Agent shall be entitled to continue to deal
solely and directly with such Lender in connection with the interests so
assigned and delegated to an Assignee until the date when all of the following
conditions shall have been met:
(x) five Business Days (or such lesser period of time as the
Administrative Agent and the assigning Lender shall agree) shall have passed
after written notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such Assignee,
shall have been given to the Company and the Administrative Agent by such
assigning Lender and the Assignee,
(y) the assigning Lender and the Assignee shall have executed and
delivered to the Company and the Administrative Agent an assignment agreement
substantially in the form of Exhibit G (an "Assignment Agreement"), together
with any documents required to be delivered thereunder, which Assignment
Agreement shall have been accepted by the Administrative Agent, the Issuing Bank
and, if applicable, the Company, and
(z) the assigning Lender or the Assignee shall have paid the
Administrative Agent a processing fee of L500.
From and after the date on which the conditions described above have been met,
(A) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have
the rights and obligations of a Lender hereunder, and (B) the assigning Lender,
to the extent that rights and obligations hereunder have been assigned and
delegated by it pursuant to such Assignment Agreement, shall be released from
its obligations
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hereunder. The Administrative Agent shall prepare all necessary documents, if
any, in connection with assignments. Within five Business Days after the
effectiveness of any assignment and delegation, the Company shall execute and
deliver to the Administrative Agent (for delivery to the Assignee and the
Assignor, as applicable) a new Note in a principal amount equal to the sum of
the Assignee's Commitment (if any) and, if the assigning Lender has retained a
Commitment or Loans hereunder, replacement Note in the principal amount equal
to the sum of the Commitment (if any) retained by the assigning Lender (such
Note to be in exchange for, but not in payment of, the predecessor Note held by
such assigning Lender). Each Note shall be dated the effective date of such
assignment. The assigning Lender shall mark the predecessor Note "exchanged"
and deliver it to the Company. Accrued interest on that part of the
predecessor Note being assigned shall be paid as provided in the Assignment
Agreement. Accrued interest and fees on that part of the predecessor Note not
being assigned shall be paid to the assigning Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided in the
predecessor Note and in this Agreement. Any attempted assignment and
delegation not made in accordance with this Section 14.8.1 shall be null and
void.
Notwithstanding the foregoing provisions of this Section 14.8.1 or any
other provision of this Agreement, any Lender may at any time assign all or any
portion of its Loans and its Note to any central bank (but no such assignment
shall release any Lender from any of its obligations hereunder).
14.8.2 Participations. Any Lender may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Lender, the Notes held by such Lender, the Commitment of such Lender, the
direct or participation interest of such Lender in any Letter of Credit or any
other interest of such Lender hereunder (any Person purchasing any such
participating interest being herein called a "Participant") provided that such
assignments shall be of a constant and not a varying, percentage of the selling
Lender's Commitment, Letters of Credit and Loans. In the event of a sale by a
Lender of a participating interest to a Participant, (x) such Lender shall
remain the holder of its Notes for all purposes of this Agreement, (y) the
Company and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
hereunder and (z) all amounts payable by the Company shall be determined as if
such Lender had not sold such participation and shall be paid directly to such
Lender. No Participant shall have any direct or indirect voting rights
hereunder except with respect to any of the events described in the third
sentence of Section 14.1. Each Lender agrees to incorporate the requirements of
the preceding
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sentence into each participation agreement which such Lender enters into with
any Participant. The Company agrees that if amounts outstanding under this
Agreement and the Notes are due and payable (as a result of acceleration or
otherwise), each Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement and
any Note and with respect to any Letter of Credit to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement; provided that such right of setoff shall be subject to
the obligation of each Participant to share with the Lenders, and the Lenders
agree to share with each Participant, as provided in Section 7.5. The Company
also agrees that each Participant shall be entitled to the benefits of Section
8 as if it were a Lender (provided that no Participant shall receive any
greater compensation pursuant to Section 8 than would have been paid to the
participating Lender if no participation had been sold).
14.9 Governing Law. This Agreement and each Note shall be a contract made
under and governed by the internal laws of the State of New York. Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agents and the
Lenders expressed herein or in any other Loan Document shall be in addition to
and not in limitation of those provided by applicable law.
14.10 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
14.11 Successors and Assigns. This Agreement shall be binding upon the
Company, the Lenders and the Agents and their respective successors and assigns,
and shall inure to the benefit of the Company, the Lenders, the Issuing Bank and
the Agents and the permitted successors and assigns of the Lenders, the Issuing
Bank and the Agents.
14.12 Indemnification by the Company.
(a) In consideration of the execution and delivery of this Agreement by
the Agents and the Lenders and the agreement to extend the Commitments provided
hereunder, the Company hereby agrees to indemnify, exonerate and hold the
Issuing Bank, each
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Agent, each Lender and each of the officers, directors, employees and agents of
the Issuing Bank, each Agent and each Lender (collectively the "Lender Parties"
and individually each a "Lender Party") free and harmless from and against any
and all actions, causes of action, suits, losses, liabilities, damages and
expenses, including, without limitation, reasonable attorneys' fees and charges
(collectively therein called the "Indemnified Liabilities"), incurred by the
Lender Parties or any of them as a result of, or arising out of, or relating to
(i) any tender offer, merger, purchase of stock, purchase of assets or other
similar transaction financed or proposed to be financed in whole or in part,
directly or indirectly, with the proceeds of any of the Loans or Letters of
Credit or (ii) the execution, delivery, performance or enforcement of this
Agreement or any other Loan Document by any of the Lender Parties, except for
any such Indemnified Liabilities as to any Lender Party arising on account of
such Lender Party's bad faith, gross negligence or willful misconduct. If and
to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Nothing set forth above shall be construed
to relieve any Lender Party from any obligation it may have under this
Agreement.
(b) Without limiting the provisions of clause (a) above, the Company
agrees to reimburse each Lender Party for, and indemnify each Lender Party
against, any and all losses, claims, damages, penalties, judgments, liabilities
and expenses (including reasonable attorneys' and consultant's fees) which any
Lender Party may pay, incur or become subject to arising out of or relating to
the use, handling, release, emission, discharge, transportation, storage,
treatment or disposal of any Regulated Material at any real property owned or
leased by the Company or any Subsidiary or used by the Company or any Subsidiary
in its business or operations, except to the extent caused by the acts or
omissions of such Lender Party.
14.13 Survival of Indemnities. All obligations provided for in Section
14.12 and in any other indemnity provided the Issuing Bank, any Agent or any
Lender in any other Loan Document shall survive repayment of the Loans,
cancellation of the Notes and any termination of this Agreement or any of the
Loan Documents.
14.14 Confidentiality. The Agents, the Issuing Bank and the Lenders shall
hold all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as such by the Company in accordance with
their customary procedures for handling confidential information of this nature
and in accordance with safe and sound banking
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practices and, in any event, may make disclosure on the same confidential basis
as provided for herein that is reasonably required by any actual or bona fide
potential transferee or participant in connection with the contemplated
transfer of any Note or participation therein or in any Letter of Credit or as
required or requested by any governmental agency or representative thereof or
pursuant to legal process; provided that, unless prohibited by applicable law
or court order, each Agent, the Issuing Bank and each Lender shall promptly
notify the Company of any request by any governmental agency or representative
thereof (other than any such request in connection with an examination of the
financial condition of such Agent, the Issuing Bank or such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information.
14.15 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF
NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK OR, AT THE ADMINISTRATIVE AGENT'S OPTION, ANY SUCH LITIGATION MAY BE
BROUGHT AND MAINTAINED AND/OR ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE THE COMPANY, SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. EACH OF THE COMPANY, THE ISSUING BANK, EACH AGENT
AND EACH LENDER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. EACH OF THE COMPANY, THE ISSUING BANK, EACH AGENT AND EACH LENDER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
14.16 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE ISSUING BANK, EACH
AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE,
ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
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14.17 American Legal Terms. References to any legal term or concept
(including without limitation those for any action, remedy, method of judicial
proceeding, document, statute, court official, governmental authority or agency)
shall in respect of any jurisdiction other than the United States be construed
as references to the term or concept which most nearly corresponds to it in that
jurisdiction.
14.18 Telegraph Assumption. The Company shall have the right to
substitute Telegraph as a party entitled to borrow some portion of the
Commitment under this Agreement (the "Assumed Commitment") provided that the
Company guarantees such Assumed Commitment and the Guarantees and the Collateral
Documents continue to guarantee and secure repayment of such Assumed Commitment
on terms satisfactory to the Lenders (collectively, the "Telegraph Assumption").
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Delivered at New York, New York, as of the day and year first above
written.
FIRST DT HOLDINGS LIMITED
By /s/ Paul B. Healy
-----------------------------
Vice President
<PAGE> 94
THE TORONTO-DOMINION BANK, individually, as Issuing Bank and as
Administrative Agent
By /s/ Janice Gibson
-----------------------------
Director
<PAGE> 95
EXHIBIT A
FORM OF
NOTE
L__________
May 30, 1996
Chicago, Illinois
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
________________ at the principal office of The Toronto-Dominion Bank in
London, England, _______________ Sterling (L__________) or, if less, the
aggregate unpaid amount of all Loans made by the payee to the undersigned
pursuant to the Credit Agreement referred to below, such amount to be paid at
the times set forth in the Credit Agreement.
The undersigned further promises to pay interest on the unpaid principal
amount of each Loan evidenced hereby from the date of such Loan until such Loan
is paid in full, payable at the rates and at the times set forth in the Credit
Agreement. Payments of both principal and interest are to be made in lawful
money of the United Kingdom of Great Britain and Northern Ireland.
This Note evidences indebtedness incurred under, and is subject to the terms
and provisions of, the Credit Agreement, dated as of May 30, 1996 (herein, as
amended or otherwise modified from time to time, called the "Credit
Agreement"), among the undersigned, various financial institutions (including
the payee), and The Toronto-Dominion Bank, as issuing bank and administrative
agent, to which Credit Agreement reference is hereby made for a statement of
the terms and provisions under which this Note may or must be paid prior to its
due date or may have its due date accelerated.
In addition to and not in limitation of the foregoing and the provisions of
the Credit Agreement, the undersigned further agrees, subject only to any
limitation imposed by applicable law, to pay all reasonable expenses, including
reasonable attorneys' fees and legal expenses, incurred by the holder of this
Note in endeavoring to collect any amounts payable hereunder which are not paid
when due, whether by acceleration or otherwise.
The undersigned hereby waives demand, presentment, protest, and notice of
demand, presentment, protest and nonpayment.
<PAGE> 96
THIS NOTE IS MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
FIRST DT HOLDINGS LIMITED
By
---------------------------
Name
-----------------------
Title
----------------------
<PAGE> 97
EXHIBIT B
FORM OF
COMPLIANCE CERTIFICATE
To: The Toronto-Dominion Bank
as Administrative Agent
Reference is made to the Credit Agreement, dated as of May __, 1996
(herein, as amended or otherwise modified from time to time, called the "Credit
Agreement"), among First DT Holdings Limited (the "Company"), various financial
institutions, and The Toronto-Dominion Bank, as Issuing Bank and Administrative
Agent. Terms used but not otherwise defined herein are used herein as defined in
the Credit Agreement.
I. Report. Enclosed herewith is a copy of the [annual
audit/quarterly] report of the Company as at ____________, 19__ (the
"Computation Date"), which report fairly presents the financial condition
and results of operations of the Company and its Subsidiaries, as of the
Computation Date.
II. Financial Tests. The Company hereby certifies and warrants to you
that the following is a true and correct computation as at the Computation
Date of the following ratios and/or financial restrictions contained in
Section 10 of the Credit Agreement:
A. Section 10.6.1 Asset Coverage Ratio.
(1) Operating Cash Flow for the preceding four Fiscal Quarters ending on
the Computation Date:
(a) Consolidated Net Income for the preceding four Fiscal Quarters ending
on the Computation Date: $______
(b) The consolidated interest expense and other financing costs of the
Company and its Subsidiaries deducted in determining Consolidated Net Income
(Loss) for the preceding four Fiscal Quarters ending on the Computation Period:
$______
<PAGE> 98
(c) all depreciation and amortization of assets (including goodwill and
other intangible assets) of the Company and its Subsidiaries deducted in
determining Consolidated Net Income (Loss) for the preceding four Fiscal
Quarters ending on the Computation Date: $______
(e) other non-cash expenses and all extraordinary and non-recurring
expenses (including all one-time, non-recurring transaction expenses associated
with the Scheme, to the extent such expenses are included in determining
Consolidated Net Income (Loss)) deducted in determining Consolidated Net Income
(Loss) for the preceding four Fiscal Quarters ending on the Computation Date:
$______
(f) Item (a) plus Item (b) plus Item (c) plus Item (d) plus Item (e):
$______
(2) Dividends received by the Company from either Fairfax or Southam in
the preceding four Fiscal Quarters ending on the Computation Date:
$______
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(3) Item (l)(f) minus Item (2): $______
(4) Item (3) multiplied by 5.5: $______
(5) The Closing Price of the Fairfax Shares as of the most recent trading
date (being 1996) on the Australian Stock Exchange:
A$______
(6) The Dollar Equivalent of Australian Dollars (Item III.A.):
A$1 = US $______
(7) The Dollar Equivalent of the Closing Price of the Fairfax Shares (Item
(5) multiplied by Item (6): $______
(8) Item (7) multiplied by 0.88: $______
(9) Item (4) plus Item (8): $______
(10) Aggregate amount of the Commitments, the Capital Leases and Guarantee
Obligations: $______
(11) Ratio of Item (9) to Item (10): ______ to 1
(12) Minimum Asset Coverage Ratio required by Section 10.6.1 as of any
Computation Date before the Closing Date: 1.25 to 1
(13) Minimum Asset Coverage Ratio required by Section 10.6.1 as of any
Computation Date on or after the Closing Date: 1.5 to 1
B. Section 10.6.2 Interest Coverage Ratio.
(1) Operating Cash Flow for the Fiscal Quarter ending on the Computation
Date:
(a) Consolidated Net Income (Loss) for the Fiscal Quarter:
$______
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<PAGE> 100
(b) the consolidated interest expense and other financing costs of the
Company and its Subsidiaries deducted in determining Consolidated Net Income
(Loss) for the Fiscal Quarter: $______
(c) all depreciation and amortization of assets (including goodwill and
other intangible assets) of the Company and its Subsidiaries deducted in
determining Consolidated Net Income (Loss) for the Fiscal Quarter: $______
(d) all federal, state, local and foreign income taxes (whether paid or
deferred) of the Company and its Subsidiaries deducted in determining
Consolidated Net Income for the Fiscal Quarter: $______
(e) other non-cash expenses and all extraordinary and nonrecurring
expenses (including all one-time, non-recurring transaction expenses associated
with the Scheme, to the extent such expenses are included in determining
Consolidated Net Income (Loss)) deducted in determining Consolidated Net Income
(Loss) for the Fiscal Quarter: $______
(f) Item (a) plus Item (b) plus Item (c) plus Item (d) plus Item (e):
$______
(2) One-half of the most recently received Fairfax dividend (regardless of
whether such dividend was received during the Fiscal Quarter):
$______
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(3) Item (1)(f) plus (minus)1 Item (2): $______
(4) Total Interest Expense for the-Fiscal Quarter:
(a) the consolidated interest expense and commitment fees2 of the Company
and its Subsidiaries for such period accrued on Funded Debt for the Fiscal
Quarter: $______
(b) amounts paid by Telegraph with respect to Redeemable Capital Stock
issued by West Ferry Printers Limited: $______
(c) Item (a) plus item (b): $______
(5) Permitted Payments made pursuant to Section 10.9(b)(i):
$______
(6) Item (4)(c) plus Item (5): $______
(7) Ratio of item (3) to item (6): $______ to 1
(8) Minimum Interest Coverage Ratio required by Section 10.6.2 for the
Fiscal Quarter ending on the Computation Date:
1.5 to 1
____________________
1 Item (2) should be subtracted from Item (l)(f) in any Fiscal Quarter in
which a Fairfax Dividend is received and added in any Fiscal Quarter in
which no Fairfax Dividend is received.
2 For the purpose of calculating consolidated interest expense and
commitment fees for any Fiscal Quarter or portion thereof ending on or
before the date the initial loans are made under the Credit Agreement (the
"Pre-Funding Period"), Funded Debt shall be determined by assuming that
the Existing Debt Facilities had been repaid and Loans in an amount equal
to the Commitment had been outstanding for the entire Pre-Funding Period
which Loans accrued interest at a rate per annum equal to LIBOR (Reserve
Adjusted) as of the date of the calculation plus the Applicable Margin.
5
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C. Section 10.7 Limitations on Debt.
(1) Debt of FDTH under the FDTH/Holdco Subordinated Note at the end of the
Fiscal Quarter ending on the Computation Date: $______
(2) Maximum Debt of FDTH under the FDTH/Holdco Subordinated Note permitted
by Section 10.7 at the end of the Fiscal Quarter ending on the Computation Date:
US $100,000,000
D. Section 10.9 Restricted Subordinated Payments
(1) Restricted Payments:
(a) regular quarterly dividends payable on the DTH Preference Shares and
the Series A and Series B FDTH Preference Shares: $______
(b) amount of Interest due on the Holdco Facility: $______
(c) Item (a) plus Item (b): $______
(2) Interest/Restricted Payment Coverage Ratio:
(a) Operating Cash Flow (Item B.(3)): $______
(b) Total Interest Expense (Item B.(4)(c)): $______
(c) Permitted Payments made pursuant to Section 10.9(b)(i):
$______
(d) Permitted Payments made pursuant to Section 10.9 (b)(ii):
$______
(e) Restricted Payments made pursuant to Section 10.9 (a)(l) (Item
(l)(c)): $______
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(f) Item (b) plus Item (c) plus Item (d) plus Item (e):
$______
(g) Ratio of Item (a) to Item (f):
______to 1
(h) Minimum Interest/ Restricted Payment Coverage Ratio required by
Section 10.9(a)(1)(c): 1.0 to 1
E. Section 10.9 Management Fees.
(1) Management Fees paid during the Fiscal Quarter:
$______
(2) Dividends paid during the Fiscal Quarter pursuant to Section
10.9(a)(2): $______
(3) Item (1) plus Item (2): $______
(4) Excess Cash Flow:
(a) Operating Cash Flow (Item B.(3)): $______
(b) Total Interest Expense (Item B.(4)(c)): $______
(c) Scheduled principal payments on Funded Debt for such Fiscal Quarter:
$______
(d) All federal, state, local and foreign income taxes of the Company and
its Subsidiaries paid during the Fiscal Quarter:
$______
(e) Restricted Payments and Permitted Payments paid during the Fiscal
Quarter (Item D. (2)(c) plus Item D. (2) (d) plus Item D. (2)(e)):
$______
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(f) Capital Expenditures during the Fiscal Quarter:
$______
(g) The sum of Items (b) through (f): $______
(h) Scheduled principal payments on Funded Debt other than the Loans
during the Fiscal Quarter: $______
(i) Item (g) minus Item (h): $______
(j) Item (a) minus Item (i):
$______
(5) The lesser of Item (4)(j) and US $3,750,000:
$______
III. Currency Conversion Rates. The Company hereby certifies that, as
of the date of this certificate:
A. The Dollar Equivalent of Australian Dollars is:
A$1 = US $______
B. The Dollar Equivalent of Sterling is:
L1 = US $______
IV. Defaults. The Company hereby further certifies and warrants to
you that no Event of Default or Unmatured Event of Default has occurred and
is continuing.
IN WITNESS WHEREOF, the Company has caused this Certificate to be executed
and delivered by its duly authorized officer this _____ day of __________, 19__.
FIRST DT HOLDINGS LIMITED
By
------------------------------
Name
----------------------------
Title
---------------------------
8
<PAGE> 105
EXHIBIT C-1
FORM OF
SUBSIDIARY GUARANTY
THIS GUARANTY (this "Guaranty") dated as of ________ __, 1996, is made by
the undersigned (collectively, the "Guarantors" and each individually a
"Guarantor"), in favor of the Lenders and the Administrative Agent (each as
defined below).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of _________ __, 1996
(together with all amendments and other modifications, if any, from time to time
made thereto, the "Credit Agreement"), among First DT Holdings Limited (the
"Company"), various financial institutions (together with their respective
successors and assigns, collectively the "Lenders" and each individually a
"Lender") and The Toronto-Dominion Bank, as issuing bank (in such capacity, the
"Issuing Bank") and administrative agent (in such capacity, together with any
successors in such capacity, the "Administrative Agent"), the Lenders have
extended Commitments to make Loans to and issue or participate in Letters of
Credit for the account of the Company; and
WHEREAS, as a covenant for the making of the initial Loans and the issuance
of the initial Letter(s) of Credit under the Credit Agreement, the Company
agreed to cause the Guarantors to execute and deliver this Guaranty; and
WHEREAS, each Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of each Guarantor to execute this
Guaranty inasmuch as such Guarantor will derive substantial direct and indirect
benefits from the Loans made from time to time to the Company and the Letters of
Credit issued from time to time for the account of the Company pursuant to the
Credit Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to continue to make the Loans and issue or participate in Letters of Credit to
the Company pursuant to the Credit Agreement, each Guarantor agrees, for the
benefit of the Lenders and the Administrative Agent, as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
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Administrative Agent is defined in the first recital.
Company is defined in the first recital.
Credit Agreement is defined in the first recital.
Guaranteed Obligations is defined in Section 2.1 hereof.
Guarantor is defined in the preamble.
Guaranty is defined in the preamble.
Hedging Agreements means all agreements that are defined to be "Hedging
Agreements" in the Credit Agreement that are entered into with any Person who at
the time such Hedging Agreement is entered into is a Lender or an affiliate of a
Lender.
Lender is defined in the first recital.
Loan Documents means those agreements and other documents defined as "Loan
Documents" in the Credit Agreement and, in addition, all Hedging Agreements.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, capitalized terms used in this
Guaranty, including its preamble and recitals, have the meanings provided in the
Credit Agreement.
ARTICLE II.
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. Each Guarantor hereby absolutely, unconditionally
and irrevocably, and jointly and severally, as primary obligor and not merely as
surety, guarantees the full and prompt payment when due, whether by acceleration
or otherwise, and at all times thereafter, of all obligations (monetary or
otherwise) of the Company to each of the Lenders and to the Administrative
Agent, howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due,
which arise out of or in connection with the Credit Agreement, the Notes, any
Letter of Credit or Letter of Credit Application, any Hedging Agreement or any
other Loan Document, in each case as the same may be amended, modified, extended
or renewed from time to time (all such obligations being herein collectively
called the "Guaranteed Obligations").
This Guaranty constitutes a guaranty by each Guarantor of payment when due
and not of collection and each Guarantor specifically agrees that it shall not
be necessary or required
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that the Administrative Agent or any Lender exercise any right, assert any claim
or demand or enforce any remedy whatsoever against the Company (or any other
Person) before or as a condition to the obligations of such Guarantor hereunder.
Any term or provision of this Guaranty or any other Loan Document to the
contrary notwithstanding, the aggregate maximum amount of the Guaranteed
Obligations for which each Guarantor shall be liable shall not exceed the
maximum amount for which such Guarantor can be liable without rendering this
Guaranty or any other Loan Document as it relates to such Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer.
SECTION 2.2. Acceleration of Guaranty. Each Guarantor agrees that, in the
event of any Event of Default under Section 12.1.4 of the Credit Agreement, and
if such event shall occur at a time when any of the Guaranteed Obligations are
not then due and payable, such Guarantor shall pay to the Administrative Agent
for the account of the Administrative Agent and the Lenders forthwith the full
amount which would be payable hereunder by such Guarantor if all Liabilities
were then due and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all respects
be a continuing, absolute, unconditional and irrevocable guaranty of payment by
each Guarantor, and shall remain in full force and effect until all Guaranteed
Obligations have been paid in full, finally and indefeasibly, all obligations of
such Guarantor hereunder shall have been paid in full, finally and indefeasibly,
and the Commitments, all Letters of Credit, all Hedging Agreements and any other
commitments by the Lenders or the Administrative Agent to the Company shall have
terminated (even if the Letters of Credit have been cash collateralized). Each
Guarantor guarantees that the Guaranteed Obligations shall be paid strictly in
accordance with the terms of the Credit Agreement and each other Loan Document
under which they arise, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Administrative Agent or any Lender with respect thereto. The
creation or existence from time to time of additional Guaranteed Obligations to
the Administrative Agent or the Lenders or any of them is hereby authorized,
without notice to any Guarantor, and shall in no way impair the rights of the
Administrative Agent or the Lenders or the obligations of any Guarantor under
this Guaranty, including the guaranty hereunder of such additional Guaranteed
Obligations. The liability of each Guarantor under this Guaranty shall be
absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the Credit
Agreement, any Note or any other Loan Document;
(b) the failure of the Administrative Agent or any Lender
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(i) to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person (including any other guarantor)
under the provisions of the Credit Agreement, any Note, any other Loan
Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor of,
or collateral securing, any Guaranteed Obligations;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other extension,
compromise or renewal of any Guaranteed Obligation;
(d) any reduction, limitation, impairment or termination of any
Guaranteed Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and such
Guarantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Guaranteed Obligations;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Credit Agreement, any
Note or any other Loan Document;
(f) (i) any addition, exchange, release, surrender or non-perfection of
any collateral or (ii) any amendment to or waiver or release or addition of, or
consent to departure from, any other guaranty held by the Administrative Agent
or any Lender, securing or supporting any of the Guaranteed Obligations; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Guarantor, the Company,
any surety or any other guarantor.
SECTION 2.4. Reinstatement, etc. Each Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Guaranteed Obligations is
rescinded or must otherwise be restored by the Administrative Agent or any
Lender, upon the insolvency, bankruptcy or reorganization of the Company, any
other Person or otherwise, as though such payment had not been made.
SECTION 2.5. Waiver, etc. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and any requirement that the
Administrative Agent or any Lender protect,
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secure, perfect or insure any security interest or Lien, or any property subject
thereto, or exhaust any right or take any action against the Company or any
other Person (including any other guarantor) or entity or any collateral
securing any Guaranteed Obligations.
SECTION 2.6. Waiver of Subrogation and Contribution. Until the Guaranteed
Obligations have been paid in cash indefeasibly in full, each Guarantor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against the Company or any other Person that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations under this
Guaranty or any other Loan Document, including any right of subrogation,
reimbursement, contribution, exoneration, or indemnification, any right to
participate in any claim or remedy of the Administrative Agent or any Lender
against the Company or any other Person or any collateral which the
Administrative Agent or any Lender now has or hereafter acquires, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including the right to take or receive from the Company or any other
Person, directly or indirectly, in cash or other property or by set-off or in
any manner, payment or security on account of such claim or other rights. If any
amount shall be paid to any Guarantor in violation of the preceding sentence and
the Guaranteed Obligations shall not have been paid in cash indefeasibly in full
and the Commitments, all Letters of Credit, all Hedging Agreements and any other
commitments by the Lenders or the Administrative Agent to the Company shall not
have been terminated, such amount shall be deemed to have been paid to such
Guarantor for the benefit of, and held in trust for, the Administrative Agent
and the Lenders, and shall forthwith be paid to the Administrative Agent to be
credited and applied upon the Guaranteed Obligations, whether matured or
unmatured. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Credit Agreement
and that the waiver set forth in this Section is knowingly made in contemplation
of such benefits.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lender to make loans under the
Credit Agreement, each Guarantor represents and warrants to the Agents and the
Lenders that:
SECTION 3.1. Organization, etc. Such Guarantor is a limited liability
company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation; such Guarantor is duly qualified to do
business in each jurisdiction where the nature of its business makes such
qualification necessary, except where the failure to be so qualified would not
have a Material Adverse Effect; and such Guarantor has full corporate power and
authority to own its property and conduct its business as presently conducted by
it.
SECTION 3.2. Authorization; No Conflict. The execution and delivery by
such Guarantor of this Guaranty and each other Loan Document to which it is
intended to be a
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party, and the performance by such Guarantor of its obligations under each Loan
Document to which it is intended to be a party are within the corporate powers
of such Guarantor, have been duly authorized by all necessary corporate action
on the part of such Guarantor (including any necessary shareholder action), have
received all necessary governmental approval (if any shall be required), and do
not and will not (a) violate any provision of law or any order, decree or
judgment of any court or other government agency which is binding on such
Guarantor, (b) contravene or conflict with, or result in a breach of, any
provision of the Memorandum and Articles of Association or other organizational
documents of such Guarantor or of any agreement, indenture, instrument or other
document, or any judgment, order or decree, which is binding on such Guarantor
or (c) result in, or require, the creation or imposition of any Lien on any
property of such Guarantor (other than pursuant to the Loan Documents).
SECTION 3.3. Validity and Binding Nature. This Guaranty is, and upon the
execution and delivery thereof each other Loan Document to which such Guarantor
is intended to be a party will be, the legal, valid and binding obligation of
such Guarantor, enforceable against such Guarantor in accordance with its terms,
except that enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, fraudulent transfer, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in
equity or at law).
ARTICLE IV.
MISCELLANEOUS PROVISIONS
SECTION 4.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof.
SECTION 4.2. Binding on Successors, Transferees and Assigns; Assignment of
Guaranty. This Guaranty shall be binding upon each Guarantor and their
respective successors, transferees and assigns, and all references herein to the
Company and any Guarantor, respectively, shall be deemed to include any of such
Person's successor or successors, whether intermediate or remote. Any Lender
may from time to time, in accordance with Section 14.8 of the Credit Agreement,
without notice to any Guarantor, assign or transfer any or all of the Guaranteed
Obligations or any interest therein; and, notwithstanding any such assignment or
transfer or any subsequent assignment or transfer thereof, such Guaranteed
Obligations shall be and remain Guaranteed Obligations for the purpose of this
Guaranty, and each and every immediate and successive assignee or transferee of
any of the Guaranteed Obligations or of any interest therein shall, to the
extent of the interest of such assignee or transferee in the Guaranteed
Obligations, be entitled to the
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benefits of this Guaranty and shall be protected to the same extent as if such
assignee or transferee were a Lender.
SECTION 4.3. Amendments, etc. No amendment to or waiver of any provision
of this Guaranty, nor consent to any departure by any Guarantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Administrative Agent and each Guarantor, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
SECTION 4.4. Addresses for Notices to the Guarantor. All notices
hereunder to any Guarantor shall be in writing (including via facsimile) and
shall be sent to it at the address or facsimile number set forth below its
signature hereto or at such other address or facsimile number as may be
designated by such Guarantor in a written notice received by the Administrative
Agent. Notices sent by facsimile transmission shall be deemed to have been given
when sent; notices sent by mail shall be deemed to have been given three
Business Days after the date when sent by registered or certified mail, postage
prepaid; and notices sent by hand delivery shall be deemed to have been received
when received.
SECTION 4.5. No Waiver; Remedies; Security. In addition to, and not in
limitation of, Section 2.3 and Section 2.5, no failure on the part of the
Administrative Agent or any Lender to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. Pursuant to the
Credit Agreement, (a) this Guaranty has been delivered to the Administrative
Agent and (b) the Administrative Agent has been authorized to enforce this
Guaranty on behalf of itself and each of the Lenders. All payments by any
Guarantor pursuant to this Guaranty shall be made to the Administrative Agent
applied to costs, expenses, fees or the ratable benefit of the Lenders, as
applicable. This Guaranty is secured by various collateral documents delivered
by one or more of the Guarantors and reference is made to such collateral
documents for a description of the collateral security of this Guaranty, the
nature and extent of such collateral and the rights of the parties in and to
such collateral.
SECTION 4.6. Section Captions. Section captions used in this Guaranty are
for convenience of reference only, and shall not affect the construction of this
Guaranty.
SECTION 4.7. Setoff. In addition to, and not in limitation of, any rights
of the Administrative Agent or any Lender under applicable law, the
Administrative Agent or any Lender shall, upon the occurrence of any Event of
Default, have the right to appropriate and apply to the payment of the
obligations of each Guarantor owing to it hereunder, whether or not then due,
and each Guarantor hereby grants to the Administrative Agent and each Lender a
continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of such Guarantor then or thereafter maintained with the
Administrative Agent or such
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<PAGE> 112
Lender and any and all property of every kind or description of or in the name
of such Guarantor now or hereafter, for any reason or purpose whatsoever, in the
possession or control of, or in transit to, the Administrative Agent or such
Lender or any agent or bailee therefor.
SECTION 4.8. Fees and Expenses. Each Guarantor further agrees to pay all
reasonable expenses (including reasonable attorneys' fees and legal expenses)
paid or incurred by the Administrative Agent or any Lender in endeavoring to
collect the Guaranteed Obligations, or any part thereof, in realizing upon or
protecting any Collateral for this Guaranty, and in enforcing this Guaranty
against such Guarantor.
SECTION 4.9. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 4.10. Governing Law, Entire Agreement, Counterparts, etc. This
Guaranty shall be governed by and construed in accordance with the laws of the
State of New York without reference to conflicts of laws principles. This
Guaranty and the other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and thereof and
supersede any prior agreements, written or oral, with respect thereto. This
Guaranty may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, and each such counterpart shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same Guaranty. At any time after the date of this Guaranty, one or
more additional persons or entities may become parties hereto by executing and
delivering to the Administrative Agent a counterpart of this Guaranty.
Immediately upon such execution and delivery (and without any further action),
each such additional person or entity will become a party to, and will be bound
by all the terms of, this Guaranty.
SECTION 4.11. Forum Selection And Consent To Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE
STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK OR, AT THE ADMINISTRATIVE AGENT'S OPTION, ANY SUCH
LITIGATION MAY BE BROUGHT AND MAINTAINED AND/OR ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS
TO THE JURISDICTION OF THE
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<PAGE> 113
COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. EACH GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK. EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
SECTION 4.12. Waiver of Jury Trial. EACH GUARANTOR AND, BY ACCEPTING THE
BENEFITS HEREOF, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THE FOREGOING, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
A JURY.
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
THE TELEGRAPH PLC
By:
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Name:
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Title:
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Address:
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Facsimile No.:
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Attention:
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With a copy to:
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Address:
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Facsimile No.:
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Attention:
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CREDITSCHEME LIMITED
By:
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Name:
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Title:
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Address:
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Facsimile No.:
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Attention:
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With a copy to:
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Address:
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Facsimile No.:
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Attention:
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DEEDTASK LIMITED
By:
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Name:
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Title:
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Address:
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Facsimile No.:
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Attention:
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With a copy to:
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Address:
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Facsimile No.:
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Attention:
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TELEGRAPH AUSTRALIAN HOLDINGS LIMITED
By:
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Name:
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Title:
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Address:
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Facsimile No.:
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Attention:
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With a copy to:
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Address:
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Facsimile No.:
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Attention:
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DEEDTASK HOLDING BV
By:
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Name:
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Title:
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Address:
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Facsimile No.:
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Attention:
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With a copy to:
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Address:
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Facsimile No.:
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Attention:
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DAILY TELEGRAPH HOLDINGS BV
By:
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Name:
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Title:
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Address:
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Facsimile No.:
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Attention:
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With a copy to:
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Address:
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Attention:
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THE SPECTATOR (1828 LIMITED)
By:
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Name:
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Title:
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Address:
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Attention:
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Address:
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Facsimile No.:
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Attention:
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THE DAILY TELEGRAPH BUSINESS
NETWORK LIMITED
By:
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Name:
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Title:
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Address:
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Attention:
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With a copy to:
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Address:
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Attention:
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TELEGRAPH PUBLISHING LIMITED
By:
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Name:
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Title:
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Address:
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Facsimile No.:
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Attention:
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With a copy to:
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Address:
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Attention:
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BUSINESS NEWS DELIVERIES LIMITED
By:
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Name:
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Title:
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Address:
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Facsimile No.:
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Attention:
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With a copy to:
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Address:
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Attention:
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THE TELEGRAPH BUSINESS SCHOOL LIMITED
By:
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Name:
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Title:
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Address:
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Facsimile No.:
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Attention:
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With a copy to:
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Address:
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Facsimile No.:
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Attention:
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The undersigned is executing a counterpart hereof for purposes of
becoming a party hereto:
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By:
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Name:
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Title:
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Address:
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Facsimile No.:
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Attention:
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EXHIBIT C-2
FORM OF
HOLLINGER INTERNATIONAL GUARANTY
THIS GUARANTY (this "Guaranty") dated as of ________ ___, 1996, is made by
HOLLINGER INTERNATIONAL INC., a Delaware corporation (the "Parent") and
TELHOLDCO INC., a Delaware corporation (the "Affiliate" and together with the
Parent, collectively the "Guarantors" and each individually a "Guarantor"), in
favor of the Lenders and the Administrative Agents (each as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of even date herewith
(together with all amendments and other modifications, if any, from time to time
made thereto, the "Credit Agreement"), among First DT Holdings Limited (the
"Company"), various financial institutions (together with their respective
successors and assigns, collectively the "Lenders" and each individually a
"Lender") and The Toronto-Dominion Bank, as issuing bank (in such capacity, the
"Issuing Bank") and as administrative agent (in such capacity, together with any
successors in such capacity, the "Administrative Agent"), the Lenders have
extended Commitments to make Loans and issue or participate in Letters of Credit
for the account of the Company; and
WHEREAS, as a condition precedent to the making of the initial Loans and
the issuance of the initial Letter(s) of Credit under the Credit Agreement, the
Guarantors are required to execute and deliver this Guaranty; and
WHEREAS, each Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of each Guarantor to execute this
Guaranty inasmuch as each such Guarantor will derive substantial direct and
indirect benefits from the Loans made from time to time to the Company and the
Letters of Credit issued from time to time for the account of the Company
pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to make the Loans and issue or participate in Letters of Credit (including the
initial Loans and the initial Letter(s) of Credit) to the Company pursuant to
the Credit Agreement, each Guarantor agrees, for the benefit of the Lenders and
the Administrative Agent, as follows:
<PAGE> 127
ARTICLE I.
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
Administrative Agent is defined in the first recital.
Company is defined in the first recital.
Credit Agreement is defined in the first recital.
Guaranteed Obligations is defined in Section 2.1 hereof.
Guarantor is defined in the preamble.
Guaranty is defined in the preamble.
Hedging Agreements means all agreements that are defined to be "Hedging
Agreements" in the Credit Agreement that are entered into with any Person who at
the time such Hedging Agreement is entered into is a Lender or an affiliate of a
Lender.
HTH/FDTH Share Exchange Agreement means the share exchange agreement dated
as of July 19, 1995, between Hollinger Inc. and FDTH.
Lender is defined in the first recital.
Loan Documents means those agreements and other documents defined as "Loan
Documents" in the Credit Agreement and, in addition, all Hedging Agreements.
Material Adverse Effect means a material adverse effect on (a) the
condition (financial or otherwise), operations, business, properties, assets or
prospects of a Guarantor and its Subsidiaries taken as a whole or (b) the
ability of a Guarantor to timely and fully perform any of its payment or other
material obligations under this Guaranty or any other Loan Document to which it
is a party.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, capitalized terms used in this
Guaranty, including its preamble and recitals, have the meanings provided in the
Credit Agreement.
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ARTICLE II.
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. Each Guarantor hereby absolutely, unconditionally
and irrevocably, and jointly and severally, as primary obligor and not merely as
surety, guarantees the full and prompt payment when due, whether by acceleration
or otherwise, and at all times thereafter, of all obligations (monetary or
otherwise) of the Company to each of the Lenders and the Administrative Agent,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, which arise out
of or in connection with the Credit Agreement, the Notes, any Letter of Credit
or Letter of Credit Application, any Hedging Agreement or any other Loan
Document, in each case as the same may be amended, modified, extended or renewed
from time to time (all such obligations being herein collectively called the
"Guaranteed Obligations").
This Guaranty constitutes a guaranty by each Guarantor of payment when due
and not of collection, and each Guarantor specifically agrees that it shall not
be necessary or required that any Agent or any Lender exercise any right, assert
any claim or demand or enforce any remedy whatsoever against the Company (or any
other Person) before or as a condition to the obligations of such Guarantor
hereunder.
Any term or provision of this Guaranty or any other Loan Document to the
contrary notwithstanding, the aggregate maximum amount of the Guaranteed
Obligations for which each Guarantor shall be liable shall not exceed the
maximum amount for which such Guarantor can be liable without rendering this
Guaranty or any other Loan Document as it relates to such Guarantor voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer.
SECTION 2.2. Acceleration of Guaranty. Each Guarantor agrees that, in the
event of any Event of Default under Section 12.1.4 of the Credit Agreement, and
if such event shall occur at a time when any of the Guaranteed Obligations are
not then due and payable, such Guarantor shall pay to the Administrative Agent
for the account of the Agents and the Lenders forthwith the full amount which
would be payable hereunder by such Guarantor if all Liabilities were then due
and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all respects
be a continuing, absolute, unconditional and irrevocable guaranty of payment by
each Guarantor, and shall remain in full force and effect until all Guaranteed
Obligations have been paid in full, finally and indefeasibly, all obligations of
such Guarantor hereunder shall have been paid in full, finally and indefeasibly,
and the Commitments, all Letters of Credit, all Hedging Agreements and any other
commitments by the Lenders or the Agents to the Company shall have terminated
(even if the Letters of Credit have been cash collateralized). Each
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Guarantor guarantees that the Guaranteed Obligations shall be paid strictly in
accordance with the terms of the Credit Agreement and each other Loan Document
under which they arise, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Agent or any Lender with respect thereto. The creation or
existence from time to time of additional Guaranteed Obligations to the
Administrative Agent or the Lenders or any of them is hereby authorized,
without notice to any Guarantor, and shall in no way impair the rights of the
Administrative Agent or the Lenders or the obligations of any Guarantor under
this Guaranty, including such Guarantor's guaranty of such additional
Guaranteed Obligations. The liability of each Guarantor under this Guaranty
shall be absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the Credit
Agreement, any Note or any other Loan Document;
(b) the failure of the Administrative Agent or any Lender
(i) to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person (including any other guarantor)
under the provisions of the Credit Agreement, any Note, any other Loan
Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor of,
or collateral securing, any Guaranteed Obligations;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other extension,
compromise or renewal of any Guaranteed Obligation;
(d) any reduction, limitation, impairment or termination of any
Guaranteed Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and such
Guarantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Guaranteed Obligations;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Credit Agreement, any
Note or any other Loan Document;
(f) (i) any addition, exchange, release, surrender or non-perfection of
any collateral or (ii) any amendment to or waiver or release or addition of, or
consent to
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departure from, any other guaranty held by the Administrative Agent or any
Lender, securing or supporting any of the Guaranteed Obligations; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, such Guarantor, the Company,
any surety or any guarantor.
SECTION 2.4. Reinstatement, etc. Each Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Guaranteed Obligations is
rescinded or must otherwise be restored by the Administrative Agent or any
Lender, upon the insolvency, bankruptcy or reorganization of the Company, any
other Person or otherwise, as though such payment had not been made.
SECTION 2.5. Waiver, etc. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and any requirement that any Agent or
any Lender protect, secure, perfect or insure any security interest or Lien, or
any property subject thereto, or exhaust any right or take any action against
the Company or any other Person (including any other guarantor) or entity or any
collateral securing any Guaranteed Obligations.
SECTION 2.6. Waiver of Subrogation and Contribution. Until the Guaranteed
Obligations have been paid in cash indefeasibly in full, each Guarantor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against the Company or any other Person that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations under this
Guaranty or any other Loan Document, including any right of subrogation,
reimbursement, contribution, exoneration, or indemnification, any right to
participate in any claim or remedy of the Administrative Agent or any Lender
against the Company or any other Person or any collateral which the
Administrative Agent or any Lender now has or hereafter acquires, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including the right to take or receive from the Company or any other
Person, directly or indirectly, in cash or other property or by set-off or in
any manner, payment or security on account of such claim or other rights. If any
amount shall be paid to either Guarantor in violation of the preceding sentence
and the Guaranteed Obligations shall not have been paid in cash indefeasibly in
full and the Commitments, all Letters of Credit, all Hedging Agreements and any
other commitments by the Lenders or the Agents to the Company shall not have
been terminated, such amount shall be deemed to have been paid to such Guarantor
for the benefit of, and held in trust for, the Administrative Agent and the
Lenders, and shall forthwith be paid to the Administrative Agent to be credited
and applied upon the Guaranteed Obligations, whether matured or unmatured. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Credit Agreement and that the
waiver set forth in this Section is knowingly made in contemplation of such
benefits.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make Loans thereunder, each Guarantor
represents and warrants to the Agents and the Lenders that:
SECTION 3.1. Organization, etc. Such Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; such Guarantor is duly qualified to do business in each jurisdiction
where the nature of its business makes such qualification necessary, except
where the failure to be so qualified would not have a Material Adverse Effect;
and such Guarantor has full corporate power and authority to own its property
and conduct its business as presently conducted by it.
SECTION 3.2. Authorization; No Conflict. The execution and delivery by
such Guarantor of this Guaranty and each other Loan Document to which it is
intended to be a party, and the performance by such Guarantor of its obligations
under each Loan Document to which it is intended to be a party are within the
corporate powers of such Guarantor, have been duly authorized by all necessary
corporate action on the part of such Guarantor (including any necessary
shareholder action), have received all necessary governmental approval (if any
shall be required), and do not and will not (a) violate any provision of law or
any order, decree or judgment of any court or other government agency which is
binding on such Guarantor, (b) contravene or conflict with, or result in a
breach of, any provision of the Certificate of Incorporation, By-Laws or other
organizational documents of such Guarantor or of any agreement, indenture,
instrument or other document, or any judgment, order or decree, which is binding
on such Guarantor or (c) result in, or require, the creation or imposition of
any Lien on any property of such Guarantor (other than pursuant to the Loan
Documents).
SECTION 3.3. Validity and Binding Nature. This Guaranty is, and upon the
execution and delivery thereof each other Loan Document to which such Guarantor
is intended to be a party will be, the legal, valid and binding obligation of
such Guarantor, enforceable against such Guarantor in accordance with its terms,
except that enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, fraudulent transfer, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in
equity or at law).
SECTION 3.4. Financial Information. The audited consolidated financial
statements of the Parent and its Subsidiaries as at December 31, 1995 and for
the two years then ended and the unaudited consolidated financial statements of
the Parent and its Subsidiaries for the three months ended March 31, 1996, (a)
are true and correct in all material respects, (b)
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have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as disclosed
therein and, in the case of the interim financial statements, the absence of
footnotes) and (c) present fairly the consolidated financial condition of the
Parent and its Subsidiaries at such dates and the results of their operations
for the periods then ended.
SECTION 3.5. No Material Adverse Change. Except as disclosed on Schedule
3.5 hereto, since December 31, 1995, no event or events have occurred which,
individually or in the aggregate, has had or is reasonably likely to have a
Material Adverse Effect.
SECTION 3.6. Litigation and Guarantee Obligations. No litigation
(including, without limitation, derivative actions), arbitration proceeding or
governmental proceeding is pending or, to any Guarantor's knowledge, threatened
against such Guarantor or any of its Subsidiaries which, if adversely
determined, might have a Material Adverse Effect, except as set forth in
Schedule 3.6 hereto. Other than any liability incident to such litigation or
proceedings, neither any Guarantor nor any of its Subsidiaries has any material
guarantee obligations not provided for or disclosed in the financial statements
referred to in clause (a) of Section 3.4 or listed in Schedule 3.6 hereto.
SECTION 3.7. Investment Company Act. Neither Guarantor nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 3.8. Public Utility Holding Company Act. Neither Guarantor nor
any of its Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
SECTION 3.9. Solvency, etc. On the Effective Date and immediately prior
to and after giving effect to each borrowing under the Credit Agreement and the
use of the proceeds thereof, (a) each Guarantor's assets will exceed its
liabilities and (b) each Guarantor will be solvent, will be able to pay its
debts as they mature, will own property with fair saleable value greater than
the amount required to pay its debts and will have capital sufficient to carry
on its business as then constituted.
SECTION 3.10. Information. All written information heretofore or
contemporaneously herewith furnished by either Guarantor to any Lender or any
Agent for purposes of or in connection with the Credit Agreement and this
Guaranty and the transactions contemplated thereby and hereby is, and all
written information hereafter furnished by or on behalf of such Guarantor to any
Lender or the Administrative Agent pursuant hereto or thereto or in connection
herewith or therewith will be, true and accurate in every material respect on
the date as of which such information is dated or certified, and
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none of such information is or will be incomplete by omitting to state any
material fact necessary to make such information not misleading.
SECTION 3.11. Senior Subordinated Indenture. The obligations of Parent
under this Guaranty constitute "Senior Guarantor Indebtedness" under the terms
of the Senior Subordinated Indenture.
ARTICLE IV.
COVENANTS
So long as this Guaranty is in effect the Parent agrees that, unless at any
time the Required Lenders shall otherwise expressly consent in writing, it will:
SECTION 4.1. Reports, Certificates and Other Information. Furnish to each
Lender:
SECTION 4.1.1. Annual Report. Promptly when available and in any event
within 90 days after the close of each Fiscal Year, (a) a copy of the annual
report of the Parent and its Subsidiaries for such Fiscal Year, including
therein consolidated balance sheets of the Parent and its Subsidiaries as of the
end of such Fiscal Year and consolidated statements of earnings and cash flow of
the Parent and its Subsidiaries for such Fiscal Year, which report (i) shall be
certified by independent auditors of recognized national standing selected by
the Parent and reasonably acceptable to the Required Lenders, in an audit report
which shall be without qualification as to going concern or scope and (ii) shall
be accompanied by a written statement from such auditors to the effect that in
making the examination necessary for the signing of such audit report they have
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing or, if they have become aware of any such event,
describing it in reasonable detail; and (b) a copy of the consolidating balance
sheets of the Parent and its Subsidiaries as of the end of such Fiscal Year and
consolidating statements of earnings and cash flow for the Parent and its
Subsidiaries for such Fiscal Year, together with a certificate of one of the
chief executive officer, the chief financial officer, the chief operating
officer or the controller of the Parent certifying that such financial
statements fairly present the financial condition and results of operations of
the Parent and its Subsidiaries as of the dates and periods indicated.
SECTION 4.1.2. Quarterly Reports. Promptly when available and in any
event within 45 days after the end of each Fiscal Quarter of each Fiscal Year,
consolidated balance sheets of the Parent and its Subsidiaries as of the end of
such calendar month and consolidated statements of earnings and consolidated
statements of cash flow for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day of such Fiscal
Quarter, including a comparison with the corresponding Fiscal Quarter and period
of the previous Fiscal Year together with a certificate of one of the chief
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executive officer, the chief financial officer, the chief operating officer or
the controller of the Parent to the effect that such financial statements
fairly present the financial condition and results of operations of the Parent
and its Subsidiaries as of the dates and periods indicated, subject to changes
resulting from normal year-end adjustments.
SECTION 4.1.3. Reports to SEC and to Shareholders. Promptly upon the
filing or sending thereof, a copy of (a) any annual, periodic or special report
or registration statement (inclusive of exhibits thereto) filed by the Parent
with the SEC or any securities exchange and (b) any report, proxy statement or
similar communication to the Parent's public shareholders generally.
SECTION 4.1.4. Notice of Default and Litigation Matters. Promptly (and in
any event within one Business Day in the case of clause (a) and within five days
in the case of clauses (b) through (d)) after any officer of the Parent learns
of any of the following, written notice describing the same and the steps being
taken by the Parent or the Subsidiary affected thereby with respect thereto:
(a) the occurrence of an Event of Default or an Unmatured Event of Default; (b)
any litigation, arbitration or governmental investigation or proceeding not
previously disclosed by the Parent to the Lenders which has been instituted or,
to the knowledge of the Parent, is threatened against the Parent or any
Subsidiary or to which any of the properties of any thereof is subject which has
had or is reasonably likely to have a Material Adverse Effect; (c) any material
adverse development which occurs in any litigation, arbitration or governmental
investigation or proceeding previously disclosed on Schedule 3.6 hereto or
pursuant to clause (b); and (d) the occurrence of any other event or
circumstance which has had or is reasonably likely to have a Material Adverse
Effect.
SECTION 4.1.5. Management Reports. Promptly upon the request of the
Administrative Agent or any Lender, copies of all detailed financial and
management reports submitted to the Parent by independent auditors in connection
with any annual or interim audit made by such auditors of the books of the
Parent.
SECTION 4.1.6. Other Information. Promptly from time to time, such other
information concerning the Parent and its Subsidiaries as any Lender or the
Administrative Agent may reasonably request.
SECTION 4.2. Books, Records and Inspections. Keep proper books and
records in which full and correct entries shall be made sufficient to allow the
preparation of financial statements in accordance with generally accepted
accounting principles; permit on reasonable notice and at reasonable times and
intervals any Lender or the Administrative Agent or any representative thereof
to (a) visit and inspect the properties of the Parent during normal business
hours, (b) inspect and make extracts from and copies of its books and records,
and (c) discuss with its principal officers its businesses, operations and
financial matters. The Parent will (i) after the occurrence and during the
continuance of any Event of Default and (ii) otherwise with the consent of the
Company, which consent shall not be unreasonably
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withheld, also permit any Lender, the Administrative Agent or any
representative thereof to discuss with the Parent's independent auditors its
businesses, operations and financial matters, provided that the Parent is given
reasonable prior notice of and an opportunity to attend any meeting between
such auditors and any Lender, the Administrative Agent or any representative
thereof at which such issues will be discussed. All visits, discussions, and
examinations by the Administrative Agent shall be at the Parent's expense.
SECTION 4.3. Maintenance of Existence, etc. Maintain and preserve, (a)
its existence and good standing in the jurisdiction of its incorporation and (b)
its qualification and good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good
standing would not be reasonably likely to result in a Material Adverse Effect).
SECTION 4.4. Mergers, Consolidations, Sales. Not, and not permit the
Affiliate, DT Holdings Limited or any of its Subsidiaries to, be a party to any
merger or consolidation or to sell all or substantially all their assets, except
for (a) any such merger or consolidation, sale, transfer, conveyance, lease or
assignment permitted under the Credit Agreement, (b) any merger by the Parent so
long as it is the surviving corporation, or (c) any consolidation by the Parent
so long as it does not result in a Change in Control.
SECTION 4.5. Amendments to Certain Documents. Not, and not permit any
Subsidiary to, make or agree to any amendment to or modification of, or waive
any of its rights under, any of the terms of (a) the Series A Preferred Shares,
(b) the DTH/FDTH Preference Share Agreement dated October 13, 1995 between
Hollinger, Inc. and Hollinger International, and (c) the Business Opportunities
Agreement as amended and restated as of February 7, 1996 between Hollinger
International and Hollinger, Inc.
SECTION 4.6. Certain Restrictive Agreements. With respect to the
Affiliate, DT Holdings Limited and each of its Subsidiaries (other than the
Company), not, and not permit such entities to, enter into any agreement or
other contract (other than the Senior Subordinated Indenture) which would impose
restrictions on the ability of such entity to receive, or such Subsidiary to
make or declare, dividends or other distributions from such Subsidiary to such
entity that are more restrictive than the restrictions that the entity and such
Subsidiary are subject to on the Effective Date.
ARTICLE V.
MISCELLANEOUS PROVISIONS
SECTION 5.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof.
SECTION 5.2. Binding on Successors, Transferees and Assigns; Assignment of
Guaranty. This Guaranty shall be binding upon each Guarantor and its
successors,
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transferees and assigns, and all references herein to the Company and either
Guarantor, respectively, shall be deemed to include any of such Person's
successor or successors, whether intermediate or remote. Any Lender may from
time to time, in accordance with Section 14.9 of the Credit Agreement, without
notice to either Guarantor, assign or transfer any or all of the Guaranteed
Obligations or any interest therein; and, notwithstanding any such assignment
or transfer or any subsequent assignment or transfer thereof, such Guaranteed
Obligations shall be and remain Guaranteed Obligations for the purpose of this
Guaranty, and each and every immediate and successive assignee or transferee of
any of the Guaranteed Obligations or of any interest therein shall, to the
extent of the interest of such assignee or transferee in the Guaranteed
Obligations, be entitled to the benefits of this Guaranty and shall be
protected to the same extent as if such assignee or transferee were a Lender.
SECTION 5.3. Amendments, etc. No amendment to or waiver of any provision
of this Guaranty, nor consent to any departure by either Guarantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent and each Guarantor, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 5.4. Addresses for Notices to the Guarantors. All notices
hereunder to the Guarantors shall be in writing (including via facsimile) and
shall be sent to it at the address or facsimile number set forth below its
signature hereto or at such other address or facsimile number as may be
designated by a Guarantor in a written notice received by the Administrative
Agent. Notices sent by facsimile transmission shall be deemed to have been
given when sent; notices sent by mail shall be deemed to have been given three
Business Days after the date when sent by registered or certified mail, postage
prepaid; and notices sent by hand delivery shall be deemed to have been received
when received.
SECTION 5.5. No Waiver; Remedies; Security. In addition to, and not in
limitation of, Section 2.3 and Section 2.5, no failure on the part of any Agent
or any Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law. Pursuant to the Credit Agreement,
(a) this Guaranty has been delivered to the Administrative Agent and (b) the
Administrative Agent has been authorized to enforce this Guaranty on behalf of
itself, and each of the Lenders. All payments by either Guarantor pursuant to
this Guaranty shall be made to the Administrative Agent applied to costs,
expenses, fees or the ratable benefit of the Lenders, as applicable. This
Guaranty is secured by various collateral documents delivered by each Guarantor
and reference is made to such collateral documents for a description of the
collateral security this Guaranty, the nature and extent of such collateral and
the rights of the parties in and to such collateral.
SECTION 5.6. Section Captions. Section captions used in this Guaranty are
for convenience of reference only, and shall not affect the construction of this
Guaranty.
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SECTION 5.7. Setoff. In addition to, and not in limitation of, any rights
of any Agent or any Lender under applicable law, the Administrative Agent or any
Lender shall, upon the occurrence of any Event of Default, have the right to
appropriate and apply to the payment of the obligations of each Guarantor owing
to it hereunder, whether or not then due, and such Guarantor hereby grants to
the Administrative Agent and each Lender a continuing security interest in, any
and all balances, credits, deposits, accounts or moneys of such Guarantor then
or thereafter maintained with the Administrative Agent or such Lender and any
and all property of every kind or description of or in the name of such
Guarantor now or hereafter, for any reason or purpose whatsoever, in the
possession or control of, or in transit to, the Administrative Agent or such
Lender or any agent or bailee therefor.
SECTION 5.8. Fees and Expenses. Each Guarantor further agrees to pay all
reasonable expenses (including reasonable attorneys' fees and legal expenses)
paid or incurred by the Administrative Agent or any Lender in endeavoring to
collect the Guaranteed Obligations, or any part thereof, in realizing upon or
protecting any Collateral for this Guaranty, and in enforcing this Guaranty
against such Guarantor.
SECTION 5.9. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 5.10. Governing Law, Entire Agreement, etc. This Guaranty shall
be governed by and construed in accordance with the laws of the State of New
York without reference to conflicts of laws principles. This Guaranty and the
other Loan Documents constitute the entire understanding among the parties
hereto with respect to the subject matter hereof and thereof and supersede any
prior agreements, written or oral, with respect thereto.
SECTION 5.11. Forum Selection And Consent To Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH GUARANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
EACH
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<PAGE> 138
GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
SECTION 5.12. Waiver of Jury Trial. EACH GUARANTOR AND (BY ACCEPTING THE
BENEFITS HEREOF) THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THE FOREGOING, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
A JURY.
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
HOLLINGER INTERNATIONAL INC.
By:__________________________________
Name:
Title:
Address: 107-115 South Emma, Box 1000
West Frankfort, Illinois 62896
Facsimile No.: (618) 932-6155
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
TELHOLDCO INC.
By:________________________________________
Name:
Title:
Address: 107-115 South Emma, Box 1000
West Frankfort, Illinois 62896
Facsimile No.: (618) 932-6155
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
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EXHIBIT D
Form Of Publishing Letter Agreement
Hollinger International Publishing Inc.
401 North Wabash Avenue
Chicago, Illinois 60601
May 30, 1996
The Toronto-Dominion Bank
Triton Court
14/18 Finsbury Square
London, England EC2A 1DB
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of May 30, 1996
(together with all amendments and other modifications, if any, from time to time
made thereto, the "Credit Agreement"), among First DT Holdings Limited, a
limited liability company incorporated under the laws of England and Wales (the
"Company"), various financial institutions (together with their respective
successors and assigns, collectively the "Lenders"), The Toronto-Dominion Bank
as Issuing Bank and The Toronto-Dominion Bank, as administrative agent (in such
capacity, the "Administrative Agent"), together with all agreements, instruments
and documents executed and delivered in connection therewith (collectively the
"Bank Agreements"). Capitalized terms used herein and not defined herein shall
have the meanings assigned in the Credit Agreement.
Pursuant to the Credit Agreement and the Bank Agreements, Hollinger
International Publishing, Inc., a Delaware corporation and parent of the Company
("Publishing") pledged to the Administrative Agent for the benefit of the
Lenders all shares of stock of TelHoldco Inc., a Delaware corporation and
Wholly-Owned Subsidiary of Publishing. In connection with the Publishing Pledge
Agreement and the Credit Agreement, Publishing hereby covenants and agrees with
the Administrative Agent and the Lenders that it will not (a) designate
TelHoldco, DT Holdings Limited, the Company or any of its Subsidiaries as a
"Restricted Subsidiary" under the Publishing Credit Agreement or the Senior
Subordinate Indenture or (b) make or agree to any amendment to or modification
of, or waive any of its rights under, any of the terms of: (i) the
Publishing/Telegraph Subscription Agreement,
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EXHIBIT D
Form Of Publishing Letter Agreement
(ii) the Joint Venture Agreement dated April 13, 1993 among Hollinger Inc.,
Telegraph, HTH and Deedtask Limited, which was assigned to Publishing, and
(iii) the Business Opportunities Agreement as amended and restated as of
February 7, 1996 between Hollinger International and Publishing.
HOLLINGER INTERNATIONAL PUBLISHING INC.
By:____________________________
Name:__________________________
Title:_________________________
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PUBLISHING PLEDGE AGREEMENT
THIS HOLLINGER INTERNATIONAL PUBLISHING PLEDGE AGREEMENT (this "Agreement")
dated as of May 30, 1996, is between HOLLINGER INTERNATIONAL PUBLISHING INC., a
Delaware corporation ("Hollinger International Publishing"), and THE
TORONTO-DOMINION BANK in its capacity as administrative agent for the Lenders
referred to below (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement dated as of even date herewith
(as amended or otherwise modified from time to time, the "Credit Agreement")
among First DT Holdings Limited (the "Company"), various financial institutions
(such financial institutions, together with their respective successors and
assigns, collectively the "Lenders" and individually each a "Lender"), The
Toronto-Dominion Bank, as issuing bank and the Administrative Agent, the Lenders
have agreed to make loans to, and to issue or participate in letters of credit
for the account of the Company from time to time;
WHEREAS, the Company is a Subsidiary of Publishing and it is in the best
interest of Publishing to execute this Agreement inasmuch as Publishing will
derive substantial direct and indirect benefits from the loans made from time to
time to the Company and the letters of credit issued from time to time for the
account of the Company pursuant to the Credit Agreement; and
WHEREAS, it is a condition precedent to the making of loans and the
issuance of letters of credit under the Credit Agreement that Publishing execute
and deliver this Agreement;
NOW, THEREFORE, for and in consideration of any loan, advance or other
financial accommodation heretofore or hereafter made to the Company under or in
connection with the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. When used herein, the following terms have the following
meanings (such meanings to be applicable to both the singular and plural forms
of such terms):
Collateral - see Section 2 hereof.
Default means the occurrence of any Event of Default (as defined in the
Credit Agreement).
Issuer means the issuer of any of the shares of stock or other securities
representing all or any of the Collateral.
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Liabilities means all obligations (monetary or otherwise) of the Company,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, which arise out
of or in connection with the Credit Agreement, this Agreement, any other Loan
Document or any other document or instrument executed in connection therewith.
Loan Document has the meaning assigned to such term in the Credit
Agreement.
2. Pledge. As security for the payment of all Liabilities, Publishing
hereby pledges to the Administrative Agent for the benefit of the Lenders and
the Administrative Agent, and grants to the Administrative Agent for the benefit
of the Lenders and the Administrative Agent a continuing security interest in,
all of the following:
A. All of the shares of stock and other securities described in Schedule I
hereto, all of the certificates and/or instruments representing such shares of
stock and other securities, and all cash, securities, dividends, rights and
other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
or other securities;
B. All additional shares of stock of any of the Issuers listed in Schedule
I hereto at any time and from time to time acquired by Publishing in any manner,
all of the certificates representing such additional shares, and all cash,
securities, dividends, rights and other property at any time and from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares;
C. All other property hereafter delivered to the Administrative Agent in
substitution for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such property, and all cash, securities,
interest, dividends, rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
D. All products and proceeds of all of the foregoing.
All of the foregoing are herein collectively called the "Collateral".
Publishing agrees to deliver to the Administrative Agent, promptly upon
receipt and in due form for transfer (i.e., endorsed in blank or accompanied by
stock or bond powers executed in blank), any Collateral which may at any time or
from time to time be in or come into the possession or control of Publishing;
and prior to the delivery thereof to the Administrative Agent, such Collateral
shall be held by Publishing separate and apart from its other property and in
express trust for the Administrative Agent.
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<PAGE> 144
3. Warranties; Further Assurances. Publishing warrants to the
Administrative Agent and each Lender that: (a) Publishing is (or at the time of
any future delivery, pledge, assignment or transfer thereof will be) the legal
and equitable owner of the Collateral free and clear of all liens, security
interests and encumbrances of every description whatsoever other than the
security interest created hereunder; (b) assuming continuous possession by the
Administrative Agent, the pledge and delivery of the Collateral pursuant to this
Agreement will create a valid perfected security interest in the Collateral in
favor of the Administrative Agent; (c) all shares of stock referred to in
Schedule I hereto are duly authorized, validly issued, fully paid and
non-assessable; (d) as to each Issuer whose name appears in Schedule I hereto,
the Collateral represents on the date hereof not less than the applicable
percent (as shown in Schedule I hereto) of the total shares of capital stock
issued and outstanding of such Issuer; and (e) the information contained in
Schedule I hereto is true and accurate in all respects.
So long as any of the Liabilities shall be outstanding (even if the Letters
of Credit have been cash collateralized) or any commitment shall exist on the
part of the Administrative Agent or any Lender with respect to the creation of
any Liabilities, Publishing (i) shall not (except as otherwise permitted
pursuant to the Credit Agreement), without the express prior written consent of
the Administrative Agent, (x) sell, assign, exchange, pledge or otherwise
transfer, encumber, or grant any option, warrant or other right to purchase any
Collateral which is pledged hereunder, or (y) otherwise diminish or impair any
of its rights in, to or under any of the Collateral; (ii) shall execute such
Uniform Commercial Code financing statements and other documents (and pay the
costs of filing and recording or re-filing and re-recording the same in all
public offices reasonably deemed necessary or appropriate by the Administrative
Agent) and do such other acts and things, all as the Administrative Agent may
from time to time reasonably request, to establish and maintain a valid,
perfected security interest in the Collateral, including without limitation
marking Publishing's stock books and records to reflect such security interest,
(free of all other liens, claims and rights of third parties whatsoever) to
secure the performance and payment of the Liabilities; (iii) will execute and
deliver to the Administrative Agent such stock powers, endorsements and similar
documents relating to the Collateral, satisfactory in form and substance to the
Administrative Agent, as the Administrative Agent may reasonably request; and
(iv) will furnish the Administrative Agent or any Lender such information
concerning the Collateral as the Administrative Agent or such Lender may from
time to time reasonably request, and will permit the Administrative Agent or any
Lender or any designee of the Administrative Agent or any Lender, from time to
time at reasonable times and on reasonable notice, to inspect, audit and make
copies of and extracts from all records and all other papers in the possession
of Publishing which pertain to the Collateral, and will, upon request of the
Administrative Agent at any time when a Default has occurred and is continuing,
deliver to the Administrative Agent all of such records and papers.
4. Holding in Name of Administrative Agent, etc. The Administrative Agent
may from time to time after the occurrence and during the continuance of a
Default, without
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<PAGE> 145
notice to Publishing, take all or any of the following actions: (a) transfer
all or any part of the Collateral into the name of the Administrative Agent or
any nominee or sub-agent for the Administrative Agent, with or without
disclosing that such Collateral is subject to the lien and security interest
hereunder, (b) appoint one or more sub-agents or nominees for the purpose of
retaining physical possession of the Collateral, (c) notify the parties
obligated on any of the Collateral to make payment to the Administrative Agent
of any amounts due or to become due thereunder, (d) endorse any checks, drafts
or other writings in the name of Publishing to allow collection of the
Collateral, (e) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with respect thereto, and
(f) take control of any proceeds of the Collateral.
5. Voting Rights, Dividends, Payments etc. (a) Notwithstanding certain
provisions of Section 4 hereof, so long as the Administrative Agent has not
given the notice referred to in paragraph (b) below:
A. Publishing shall be entitled to exercise any and all voting or
consensual rights and powers and stock purchase or subscription rights (but any
such exercise by Publishing of stock purchase or subscription rights may be made
only from funds of Publishing not comprising part of the Collateral) relating or
pertaining to the Collateral constituting stock or any part thereof for any
purpose; provided, however, that Publishing agrees that it will not exercise any
such right or power in any manner which would have a Material Adverse Effect on
the value of such Collateral or any part thereof.
B. Publishing shall be entitled to receive and retain any and all lawful
dividends payable in respect of the Collateral constituting stock which are paid
in cash by any Issuer if such dividends are permitted by the Credit Agreement,
but all dividends and distributions in respect of such Collateral or any part
thereof made in shares of stock or other property or representing any return of
capital, whether resulting from a subdivision, combination or reclassification
of such Collateral or any part thereof or received in exchange for such
Collateral or any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets to which any Issuer may be a party or
otherwise or as a result of any exercise of any stock purchase or subscription
right, shall be and become part of the Collateral hereunder and, if received by
Publishing, shall be forthwith delivered to the Agent in due form for transfer
(i.e., endorsed in blank or accompanied by stock or bond powers executed in
blank) to be held for the purposes of this Agreement.
C. The Administrative Agent shall execute and deliver, or cause to be
executed and delivered, to Publishing, all such proxies, powers of attorney,
dividend orders and other instruments as Publishing may request for the purpose
of enabling
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<PAGE> 146
Publishing to exercise the rights and powers which it is entitled to exercise
pursuant to clause (A) above and to receive the dividends which it is
authorized to retain pursuant to clause (B) above.
(b) Upon written notice from the Administrative Agent during the existence
of a Default, and so long as the same shall be continuing, all rights and powers
which Publishing is entitled to exercise pursuant to Section 5(a)(A) hereof, and
all rights of Publishing to receive and retain dividends pursuant to Section
5(a)(B) hereof, shall forthwith cease, and all such rights and powers shall
thereupon become vested in the Administrative Agent which shall have, during the
continuance of such Default, the sole and exclusive authority to exercise such
rights and powers and to receive such dividends and payments. Any and all money
and other property paid over to or received by the Administrative Agent pursuant
to this paragraph (b) shall be retained by the Administrative Agent as
additional Collateral hereunder and applied in accordance with the provisions
hereof.
6. Remedies. Whenever a Default shall exist and be continuing, the
Administrative Agent may exercise from time to time any rights and remedies
available to it under the Uniform Commercial Code as in effect in New York or
otherwise available to it. Without limiting the foregoing, whenever a Default
shall exist and be continuing the Administrative Agent (a) may, to the fullest
extent permitted by applicable law, without notice, advertisement, hearing or
process of law of any kind, (i) sell any or all of the Collateral, free of all
rights and claims of Publishing therein and thereto, at any public or private
sale or brokers' board and (ii) bid for and purchase any or all of the
Collateral at any such public sale and (b) shall have the right, for and in the
name, place and stead of Publishing, to execute endorsements, assignments, stock
powers and other instruments of conveyance or transfer with respect to all or
any of the Collateral. Publishing hereby expressly waives, to the fullest
extent permitted by applicable law, any and all notices, advertisements,
hearings or process of law in connection with the exercise by the Administrative
Agent of any of its rights and remedies during the continuance of a Default. If
any notification of intended disposition of any of the Collateral is required by
law, such notification, if mailed, shall be deemed reasonably and properly given
if mailed by certified or registered mail at least twenty (20) days before such
disposition, postage prepaid, addressed to Publishing, either at the address of
Publishing shown below, or at any other address of Publishing appearing on the
records of the Administrative Agent. Any proceeds of any of the Collateral may
be applied by the Administrative Agent to the payment of expenses in connection
with the Collateral, including, without limitation, reasonable attorneys' fees
and legal expenses, and any balance of such proceeds may be applied by the
Administrative Agent toward the payment of such of the Liabilities, and in such
order of application, as the Administrative Agent may from time to time elect
(and, after payment in full of all Liabilities, any excess shall be delivered to
Publishing or as a court of competent jurisdiction shall direct).
The Administrative Agent is hereby authorized to comply with any limitation
or restriction in connection with any sale of Collateral as it may be advised by
counsel is
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<PAGE> 147
necessary in order to (a) avoid any violation of applicable law (including,
without limitation, compliance with such procedures as may restrict the number
of prospective bidders and purchasers and/or further restrict such prospective
bidders or purchasers to persons or entities who will represent and agree that
they are purchasing for their own account for investment and not with a view to
the distribution or resale of such Collateral) or (b) obtain any required
approval of the sale or of the purchase by any governmental regulatory
authority or official, and Publishing agrees that such compliance shall not
result in such sale being considered or deemed not to have been made in a
commercially reasonable manner and that the Administrative Agent shall not be
liable or accountable to Publishing for any discount allowed by reason of the
fact that such Collateral is sold in compliance with any such limitation or
restriction.
7. General. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if it takes
such action for that purpose as Publishing shall request in writing, but failure
of the Administrative Agent to comply with any such request shall not of itself
be deemed a failure to exercise reasonable care, and no failure of the
Administrative Agent to preserve or protect any rights with respect to the
Collateral against prior parties, or to do any act with respect to preservation
of the Collateral not so requested by Publishing, shall be deemed of itself a
failure to exercise reasonable care in the custody or preservation of any
Collateral.
No delay on the part of the Administrative Agent in exercising any right,
power or remedy shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement shall be effective unless the same shall be in writing and
signed and delivered by the Administrative Agent and Publishing, and then such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
All obligations of Publishing and all rights, powers and remedies of the
Administrative Agent and the Lenders expressed herein are in addition to all
other rights, powers and remedies possessed by them, including, without
limitation, those provided by applicable law or in any other written instrument
or agreement relating to any of the Liabilities or any security therefor.
Notwithstanding the preceding sentence, except as expressly set forth in this
Agreement or the Loan Documents, in the event of a Default, or in the event of a
default in the observance or performance of the agreements, covenants and
conditions contained in the Loan Documents or in this Agreement, the
Administrative Agent will proceed solely against the Collateral under this
Agreement and no deficiency, money judgment or liability shall be sought or
obtained against Publishing, and (without limiting the above) Publishing shall
have no personal liability for or in respect of this Agreement, the Loan
Documents or any Default.
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This Agreement shall be construed in accordance with and governed by the
internal laws of the State of New York without reference to conflict of law
principles. Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
This Agreement shall be binding upon Publishing and the Administrative
Agent and their respective successors and assigns, and shall inure to the
benefit of Publishing and the Administrative Agent and the successors and
assigns of the Administrative Agent.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. PUBLISHING HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. PUBLISHING
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, TO THE ADDRESS OF THE PERSON SPECIFIED IN, OR PURSUANT TO, THE
CREDIT AGREEMENT, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. PUBLISHING HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT PUBLISHING HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, PUBLISHING HEREBY
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<PAGE> 149
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
EACH OF PUBLISHING, THE ADMINISTRATIVE AGENT AND, BY ACCEPTING THE BENEFITS
HEREOF, EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY
OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
-8-
<PAGE> 150
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as
of the day and year first written above.
HOLLINGER INTERNATIONAL PUBLISHING INC.
By:_____________________________________
_____________________________________
Name: __________________________________
Title:
Address: 107-115 South Emma, Box 1000
West Frankfort, Illinois 62896
Facsimile No.: (618) 932-6155
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 151
THE TORONTO-DOMINION BANK,
as Administrative Agent
Address:
By:_____________________________________
_____________________________________
Name: __________________________________
Title:
<PAGE> 152
SCHEDULE I
TO PUBLISHING PLEDGE AGREEMENT
STOCK
HOLLINGER INTERNATIONAL PUBLISHING INC.
===========================================================================
ISSUER Cert # No. of shares % Total Outstanding
- ---------------------------------------------------------------------------
TelHoldco Inc. 1 100 100% 100
===========================================================================
-11-
<PAGE> 153
EXHIBIT E-2
FORM OF COMPANY PLEDGE AGREEMENT
DATED , 1996
----------------------------
THE TORONTO-DOMINION BANK
- and -
TELHOLDCO INC.
and
FIRST DT HOLDINGS LIMITED
-----------------------------------------------
DEED OF CHARGE
AND
MEMORANDUM OF DEPOSIT
-----------------------------------------------
MAYER, BROWN & PLATT
162 Queen Victoria Street
London EC4V 4DB
<PAGE> 154
THIS DEED OF CHARGE AND MEMORANDUM OF DEPOSIT is made the ____day of
___________, 1996.
BETWEEN:
(1) THE TORONTO-DOMINION BANK (in its capacity as administrative agent for
the Lenders, as defined below, the "Administrative Agent", which expression
shall be deemed to include its successors and assigns and any person, firm or
company with which it may amalgamate or merge from time to time);
(2) TELHOLDCO, INC., a Delaware corporation ("TelHoldco"); and
(3) FIRST DT HOLDINGS LIMITED, a limited liability company incorporated
under the laws of England and Wales (the "Company" and, together with TelHoldco,
the "Depositors" and individually each a "Depositor").
WHEREAS:
(A) Pursuant to the Credit Agreement dated as of _____________, 1996 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
the Company, various financial institutions (collectively the "Lenders" and
individually each a "Lender"), The Toronto-Dominion Bank, as issuing bank, and
the Administrative Agent, the Lenders have agreed to make a L250,000,000
revolving facility available to the Company.
(B) The obligations of the Company under the Credit Agreement are to be
secured pursuant to this Deed of Charge and Memorandum of Deposit (as the same
may from time to time be amended, varied, supplemented, novated or modified,
this "Charge and Memorandum").
(C) Pursuant to a Guaranty dated as of __________, 1996 (as amended or
otherwise modified from time to time, the "TelHoldco Guaranty") executed by
TelHoldco and Hollinger International Inc. in favor of the Lenders and
Administrative Agent, TelHoldco guaranteed the obligations of the Company under
the Credit Agreement.
(D) The obligations of TelHoldco under the TelHoldco Guaranty are to be
secured pursuant to this Charge and Memorandum.
(E) It is a condition precedent to the making of certain loans, or a
covenant for the making of certain loans, under the
<PAGE> 155
Credit Agreement that the Depositors execute and deliver this Charge and
Memorandum.
(F) For and in consideration of any loan, advance or other financial
accommodation heretofore or hereafter made to the Company under or in connection
with the Credit Agreement, the substantial direct and indirect benefits derived
by the Depositors from such loans, advances and financial accommodations, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as set forth in this Charge
and Memorandum.
NOW IT IS HEREBY DECLARED:
1. Definitions. When used herein, the following terms have the following
meanings (such meanings to be applicable to both the singular and plural forms
of such terms):
Default means the occurrence of any Event of Default (as defined in the
Credit Agreement).
Issuer means The Telegraph plc, a public liability company incorporated
under the laws of England and Wales.
Liabilities means all obligations (monetary or otherwise) of such Depositor
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, which arise out
of or in connection with the Credit Agreement, the Notes, this Charge and
Memorandum, any other Loan Document or any other document or instrument executed
in connection therewith (including any Hedging Agreement (as defined in the
Credit Agreement) entered into with any Person who at the time such Hedging
Agreement is entered into is a Lender or an affiliate thereof).
Loan Document has the meaning assigned to such term in the Credit
Agreement.
Securities has the meaning assigned to such term in Section 2 hereof.
2. Security for Indebtedness. Each Depositor by way of continuing security
for the payment and satisfaction when due of the Liabilities hereby charges by
way of first fixed equitable charge and assigns by way of security to the
Administrative Agent, for the benefit of the Lenders and the Administrative
Agent, all of its right, title and interest in and to the following:
- 2 -
<PAGE> 156
A. All of the shares described in Schedule I hereto listed under such
Depositor's name, all of the certificates and/or instruments representing such
shares and all cash, securities, dividends, rights and other property at any
time and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares;
B. All other property hereafter delivered to the Administrative Agent in
substitution for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such property, and all cash, securities,
interest, dividends, rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
C. All products and proceeds of all of the foregoing.
All of the foregoing are herein collectively called the "Securities".
3. Continuing Security. This security is to be a continuing security,
notwithstanding any intermediate payment or settlement of accounts or any other
matter whatsoever, for the payment and satisfaction of the Liabilities, as and
when the same shall fall due, and is to be in addition to, and without prejudice
to, any other security which the Administrative Agent or the Lenders may now or
hereafter hold in respect of the Liabilities. The Administrative Agent may at
any time and without reference to any Depositor give up, release, deal with,
vary, exchange or abstain from perfecting or enforcing any other such security
at any time and discharge any party to any other such security, and realise the
same, without in any way affecting or prejudicing the security evidenced by this
Charge and Memorandum.
4. Undertaking to Deposit. Each Depositor hereby undertakes to deposit
with the Administrative Agent, to the intent that the same shall be subject in
all respects to the provisions of this Charge and Memorandum: (i) all
certificates, documents of title and other documentary evidence of all rights,
bonuses, new shares, stock, rights to take up securities or other securities of
whatever nature (including without limitation any security resulting from any
conversion, consolidation or subdivision of the Securities or rights arising
from a reduction of capital, liquidation or scheme of arrangement) which at any
time during the continuance of this Charge and Memorandum may be issued in
respect of any of, or attributable to, the Securities; and (ii) transfers of the
Securities, in form and substance
- 3 -
<PAGE> 157
satisfactory to the Administrative Agent, duly executed in blank by such
Depositor or its nominee and completed in favour of the Administrative Agent or
otherwise as the Administrative Agent may direct; and prior to the delivery
thereof to the Administrative Agent, such Securities and other documents shall
be held by such Depositor separate and apart from its other property and in
express trust for the Administrative Agent.
Each Depositor hereby further undertakes to procure that, within 7 days of
the Issuer being re-registered as a private limited company, the Issuer deliver
to such Depositor replacement certificates in respect of the Securities and each
Depositor shall immediately deposit such replacement certificates, together with
the relevant transfers duly executed and completed as required above, with the
Administrative Agent to the intent that the same shall be subject in all
respects to the provisions of this Charge and Memorandum.
5. Warranties; Further Assurances. Each Depositor warrants to the
Administrative Agent and each Lender that: (a) it charges and assigns the
Securities with full title guarantee (and that any future delivery, charge and
assignment or transfer thereof will also be with full title guarantee) and
further that, in each case, the Securities are free and clear of all liens,
security interests and encumbrances of every description whatsoever other than
the security interest created hereunder; (b) assuming continuous possession of
the Securities by the Administrative Agent this Charge and the Memorandum and
the actions contemplated hereby are effective to create a valid first fixed
equitable charge and, as the case may be, assignment by way of security in, to
or over the Securities in favour of the Administrative Agent for the benefit of
the Lenders; (c) all shares referred to in Schedule I hereto are duly
authorised, validly issued, fully paid and non-assessable and registered in the
name of such Depositor; (d) as to the Issuer the Securities represent on the
date hereof not less than the applicable percent (as shown in Schedule I hereto)
of the total shares issued and outstanding of the Issuer; and (e) the
information contained in Schedule I hereto with regard to such Depositor is true
and accurate in all respects.
So long as any of the Liabilities shall be outstanding (even if the Letters
of Credit have been cash collateralized) or any commitment shall exist on the
part of the Administrative Agent or any Lender with respect to the creation of
any Liabilities, each Depositor (i) shall not (except as otherwise permitted
pursuant to the Credit Agreement), without the express prior written consent of
the Administrative Agent, (x) sell, assign, exchange, charge or otherwise
transfer, encumber, or grant any option, warrant or other right to purchase the
Securities or (y)
- 4 -
<PAGE> 158
otherwise diminish or impair any of its rights in, to or under any of the
Securities; (ii) shall execute such documents (and pay the costs of filing and
recording or re-filing and re-recording the same in all public offices
reasonably deemed necessary or appropriate by the Administrative Agent) and do
such other acts and things, all as the Administrative Agent may from time to
time reasonably request, to establish and maintain a valid, perfected security
interest in the Securities (free of all other liens, claims and rights of third
parties whatsoever) to secure the performance and payment of the Liabilities;
and (iii) will furnish the Administrative Agent or any Lender such information
concerning the Securities as the Administrative Agent or such Lender may from
time to time reasonably request, and will permit the Administrative Agent or
any Lender or any designee of the Administrative Agent or any Lender, from time
to time at reasonable times and on reasonable notice, to inspect, audit and
make copies of and extracts from all records and all other papers in the
possession of such Depositor which pertain to the Securities as set forth in
Section 10.2 of the Credit Agreement, and will, upon request of the
Administrative Agent at any time when a Default has occurred and is continuing,
deliver to the Administrative Agent all of such records and papers.
6. Holding in Name of Administrative Agent, etc. The Administrative Agent
may from time to time after the occurrence and during the continuance of a
Default, without notice to any Depositor, take all or any of the following
actions: (a) transfer all or any part of the Securities into the name of the
Administrative Agent or any nominee or sub-agent for the Administrative Agent,
with or without disclosing that such Securities are subject to the security
interests hereunder, (b) appoint one or more sub-agents or nominees for the
purpose of retaining physical possession of the Securities, (c) notify the
parties obligated on any of the Securities to make payment to the Administrative
Agent of any amounts due or to become due thereunder, (d) endorse any cheques,
drafts or other writings in the name of the applicable Depositor to allow
collection of the Securities, (e) enforce collection of any of the Securities by
suit or otherwise, and surrender, release or exchange all or any part thereof,
or compromise or renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with respect thereto, and (f)
take control of any proceeds of the Securities.
7. Voting Rights, Dividends, Payments etc. (a) Notwithstanding certain
provisions of Section 6 hereof, so long as the Administrative Agent has not
given the notice referred to in paragraph (b) below:
A. Each Depositor shall be entitled to exercise any and all voting or
consensual rights and powers and share
- 5 -
<PAGE> 159
purchase or subscription rights (but any such exercise by a Depositor of share
purchase or subscription rights may be made only from funds of such Depositor
not comprising part of the Securities) relating or pertaining to the Securities
constituting shares or any part thereof for any purpose; provided, however,
that each Depositor agrees that it will not exercise any such right or power in
any manner which would have a material adverse effect on the value of such
Securities or any part thereof.
B. Each Depositor shall be entitled to receive and retain any and all
lawful dividends payable in respect of the Securities constituting shares which
are paid in cash by the Issuer if such dividends are permitted by the Credit
Agreement, but all dividends and distributions in respect of such Securities or
any part thereof made in shares or other property or representing any return of
capital, whether resulting from a subdivision, combination or reclassification
of such Securities or any part thereof or received in exchange for such
Securities or any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets to which the Issuer may be a party or
otherwise or as a result of any exercise of any share purchase or subscription
right, shall be and become part of the Securities hereunder and, if received by
any Depositor, shall, pursuant to and in accordance with the provisions of
Section 4, be forthwith delivered to the Administrative Agent together with
appropriate transfers duly executed in blank to be held for the purposes of this
Charge and Memorandum.
C. The Administrative Agent shall execute and deliver, or cause to be
executed and delivered, to each Depositor, all such proxies, powers of attorney,
dividend orders and other instruments as such Depositor may request for the
purpose of enabling such Depositor to exercise the rights and powers which it is
entitled to exercise pursuant to clause (A) above and to receive the dividends
which it is authorized to retain pursuant to clause (B) above.
(b) Upon written notice from the Administrative Agent during the existence
of a Default, and so long as the same shall be continuing, all rights and powers
which any Depositor is entitled to exercise pursuant to Section 7(a)(A) hereof
and all rights of any Depositor to receive and retain dividends pursuant to
Section 7(a)(B) hereof shall forthwith cease, and all such rights and powers
shall thereupon become vested in the Administrative Agent which shall have,
during the continuance of such Default, the sole and exclusive authority to
exercise such rights and powers and to receive such dividends and payments. Any
and all money and other property paid over to or received by
- 6 -
<PAGE> 160
the Administrative Agent pursuant to this paragraph (b) shall be retained by
the Administrative Agent as additional Securities hereunder and applied in
accordance with the provisions hereof.
8. Remedies. Whenever a Default shall exist and be continuing, the
Administrative Agent may exercise from time to time any rights and remedies
available to it and, without limiting the foregoing, whenever a Default shall
exist and be continuing the Administrative Agent (a) may, to the fullest extent
permitted by applicable law, without notice, advertisement, hearing or process
of law of any kind, (i) sell any or all of the Securities, free of all rights
and claims of any Depositor therein and thereto, at any public or private sale
and (ii) bid for and purchase any or all of the Securities at any such public
sale; (b) shall have the right, for and in the name, place and stead of each
Depositor, to execute endorsements, assignments, share transfer forms and other
instruments of conveyance or transfer with respect to all or any of the
Securities. Each Depositor hereby expressly waives, to the fullest extent
permitted by applicable law, any and all notices, advertisements, hearings or
process of law in connection with the exercise by the Administrative Agent of
any of its rights and remedies during the continuance of a Default. Any
proceeds of any of the Securities may be applied by the Administrative Agent to
the payment of expenses in connection with the Securities, including, without
limitation, reasonable attorneys' fees and legal expenses, and any balance of
such proceeds may be applied by the Administrative Agent toward the payment of
such of the Liabilities, and in such order of application, as the Administrative
Agent may from time to time elect (and, after payment in full of all
Liabilities, any excess shall be delivered to the Company or as a court of
competent jurisdiction shall direct).
The Administrative Agent is hereby authorized to comply with any limitation
or restriction in connection with any sale of the Securities as it may be
advised by counsel is necessary in order to (a) avoid any violation of
applicable law (including, without limitation, compliance with such procedures
as may restrict the number of prospective bidders and purchasers and/or further
restrict such prospective bidders or purchasers to persons or entities who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Securities)
or (b) obtain any required approval of the sale or of the purchase by any
governmental regulatory authority or official, and each Depositor agrees that
such compliance shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner and that the Administrative
Agent shall not be liable or accountable to any Depositor for any discount
allowed
- 7 -
<PAGE> 161
by reason of the fact that such Securities are sold in compliance with any such
limitation or restriction.
9. Power of Attorney. In addition, and without limiting the powers of the
Administrative Agent set forth in Section 8, each Depositor hereby irrevocably
and by way of security appoints the Administrative Agent and any person
nominated in writing under the hand of any officer of the Administrative Agent
severally to be its attorney for it and in its name and on its behalf and as its
act and deed to prepare, complete, execute, seal, deliver, lodge and file and
otherwise perfect and do any deed, assurance, agreement, instrument, transfer,
memorandum, form, act or thing and institute and conduct any proceedings which
any Depositor is required to execute and do under this Charge and Memorandum or,
following the occurrence of a Default, which the Administrative Agent may deem
necessary or prudent in order to effect or complete any sale made by the
Administrative Agent of any or all of the Securities or in order to protect,
preserve or realise any or all of the Securities or in order to enforce or
prosecute any rights which any Depositor or the Administrative Agent may enjoy
in respect of or under any or all of the Securities including the giving of
receipts for all payments made under or in respect of all or any of the
Securities and executing and doing all or any of the documents, acts and things
referred to in Section 8 hereof. Each Depositor will on request by the
Administrative Agent execute all such transfers, powers of attorney and other
documents as the Administrative Agent may require (i) for the purposes of
perfecting or preserving the rights and interests of the Administrative Agent on
behalf of the Lenders under or pursuant to this Charge and Memorandum or in
respect of all or any of the Securities or (ii) following the occurrence of a
Default to vest all or any of the Securities in the Administrative Agent or its
nominees or a purchaser or transferee.
10. Law of Property Act, 1925. Sections 93 (restricting the rights of
consolidation) and 103 (restricting the right of sale) of the Law of Property
Act, 1925 shall not apply to the security evidenced by this Charge and
Memorandum.
11. General. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Securities if it takes
such action for that purpose as any Depositor shall request in writing, but
failure of the Administrative Agent to comply with any such request shall not of
itself be deemed a failure to exercise reasonable care, and no failure of the
Administrative Agent to preserve or protect any rights with respect to the
Securities against prior parties, or to do any act with respect to preservation
of the Securities not so requested by any Depositor, shall be deemed of itself a
- 8 -
<PAGE> 162
failure to exercise reasonable care in the custody or preservation of the
Securities.
No delay on the part of the Administrative Agent in exercising any right,
power or remedy shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Charge and Memorandum shall be effective unless the same shall
be in writing and signed and delivered by the Administrative Agent and each
Depositor, and then such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
All obligations of the Depositors and all rights, powers and remedies of
the Administrative Agent and the Lenders expressed herein are in addition to all
other rights, powers and remedies possessed by them, including, without
limitation, those provided by applicable law or in any other written instrument
or agreement relating to any of the Liabilities or any security therefor.
This Charge and Memorandum shall be binding upon each Depositor and the
Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of each Depositor and the Administrative Agent and the
successors and assigns of the Administrative Agent.
12. Taxes. All payments to be made by any Depositor to any person
hereunder shall be made free and clear of, and without deduction for or on
account of, tax unless such Depositor is required by law to make such a payment
subject to the deduction or withholding of tax, in which case the sum payable by
such Depositor in respect of which such deduction or withholding is required to
be made shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, such person receives and retains (free
from any liability in respect of any such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had no such
deduction or withholding been made or required to be made.
13. Judgment Currency. The obligations of each Depositor, in respect of
any sum due to the Administrative Agent or any Lender hereunder shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other than
the currency in which such sum was originally denominated (the "Original
Currency"), be discharged only to the extent that following receipt by the
Administrative Agent or such Lender of any sum adjudged to be so due in the
Judgment Currency, the
- 9 -
<PAGE> 163
Administrative Agent or such Lender, in accordance with normal banking
procedures, purchases the Original Currency with the Judgment Currency. If the
amount of Original Currency so purchased is less than the sum originally due to
the Administrative Agent or such Lender, each Depositor agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent or such Lender, as the case may be, against such loss, and
if the amount of Original Currency so purchased exceeds the sum originally due
to the Administrative Agent or such Lender, as the case may be, the
Administrative Agent or such Lender agrees to remit such excess to the
Depositor.
14. Governing Law and Jurisdiction.
A. This Charge and Memorandum shall be governed by and construed in
accordance with English law.
B. All parties irrevocably agree for the exclusive benefit of the
Administrative Agent that the High Court of Justice in England is to have
jurisdiction to settle any disputes which may arise out of or in connection with
this Charge and Memorandum and that accordingly any suit, action or proceeding
arising out of or in connection with this Charge and Memorandum (in this Section
14 referred to as "Proceedings") may be brought in such court.
C. Nothing in this Section 14 shall limit the right of the Administrative
Agent to take Proceedings against any Depositor in any other court of competent
jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions
preclude the taking of Proceedings in any other jurisdiction, whether
concurrently or not.
D. Each Depositor irrevocably waives any objection which it may have now
or hereafter to the laying of the venue of any Proceedings in any such court as
is referred to in this Section 14 and any claim that any such Proceedings have
been brought in an inconvenient forum and further irrevocably agrees that a
judgment in any Proceedings brought in the English court or in any other court
of competent jurisdiction shall be conclusive and binding upon it and may be
enforced in the courts of any other jurisdiction.
E. Each Depositor hereby irrevocably agrees that any writ, judgment or
other notice of process shall be sufficiently and effectively served on it (i)
in connection with proceedings in England, if addressed to such Depositor and
delivered to [Norose Notices Limited of Kempson House,
- 10 -
<PAGE> 164
P.O. Box 570, Camomile Street, London EC3A 7AN] (ii) to the extent permitted by
applicable law, if a copy thereof is mailed by registered or certified airmail,
postage prepaid, to the address for the time being for the service of notices
on it under Clause 14.3 of the Credit Agreement or (iii) if served in any other
manner permitted by applicable law.
F. Each Depositor hereby consents generally in respect of any Proceedings
arising out of or in connection with this Charge and Memorandum to the giving of
any relief or the issue of any process in connection with such Proceedings,
including, without limitation, the making, enforcement or execution against any
property or assets or whatsoever of any order or judgment which may be made or
given in such Proceedings.
IN WITNESS WHEREOF the parties hereto have caused this Charge and
Memorandum to be duly executed and delivered as a deed on the day and year first
before written.
- 11 -
<PAGE> 165
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
TELHOLDCO INC. )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
THE TORONTO-DOMINION BANK )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
FIRST DT HOLDINGS LIMITED )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
- 14 -
<PAGE> 166
SCHEDULE I
TO DEED OF CHARGE AND MEMORANDUM OF DEPOSIT
SHARES
TELHOLDCO INC.
<TABLE>
<CAPTION>
ISSUER Cert # No. of Shares % Total Outstanding
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Telegraph plc 7,000,000 5.13% [136,176,134]
Ordinary Shares Ordinary Shares
</TABLE>
FIRST DT HOLDINGS LIMITED
<TABLE>
<CAPTION>
ISSUER Cert # No. of Shares % Total Outstanding
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Telegraph plc [80,237,130] [58.9]% [ ] Ordinary Shares
Ordinary Shares
The Telegraph plc 5,000,000 non-voting 100% 5,000,000 non-voting
Redeemable Preference Shares Redeemable Preference Shares
</TABLE>
<PAGE> 167
DTH PLEDGE
DATED 30TH MAY, 1996
THE TORONTO-DOMINION BANK
- and -
DT HOLDINGS LIMITED
_______________________________________________
DEED OF CHARGE
AND
MEMORANDUM OF DEPOSIT
_______________________________________________
MAYER, BROWN & PLATT
162 Queen Victoria Street
London EC4V 4DB
<PAGE> 168
THIS DEED OF CHARGE AND MEMORANDUM OF DEPOSIT is made the 30th_day of May,
1996.
BETWEEN:
(1) THE TORONTO-DOMINION BANK (in its capacity as administrative agent for
the Lenders, as defined below, the "Administrative Agent", which expression
shall be deemed to include its successors and assigns and any person, firm or
company with which it may amalgamate or merge from time to time); and
(2) DT HOLDINGS LIMITED, a limited liability company incorporated under
the laws of England and Wales (the "Depositor").
WHEREAS:
(A) Pursuant to the Credit Agreement dated as of 30th May, 1996 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
First DT Holdings Limited (the "Company"), various financial institutions
(collectively the "Lenders" and individually each a "Lender"), The
Toronto-Dominion Bank, as issuing bank, and the Administrative Agent, the
Lenders have agreed to make a L250,000,000 revolving facility available to the
Company.
(B) The obligations of the Company under the Credit Agreement are to be
secured by certain securities of the Company held by the Depositor pursuant to
this Deed of Charge and Memorandum of Deposit (as the same may from time to time
be amended, varied, supplemented, novated or modified, this "Charge and
Memorandum").
(C) It is a condition precedent to the making of certain loans under the
Credit Agreement that the Depositor execute and deliver this Charge and
Memorandum.
(D) For and in consideration of any loan, advance or other financial
accommodation heretofore or hereafter made to the Company under or in connection
with the Credit Agreement, the substantial direct and indirect benefits derived
by the Depositor from such loans, advances and financial accommodations, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as set forth in this Charge and
Memorandum.
- 1 -
<PAGE> 169
NOW IT IS HEREBY DECLARED:
1. Definitions. When used herein, the following terms have the following
meanings (such meanings to be applicable to both the singular and plural forms
of such terms):
Default means the occurrence of any Event of Default (as defined in the
Credit Agreement).
Issuer means the Company as issuer of the shares or other securities
representing all or any of the Securities.
Liabilities means all obligations (monetary or otherwise) of the Company,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, which arise out
of or in connection with the Credit Agreement, the Notes, this Charge and
Memorandum, any other Loan Document or any other document or instrument executed
in connection therewith (including any Hedging Agreement (as defined in the
Credit Agreement) entered into with any Person who at the time such Hedging
Agreement is entered into is a Lender or an affiliate thereof).
Loan Document has the meaning assigned to such term in the Credit
Agreement.
Securities has the meaning assigned to such term in Section 2 hereof.
2. Security for Indebtedness. The Depositor by way of continuing security
for the payment and satisfaction when due of the Liabilities hereby charges by
way of first fixed equitable charge and assigns and pledges by way of security
to the Administrative Agent, for the benefit of the Lenders and the
Administrative Agent, all of its right, title and interest in and to the
following:
A. All of the shares described in Schedule I hereto listed under the
Depositor's name, all of the certificates, warrants, coupons, talons and/or
instruments representing such shares and all cash, securities, dividends, rights
and other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares;
B. All other property hereafter delivered to the Administrative Agent in
substitution for or in addition to any of the foregoing, all certificates,
warrants, coupons, talons and instruments representing or evidencing such
property, and all cash, securities, interest, dividends, rights and other
property at any time and from time to time
<PAGE> 170
received, receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
C. All products and proceeds of all of the foregoing.
All of the foregoing are herein collectively called the "Securities".
3. Continuing Security. The security is to be a continuing security,
notwithstanding any intermediate payment or settlement of accounts or any other
matter whatsoever, for the payment and satisfaction of the Liabilities, as and
when the same shall fall due, and is to be in addition to, and without prejudice
to, any other security which the Administrative Agent or the Lenders may now or
hereafter hold in respect of the Liabilities. The Administrative Agent may at
any time and without reference to the Depositor give up, release, deal with,
vary, exchange or abstain from perfecting or enforcing any other such security
at any time and discharge any party to any other such security, and realise the
same, without in any way affecting or prejudicing the security evidenced by this
Charge and Memorandum.
4. Undertaking to Deposit. The Depositor hereby undertakes to deposit with
the Administrative Agent, to the intent that the same shall be subject in all
respects to the provisions of this Charge and Memorandum: (i) all certificates,
documents of title and other documentary evidence of all rights, bonuses, new
shares, stock, rights to take up securities or other securities of whatever
nature (including without limitation any security resulting from any conversion,
consolidation or subdivision of the Securities or rights arising from a
reduction of capital, liquidation or scheme of arrangement) which at any time
during the continuance of this Charge and Memorandum may be issued in respect of
any of, or attributable to, the Securities; and (ii) save where any of the
Securities are in bearer form, transfers of the Securities, in form and
substance satisfactory to the Administrative Agent, duly executed in blank by
the Depositor or its nominee and completed in favour of the Administrative Agent
or otherwise as the Administrative Agent may direct; and prior to the delivery
thereof to the Administrative Agent, such Securities and other documents shall
be held by the Depositor separate and apart from its other property and in
express trust for the Administrative Agent.
5. Warranties; Further Assurances. The Depositor warrants to the
Administrative Agent and each Lender that: (a) it charges and assigns and
pledges the Securities with full title guarantee (and that any future delivery,
charge and assignment and pledge or transfer thereof will also be with full
title guarantee) and further that, in each case, the Securities are free and
clear of
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<PAGE> 171
all liens, security interests and encumbrances of every description whatsoever
other than the security interest created hereunder; (b) assuming continuous
possession of the Securities by the Administrative Agent this Charge and the
Memorandum and the actions contemplated hereby are effective to create a valid
first fixed equitable charge and, as the case may be, assignment or pledge by
way of security in, to or over the Securities in favour of the Administrative
Agent for the benefit of the Lenders; (c) all shares referred to in Schedule I
hereto are duly authorised, validly issued, fully paid and non-assessable and
registered (save where any such shares are in bearer form) in the name of and
held by the Depositor; (d) as to the Issuer the Securities represent on the
date hereof not less than the applicable percent (as shown in Schedule I
hereto) of the total shares issued and outstanding of the Issuer; and (e) the
information contained in Schedule I hereto is true and accurate in all
respects.
So long as any of the Liabilities shall be outstanding or any commitment
shall exist on the part of the Administrative Agent or any Lender with respect
to the creation of any Liabilities, the Depositor (i) shall not (except as
otherwise permitted pursuant to the Credit Agreement), without the express prior
written consent of the Administrative Agent, (x) sell, assign, exchange, charge,
pledge or otherwise transfer, encumber, or grant any option, warrant or other
right to purchase the Securities or (y) otherwise diminish or impair any of its
rights in, to or under any of the Securities; (ii) shall continue to own and
keep charged hereunder not less than the applicable percent (as shown in
Schedule I hereto) of the total shares issued and outstanding of the Issuer;
(iii) shall execute such documents (and pay the costs of filing and recording or
re-filing and re-recording the same in all public offices reasonably deemed
necessary or appropriate by the Administrative Agent) and do such other acts and
things, all as the Administrative Agent may from time to time reasonably
request, to establish and maintain a valid, perfected security interest in the
Securities (free of all other liens, claims and rights of third parties
whatsoever) to secure the performance and payment of the Liabilities; and (iv)
will furnish the Administrative Agent or any Lender such information concerning
the Securities as the Administrative Agent or such Lender may from time to time
reasonably request, and will permit the Administrative Agent or any Lender or
any designee of the Administrative Agent or any Lender, from time to time at
reasonable times and on reasonable notice, to inspect, audit and make copies of
and extracts from all records and all other papers in the possession of the
Depositor which pertain to the Securities as set forth in Section 10.2 of the
Credit Agreement, and will, upon request of the Administrative Agent at any time
when a Default has occurred and is continuing, deliver to the Administrative
Agent all of such records and papers.
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<PAGE> 172
6. Holding in Name of Administrative Agent, etc. The Administrative Agent
may from time to time after the occurrence and during the continuance of a
Default, without notice to the Depositor, take all or any of the following
actions: (a) transfer or, in the case of any Securities in bearer form, deliver
all or any part of the Securities to the Administrative Agent or any nominee or
sub-agent for the Administrative Agent, with or without disclosing that such
Securities are subject to the security interests hereunder, (b) appoint one or
more sub-agents or nominees for the purpose of retaining physical possession of
the Securities, (c) notify the parties obligated on any of the Securities to
make payment to the Administrative Agent of any amounts due or to become due
thereunder, (d) endorse any cheques, drafts or other writings in the name of the
Depositor to allow collection of the Securities, (e) enforce collection of any
of the Securities by suit or otherwise, and surrender, release or exchange all
or any part thereof, or compromise or renew for any period (whether or not
longer than the original period) any obligations of any nature of any party with
respect thereto, and (f) take control of any proceeds of the Securities.
7. Voting Rights, Dividends, Payments etc. (a) Notwithstanding certain
provisions of Section 6 hereof, so long as the Administrative Agent has not
given the notice referred to in paragraph (b) below:
A. The Depositor shall be entitled to exercise any and all voting or
consensual rights and powers and share purchase or subscription rights (but any
such exercise by the Depositor of share purchase or subscription rights may be
made only from funds of the Depositor not comprising part of the Securities)
relating or pertaining to the Securities constituting shares or any part thereof
for any purpose; provided, however, that the Depositor agrees that it will not
exercise any such right or power in any manner which would have a material
adverse effect on the value of such Securities or any part thereof.
B. The Depositor shall be entitled to receive and retain any and all
lawful dividends payable in respect of the Securities constituting shares which
are paid in cash by the Issuer if such dividends are permitted by the Credit
Agreement, but all dividends and distributions in respect of such Securities or
any part thereof made in shares or other property or representing any return of
capital, whether resulting from a subdivision, combination or reclassification
of such Securities or any part thereof or received in exchange for such
Securities or any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets to which the Issuer may be a party or
otherwise or as a result of any exercise of any share
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<PAGE> 173
purchase or subscription right, shall be and become part of the Securities
hereunder and, if received by the Depositor, shall, pursuant to and in
accordance with the provisions of Section 4, be forthwith delivered to the
Administrative Agent together with, where such Securities are in registered
form, appropriate transfers duly executed in blank to be held for the purposes
of this Charge and Memorandum.
C. The Administrative Agent shall execute and deliver, or cause to be
executed and delivered, to the Depositor, all such proxies, powers of attorney,
dividend orders and other instruments as the Depositor may request for the
purpose of enabling the Depositor to exercise the rights and powers which it is
entitled to exercise pursuant to clause A. above and to receive the dividends
which it is authorized to retain pursuant to clause B. above.
(b) Upon written notice from the Administrative Agent during the existence
of a Default, and so long as the same shall be continuing, all rights and powers
which the Depositor is entitled to exercise pursuant to Section 7(a)A. hereof
and all rights of the Depositor to receive and retain dividends pursuant to
Section 7(a)B. hereof shall forthwith cease, and all such rights and powers
shall thereupon become vested in the Administrative Agent which shall have,
during the continuance of such Default, the sole and exclusive authority to
exercise such rights and powers and to receive such dividends and payments and
any proxies, powers of attorney, dividend orders and other instruments executed
and delivered to the Depositor pursuant to Section 7(a)C. above shall be deemed
rescinded and revoked. Any and all money and other property paid over to or
received by the Administrative Agent pursuant to this paragraph (b) shall be
retained by the Administrative Agent as additional Securities hereunder and
applied in accordance with the provisions hereof.
8. Remedies. Whenever a Default shall exist and be continuing, the
Administrative Agent may exercise from time to time any rights and remedies
available to it and, without limiting the foregoing, whenever a Default shall
exist and be continuing the Administrative Agent (a) may, to the fullest extent
permitted by applicable law, without notice, advertisement, hearing or process
of law of any kind, (i) sell any or all of the Securities, free of all rights
and claims of the Depositor therein and thereto, at any public or private sale
and (ii) bid for and purchase any or all of the Securities at any such public
sale; (b) shall have the right, for and in the name, place and stead of the
Depositor, to execute endorsements, assignments, share transfer forms and other
instruments of conveyance or transfer with respect to all or any of the
Securities. The Depositor hereby expressly waives, to the fullest extent
permitted by applicable law, any and all notices,
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<PAGE> 174
advertisements, hearings or process of law in connection with the exercise by
the Administrative Agent of any of its rights and remedies during the
continuance of a Default. Any proceeds of any of the Securities may be applied
by the Administrative Agent to the payment of expenses in connection with the
Securities, including, without limitation, reasonable attorneys' fees and legal
expenses, and any balance of such proceeds may be applied by the Administrative
Agent toward the payment of such of the Liabilities, and in such order of
application, as the Administrative Agent may from time to time elect (and,
after payment in full of all Liabilities, any excess shall be delivered to the
Company or as a court of competent jurisdiction shall direct).
The Administrative Agent is hereby authorized to comply with any limitation
or restriction in connection with any sale of the Securities as it may be
advised by counsel is necessary in order to (a) avoid any violation of
applicable law (including, without limitation, compliance with such procedures
as may restrict the number of prospective bidders and purchasers and/or further
restrict such prospective bidders or purchasers to persons or entities who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Securities)
or (b) obtain any required approval of the sale or of the purchase by any
governmental regulatory authority or official, and the Depositor agrees that
such compliance shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner and that the Administrative
Agent shall not be liable or accountable to the Depositor for any discount
allowed by reason of the fact that such Securities are sold in compliance with
any such limitation or restriction.
9. Power of Attorney. In addition, and without limiting the powers of the
Administrative Agent set forth in Section 8, the Depositor hereby irrevocably
and by way of security appoints the Administrative Agent and any person
nominated in writing under the hand of any officer of the Administrative Agent
severally to be its attorney for it and in its name and on its behalf and as its
act and deed to prepare, complete, execute, seal, deliver, lodge and file and
otherwise perfect and do any deed, assurance, agreement, instrument, transfer,
memorandum, form, act or thing and institute and conduct any proceedings which
the Depositor is required to execute and do under this Charge and Memorandum or,
following the occurrence of a Default, which the Administrative Agent may deem
necessary or prudent in order to effect or complete any sale made by the
Administrative Agent of any or all
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<PAGE> 175
of the Securities or in order to protect, preserve or realise any or all of the
Securities or in order to enforce or prosecute any rights which the Depositor
or the Administrative Agent may enjoy in respect of or under any or all of the
Securities including the giving of receipts for all payments made under or in
respect of all or any of the Securities and executing and doing all or any of
the documents, acts and things referred to in Section 8 hereof. The Depositor
will on request by the Administrative Agent execute all such transfers, powers
of attorney and other documents as the Administrative Agent may require (i) for
the purposes of perfecting or preserving the rights and interests of the
Administrative Agent on behalf of the Lenders under or pursuant to this Charge
and Memorandum or in respect of all or any of the Securities or (ii) following
the occurrence of a Default to vest all or any of the Securities in the
Administrative Agent or its nominees or a purchaser or transferee.
10. Law of Property Act, 1925. Sections 93 (restricting the rights of
consolidation) and 103 (restricting the right of sale) of the Law of Property
Act, 1925 shall not apply to the security evidenced by this Charge and
Memorandum.
11. General. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Securities if it takes
such action for that purpose as the Depositor shall request in writing, but
failure of the Administrative Agent to comply with any such request shall not of
itself be deemed a failure to exercise reasonable care, and no failure of the
Administrative Agent to preserve or protect any rights with respect to the
Securities against prior parties, or to do any act with respect to preservation
of the Securities not so requested by the Depositor, shall be deemed of itself a
failure to exercise reasonable care in the custody or preservation of the
Securities.
No delay on the part of the Administrative Agent in exercising any right,
power or remedy shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Charge and Memorandum shall be effective unless the same shall be in
writing and signed and delivered by the Administrative Agent and the Depositor,
and then such amendment, modification, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
All obligations of the Depositor and all rights, powers and remedies of the
Administrative Agent and the Lenders expressed herein are in addition to all
other rights, powers and remedies possessed by them, including, without
limitation, those provided by applicable law or in any other written instrument
or agreement relating to any of the Liabilities or any security therefor.
- 8 -
<PAGE> 176
Except as expressly set forth in this Charge and Memorandum or the Loan
Documents, in the event of a Default, or in the observance or performance of
the agreements, covenants and conditions contained in the Loan Documents, or in
this Charge and Memorandum, the Administrative Agent will proceed solely
against the Securities under this Charge and Memorandum and no deficiency,
money judgment or liability shall be sought or obtained against the Depositor,
and (without limiting the above) the Depositor shall have no personal liability
for or in respect of this Charge and Memorandum, the Loan Documents or any
Default.
This Charge and Memorandum may be executed in any number of counterparts
and by the different parties hereto on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same agreement.
This Charge and Memorandum shall be binding upon the Depositor and the
Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of the Depositor and the Administrative Agent and the
successors and assigns of the Administrative Agent.
12. Taxes. All payments to be made by the Depositor to any person
hereunder shall be made free and clear of, and without deduction for or on
account of, tax unless the Depositor is required by law to make such a payment
subject to the deduction or withholding of tax, in which case the sum payable by
the Depositor in respect of which such deduction or withholding is required to
be made shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, such person receives and retains (free
from any liability in respect of any such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had no such
deduction or withholding been made or required to be made.
13. Judgment Currency. The obligations of the Depositor, in respect of
any sum due to the Administrative Agent or any Lender hereunder shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other than
the currency in which such sum was originally denominated (the "Original
Currency"), be discharged only to the extent that following receipt by the
Administrative Agent or such Lender of any sum adjudged to be so due in the
Judgment Currency, the Administrative Agent or such Lender, in accordance with
normal banking procedures, purchases the Original Currency with the Judgment
Currency. If the amount of Original Currency so purchased is less than the sum
originally due to the Administrative Agent or such Lender, the Depositor agrees,
as a separate obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent or such Lender, as the case
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<PAGE> 177
may be, against such loss, and if the amount of Original Currency so purchased
exceeds the sum originally due to the Administrative Agent or such Lender, as
the case may be, the Administrative Agent or such Lender agrees to remit such
excess to the Depositor.
14. Governing Law and Jurisdiction.
A. This Charge and Memorandum shall be governed by and construed in
accordance with English law.
B. All parties irrevocably agree for the exclusive benefit of the
Administrative Agent that the High Court of Justice in England is to have
jurisdiction to settle any disputes which may arise out of or in connection with
this Charge and Memorandum and that accordingly any suit, action or proceeding
arising out of or in connection with this Charge and Memorandum (in this Section
14 referred to as "Proceedings") may be brought in such court.
C. Nothing in this Section 14 shall limit the right of the Administrative
Agent to take Proceedings against the Depositor in any other court of competent
jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions
preclude the taking of Proceedings in any other jurisdiction, whether
concurrently or not.
D. The Depositor irrevocably waives any objection which it may have now or
hereafter to the laying of the venue of any Proceedings in any such court as is
referred to in this Section 14 and any claim that any such Proceedings have been
brought in an inconvenient forum and further irrevocably agrees that a judgment
in any Proceedings brought in the English court or in any other court of
competent jurisdiction shall be conclusive and binding upon it and may be
enforced in the courts of any other jurisdiction.
E. The Depositor hereby irrevocably agrees that any writ, judgment or
other notice of process shall be sufficiently and effectively served on it if
addressed to the Depositor and delivered to it c/o Stikeman, Elliott, Cottons
Centre, Cottons Lane, London SE1 2QL (Attention: William A. Scott) or if served
in any other manner permitted by applicable law.
F. The Depositor hereby consents generally in respect of any Proceedings
arising out of or in connection with this Charge and Memorandum to the giving of
any relief or the issue of any process in connection with such Proceedings,
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<PAGE> 178
including, without limitation, the making, enforcement or execution against any
property or assets or whatsoever of any order or judgment which may be made or
given in such Proceedings.
IN WITNESS WHEREOF the parties hereto have caused this Charge and
Memorandum to be duly executed and delivered as a deed on the day and year first
before written.
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<PAGE> 179
SIGNED as a Deed )
by and )
and )
thereby executed by )
DT HOLDINGS LIMITED )
as its Deed )
Attorney-in-Fact
Attorney-in-Fact
SIGNED as a Deed )
by and )
and )
thereby executed by )
THE TORONTO-DOMINION BANK )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
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<PAGE> 180
SCHEDULE I
TO DEED OF CHARGE AND MEMORANDUM OF DEPOSIT
SHARES
DT HOLDINGS LIMITED
<TABLE>
<CAPTION>
ISSUER Cert # No. of Shares % Total Outstanding
<S> <C> <C> <C> <C>
First DT Holdings Limited 1 + 2 72,374,603 Ordinary Shares 100% 72,374,603
Ordinary Shares
First DT Holdings Limited 4 165,000,000 Second Preference 100% 165,000,000 Second Preference
Shares Shares
First DT Holdings Limited N/A Share Warrant No. 1 in respect 100% Share Warrant No. 1 in respect
of 23,801,420 Third Preference of 23,801,420 Third Preference
Shares Shares
</TABLE>
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<PAGE> 181
EXHIBIT E-4
FORM OF
SUBSIDIARY PLEDGE AGREEMENT
DATED , 1996
THE TORONTO DOMINION BANK
- and -
THE COMPANIES PARTY HERETO
_______________________________________________
DEED OF CHARGE
AND
MEMORANDUM OF DEPOSIT
_______________________________________________
MAYER, BROWN & PLATT
162 Queen Victoria Street
London EC4V 4DB
<PAGE> 182
THIS DEED OF CHARGE AND MEMORANDUM OF DEPOSIT is made the ____ day of
_______, 1995.
BETWEEN:
(1) THE TORONTO DOMINION BANK (in its capacity as administrative agent for
the Lenders, as defined below, the "Administrative Agent", which expression
shall be deemed to include its successors and assigns and any person, firm or
company with which it may amalgamate or merge from time to time); and
(2) Such other parties as may from time to time become parties hereto as
depositors (the "Depositors" and individually each a "Depositor").
WHEREAS:
(A) Pursuant to the Credit Agreement dated as of _________ __, 1996 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
First DT Holdings Limited (the "Company"), various financial institutions
(collectively the "Lenders" and individually each a "Lender"), The
Toronto-Dominion Bank, as issuing bank, and the Administrative Agent, the
Lenders have agreed to make a L250,000,000 revolving facility available to the
Company.
(B) The obligations of the Company under the Credit Agreement are to be
secured by certain securities of the Depositors pursuant to this Deed of Charge
and Memorandum of Deposit (as the same may from time to time be amended, varied,
supplemented, novated or modified, this "Charge and Memorandum").
(C) Pursuant to the Guaranty dated as of ____________, 1996 (as amended or
otherwise modified from time to time, the "Subsidiary Guaranty") executed by
each Depositor in favour of the Lenders and the Administrative Agent, each
Depositor guaranteed the obligations of the Company under the Credit Agreement.
The obligations of each Depositor under the Subsidiary Guaranty are to be
secured pursuant to this Charge and Memorandum.
(D) For and in consideration of any loan, advance or other financial
accommodation heretofore or hereafter made to the Company under or in connection
with the Credit Agreement, the substantial direct and indirect benefits derived
by the Depositors from such loans, advances and financial accommodations and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as set forth in this Charge and
Memorandum.
<PAGE> 183
NOW IT IS HEREBY DECLARED:
1. Definitions. When used herein, the following terms have the following
meanings (such meanings to be applicable to both the singular and plural forms
of such terms):
Default means the occurrence of any Event of Default (as defined in the
Credit Agreement).
Issuer means the issuer of any of the shares or other securities
representing all or any of the Securities.
Liabilities means all obligations (monetary or otherwise) of such
Depositor, howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due,
which arise out of or in connection with the Subsidiary Guaranty, this Charge
and Memorandum, any other Loan Document or any other document or instrument
executed in connection therewith (including any Hedging Agreement (as defined in
the Credit Agreement) entered into with any Person who at the time such Hedging
Agreement is entered into is a Lender or an affiliate thereof).
Loan Document has the meaning assigned to such term in the Credit
Agreement.
Securities has the meaning assigned to such term in Section 2 hereof.
2. Security for Indebtedness. Each Depositor by way of continuing security
for the payment and satisfaction when due of the Liabilities hereby charges by
way of first fixed equitable charge and assigns by way of security to the
Administrative Agent, for the benefit of the Lenders and the Administrative
Agent, all of its right, title and interest in and to the following:
A. All of the shares described in Schedule I hereto listed under such
Depositor's name, all of the certificates and/or instruments representing such
shares and all cash, securities, dividends, rights and other property at any
time and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares;
B. All other property hereafter delivered to the Administrative Agent in
substitution for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such property, and all cash, securities,
interest, dividends, rights and other property
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at any time and from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all thereof; and
C. All products and proceeds of all of the foregoing.
All of the foregoing are herein collectively called the "Securities".
3. Continuing Security. This security is to be a continuing security,
notwithstanding any intermediate payment or settlement of accounts or any other
matter whatsoever, for the payment and satisfaction of the Liabilities, as and
when the same shall fall due, and is to be in addition to, and without prejudice
to, any other security which the Administrative Agent or the Lenders may now or
hereafter hold in respect of the Liabilities. The Administrative Agent may at
any time and without reference to any Depositor give up, release, deal with,
vary, exchange or abstain from perfecting or enforcing any other such security
at any time and discharge any party to any other such security, and realise the
same, without in any way affecting or prejudicing the security evidenced by this
Charge and Memorandum.
4. Undertaking to Deposit. Each Depositor hereby undertakes to deposit
with the Administrative Agent, to the intent that the same shall be subject in
all respects to the provisions of this Charge and Memorandum: (i) all
certificates, documents of title and other documentary evidence of all rights,
bonuses, new shares, stock, rights to take up securities or other securities of
whatever nature (including without limitation any security resulting from any
conversion, consolidation or subdivision of the Securities or rights arising
from a reduction of capital, liquidation or scheme of arrangement) which at any
time during the continuance of this Charge and Memorandum may be issued in
respect of any of, or attributable to, the Securities; and (ii) transfers of the
Securities, in form and substance satisfactory to the Administrative Agent, duly
executed in blank by such Depositor or its nominee and completed in favour of
the Administrative Agent or otherwise as the Administrative Agent may direct;
and prior to the delivery thereof to the Administrative Agent, such Securities
and other documents shall be held by such Depositor separate and apart from its
other property and in express trust for the Administrative Agent.
5. Warranties; Further Assurances. Each Depositor warrants to the
Administrative Agent and each Lender that: (a) it charges and assigns the
Securities with full title guarantee (and that any future delivery, charge and
assignment or transfer thereof will also be with full title guarantee) and
further that, in each case, the Securities are free and clear of all liens,
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<PAGE> 185
security interests and encumbrances of every description whatsoever other than
the security interest created hereunder; (b) assuming continuous possession of
the Securities by the Administrative Agent this Charge and the Memorandum and
the actions contemplated hereby are effective to create a valid first fixed
equitable charge and, as the case may be, assignment by way of security in, to
or over the Securities in favour of the Administrative Agent for the benefit of
the Lenders; (c) all shares shown on Schedule I of such Depositor are duly
authorised, validly issued, fully paid and non-assessable and registered in the
name of such Depositor; and (d) as to the Issuer the Securities represent on
the date hereof not less than the applicable percent (as shown against its name
on Schedule I) of the total shares issued and outstanding of the applicable
Issuer and (e) the information contained in Schedule I hereto with regard to
such Depositor is true and accurate in all respects.
So long as any of the Liabilities shall be outstanding (even if the Letters
of Credit have been cash collateralized) or any commitment shall exist on the
part of the Administrative Agent or any Lender with respect to the creation of
any Liabilities, each Depositor (i) shall not (except as otherwise permitted
pursuant to the Credit Agreement), without the express prior written consent of
the Administrative Agent, (x) sell, assign, exchange, charge or otherwise
transfer, encumber, or grant any option, warrant or other right to purchase the
Securities or (y) otherwise diminish or impair any of its rights in, to or under
any of the Securities; (ii) shall execute such documents (and pay the costs of
filing and recording or re-filing and re-recording the same in all public
offices reasonably deemed necessary or appropriate by the Administrative Agent)
and do such other acts and things, all as the Administrative Agent may from time
to time reasonably request, to establish and maintain a valid, perfected
security interest in the Securities (free of all other liens, claims and rights
of third parties whatsoever) to secure the performance and payment of the
Liabilities; and (iii) will furnish the Administrative Agent or any Lender such
information concerning the Securities as the Administrative Agent or such Lender
may from time to time reasonably request, and will permit the Administrative
Agent or any Lender or any designee of the Administrative Agent or any Lender,
from time to time at reasonable times and on reasonable notice, to inspect,
audit and make copies of and extracts from all records and all other papers in
the possession of such Depositor which pertain to the Securities as set forth in
Section 10.2 of the Credit Agreement, and will, upon request of the
Administrative Agent at any time when a Default has occurred and is continuing,
deliver to the Administrative Agent all of such records and papers.
6. Holding in Name of Administrative Agent, etc. The Administrative Agent
may from time to time after the occurrence
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<PAGE> 186
and during the continuance of a Default, without notice to any Depositor, take
all or any of the following actions: (a) transfer all or any part of the
Securities into the name of the Administrative Agent or any nominee or
sub-agent for the Administrative Agent, with or without disclosing that such
Securities are subject to the security interests hereunder, (b) appoint one or
more sub-agents or nominees for the purpose of retaining physical possession of
the Securities, (c) notify the parties obligated on any of the Securities to
make payment to the Administrative Agent of any amounts due or to become due
thereunder, (d) endorse any cheques, drafts or other writings in the name of
any Depositor to allow collection of the Securities, (e) enforce collection of
any of the Securities by suit or otherwise, and surrender, release or exchange
all or any part thereof, or compromise or renew for any period (whether or not
longer than the original period) any obligations of any nature of any party
with respect thereto, and (f) take control of any proceeds of the Securities.
7. Voting Rights, Dividends, Payments etc. (a) Notwithstanding certain
provisions of Section 6 hereof, so long as the Administrative Agent has not
given the notice referred to in paragraph (b) below:
A. Each Depositor shall be entitled to exercise any and all voting or
consensual rights and powers and share purchase or subscription rights (but any
such exercise by the Depositor of share purchase or subscription rights may be
made only from funds of such Depositor not comprising part of the Securities)
relating or pertaining to the Securities constituting shares or any part thereof
for any purpose; provided, however, that each Depositor agrees that it will not
exercise any such right or power in any manner which would have a material
adverse effect on the value of such Securities or any part thereof.
B. Each Depositor shall be entitled to receive and retain any and all
lawful dividends payable in respect of the Securities constituting shares which
are paid in cash by the Issuer if such dividends are permitted by the Credit
Agreement, but all dividends and distributions in respect of such Securities or
any part thereof made in shares or other property or representing any return of
capital, whether resulting from a subdivision, combination or reclassification
of such Securities or any part thereof or received in exchange for such
Securities or any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets to which the Issuer may be a party or
otherwise or as a result of any exercise of any share purchase or subscription
right, shall be and become part of the Securities hereunder and, if received by
any Depositor,
- 5 -
<PAGE> 187
shall, pursuant to and in accordance with the provisions of Section 4, be
forthwith delivered to the Administrative Agent together with appropriate
transfers duly executed in blank to be held for the purposes of this Charge and
Memorandum.
C. The Administrative Agent shall execute and deliver, or cause to be
executed and delivered, to each Depositor, all such proxies, powers of attorney,
dividend orders and other instruments as such Depositor may request for the
purpose of enabling such Depositor to exercise the rights and powers which it is
entitled to exercise pursuant to clause (A) above and to receive the dividends
which it is authorized to retain pursuant to clause (B) above.
(b) Upon written notice from the Administrative Agent during the existence
of a Default, and so long as the same shall be continuing, all rights and powers
which any Depositor is entitled to exercise pursuant to Section 7(a)(A) hereof
and all rights of any Depositor to receive and retain dividends pursuant to
Section 7(a)(B) hereof shall forthwith cease, and all such rights and powers
shall thereupon become vested in the Administrative Agent which shall have,
during the continuance of such Default, the sole and exclusive authority to
exercise such rights and powers and to receive such dividends and payments. Any
and all money and other property paid over to or received by the Administrative
Agent pursuant to this paragraph (b) shall be retained by the Administrative
Agent as additional Securities hereunder and applied in accordance with the
provisions hereof.
8. Remedies. Whenever a Default shall exist and be continuing, the
Administrative Agent may exercise from time to time any rights and remedies
available to it and, without limiting the foregoing, whenever a Default shall
exist and be continuing the Administrative Agent (a) may, to the fullest extent
permitted by applicable law, without notice, advertisement, hearing or process
of law of any kind, (i) sell any or all of the Securities, free of all rights
and claims of any Depositor therein and thereto, at any public or private sale
and (ii) bid for and purchase any or all of the Securities at any such public
sale; (b) shall have the right, for and in the name, place and stead of any
Depositor, to execute endorsements, assignments, share transfer forms and other
instruments of conveyance or transfer with respect to all or any of the
Securities. Each Depositor hereby expressly waives, to the fullest extent
permitted by applicable law, any and all notices, advertisements, hearings or
process of law in connection with the exercise by the Administrative Agent of
any of its rights and remedies during the continuance of a Default. Any
proceeds of any of the Securities may be applied by the Administrative Agent to
the payment of expenses in connection with the Securities,
- 6 -
<PAGE> 188
including, without limitation, reasonable attorneys' fees and legal expenses,
and any balance of such proceeds may be applied by the Administrative Agent
toward the payment of such of the Liabilities, and in such order of
application, as the Administrative Agent may from time to time elect (and,
after payment in full of all Liabilities, any excess shall be delivered to the
Company or as a court of competent jurisdiction shall direct).
The Administrative Agent is hereby authorized to comply with any limitation
or restriction in connection with any sale of the Securities as it may be
advised by counsel is necessary in order to (a) avoid any violation of
applicable law (including, without limitation, compliance with such procedures
as may restrict the number of prospective bidders and purchasers and/or further
restrict such prospective bidders or purchasers to persons or entities who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Securities)
or (b) obtain any required approval of the sale or of the purchase by any
governmental regulatory authority or official, and each Depositor agrees that
such compliance shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner and that the Administrative
Agent shall not be liable or accountable to any Depositor for any discount
allowed by reason of the fact that such Securities are sold in compliance with
any such limitation or restriction.
9. Power of Attorney. In addition, and without limiting the powers of the
Administrative Agent set forth in Section 8, each Depositor hereby irrevocably
and by way of security appoints the Administrative Agent and any person
nominated in writing under the hand of any officer of the Administrative Agent
severally to be its attorney for it and in its name and on its behalf and as its
act and deed to prepare, complete, execute, seal, deliver, lodge and file and
otherwise perfect and do any deed, assurance, agreement, instrument, transfer,
memorandum, form, act or thing and institute and conduct any proceedings which
such Depositor is required to execute and do under this Charge and Memorandum
or, following the occurrence of a Default, which the Administrative Agent may
deem necessary or prudent in order to effect or complete any sale made by the
Administrative Agent of any or all of the Securities or in order to protect,
preserve or realise any or all of the Securities or in order to enforce or
prosecute any rights which such Depositor or the Administrative Agent may enjoy
in respect of or under any or all of the Securities including the giving of
receipts for all payments made under or in respect of all or any of the
Securities and executing and doing all or any of the documents, acts and things
referred to in Section 8 hereof. Each Depositor will on request by the
Administrative Agent execute all such transfers,
- 7 -
<PAGE> 189
powers of attorney and other documents as the Administrative Agent may require
(i) for the purposes of perfecting or preserving the rights and interests of
the Administrative Agent on behalf of the Lenders under or pursuant to this
Charge and Memorandum or in respect of all or any of the Securities or (ii)
following the occurrence of a Default to vest all or any of the Securities in
the Administrative Agent or its nominees or a purchaser or transferee.
10. Law of Property Act, 1925. Sections 93 (restricting the rights of
consolidation) and 103 (restricting the right of sale) of the Law of Property
Act, 1925 shall not apply to the security evidenced by this Charge and
Memorandum.
11. General. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Securities if it takes
such action for that purpose as a Depositor shall request in writing, but
failure of the Administrative Agent to comply with any such request shall not of
itself be deemed a failure to exercise reasonable care, and no failure of the
Administrative Agent to preserve or protect any rights with respect to the
Securities against prior parties, or to do any act with respect to preservation
of the Securities not so requested by a Depositor, shall be deemed of itself a
failure to exercise reasonable care in the custody or preservation of the
Securities.
No delay on the part of the Administrative Agent in exercising any right,
power or remedy shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Charge and Memorandum shall be effective unless the same shall
be in writing and signed and delivered by the Administrative Agent and each
Depositor, and then such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
All obligations of each Depositor and all rights, powers and remedies of
the Administrative Agent and the Lenders expressed herein are in addition to all
other rights, powers and remedies possessed by them, including, without
limitation, those provided by applicable law or in any other written instrument
or agreement relating to any of the Liabilities or any security therefor.
This Charge and Memorandum shall be binding upon each Depositor and the
Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of each
- 8 -
<PAGE> 190
Depositor and the Administrative Agent and the successors and assigns of the
Administrative Agent.
12. Taxes. All payments to be made by any Depositor to any person
hereunder shall be made free and clear of, and without deduction for or on
account of, tax unless such Depositor is required by law to make such a payment
subject to the deduction or withholding of tax, in which case the sum payable by
such Depositor in respect of which such deduction or withholding is required to
be made shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, such person receives and retains (free
from any liability in respect of any such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had no such
deduction or withholding been made or required to be made.
13. Judgment Currency. The obligations of each Depositor, in respect of
any sum due to the Administrative Agent or any Lender hereunder shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other than
the currency in which such sum was originally denominated (the "Original
Currency"), be discharged only to the extent that following receipt by the
Administrative Agent or such Lender of any sum adjudged to be so due in the
Judgment Currency, the Administrative Agent or such Lender, in accordance with
normal banking procedures, purchases the Original Currency with the Judgment
Currency. If the amount of Original Currency so purchased is less than the sum
originally due to the Administrative Agent or such Lender, each Depositor
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent or such Lender, as the case may be, against
such loss, and if the amount of Original Currency so purchased exceeds the sum
originally due to the Administrative Agent or such Lender, as the case may be,
the Administrative Agent or such Lender agrees to remit such excess to such
Depositor.
14. Governing Law and Jurisdiction.
A. This Charge and Memorandum shall be governed by and construed in
accordance with English law.
B. The Administrative Agent and each Depositor irrevocably agree for the
exclusive benefit of the Administrative Agent that the High Court of Justice in
England is to have jurisdiction to settle any disputes which may arise out of or
in connection with this Charge
- 9 -
<PAGE> 191
and Memorandum and that accordingly any suit, action or proceeding arising out
of or in connection with this Charge and Memorandum (in this Section 14
referred to as "Proceedings") may be brought in such court.
C. Nothing in this Section 14 shall limit the right of the Administrative
Agent to take Proceedings against any Depositor in any other court of competent
jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions
preclude the taking of Proceedings in any other jurisdiction, whether
concurrently or not.
D. Each Depositor irrevocably waives any objection which it may have now
or hereafter to the laying of the venue of any Proceedings in any such court as
is referred to in this Section 14 and any claim that any such Proceedings have
been brought in an inconvenient forum and further irrevocably agrees that a
judgment in any Proceedings brought in the English court or in any other court
of competent jurisdiction shall be conclusive and binding upon it and may be
enforced in the courts of any other jurisdiction.
E. Each Depositor hereby irrevocably agrees that any writ, judgment or
other notice of process shall be sufficiently and effectively served on it (i)
in connection with proceedings in England, if addressed to the Depositor and
delivered to [ ], (ii) to the extent permitted by applicable law, if a
copy thereof is mailed by registered or certified airmail, postage prepaid, to
the address set forth in the Subsidiary Guaranty or (iii) if served in any other
manner permitted by applicable law.
F. Each Depositor hereby consents generally in respect of any Proceedings
arising out of or in connection with this Charge and Memorandum to the giving of
any relief or the issue of any process in connection with such Proceedings,
including, without limitation, the making, enforcement or execution against any
property or assets or whatsoever of any order or judgment which may be made or
given in such Proceedings.
IN WITNESS WHEREOF the parties hereto have caused this Charge and
Memorandum to be duly executed and delivered as a deed on the day and year first
before written.
- 10 -
<PAGE> 192
SCHEDULE I
THE TELEGRAPH PLC
<TABLE>
<CAPTION>
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Creditscheme Limited 100%
Deedtask Limited 100%
The Spectator (1828 Limited) 100%
The Daily Telegraph Business Network Limited 100%
Telegraph Publishing Limited 100%
Business News Deliveries Limited 100%
The Telegraph Business School Limited 100%
CREDITSCHEME LIMITED
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
Telegraph Australian Holdings Limited 42%
DEEDTASK LIMITED
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
Telegraph Australian Holdings Limited 58%
</TABLE>
- 11 -
<PAGE> 193
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
The Telegraph plc )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
- 12 -
<PAGE> 194
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
Creditscheme Limted )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
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<PAGE> 195
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
Deedtask Limited )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
- 14 -
<PAGE> 196
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
The Toronto-Dominion Bank )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
- 15 -
<PAGE> 197
EXHIBIT E-5
FORM OF DUTCH PLEDGE AGREEMENT
DEED OF PLEDGE OF REGISTERED SHARES
Today, the
of
nineteen hundred and ninety-six, appeared before me, [ ], civil law notary in
Amsterdam:
in the present matter acting as holder of a power of attorney of:
1. the company incorporated and existing under the laws of [ ]
having its registered office at [ ] hereinafter to be referred to as: "the
Pledgor";
2. the company incorporated and existing under the laws of Canada;
The Toronto- Dominion Bank, acting through its London office at Triton Court,
14/18 Finsbury Square, London, England, EC21DB, hereinafter to be referred to
as: "the Administrative Agent";
3. the private company with limited liability:
with official seat in Amsterdam, having its registered office at Joan
Auyskenweg 4, 1096 CJ Amsterdam and filed at the Trade Register of the Chamber
of Commerce and Industry in Amsterdam under number 33240029, hereinafter to be
referred to as: "the Company".
Evidenceof the above-mentioned powers of attorney is by meansof three
private instruments, which shall be attached to the present deed.
These powers of attorney have been sufficiently proven to me, civil law
notary.
The appearer, in his mentioned capacity, declared:
<PAGE> 198
A. pursuant to the Credit Agreement dated as of [ ] 1996 (as
amended or otherwise modified from time to time, hereinafter to be referred to
as: the "Credit Agreement") among First DT Holdings Limited, various financial
institutions (collectively to be referred to as: the "Lenders" and individually
each: a "Lender"), The Toronto-Dominion Bank, as issuing bank and the
Administrative Agent, the Lenders have agreed to make a L250,000,000 revolving
facility available to First DT Holdings Limited;
B. the obligations of First DT Holdings Limited under the Credit
Agreement are to be secured by certain securities of the Pledgor pursuant to
this deed of pledge (as the same may from time to time be amended, varied,
supplemented, novated or modified);
C. pursuant to the Guaranty dated as of [ ] 1996 (as amended or
otherwise modified from time to time, hereinafter to be referred to as the:
"Subsidiary Guaranty") executed by the Pledgor in favour of the Lenders and the
Administrative Agent, the Pledgor guaranteed the obligations of First DT
Holdings Limited under the Credit Agreement.
The obligations of the Pledgor under the Subsidiary Guaranty are to be
secured by this deed;
D. for and in consideration of any loan, advance or other
financial accommodation heretofore or hereafter made to First DT Holdings
Limited under or in connection with the Credit Agreement, the substantial direct
and indirect benefits derived by the Pledgor from such loans, advances and
financial accommodations and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as set forth in this deed.
The appearer, in his mentioned capacity, declared on behalf of the Pledgor:
by way of continuing security for the payment and satisfaction when due of the
Liabilities as defined hereinafter, to create a first right of pledge in favour
of the Administrative Agent by way of security to the Administrative Agent, for
the benefit of the Lenders and the Administrative Agent, with regard to:
ordinary registered shares in the capital of the Company, numbered each with a
nominal value of one hundred Dutch Guilders (NLG 100.-), constituting 99,9996%
of the entire issued capital, hereinafter to be referred to as: "the Shares", of
which Shares the Pledgor acquired ownership by virtue of [ ].
<PAGE> 199
The appearer declared to accept the aforesaid right of pledge on behalf of
the Administrative Agent under the provisions referred to hereinafter:
ARTICLE 1.
When used in this deed, the following terms have the following meanings
(such meanings to be applicable to both the singular and plural forms of such
terms):
Default: means the occurrence of any Event of Default (as defined in the
Credit Agreement).
Liabilities: means all obligations (monetary or otherwise) of the Pledgor,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, which arise out
of or in connection with the Subsidiary Guaranty, this deed, any other Loan
Document or any other document or instrument executed in connection therewith
(including any Hedging Agreement (as defined in the Credit Agreement) entered
into with any person who at the time such Hedging Agreement is entered into is a
Lender or an affiliate thereof).
Loan Document: has the meaning assigned to such term in the Credit
Agreement.
Securities: has the meaning as assigned to such term in article 2 of this
deed.
ARTICLE 2.
The pledge of the Shares includes all of the rights, title and interest of
the Pledgor in and to the following:
A. all cash, securities, dividends, rights and other property at
any time and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any and all of the Shares;
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<PAGE> 200
B. all other property hereafter delivered to the Administrative
Agent in substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such property, and all
cash, securities, interest, dividends, rights and other property at any time and
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof; and
C. all products and proceeds of all of the foregoing.
All of the foregoing are herein collectively to be referred to in this
pledge as: the "Securities".
ARTICLE 3.
This pledge is to be a continuing security, notwithstanding any
intermediate payment or settlement of accounts of any other matter whatsoever,
for the payment and satisfaction of the Liabilities, as and when the same shall
fall due, and is to be in addition to, and without prejudice to, any other
security which the Administrative Agent or the Lenders may now or hereafter hold
in respect of the Liabilities.
ARTICLE 4.
The Administrative Agent shall be entitled to exercise any and all voting
or consensual rights and powers and share purchase or subscription rights
relating or pertaining to the Shares, the Securities or any part thereof for any
purpose.
The Administrative Agent hereby grants, subject to Article 6, a power of
attorney to the Pledgor to exercise the rights mentioned in the previous
sentence provided, however, that the Pledgor agrees that it will not exercise
any such right or power in any manner which would have a material adverse effect
on the value of the Shares, the Securities or any part thereof.
- 4 -
<PAGE> 201
ARTICLE 5.
The Administrative Agent shall be entitled to receive and retain any and
all lawful dividends payable in respect of the Shares or the Securities which
are paid in cash by the Company if such dividends are permitted by the Credit
Agreement, but all dividends and distributions in respect of the Shares or the
Securities or any part thereof made in shares or other property or representing
any return of capital, whether resulting from a subdivision, combination or
reclassification of such Shares or Securities or any part thereof or as a result
of any merger, consolidation, acquisition or other exchange of assets to which
the Company may be a party or otherwise or as a result of any exercise of any
share purchase or subscription right, shall be and become part of this pledge
and if received by the Pledgor, shall be forthwith delivered to the
Administrative Agent to be held for the purpose of this pledge. The
Administrative Agent hereby grants, subject to Article 6, a power of attorney to
the Pledgor to receive and retain such dividends and otherwise to exercise the
rights mentioned in the previous sentence.
ARTICLE 6.
Upon written notice from the Administrative Agent during the existence of a
Default, and so long as the same shall be continuing, the powers of attorney
granted pursuant to articles 4 and 5 shall be revoked and all rights and powers
which the Pledgor is entitled to exercise pursuant to articles 4 and 5 hereof
shall forthwith cease, and the Administrative Agent shall have, during the
continuance of such Default, the sole and exclusive authority to exercise such
rights and powers and to receive such dividends and payments.
Any and all money and other property paid over to or received by the
Administrative Agent pursuant to this article shall be retained by the
Administrative Agent as additional Securities hereunder and applied in
accordance with the provisions hereof.
ARTICLE 7.
The Pledgor declares that it is authorized to pledge the Shares, the
Securities and the rights attaching thereto, that the Shares, the Securities and
the rights attaching thereto are unencumbered, that they are not
- 5 -
<PAGE> 202
subject to any rights of third parties, that no promises have been made or will
be made in respect thereof to third parties, and that the Shares, the
Securities and the rights attaching thereto are free from any attachments. The
Pledgor furthermore declares that all legal requirements and all requirements
under the articles of association of the Company relating to the pledge of the
Shares, the Securities and the rights attaching thereto have been complied
with. The Pledgor declares that the Shares are fully paid-up, that no
resolutions have been adopted for the issue of new shares or the granting of
rights to take shares, and that no depositary receipts in respect of the Shares
or the Securities have been issued.
ARTICLE 8.
The Pledgor shall do anything in its power to prevent the issue of shares
in the Company and the granting of rights to take shares in the Company, and
will forthwith notify the Administrative Agent of any intention thereto.
The Pledgor shall forthwith notify the Administrative Agent of any
circumstances which may be of importance for the position of the Administrative
Agent or the value of the Shares.
Such circumstances, among others include: the filing of a petition for the
Pledgor's or the Company's bankruptcy, adjudication of the Pledgor's or the
Company's bankruptcy, the granting to the Pledgor or the Company of an official
moratorium, attachment of (part of) the Shares, the Securities or the Pledgor's
or the Company's assets, alienation of (part of) the Company's assets other than
in connection with its ordinary business, or the complete or partial cessation
of the Pledgor's or the Company's activities.
The Pledgor shall also forthwith notify any person desirous of enforcing
any rights in respect of the Shares, the Securities or the rights attaching
thereto of the right of pledge held by the Administrative Agent, without
prejudice to the authority of the Administrative Agent to proceed to such
notification itself.
ARTICLE 9.
Whenever a Default (including a Pledgor's default as referred to below)
shall exist and be continuing the Administrative Agent may exercise from time to
time any rights and remedies available to it and, without limiting the
foregoing, the Administrative Agent will be entitled to sell the Shares, the
Securities or any part of them, together with the rights attaching thereto.
- 6 -
<PAGE> 203
The Pledgor will be in default in the event of non-observance of any
commitment arising from the present deed, or if the Pledgor should file a
petition for an official moratorium or bankruptcy, should for the time being be
granted an official moratorium, should be declared bankrupt, or if the Pledgor's
business should be liquidated, its business operations should be discontinued,
or if (or any part of) the Securities or the Shares should be attached.
ARTICLE 10.
If the Administrative Agent should wish to proceed to the sale of any of
the Securities and the rights attaching thereto, it will not be under any
obligation to notify the Pledgor, or any other party of the intended sale save
as required by applicable laws.
Nor will the Administrative Agent be under the obligation to give
notification in the event of the Administrative Agent having proceeded to such
sale.
ARTICLE 11.
The Administrative Agent will be entitled to deduct any proceeds it may
acquire by means of collection of the rights attaching to the Securities or by
means of the sale of the Securities and the rights attaching thereto, after
deduction of all expenses, including any expenses of legal assistance or
litigation, from any claim, or any part thereof, which the Administrative Agent
may hold on the Pledgor, in such order as will be determined by the
Administrative Agent.
ARTICLE 12.
Insofar as the Pledgor, after collection of the rights attaching to the
Securities, or in consequence of the sale by the Administrative Agent of the
Securities and the rights attaching thereto, should have a claim for payment of
(a portion of) the amounts collected, the Pledgor hereby pledges such claim to
the Administrative Agent, such pledging hereby being accepted by the
Administrative Agent, for the purpose of providing such security as referred to
above.
The Pledgor hereby notifies the Administrative Agent of such pledging.
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<PAGE> 204
The Administrative Agent hereby confirms the receipt of such notification.
ARTICLE 13.
The Administrative Agent will exclusively be under the obligation to
renounce its rights of pledge if in the opinion of the Administrative Agent, it
should no longer have any claim on the Pledgor, or should no longer be in a
position to make any future claims.
ARTICLE 14.
The existence and amount of the Pledgor's debt to the Administrative Agent
will be evident from an extract from the accounting records of the
Administrative Agent, duly signed by the Administrative Agent.
In any relevant case, the Pledgor will remain entitled to claim from the
Administrative Agent repayment of anything the Pledgor can prove to be excess
payment or charge, without thereby being in a position, however, to claim
damages from the Administrative Agent.
ARTICLE 15.
All expenses, of whatever nature, incurred both in and out of court in
connection with the present deed and the execution of the present agreement,
including the expenses of legal assistance and litigation, will be for the
Pledgor's account.
ARTICLE 16.
This deed will be subject to Dutch law. Wherever differences occur in the
interpretation and/or the contents of this deed and any other agreement or
related document, the contents of this deed will at all times prevail.
ARTICLE 17.
The Pledgor will choose domicile at the Pledgor's own address referred to
in the present deed.
Any change of domicile will only be valid after the Pledgor having notified
the Administrative Agent thereof in writing.
- 8 -
<PAGE> 205
Finally the appearer declared on behalf of the Company
(a) to acknowledge the pledge of the Securities by signing the
present deed, and to forthwith make an annotation thereof in the register of
shareholders, and
(b) to confirm that the information mentioned above relating to
the Securities and the Company and its capital, is correct.
The original of this deed was executed in Amsterdam on the date stated at
the beginning of this deed at .
After the substance of this deed had been stated to the appearer, he had
declared to have noted the contents of this deed and not to require to have the
deed read out in full.
After it had been read in outline, this deed was then signed by the
appearer and by me, civil law notary.
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<PAGE> 206
EXHIBIT E-6
FORM OF
FAIRFAX PLEDGE AGREEMENT
DATED , 1996
THE TORONTO-DOMINION BANK
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TELEGRAPH AUSTRALIAN HOLDINGS LIMITED
and
DAILY TELEGRAPH HOLDINGS BV
_______________________________________________
DEED OF CHARGE
AND
MEMORANDUM OF DEPOSIT
_______________________________________________
MAYER, BROWN & PLATT
162 Queen Victoria Street
London EC4V 4DB
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THIS DEED OF CHARGE AND MEMORANDUM OF DEPOSIT is made the ____ day of
_______, 1996.
BETWEEN:
(1) THE TORONTO DOMINION BANK (in its capacity as administrative agent for
the Lenders, as defined below, the "Administrative Agent", which expression
shall be deemed to include its successors and assigns and any person, firm or
company with which it may amalgamate or merge from time to time); and
(2) TELEGRAPH AUSTRALIAN HOLDINGS LIMITED a limited liability company
incorporated under the laws of England and Wales ("TAH"); and
(3) DAILY TELEGRAPH HOLDINGS BV, a company incorporated under the laws of
The Netherlands (together with TAH, the "Depositors" and individually each a
"Depositor").
WHEREAS:
(A) Pursuant to the Credit Agreement dated as of _________ __, 1996 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
First DT Holdings Limited (the "Company"), various financial institutions
(collectively the "Lenders" and individually each a "Lender"), The
Toronto-Dominion Bank, as issuing bank, and the Administrative Agent, the
Lenders have agreed to make a L250,000,000 revolving facility available to the
Company.
(B) The obligations of the Company under the Credit Agreement are to be
secured by certain securities of the Issuer held by the Depositors pursuant to
this Deed of Charge and Memorandum of Deposit (as the same may from time to time
be amended, varied, supplemented, novated or modified, this "Charge and
Memorandum").
(C) Pursuant to the Guaranty dated as of ____________, 1996 (as amended or
otherwise modified from time to time, the "Subsidiary Guaranty") executed by
each Depositor in favour of the Lenders and the Administrative Agent, each
Depositor guaranteed the obligations of the Company under the Credit Agreement.
The obligations of each Depositor under the Subsidiary Guaranty are to be
secured pursuant to this Charge and Memorandum.
(D) For and in consideration of any loan, advance or other financial
accommodation heretofore or hereafter made to the Company under or in connection
with the Credit Agreement, the substantial direct and indirect benefits derived
by the Depositors from such loans, advances and financial accommodations and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as set forth in this Charge and
Memorandum.
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NOW IT IS HEREBY DECLARED:
1. Definitions. When used herein, the following terms have the following
meanings (such meanings to be applicable to both the singular and plural forms
of such terms):
Default means the occurrence of any Event of Default (as defined in the
Credit Agreement).
Issuer means John Fairfax Holdings Limited, a limited liability company
incorporated under the laws of the State of New South Wales, Australia.
Liabilities means all obligations (monetary or otherwise) of each
Depositor, howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due,
which arise out of or in connection with the Subsidiary Guaranty, this Charge
and Memorandum, any other Loan Document or any other document or instrument
executed in connection therewith (including any Hedging Agreement (as defined in
the Credit Agreement) entered into with any Person who at the time such Hedging
Agreement is entered into is a Lender or an affiliate thereof).
Loan Document has the meaning assigned to such term in the Credit
Agreement.
Securities has the meaning assigned to such term in Section 2 hereof.
2. Security for Indebtedness. Each Depositor by way of continuing security
for the payment and satisfaction when due of the Liabilities hereby charges by
way of first fixed equitable charge and assigns by way of security to the
Administrative Agent, for the benefit of the Lenders and the Administrative
Agent, all of its right, title and interest in and to the following:
A. All of the shares and debentures described in Schedule I hereto listed
under such Depositor's name, all of the certificates and/or instruments
representing such shares and debentures and all cash, securities, dividends,
rights and other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
shares and debentures;
B. All other property hereafter delivered to the Administrative Agent in
substitution for or in addition to any of the foregoing, all certificates and
instruments
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representing or evidencing such property, and all cash, securities, interest,
dividends, rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
C. All products and proceeds of all of the foregoing.
All of the foregoing are herein collectively called the "Securities".
3. Continuing Security. This security is to be a continuing security,
notwithstanding any intermediate payment or settlement of accounts or any other
matter whatsoever, for the payment and satisfaction of the Liabilities, as and
when the same shall fall due, and is to be in addition to, and without prejudice
to, any other security which the Administrative Agent or the Lenders may now or
hereafter hold in respect of the Liabilities. The Administrative Agent may at
any time and without reference to any Depositor give up, release, deal with,
vary, exchange or abstain from perfecting or enforcing any other such security
at any time and discharge any party to any other such security, and realise the
same, without in any way affecting or prejudicing the security evidenced by this
Charge and Memorandum.
4. Undertaking to Deposit. Each Depositor hereby undertakes to immediately
deposit with the Administrative Agent, to the intent that the same shall be
subject in all respects to the provisions of this Charge and Memorandum: (i) all
certificates, documents of title and other documentary evidence of all rights,
bonuses, new shares, stock, rights to take up securities or other securities of
whatever nature (including without limitation any security resulting from any
conversion, consolidation or subdivision of the Securities or rights arising
from a reduction of capital, liquidation or scheme of arrangement) which at any
time during the continuance of this Charge and Memorandum may be issued in
respect of any of, or attributable to, the Securities; and (ii) transfers of the
Securities, in form and substance satisfactory to the Administrative Agent, duly
executed in blank by such Depositor or its nominee and completed in favour of
the Administrative Agent or otherwise as the Administrative Agent may direct;
and prior to the delivery thereof to the Administrative Agent, such Securities
and other documents shall be held by such Depositor separate and apart from its
other property and in express trust for the Administrative Agent.
5. Warranties; Further Assurances. Each Depositor warrants to the
Administrative Agent and each Lender that: (a) as the sole beneficial owner of
the Securities it charges and assigns the Securities (and that it will be the
sole beneficial owner of any property comprised in any future
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delivery, charge and assignment or transfer thereof will also be with full
title guarantee) and further that, in each case, the Securities are free and
clear of all liens, security interests and encumbrances of every description
whatsoever other than the security interest created hereunder; (b) assuming
continuous possession of the Securities by the Administrative Agent this Charge
and the Memorandum and the actions contemplated hereby are effective to create
a valid first fixed equitable charge and, as the case may be, assignment by way
of security in, to or over the Securities in favour of the Administrative Agent
for the benefit of the Lenders; (c) all shares and debentures shown on Schedule
I of such Depositor are duly authorised, validly issued, fully paid and
non-assessable and registered in the name of such Depositor; and (d) as to the
Issuer the Securities represent on the date hereof not less than the applicable
percent (as shwon against its name on Schedule I) of the total shares issued
and outstanding of the Issuer. Each Depositor acknowledges that the Lenders
have entered into the Loan Documents in reliance on the representations and
warranties in this Section 5.
So long as any of the Liabilities shall be outstanding or any commitment
shall exist on the part of the Administrative Agent or any Lender with respect
to the creation of any Liabilities, each Depositor (i) shall not (except as
otherwise permitted pursuant to the Credit Agreement), without the express prior
written consent of the Administrative Agent, (a) sell, assign, exchange, charge
or otherwise transfer, encumber, or grant any option, warrant or other right to
purchase the Securities (other than the creation of an interest over an asset
which interest ranks after the charge created by this Deed which creation may
not by law be restricted by the Administrative Agent or a Lender), (b) shall
take no action, and shall procure that no action is taken by the Company, to
convert the Securities into uncertificated form, (c) will ensure that the
Securities remain on a register in the [Australian Capital Territory/the United
Kingdom] or (d) otherwise diminish or impair any of its rights in, to or under
any of the Securities; (ii) shall execute such documents (and pay the costs of
filing and recording or re-filing and re-recording the same in all public
offices reasonably deemed necessary or appropriate by the Administrative Agent)
and do such other acts and things, all as the Administrative Agent may from time
to time reasonably request, to establish and maintain a valid, perfected
security interest in the Securities (free of all other liens, claims and rights
of third parties whatsoever) to secure the performance and payment of the
Liabilities; and (iv) will furnish the Administrative Agent or any Lender such
information concerning the Securities as the Administrative Agent or such Lender
may from time to time reasonably request, and will permit the Administrative
Agent or any Lender or any designee of the Administrative Agent or any Lender,
from time to time at reasonable times and on reasonable notice, to inspect,
audit
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and make copies of and extracts from all records and all other papers in the
possession of such Depositor which pertain to the Securities as set forth in
Section 10.2 of the Credit Agreement, and will, upon request of the
Administrative Agent at any time when a Default has occurred and is continuing,
deliver to the Administrative Agent all of such records and papers.
The Depositors shall duly and punctually comply with their obligations
under the Loan Documents and ensure that its and the Company's representations
and warranties in the Loan Documents are true and ensure that the Company duly
and punctually complies with its obligations under the Loan Documents.
6. Holding in Name of Administrative Agent, etc. The Administrative Agent
may from time to time after the occurrence and during the continuance of a
Default, without notice to any Depositor, take all or any of the following
actions: (a) transfer all or any part of the Securities into the name of the
Administrative Agent or any nominee or sub-agent for the Administrative Agent,
with or without disclosing that such Securities are subject to the security
interests hereunder, (b) appoint one or more sub-agents or nominees for the
purpose of retaining physical possession of the Securities, (c) notify the
parties obligated on any of the Securities to make payment to the Administrative
Agent of any amounts due or to become due thereunder, (d) endorse any cheques,
drafts or other writings in the name of any Depositor to allow collection of the
Securities, (e) enforce collection of any of the Securities by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with respect thereto, and (f)
take control of any proceeds of the Securities.
7. Voting Rights, Dividends, Payments etc. (a) Notwithstanding certain
provisions of Section 6 hereof, so long as the Administrative Agent has not
given the notice referred to in paragraph (b) below:
A. Each Depositor shall be entitled to exercise any and all voting or
consensual rights and powers and share purchase or subscription rights (but any
such exercise by the Depositor of share purchase or subscription rights may be
made only from funds of such Depositor not comprising part of the Securities)
relating or pertaining to the Securities constituting shares or any part thereof
for any purpose; provided, however, that each Depositor agrees that it will not
exercise any such right or power in any manner which would have a material
adverse effect on the value of such Securities or any part thereof.
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B. Each Depositor shall be entitled to receive and retain any and all
lawful dividends payable in respect of the Securities constituting shares which
are paid in cash by the Issuer if such dividends are permitted by the Credit
Agreement, but all dividends and distributions in respect of such Securities or
any part thereof made in shares or other property or representing any return of
capital, whether resulting from a subdivision, combination or reclassification
of such Securities or any part thereof or received in exchange for such
Securities or any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets to which the Issuer may be a party or
otherwise or as a result of any exercise of any share purchase or subscription
right, shall be and become part of the Securities hereunder and, if received by
any Depositor, shall, pursuant to and in accordance with the provisions of
Section 4, be forthwith delivered to the Administrative Agent together with
appropriate transfers duly executed in blank to be held for the purposes of this
Charge and Memorandum.
C. The Administrative Agent shall execute and deliver, or cause to be
executed and delivered, to each Depositor, all such proxies, powers of attorney,
dividend orders and other instruments as such Depositor may request for the
purpose of enabling such Depositor to exercise the rights and powers which it is
entitled to exercise pursuant to clause (A) above and to receive the dividends
which it is authorized to retain pursuant to clause (B) above.
D. Each Depositor will:
(i) notify the Administrative Agent immediately if it becomes
entitled to, or is offered, any rights to purchase, take up, be allotted or
subscribe for any marketable security; and
(ii) ensure that all documents relating to such rights or arising out
of their subscription, taking up or exercise are delivered to the
Administrative Agent.
(b) Upon written notice from the Administrative Agent during the existence
of a Default, and so long as the same shall be continuing, all rights and powers
which any Depositor is entitled to exercise pursuant to Section 7(a)(A) hereof
and all rights of any Depositor to receive and retain dividends pursuant to
Section 7(a)(B) hereof shall forthwith cease, and all such rights and powers
shall thereupon become vested in the Administrative Agent which shall have,
during the continuance of such Default, the sole and exclusive authority to
exercise such rights and powers and to receive such
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dividends and payments. Any and all money and other property paid over to or
received by the Administrative Agent pursuant to this paragraph (b) shall be
retained by the Administrative Agent as additional Securities hereunder and
applied in accordance with the provisions hereof.
8.1 Appointment of Receiver. To the extent permitted by law, at any time
after an Event of Default (whether or not it is continuing) the Administrative
Agent or any authorised officer or agent of the Administrative Agent may:
(i) appoint any person or any two or more persons jointly or
severally or both to be a receiver or receiver and manager of all or any of
the Securities;
(ii) remove any Receiver;
(iii) appoint another Receiver in addition to or in place of a
Receiver; and
(iv) fix or vary the remuneration of a Receiver.
8.2 Agent of Mortgagor. Subject to Section 8.4, every Receiver is the
agent of the Depositors. The Depositors alone are responsible for his acts and
defaults.
8.3 Receiver's Powers. In addition to any powers granted by law, and
except to the extent specifically excluded by the terms of his appointment,
every Receiver has power to do anything in respect of the Securities that the
Depositor could do. His powers include the following (without limitation):
(i) He may take possession of, get in and manage the
Securities.
(ii) He may carry on or concur in carrying on any business.
(iii) He may acquire in any manner any asset (including, without
limitation, to take it on lease). After that acquisition it will be
included in the Securities.
(iv) He may do anything to maintain, protect or improve any of
the Securities or to obtain income or returns from any of the Securities.
(v) He may:
(a) borrow or raise any money from any Lender or any other person
approved by the Administrative Agent;
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(b) give guarantees; and
(c) grant any security interest over any of the Securities to secure that
money or guarantee. That security interest may rank in priority to or equally
with or after, the security created by this Deed. It may be given in the name of
the Depositor or otherwise.
(vi) He may lend money or provide financial accommodation.
(vii) He may sell any of the Securities (whether or not the
Receiver has taken possession).
(viii) Without limitation any sale may be made:
(a) by public auction, private treaty or tender;
(b) for cash or on credit;
(c) in one lot or in parcels;
(d) either with or without special conditions or stipulations as to title
or time or mode of payment of purchase money or otherwise;
(e) with power to allow the whole or any part of the purchase money to be
deferred (whether with or without any security); and
(f) whether or not in conjunction with the sale of any property by any
person.
(ix) He may grant or take put or call options.
(x) He may employ or discharge any person as employee,
contractor, agent, professional adviser, consultant or auctioneer for any
purpose.
(xi) He may make or accept any arrangement or compromise.
(xii) He may give receipts for money and other assets.
(xiii) He may:
(a) perform or enforce;
(b) exercise or refrain from exercising the Depositor's rights and powers
under; or
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(c) obtain the benefit in other ways of,
any documents or agreements or rights which form part of the Securities and any
documents or agreements entered into in exercise of any power.
(xiv) He may vary, rescind or terminate any document or
agreement.
(xv) He may make debtors bankrupt, wind-up companies and do
anything in relation to any bankruptcy, winding-up, official management,
scheme of arrangement or receivership or other administration (including,
without limitation, attend and vote at meetings of creditors and appoint
proxies for such meetings).
(xvi) He may commence, defend, conduct, settle, discontinue or
compromise proceedings in the name of the Depositors or otherwise.
(xvii) He may enter into and execute documents or agreements on
behalf of himself or the Depositors. This includes, without limitation,
signing, accepting and endorsing cheques, promissory notes and bills of
exchange.
(xviii) He may operate any bank account comprising part of the
Securities and open and operate any further bank account.
(xix) He may surrender, release or transfer any of the
Securities.
(xxii) He may delegate to any person approved by the
Administrative Agent any of the powers conferred upon the Receiver
(including delegation).
(xx) He may exchange with any person any of the Securities for
other property.
(xxi) He may promote the formation of companies with a view to
purchasing any of the Securities or assuming the obligations of the
Depositor or otherwise.
(xxii) He may delegate to any person approved by the
Administrative Agent any of the powers conferred upon the Receiver
(including delegation).
(xxiii) He may have access to and make use of the premises, plant,
equipment, and records and accounting and other services of the Depositor
and the services of its staff.
(xxiv) He may exercise any voting or other rights or powers in
respect of any of the Securities and to do anything in relation to
marketable securities.
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(xxv) He may pay any outgoing or indebtedness of the Depositor or
any other person.
(xxvi) He may redeem any security interest or acquire it and any
debt secured by it.
(xxvii) He may take out insurance.
(xxviii) He may do anything incidental to the exercise of any other
power.
All of the above paragraphs are to be construed independently. None limits
the generality of any other.
8.4 Receiver appointed after commencement of winding-up. The power to
appoint a Receiver may be exercised notwithstanding that:
(a) an order may have been made or a resolution may have been passed
to wind up a Depositor; and
(b) a receiver appointed in those circumstances may not, or may not
in some respects specified by the Receiver, act as the agent of the Depositor.
8.5 Powers exercisable by the Administrative Agent. Whether or not a
Receiver has been appointed, to the extent permitted by law the Administrative
Agent may exercise any power of a Receiver at any time after an Event of Default
(whether or not it is continuing) in addition to any power of the Administrative
Agent or the Lenders and without giving notice. It may exercise those powers
and its powers without taking possession or being liable as mortgagee in
possession.
8.6 Withdrawal. The Administrative agent may at any time give up
possession of the Securities and may at any time withdraw any receivership.
9. Remedies. Whenever a Default shall exist and be continuing, the
Administrative Agent may exercise from time to time any rights and remedies
available to it and, without limiting the foregoing, whenever a Default shall
exist and be continuing the Administrative Agent (a) may, to the fullest extent
permitted by applicable law, without notice, advertisement, hearing or process
of law of any kind, (i) sell any or all of the Securities, free of all rights
and claims of any Depositor therein and thereto, at any public or private sale
and (ii) bid for and purchase any or all of the Securities at any such public
sale; (b) shall have the right, for and in the name, place and stead of any
Depositor, to execute endorsements, assignments, share transfer forms and other
instruments of conveyance or transfer with respect to all or any of the
Securities. Each Depositor hereby expressly waives, to the fullest extent
permitted by applicable law, any and all notices, advertisements, hearings or
process of law in
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connection with the exercise by the Administrative Agent of any of its rights
and remedies during the continuance of a Default. Any proceeds of any of the
Securities and any other money received under this Deed may be applied by the
Administrative Agent to the payment of expenses in connection with the
Securities, including, without limitation, reasonable attorneys' fees and legal
expenses, and any balance of such proceeds may be applied by the Administrative
Agent toward the payment of such of the Liabilities, and in such order of
application, as the Administrative Agent may from time to time elect (and,
after payment in full of all Liabilities, any excess shall be delivered to the
Company or as a court of competent jurisdiction shall direct).
The Administrative Agent is hereby authorized to comply with any limitation
or restriction in connection with any sale of the Securities as it may be
advised by counsel is necessary in order to (a) avoid any violation of
applicable law (including, without limitation, compliance with such procedures
as may restrict the number of prospective bidders and purchasers and/or further
restrict such prospective bidders or purchasers to persons or entities who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Securities)
or (b) obtain any required approval of the sale or of the purchase by any
governmental regulatory authority or official, and each Depositor agrees that
such compliance shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner and that the Administrative
Agent shall not be liable or accountable to any Depositor for any discount
allowed by reason of the fact that such Securities are sold in compliance with
any such limitation or restriction.
10. Power of Attorney. In addition, and without limiting the powers of
the Administrative Agent set forth in Section 9, each Depositor hereby
irrevocably and by way of security appoints the Administrative Agent and any
person nominated in writing under the hand of any officer of the Administrative
Agent severally to be its attorney for it and in its name and on its behalf and
as its act and deed to prepare, complete, execute, seal, deliver, lodge and file
and otherwise perfect and do any deed, assurance, agreement, instrument,
transfer, memorandum, form, act or thing and institute and conduct any
proceedings which such Depositor is required to execute and do under this Charge
and Memorandum or, following the occurrence of a Default, which the
Administrative Agent may deem necessary or prudent in order to effect or
complete any sale made by the Administrative Agent of any or all of the
Securities or in order to protect, preserve or realise any or all of the
Securities or in order to enforce or prosecute any rights which such Depositor
or the Administrative Agent may enjoy in respect of or under any or all of the
Securities including the giving of receipts for all payments made under or in
respect of all or any of the
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Securities and executing and doing all or any of the documents, acts and things
referred to in Section 8 hereof. Each Depositor will on request by the
Administrative Agent execute all such transfers, powers of attorney and other
documents as the Administrative Agent may require (i) for the purposes of
perfecting or preserving the rights and interests of the Administrative Agent
on behalf of the Lenders under or pursuant to this Charge and Memorandum or in
respect of all or any of the Securities or (ii) following the occurrence of a
Default to vest all or any of the Securities in the Administrative Agent or its
nominees or a purchaser or transferee.
11. General. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Securities if
it takes such action for that purpose as a Depositor shall request in writing,
but failure of the Administrative Agent to comply with any such request shall
not of itself be deemed a failure to exercise reasonable care, and no failure of
the Administrative Agent to preserve or protect any rights with respect to the
Securities against prior parties, or to do any act with respect to preservation
of the Securities not so requested by a Depositor, shall be deemed of itself a
failure to exercise reasonable care in the custody or preservation of the
Securities.
No delay on the part of the Administrative Agent in exercising any right,
power or remedy shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Charge and Memorandum shall be effective unless the same shall
be in writing and signed and delivered by the Administrative Agent and each
Depositor, and then such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
All obligations of each Depositor and all rights, powers and remedies of
the Administrative Agent and the Lenders expressed herein are in addition to all
other rights, powers and remedies possessed by them, including, without
limitation, those provided by applicable law or in any other written instrument
or agreement relating to any of the Liabilities or any security therefor.
To the extent permitted by law:
(a) the Depositors dispense with any notice or lapse of time
required by any law before the Administrative Agent or the Lenders enforce this
Deed or exercise any power;
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(b) no Lender is required to give notice to any person before
enforcement or exercise;
(c) any law requiring the giving of notice or the compliance with a
procedure or the lapse of time before enforcement or exercise is excluded.
Subject to any law which applies, notwithstanding an agreement to the
contrary, none of the Administrative Agent, any Lender, Receiver or Attorney
will be liable in respect of:
(a) any conduct, delay, negligence or breach of duty in the exercise
or non-exercise of a power; nor
(b) for any loss (including consequential loss) which results,
except where it arises from fraud or gross negligence on the part of the
Administrative Agent, any Lender, Receiver or Attorney.
No power and nothing in this Deed merges in, or in any other way
prejudicially affects or is prejudicially affected by:
(a) any other security interest; or
(b) any judgment, right or remedy against any person,
which any Lender or any person claiming through any Lender may have at any
time.
Except where expressly stated the Administrative Agent or any Lender may
give or withhold, or give conditionally, approvals and consents, may be
satisfied or unsatisfied, and may form opinions, at its absolute discretion.
Any provision of this Deed which is prohibited or unenforceable in any
jurisdiction is ineffective as to that jurisdiction to the extent of the
prohibition or unenforceability. That does not invalidate the remaining
provisions of this Deed nor affect the validity or enforceability of that
provision in any other jurisdiction.
To the full extent permitted by law all legislation which at any time
directly or indirectly:
(a) lessens, varies or affects in favour of the Depositor any
obligation under this Deed; or
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(b) delays, prevents or prejudicially affects the exercise by the
Administrative Agent, any Lender, any Receiver or Attorney, of any power,
is excluded from this Deed.
This Charge and Memorandum shall be binding upon each Depositor and the
Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of each Depositor and the Administrative Agent and the
successors and assigns of the Administrative Agent.
12. Judgment Currency. The obligations of each Depositor, in respect
of any sum due to the Administrative Agent or any Lender hereunder shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other than
the currency in which such sum was originally denominated (the "Original
Currency"), be discharged only to the extent that following receipt by the
Administrative Agent or such Lender of any sum adjudged to be so due in the
Judgment Currency, the Administrative Agent or such Lender, in accordance with
normal banking procedures, purchases the Original Currency with the Judgment
Currency. If the amount of Original Currency so purchased is less than the sum
originally due to the Administrative Agent or such Lender, each Depositor
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent or such Lender, as the case may be, against
such loss, and if the amount of Original Currency so purchased exceeds the sum
originally due to the Administrative Agent or such Lender, as the case may be,
the Administrative Agent or such Lender agrees to remit such excess to such
Depositor.
13. Governing Law and Jurisdiction.
A. This Charge and Memorandum shall be governed by and construed in
accordance with the laws of the Australian Capital Territory and Australia.
B. The Administrative Agent and each Depositor irrevocably agree
for the exclusive benefit of the Administrative Agent that the courts of the
Australian Capital Territory are to have jurisdiction to settle any disputes
which may arise out of or in connection with this Charge and Memorandum and that
accordingly any suit, action or proceeding arising out of or in connection with
this Charge and Memorandum (in this Section 13 referred to as "Proceedings") may
be brought in such court.
C. Nothing in this Section 13 shall limit the right of the
Administrative Agent to take Proceedings against any Depositor in any other
court of competent jurisdiction, nor shall the taking of Proceedings in one or
more jurisdictions preclude the taking of Proceedings in any other jurisdiction,
whether concurrently or not.
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D. Each Depositor irrevocably waives any objection which it may
have now or hereafter to the laying of the venue of any Proceedings in any such
court as is referred to in this Section 13 and any claim that any such
Proceedings have been brought in an inconvenient forum and further irrevocably
agrees that a judgment in any Proceedings brought in the courts of the
Australian Capital Territory or in any other court of competent jurisdiction
shall be conclusive and binding upon it and may be enforced in the courts of any
other jurisdiction.
E. Each Depositor hereby irrevocably agrees that any writ, judgment
or other notice of process shall be sufficiently and effectively served on it
(i) in connection with proceedings in the Australian Capital Territory, if
addressed to the Depositor and delivered to [ ], (ii) to the extent permitted by
applicable law, if a copy thereof is mailed by registered or certified airmail,
postage prepaid, to the address set forth in the Subsidiary Guaranty or (iii) if
served in any other manner permitted by applicable law.
F. Each Depositor hereby consents generally in respect of any
Proceedings arising out of or in connection with this Charge and Memorandum to
the giving of any relief or the issue of any process in connection with such
Proceedings, including, without limitation, the making, enforcement or execution
against any property or assets or whatsoever of any order or judgment which may
be made or given in such Proceedings.
14. Acknowledgement by Depositors. The Depositors confirm that:
(a) they have not entered into any Loan Document in reliance on, or
as a result of, any statement or conduct of any kind of or on behalf of any
Lender or any Affiliate of any Lender (including, without limitation, any
advice, warranty, representation or undertaking); and
(b) no Lender or any Affiliate of any Lender is obliged to do
anything (including, without limitation, disclose anything or give advice).
except as expressly set out in the Loan Documents.
IN WITNESS WHEREOF the parties hereto have caused this Charge and
Memorandum to be duly executed and delivered as a deed on the day and year first
before written.
- 16 -
<PAGE> 222
SCHEDULE I
TELEGRAPH AUSTRALIAN HOLDINGS LIMITED
<TABLE>
<CAPTION>
ISSUER Cert # No. of Shares % Total Outstanding
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John Fairfax Holdings Limited 4,775,000 0.60%
Ordinary Shares
DAILY TELEGRAPH HOLDINGS BV
ISSUER Cert # No. of Shares % Total Outstanding
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John Fairfax Holdings Limited 181,099,606 22.77%
Ordinary Shares
10,500,000 1.32%
Non-voting
Convertible
Debentures
</TABLE>
- 17 -
<PAGE> 223
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
TELEGRAPH AUSTRALIAN HOLDINGS )
LIMITED )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
DAILY TELEGRAPH HOLDINGS BV )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
THE TORONTO-DOMINION BANK )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
- 18 -
<PAGE> 224
EXHIBIT G
FORM OF
ASSIGNMENT AGREEMENT
Reference is made to Section 14.8.1 of the Credit Agreement dated as of May
30, 1996, (as amended or otherwise modified, the "Credit Agreement"), among
First DT Holdings Limited, various financial institutions, and The
Toronto-Dominion Bank, as issuing bank and administrative agent (in such
capacity, the "Administrative Agent"). Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.
_____________________ ("Assignor") and ________________ ("Assignee") hereby
agree as follows:
The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to all of
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to ______% of the Loans, the participation interest in the Letters
of Credit and the Commitment, such purchase and assignment to be effective as of
the effective date set forth herein. After giving effect to such assignment and
delegation, the Assignor's and Assignee's Percentages for the purposes of the
Credit Agreement will be as set forth opposite each such Person's name on the
signature pages hereof.
The effective date of this Agreement shall be the date when the consent of
the Issuing Bank, the Administrative Agent and the Company to this Agreement has
been received and the conditions set forth in clauses (x), (y) and (z) of the
proviso to the first paragraph of Section 14.8.1 of the Credit Agreement shall
be either met or waived. The Assignor hereby instructs the Administrative Agent
to make all payments after the effective date hereof in respect of the interest
assigned hereby directly to the Assignee. The Assignor and the Assignee agree
that all interest and fees accrued up to, but not including, the effective date
of the assignment and delegation being made hereby are the property of the
Assignor, and not the Assignee. The Assignee agrees that, upon receipt of any
such interest or fees, the Assignee will promptly remit the same to the
Assignor.
The Assignee hereby confirms that it has received a copy of the Credit
Agreement and the exhibits related thereto, together with copies of the
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the initial Loans and the issuance of the initial
Letter(s) of Credit thereunder. The Assignee acknowledges and agrees that it
(i) has made and will continue to make such inquiries and has taken and
<PAGE> 225
will take such care on its own behalf as would have been the case had its
Commitments been granted, the Letters of Credit issued and its Loans been made
directly by such Assignee to the Company without the intervention of any Agent,
the Assignor or any other Lender and (ii) has made and will continue to make,
independently and without reliance upon any Agent, the Assignor or any other
Lender and based on such documents and information as it has deemed
appropriate, its own credit analysis and decisions relating to the Credit
Agreement. The Assignee further acknowledges and agrees that no Agent makes
any representations or warranties about the creditworthiness of the Company or
any other party to the Credit Agreement or any other Loan Document or with
respect to the legality, validity, sufficiency or enforceability of the Credit
Agreement or any other Loan Document or the value of any security therefor.
The Assignor represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim.
The Assignee represents and warrants to the Administrative Agent that, as
of the date hereof, the Company will not be obligated to pay any greater amount
under Section 7.6 or Section 8 of the Credit Agreement than the Company is
obligated to pay to the Assignor under such Sections.
Upon the effectiveness of this Agreement:
(a) the Assignee (i) shall be deemed automatically to have become a
party to the Credit Agreement and have all the rights and obligations of a
"Lender" under the Credit Agreement as if it were an original signatory thereto
to the extent specified in the second paragraph hereof; and (ii) agrees to be
bound by the terms and conditions set forth in the Credit Agreement as if it
were an original signatory thereto; and
(b) the Assignor shall be released from its obligations under the
Credit Agreement to the extent specified in the second paragraph hereof.
The Assignor and the Assignee hereby agree that the [Assignor] [Assignee]
will pay the Administrative Agent the processing fee referred to in Section
14.8.1 of the Credit Agreement.
2
<PAGE> 226
The Assignee hereby advises each of you of the following administrative
details with respect to the assigned Loans and Commitments:
(A) Address for Notices:
Institution Name:
Address:
Attention:
Telephone:
Facsimile:
(B) Payment Instructions:
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
___________________, 199_.
Percentage = _______ [Insert Name of Assignee]
By: _____________________
Name:
Title:
Adjusted Percentage = _______ [Insert Name of Assignor]
By: ____________________
Name:
Title:
3
<PAGE> 227
ACCEPTED AND CONSENTED TO
this ____ day of _________, 199_.
THE TORONTO-DOMINION BANK,
as Administrative Agent
By:__________________________________
Name:_____________________________
Title:____________________________
CONSENTED TO
this ____ day of ________, 199_.
FIRST DT HOLDINGS LIMITED
By:__________________________________
Name:_____________________________
Title:____________________________
CONSENTED TO
this __ day of ______, 199_.
THE TORONTO-DOMINION BANK,
as Issuing Bank
By:__________________________________
Name:_____________________________
Title:____________________________
4
<PAGE> 228
SUBORDINATED PROMISSORY NOTE
$193,000,000
August 7, 1996
Chicago, Illinois
FOR VALUE RECEIVED, FIRST DT HOLDINGS LIMITED, a limited liability company
under the laws of England and Wales (the "Company") promises to pay to the order
of HOLLINGER INTERNATIONAL INC. ("Hollinger International"), a Delaware
corporation, in Chicago, Illinois $193,000,000 (the "Loan"), on February 7,
1998.
The Company further promises to pay interest on the Loan evidenced hereby
from the date of such Loan until such Loan is repaid in full at the rate equal
to the Base Rate plus 1.25% per annum. Base Rate means the rate per annum equal
to the rate of interest announced by The Toronto- Dominion Bank in New York as
its reference rate for the determination of interest rates for loans of varying
maturities in Dollars to United States residents of varying degrees of
creditworthiness and being quoted at such time by The Toronto-Dominion Bank in
New York as its "prime rate" from time to time, changing when and as said rate
changes; it being understood that in neither case is such rate necessarily the
lowest rate of interest provided to borrowers by the quoting institution. Such
payments of interest by the undersigned shall be made quarterly on each August
31, November 30, February 28 and May 31 and at maturity, commencing on November
30, 1996. Payments of both principal and interest are to be made in lawful
money of the United States of America. If any payment of principal or interest
on this Promissory Note shall become due on a Saturday, Sunday, or bank holiday
under the laws of the place where payment is received, such payment shall be
made on the next succeeding business day and such extension of time shall in
such case be included in computing interest in connection with such payment.
The Company shall have the right at any time to prepay, without premium or
penalty, all or any part of the unpaid principal balance of this Promissory
Note, provided that at the time of any such prepayment, the Company shall also
pay all accrued interest on the amount of such principal sum so prepaid.
If any of the following events ("Events of Default") shall occur:
(a) default by the Company in the payment of any installment of principal
or interest on this Promissory Note when the same becomes due and payable, which
default continues unremedied for a period of five
<PAGE> 229
(5) days after notice by or the holder of this Promissory Note requesting
that such default be cured;
(b) default by the Company in the performance of or compliance with any
other term or covenant contained in this Promissory Note, which default
continues unremedied for a period of thirty (30) days after notice by the holder
of this Promissory Note requesting that such default be cured;
(c) if the Company shall make a general assignment for the benefit of
creditors, or shall file a voluntary petition in bankruptcy, or shall file any
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, or shall file any answer admitting
or not contesting the material allegations of a petition filed against the
undersigned in any such proceeding or shall seek or consent to or acquiesce in
the appointment of any trustee, receiver or liquidator of the undersigned; or
(d) if there shall be filed against the Company any petition or
application for relief under any bankruptcy or similar law which is not
discharged within sixty (60) days after such petition; or
(e) the Company is unable to pay its debts as they fall due, commences
negotiations with any one or more of its creditors with a view to the general
readjustment or rescheduling of its indebtedness or makes a general assignment
for the benefit of or a composition with its creditors; or
(f) the Company takes any corporate action or other steps are taken or
legal proceedings are started for its winding-up, dissolution, administration or
re-organization or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of it or of any or all of
its revenues and assets; or
(g) any execution or distress is levied against, or an encumbrancer takes
possession of the whole or any part of, the property, undertaking or assets of
the Company;
then, and in any such event, the holder of this Promissory Note may, at any
time, at its option, by written notice to the
<PAGE> 230
Company, declare the entire amount of principal and interest remaining unpaid
on this Promissory Note due and payable.
In case any one or more Events of Default shall occur and be continuing,
the holder of this Promissory Note may proceed to protect and enforce its rights
by an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any covenant contained in this Promissory Note, or
for an injunction against a violation of any of the terms hereof, or in aid of
the exercise of any power granted hereby or by law. No course of dealing and no
delay on the part of the holder of this Promissory Note in exercising any right,
power or remedy shall operate as a waiver thereof or otherwise prejudice rights
of the holder of this Promissory Note. No right conferred hereby to the holder
of this Promissory Note shall be exclusive of any other right referred to herein
or now or hereafter available at law, in equity, by statute or otherwise.
The undersigned waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Promissory Note. In any action on this
Promissory Note, the holder of this Promissory Note need not produce or file the
original of this Promissory Note, but need only produce or file a photocopy of
this Promissory Note certified by such holder to be a true and correct copy of
this Promissory Note.
In addition to and not in limitation of the foregoing, the undersigned
further agrees, subject only to any limitations imposed by applicable law, to
pay all reasonable expenses incurred by the holder of this Note in endeavoring
to collect any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.
THIS NOTE IS THE SUBJECT OF THE SUBORDINATION AGREEMENT DATED AUGUST 7,
1996 BETWEEN THE COMPANY, HOLLINGER INTERNATIONAL AND THE TORONTO- DOMINION
BANK, as Administrative Agent.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH THIS NOTE, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE HOLDER'S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED
<PAGE> 231
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
NEW YORK. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
THE COMPANY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER NOTE AND ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH FROM ANY BANKING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
This Note is made under and governed by the internal laws of the State of
New York.
FIRST DT HOLDINGS LIMITED, a
limited liability company under the
laws of England and Wales
By:__________________________________
Name:
Title:
<PAGE> 232
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement"), dated as of August 7,
1996, is among FIRST DT HOLDINGS LIMITED, a limited liability company under the
laws of England and Wales (the "Company"), HOLLINGER INTERNATIONAL INC., a
Delaware corporation (the "Subordinated Lender"), and THE TORONTO-DOMINION BANK
as administrative agent (in such capacity, the "Administrative Agent") for the
Lenders party to the Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Subordinated Lender has made, and/or may in the future make,
loans and advances to the Company; and
WHEREAS, the Company has entered into that certain Credit Agreement, dated
as of May 30, 1996 (together with all extensions, renewals, amendments,
modifications or supplements, if any, from time to time made thereto, the
"Credit Agreement"), with various financial institutions, The Toronto-Dominion
Bank, as issuing bank, and the Administrative Agent; and
WHEREAS, the execution and delivery of this Agreement is a condition, among
others, to the Company's ability to borrow funds from the Lenders pursuant to
the provisions of the Credit Agreement; and
WHEREAS, as an entity financially interested in the Company, the
Subordinated Lender deems it to be in its best interests to enter into this
Agreement;
NOW, THEREFORE, to induce the Administrative Agent and the Lenders to enter
into the Credit Agreement and induce the Lenders to make the initial Loans
thereunder and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Subordinated
Lender hereby agree with the Administrative Agent as follows:
Capitalized terms used herein and not otherwise defined are used as defined
in the Credit Agreement. The expressions "paid in full" or "payment in full"
shall mean (A) the payment in full in cash of all Senior Indebtedness in
accordance with its terms, or (B) such other satisfaction in full of all Senior
Indebtedness to which the holders of the Senior Indebtedness may agree. "Hedging
Agreements" as used herein means collectively all Hedging Agreements (as such
term is defined in the Credit Agreement) that are entered into with any Lender
or any affiliate of any Lender.
<PAGE> 233
1. For purposes hereof, the term "Senior Indebtedness" means at any time,
collectively, all obligations howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, now or hereafter existing, or due or
to become due of the Company and its Subsidiaries to the Administrative Agent,
the Lenders, or any of them, under the Credit Agreement, the Notes, the other
Loan Documents, the Hedging Agreements and any and all renewals or extensions
and refinancings thereof (including, without limitation, any interest accruing
subsequent to the commencement of bankruptcy, insolvency or similar proceedings
with respect to the Company). The term "Subordinated Debt" means, collectively,
(i) all obligations of the Company to the Subordinated Lender under that certain
Subordinated Promissory Note dated August 7, 1996 in original principal amount
of $193,000,000 made by the Company in favor of the Subordinated Lender, and
(ii) such additional obligations of the Company or any of the Company's
Subsidiaries to the Subordinated Lender which the Subordinated Lender may, by
written Addendum to this Agreement delivered to the Administrative Agent, add to
the scope of this Agreement.
2. (a) All Senior Indebtedness, including all interest and fees and any
other payments due or to become due pursuant to the terms of the instruments
evidencing such Senior Indebtedness shall be paid in full by the Company before
any payment is made on account of the principal, interest, fees or other amounts
on or with respect to any Subordinated Debt, provided, however, that the Company
may make periodic payments of interest to the Subordinated Lender under the
Subordinated Debt so long as such payments are permitted, and in amounts
permitted, under Section 10.9 of the Credit Agreement.
(b) In the event that the Company shall make any payment on account of
the principal, interest, fees or other amounts on or with respect to the
Subordinated Debt to the Subordinated Lender which is not permitted hereunder,
such payment shall be held by the Subordinated Lender in express trust for the
benefit of and shall be paid forthwith over and delivered to the Administrative
Agent and the Lenders for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in accordance with its terms.
(c) Upon the occurrence and during the continuance of an Unmatured Event
of Default or an Event of Default, the Administrative Agent shall have the right
to notify and instruct the Company to thereafter cease to make any and all
payments otherwise due to the Subordinated Lender in connection with any
Subordinated Debt.
-2-
<PAGE> 234
3. The Subordinated Lender agrees that the Subordinated Debt shall be
unsecured, and that if at any time the Subordinated Lender shall be in
possession of any assets of the Company or any Subsidiary of the Company which
are subject to a Lien in favor of the Administrative Agent, the Lenders, or any
of them (the "Collateral"), the Subordinated Lender shall hold such Collateral
in trust for the Administrative Agent and the Lenders so long as any of the
Senior Indebtedness remains unpaid. Until such time as the Senior Indebtedness
has been paid in full and the Commitments and all Hedging Agreements are
terminated, the Subordinated Lender agrees that it shall not exercise any of its
rights under any document, instrument or agreement, or accelerate or collect the
obligations of the Company or any of its Subsidiaries to it, or to realize upon
any of the Collateral or any other assets of the Company or any Subsidiary of
the Company or to attach, levy upon or execute against any of the Collateral or
any other assets of the Company or any Subsidiary of the Company.
4. Upon any distribution of the Collateral, the assets or the properties of
the Company or any of its Subsidiaries or upon any dissolution, winding up,
liquidation or reorganization involving the Company or any of its Subsidiaries
(whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise):
(a) the Administrative Agent and the Lenders shall first be entitled to
receive payment in full of the principal of and interest on the Senior
Indebtedness and all fees and any other payments (including all costs and
expenses) due pursuant to the terms of the instruments evidencing such Senior
Indebtedness before the Subordinated Lender is entitled to receive any payment
on account of any Subordinated Debt;
(b) any payment or distribution of the assets or properties of the
Company or any of its Subsidiaries of any kind or character, whether in cash,
property or securities, to which the Subordinated Lender would be entitled
except for the provisions of this Agreement, shall be paid by the liquidating
trustee or agent or other person making such payment or distribution directly to
the Administrative Agent on behalf of the Administrative Agent and the Lenders;
and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of the assets or properties of the Company or any of its
Subsidiaries of any kind or character, whether in cash, property or securities,
shall be received by the Subordinated Lender on account of principal, interest,
fees or other amounts on or with respect to the Subordinated Debt before all
Senior Indebtedness is paid in full, such payment or distribution shall be
received and held in trust for and shall be
-3-
<PAGE> 235
paid over to the Administrative Agent on behalf of the Lenders for application
to the payment of such Senior Indebtedness until all such Senior Indebtedness
shall have been paid in full.
5. No right of the Administrative Agent or any Lender or any present or
future holder of any of the Senior Indebtedness to enforce subordination as
provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or any of its Subsidiaries, or
the Subordinated Lender, or by any act or failure to act, in good faith, by the
holder of any of the Senior Indebtedness, or by any noncompliance by the Company
or any of its Subsidiaries, or the Subordinated Lender, with the terms of the
Credit Agreement or any other Loan Document or any Hedging Agreement regardless
of any knowledge thereof with which such holder may have or be otherwise
charged.
6. The Subordinated Lender, by its execution of this Agreement, authorizes
and expressly directs the Administrative Agent, on behalf of the Administrative
Agent and the Lenders, to take such action as may be necessary or appropriate,
in the Administrative Agent's sole discretion, from time to time to effectuate
the subordination provided herein and appoints the Administrative Agent its
attorney-in-fact for such purpose, including, without limitation, in the event
of any dissolution, winding up, liquidation or reorganization of the Company or
any of its Subsidiaries (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise)
tending towards liquidation of the business or the assets of the Company or any
of its Subsidiaries, the immediate filing of a claim for the unpaid balance of
its Subordinated Debt in the form required in said proceedings and the taking of
all steps necessary to cause such claim to be approved and the right to vote
such claim at creditors' meetings, with respect to the election of trustees, for
or against acceptance of plans or otherwise as the Administrative Agent deems
necessary or desirable to enforce the provisions of this Agreement.
7. The Administrative Agent and the Lenders may extend, renew, modify or
amend the terms of any of the Senior Indebtedness or any security therefor and
release, transfer, assign, sell or exchange such security and otherwise deal
freely with the Company and its Subsidiaries, or any of them, to the same extent
as could any Person, all without notice to or consent of the Subordinated Lender
and without affecting the liabilities and obligations of the Subordinated Lender
pursuant to the provisions hereof.
8. The Lenders, or any of them, may assign or transfer any or all of the
Senior Indebtedness or any interest herein as
-4-
<PAGE> 236
provided in the Credit Agreement; and notwithstanding any such assignment or
transfer or any subsequent assignment or transfer thereof, such Senior
Indebtedness shall be and remain Senior Indebtedness for the purposes of this
Agreement, and every immediate and successive assignee or transferee of any of
the Senior Indebtedness or of any interest therein shall, to the extent of the
interest of such assignee or transferee in the Senior Indebtedness, be entitled
to the benefits of this Agreement to the same extent as if such assignee or
transferee were such Lender or Lenders.
9. No delay on the part of the Administrative Agent or the Lenders in the
exercise of any right or remedy shall operate as a waiver thereof, and no single
or partial exercise by the Administrative Agent or any Lender of any right or
remedy shall preclude other or further exercise thereof or the exercise of any
other right or remedy; nor shall any modification or waiver of any of the
provisions of this Agreement be binding upon any party hereto except as
expressly set forth in a writing duly signed and delivered by or on any party
hereto.
10. The Subordinated Lender and the Company, for itself and each of its
Subsidiaries, hereby waive (a) notice of acceptance of this Agreement by the
Administrative Agent and the Lenders, (b) notice of the existence or creation or
nonpayment of all or any of the Senior Indebtedness, and (c) all diligence in
the collection or protection of or realization upon the Senior Indebtedness or
the Collateral therefor.
11. The Subordinated Lender hereby agrees to cause all instruments
evidencing Indebtedness subject to the provisions of this Agreement to be
subject to an appropriate legend to the effect that the Indebtedness evidenced
by such instrument is subordinated to the Senior Indebtedness in the manner and
to the extent set forth in this Agreement, and will make, or cause to be made,
appropriate entries in the books and records of the Subordinated Lender to
indicate that the Subordinated Debt is subject to the Senior Indebtedness.
12. The priorities herein specified are applicable irrespective of the
time of creation of any of the Senior Indebtedness or Subordinated Debt.
13. The Company and the Subordinated Lender hereby expressly agree and
represent that this Agreement is to induce the Administrative Agent and the
Lenders, and each of them, to enter into the Credit Agreement and to induce the
Lenders to make Loans thereunder. The provisions hereof shall be binding upon
the successors and assigns of the Company and the Subordinated Lender and shall
inure to the benefit of the Administrative Agent and the Lenders and any
participant of any Lender and all
-5-
<PAGE> 237
subsequent holders of the Senior Indebtedness. It is hereby further agreed
that the Administrative Agent and the Lenders may enforce any and all rights
derived from this Agreement by suit, either in equity or law, for specific
performance of any agreement herein contained or for judgment at law and any
other relief whatsoever appropriate to such action or procedure. In the event
this Agreement shall be enforced by the Administrative Agent, the Lenders, or
any of them, or by its selected counsel, the Company agrees to pay all
reasonable costs and expenses of such enforcement.
14. The subordination provisions set forth in this Agreement shall
continue to be effective or be reinstated, as the case may be, at any time any
payment of any of the Senior Indebtedness or the Subordinated Indebtedness is
rescinded or must otherwise be returned by any holder of the Senior Indebtedness
or the Subordinated Debt upon the insolvency, bankruptcy or reorganization of
the Company or otherwise, all as though such payment had not been made.
15. The Subordinated Lender agrees that it shall not assign, pledge or
hypothecate any Subordinated Debt, except in connection with the Publishing
Facility (as defined in the Credit Agreement).
16. This Agreement shall be interpreted, and the rights and liabilities of
the parties hereto shall for all purposes be governed by and construed and
enforced without giving effect to the principles of conflicts of laws, in
accordance with the laws of the State of New York. Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
17. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN
THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH PARTY HERETO HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH PARTY
HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL
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<PAGE> 238
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE SUBORDINATED LENDER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
18. EACH PARTY HERETO, INCLUDING THE ADMINISTRATIVE AGENT, AND, BY THEIR
ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE LENDERS HEREBY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH FROM
ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
19. This Agreement may be executed in any number of counterparts and by
the parties hereto on separate counterparts, each of which shall be deemed to be
an original, but all such separate counterparts shall together constitute one
and the same instrument.
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<PAGE> 239
IN WITNESS WHEREOF, the Company, the Subordinated Lender and the
Administrative Agent have caused their respective duly authorized officers or
representatives to execute, seal and deliver this Agreement as of the date
first above written.
HOLLINGER INTERNATIONAL INC.,
a Delaware corporation
By:__________________________________
Name: Title:
FIRST DT HOLDINGS LIMITED, a
limited liability company under the
laws of England and Wales
By:__________________________________
Name:
Title:
THE TORONTO-DOMINION BANK
as Administrative Agent
By:__________________________________
Name:_____________________________
Title:____________________________
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<PAGE> 240
Schedule 9.8
Subsidiaries
The Company owns 80,237,138 ordinary shares of Telegraph, representing
approximately 58.9% of the authorized ordinary shares of Telegraph, as well as
5,000,000 (100%) non-voting redeemable preference shares of Telegraph.
Telegraph has the following interests in Subsidiaries:
NAME CLASS AND PROPORTION OF NOMINAL
VALUE OF ISSUED SHARES HELD
Creditscheme Limited (England) Ordinary shares - 100%
Deedtask Limited (England) Ordinary shares - 100%
Telegraph Australian Holdings Limited Ordinary shares - 100%
(held by Creditscheme Limited, Deedtask
Limited and Telegraph as to 40.78%,
56.31% and 2.91%, respectively)
Deedtask Holdings BV (Netherlands) Ordinary shares - 99.9996%**
(held by Telegraph Australian Holdings Limited)
Daily Telegraph Holdings BV Ordinary shares - 99.8997%**
(Netherlands)*
(held by Deedtask Holdings BV)+
Certain Dormant Companies
and Companies with insignificant
assets++ Ordinary shares - 100%
* Telegraph Australian Holdings Limited holds 4,775,000 ordinary
shares of Fairfax and Daily Telegraph Holdings BV holds
184,599,606 ordinary and 7,000,000 non-voting convertible
debentures of Fairfax. These represent in aggregate
approximately 24.7% of Fairfax's issued capital.
** 2979969 Canada Ltd., a subsidiary of Hollinger Inc., holds 10
of the 2,500,010 ordinary shares of each of Daily Telegraph
Holdings BV and Deedtask Holdings BV.
+ Telegraph also holds 2,500 non-cumulative preference shares in
the capital of Daily Telegraph Holdings BV, being the total
outstanding preference share capital of Daily Telegraph
Holdings BV.
++ Slobodon Limited, The Evening Post Limited, Yellov Limited,
The Sunday Telegraph Limited, DT Developments Limited, The
Morning Post Limited, Telegraph Trustees Limited, Young
Telegraph Limited, Telegraph Books Limited, Equalmission
Limited, The Spectator (1828) Limited, The Daily Telegraph
Business Networks Limited, Telegraph Publishing Limited,
Business News Deliveries Limited.
<PAGE> 241
SCHEDULE 10.7.
<PAGE> 242
EXHIBIT J
FORM OF
SCHEME CERTIFICATE
To: The Toronto-Dominion Bank,
as Administrative Agent under the U.K. Credit Agreement
Toronto Dominion (Texas), Inc.
as Administrative Agent under the U.S. Credit Agreement
Toronto Dominion Investments Inc.
as Collateral Agent under the Holdco Facility
Reference is made to:
1. the Credit Agreement, dated as of May 30, 1996 (herein, as amended
or otherwise modified from time to time, called the "U.K. Credit Agreement"),
among First DT Holdings Limited (the "U.K. Borrower"), various financial
institutions (the "U.K. Lenders"), and The Toronto Dominion Bank as issuing
bank and administrative agent;
2. the Amended and Restated Credit Agreement, dated as of May 30, 1996
(herein, as amended or otherwise modified from time to time, called the "U.S.
Credit Agreement"), among Hollinger International Publishing Inc. (the "U.S.
Borrower"), various financial institutions (the "U.S. Lenders"), The
Toronto-Dominion Bank, as issuing bank, and Toronto Dominion (Texas), Inc. as
administrative agent; and
3. the Securities Purchase Agreement, dated as of May 30, 1996
(herein, as amended or otherwise modified from time to time, called the "Holdco
Facility" and, together with the U.K. Credit Agreement and the U.S. Credit
Agreement, the "Facilities"), among Hollinger International Publishing Holdings
Inc. ("Holdco"), Hollinger International Inc. ("Hollinger International"), and
Toronto Dominion Investments Inc. as collateral agent ("TD" and, together with
the U.K. Lenders and the U.S. Lenders, the "Lenders").
<PAGE> 243
Terms used but not otherwise defined herein are used herein as defined in
the relevant Facility.
Each of the U.K. Borrower, the U.S. Borrower, Holdco, and Hollinger
International hereby certify, with respect to each Facility to which they are a
party or a guarantor, as the case may be, that:
1. no Event of Default or Unmatured Event of Default has occurred and
is continuing under such Facility or would result if Loans were to be advanced
thereunder or the Scheme was to become effective as at the date of this
certificate;
2. the representations and warranties contained in such Facility are
true and correct as at the date of this certificate;
3. no event has occurred since December 31, 1995 which may have a
Material Adverse Effect; and
4. each Obligor would, if the Loan were advanced on the date of this
certificate, be able to comply with its obligations under or in respect to the
Facility including, in particular, its ability to satisfy the conditions
precedent and financial covenants applicable to such Obligor.
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<PAGE> 244
IN WITNESS WHEREOF, each of the U.K. Borrower, the U.S. Borrower,
Holdco, and Hollinger have caused this Certificate to be executed and delivered
by its duly authorized officers this _____ day of __________, 19__.
FIRST DT HOLDINGS LIMITED
By:____________________________
Name___________________________
Title__________________________
HOLLINGER INTERNATIONAL PUBLISHING INC.
By_____________________________
Name___________________________
Title__________________________
HOLLINGER INTERNATIONAL PUBLISHING
HOLDINGS INC.
By_____________________________
Name___________________________
Title__________________________
HOLLINGER INTERNATIONAL INC.
By_____________________________
Name___________________________
Title__________________________
-3-
<PAGE> 1
Exhibit 10.03
FIRST AMENDMENT AGREEMENT
THIS FIRST AMENDMENT AGREEMENT (this "Amendment"), dated as of August 6,
1996, is among FIRST DT HOLDINGS LIMITED (the "Company"), the Lenders listed on
the signature pages hereto, and THE TORONTO-DOMINION BANK ("Toronto-Dominion"),
as Issuing Bank and Administrative Agent;
W I T N E S E T H:
WHEREAS, the Company and the Administrative Agent are parties to that
certain Credit Agreement dated as of May 30, 1996 (the "Credit Agreement");
WHEREAS, Toronto-Dominion wishes to assign certain portions of its
Commitment under the Credit Agreement to certain Lenders and the parties desire
to appoint Toronto Dominion Securities (USA), Inc., as Arranger, First Chicago
as Managing Agent and Documentation Agent, Bank of America National Trust and
Savings Association as Managing Agent and Syndication Agent, and Barclays Bank
PLC as Managing Agent under the Credit Agreement; and
WHEREAS, the parties hereto wish to amend the Credit Agreement as
hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of the premises and
the mutual agreements herein contained, hereby agree as follows:
SECTION 1 CREDIT AGREEMENT DEFINITIONS. Capitalized terms used herein that
are defined in the Credit Agreement shall have the same meaning when used herein
unless otherwise defined herein.
SECTION 2 AMENDMENTS TO CREDIT AGREEMENT. Effective on (and subject to
the occurrence of) the First Amendment Effective Date (as defined below), the
Credit Agreement shall be amended as follows:
2.1 Amendments to Section 1. Section 1 of the Credit Agreement is amended
as follows:
(a) The definition of "Acceleration Right" is amended by inserting the
following at the end thereof:
"; provided, however, that no Acceleration Right shall be deemed to have
occurred with respect to the Series A FDTH Preference Shares or the Series B
FDTH Preference Shares unless and until a "Retraction Event" (as such term is
defined in the Share Designation for such Preference Shares) has occurred and a
holder of such
<PAGE> 2
Preference Shares shall have exercised its right to require any of such
Preference Shares to be redeemed."
(b) The definition of "Asset Coverage Ratio" is amended in its entirety
to read as follows:
Asset Coverage Ratio means, as of any date, the ratio of (a) the sum of (i)
5.5 multiplied by the Operating Cash Flow for the immediately preceding four
Fiscal Quarters excluding any dividends received from Fairfax or Southam plus
(ii) 88% of the Sterling Equivalent of the Closing Price of the Fairfax Shares
as of the most recent trading date on the Australian Stock Exchange to (b)
Funded Debt. In the event that the Telegraph Ordinary Shares pledged by the
Company and TelHoldco pursuant to the Company Pledge Agreement (the "Pledged
Telegraph Shares") constitute more than 88% of all issued and outstanding Voting
Stock of Telegraph, the percentage in clause (a)(ii) above shall be increased to
the percentage which the Pledged Telegraph Shares represent of the issued and
outstanding Voting Stock of Telegraph (rounded to the second decimal place).
(c) The definition of "Dutch Pledge Agreement" is amended in its entirety
to read as follows:
Dutch Pledge Agreement means each of (a) a Pledge Agreement dated the
Closing Date executed by Telegraph Australian Holdings Limited, (b) a Pledge
Agreement dated the Closing Date executed by Deedtask Holding B.V., and (c) a
Pledge Agreement dated the Closing Date executed by Telegraph, each
substantially in the form attached hereto as Exhibit E-5, as amended,
supplemented or otherwise modified from time to time.
(d) The definition of "Dollar Equivalent" is deleted in its entirety.
(e) The definition of "Excess Cash Flow" is amended by deleting the words
"minus (vii) scheduled principal payments on Funded Debt other than the Loans
during such Fiscal Quarter".
(f) The definition of "FDTH Holdco Subordinated Note" is amended in its
entirety to read as follows:
FDTH/Holdco Subordinated Note means the U.S.[$__________] unsecured
promissory note dated as of the Closing Date issued by the Company in favor of
Hollinger International and subordinated to the
2
<PAGE> 3
obligations of the Company pursuant to this Amendment and the Loan Documents
substantially in the form of Exhibit H, as amended, supplemented, or otherwise
modified from time to time.
(g) The definition of "FDTH/Holdco Subordination Agreement" is amended in
its entirety to read as follows:
FDTH/Holdco Subordination Agreement means the subordination agreement dated
as of the Closing Date among Hollinger International, FDTH and the
Administrative Agent relating to the FDTH/Holdco Subordinated Note substantially
in the form of Exhibit I, as amended, supplemented or otherwise modified from
time to time.
(h) The definition of "Funded Debt" is amended in its entirety to read as
follows:
Funded Debt means the sum of (a) all Debt of the Company and its
Subsidiaries pursuant to clauses (a), (b), (d), and (h) of the definition of
Debt plus the Stated Amount of all Letters of Credit, minus (b) Debt of the
Company to its Subsidiaries and Debt of its Subsidiaries to the Company or to
other Subsidiaries and Debt under the FDTH/Holdco Subordinated Note.
(i) The definition of "Guaranties" is amended in its entirety to read as
follows:
Guaranties means the Hollinger International Guaranty, the Subsidiary
Guaranty, the Dutch Subsidiary Guaranties and any guaranty executed by the
Company in connection with the Telegraph Assumption.
(j) The definition of "Publishing Pledge Agreement" is deleted in its
entirety.
(k) The definition of "Telegraph" is amended in its entirety to read as
follows:
Telegraph means, (a) prior to its registration as a private limited company
The Telegraph plc, a public limited liability company incorporated under the
laws of England and Wales and (b) thereafter, Telegraph Group Limited, a limited
liability company incorporated under the laws of England and Wales.
(l) The definition of "Total Interest Expense" is amended by inserting
the following at the end thereof:
3
<PAGE> 4
Notwithstanding the foregoing, for purposes of calculating Excess Cash Flow for
periods ending prior to the Closing Date, Total Interest Expense shall be
calculated based on the actual Funded Debt outstanding and the interest accrued
thereon during the relevant period.
(m) Section 1 of the Credit Agreement is further amended by adding the
following definitions in the proper alphabetical order:
(i) Consent of Obligors has the meaning set forth in Section 5(b) of
the First Amendment Agreement.
(ii) Dormant Subsidiaries means The Spectator (1828) Limited, The
Daily Telegraph Business Network Limited, Telegraph Publishing Limited,
Business News Deliveries Limited, Slobodon Limited, The Evening Post
Limited, Yellov Limited, The Sunday Telegraph Limited, DT Developments
Limited, The Morning Post Limited, Telegraph Trustees Limited, Young
Telegraph Limited, Telegraph Books Limited, and Equalmission Limited.
(iii) Dutch Subsidiary Guaranties means each of the Guaranties dated
the Closing Date executed by Deedtask Holdings B.V. and Daily Telegraph
Holdings BV.
(iv) First Amendment Agreement means the First Amendment Agreement
dated as of August 6, 1996, among the Company, the Lenders, and
Toronto-Dominion.
(v) Purchase Option has the meaning set out in the Scheme Circular.
(vi) Sterling Equivalent means, with respect to Australian Dollars,
Canadian Dollars or U.S. Dollars at any time for the determination thereof,
the equivalent amount of Sterling obtained by converting Australian
Dollars, Canadian Dollars or U.S. Dollars as the case may be, involved in
such computation into Sterling at the spot rate quoted by the
Administrative Agent for the purchase of Sterling with Australian Dollars,
Canadian Dollars or U.S. Dollars, as the case may be, at its foreign
exchange trading center located in London England, or such other location
as the Administrative Agent may designate from time to time.
(vi) Publishing Non-Redemption Agreement means the Non-Redemption
Agreement dated the Closing Date among Publishing, Telegraph, and
Toronto-Dominion.
4
<PAGE> 5
2.2 Section 2.1(b). Section 2.1(b) is amended in its entirety to read as
follows:
"(b) the Issuing Bank agrees to issue Letters of Credit at the request of
and for the account of the Company from time to time before the Commitment
Termination Date and, as more fully set forth in Section 2.5, each Lender agrees
to purchase a participation in each such Letter of Credit, provided that the
aggregate Stated Amount of all Letters of Credit shall not at any time exceed
the lesser of (i) L5,100,000 or (ii) an amount equal to (A) the aggregate amount
of the Commitments minus (B) the aggregate principal amount of all outstanding
Loans."
2.3 Section 2.3. The first sentence of Section 2.3 of the Credit
Agreement is amended by inserting the following at the end thereof:
", such notice shall include a calculation of the Asset Coverage Ratio after
giving effect to the requested borrowing and any borrowings and Letters of
Credit which have been requested but not yet funded or issued, as the case may
be."
2.4 Section 2.4. Section 2.4 of the Credit Agreement is amended in its
entirety to read as follows:
Letter of Credit Procedures. The Company shall give notice to the Issuing
Bank of the proposed issuance of each Letter of Credit on a Business Day which
is at least three Business Days (or such lesser period as to which the Issuing
Bank may agree) prior to the proposed date of issuance of such Letter of Credit
which notice shall include a calculation of the Asset Coverage Ratio after
giving effect to the requested Letter of Credit and any Letters of Credit or
borrowings which have been requested but not yet issued or funded, as the case
may be. Each such notice shall be accompanied by a Letter of Credit
Application, duly executed by the Company and in all respects satisfactory to
the Issuing Bank, together with such other documentation as the Issuing Bank may
reasonably request in support thereof, it being understood that each Letter of
Credit Application shall specify, among other things, the amount of the Letter
of Credit, the date on which the proposed Letter of Credit is to be issued, the
expiration date of such Letter of Credit which shall not be later than (x)
February 1, 2002 in the case of the Letter of Credit issued in respect of the
FDTH Loan Notes and (y) five Business Days prior to the Commitment Termination
Date in the case of all other Letters of Credit and whether such Letter of
Credit is to be
5
<PAGE> 6
transferable in whole or in part. Subject to the satisfaction of the
conditions precedent set forth in Section 11 with respect to the issuance of
such Letter of Credit, the Issuing Bank shall issue such Letter of Credit on
the requested issuance date.
2.5 Section 6.1.2(b). Section 6.1.2(b) of the Credit Agreement is amended
by deleting the words "three consecutive Business Days" and inserting therefor
the words "five consecutive Business Days".
2.6 Section 6.1.2. Section 6.1.2 of the Credit Agreement is amended by
adding the following new subsection (f) thereto:
(f) On the date that the Company receives any special dividend on its
Telegraph shares paid pursuant to the Scheme, the Commitment shall, without
further action, automatically and permanently be reduced by an amount equal to
such dividend.
2.7 Section 6.2.3. Section 6.2.3 of the Credit Agreement is amended by
inserting the following at the end thereof:
"All prepayments of Loans (whether voluntary or mandatory) shall first be
applied to repayment of Loans the proceeds of which were used for the purposes
set forth in Sections 10.12(b), (c) and (d)."
2.8 Section 10.1.3. Section 10.1.3 of the Credit Agreement is amended by
inserting, following the words "chief operating officer", the words ", the Vice
President of Finance".
2.9 Section 10.7(c). Section 10.7(c) of the Credit Agreement is amended
by deleting the figure "U.S. $100,000,000" and inserting ["U.S. $__________"]
therefor.
2.10 Section 10.7(d). Section 10.7(d) of the Credit Agreement is amended
in its entirety to read as follows:
"(d) unsecured Debt of the Company to its Wholly-Owned Subsidiaries
provided such debt if incurred after the Effective Date is subordinated to the
Loans on terms and conditions satisfactory to the Required Lenders;"
2.11 Section 10.7(h). Section 10.7(h) of the Credit Agreement is amended
in its entirety to read as follows:
"(h) Debt of Telegraph outstanding on the Effective Date not exceeding
L45,000,000 and listed on Schedule 10.7 under the heading "Continuing Debt" (for
purposes of calculating the amount of Continuing Debt, the amount of
6
<PAGE> 7
Telegraph's net obligations, if any, under each Hedging Agreement (determined
on the mark-to-market value for such Hedging Agreement based upon a readily
available quotation provided by a recognized dealer in such Hedging Agreements)
shall be included) and other Debt hereafter incurred by Subsidiaries in
connection with Liens permitted by Section 10.8, and extensions, renewals and
refinancings of any Debt (other than Hedging Agreements) described in this
clause (h) so long as the permitted or available principal amount thereof is
not increased;"
2.12 Section 10.7(m). Section 10.7(m) of the Credit Agreement is amended
in its entirety to read as follows:
"(m) Redeemable Capital Stock of the Company, Telegraph and Daily Telegraph
Holdings BV outstanding on the Effective Date; and"
2.13 Section 10.7. Section 10.7 of the Credit Agreement is further amended
by inserting the following new subsection (n) at the end thereof:
"(n) the "C" Ordinary Shares of Telegraph issued to Publishing pursuant to
the Publishing/Telegraph Subscription Agreement."
2.14 Section 10.8(j). Section 10.8(j) of the Credit Agreement is amended
in its entirety to read as follows:
(j) Liens securing Subsidiary Notes; and
2.15 Section 10.9(a)(iv). Section 10.9(a)(iv) of the Credit Agreement is
amended in its entirety to read as follows:
(iv) declare or pay any dividend or distribution on any Capital Stock
of any Subsidiary to any Person (other than (x) with respect to any Capital
Stock held by the Company or any of its Wholly-Owned Subsidiaries or (y)
with respect to Capital Stock held by Publishing or TelHoldco or by any
other Person (other than another Affiliate of the Company or an Affiliate
of such Affiliate) made on a pro rata basis consistent with the ownership
interests in such Capital Stock to the owners of such Capital Stock, except
that, in the case of the Capital Stock of a Subsidiary that is a Guarantor,
(i) no Unmatured Event of Default or Event of Default shall have occurred
and be continuing and (ii) no holders of any other Debt of the Company or
any Subsidiary shall have an Acceleration Right);
7
<PAGE> 8
2.16 Sections 10.9(a)(1) and (2). Sections 10.9(a)(1) and (2) of the
Credit Agreement are amended in their entirety to read as follows:
(1) the Company may make Restricted Payments pursuant to paragraphs (i) and
(iii) above in an amount equal to the sum of regular quarterly dividends payable
on the DTH Preference Shares and the Series A and Series B FDTH Preference
Shares (including dividends attributable to the U.K. Advance Corporation Tax
refund and other tax indemnifications) provided (A) no Unmatured Event of
Default or Event of Default shall have occurred and be continuing or shall
result from the payment of such Restricted Payment; (B) no holders of any other
Debt of the Company or any Subsidiary shall have an Acceleration Right; and (C)
after giving effect to such payment, the Interest/Restricted Payment Coverage
Ratio is 1.0:1.0 or greater and (2) each Fiscal Quarter the Company may make
Restricted Payments pursuant to paragraph (vii) above, and Restricted Payments
pursuant to paragraph (i) above in excess of the Restricted Payments permitted
pursuant to clause (1) above and/or pay interest on the FDTH/Holdco Subordinated
Note, in an amount equal to the lesser of (x) Excess Cash Flow and (y) US
$3,750,000 provided (A) no Unmatured Event of Default or Event of Default shall
have occurred and be continuing or shall result from the payment of such
Restricted Payment or interest and (B) no holders of any other Debt of the
Company or any Subsidiary shall have an Acceleration Right.
2.17 Section 10.10(a). Section 10.10(a) of the Credit Agreement is amended
in its entirety to read as follows:
(a) Investments existing on the Effective Date identified in Schedule
10.10 and loans or advances to DTH existing on the Closing Date in an amount not
to exceed L20,100,000;
2.18 Section 10.10(c). Section 10.10(c) of the Credit Agreement is amended
in its entirety to read as follows:
(c) Investments by the Company in its Subsidiaries or by any Subsidiary
in its Wholly-Owned Subsidiary, in the form of contributions to capital or loans
or advances; provided that, (i) any loans made after the Effective Date are
evidenced by Subsidiary Notes which have been pledged pursuant to a Pledge
Agreement, (ii) the aggregate amount of Investments in Dormant Subsidiaries
after the Effective Date shall not exceed L5,000 and (iii) immediately before
and after giving effect to such Investment, no Unmatured Event of Default or
Event of Default shall have occurred and be continuing; provided, further, that
no Investments shall be made in HTH;
8
<PAGE> 9
2.19 Section 10.19(g). Section 10.19(g) is amended in its entirety to read
as follows:
"(g) the Joint Venture Agreement dated April 13, 1993 among Hollinger Inc.,
Telegraph, HTH and Deedtask Limited and assumed by FDTH (other than as provided
in the Hollinger Inc. Subordination Agreement)"
2.20 Section 10.26. Section 10.26 of the Credit Agreement is amended by
deleting the words "and Subsidiary Security Agreement" each time they appear in
the Section.
2.21 Sections 10.18, 10.30 and 11.2.12. Notwithstanding the provisions of
Sections 10.18(b), 10.30(a) and 11.2.12 of the Credit Agreement, the Dormant
Subsidiaries shall not be required to execute the Subsidiary Guaranty or provide
the certificates referred to in Section 11.2.12 of the Credit Agreement;
provided, however, Telegraph shall pledge the stock of the Dormant Subsidiaries
as required under Section 10.30 of the Credit Agreement.
2.22 Section 11.1.4. Section 11.1.4 of the Credit Agreement is amended by
deleting the reference to "Exhibit C-1" and inserting "Exhibit C- 2" therefor.
2.23 Section 11.1.7. Section 11.1.7 of the Credit Agreement is amended by
deleting the reference to "Exhibit L" and inserting "Exhibit D" therefor.
2.24 Section 11.2.2. Section 11.2.2 of the Credit Agreement is amended in
its entirety to read as follows:
11.2.2 Holdco Facility and Publishing Credit Agreement. The
Administrative Agent shall have received evidence, reasonably satisfactory to
the Administrative Agent, that each of the Holdco Facility and the Publishing
Credit Agreement has closed on terms and conditions reasonably satisfactory to
the Administrative Agent (or equity and/or debt proceeds are available in lieu
of the Holdco Facility and/or a portion of the Commitments) and that sufficient
cash will be available to the Company to consummate the Scheme and to repay the
Existing Debt Facilities, taking into account the Loans hereunder and the loans
under the Holdco Facility and the Publishing Credit Agreement (or equity and/or
debt proceeds in lieu thereof).
9
<PAGE> 10
2.25 Section 11.2.17. Section 11.2.17 of the Credit Agreement is amended
by deleting "CT Corporation Systems" and inserting "Prentice Hall" therefor.
2.26 Section 11.2. Section 11.2 of the Credit Agreement is amended by
adding the following new subsection 11.2.20 at the end thereof:
11.2.20 DTH/FDTH Preference Share Agreement. Hollinger shall have entered
into an agreement with the Administrative Agent in form and substance
satisfactory to the Administrative Agent whereby Hollinger Inc. agrees not to
exercise its rights under the DTH/FDTH Preference Share Agreement dated October
13, 1995 between Hollinger Inc. and Hollinger International.
2.27 Section 12.1.2. Section 12.1.2 of the Credit Agreement is amended in
its entirety to read as follows:
12.1.2 Default under Other Debt. (a) Default in the payment when due
(subject to any applicable grace period), whether by acceleration or otherwise,
of any other Debt of Hollinger International, Publishing, the Company, Telegraph
or any other Subsidiary or (b) default in the performance or observance of any
obligation or condition (subject to any applicable grace period) with respect to
any such other Debt of Hollinger International, Publishing, the Company,
Telegraph or any other Subsidiary, if, in the case of either clause (a) or (b)
above, the effect of such default is to permit the holder of such Debt to
accelerate the maturity of (or there is matured and unpaid) such other Debt
aggregating L2,000,000, in the case of Hollinger International, Publishing, the
Company and Telegraph (L500,000 with respect to any other Subsidiary) or more;
provided, however, that no Default or Event of Default shall be deemed to have
occurred with respect to the Series A FDTH Preference Shares or the Series B
FDTH Preference Shares unless and until a "Retraction Event" (as such term is
defined in the Share Designation for such Preference Shares) has occurred and a
holder of such Preference Shares shall have exercised its right to require any
of such Preference Shares to be redeemed.
2.28 Section 14.15. Section 14.15 of the Credit Agreement is amended by
inserting the following between the third and fourth sentences thereof:
AS AN ALTERNATIVE METHOD OF SERVICE, THE COMPANY FURTHER IRREVOCABLY
APPOINTS PRENTICE HALL AS ITS PROCESS AGENT TO RECEIVE, ON ITS BEHALF AND ON
BEHALF OF ITS PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND
10
<PAGE> 11
ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH
SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE
BORROWER IN CARE OF THE PROCESS AGENT.
2.29 Section 14.18. Section 14.18 of the Credit Agreement is amended by
adding the following at the end thereof:
In connection with the Telegraph Assumption, the Company shall provide a
calculation of the Asset Coverage Ratio after giving effect to such Assumption
and the redemption of Telegraph Ordinary Shares from FDTH in connection with the
Telegraph Assumption.
2.30 Schedule 9.8. Schedule 9.8 of the Credit Agreement is deleted in its
entirety and Schedule 9.8 to this Amendment is substituted therefor. The
Lenders and the Administrative Agent acknowledge (i) after the Effective Date
Telegraph formed a new Subsidiary, Strawberry Hill Executives Limited, and (ii)
each of Strawberry Hill Executives Limited and that Cloverhawk Limited will be
sold for a minimal sum on or shortly after the Closing Date and shall not be
considered a Subsidiary under the Credit Agreement.
2.31 Schedule 10.7. Schedule 10.7 of the Credit Agreement is deleted in
its entirety and Schedule 10.7 to this Amendment is substituted therefor. The
Company represents that all Debt of Telegraph and its Subsidiaries is either
intercompany Debt, Debt listed on Schedule 10.7 or included in the definition of
Existing Debt Facilities.
2.32 Schedule 10.10. The Lenders and the Administrative Agent acknowledge
that Telegraph Connections Limited (a/k/a Lamponions Limited) listed on Schedule
10.10 to the Credit Agreement has been dissolved.
2.33 Schedule 14.3. Schedule 14.3 of the Credit Agreement is deleted in
its entirety and Schedule 14.3 attached hereto is substituted therefor.
2.34 Exhibit B. Exhibit B to the Credit Agreement is deleted in its
entirety and Exhibit A to this Amendment is substituted therefor.
2.35 Exhibit H. Exhibit H to the Credit Agreement is deleted in its
entirety and Exhibit B to this Amendment is substituted therefor.
2.36 Exhibit I. Exhibit I to the Credit Agreement is deleted in its
entirety and Exhibit C to this Amendment is substituted therefor.
11
<PAGE> 12
SECTION 3 PUBLISHING PLEDGE AGREEMENT. The Publishing Pledge Agreement
shall be automatically terminated and the collateral pledged thereunder released
effective on the First Amendment Effective Date without further action and each
of the Credit Agreement and each other Loan Document is amended to delete any
and all references to the Publishing Pledge Agreement.
SECTION 4 REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders
and the Administrative Agent to execute and deliver this Amendment, the Company
hereby represents and warrants to each Lender and to the Administrative Agent
that:
(a) no Event of Default or Unmatured Event of Default has occurred and is
continuing or will result from the execution and delivery or effectiveness of
this Amendment; and
(b) the warranties of the Company contained in Section 9 of the Credit
Agreement are true and correct as of the date hereof, with the same effect as
though made on such date.
SECTION 5 CONDITIONS TO EFFECTIVENESS. The amendments set forth in Section
2 hereof shall become effective on the date (the "First Amendment Effective
Date") when the Administrative Agent shall have received all of the following,
each in form and substance satisfactory to the Administrative Agent:
(a) six counterparts of this Amendment executed by all of the parties
hereto;
(b) six letters executed by each Effective Date Obligor and substantially
in the form of Exhibit D hereto (the "Consent of Obligors");
(c) six certificates of an authorized officer of the Company as to the
items set forth in Section 4 of this Amendment; and
(d) such other documents as the Administrative Agent or any Lender may
reasonably request;
provided, however, that the amendment provided for in Section 2.1(a) of this
Amendment restating the Asset Coverage Ratio definition shall only be effective
upon (i) satisfaction of the conditions set forth in Sections 5(a) through 5(d)
above, (ii) termination of the Holdco Facility and (iii) reduction of the
Commitment under the Credit Agreement by $75,000,000.
SECTION 6 APPLICATION OF DEBT/EQUITY PROCEEDS. Hollinger International
entered into underwriting agreements on August 1,
12
<PAGE> 13
1996 to issue (a) 10,000,000 shares of its Class A Common Stock (the "Equity
Offering"), plus an additional 1,500,000 shares subject to over- allotment
options (the "Equity Greenshoe") and (b) 18,000,000 9.75% Preferred Redeemable
Increased Dividend Equity Securities (the "PRIDES Offering") depositary shares
representing one half share of Series B Convertible Preferred Stock, plus an
additional 2,700,000 PRIDES subject to over-allotment options (the "PRIDES
Greenshoe"). The Lenders agree that notwithstanding the provisions of Section
6 of the Credit Agreement, the Debt/Equity Proceeds from the Equity Offering,
the PRIDES Offering, the Equity Greenshoe, if any, and the PRIDES Greenshoe, if
any (collectively the "Equity/PRIDE Proceeds") shall be applied as follows:
(a) the first $100,000,000 of Equity/PRIDE Proceeds shall be used to
replace the funds which would have been provided by the Holdco Facility,
(b) the next $75,000,00 of Equity/PRIDE Proceeds shall be used to replace
the funds which would have been available absent the $75,000,000 mandatory
commitment reduction under the Credit Agreement, and
(c) thereafter, 50% of the Equity/PRIDE Proceeds remaining after
application as required by subsections (a) and (b) above, shall be applied as a
permanent repayment of the CIBC Credit Facility such repayment to be made within
ten Business Days of receipt of such Equity/PRIDE Proceeds and 50% may be
retained by Hollinger International.
SECTION 7 FIRST AMENDMENT EFFECTIVE DATE ASSIGNMENTS. By its execution of
this Amendment Toronto-Dominion agrees, and by its execution of this Amendment
each of the Lenders set forth on Schedule 1.1 attached hereto other than
Toronto-Dominion (each an "Assignee Lender" and collectively the "Assignee
Lenders") agrees, that:
(a) effective as of the First Amendment Effective Date, (i)
Toronto-Dominion (the "Assignor Lender") will sell and assign an interest in and
to 20% of the Assignor Lender's respective rights and obligations under the
Commitment and its participation in Letters of Credit existing as of the First
Amendment Effective Date (such Commitment and participation in Letters of Credit
of the Assignor Lender being the "Assigned Interests") to each Assignee Lender,
and (ii) after giving effect to and on the First Amendment Effective Date, each
Assignee Lender will purchase and assume the Assigned Interests;
(b) as of the First Amendment Effective Date, prior to giving effect to
any assignment, purchase or assumption
13
<PAGE> 14
under this Section 5 as of such date, the Assignor Lender represents and
warrants, as to the assignment effected by the Assignor Lender, that as of the
Effective Date: (i) it has 100% of the Commitment under the Credit Agreement;
and (ii) that the Assignor Lender is the legal and beneficial owner of the
Assigned Interests being assigned by it hereunder and that such Assigned
Interests are free and clear of any adverse claim or encumbrance by the
Assignor Lender;
(c) each of the Assignor Lender and each Assignee Lender confirms and
agrees with each other as to the assignment effected by the Assignor Lender and
to the purchase and assumption effected by such Assignee Lender, as the case may
be, as follows: (i) except as set forth in Section 6(b), the Assignor Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Credit Agreement or this Amendment or with respect to the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement, any other "Loan Document" (as defined in the Credit
Agreement), this Amendment or any other Loan Document; (ii) the Assignor Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Company or any Guarantor or the performance or
observance by the Company or any Guarantor of any of its obligations under the
Credit Agreement, any other "Loan Document" (as defined in the Credit
Agreement), this Amendment or any other Loan Document; (iii) each Assignee
Lender confirms that it has received such documents and information as it has
deemed appropriate to make its own credit analysis and decision to execute and
deliver this Amendment and agrees that it shall have no recourse against, any
Agent, the Issuing Bank, the Assignor Lender or any other Lender with respect to
any matters relating to the Credit Agreement or this Amendment; and (iv) each
Assignee Lender will, independently and without reliance upon any Agent, the
Issuing Bank or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement and the other Loan
Documents;
(d) effective as of the First Amendment Effective Date, (i) each Assignee
Lender shall be and be deemed a party to the Credit Amendment and, to the extent
provided in this Amendment, have the rights and obligations of a Lender
hereunder and (ii) the Assignor Lender shall, to the extent provided herein,
relinquish its rights and be released from
14
<PAGE> 15
its obligations under the Credit Amendment as to any assignment effected
pursuant to this Section 6; and
(e) from and after the First Amendment Effective Date, the Administrative
Agent shall make all payments under this Amendment in respect of the Assigned
Interests assigned hereby (including, all payments of principal, interest and
commitment fees with respect thereto) to each Assignee Lender as a Lender
hereunder.
SECTION 8 GENERAL.
8.1 Reaffirmation of Loan Documents. From and after the date hereof, each
reference that appears in any other Loan Document to the Credit Agreement shall
be deemed to be a reference to the Credit Agreement as amended hereby. As
amended hereby, the Credit Agreement is hereby reaffirmed, approved and
confirmed in every respect, and shall remain in full force and effect.
8.2 Counterparts; Effectiveness. This Amendment may be executed by the
parties hereto in any number of counterparts and by the different parties on
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Agreement.
8.3 Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. THIS AMENDMENT CONSTITUTES THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDES ANY PRIOR AGREEMENTS WITH RESPECT THERETO.
8.4 Loan Document. Each of this Amendment and the Consent of Obligors is
a Loan Document.
15
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
FIRST DT HOLDINGS LIMITED
By: /s/ KENNETH L. SEROTA
-----------------------
Title: Vice President
<PAGE> 17
THE TORONTO-DOMINION BANK, individually, as
Issuing Bank and as Administrative Agent
By: /s/ ELIZABETH BARRETT HACKEL
--------------------------------
Title: Director
<PAGE> 18
THE FIRST NATIONAL BANK OF CHICAGO,
individually, as Managing Agent and as
Documentation Agent
By: /s/ JEFFREY B. BAKALAR
---------------------------
Title: Vice President
<PAGE> 19
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, individually, as Managing Agent
and as Syndication Agent
By: /s/ RUSSELL D. SOLOMON
-----------------------------
Title: Vice President
<PAGE> 20
BARCLAYS BANK PLC,
individually and as Managing Agent
By: /s/ FRANK J. SISSINI
------------------------
Title: Director
<PAGE> 21
Exhibit D to
First Amendment Agreement
____________, 1996
The Toronto-Dominion Bank
as Administrative Agent
Re: Credit Agreement dated as of May 30, 1996, among First DT
Holdings Limited, various financial institutions party thereto
and The Toronto-Dominion Bank, as Issuing Bank and
Administrative Agent
Ladies/Gentlemen:
Please refer to the following documents: (a) the above referenced
Credit Agreement, (the "Credit Agreement"), (b) the Guaranty, dated as of May
30, 1996, to which each of Hollinger International Inc. and TelHoldco Inc. is a
party, (c) the Deed of Charge and Memorandum of Deposit dated May 30, 1996 to
which DT Holdings Limited is a party, (d) the letter agreement dated May 30,
1996 to which Hollinger International Publishing Inc. is a party, and (e) the
First Amendment Agreement (the "First Amendment Agreement"), dated as of August
6, 1996, among First DT Holdings Limited, various financial institutions party
thereto and The Toronto-Dominion Bank, as Issuing Bank and Administrative
Agent. Capitalized terms which are used in this letter but are not defined
herein have the meanings which the Credit Agreement (as amended by the First
Amendment Agreement) assigns to those terms.
The First Amendment Agreement amends the Credit Agreement. As a
condition to the effectiveness of the First Amendment Agreement, each of the
undersigned is required to deliver this Letter Agreement to the Administrative
Agent.
Each of the undersigned hereby confirms and agrees that (i) each Loan
Document to which it is a party is hereby reaffirmed, approved and confirmed in
every respect, (ii) each such Loan Document and any agreement, instrument,
certificate and document
A-1
<PAGE> 22
given in connection therewith has been, is and shall remain in full force and
effect and (iii) the amendments made pursuant to the First Amendment Agreement
shall not impair in any way any of its obligations under any Loan Document to
which it is a party.
Very truly yours,
HOLLINGER INTERNATIONAL INC.
By:___________________________
Title:________________________
TELHOLDCO INC.
By:___________________________
Title:________________________
DT HOLDINGS LIMITED
By:___________________________
Title:________________________
HOLLINGER INTERNATIONAL
PUBLISHING INC.
By:___________________________
Title:________________________
A-2
<PAGE> 23
EXHIBIT A to
FIRST AMENDMENT
AGREEMENT
EXHIBIT B
FORM OF
COMPLIANCE CERTIFICATE
To: The Toronto-Dominion Bank
as Administrative Agent
Reference is made to the Credit Agreement, dated as of May ______, 1996
(herein, as amended or otherwise modified from time to time, called the "Credit
Agreement"), among First DT Holdings Limited (the "Company"), various financial
institutions, and The Toronto-Dominion Bank, as Issuing Bank and Administrative
Agent. Terms used but not otherwise defined herein are used herein as defined
in the Credit Agreement.
I. Report. Enclosed herewith is a copy of the [annual
audit/quarterly] report of the Company as at ____________, 19__ (the
"Computation Date"), which report fairly presents the financial condition
and results of operations of the Company and its Subsidiaries, as of the
Computation Date.
II. Financial Tests. The Company hereby certifies and warrants
to you that the following is a true and correct computation as at the
Computation Date of the following ratios and/or financial restrictions
contained in Section 10 of the Credit Agreement:
A. Section 10.6.1 Asset Coverage Ratio.
(1) Operating Cash Flow for the preceding four Fiscal Quarters ending
on the Computation Date:
(a) Consolidated Net Income for the preceding four Fiscal Quarters
ending on the Computation Date: L_______
<PAGE> 24
(b) The consolidated interest expense and other financing costs of
the Company and its Subsidiaries deducted in determining Consolidated Net Income
(Loss) for the preceding four Fiscal Quarters ending on the Computation Period:
L_______
(c) all depreciation and amortization of assets (including goodwill
and other intangible assets) of the Company and its Subsidiaries deducted in
determining Consolidated Net Income (Loss) for the preceding four Fiscal
Quarters ending on the Computation Date: L_______
(d) all federal, state, local and foreign income taxes (whether paid
or deferred) of the Company and its Subsidiaries deducted in determining
Consolidated Net Income for the preceding four Fiscal Quarters ending on the
Computation Date: L_______
(e) other non-cash expenses and all extraordinary and non-recurring
expenses (including all one-time, non-recurring transaction expenses associated
with the Scheme, to the extent such expenses are included in determining
Consolidated Net Income (Loss)) deducted in determining Consolidated Net Income
(Loss) for the preceding four Fiscal Quarters ending on the Computation Date:
L_______
<PAGE> 25
(f) Item (a) plus Item (b) plus Item (c) plus Item (d) plus Item (e):
L_______
(2) Dividends received by the Company from either Fairfax or Southam
in the preceding four Fiscal Quarters ending on the Computation Date:
L_______
(3) Item (1)(f) minus Item (2): L_______
(4) Item (3) multiplied by 5.5: L_______
(5) Number of Fairfax Shares pledged _______
(6) The Closing Price of one Fairfax Share as of the most recent
trading date (being _________, 1996) on the Australian Stock Exchange: A$_______
(7) Market Value of pledged Fairfax Shares (in A$1) (Item (5)
multiplied by Item (6)) A$_______
(8) The Sterling Equivalent of Australian Dollars (Item III.A.):
A$1 = L_______
(9) The Sterling Equivalent of the Closing Price of the Pledged
Fairfax Shares (Item (7) multiplied by Item (8):
L_______
(10) Item (9) multiplied by 0.88:1 L_______
(11) Item (4) plus Item (10): L_______
(12) Aggregate amount of Funded Debt: L_______
(13) Ratio of Item (11) to Item (12): _____ to 1
(14) Minimum Asset Coverage Ratio required by Section 10.6.1 as of any
Computation Date before the Closing Date: 1.25 to 1
(15) Minimum Asset Coverage Ratio required by Section 10.6.1 as of any
Computation Date on or after the Closing Date: 1.5 to 1
__________________________________
1/ Or, if larger, the percentage of Voting Stock of Telegraph pledged by
FDTH and TelHoldco pursuant to the Company Pledge Agreement.
-3-
<PAGE> 26
B. Section 10.6.2 Interest Coverage Ratio.
(1) Operating Cash Flow for the Fiscal Quarter ending on the
Computation Date:
(a) Consolidated Net Income (Loss) for the Fiscal Quarter:
L_______
(b) the consolidated interest expense and other financing costs of the
Company and its Subsidiaries deducted in determining Consolidated Net Income
(Loss) for the Fiscal Quarter: L_______
(c) all depreciation and amortization of assets (including goodwill and
other intangible assets) of the Company and its Subsidiaries deducted in
determining Consolidated Net Income (Loss) for the Fiscal Quarter:
L_______
(d) all federal, state, local and foreign income taxes (whether paid or
deferred) of the Company and its Subsidiaries deducted in determining
Consolidated Net Income for the Fiscal Quarter:
L_______
-4-
<PAGE> 27
(e) other non-cash expenses and all extraordinary and non-recurring
expenses (including all one-time, non-recurring transaction expenses associated
with the Scheme, to the extent such expenses are included in determining
Consolidated Net Income (Loss)) deducted in determining Consolidated Net Income
(Loss) for the Fiscal Quarter: L_______
(f) Item (a) plus Item (b) plus Item (c) plus Item (d) plus Item (e):
L_______
(2) (a) Most recently received Fairfax A$_____
Dividend
(b) Sterling Equivalent on _______, 199__ [date dividend received]
A$1 = L_____
(c) Item (2)(a) multiplied by (2)(b) L_____
(d) One-half of the most recently received Fairfax dividend (regardless
of whether such dividend was received during the Fiscal Quarter) Item (2) (c)
multiplied by .50: L_______
(3) Item (1)(f) plus (minus)2/ Item (2): L_______
(4) Total Interest Expense for the Fiscal Quarter:
(a) the consolidated interest expense and commitment fees3/ of the
Company and its Subsidiaries for such period accrued on Funded Debt for the
Fiscal Quarter: L_______
__________________________________
2/ Item (2)(d) should be subtracted from Item (1)(f) in any Fiscal
Quarter in which a Fairfax Dividend is received and added in any
Fiscal Quarter in which no Fairfax Dividend is received.
3/ For the purpose of calculating consolidated interest expense and
commitment fees for any Fiscal Quarter or portion thereof ending on or
before the date the initial loans are made under the Credit Agreement
(the "Pre-Funding Period"), Funded Debt shall be determined by
assuming that the Existing Debt Facilities had been repaid and Loans
in an amount equal to the Commitment had been outstanding for the
entire Pre-Funding Period which Loans accrued interest at a rate per
annum equal to LIBOR (Reserve Adjusted) as of the date of the
calculation plus the Applicable Margin.
-5-
<PAGE> 28
(b) amounts paid by Telegraph with respect to Redeemable Capital Stock
issued by West Ferry Printers Limited:
L_______
(c) Item (a) plus item (b): L_______
(5) Permitted Payments made pursuant to Section 10.9(b)(i): L_______
(6) Item (4)(c) plus Item (5): L_______
(7) Ratio of item (3) to item (6): ____ to 1
(8) Minimum Interest Coverage Ratio required by Section 10.6.2 for the
Fiscal Quarter ending on the Computation Date: 1.5 to 1
C. Section 10.7 Limitations on Debt.
(1) Debt of FDTH under the FDTH/Holdco Subordinated Note at the end of
the Fiscal Quarter ending on the Computation Date:
L_______
- -----------------
3/ (...continued)
Facilities had been repaid and Loans in an amount equal to the Commitment
had been outstanding for the entire Pre-Funding Period which Loans accrued
interest at a rate per annum equal to LIBOR (Reserve Adjusted) as of the
date of the calculation plus the Applicable Margin.
-6-
<PAGE> 29
(2) Maximum Debt of FDTH under the FDTH/Holdco Subordinated Note
permitted by Section 10.7 at the end of the Fiscal Quarter ending on the
Computation Date: [US$________]4/
D. Section 10.9 Restricted Subordinated Payments
(1) Restricted Payments:
(a) (i) regular quarterly dividends payable on the Series 1
DTH Preference Shares (in Cdn $): Cdn$________
(ii) quarterly dividends payable on the Series 1 DTH
Preference Shares attributable to ACT Cdn$________
(iii) Item (a) plus Item (b) Cdn$________
(iv) The Sterling Equivalent of Canadian Dollars on _____,
19__ [the date the dividend was paid] (Item III.B.)
Cdn $1 = L_______
(v) The Sterling Equivalent of such preferred dividends
(Item (a)(iii) multiplied by Item (a)(iv) L______
(b) (i) regular quarterly dividends payable on the Series 2
DTH Preference Shares (in U.S. $): US$________
(ii) quarterly dividends payable on the Series 2 DTH
Preference Shares attributable to ACT US$________
(iii) Item (a) plus Item (b) US$________
__________________________________
4/ To be completed.
-7-
<PAGE> 30
(iv) The Sterling Equivalent of US Dollars on _____, 19__
[the date the dividend was paid] (Item III.B.) US $1 = L_______
(v) The Sterling Equivalent of such preferred dividends
(Item (b)(iii) multiplied by Item (b)(iv) L______
(c) (i) regular quarterly dividends payable on the
Series A FDTH Preference Shares (in Cdn $): Cdn$________
(ii) quarterly dividends payable on the Series A FDTH
Preference Shares attributable to ACT Cdn$________
(iii) Item (a) plus Item (b) Cdn$________
(iv) The Sterling Equivalent of Canadian Dollars on _____,
19__ [the date the dividend was paid] (Item III.B.) Cdn $1 = L_______
(v) The Sterling Equivalent of such preferred dividends
(Item (c)(iii) multiplied by Item (c)(iv) L______
(d) (i) regular quarterly dividends payable on the
Series B FDTH Preference Shares (in Cdn $): Cdn$________
(ii) quarterly dividends payable on the Series B FDTH
Preference Shares attributable to ACT Cdn$________
(iii) Item (a) plus Item (b) Cdn$________
-8-
<PAGE> 31
(iv) The Sterling Equivalent of Canadian Dollars on _____,
19__ [the date the dividend was paid] (Item III.B.) Cdn $1 = L_______
(v) The Sterling Equivalent of such preferred dividends
(Item (d)(iii) multiplied by Item (d)(iv) L______
(e) Total Dividends paid on DTH and FDTH Shares (Item (a)(v) plus Item
(b)(v) plus Item (c)(v) plus Item (d)(v)) L______
(2) Interest/Restricted Payment Coverage Ratio:
(a) Operating Cash Flow (Item B.(3)):
L_______
(b) Total Interest Expense (Item B.(4)(c)):
L_______
(c) Permitted Payments made pursuant to Section 10.9(b)(i): L_______
(d) Permitted Payments made pursuant to Section 10.9 (b)(ii):
L_______
(e) Restricted Payments made pursuant to Section 10.9 (a)(1) (Item
(1)(a)): L_______
(f) Item (b) plus Item (c) plus Item (d) plus Item (e):
L_______
(g) Ratio of Item (a) to Item (f): _______ to 1
(h) Minimum Interest/ Restricted Payment Coverage Ratio required by
Section 10.9(a)(1)(c): 1.0 to 1
-9-
<PAGE> 32
E. Section 10.9 Management Fees, Additional Dividends, Interest.
(1) Management Fees paid during the Fiscal Quarter: L_______
(2) Dividends paid during the Fiscal Quarter pursuant to Section
10.9(a)(2): L_______
(3) Interest on the FDTH/Holdco Subordinated Note paid during the
Fiscal Quarter pursuant to Section 10.9(a)(2): L_______
(4) Item (1) plus Item (2) plus Item (3): L_______
(5) Amount permitted to be paid [INSERT ITEM (E.(8) FROM PRIOR
COMPLIANCE CERTIFICATE] L_______
(6) Excess Cash Flow:
(a) Operating Cash Flow (Item B.(3)):
L_______
(b) Total Interest Expense (Item B.(4)(c)):
L_______
(c) Scheduled principal payments on Funded Debt for such Fiscal
Quarter: L_______
(d) All federal, state, local and foreign income taxes of the Company
and its Subsidiaries paid during the Fiscal Quarter: L_______
(e) Restricted Payments and Permitted Payments paid during the Fiscal
Quarter (Item D. (2)(c) plus Item D.(2) (d) plus Item D.(2)(e)):
L_______
-10-
<PAGE> 33
(f) Capital Expenditures during the Fiscal Quarter: L_______
(g) The sum of Items (b) through (f): L_______
(h) Item (a) minus Item (g):
L_______
(7) Sterling Equivalent of $3,750,000: L_______
(8) The lesser of Item (6)(h) and Item (7):
L_______
III. Currency Conversion Rates. The Company hereby certifies
that, as of the date of this certificate:
A. The Sterling Equivalent of Australian Dollars is: A$1 =
L_______
B. The Sterling Equivalent of Canadian Dollars is: Cdn$1 =
L_______
C. The Sterling Equivalent of US Dollars is: US$1 =
L_______
IV. Defaults. The Company hereby further certifies and warrants
to you that no Event of Default or Unmatured Event of Default has occurred
and is continuing.
-11-
<PAGE> 34
IN WITNESS WHEREOF, the Company has caused this Certificate to be executed
and delivered by its duly authorized officer this _____ day of __________, 19__.
FIRST DT HOLDINGS LIMITED
By_____________________________
Name__________________________
Title_________________________
-12-
<PAGE> 1
EXHIBIT 10.04
===============================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of May 30, 1996
among
HOLLINGER INTERNATIONAL PUBLISHING INC.,
VARIOUS FINANCIAL INSTITUTIONS,
THE TORONTO-DOMINION BANK,
as Issuing Bank,
and
TORONTO DOMINION (TEXAS), INC.
as Administrative Agent
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2 COMMITMENTS OF THE LENDERS; TYPES OF LOANS;
LETTERS OF CREDIT; BORROWING PROCEDURES . . . . . . . . . . 30
2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.2 Various Types of Loans . . . . . . . . . . . . . . . . . . . . . . 31
2.3 Borrowing Procedures . . . . . . . . . . . . . . . . . . . . . . . 31
2.4 Procedures for Conversion of Type of Loan . . . . . . . . . . . . . 32
2.5 Letter of Credit Procedures . . . . . . . . . . . . . . . . . . . . 32
2.6 Participations in Letters of Credit . . . . . . . . . . . . . . . . 33
2.7 Reimbursement Obligations . . . . . . . . . . . . . . . . . . . . . 34
2.8 Limitation on the Issuing Bank's Obligations . . . . . . . . . . . 34
2.9 Funding by Lenders to the Issuing Bank . . . . . . . . . . . . . . 34
2.10 Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.11 Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.12 Determination of Dollar Equivalents . . . . . . . . . . . . . . . . 35
2.13 Commitments Several . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3 NOTES EVIDENCING LOANS . . . . . . . . . . . . . . . . . . . 36
3.1 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.2 Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.1 Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.2 Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . 37
4.3 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.4 Setting and Notice of Eurocurrency Rates . . . . . . . . . . . . . 38
4.5 Computation of Interest . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5 FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.1 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . 39
5.3 Additional Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS;
REPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1 Reduction or Termination of the Commitments . . . . . . . . . . . . 40
6.1.1 Voluntary Reduction or Termination . . . . . . . . . . 40
6.1.2 Mandatory Commitment Reduction . . . . . . . . . . . . 40
6.2 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.2.1 Mandatory Prepayments due to Commitment
Reductions . . . . . . . . . . . . . . . . . . . . . 40
6.2.2 Mandatory Prepayments due to Currency
Fluctuations . . . . . . . . . . . . . . . . . . . . 40
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6.2.3 Mandatory Prepayments due to Excess Debt/
Equity Proceeds . . . . . . . . . . . . . . . . . . . . . 41
6.2.4 Voluntary Prepayments . . . . . . . . . . . . . . . . 41
6.2.5 All Prepayments . . . . . . . . . . . . . . . . . . . 41
6.2.6 Commitment Termination Date . . . . . . . . . . . . . 41
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES . . . . . . . 41
7.1 Making of Payments . . . . . . . . . . . . . . . . . . . . . . . . 41
7.2 Application of Certain Payments . . . . . . . . . . . . . . . . . . 42
7.3 Due Date Extension . . . . . . . . . . . . . . . . . . . . . . . . 42
7.4 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.5 Proration of Payments . . . . . . . . . . . . . . . . . . . . . . . 42
7.6 Net Payments; Tax Exemptions . . . . . . . . . . . . . . . . . . . 43
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EUROCURRENCY LOANS . 44
8.1 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.2 Basis for Determining Interest Rate Inadequate or Unfair . . . . . 45
8.3 Changes in Law Rendering Eurocurrency Loans Unlawful . . . . . . . 46
8.4 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.5 Right of Lenders to Fund through Other Offices . . . . . . . . . . 47
8.6 Discretion of Lenders as to Manner of Funding . . . . . . . . . . . 47
8.7 Mitigation of Circumstances; Replacement of
Affected Lender . . . . . . . . . . . . . . . . . . . . . . . 48
8.8 Conclusiveness of Statements; Survival of
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9 WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.1 Organization, etc . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.2 Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . 49
9.3 Validity and Binding Nature . . . . . . . . . . . . . . . . . . . . 49
9.4 Financial Information . . . . . . . . . . . . . . . . . . . . . . . 50
9.5 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . 50
9.6 Litigation and Contingent Liabilities . . . . . . . . . . . . . . . 50
9.7 Ownership of Properties; Liens . . . . . . . . . . . . . . . . . . 51
9.8 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.9 Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . 51
9.10 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . 51
9.11 Public Utility Holding Company Act . . . . . . . . . . . . . . . . 51
9.12 Regulations G, T, U and X . . . . . . . . . . . . . . . . . . . . . 51
9.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.14 Solvency, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.15 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.16 Contracts; Labor Matters . . . . . . . . . . . . . . . . . . . . . 52
9.17 Environmental and Safety and Health Matters . . . . . . . . . . . . 53
9.18 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.19 Senior Subordinated Indenture . . . . . . . . . . . . . . . . . . . 54
</TABLE>
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SECTION 10 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.1 Reports, Certificates and Other Information . . . . . . . . . . . . 54
10.1.1 Annual Report . . . . . . . . . . . . . . . . . . . . 54
10.1.2 Quarterly Reports . . . . . . . . . . . . . . . . . . 55
10.1.3 Certificates . . . . . . . . . . . . . . . . . . . . 55
10.1.4 Reports to SEC and to Shareholders . . . . . . . . . 56
10.1.5 Notice of Default, Litigation and ERISA
Matters . . . . . . . . . . . . . . . . . . . . . . 56
10.1.6 Subsidiaries . . . . . . . . . . . . . . . . . . . . 56
10.1.7 Management Reports . . . . . . . . . . . . . . . . . 57
10.1.8 Insurance Information . . . . . . . . . . . . . . . . 57
10.1.9 Annual Budget . . . . . . . . . . . . . . . . . . . . 57
10.1.10 Other Information . . . . . . . . . . . . . . . . . . 57
10.2 Books, Records and Inspections . . . . . . . . . . . . . . . . . . 57
10.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.4 Compliance with Laws; Maintenance of Property;
Payment of Taxes and Liabilities . . . . . . . . . . . . . . 58
10.5 Maintenance of Existence, etc. . . . . . . . . . . . . . . . . . . 58
10.6 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . 59
10.6.1 Total Leverage Ratio . . . . . . . . . . . . . . . . 59
10.6.2 Senior Leverage Ratio . . . . . . . . . . . . . . . . 59
10.6.3 Interest Coverage Ratio . . . . . . . . . . . . . . . 59
10.6.4 Computation of Financial Covenants . . . . . . . . . 59
10.7 Limitations on Debt . . . . . . . . . . . . . . . . . . . . . . . . 59
10.8 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.9 Limitation on Restricted Payments. . . . . . . . . . . . . . . . . 61
10.10 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.11 Mergers, Consolidations, Sales, Acquisitions . . . . . . . . . . . 64
10.12 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.13 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . 65
10.14 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 66
10.15 Environmental Covenants . . . . . . . . . . . . . . . . . . . . . . 66
10.15.1 Environmental Response Obligation . . . . . . . . . 66
10.15.2 Environmental Liabilities . . . . . . . . . . . . . 66
10.16 Unconditional Purchase Obligations . . . . . . . . . . . . . . . . 66
10.17 Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . 67
10.18 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 67
10.19 Amendments to Certain Documents . . . . . . . . . . . . . . . . . . 67
10.20 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . 67
10.21 Limitations on Sale and Leaseback Transactions . . . . . . . . . . 67
10.22 Tax Allocation Agreement . . . . . . . . . . . . . . . . . . . . . 68
10.23 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.24 Holding Company Status . . . . . . . . . . . . . . . . . . . . . . 68
10.25 Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries . . . . . . . . . 68
10.26 Designation and Ownership of Subsidiaries . . . . . . . . . . . . . 68
10.27 New Restricted Subsidiaries, Investments and Acquisitions . . . . . 69
10.28 Pledge of AP-91 . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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10.29 Operating Leases . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.30 Scheme Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.31 Post-Scheme Matters . . . . . . . . . . . . . . . . . . . . . . . . 71
10.32 Scheme Certificate . . . . . . . . . . . . . . . . . . . . . . . . 71
10.33 AP-91 Further Restricted . . . . . . . . . . . . . . . . . . . . . 71
10.34 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11 CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . 72
11.1 Documentary Conditions to Amendment Effective Date . . . . . . . . 72
11.1.1 Notes . . . . . . . . . . . . . . . . . . . . . . . . 72
11.1.2 Resolutions . . . . . . . . . . . . . . . . . . . . . 72
11.1.3 Consents, etc . . . . . . . . . . . . . . . . . . . . 72
11.1.4 Incumbency and Signature Certificates . . . . . . . . 72
11.1.5 Reaffirmation . . . . . . . . . . . . . . . . . . . . 72
11.1.6 Pledge Agreements . . . . . . . . . . . . . . . . . . 72
11.1.7 Hollinger International Guaranty . . . . . . . . . . 73
11.1.8 Opinion of Counsel for the Company and the
Guarantors . . . . . . . . . . . . . . . . . . . . 73
11.1.9 No Material Adverse Effect . . . . . . . . . . . . . 73
11.1.10 Compliance Certificate . . . . . . . . . . . . . . . 73
11.1.11 Take-Out of First Chicago . . . . . . . . . . . . . . 73
11.1.12 Fees . . . . . . . . . . . . . . . . . . . . . . . . 73
11.1.13 Other . . . . . . . . . . . . . . . . . . . . . . . . 74
11.2 Documentary Conditions to Closing Date . . . . . . . . . . . . . . 74
11.2.1 . . . . . . . . . . . . . . . . . . . . . . . 74
11.2.2 Holdco Facility and FDTH Credit Agreement . . . . . . 74
11.2.3 No Material Adverse Effect . . . . . . . . . . . . . 74
11.2.4 Approval of the Scheme . . . . . . . . . . . . . . . 74
11.2.5 Scheme Sanction . . . . . . . . . . . . . . . . . . . 75
11.2.6 No Litigation Re: Scheme . . . . . . . . . . . . . . 75
11.2.7 Consummation of Other Transactions . . . . . . . . . 75
11.2.8 Capital Structure . . . . . . . . . . . . . . . . . . 75
11.2.9 Capital Markets . . . . . . . . . . . . . . . . . . . 76
11.2.10 Compliance Certificate . . . . . . . . . . . . . . . 76
11.2.11 Publishing/Telegraph Subscription Agreement . . . . 76
11.2.12 Fees . . . . . . . . . . . . . . . . . . . . . . . . 76
11.2.13 Other . . . . . . . . . . . . . . . . . . . . . . . 76
11.3 All Loans and Letters of Credit . . . . . . . . . . . . . . . . . . 76
11.3.1 No Default, etc. . . . . . . . . . . . . . . . . . . 76
11.3.2 Confirmatory Certificate . . . . . . . . . . . . . . 77
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT . . . . . . . . . . . . . . . 77
12.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 77
12.1.1 Non-Payment of the Loans, etc . . . . . . . . . . . . 77
12.1.2 Default under Other Debt . . . . . . . . . . . . . . 77
12.1.3 Other Material Obligations . . . . . . . . . . . . . 78
12.1.4 Bankruptcy, Insolvency, etc . . . . . . . . . . . . . 78
12.1.5 Non-Compliance with Provisions of This
Agreement . . . . . . . . . . . . . . . . . . . . . 79
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12.1.6 Warranties . . . . . . . . . . . . . . . . . . . . . 79
12.1.7 Pension Plans . . . . . . . . . . . . . . . . . . . . 79
12.1.8 Judgments . . . . . . . . . . . . . . . . . . . . . . 79
12.1.9 Holdco Guaranty . . . . . . . . . . . . . . . . . . . 79
12.1.10 Southam Collateral . . . . . . . . . . . . . . . . . 80
12.1.11 Invalidity of Guaranty, etc. . . . . . . . . . . . . 80
12.1.12 Invalidity of Collateral Documents, etc. . . . . . . 80
12.1.13 Change in Control . . . . . . . . . . . . . . . . . . 80
12.1.14 Material Adverse Change . . . . . . . . . . . . . . . 80
12.1.15 Ownership of Restricted Subsidiaries . . . . . . . . 80
12.2 Effect of Event of Default . . . . . . . . . . . . . . . . . . . . 80
SECTION 13 THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.3 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
13.4 Credit Investigation . . . . . . . . . . . . . . . . . . . . . . . 82
13.5 Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . 82
13.6 Action on Instructions of the Lenders . . . . . . . . . . . . . . . 83
13.7 Funding Reliance . . . . . . . . . . . . . . . . . . . . . . . . . 83
13.8 Collateral Matters . . . . . . . . . . . . . . . . . . . . . . . . 84
13.9 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 14 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
14.1 Waiver; Amendments . . . . . . . . . . . . . . . . . . . . . . . . 85
14.2 Confirmations . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
14.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
14.4 Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
14.5 Regulations G, T, U and X . . . . . . . . . . . . . . . . . . . . . 86
14.6 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . 86
14.7 Subsidiary References . . . . . . . . . . . . . . . . . . . . . . . 87
14.8 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
14.9 Assignments; Participations . . . . . . . . . . . . . . . . . . . . 87
14.9.1 Assignments . . . . . . . . . . . . . . . . . . . . . . . 87
14.9.2 Participations . . . . . . . . . . . . . . . . . . . . . . 89
14.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 89
14.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
14.12 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 90
14.13 Indemnification by the Company . . . . . . . . . . . . . . . . . . 90
14.14 Survival of Indemnities . . . . . . . . . . . . . . . . . . . . . 91
14.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . 91
14.16 Forum Selection and Consent to Jurisdiction . . . . . . . . . . . 91
14.17 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . 92
14.18 Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . 92
</TABLE>
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EXHIBIT A Form of Note
EXHIBIT B Form of Compliance Certificate
EXHIBIT C Form of Reaffirmation
EXHIBIT D Form of Amended & Restated Hollinger
International Guaranty
EXHIBIT E-1 Form of Holdco Pledge Agreement
EXHIBIT E-2 Form of U.K. Pledge Agreement
EXHIBIT E-3 Form of Amended and Restated Company Pledge
Agreement
EXHIBIT F Form of Opinion of Kirkpatrick & Lockhart LLP
EXHIBIT G Form of Assignment Agreement
EXHIBIT H Form of Subsidiary Note
EXHIBIT I Form of Subsidiary Security Agreement
EXHIBIT J Form of Scheme Certificate
EXHIBIT K Form of Tax Allocation Agreement
SCHEDULE 1.1 Commitments and Percentages
SCHEDULE 1.2 Pricing Grid
SCHEDULE 2.6 Existing Letters of Credit
SCHEDULE 9.5 Recent Developments
SCHEDULE 9.6 Litigation and Contingent Liabilities
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.9 Welfare Plans
SCHEDULE 9.15 Insurance
SCHEDULE 9.16 Contracts; Labor Matters
SCHEDULE 9.17 Environmental and Safety and Health Matters
SCHEDULE 10.7 Debt
SCHEDULE 10.8 Liens
SCHEDULE 10.10 Investments
SCHEDULE 14.3 Addresses for Notices
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 30, 1996 (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"), is entered into among HOLLINGER INTERNATIONAL PUBLISHING INC., a
Delaware corporation (the "Company"), the undersigned financial institutions
(together with their respective successors and assigns, collectively the
"Lenders" and individually each a "Lender"), THE TORONTO-DOMINION BANK (in its
individual capacity, "Toronto-Dominion") as issuing bank and TORONTO DOMINION
(TEXAS), INC. (in its individual capacity, "TD-Texas") as administrative agent
for the Lenders.
WHEREAS, the Company, TD-Texas, as Administrative Agent, Toronto-Dominion,
as Issuing Bank and The First National Bank of Chicago ("First Chicago"), as
Documentation Agent entered into that certain Credit Agreement dated as of
February 7, 1996, as amended or modified and in effect immediately prior to the
Amendment Effective Date (the "Existing Credit Agreement") whereunder certain
financial institutions agreed to make revolving loans and to issue letters of
credit in the maximum amount of $100,000,000 (such revolving loans and letters
of credit outstanding on the Amendment Effective Date, collectively the
"Existing Credit Extensions");
WHEREAS, pursuant to that certain proposal, First DT Holdings Limited, an
English company and a subsidiary of the Company ("FDTH"), will acquire the
publicly held shares and options in The Telegraph plc, a public limited
liability company incorporated under the laws of England and Wales ("Telegraph")
not owned by the Company or any of its Subsidiaries to be effected by way of a
"Scheme of Arrangement" under Section 425 of the Companies Act 1985 (the
"Scheme");
WHEREAS, the Company has requested the Lenders to provide financing for its
acquisition of Telegraph shares;
WHEREAS, the Company desires to refinance the Existing Credit Extensions
and obtain a revolving loan commitment (to include availability for revolving
loans and the issuance of letters of credit) pursuant to which borrowings of
revolving loans in the maximum aggregate principal amount not to exceed
$125,000,000 would be made to the Company;
WHEREAS, the Company has requested the Lenders to amend and restate the
Existing Credit Agreement on the terms and conditions set forth in this
Agreement, to set forth, among other things, the terms and conditions under
which the Lenders hereafter will make credit extensions to the Company; it being
the intention of the Company, the Lenders and the Administrative Agent that this
<PAGE> 9
Agreement and the Loan Documents executed in connection herewith shall not
effect the novation of the obligations of the Company under the Existing Credit
Agreement but be merely a restatement and, where applicable, an amendment of
and substitution for the terms governing such obligations hereafter; and
WHEREAS, the Existing Credit Extensions outstanding immediately prior to
the Amendment Effective Date pursuant to the Existing Credit Agreement shall be
deemed to be issued and outstanding under the Commitment for all purposes hereof
and of the Loan Documents after giving effect to the Amendment Effective Date;
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 DEFINITIONS.
When used herein the following terms shall have the following meaning (such
definitions to be applicable to both the singular and plural forms of such
terms);
Acceleration Right means a right, which at the time is immediately
exercisable (without further notice or lapse of time), by the holders or a
trustee to cause the acceleration of the maturity of Debt of the Company or a
Restricted Subsidiary having an aggregate principal amount outstanding of at
least $5,000,000.
Acquisition means (a) any acquisition or merger by the Company or any of
its Restricted Subsidiaries of or with any other Person which owns or operates
newspapers or other similar publication businesses or printing businesses, which
acquisition or merger has been approved and recommended in writing by the Board
of Directors of the Person to be acquired or, if such Board approval is not
required or practicable, which merger or acquisition otherwise has been made and
consummated without any hostile or antagonistic measures, which Person shall
then become consolidated with the Company or any such Restricted Subsidiary in
accordance with GAAP, or (b) any acquisition by the Company or any of its
Restricted Subsidiaries of the assets of any Newspaper Business which
acquisition has been approved and recommended in writing by the Board of
Directors of the business whose assets are being acquired or, if such Board
approval is not practicable, which acquisition otherwise has been made and
approved without any hostile or antagonistic measures.
2
<PAGE> 10
Acquisition Annualized Operating Cash Flow means, with respect to an
Acquisition permitted hereunder, an amount equal to (a) (i) the cumulative
Operating Cash Flow (x) of the Restricted Subsidiary acquired in such
Acquisition or (y) which is derived from the Newspaper Business or assets
acquired therein, for the period beginning on the first day of the first full
calendar quarter commencing immediately after the date of such Acquisition, and
ending on the last day of the calendar quarter being tested, divided by (ii) the
number of full calendar quarters which, as of the applicable calculation date,
have elapsed since the date of such Acquisition, multiplied by (b) four (4);
provided, however, after four (4) full calendar quarters have elapsed since the
date of such Acquisition, Acquisition Annualized Operating Cash Flow shall with
respect to such Acquisition be cumulative Operating Cash Flow for the preceding
four (4) full calendar quarters. The foregoing calculation and determination of
the Acquisition Annualized Operating Cash Flow shall be certified from time to
time as required herein by the Company to the Administrative Agent and the
Lenders pursuant to a form substantially in accordance with the form of Exhibit
B.
Acquisition Certificate - see Section 10.11(d).
Acquisition Debt means any Debt of the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any Restricted Subsidiary
(a) at any time or from time to time incurred, created or assumed in connection
with any Acquisition prior to the Amendment Effective Date or (b) existing at
the time any Person (including an Unrestricted Subsidiary) becomes a Restricted
Subsidiary but excluding in case of clauses (a) and (b) (x) Debt incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary or such Acquisition, (y) any Debt of the Company to the
Administrative Agent and the Lenders, or any of them, under this Agreement or
under any other Loan Document and (z) Intercompany Debt.
Administrative Agent means TD-Texas in its capacity as administrative agent
for the Lenders hereunder and any successor thereto in such capacity.
Affected Lender means any Lender that has given notice to the Company
(which has not been rescinded) of (a) any obligation by the Company to pay any
amount pursuant to Section 7.6 or 8.1 or (b) the occurrence of any circumstances
of the nature described in Section 8.2 or 8.3.
Affected Loan - see Section 8.3.
Affiliate means, with respect to any specified Person, (a) any other Person
directly or indirectly controlling or controlled
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<PAGE> 11
by or under direct or indirect common control with such specified Person or (b)
any other Person that owns, directly or indirectly, 10% or more of such
Person's equity ownership or Voting Stock or any officer or director of any
such Person or other Person or with respect to any natural Person, any Person
having a relationship with such Person by blood, marriage or adoption not more
remote than first cousin. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person directly or indirectly, whether through
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Agents means the Administrative Agent and any co-agent named from time to
time by the Administrative Agent and the Company.
Agreement - see the Preamble.
Alternate Base Rate means, at any time, the greater of (a) the Federal
Funds Rate plus 1/2 of 1% and (b) the Base Rate.
Amendment Effective Date - see Section 11.1.
Amortization Expense of any Person means, for any period, amounts
recognized during such period as (a) amortization of goodwill or (b)
amortization of any other intangible assets with an original life of ten years
or more, in each case in accordance with GAAP and to the extent reflected in the
Consolidated Net Income (Loss) of the Company and the Restricted Subsidiaries.
AP-91 means American Publishing (1991) Inc., a Delaware corporation.
AP-91 Agreement means that certain letter agreement, dated as of February
7, 1996, as amended, modified or supplemented from time to time, executed by
AP-91, relating to the APAC-90 8% Preferred Stock.
AP-91 Senior Notes means those certain 10.24% Series A Senior Secured Notes
due September 1, 1996, 10.34% Series B Senior Secured Notes due September 1,
1997, 10.44% Series C Senior Secured Notes due September 1, 1998, 10.49% Series
D Senior Secured Notes due September 1, 1999 and 10.53% Series E Senior Secured
Notes due September 1, 2000 issued by AP-91 pursuant to those certain Note
Purchase Agreements, each dated as of September 12, 1990, pursuant to which such
Notes were issued by AP-91 to those purchasers identified therein, as such
Senior Secured Notes and Note Purchase Agreements are amended and in effect on
the Amendment Effective Date.
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<PAGE> 12
APAC-90means APAC-90 Inc., a Delaware corporation.
APAC-90 8% Preferred Stock means the 8% First Series Preferred Shares
issued by APAC-90.
APAC-90 Preferred Stockmeans collectively the APAC-90 8% Preferred Stock
and the Second Series Preferred Stock issued by APAC-90.
APAC 95 means APAC-95 Inc., a Delaware corporation.
APHI means American Publishing Holdings Inc., a Delaware corporation.
Applicable Commitment Fee Rate means the rate set forth beneath "Commitment
Fee Rate" on the Pricing Grid for the applicable period.
Applicable Margin means (a) in the case of Eurocurrency Loans the rate set
forth beneath "Eurocurrency Rate" on the Pricing Grid and (b) in the case of
Floating Rate Loans, the rate set forth beneath "Alternate Base Rate" on the
Pricing Grid.
Asset Sale means (a) any sale, lease, transfer or other disposition
(including by way of merger or consolidation or Asset Swap) by the Company or
any Restricted Subsidiary of any asset (including the sale of the Capital Stock
of any Restricted Subsidiary) outside the ordinary course of business to a
Person other than the Company or a Restricted Subsidiary, or (b) any sale or
assignment with or without recourse of accounts receivable of the Company or any
Restricted Subsidiary. For purposes of this definition, the term "Asset Sale"
shall not include any transfer of property and assets (i) having a market value
of less than $1,000,000 (it being understood that if the market value of the
properties or assets being transferred exceeds $1,000,000, the entire value and
not just the portion in excess of $1,000,000 shall be deemed to have been the
subject of an Asset Sale), (ii) which are obsolete (in the case of equipment) to
the Company's and its Restricted Subsidiaries' businesses and (iii) consisting
of any transfer of common shares of HTH by FDTH to Hollinger Inc. pursuant to
the provisions of the HTH/FDTH Share Exchange Agreement.
Asset Swap means the exchange of the assets of any Newspaper Business owned
by the Company or any Restricted Subsidiary ("Traded Newspaper Assets") as an
entirety or substantially as an entirety for all or substantially all of the
assets of another Newspaper Business ("Traded-For Newspaper Assets") owned by
the Person (or an Affiliate of the Person) to whom such Traded Newspaper Assets
shall be transferred in such exchange.
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<PAGE> 13
Assignee - see Section 14.9.1.
Assignment Agreement - see Section 14.9.1.
Base Rate means the rate per annum determined by the Administrative Agent
to be the rate of interest announced by Toronto-Dominion in New York as its
reference rate for the determination of interest rates for loans of varying
maturities in Dollars to United States residents of varying degrees of
creditworthiness and being quoted at such time by Toronto-Dominion in New York
as its "prime rate" from time to time, changing when and as said rate changes;
it being understood that in neither case is such rate necessarily the lowest
rate of interest provided to borrowers by the quoting institution.
Board of Directors means the board of directors of a Person or any duly
authorized committee of such board.
Business Day means any day on which commercial banks are open for
commercial banking business in Chicago and New York and, in the case of a
Business Day which relates to a Eurocurrency Loan, on which dealings in Dollars
and Sterling are carried on in the London interbank market.
Capital Expenditures means all expenditures which, in accordance with GAAP,
would be required to be capitalized and shown on the consolidated balance sheet
of the Company, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed (a)
from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored or (b) with awards of
compensation arising from the taking by eminent domain or condemnation of the
assets being replaced.
Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person which, in conformity with GAAP, is accounted for as a capital lease on
the balance sheet of such Person.
Capital Stock of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock.
Cash Equivalent Investment means, at any time:
(a) any evidence of Debt, maturing not more than one year after such time,
issued or guaranteed by the United States Government;
6
<PAGE> 14
(b) commercial paper, maturing not more than one year from the date of
issue, which is issued by
(i) a corporation (except an Affiliate) organized under the laws of
any State of the United States of America or of the District of Columbia
and rated at least A-1 by S&P or P-1 by Moody's, at the time of investment,
or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers' acceptance or eurodollar time
deposit, maturing not more than one year after the date of issue, which is
issued by either
(i) a financial institution that is a member of the Federal Reserve
System and has a combined capital and surplus and undivided profits of not
less than $500,000,000, or
(ii) any Lender; or
(d) any repurchase agreement with a term of one year or less which
(i) is entered into with
(A) any Lender, or
(B) any other commercial banking institution of the
stature referred to in clause (c)(i),
(ii) is secured by a fully perfected Lien in any obligation of the
type described in any of clauses (a) through (c), and
(iii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of such
Lender (or other commercial banking institution) thereunder;
(e) investments in money market funds that invest solely in Cash
Equivalent Investments described in clauses (a) through (d); or
(f) investments in short-term asset management accounts offered by any
Lender for the purpose of investing in loans to any corporation (other than an
Affiliate) organized under the laws of any state of the United States
7
<PAGE> 15
or of the District of Columbia and rated at least A-1 by S&P or P-1 by Moody's.
Change in Control means the occurrence of any of the following after the
Amendment Effective Date:
(a) there is a report filed on Schedule 13D, 14D-1 or 14D-1F (or any
successor schedule, form or report) pursuant to the Exchange Act, disclosing
that any person (for purposes of this definition, as the term "person" is used
in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor
provision to either of the foregoing), other than any person consisting solely
of Conrad M. Black (or his heirs, executors or legal representatives) and his
Affiliates, has become the beneficial owner (as the term "beneficial owner" is
defined under Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of Voting Stock representing 50% or more of the total voting
power attached to all Voting Stock of Hollinger Inc. or Hollinger International
then outstanding; provided, however, that a person shall not be deemed to be the
beneficial owner of, or to own beneficially, (i) any securities tendered
pursuant to a tender or exchange offer made by or on behalf of such person or
any of such person's Affiliates until such tendered securities are accepted for
purchase or exchange thereunder, or (ii) any securities if such beneficial
ownership (A) arises solely as a result of a revocable proxy delivered in
response to a proxy or consent solicitation made pursuant to applicable law, and
(B) is not also then reportable on Schedule 13D (or any successor schedule)
under the Exchange Act;
(b) there is a report filed or required to be filed with any securities
commission or securities regulatory authority in Canada, disclosing that any
offeror (as the term "offeror" is defined in Section 89(1) of Securities Act
(Ontario) for the purpose of Section 101 of such Securities Act or any successor
provision of the foregoing) other than any person consisting solely of Conrad M.
Black (or his heirs, executors or legal representatives) and his Affiliates, has
acquired beneficial ownership (within the meaning of the Securities Act
(Ontario)) of, or the power to exercise control or direction over, or securities
convertible into, any voting or equity shares of Hollinger Inc. that together
with such offeror's securities (as the term "offeror's securities" is defined in
Section 89(1) of the Securities Act (Ontario) or any successor provision thereto
in relation to the voting or equity shares of Hollinger Inc.) would constitute
Voting Stock of Hollinger Inc. representing 50% or more of the total voting
power attached to all Voting Stock of Hollinger Inc. then outstanding;
(c) Hollinger International shall cease to own, directly or indirectly,
100% of the Voting Stock of the Company or TelHoldco,
8
<PAGE> 16
or, on and after the Closing Date, Telegraph (other than the Telegraph Ordinary
Shares issued pursuant to Put/Call Options or any New Preference Shares issued
pursuant to the Purchase Option); or
(d) Conrad M. Black (or his heirs, executors and legal representatives)
and his Affiliates cease to beneficially own and control the voting of, directly
or indirectly, Voting Stock of Hollinger International representing a greater
percentage of the total voting power attached to the Voting Stock of Hollinger
International than the percentage beneficially owned and controlled, directly or
indirectly, by any other single shareholder of Hollinger International together
with its Affiliates.
CIBC Credit Facility means the Cdn$300,000,000 credit facility described in
the Summary of Terms and Conditions dated May 24, 1996 among Hollinger
International, certain financial institutions and Canadian Imperial Bank of
Commerce, as administrative agent.
Closing Date - see Section 11.2.
Code means the Internal Revenue Code of 1986, as amended.
Collateral means, collectively, all of the property and assets that are
from time to time subject to the Collateral Documents.
Collateral Document means the Company Security Agreement, each Pledge
Agreement, each Subsidiary Note, each Subsidiary Security Agreement, and the
Reaffirmation.
Commitment means as to any Lender the commitment of such Lender to make
Loans to and to issue or participate in Letters of Credit for the account of the
Company pursuant to Section 2.1(a). The initial amount of the Commitment of
each Lender is set forth on Schedule 1.1.
Commitment Termination Date means (i) September 30, 1996 if the Closing
Date has not occurred on or prior to such date or (ii) the date which is the
earlier of six months from the Closing Date or such other date on which the
Commitments shall terminate pursuant to Section 12.
Company - see the Preamble.
Company Pledge Agreement - see Section 11.1.6.
Company Security Agreement means that certain Company Security Agreement,
dated as of February 7, 1996, as amended,
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<PAGE> 17
modified or supplemented from time to time, issued by the Sun-Times and its
Subsidiaries (other than STDS), APHI, APAC 95, Daily Southtown, Inc., and
certain other Restricted Subsidiaries in favor of the Administration Agent.
Computation Period means, for each Fiscal Quarter, the four consecutive
Fiscal Quarters ending on the last day of such Fiscal Quarter.
Consolidated Net Income (Loss) of the Company and the Restricted
Subsidiaries means, for any period, the consolidated net income (or loss) of the
Company and the Restricted Subsidiaries for such period as determined in
accordance with GAAP, adjusted, to the extent included in calculating such
consolidated net income (or loss), by excluding, without duplication, (a) all
extraordinary gains and losses, (b) the portion of consolidated net income (or
loss) of the Company and its Restricted Subsidiaries allocable to Investments in
unconsolidated Persons (other than Unrestricted Subsidiaries) to the extent that
cash dividends or distributions have not actually been received by such Person
or one of its consolidated Restricted Subsidiaries, (c) the portion of
consolidated net income (or loss) of the Company and its Restricted Subsidiaries
allocable to the Company's Unrestricted Subsidiaries (or to payments received
therefrom), (d) net income (or loss) of a Person combined with the Company or
any of its Subsidiaries on a "pooling of interests" basis attributable to any
period prior to the date of combination, (e) any gain or loss, net of taxes,
realized upon the termination of any employee pension benefit plan, (f)
aggregate net gains and losses (less all fees and expenses relating thereto) in
respect of dispositions of assets (including sales of shares of Unrestricted
Subsidiaries or unconsolidated Persons) other than in the ordinary course of
business, (g) the net income of any Restricted Subsidiary to the extent that the
declaration of dividends or similar distributions by that Restricted Subsidiary
of that income is not at the time permitted, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulations applicable to that
Restricted Subsidiary or its stockholders; provided, however, that the foregoing
shall not apply to the net income of AP-91 relating to the business of AP-91 as
conducted as of the Amendment Effective Date on account of restrictions on AP-91
in the AP-91 Senior Notes, (h) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued at any time following the date of this Agreement, (i) any net
gain from the collection of proceeds of life insurance policies, (j) any gain
arising from the acquisition of any securities, or the extinguishment, under
GAAP, of any Debt of the Company or (k) aggregate net gains or losses relating
to foreign currency transactions or translations.
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<PAGE> 18
Contributed Cash Flow means on any date of any assets sold or proposed to
be sold (or deemed disposed of) in any Asset Sale, or of any assets consisting
of Traded Newspaper Assets or Traded-For Newspaper Assets included or proposed
to be included in any Asset Swap, the Operating Cash Flow generated by such
assets for the period of four Fiscal Quarters ended on or (if such date shall
not be the last day of a Fiscal Quarter) most recently prior to such date.
Debt of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money (including Intercompany Debt), whether or not
evidenced by bonds, debentures, notes or similar instruments, (b) all
obligations of such Person as lessee under Capital Leases which have been
recorded as liabilities on a balance sheet of such Person, (c) all obligations
of such Person to pay the deferred purchase price of property or services (other
than current accounts payable in the ordinary course of business), (d) all
indebtedness secured by a Lien on the property of such Person, whether or not
such indebtedness shall have been assumed by such Person (it being understood
that if such Person has not assumed or otherwise become personally liable for
any such indebtedness, the amount of the Debt of such Person in connection
therewith shall be limited to the lesser of the face amount of such indebtedness
or the fair market value of all property of such Person securing such
indebtedness), (e) all obligations, contingent or otherwise, with respect to the
face amount of all letters of credit (whether or not drawn) and banker's
acceptances issued for the account of such Person (including, without
limitation, the Letters of Credit) and in connection with any agreement to
purchase, redeem, exchange, convert or otherwise acquire for value any Capital
Stock of such Person, or any warrants, rights or options to acquire such Capital
Stock now or hereafter outstanding, (f) all liabilities of such Person in
respect of Hedging Agreements, (g) all Debt referred to in clauses (a) through
(d) above of other Persons and all dividends of other Persons, the payment of
which is secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien, upon or with respect to
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Debt, (h) all Guarantee Obligations of such Person, (i)
Acquisition Debt, (j) all Redeemable Capital Stock valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends and (k) any amendment, supplement, modification, deferral, renewal,
extension, refunding or refinancing or any Debt of the types referred to in
clauses (a) through (j) above. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable
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<PAGE> 19
Capital Stock as if such Redeemable Capital Stock were purchased on any date on
which Debt shall be required to be determined pursuant to this Agreement, and
if such price is based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value to be determined in good faith
by the Board of Directors of such Person. Debt shall not include the
obligations of any Person related to deferred taxes or severance obligations of
any nature payable by such Person.
Debt/Equity Proceeds means the aggregate Net Cash Proceeds from the
issuance of any equity or Debt by Hollinger International, Holdco or any
Subsidiary of Hollinger International or Holdco formed on or after the Amendment
Effective Date.
Determination Date - see Section 2.12.
Dollar and the sign "$" mean lawful money of the United States of America.
Dollar Equivalent means, (i) with respect to Dollars or an amount
denominated in Dollars, such amount, and (ii) with respect to any amount of
Sterling, at any time for the determination thereof, the equivalent amount of
Dollars obtained by converting such Sterling involved in such computation into
Dollars at the spot rate as quoted by the Administrative Agent for the purchase
of Dollars with Sterling through the FX Trading Office at approximately 8:00
a.m. (Houston time) two Business Days prior to the date on which such
computation is made.
DTH means DT Holdings Limited, a limited liability company incorporated
under the laws of England and Wales.
Environmental Laws means the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, any
so-called "Superfund" or "Superlien" law, the Toxic Substances Control Act, and
any other applicable federal, state or local statute, law, ordinance, code,
rule, regulation, order, decree or other officially-promulgated and legally
binding policy regulating, relating to, or imposing liability or standards of
conduct (including, but not limited to, permit requirements and emission or
effluent restrictions) concerning any Regulated Materials, as now or at any time
hereafter in effect applicable to the Company or any of its Restricted
Subsidiaries.
Equity Offering means the issuance by Hollinger International in February,
1996 of 16,100,000 shares of Class A Common Stock, par value $.01 per share,
concurrently with the issuance of the Senior Subordinated Notes.
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<PAGE> 20
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
Eurocurrency Loan means any Loan which bears interest at a rate determined
by reference to the Eurocurrency Rate (Reserve Adjusted).
Eurocurrency Office means (a) with respect to any Lender, the office or
offices of such Lender which shall be making or maintaining the Eurocurrency
Loans of such Lender hereunder or such other office or offices at which such
Lender determines its Eurocurrency Rate and (b) with respect to the
Administrative Agent, the office or offices of the Administrative Agent which
shall receive payments or disburse borrowings in Dollars and Sterling as the
Administrative Agent designates to the Lenders and the Company from time to
time. A Eurocurrency Office may be either a domestic or foreign office.
Eurocurrency Rate means, with respect to any Eurocurrency Loan for any
Interest Period,
(a) with respect to Eurocurrency Loans denominated in Dollars, the rate of
interest (rounded, if necessary, to the next higher 1/16 of 1%) of the rate per
annum at which Dollar deposits in immediately available funds are offered by the
Administrative Agent's Eurocurrency Office in the London interbank market at or
about 11:00 a.m. (London time), two Business Days prior to the first day of such
Interest Period, in the approximate amount of TD-Texas' relevant Eurocurrency
Loan and having a maturity approximately equal to such Interest Period; and
(b) with respect to Eurocurrency Loans denominated in Sterling, the rate of
interest (rounded, if necessary, to the next higher 1/16 of one percent) equal
to the rate at which Sterling deposits in immediately available funds are
offered by the Administrative Agent's Eurocurrency Office in the London
interbank market at or about 11:00 a.m. (London time) two Business Days' prior
to the beginning of such Interest Period in the approximate amount of TD-Texas'
relevant Eurocurrency Loan and having a maturity approximately equal to such
Interest Period.
Eurocurrency Rate (Reserve Adjusted)means, relative to any Loan to be made,
continued or maintained as, or converted into, a Eurocurrency Rate Loan, for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) determined pursuant to the following formula:
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<PAGE> 21
Eurocurrency Rate = Eurocurrency Rate
(Reserve Adjusted) --------------------------------------
1.00 - Eurocurrency Reserve Percentage
Eurocurrency Reserve Percentagemeans, with respect to any Eurocurrency Loan
denominated in Dollars for any Interest Period, a percentage (expressed as a
decimal) equal to the daily average during such Interest Period of the
percentage in effect on each day of such Interest Period, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor), for
determining the aggregate maximum reserve requirements applicable to
"Eurocurrency Liabilities" pursuant to Regulation D or any other then applicable
regulation of such Board of Governors which prescribes reserve requirements
applicable to "Eurocurrency Liabilities" as presently defined in Regulation D.
Event of Default means any of the events described in Section 12.1.
Excess Cash Flow means, as of the last day of any Fiscal Quarter, the sum,
without duplication, of:
(a) Operating Cash Flow for such Fiscal Quarter;
minus
(b) the sum of:
(i) Total Interest Expense, to the extent actually paid during such
Fiscal Quarter;
plus
(ii) all scheduled principal payments on Funded Debt other than
obligations under the Loan Documents during such Fiscal Quarter,
plus
(iii) all Federal, state, local and foreign income taxes (actually
paid) of the Company and its Restricted Subsidiaries deducted in
determining Consolidated Net Income (Loss) during such Fiscal Quarter,
plus
(iv) Restricted Payments actually made pursuant to Section 10.9(a)
and Permitted Payments actually made pursuant to Sections 10.9(b)(i) and
10.9(b)(ii) during such Fiscal Quarter,
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<PAGE> 22
plus
(v) Capital Expenditures during such Fiscal Quarter.
Excess Debt/Equity Proceeds means 50% of the aggregate Debt/Equity Proceeds
after any mandatory repayment of the Holdco Facility, the mandatory commitment
reduction pursuant to Section 6.1.2(d) of the FDTH Credit Agreement, and
repayment of the CIBC Credit Facility.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Excluded Taxes - see definition of Taxes.
Exemption Agreement - see Section 7.6.
Exemption Representation - see Section 7.6.
Existing Credit Agreement - see the Recitals.
Existing Credit Extensions - see the Recitals.
Existing Letters of Credit means the letters of credit listed on Schedule
2.6.
Extraordinary Cash Dividends means in respect of the Southam Interests:
(a) a cash dividend in respect of a particular calendar year representing
the excess, if any, of (i) the aggregate of all cash dividends declared and paid
on such securities during the calendar year over (ii) the greatest of (x) 200%
of the aggregate of all cash dividends declared and paid on such securities
during the immediately preceding calendar year, (y) 300% of the average of the
aggregate of all cash dividends declared and paid on such securities during the
immediately preceding three calendar years; and (z) 100% of the aggregate
consolidated net income of the issuer of such securities, before extraordinary
items, for its immediately preceding fiscal year; and
(b) any cash dividend declared by Southam on its common shares which the
directors of Southam by resolution determine to be extraordinary, taking into
account the amount of the dividend, the effect of the dividend on the market
value of such securities after payment thereof, the form of payment, the
financial position of Southam, economic conditions, business practices and such
other factors as the directors of Southam considered to be relevant.
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FDTH means First DT Holdings Limited, a limited liability company
incorporated under the laws of England and Wales and a wholly owned subsidiary
of DTH.
FDTH Credit Agreement means that certain Credit Agreement dated as of May
30, 1996 among FDTH, Toronto-Dominion as administrative agent and
Toronto-Dominion as issuing bank, whereunder certain financial institutions
agree to make revolving loans and to issue letters of credit in the maximum
amount of L250,000,000.
Federal Funds Rate means, for any period, a fluctuating interest rate per
annum equal for each day during such period to (a) the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the preceding Business Day) by the
Federal Reserve Bank of New York; or (b) if such rate is not so published for
any day which is a Business Day, the average of the quotations at approximately
2:00 p.m., New York City time, for such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
First Chicago - see the Recitals.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of the Company and its Restricted
Subsidiaries, which period shall be the 12-month period ending on December 31 of
each year. References to a Fiscal Year with a number corresponding to any
calendar year (e.g., "Fiscal Year 1995") refer to the Fiscal Year ending on
December 31 of such calendar year.
Floating Rate Loan means any Loan which bears interest at or by reference
to the Alternate Base Rate.
Funded Debt means the sum of (a) all Debt of the Company and its Restricted
Subsidiaries pursuant to clauses (a), (b), (d), (g), (h) and (i) of the
definition of Debt, minus (b) Debt of the Company to Restricted Subsidiaries and
Debt of Restricted Subsidiaries to the Company or to other Restricted
Subsidiaries.
FX Trading Office means the foreign exchange trading center of the
Administrative Agent located in Houston, Texas, or whatever other office the
Administrative Agent may from time to time designate.
GAAPmeans generally accepted accounting principles in the United States, as
in effect from time to time.
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Group - see Section 2.2.
Guarantee Obligation means any agreement, undertaking or arrangement by
which any Person guarantees or endorses (by direct or indirect agreement,
contingent or otherwise, to provide funds for payment, to supply funds to or
otherwise to invest in a debtor, or otherwise to assure a creditor against loss)
any indebtedness, obligation or other liability of any other Person (other than
by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Guarantee Obligation shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount of the debt, obligation or other liability guaranteed thereby.
Guarantor means (a) as of the Amendment Effective Date, Hollinger
International and each of the Company's Restricted Subsidiaries listed on
Schedule 9.8 other than the Subsidiaries of AP-91, Palestine Post, JPEH, JPPL
and STDS, and (b) thereafter, the Persons referred to in clause (a) and each
other Person which from time to time executes and delivers a counterpart of the
Subsidiary Guaranty.
Guaranties means the Hollinger International Guaranty and the Subsidiary
Guaranty.
Hedging Agreement means any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designed to protect a Person against fluctuations in
interest rates, currency exchange rates or commodity prices.
Holdco means Hollinger International Publishing Holdings Inc., a Delaware
corporation and wholly owned subsidiary of Hollinger International.
Holdco Facility means the Securities Purchase Agreement dated as of May 30,
1996 between Holdco and Toronto Dominion Investments, Inc. providing for a
secured senior exchangeable note facility in the maximum principal amount of
$100,000,000.
Holdco Pledge Agreement - see Section 11.1.6.
Hollinger Inc. means Hollinger Inc., a corporation continued under the laws
of Canada.
Hollinger International means Hollinger International Inc., a Delaware
corporation.
Hollinger International Guaranty see Section 11.1.7.
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HTH means Hollinger-Telegraph Holdings, Inc., a corporation continued under
the laws of Alberta.
HTH/FDTH Share Exchange Agreement means the share exchange agreement dated
as of July 19, 1995 between Hollinger Inc. and FDTH.
Indemnified Liability - see Section 14.13.
Intercompany Debt means all Debt owed by the Company and/or its Restricted
Subsidiaries to Hollinger Inc. or Hollinger International, or any other
Affiliate other than the Company or any Restricted Subsidiary.
Interest Coverage Ratio means, as of the last day of any Computation
Period, the ratio of (a) Operating Cash Flow for such Computation Period to (b)
Total Interest Expense for such Computation Period.
Interest Period - see Section 4.3.
Investment means, with respect to any Person:
(a) any loan or advance made by such Person to any other Person; and
(b) any ownership or similar interest held by such Person in any other
Person.
The amount of any Investment shall be the original principal or capital
amount thereof less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other Person) and shall,
if made by the transfer or exchange of property other than cash, be deemed to
have been made in an original principal or capital amount equal to the fair
market value of such property.
Issuing Bank means Toronto-Dominion in its capacity as issuer of Letters of
Credit.
Jerusalem Post Note means the Capital Note from the Palestine Post to the
Company (as assignee of Hollinger International) dated December 31, 1995 in the
original principal amount of 44,978,242 New Israeli Shekels.
JPEH means Jerusalem Post Employees Holding (1983) Ltd., an Israeli
corporation.
JPPL means Jerusalem Post Publications Limited, an Israeli corporation.
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Lender - see the Preamble.
Lender Party - see Section 14.13.
Letter of Credit means a standby letter of credit having terms and
provisions which are permitted by this Agreement and which otherwise are
reasonably satisfactory to the Issuing Bank.
Letter of Credit Application means a letter of credit application in the
form then used by the Issuing Bank for standby letters of credit (with
appropriate adjustments to indicate that any letter of credit issued thereunder
is to be issued pursuant to, and subject to the terms and conditions of, this
Agreement).
Lien means, when used with respect to any Person, any interest of any other
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Limited means 323067 Canada Limited, a company organized under the laws of
Canada.
Loans - see Section 2.1.
Loan Documents means this Agreement, the Notes, the Guaranties, the Letter
of Credit Applications and the Collateral Documents.
Management Fees means any management, consulting, non-competition, advisory
or other similar fees or payments, or any interest thereon, payable by the
Company or any of its Restricted Subsidiaries to Hollinger, Hollinger
International or any other Affiliate other than the Company or any Restricted
Subsidiary.
Margin Stock means any "margin stock" as defined in any of Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System.
Material Adverse Effect means a material adverse effect on (a) the
condition (financial or otherwise), operations, business, prospects, properties
or assets of the Company and its Restricted Subsidiaries taken as a whole; or
(b) the ability of the Company and the Restricted Subsidiaries which are
Guarantors taken as a whole to timely and fully perform any of their payment or
other material obligations under this Agreement or any other Loan Document to
which they are a party.
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Media Business means the business of the broadcast of radio or television
broadcasting, cable and satellite programs (including national, regional or
local radio, television, cable and satellite programs).
Moody's means Moody's Investors Service, Inc. or any successor rating
agency.
Negative Trade Differential means with respect to any Asset Swap the
amount, if any, by which the Contributed Cash Flow of the Traded Newspaper
Assets included in such Asset Swap (as determined in good faith by the Board of
Directors of the Company) as of the date of such Asset Swap exceeds the
Contributed Cash Flow of the Traded-For Newspaper Assets included in such Asset
Swap (as so determined).
Net Cash Proceeds means (a) with respect to any Asset Sale by any Person,
the proceeds thereof in the form of cash or cash equivalents including payments
of principal and interest in respect of deferred payment obligations when
received in the form of, or stock or other assets when disposed of for, cash or
cash equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary) net of (i)
brokerage commissions and other reasonable fees and expenses (including fees and
expenses of counsel and investment bankers) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale, (iii) payments
made to retire indebtedness where payment of such indebtedness is secured by the
assets or properties the subject of such Asset Sale, (iv) amounts required to be
paid to any Person (other than the Company or any Restricted Subsidiary) owning
a beneficial interest in the assets subject to the Asset Sale and (v)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve, in accordance with GAAP, against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Administrative Agent, (b) with respect
to any issuance or sale of Capital Stock or options, warrants or rights to
purchase Capital Stock, or debt securities or Capital Stock that have been
converted into or exchanged for Capital Stock, the proceeds of such issuance or
sale in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed of for, cash or cash equivalents (except to the extent that
such obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary), net of
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attorneys' fees, accountants' fees and brokerage, consultation, underwriting
and other fees and expenses actually incurred in connection with such issuance
or sale and net of taxes paid or payable as a result thereof, and (c) with
respect to the issuance by the Company of Subordinated Debt, the proceeds of
such issuance net of attorney's fees, accountant's fees and brokerage,
consultation, underwriting and other fees and expenses actually incurred in
connection with such issuance.
Newspaper Business means the business of publishing and distributing
(including distributing by electronic means) newspapers, magazines and other
paid or free publications having national, regional, local or targeted markets,
including publications having limited or no news or editorial content such as
shoppers or other "total market coverage" publications and similar publications.
New Preference Shares has the meaning set out in the Scheme Documents.
Notes - see Section 3.1.
Occupational Safety and Health Law means the Occupational Safety and Health
Act of 1970 and any other federal, state or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to or imposing liability
or standards of conduct concerning employee health and/or safety.
Operating Cash Flow means, as of the last day of any Fiscal Quarter, the
sum, without duplication, of:
(a) Consolidated Net Income (Loss) for the Computation Period,
plus
(b) the consolidated interest expense and other financing costs of the
Company and its Restricted Subsidiaries deducted in determining Consolidated Net
Income (Loss) for such Computation Period,
plus
(c) all depreciation and amortization of assets (including goodwill and
other intangible assets) of the Company and its Restricted Subsidiaries deducted
in determining Consolidated Net Income (Loss) for such Computation Period,
plus
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(d) all federal, state, local and foreign income taxes (whether paid or
deferred) of the Company and its Restricted Subsidiaries deducted in determining
Consolidated Net Income (Loss) for such Computation Period,
plus
(e) other non-cash expenses and all extraordinary and non-recurring
expenses (including all one-time, non-recurring transaction expenses associated
with the Reorganization, the Senior Subordinated Notes, the Existing Credit
Agreement or the Scheme, to the extent such expenses are included in determining
Consolidated Net Income (Loss)) deducted in determining Consolidated Net Income
(Loss).
In the case of an Acquisition or Asset Swap permitted hereunder, Operating Cash
Flow of the Company and its Restricted Subsidiaries on a consolidated basis for
purposes of any calculation of Operating Cash Flow made for the period ending
prior to the first day of the first full calendar quarter after the date of
such Acquisition or Asset Swap shall be adjusted to give effect to such
Acquisition or Asset Swap by adding or subtracting, as the case may be, the
Company's estimate of Operating Cash Flow for such Acquisition or Asset Swap,
which estimate shall be approved in advance by the Required Lenders. In the
case of an Asset Swap, the Company's estimate of Operating Cash Flow of the
Traded-For Newspaper Assets shall be reduced by an amount equal to the actual
Operating Cash Flow of the Traded Newspaper Assets. In the event the Company
and the Required Lenders do not agree on such adjustment, Operating Cash Flow
for such Acquisition shall be zero. The Operating Cash Flow of the Company on
a consolidated basis with its Restricted Subsidiaries for the twelve-month
period commencing on the first day of the first full calendar quarter
commencing immediately after the date of such Acquisition or Asset Swap and for
any twelve-month period ending on the last day of any calendar quarter during
such twelve-month period shall be adjusted by (1) adding or subtracting, as the
case may be, the Acquisition Annualized Operating Cash Flow of the Restricted
Subsidiary so acquired and (2) excluding the Operating Cash Flow of the
Restricted Subsidiary for the Computation Period; in the case of an Asset Swap,
the Acquisition Annualized Operating Cash Flow of the Traded-For Newspaper
Assets shall be reduced by an amount equal to the actual Operating Cash Flow of
the Traded Newspaper Assets. In the case of any Acquisition or Asset Swap, the
expenses incurred by the Company in connection with such Acquisition, in an
amount to be approved by the Required Lenders, may be excluded from the
determination of Operating Cash Flow of the Company and its Restricted
Subsidiaries for the twelve-month period ending with the last day of the
calendar quarter during which such Acquisition or Asset Swap occurred;
provided, however, that in such event, the expenses so excluded shall be taken
into account
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and deducted from Operating Cash Flow in the first full calendar quarter
immediately succeeding the date of such Acquisition or Asset Swap, as if such
expenses actually had been incurred during such succeeding fiscal quarter. For
purposes of this Agreement, "Operating Cash Flow" shall not include any portion
of the Operating Cash Flow of any Person other than Restricted Subsidiaries.
Optionholders has the meaning set out in the Scheme Circular.
Options Proposals has the meaning set out in the Scheme Circular.
Palestine Post means The Palestine Post Limited, an Israeli corporation.
Participant - see Section 14.9.2.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in section
3(2) of ERISA, which is subject to title IV of ERISA (other than a multiemployer
plan as defined in section 4001(a)(3) of ERISA), and to which the Company or any
corporation, trade or business that is, along with the Company, a member of a
controlled group of corporations or a controlled group of trades or businesses,
as described in section 414 of the Internal Revenue Code or section 4001 of
ERISA, may have any liability, including any liability by reason of having been
a substantial employer within the meaning of section 4063 of ERISA at any time
during the preceding five years or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
Percentage means as to any Lender the percentage which (a) the amount of
such Lender's Commitment is of (b) the aggregate amount of Commitments of all
Lenders; provided that after the Commitments have been terminated, "Percentage"
shall mean as to any Lender the percentage which the aggregate principal amount
of such Lender's Loans is of the aggregate principal amount of all Loans. The
initial Percentage for each Lender is set forth opposite such Lender's name on
Schedule 1.1.
Person means any natural person, corporation, partnership, limited
liability company, trust, association, governmental authority or unit, or any
other entity, whether acting in an individual, fiduciary or other capacity.
Pledge Agreements means the Holdco Pledge Agreement, the UK Pledge
Agreement, and the Company Pledge Agreement.
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<PAGE> 31
Preferred Stock means, with respect to any Person, any Capital Stock of any
class or classes (however designated) which is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person.
Pricing Grid means the Pricing Grid set forth on Schedule 1.2.
Publishing/Telegraph Subscription Agreement means the Subscription
Agreement between Publishing and Telegraph relating to the Subscription by
Publishing of approximately 15,000,000 Telegraph Ordinary Shares on the Closing
Date (assuming a Subscription price of $8.40) in form and substance satisfactory
to the Administrative Agent.
Put/Call Options means the Optionholders' rights to purchase Telegraph
Ordinary Shares which remain outstanding after the Scheme becomes effective
which are subject to puts and calls as outlined in the Options Proposals.
Qualified Capital Stockof any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
Rating Agency means S&P and Moody's.
Reaffirmation - see Section 11.1.5.
Redeemable Capital Stock means any Capital Stock that, either by its terms,
by the terms of any security into which it is convertible or exchangeable or
otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed prior to any stated maturity of the principal of the
Senior Subordinated Notes or is redeemable at the option of the holder thereof
at any time prior to any such stated maturity, or is convertible into or
exchangeable for debt securities at any time prior to any such stated maturity
at the option of the holder thereof, provided, however, that Redeemable Capital
Stock shall not include any shares of APAC-90 Preferred Stock so long as such
shares are owned by the Company or one or more Restricted Subsidiaries.
Regulated Materials means any toxic substance, hazardous substance,
hazardous material, hazardous chemical or hazardous waste defined or qualifying
as such in (or for the purposes of) any Environmental Law, or any pollutant or
contaminant, and shall include, but not be limited to, petroleum, including
crude oil or any fraction thereof which is liquid at standard conditions of
temperature or pressure (60 degrees fahrenheit and 14.7 pounds per square inch
absolute), any radioactive material, including,
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<PAGE> 32
but not limited to, any source, special nuclear or by-product material as
defined at 42 U.S.C. section 2011 et. seq., as amended from time to time,
polychlorinated biphenyls and asbestos in any form or condition.
Reorganization means the reorganization of the assets of Hollinger Inc.,
Hollinger International and their Subsidiaries consummated on October 13, 1995
pursuant to the Share Exchange Agreement dated as of July 19, 1995, between
Hollinger Inc. and Hollinger International.
Required Lenders means Lenders having an aggregate Percentage of more than
66-2/3 but in any event not less than two Lenders.
Restricted Subsidiary means, initially, each Subsidiary of the Company
existing on the date of this Agreement, other than DTH and its Subsidiaries and
TelHoldco, and any other Restricted Subsidiary designated from time to time by
the Board of Directors of the Company as a "Restricted Subsidiary" in accordance
with Section 10.26 of this Agreement.
Scheme - see the Recitals.
Scheme Circular means the documents to be despatched, inter alia, to
Telegraph's shareholders describing the Scheme and including the explanatory
statement required by Section 426 of the Companies Act 1985.
Scheme Documents means the Scheme Circular and the documents to be
despatched to the Optionholders in connection with the Options Proposals.
SEC means the Securities and Exchange Commission.
Senior Funded Debt means Funded Debt excluding Debt pursuant to the Senior
Subordinated Notes.
Senior Leverage Ratio means, as of the last day of any Computation Period
the ratio of (a) Senior Funded Debt as of such date to (b) Operating Cash Flow
for such Computation Period. For purposes of calculating Senior Funded Debt for
any period or portion thereof ending on or before the Closing Date (the
"Pre-Funding Period"), Senior Funded Debt shall be determined by assuming that
this Agreement had been in effect during the entire Pre-Funding Period and Loans
in an amount equal to the aggregate Commitment hereunder had been outstanding
for the entire Pre-Funding Period.
Senior Subordinated Indenture means that certain Indenture dated as of
February 1, 1996 between the Company and Fleet
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<PAGE> 33
National Bank of Connecticut, as Trustee, relating to the Senior Subordinated
Notes, as the same may hereafter be amended, amended and restated, supplemented
or otherwise modified in accordance with the terms thereof and hereof and in
effect.
Senior Subordinated Notes means the 9.25% Senior Subordinated Notes due
February 1, 2006 of the Company issued under the Senior Subordinated Indenture.
Series A Preferred Shares means the Series A Redeemable Convertible
Preferred Stock of Hollinger International, as in effect on the date of this
Agreement.
Southam means Southam Inc., a corporation continued under the laws of
Canada.
Southam Collateral means collectively Hollinger International's interest in
(a) 16,349,743 Common Shares of Southam owned by Limited or any successor owner,
(b) the Capital Stock of Limited and (c) any promissory notes from Limited in
favor of Hollinger International.
Southam Dividend Amount means the lesser of (a) the aggregate amount paid
or payable by Hollinger International since February 7, 1996 in respect of
regularly scheduled periodic dividends on the Series A Preferred Shares and (b)
the aggregate amount of the Southam Interests Dividends received by the Company
since the date hereof on account of its ownership interest (whether direct or
indirect) in Southam.
Southam Interests means the aggregate of (a) 7,145,000 Southam common
shares, being one-half the shares held by HTH (in which the Company holds a 50%
indirect equity interest) and (b) 250,000 Southam common shares held by FDTH (in
which the Company holds a 100% indirect equity interest); provided, however,
that if Southam shall pay a dividend, or make a distribution, on its common
shares in the form of Capital Stock of the same or another corporation, or
subdivide its outstanding common shares into a greater number of common shares,
or combine its outstanding common shares into a smaller number of common shares,
or effect a reorganization or reclassification of its Capital Stock, or
amalgamate, enter into an arrangement or consolidation or merge with or into
another entity (other than an amalgamation, arrangement, consolidation or merger
which does not result in a reclassification or change of the outstanding common
shares of Southam), the "Southam Interests" shall thereafter include any
securities distributed with respect to any such shares or into which any such
shares shall be converted, changed or reclassified or for which any such shares
shall be exchanged.
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Southam Interests Dividend means a dividend or other distribution paid on
or with respect to the Southam Interests on or prior to the earlier of (a) the
redemption date for the redemption of all the Series A Preferred Shares
outstanding as of such redemption date or (b) the date of final distribution to
the holders of the Series A Preferred Shares of the full preferential amount
provided under the terms thereof; provided, however, that the term "Southam
Interests Dividend" does not mean or include (x) any part of any dividend or
distribution that is payable otherwise than in cash or that constitutes an
Extraordinary Cash Dividend as applied to the Southam Interests, or (y) any
dividend or distribution on or with respect to the 250,000 Southam common shares
of which a Deedtask Limited is the direct owner or the 7,145,000 Southam common
shares which constitute the balance of the Southam common shares held by HTH in
which Telegraph has a 50% indirect equity interest.
Southtown/Star Facility means the real estate, improvements, fixtures and
related personal property associated with a facility located in Tinley Park,
Illinois used by Daily Southtown Inc. and Star Publishing Inc.
S&P means Standard & Poor's Corporation, or any successor rating agency.
Stated Amount means, with respect to any Letter of Credit at any date of
determination, the maximum aggregate amount available thereunder at any time
during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
STDS means Sun-Times Distribution Systems, Inc., a Delaware corporation.
Sterling and L mean the lawful currency of the United Kingdom of Great
Britain and Northern Ireland.
Subordinated Debt means (a) Debt pursuant to the Senior Subordinated Notes
and (b) any unsecured Debt of the Company in amounts which, when added to Funded
Debt, would not cause the Company on a pro forma basis as of the date of such
incurrence to violate the provisions of Section 10.6, does not require any
amortization prior to the date which is one year after the Commitment
Termination Date and has maturities and terms, and which is subordinated to the
obligations of the Company hereunder in a manner, satisfactory to the Lenders.
Subsidiary means, with respect to any Person, a corporation of which such
Person and/or its other Subsidiaries own, directly or indirectly, such number of
outstanding shares as have more
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<PAGE> 35
than 50% of the ordinary voting power for the election of directors or their
equivalents. Unless the context otherwise requires, each reference to
Subsidiaries herein shall be a reference to Subsidiaries of the Company,
provided that none of DTH, any of DTH's Subsidiaries, or TelHoldco shall be
deemed a Restricted Subsidiary of the Company for purposes of this Agreement.
Subsidiary Guaranty means that certain Subsidiary Guaranty dated as of
February 7, 1996, as amended, modified or supplemented from time to time,
executed by the Restricted Subsidiaries of the Company other than the
Subsidiaries of AP-91, JPEH, JPPL, Palestine Post and STDS.
Subsidiary Notes means, collectively, (a) any promissory note issued, now
or in the future, by any Restricted Subsidiary of the Company in favor of the
Company or another Restricted Subsidiary, as the case may be, each substantially
in the form of Exhibit H and (b) the Jerusalem Post Note, and any extensions,
renewals or amendments of any of the foregoing.
Subsidiary Security Agreements means, collectively, any security agreement
substantially in the form of Exhibit I or other security or collateral
instrument or documents in form and substance approved by the Administrative
Agent and the Required Lenders issued or given by any Restricted Subsidiary in
favor of the Company or another Restricted Subsidiary, as the case may be, to
secure Debt of such Restricted Subsidiary under a Subsidiary Note.
Sun Times means The Sun-Times Company, a Delaware corporation.
Sun Times Plant means the real estate, improvements, fixtures and related
personal property associated with a new printing plant for the Sun Times.
Tax Allocation Agreement - means a tax allocation agreement substantially
in the form of Exhibit K executed by the Company and its Restricted
Subsidiaries, as amended, modified or supplemented from time to time.
Taxes relative to any Person means taxes, assessments or other governmental
charges or levies imposed upon such Person, its income or any of its properties,
franchises or assets (excluding, in the case of payments made to a Lender or an
Agent, the following taxes (all of the following taxes being "Excluded Taxes"):
taxes imposed upon the overall net income of such Lender or such Agent,
franchise taxes imposed upon such Lender or such Agent with respect to its net
income by the jurisdiction under the laws of which such Lender or such Agent, as
the case may be,
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is organized or any political subdivision thereof, and franchise taxes imposed
upon such Lender or such Agent with respect to its net income by the
jurisdiction in which such Lender's or such Agent's Eurocurrency Office is
located or any political subdivision thereof).
TD Texas - see the Preamble.
Telegraph - see the Recitals.
Telegraph Ordinary Shares means ordinary shares of Telegraph purchased by
the Company or any Restricted Subsidiary pursuant to the Publishing/Telegraph
Subscription Agreement.
Telegraph Preference Shares means the 5,000,000 non-voting Redeemable
Preference Shares issued by Telegraph.
TelHoldco means TelHoldco Inc., a Delaware corporation.
Toronto-Dominion - see the Preamble.
Total Interest Expense means, for any period, the consolidated interest
expense and commitment fees of the Company and its Restricted Subsidiaries for
such period accrued on Funded Debt. For purposes of calculating consolidated
interest expense and commitment fees, Funded Debt shall include Funded Debt
under the Credit Agreement dated as of September 28, 1995 among Hollinger
International, various financial institutions and TD Texas, as administration
agent, to the extent such Funded Debt was outstanding during such period.
Total Leverage Ratio means, as of the last day of any Computation Period,
the ratio of (a) Funded Debt as of such date to (b) Operating Cash Flow for such
Computation Period. For purposes of calculating Funded Debt for any period or
portion thereof ending on or before the Closing Date (the "Pre-Funding Period"),
Funded Debt shall be determined by assuming that this Agreement had been in
effect during the entire Pre-Funding Period and Loans in an amount equal to the
aggregate Commitment hereunder had been outstanding for the entire Pre-Funding
Period.
Traded Newspaper Assets - see definition of "Asset Swap."
Traded-For Newspaper Assets - see definition of "Asset Swap."
Type of Loan or Borrowing - see Section 2.2. The types of Loans or
borrowings under this Agreement are as follows: Floating Rate Loans or
borrowings and Eurocurrency Loans or borrowings.
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U.K. Pledge Agreement - see Section 11.2.1(f).
Unmatured Event of Default means any event which if it continues uncured
will, with lapse of time or notice or lapse of time and notice, constitute an
Event of Default.
Unrestricted Subsidiary means any Subsidiary that is not a Restricted
Subsidiary; provided, however, that a Person may not be designated as an
Unrestricted Subsidiary unless (a) the creditors of such Person have no direct
or indirect recourse (including, but not limited to, recourse with respect to
the payment of principal or interest on Debt of such Unrestricted Subsidiary) to
the Company or a Restricted Subsidiary and (b) a default by such Person on any
of its Debt will not result in, or permit any holder of Debt of the Company or a
Restricted Subsidiary to declare, a default on such Debt of the Company or a
Restricted Subsidiary or cause the payment thereof to be accelerated or payable
prior to its stated maturity. Any subsidiary of an Unrestricted Subsidiary
shall be an Unrestricted Subsidiary for purposes of this Agreement.
Voting Stock means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency).
Welfare Plan means a "welfare plan", as such term is defined in Section
3(1) of ERISA.
Wholly-Owned Restricted Subsidiary means a Restricted Subsidiary of which
the Company and/or another of its Wholly-Owned Restricted Subsidiaries own,
directly or indirectly, all of the outstanding shares of Capital Stock (other
than directors' qualifying shares).
SECTION 2 COMMITMENTS OF THE LENDERS; TYPES OF LOANS; LETTERS OF
CREDIT; BORROWING PROCEDURES.
2.1 Commitments. On and subject to the terms and conditions of this
Agreement, (a) each of the Lenders, severally and for itself alone, agrees to
make loans to the Company on a revolving basis ("Loans") from time to time
before the Commitment Termination Date in such Lender's Percentage of such
aggregate amounts as the Company may from time to time request from all Lenders
under the Commitments, provided that the aggregate principal amount of all Loans
which all Lenders shall be committed to have outstanding at any one time shall
not exceed an
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amount equal to (x) the aggregate amount of the Commitments minus (y) the
Stated Amount of all outstanding Letters of Credit; and (b) the Issuing Bank
agrees to issue Letters of Credit at the request of and for the account of the
Company from time to time before the Commitment Termination Date and, as more
fully set forth in Section 2.6, each Lender agrees to purchase a participation
in each such Letter of Credit, provided that the aggregate Stated Amount of all
Letters of Credit shall not at any time exceed the lesser of (i) $15,000,000 or
(ii) an amount equal to (A) the aggregate amount of the Commitments minus (B)
the aggregate principal amount of all outstanding Loans.
Notwithstanding the foregoing, prior to the Closing Date, the aggregate
Stated Amount of all Letters of Credit shall not exceed $5,000,000 and the
aggregate Stated Amount of all Letters of Credit plus the aggregate principal
amount of all outstanding Loans shall not exceed $10,000,000.
2.2 Various Types of Loans. Each Loan shall be divided into tranches
which are either a Floating Rate Loan or a Eurocurrency Loan (each a "type" of
Loan), as the Company shall specify in the related notice of borrowing or
conversion pursuant to Section 2.3 or 2.4. Eurocurrency Loans having the same
Interest Period are sometimes called a "Group" or collectively "Groups".
Floating Rate Loans and Eurocurrency Loans may be outstanding at the same time,
provided that (i) not more than eight different Groups of Loans shall be
outstanding at any one time, (ii) the aggregate principal amount of each Group
of Eurocurrency Loans in Dollars shall at all times be at least $1,000,000 and
an integral multiple of $500,000 and (iii) the aggregate principal amount of
each Group of Eurocurrency Loans in Sterling shall at all times be at least the
Dollar Equivalent of $1,000,000 and an integral multiple of $500,000. All
borrowings, conversions and repayments of Loans shall be effected so that each
Lender will have a pro rata share (according to its Percentage) of all types and
Groups of Loans.
2.3 Borrowing Procedures. The Company shall give telephonic notice
(promptly followed by written notice) to the Administrative Agent of its
proposed borrowing not later than (a) in the case of a Floating Rate borrowing,
10:00 a.m., New York City time, on the proposed date of such borrowing, (b) in
the case of a Eurocurrency borrowing in Dollars, 10:00 a.m., New York City time,
at least three Business Days prior to the proposed date of such borrowing, and
(c) in the case of a Eurocurrency borrowing in Sterling, 10:00 a.m., New York
City time, at least five Business Days prior to the proposed date of such
Borrowing. Each such notice shall be effective upon receipt by the
Administrative Agent, shall be irrevocable, and shall specify the date, amount
and type of borrowing and, in the case of a Eurocurrency borrowing, the
applicable currency and initial
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Interest Period therefor. Promptly upon receipt of such notice, the
Administrative Agent shall advise each Lender thereof. Not later than 1:00
p.m., New York City time, on the date of a proposed borrowing, each Lender
shall provide the Administrative Agent by fed wire at the Administrative
Agent's designated Eurocurrency Office with immediately available funds in the
applicable currency covering such Lender's Percentage of such borrowing and,
subject to the satisfaction of the conditions precedent set forth in Section 11
with respect to such borrowing, the Administrative Agent shall pay over the
requested amount to the Company on the requested borrowing date. Each
borrowing shall be on a Business Day. Each borrowing denominated in Dollars
shall be in an aggregate amount of at least $1,000,000 and an integral multiple
of $500,000 and the aggregate principal amount of each Group of Eurocurrency
Loans in Sterling shall at all times be the Dollar Equivalent of at least
$1,000,000 and an integral multiple of $500,000. To the extent funds are
received from the Lenders, the Administrative Agent shall make such funds
available to the Company (i) with respect to Floating Rate Loans at the
Administrative Agent's office in New York and (ii) with respect to all
Eurocurrency Rate Loans, at the Administrative Agent's Eurocurrency Office, in
each case by wire transfer to the accounts the Company shall have specified in
its borrowing request.
2.4 Procedures for Conversion of Type of Loan. Subject to the provisions
of Section 2.2, the Company may convert all or any part of its outstanding Loan
into a Loan of a different type by giving telephonic notice (promptly followed
by written notice) to the Administrative Agent not later than 10:00 a.m., New
York City time, at least three Business Days prior to the proposed date of such
conversion. Each such notice shall be effective upon receipt by the
Administrative Agent, shall be irrevocable, and shall specify the date and
amount of such conversion, the Loan to be so converted, the type of Loan to be
converted into and, in the case of a conversion into a Eurocurrency Loan, the
initial Interest Period therefor. Promptly upon receipt of such notice, the
Administrative Agent shall advise each Lender thereof. Subject to Sections 2.10
and 2.11, such Loan shall be so converted on the requested date of conversion.
Each conversion shall be on a Business Day. Notwithstanding the foregoing, the
Company shall not be entitled to convert (a) Eurocurrency Loans denominated in
one currency into Loans in another currency or (b) Eurocurrency Loans
denominated in Sterling into a Floating Rate Loan.
2.5 Letter of Credit Procedures. The Company shall give notice to the
Issuing Bank of the proposed issuance of each Letter of Credit on a Business Day
which is at least three Business Days (or such lesser period as to which the
Issuing Bank may agree) prior to the proposed date of issuance of such Letter
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of Credit. Each such notice shall be accompanied by a Letter of Credit
Application, duly executed by the Company (and if a Restricted Subsidiary is to
be a co-applicant, such Restricted Subsidiary) and in all respects satisfactory
to the Issuing Bank, together with such other documentation as the Issuing Bank
may reasonably request in support thereof, it being understood that each Letter
of Credit Application shall specify, among other things, the date on which the
proposed Letter of Credit is to be issued, the expiration date of such Letter
of Credit (which shall not be later than five Business Days prior to the
Commitment Termination Date) and whether such Letter of Credit is to be
transferable in whole or in part. Subject to the satisfaction of the
conditions precedent set forth in Section 11 with respect to the issuance of
such Letter of Credit, the Issuing Bank shall issue such Letter of Credit on
the requested issuance date. The Company shall not be entitled to request the
issuance of a Letter of Credit for the account of any Unrestricted Subsidiary
or any Restricted Subsidiary which is not a Guarantor.
2.6 Participations in Letters of Credit. (a) On and after the Amendment
Effective Date, the Existing Letters of Credit shall be deemed for all purposes,
including for purposes of the fees to be collected pursuant to Section 5.2, and
reimbursement of costs and expenses to the extent provided herein, Letters of
Credit outstanding under this Agreement and entitled to the benefits of this
Agreement and the other Loan Documents, and shall be governed by the
applications and agreements pertaining thereto and by this Agreement. Each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank on the Amendment Effective Date, without recourse
or warranty, an undivided interest and participation in each such Existing
Letter of Credit and the Company's reimbursement obligation with respect thereto
in an amount equal to such Lender's Percentage.
(b) Concurrently with the issuance of each Letter of Credit, the Issuing
Bank shall be deemed to have sold and transferred to each other Lender, and each
other Lender shall be deemed irrevocably and unconditionally to have purchased
and received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation, to the extent of such other Lender's Percentage, in
such Letter of Credit and the Company's reimbursement obligations with respect
thereto. For the purposes of this Agreement, the unparticipated portion of each
Letter of Credit shall be deemed to be the Issuing Bank's "participation"
therein. The Issuing Bank hereby agrees, upon request of any Lender, to deliver
to such Lender a list of all outstanding Letters of Credit, together with such
information related thereto as such other Lender may reasonably request.
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2.7 Reimbursement Obligations. The Company hereby unconditionally and
irrevocably agrees to reimburse the Issuing Bank for each payment or
disbursement made by the Issuing Bank under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on the
date of such payment or distribution shall bear interest from and including the
date of such payment or disbursement to but not including the date that the
Issuing Bank is reimbursed by the Company therefor, payable on demand, at a rate
per annum equal to the sum of the Alternate Base Rate plus the Applicable Margin
from time to time in effect (plus, at any time an Event of Default exists, 2%).
The Issuing Bank shall notify the Company and the Administrative Agent whenever
any demand for payment is made under any Letter of Credit by the beneficiary
thereunder; provided, however, that the failure of the Issuing Bank to so notify
the Company or the Administrative Agent shall not affect the rights of the
Issuing Bank or the Lenders in any manner whatsoever.
2.8 Limitation on the Issuing Bank's Obligations. In determining whether
to pay under any Letter of Credit, the Issuing Bank shall have no obligation to
the Company or any Lender other than to confirm that any documents required to
be delivered under such Letter of Credit appear to have been delivered and
appear to comply on their face with the requirements of such Letter of Credit.
Any action taken or omitted to be taken by the Issuing Bank under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence and willful misconduct, shall not impose upon the Issuing Bank
any liability to the Company or any Lender and shall not reduce or impair the
Company's reimbursement obligations set forth in Section 2.7 or the obligations
of the Lenders pursuant to Section 2.9.
2.9 Funding by Lenders to the Issuing Bank. If the Issuing Bank makes any
payment or disbursement under any Letter of Credit and the Company has not
reimbursed the Issuing Bank in full for such payment or disbursement by 10:00
a.m., New York City time, on the date of such payment or disbursement or if any
reimbursement received by the Issuing Bank from the Company is or must be
returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each Lender shall be obligated to pay to the Issuing Bank,
in full or partial payment of the purchase price of its participation in such
Letter of Credit, its pro rata share (according to its Percentage) of such
payment or disbursement (but no such payment shall diminish the obligations of
the Company under Section 2.7), and the Administrative Agent shall promptly
notify each Lender thereof. Each Lender irrevocably and unconditionally agrees,
severally and for itself alone, to so pay to the Administrative Agent in
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immediately available funds for the Issuing Bank's account the amount of such
Lender's Percentage of such payment or disbursement. If and to the extent any
Lender shall not have made such amount available to the Administrative Agent by
2:00 p.m., New York City time, on the Business Day on which such Lender
receives notice from the Administrative Agent of such payment or disbursement
(it being understood that any such notice received after noon, New York City
time, on any Business Day shall be deemed to have been received on the next
following Business Day), such Lender agrees to pay interest on such amount to
the Administrative Agent for the Issuing Bank's account forthwith on demand for
each day from and including the date such amount was to have been delivered to
the Administrative Agent to but excluding the date such amount is paid, at a
rate per annum equal to (a) for the first three days after demand, the Federal
Funds Rate from time to time in effect and (b) thereafter, the Alternate Base
Rate from time to time in effect. Any Lender's failure to make available to
the Administrative Agent its Percentage of any such payment or disbursement
shall not relieve any other Lender of its obligation hereunder to make
available to the Administrative Agent such other Lender's Percentage of such
payment, but no Lender shall be responsible for the failure of any other Lender
to make available to the Administrative Agent such other Lender's Percentage of
any such payment or disbursement.
2.10 Warranty. Each notice of borrowing and/or of conversion pursuant to
Section 2.3 or 2.4, and the delivery of each Letter of Credit Application
pursuant to Section 2.5 shall automatically constitute a warranty by the Company
to the Administrative Agent and each Lender to the effect that on the date of
such requested borrowing or conversion or the issuance of the requested Letter
of Credit, as the case may be, (a) the warranties contained in Section 9
(excluding, except in the case of Loans made on the Closing Date, Sections 9.4,
9.6, 9.8 and 9.15 through 9.17) of this Agreement shall be true and correct as
of such requested date as though made on the date thereof and (b) no Event of
Default or Unmatured Event of Default shall have then occurred and be continuing
or will result therefrom.
2.11 Conditions. Notwithstanding any other provision of this Agreement,
(a) no Lender shall be obligated to make any Loan, and (b) no Lender shall be
obligated to convert into or permit the continuation at the end of the
applicable Interest Period of any Eurocurrency Loan, and (c) the Issuing Bank
shall not be obligated to issue any Letter of Credit if, in any such case, an
Event of Default or Unmatured Event of Default exists or would result therefrom.
2.12 Determination of Dollar Equivalents. The Administrative Agent will
determine the Dollar Equivalent with
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respect to any Loans denominated in Sterling (i) on the requested borrowing
date or date of any requested continuation of a Loan denominated in Sterling,
and (ii) as of the last Business Day of each month, and (iii) during the
occurrence and continuation of an Event of Default, such other dates as may be
requested by the Required Lenders (but in no event more frequently than once a
week) (each such date being a "Determination Date").
2.13 Commitments Several. The failure of any Lender to make a requested
Loan on any date shall not relieve any other Lender of its obligation to make a
Loan on such date, but no Lender shall be responsible for the failure of any
other Lender to make any Loan to be made by such other Lender.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Lender shall be evidenced by a promissory
note in the applicable currency (as amended, supplemented, replaced or otherwise
modified from time to time, individually each a "Note" and collectively for all
Lenders the "Notes") substantially in the form of Exhibit A, with appropriate
insertions, dated the Amendment Effective Date (or such earlier date as shall be
satisfactory to the Administrative Agent) and payable to the order of such
Lender in an amount equal to the sum of such Lender's Commitment (or, if less,
in the aggregate unpaid principal amount of all of such Lender's Loans) as
follows: (a) prior to the Commitment Termination Date, Loans may be borrowed,
repaid and, subject to compliance with Section 10.12, reborrowed and (b) all
outstanding Loans shall be repaid in full on the Commitment Termination Date.
3.2 Recordkeeping. Each Lender shall record in its records the date and
amount of each Loan made by such Lender, each repayment or conversion thereof
and, in the case of each Eurocurrency Loan, the dates on which each Interest
Period for such Loan shall begin and end. The aggregate unpaid principal amount
so recorded shall be rebuttable presumptive evidence of the principal amount
owing and unpaid on such Lender's Notes. The failure to so record any such
amount or information or any error in so recording any such amount or
information shall not, however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay when due the principal amount of
the Loans evidenced by such Note together with all interest accruing thereon.
SECTION 4 INTEREST.
4.1 Interest Rates. The Company promises to pay interest on the unpaid
principal amount of each Loan for the period
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commencing on the date of such Loan until such Loan is paid in full, as
follows:
(a) at all times while such Loan is a Floating Rate Loan, at a rate per
annum equal to the sum of the Alternate Base Rate from time to time in effect
plus the Applicable Margin; and
(b) at all times while such Loan is a Eurocurrency Loan, at a rate per
annum equal to the sum of the Eurocurrency Rate (Reserve Adjusted) applicable to
each Interest Period for such Loan plus the Applicable Margin;
provided, however, that at any time an Event of Default has occurred and is
continuing, the interest rate applicable to (i) each Floating Rate Loan shall
be the sum of (x) the Alternate Base Rate plus (y) the Applicable Margin plus
(z) 2% and (ii) each Eurocurrency Loan, the higher of (x) the sum of (A) the
Eurocurrency Rate (Reserve Adjusted) plus (B) the Applicable Margin plus (C) 2%
and (y) the sum of (A) the Alternate Base Rate plus (B) the Applicable Margin
plus (C) 2%.
4.2 Interest Payment Dates Accrued interest on each Floating Rate Loan
shall be payable quarterly in arrears on the last Business Day of each Fiscal
Quarter and at maturity, commencing with the first of such dates to occur after
the date of such Loan. Accrued interest on each Eurocurrency Loan shall be
payable on the last day of each Interest Period relating to such Loan. After
maturity, accrued interest on all Loans shall be payable on demand.
4.3 Interest Periods. Each "Interest Period" for a Eurocurrency Loan
shall commence on the date such Eurocurrency Loan is made or converted from a
Floating Rate Loan, or (if such Eurocurrency Loan is a continuation of a prior
Eurocurrency Loan) on the expiration of the immediately preceding Interest
Period for such continued Eurocurrency Loan, and shall end on the date which is
one, two, or three months thereafter, as the Company may specify:
(a) in the case of an Interest Period which commences on the date a
Eurocurrency Loan is made or converted from a Floating Rate Loan, in the related
notice of borrowing or conversion pursuant to Section 2.3 or 2.4, or
(b) in the case of a succeeding Interest Period with respect to any
continued Eurocurrency Loan, by telephonic notice (promptly followed by written
notice) to the Administrative Agent not later than 10:00 a.m., New York City
time, at least three Business Days prior to the first day of such succeeding
Interest Period, it being understood
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that (i) each such notice shall be effective upon receipt by the Administrative
Agent and (ii) if the Company fails to give such notice, such Loan, if
denominated in Dollars shall automatically become a Floating Rate Loan at the
end of its then-current Interest Period or, if denominated in Sterling, shall be
continued as a Loan denominated in Sterling for an Interest Period of one month
at a rate per annum equal to the sum of (A) Eurocurrency Reserve (Rate Adjusted)
plus (B) the Applicable Margin plus (C) 2%.
Each Interest Period that begins on the last day of a calendar month (or on a
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the immediately
succeeding Business Day (unless such immediately succeeding Business Day is the
first Business Day of a calendar month, in which case such Interest Period
shall end on the immediately preceding Business Day). The Company may not
select any Interest Period prior to the Commitment Termination Date for a Loan
which would end after the Commitment Termination Date.
4.4 Setting and Notice of Eurocurrency Rates. The applicable Eurocurrency
Rate for each Interest Period shall be determined by the Administrative Agent
and notice thereof shall be given by the Administrative Agent promptly to the
Company and each Lender. Each determination of the applicable Eurocurrency Rate
by the Administrative Agent shall be conclusive and binding upon the parties
hereto, in the absence of demonstrable error. The Administrative Agent shall,
upon written request of the Company or any Lender, deliver to the Company or
such Lender a statement showing the computations used by the Administrative
Agent in determining any applicable Eurocurrency Rate hereunder.
4.5 Computation of Interest. Interest shall be computed on Eurocurrency
Loans denominated in Dollars for the actual number of days elapsed on the basis
of a year of 360 days. Interest shall be computed on Floating Rate Loans and
for Eurocurrency Loans denominated in Sterling for the actual number of days
elapsed on the basis of a year of 365 or 366 days, as the case may be. The
applicable interest rate for each Floating Rate Loan shall change simultaneously
with each change in the Alternate Base Rate.
SECTION 5 FEES.
5.1 Commitment Fee. The Company shall pay to the Administrative Agent for
the account of each Lender a commitment fee equal to the Applicable Commitment
Fee Rate on the daily
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average of the unused amount of such Lender's Commitment. Such commitment fee
shall accrue from April 23, 1996 to but excluding the Commitment Termination
Date. Such commitment fee shall be payable in arrears on the Amendment
Effective Date, on the Closing Date, on the last Business Day of each Fiscal
Quarter and on the Commitment Termination Date, in each case for the period
then ending for which such commitment fee shall not have been theretofore paid.
The commitment fee shall be computed for the actual number of days elapsed on
the basis of a year of 365 or 366 days, as the case may be.
5.2 Letter of Credit Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of the Lenders pro rata according to their
respective Percentages a letter of credit fee for each Letter of Credit in an
amount per annum of the daily average of the aggregate Stated Amount of such
Letter of Credit (excluding any unreimbursed payment or disbursement thereunder)
equal to the Applicable Margin for Eurocurrency Loans from time to time.
(b) The Company agrees to pay to the Issuing Bank a fronting fee in an
amount equal to 1/8 of 1% per annum of the daily average of the aggregate Stated
Amount of each Letter of Credit (excluding any unreimbursed payment or
disbursement thereunder).
(c) The fees payable pursuant to clauses (a) and (b) above shall be
computed for the actual number of days elapsed on the basis of a year of 360
days and shall be payable in arrears on the last Business Day of each Fiscal
Quarter and on the Commitment Termination Date for the period from and including
the date of the issuance of the applicable Letter of Credit to but excluding the
date such payment is due or, if earlier, the date on which such Letter of Credit
expired or was terminated.
(d) In addition, with respect to each Letter of Credit, the Company
agrees to pay to the Issuing Bank such fees and expenses as the Issuing Bank
customarily requires in connection with the issuance, amendment, transfer,
negotiation, processing and/or administration of letters of credit.
5.3 Additional Fees. The Company agrees to pay to the Administrative
Agent such additional fees at such times and in such amounts as are mutually
agreed upon in writing by the Company and the Administrative Agent.
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SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS; REPAYMENTS.
6.1 Reduction or Termination of the Commitments.
6.1.1 Voluntary Reduction or Termination. The Company may from time to
time prior to the Commitment Termination Date, on at least three Business Days'
prior written notice received by the Administrative Agent (which shall promptly
advise each Lender thereof), permanently reduce the amount of the Commitments to
an amount not less than the sum of the aggregate principal amount of all
outstanding Loans and the Stated Amount of all outstanding Letters of Credit.
Any such reduction shall be in an aggregate amount of $1,000,000 or integral
multiples thereof. The Company may at any time on like notice prior to the
Commitment Termination Date terminate the Commitments upon payment in full of
the Notes and all other obligations of the Company hereunder and the expiration,
cancellation or cash collateralization (on terms satisfactory to the
Administrative Agent and the Issuing Bank) of all outstanding Letters of Credit.
Upon any termination of the Commitment in whole all of the Loans shall become
immediately due and payable. All reductions of the Commitments shall be pro
rata among the Lenders according to their Percentages.
6.1.2 Mandatory Commitment Reduction. On each date that is one Business
Day after the receipt by the Company or any of its Subsidiaries of Net Cash
Proceeds, the Commitment shall, without further action, automatically and
permanently be reduced by an amount equal to such Net Cash Proceeds.
6.2 Prepayments.
6.2.1 Mandatory Prepayments due to Commitment Reductions. If, after
giving effect to any reduction of the Commitments pursuant to Section 6.1, (a)
the sum of the aggregate principal amount of all outstanding Loans plus the
Stated Amount of all outstanding Letters of Credit exceeds (b) the aggregate
amount of Commitments, the Company will make an immediate repayment of Loans in
an amount equal to such excess (rounded upward, if necessary, to an integral
multiple of $250,000).
6.2.2 Mandatory Prepayments due to Currency Fluctuations. The Company
shall promptly (and in any event within three Business Days) following its
receipt of any notice that the Administrative Agent shall have determined on any
Determination Date that the sum of (a) the aggregate principal amount of all
Loans denominated in Dollars plus (b) the Dollar Equivalent of the aggregate
principal amount of all Loans denominated in Sterling exceeds the Commitments
then in effect, make a mandatory
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prepayment of the outstanding principal amount of Loans in an amount equal to
such excess.
6.2.3 Mandatory Prepayments due to Excess Debt/Equity Proceeds. On each
date that is one Business Day after the receipt of any Excess Debt/Equity
Proceeds, the Company will make an immediate repayment of Loans in an amount
equal to such Excess Debt/Equity Proceeds; provided that prepayments pursuant to
this Section 6.2.3 shall not be required if at such time the Total Leverage
Ratio is 5.0:1.0 or less.
6.2.4 Voluntary Prepayments. The Company may from time to time prepay the
Loans in whole or in part, provided that (a) the Company shall give the
Administrative Agent (which shall promptly advise each Lender) not less than
three Business Days' prior written notice thereof (five Business Days in the
case of Loans denominated in Sterling), specifying the Loans to be prepaid and
the date and amount of prepayment and (b) each partial prepayment of Loans shall
be in a principal amount of at least $1,000,000 and an integral multiple of
$500,000 (or, in the case of Loans denominated in Sterling, the Dollar
Equivalent of $1,000,000 to and an integral multiple of $500,000).
6.2.5 All Prepayments. All prepayments of Loans shall be pro rata among
the Lenders according to their Percentages and any prepayment of a Loan shall
include accrued interest to the date of prepayment on the principal amount being
repaid. Any prepayment of a Eurocurrency Loan on a day other than the last day
of an Interest Period therefor shall be subject to Section 8.4.
6.2.6 Commitment Termination Date. The Company shall repay to the Lenders
on the Commitment Termination Date the aggregate principal amount of all Loans
outstanding on such date.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. (a) All payments of principal of or interest on
the Loans, and of all fees, shall be made by the Company in the applicable
currency to the Administrative Agent in immediately available funds at its
designated Eurocurrency Office not later than 2:00 p.m., local time, on the date
due; and funds received after that hour shall be deemed to have been received by
the Administrative Agent on the next following Business Day. The Administrative
Agent shall promptly remit to each Lender its share of all such payments
received in collected funds by the Administrative Agent for the account of such
Lender.
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(b) All payments under Sections 8.1 and 8.4 shall be made by the Company
directly to the Lender or Lenders entitled thereto.
7.2 Application of Certain Payments. Except as otherwise expressly
provided herein, each payment of principal shall be applied to such Loans as the
Company shall direct by notice to be received by the Administrative Agent on or
before the date of such payment or, in the absence of such notice, as the
Administrative Agent shall determine in its reasonable discretion. Concurrently
with each remittance to any Lender of its share of any such payment, the
Administrative Agent shall advise such Lender as to the application of such
payment.
7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Notes, or of any fees, falls due on a day which is not a
Business Day, then, except as provided in Section 4.3, such due date shall be
extended to the next following Business Day and, in the case of principal,
additional interest shall accrue and be payable for the period of any such
extension.
7.4 Setoff. The Company agrees that the Administrative Agent and each
Lender have all rights of set-off and bankers' lien provided by applicable law,
and in addition thereto, the Company agrees that at any time any Event of
Default has occurred and is continuing, the Administrative Agent and each Lender
may apply to any obligation of the Company hereunder, whether or not then due,
any and all balances, credits, deposits, accounts or moneys of the Company then
or thereafter with the Administrative Agent or such Lender.
7.5 Proration of Payments. If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of or interest on any Loan (or on account of
its participation in any Letter of Credit) in excess of its pro rata share of
payments and other recoveries obtained by all Lenders on account of principal of
and interest on Loans (or such participations) then held by them (other than any
non-pro rata interest payment resulting from a Loan being an Affected Loan or
any payment resulting from replacement of a Lender pursuant to Section 8.7),
such Lender shall purchase from the other Lenders such participation in the
Loans (or sub-participations in Letters of Credit) held by them as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery.
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7.6 Net Payments; Tax Exemptions.
(a) All payments by the Company of principal, interest, fees, indemnities
and other amounts payable hereunder and under the Notes shall be made to the
recipient thereof without setoff or counterclaim and free and clear of, and
without withholding or deduction for or on account of, any present or future
Taxes (other than Excluded Taxes) now or hereafter imposed on such recipient or
its income, property, assets or franchises (such recipient's "Recipient Taxes"),
except to the extent that such withholding or deduction (i) is required by
applicable law, (ii) results from the breach by such recipient of its Exemption
Agreement (as defined below) or (iii) would not be required if such recipient's
Exemption Representation (as defined below) were true. If any such withholding
or deduction is required by applicable law, the Company will:
(A) pay to the relevant authorities the full amount so required to be
withheld or deducted;
(B) promptly forward to the Administrative Agent an official receipt
or other documentation satisfactory to the Administrative Agent evidencing
such payment to such authorities; and
(C) except to the extent that such withholding or deduction results
from the breach by the recipient of its Exemption Agreement or would not be
required if such recipient's Exemption Representation were true, pay to the
Administrative Agent for the account of the relevant recipient such
additional amount as is necessary to ensure that the net amount actually
received by such recipient will equal the full amount such recipient would
have received had no such withholding or deduction been required.
(b) In consideration of the Company's agreements in clause (a) of this
Section 7.6, each Lender which is not organized under the laws of the United
States or a State thereof hereby agrees (such Lender's "Exemption Agreement"),
to the extent permitted by applicable law (including any applicable double
taxation treaty of the jurisdiction of its incorporation and the jurisdiction in
which its Eurocurrency Office is located), to execute and deliver to the Company
and the Administrative Agent (i) on or before the first scheduled payment date
after the Amendment Effective Date, a United States Internal Revenue Service
Form 1001 or 4224 as appropriate (or successor forms), properly completed and
claiming a complete exemption, as the case may be, from withholding or deduction
for or on account of Recipient Taxes of such Lender, and (ii) a new Form 1001 or
4224 (or successor form), as appropriate, upon the expiration or obsolescence of
any previously delivered Form.
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(c) Each Lender hereby represents and warrants (such Lender's "Exemption
Representation") to the Company that on the Amendment Effective Date (or, if
later, the date it becomes a party to this Agreement) it is entitled to receive
payments of principal of, and interest on, Loans made by such Lender without
withholding or deduction for or on account of such Lender's Recipient Taxes
imposed by the United States of America or any political subdivision thereof.
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EUROCURRENCY LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any Eurocurrency Office of such Lender)
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(i) shall subject any Lender (or any Eurocurrency Office of such
Lender) to any tax, duty or other charge with respect to its Eurocurrency
Loans, its Note or its obligation to make Eurocurrency Loans, or shall
change the basis of taxation of payments to any Lender of the principal of
or interest on its Eurocurrency Loans or any other amounts due under this
Agreement in respect of its Eurocurrency Loans or its obligation to make
Eurocurrency Loans (except for changes in the rate of tax on the overall
net income of such Lender or its Eurocurrency Office imposed by the
jurisdiction in which such Lender's principal executive office or
Eurocurrency Office is located); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve included in the
determination of interest rates pursuant to Section 4), special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by any Lender (or any Eurocurrency Office of such
Lender); or
(iii) shall impose on any Lender (or its Eurocurrency Office) any
other condition affecting its Eurocurrency Loans, its Note or its
obligation to make Eurocurrency Loans;
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and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D of the Board of Governors of the Federal Reserve System,
to impose a cost on) such Lender (or any Eurocurrency Office of such Lender) of
making or maintaining any Eurocurrency Loan, or to reduce the amount of any sum
received or receivable by such Lender (or its Eurocurrency Office) under this
Agreement or under its Note with respect thereto, then within 10 days after
demand by such Lender (which demand shall be accompanied by a statement setting
forth in reasonable detail the basis for and a calculation of the amount of
such demand, a copy of which shall be furnished to the Administrative Agent),
the Company shall pay directly to such Lender such additional amount or amounts
as will compensate such Lender for such increased cost or such reduction.
(b) If any Lender shall reasonably determine that the adoption or phase-in
of any applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Eurocurrency Office) or any Person controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's or such controlling
Person's capital as a consequence of such Lender's obligations hereunder
(including, without limitation, such Lender's obligations under the Commitment)
to a level below that which such Lender or such controlling Person could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such controlling Person's policies with respect to capital
adequacy) by an amount deemed by such Lender or such controlling Person to be
material, then from time to time, within 10 days after demand by such Lender
(which demand shall be accompanied by a statement setting forth in reasonable
detail the basis for and a calculation of the amount of such demand, a copy of
which shall be furnished to the Administrative Agent), the Company shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such controlling Person for such reduction.
8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
respect to any Interest Period:
(a) deposits in Dollars or Sterling (in the applicable amounts) are not
being offered to the Administrative Agent in the interbank eurocurrency market
for such Interest Period, or the Administrative Agent otherwise reasonably
determines (which determination shall be binding and conclusive on the Company)
that by reason of circumstances
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affecting the interbank eurocurrency market adequate and reasonable means do not
exist for ascertaining the applicable Eurocurrency Rate;
(b) two or more Lenders having an aggregate Percentage of 30% or more
advise the Administrative Agent that the Eurocurrency Rate (Reserve Adjusted) as
determined by the Administrative Agent will not as determined in good faith by
such Lenders adequately and fairly reflect the cost to such Lenders of
maintaining or funding such Loans for such Interest Period (taking into account
any amount to which such Lenders may be entitled under Section 8.1); or
(c) Lenders having an aggregate Percentage of 30% or more advise the
Administrative Agent that the making or funding of Eurocurrency Loans has become
impracticable as a result of an event occurring after the date of this Agreement
which in the opinion of such Lenders materially affects such Loans;
then the Administrative Agent shall promptly notify the other parties hereto
and, so long as such circumstances shall continue, (i) no Lender shall be under
any obligation to make, or convert any Floating Rate Loan into, Eurocurrency
Loans and (ii) on the last day of the current Interest Period for each
Eurocurrency Loan, such Loan shall, unless then repaid in full, automatically
convert to a Floating Rate Loan.
8.3 Changes in Law Rendering Eurocurrency Loans Unlawful. In the event
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Lender cause a substantial question as to whether it is) unlawful for any Lender
to make, maintain or fund Eurocurrency Loans, then such Lender shall promptly
notify each of the other parties hereto and, so long as such circumstances shall
continue, (a) such Lender shall have no obligation to make, or convert any
Floating Rate Loan into, Eurocurrency Loans (but shall make Floating Rate Loans
concurrently with the making of, or conversion into, Eurocurrency Loans by the
Lenders which are not so affected, in each case in an amount equal to such
Lender's pro rata share of all Eurocurrency Loans which would be made or
converted at such time in the absence of such circumstances) and (b) on the last
day of the current Interest Period for each Eurocurrency Loan of such Lender
(or, in any event, on such earlier date as may be required by the relevant law,
regulation or interpretation), such Eurocurrency Loan shall, unless then repaid
in full, automatically convert to a Floating Rate Loan provided, however, that
Eurocurrency Loans denominated in
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Sterling must be repaid and reborrowed as a Floating Rate Loan on such date.
Each Floating Rate Loan made by a Lender which, but for the circumstances
described in the foregoing sentence, would be a Eurocurrency Loan (an "Affected
Loan") shall remain outstanding for the same period as the Group of
Eurocurrency Loans of which such Affected Loan would be a part absent such
circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any
Lender (which demand shall be accompanied by a statement setting forth the basis
for the calculations of the amount being claimed, a copy of which shall be
furnished to the Administrative Agent) the Company will indemnify such Lender
against any net loss or expense which such Lender may sustain or incur
(including, without limitation, any net loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain any Eurocurrency Loan), as reasonably determined by
such Lender, as a result of (a) any payment or prepayment or conversion of any
Eurocurrency Loan of such Lender on a date other than the last day of an
Interest Period for such Loan (including, without limitation, any conversion
pursuant to Section 8.3) or (b) any failure of the Company to borrow or convert
any Loans on a date specified therefor in a notice of borrowing or conversion
pursuant to this Agreement. For this purpose, all notices to the Administrative
Agent pursuant to this Agreement shall be deemed to be irrevocable.
8.5 Right of Lenders to Fund through Other Offices. Each Lender may, if
it so elects, fulfill its commitment as to any Eurocurrency Loan by causing a
foreign branch or Affiliate of such Lender to make such Loan, provided that in
such event for the purposes of this Agreement such Loan shall be deemed to have
been made by such Lender and the obligation of the Company to repay such Loan
shall nevertheless be to such Lender and shall be deemed held by it, to the
extent of such Loan, for the account of such branch or Affiliate.
8.6 Discretion of Lenders as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Lender shall be entitled to
fund and maintain its funding of all or any part of its Loans in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder shall be made as if such Lender had actually funded
and maintained each Eurocurrency Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Eurocurrency Rate for
such Interest Period.
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8.7 Mitigation of Circumstances; Replacement of Affected Lender. (a) Each
Lender shall promptly notify the Company and the Administrative Agent of any
event of which it has knowledge which will result in, and will use reasonable
commercial efforts available to it (and not, in such Lender's good faith
judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, (i)
any obligation by the Company to pay any amount pursuant to Section 7.6 or 8.1
and (ii) the occurrence of any circumstances of the nature described in Section
8.2 or 8.3 (and, if any Lender has given notice of any such event described in
clause (i) or (ii) above and thereafter such event ceases to exist, such Lender
shall promptly so notify the Company and the Administrative Agent). Without
limiting the foregoing, each Lender will designate a different funding office if
such designation will avoid (or reduce the cost to the Company of) any event
described in clause (i) or (ii) of the preceding sentence and such designation
will not, in such Lender's sole judgment, be otherwise disadvantageous to such
Lender.
(b) At any time any Lender is an Affected Lender, the Company may replace
such Affected Lender as a party to this Agreement with one or more other bank(s)
or financial institution(s) reasonably satisfactory to the Administrative Agent
and the Issuing Bank and, upon notice from the Company, such Affected Lender
shall assign pursuant to an Assignment Agreement, and without recourse or
warranty, its Commitment, if any, its Loans, its Note, its participation in
Letters of Credit, if any, and all of its other rights and obligations hereunder
to such replacement bank(s) or other financial institution(s) for a purchase
price equal to the sum of the principal amount of the Loans so assigned, all
accrued and unpaid interest thereon, its ratable share of all accrued and unpaid
commitment fees and Letter of Credit fees, any amounts payable under Section 8.4
as a result of such Lender receiving payment of any Eurocurrency Loan prior to
the end of an Interest Period therefor and all other obligations owed to such
Affected Lender hereunder.
8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
and statements of any Lender pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
conclusive absent demonstrable error. Lenders may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, cancellation or expiration of the Letters of Credit
and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce the Agents and the Lenders to enter into this Agreement, the
Issuing Bank to issue Letters of Credit and the
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Lenders to make Loans and purchase participations in Letters of Credit
hereunder, the Company warrants to the Agents, the Issuing Bank and the Lenders
that:
9.1 Organization, etc. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware;
each Restricted Subsidiary is a corporation duly organized, validly existing and
in good standing under the state of its incorporation; the Company and each
Restricted Subsidiary is duly qualified to do business in each jurisdiction
where the nature of its business makes such qualification necessary, except
where the failure to be so qualified would not have a Material Adverse Effect;
and the Company and each Restricted Subsidiary has full corporate power and
authority to own its property and conduct its business as presently conducted
by it.
9.2 Authorization; No Conflict. The execution and delivery by the Company
of this Agreement and each other Loan Document to which it is a party, the
borrowings hereunder, the execution and delivery by each Guarantor of each Loan
Document to which it is a party and the performance by each of the Company and
each Guarantor of its obligations under each Loan Document to which it is a
party are within the corporate powers of the Company and each Guarantor, as
applicable, have been duly authorized by all necessary corporate action on the
part of the Company and each Guarantor (including any necessary shareholder
action), have received all necessary governmental approval (if any shall be
required), and do not and will not (a) violate any provision of law or any
order, decree or judgment of any court or other government agency which is
binding on the Company or any Restricted Subsidiary, (b) contravene or conflict
with, or result in a breach of, any provision of the Certificate of
Incorporation, By-Laws or other organizational documents of the Company or any
Restricted Subsidiary or of any agreement, indenture, instrument or other
document, or any judgment, order or decree, which is binding on the Company or
any Restricted Subsidiary or (c) result in, or require, the creation or
imposition of any Lien on any property of the Company or any Restricted
Subsidiary (other than pursuant to the Loan Documents).
9.3 Validity and Binding Nature. This Agreement is, and upon the
execution and delivery thereof each other Loan Document to which the Company is
a party will be, the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in equity
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or at law); and each Loan Document to which a Guarantor is a party will be,
upon the execution and delivery thereof by such Guarantor, the legal, valid and
binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, except that enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in equity or at law).
9.4 Financial Information. (a) The audited supplemental consolidated
financial statements of the Company and its Restricted Subsidiaries as at
December 31, 1994 and December 31, 1995, and the unaudited consolidated
financial statements of the Company and its Restricted Subsidiaries as at March
31, 1996, copies of which have been delivered to the Lenders in each case (i)
are true and correct in all material respects, (ii) have been prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as disclosed therein) and (iii) present fairly the consolidated
financial condition of the Company and its Restricted Subsidiaries at such dates
and the results of their operations for the periods then ended.
(b) The forecasted consolidating balance sheet, profits and loss
statement and cash flow statement of the Company and its Restricted Subsidiaries
(after giving effect to the Scheme), together with supporting details and
statement of underlying assumptions dated May 30, 1996, copies of which have
been delivered to each Lender, have been prepared by the Company in light of the
past operations of the business of the Company and its Restricted Subsidiaries
and represent, as of the date of this Agreement, the good faith estimate of the
Company and its senior management of the most probable course of the business of
the Company and its subsidiaries after giving effect to the Scheme.
9.5 No Material Adverse Change. Except as disclosed in Schedule 9.5,
since December 31, 1995, no event or events have occurred which, individually or
in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.
9.6 Litigation and Contingent Liabilities. No litigation (including,
without limitation, derivative actions), arbitration proceeding or governmental
proceeding is pending or, to the Company's knowledge, threatened against the
Company or any Restricted Subsidiary which, if adversely determined, might have
a Material Adverse Effect, except as set forth in Schedule 9.6. Other than any
liability incident to such litigation or proceedings, neither the Company nor
any Restricted Subsidiary has any material contingent liabilities not provided
for or
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disclosed in the financial statements referred to in clause (a) of Section 9.4
or listed in Schedule 9.6.
9.7 Ownership of Properties; Liens. Each of the Company and each
Restricted Subsidiary owns good and marketable title to, or a valid leasehold
interest in, all of its properties and assets, real and personal, tangible and
intangible, of any nature whatsoever (including patents, trademarks, trade
names, service marks and copyrights), free and clear of all Liens, charges and
claims (including infringement claims with respect to patents, trademarks,
copyrights and the like) except as permitted pursuant to Section 10.8.
9.8 Subsidiaries. The Company has no Subsidiaries except those listed in
Schedule 9.8 as of the Amendment Effective Date or the Closing Date.
9.9 Pension and Welfare Plans. Except as disclosed to the Lenders in
writing prior to the date of this Agreement, during the twelve-
consecutive-month period prior to the date of the execution and delivery of this
Agreement or the making of any Loan hereunder, (a) no steps have been taken to
terminate any Pension Plan which would be reasonably likely to result in the
Company being required to make a contribution to such Pension Plan, or incurring
a liability or obligation to such Pension Plan, in excess of $2,000,000, and (b)
no contribution failure has occurred with respect to any Pension Plan sufficient
to give rise to a Lien under Section 302(f) of ERISA. No condition exists or
event or transaction has occurred with respect to any Pension Plan which could
result in the incurrence by the Company of any material liability, fine or
penalty under ERISA or the Code. Except as set forth on Schedule 9.9, the
Company has no contingent liability with respect to any post- retirement benefit
under a Welfare Plan, other than liability for continuation coverage described
in Part 6 of subtitle B of title I of ERISA.
9.10 Investment Company Act. Neither the Company nor any Restricted
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
9.11 Public Utility Holding Company Act. Neither the Company nor any
Restricted Subsidiary is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
9.12 Regulations G, T, U and X. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its
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important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
9.13 Taxes. Each of the Company and each Restricted Subsidiary has filed
all income tax and other material tax returns and reports required by law to
have been filed by it and has paid all income taxes and other material taxes and
governmental charges thereby shown to be owing, except (a) as disclosed on
Schedule 9.6 and (b) for any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
9.14 Solvency, etc. On the Closing Date (or, in the case of any Person
which becomes a Guarantor after the Closing Date, on the date such Person
becomes a Guarantor), and immediately prior to and after giving effect to the
issuance of each Letter of Credit, each borrowing hereunder and the use of the
proceeds thereof, (a) the assets of each of the Company and each Restricted
Subsidiary which is a Guarantor will exceed its liabilities and (b) each of the
Company and each Restricted Subsidiary which is a Guarantor will be solvent,
will be able to pay its debts as they mature, will own property with fair
saleable value greater than the amount required to pay its debts and will have
capital sufficient to carry on its business as then constituted.
9.15 Insurance. Set forth on Schedule 9.15 is a complete and accurate
summary of the property, casualty and business interruption insurance program
carried by the Company and its Restricted Subsidiaries on the date of this
Agreement, including the insurer's(s') name(s), policy number(s), expiration
date(s), amount(s) of coverage, type(s) of coverage, the annual premium(s),
exclusions, deductibles and self- insured retention and a description in
reasonable detail of (a) any retrospective rating plan, fronting arrangement or
other self-insurance or risk assumption agreed to by the Company or any
Restricted Subsidiary or imposed upon the Company or any Restricted Subsidiary
by any such insurer and (b) any self-insurance program that is in effect.
9.16 Contracts; Labor Matters. Except as disclosed on Schedule 9.16: (a)
neither the Company nor any Restricted Subsidiary is a party to any contract or
agreement, or is subject to any charge, corporate restriction, judgment, decree
or order, which has a Material Adverse Effect; (b) no labor contract to which
the Company or any Restricted Subsidiary is a party or is otherwise subject is
scheduled to expire prior to the Commitment Termination Date; (c) neither the
Company nor any Restricted Subsidiary has, within the two-year period preceding
the date of this Agreement, taken any action which would have constituted or
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resulted in a "plant closing" or "mass layoff" within the meaning of the
Federal Worker Adjustment and Retraining Notification Act of 1988 or any
similar applicable federal, state or local law, and the Company has any
reasonable expectation that any such action is or will be required at any time
prior to the Commitment Termination Date; and (d) on the Closing Date there are
no strikes or walkouts relating to any labor contracts to which the Company or
any Restricted Subsidiary is a party or is otherwise subject.
9.17 Environmental and Safety and Health Matters. Except as disclosed on
Schedule 9.17, the Company and each of its Subsidiaries and each property,
operation and facility that the Company or any Subsidiary may own, operate or
control (i) complies in all material respects with (A) all applicable
Environmental Laws and (B) all applicable Occupational Safety and Health Laws;
(ii) is not subject to any judicial or administrative proceeding alleging the
violation of any Environmental Law or Occupational Safety and Health Law; (iii)
has not received any notice (A) that it may be in violation of any Environmental
Law or Occupational Safety and Health Law, or (B) threatening the commencement
of any proceeding relating to allegedly unlawful, unsafe or unhealthy conditions
or (C) alleging that it is or may be responsible for any response, cleanup, or
corrective action, including, but not limited to, any remedial
investigation/feasibility study, under any Environmental Law or Occupational
Safety and Health Law; (iv) has not received any notice that it is the subject
of federal or state investigation evaluating whether any investigation, remedial
action or other response is needed to respond to (A) a spillage, disposal or
release or threatened release into the environment of any Regulated Material, or
(B) any alleged violation of any Occupational Safety and Health Law; (v) has not
filed any notice under or relating to any Environmental Law or Occupational
Safety and Health Law indicating or reporting (A) any past or present spillage,
disposal or release (other than permitted releases) into the environment of, or
treatment, storage or disposal of (other than permitted releases), any Regulated
Material in excess of quantities requiring notification under any Environmental
Law, or (B) any violation of any Occupational Safety and Health Law and (vi) to
the best knowledge of the Company has no material contingent liability in
connection with (A) any actual or potential spillage, disposal or release into
the environment of, or otherwise with respect to, any Regulated Material,
whether on any premises owned or occupied by the Company or any Subsidiary or on
any other premises or (B) any unsafe or unhealthful condition. Except as
disclosed on Schedule 9.17, there are no Regulated Materials on, in or under any
property or facilities, owned, operated or controlled by the Company or any
Subsidiary (except Regulated Materials used in the ordinary course of the
business of the Company and its Subsidiaries and used, stored,
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handled, treated and disposed of in all material respects in accordance with
all applicable Environmental Laws and Occupational Safety and Health Laws)
that, under applicable Environmental Laws or Occupational Safety and Health
Laws (A) impose or could reasonably be expected to impose a liability for
removal, remediation, or other cleanup or damage to natural resources, in an
amount equal to or greater than $500,000; (B) could reasonably be expected to
have a Material Adverse Effect; or (C) could reasonably be expected to result
in the imposition of a Lien on the property or other assets of the Company or
its Subsidiaries.
9.18 Information. All written information heretofore or contemporaneously
herewith furnished by or on behalf of the Company or any Restricted Subsidiary
to any Agent or any Lender for purposes of or in connection with this Agreement
and the transactions contemplated hereby is, and all written information
hereafter furnished by or on behalf of the Company or any Restricted Subsidiary
to any Agent or any Lender pursuant hereto or in connection herewith will be,
true and accurate in every material respect on the date as of which such
information is dated or certified, and none of such information is or will be
incomplete by omitting to state any material fact necessary to make such
information not misleading.
9.19 Senior Subordinated Indenture. The obligations of the Company under
this Agreement constitute "Senior Indebtedness" (1) under the terms of the
Senior Subordinated Indenture and (2) under the terms of the "New Bank Credit
Facility," as such term is defined in the Senior Subordinated Indenture.
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Company hereunder and under the other Loan Documents are
paid in full and all Letters of Credit have been terminated, the Company agrees
that, unless at any time the Required Lenders shall otherwise expressly consent
in writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the
Administrative Agent and each Lender at its respective office:
10.1.1 Annual Report. Promptly when available and in any event within 90
days after the close of each Fiscal Year, (a) a copy of the annual report of the
Company and its Restricted Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets of the Company and its Restricted Subsidiaries as of
the end of such Fiscal Year and consolidated statements of earnings and cash
flow of the Company and its Restricted
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Subsidiaries for such Fiscal Year, which report (i) shall be prepared in
accordance with GAAP and certified by independent auditors of recognized
national standing selected by the Company and reasonably acceptable to the
Required Lenders, in an audit report which shall be without qualification as to
going concern or scope and (ii) shall be accompanied by a written statement
from such auditors to the effect that in making the examination necessary for
the signing of such audit report they have not become aware of any Event of
Default or Unmatured Event of Default that has occurred and is continuing or,
if they have become aware of any such event, describing it in reasonable
detail; and (b) a copy of the consolidating balance sheets of the Company and
its Restricted Subsidiaries as of the end of such Fiscal Year and consolidating
statements of earnings for the Company and its Restricted Subsidiaries for such
Fiscal Year, together with a certificate signed by one of the chief executive
officer, the chief financial officer, the chief operating officer or the
controller of the Company certifying that such financial statements fairly
present the financial condition and results of operations of the Company and
its Restricted Subsidiaries as of the dates and periods indicated.
10.1.2 Quarterly Reports. Promptly when available and in any event within
45 days after the end of the first three Fiscal Quarters of each Fiscal Year,
(a) consolidated balance sheets of the Company and its Restricted Subsidiaries
as of the end of such Fiscal Quarter and consolidated statements of earnings and
consolidated statements of cash flow for such Fiscal Quarter and for the period
beginning with the first day of such Fiscal Year and ending on the last day of
such Fiscal Quarter, including a comparison with the corresponding Fiscal
Quarter and period of the previous Fiscal Year and prepared in accordance with
GAAP, and (b) consolidating balance sheets of the Company and its Restricted
Subsidiaries as of the end of such Fiscal Quarter and consolidating statements
of earnings for the Company and its Restricted Subsidiaries for such Fiscal
Quarter, together with a certificate signed by one of the chief executive
officer, the chief financial officer, the chief operating officer or the
controller of the Company to the effect that such financial statements fairly
present the financial condition and results of operations of the Company and its
Restricted Subsidiaries as of the dates and periods indicated, subject to
changes resulting from normal year-end adjustments.
10.1.3 Certificates. Contemporaneously with the furnishing of a copy of
each annual audit report pursuant to Section 10.1.1, and each set of statements
pursuant to Section 10.1.2, a duly completed certificate in the form of Exhibit
B, with appropriate insertions, dated the date of such annual report or such
quarterly statements and signed by one of the chief executive officer, the chief
financial officer, the chief operating officer
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or the controller of the Company, containing a computation of each of the
financial ratios and restrictions set forth in this Section 10 and to the
effect that such officer has not become aware of any Event of Default or
Unmatured Event of Default that has occurred and is continuing or, if there is
any such event, describing it and the steps, if any, being taken to cure it.
10.1.4 Reports to SEC and to Shareholders. Promptly upon the filing or
sending thereof, a copy of (a) any annual, periodic or special report or
registration statement (inclusive of exhibits thereto) filed by the Company with
the SEC or any securities exchange and (b) any report, proxy statement or
similar communication to the Company's public shareholders, if any.
10.1.5 Notice of Default, Litigation and ERISA Matters. Promptly (and in
any event within one Business Day in the case of clause (a) and within five days
in the case of clauses (b) through (e)) after any officer of the Company learns
of any of the following, written notice describing the same and the steps being
taken by the Company or the Restricted Subsidiary affected thereby with respect
thereto: (a) the occurrence of an Event of Default or an Unmatured Event of
Default; (b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Lenders which has been
instituted or, to the knowledge of the Company, is threatened against the
Company or any Restricted Subsidiary or to which any of the properties of any
thereof is subject which has had or is reasonably likely to have a Material
Adverse Effect; (c) any material adverse development which occurs in any
litigation, arbitration or governmental investigation or proceeding previously
disclosed on Schedule 9.6 or pursuant to clause (b); (d) the institution of any
steps by the Company, any of its Subsidiaries or any other Person to terminate
any Pension Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under Section 302(f)
of ERISA, or the taking of any action with respect to a Pension Plan which could
result in the requirement that the Company furnish a bond or other security to
the PBGC or such Pension Plan, or the occurrence of any event with respect to
any Pension Plan which could result in the incurrence by the Company of any
material liability, fine or penalty, or any material increase in the contingent
liability of the Company with respect to any post-retirement Welfare Plan
benefit; and (e) the occurrence of any other event or circumstance which has had
or is reasonably likely to have a Material Adverse Effect.
10.1.6 Subsidiaries. Promptly upon the occurrences thereof, a written
report of any change in the list of its Restricted Subsidiaries.
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10.1.7 Management Reports. Promptly upon the request of the
Administrative Agent or any Lender, copies of all detailed financial and
management reports submitted to the Company by independent auditors in
connection with any annual or interim audit made by such auditors of the books
of the Company.
10.1.8 Insurance Information. Not later than 90 days after the end of
each Fiscal Year, a complete and accurate summary of the property, business
interruption and casualty insurance program of the Company and its Subsidiaries,
containing substantially the same information with respect to such insurance
program as the information set forth on Schedule 9.15; and promptly upon the
occurrence thereof, a written report of any change in the Company's insurance
program which will materially reduce the amount or scope of coverage of any type
of insurance.
10.1.9 Annual Budget. Not later than the earlier of (a) the date the
annual report is required to be delivered pursuant to Section 10.1.1 and (b) the
date on which preparation of such budget is completed, a copy of the Company's
annual budget for the next succeeding Fiscal Year.
10.1.10 Other Information. Promptly from time to time, such other
information concerning the Company and its Restricted Subsidiaries as any Lender
or the Administrative Agent may reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each Restricted
Subsidiary to keep, proper books and records in which full and correct entries
shall be made sufficient to allow the preparation of financial statements in
accordance with GAAP; permit, and cause each Restricted Subsidiary to permit, on
reasonable notice and at reasonable times and intervals any Lender, the
Administrative Agent or any representative thereof to (a) visit and inspect the
properties of the Company or any of its Restricted Subsidiaries during normal
business hours, (b) inspect and make extracts from and copies of their
respective books and records, and (c) discuss with their respective principal
officers their respective businesses, operations and financial matters. The
Company and each of its Restricted Subsidiaries will (i) after the occurrence
and during the continuance of any Event of Default and (ii) otherwise with the
consent of the Company, which consent shall not be unreasonably withheld, also
permit any Lender, the Administrative Agent or any representative thereof to
discuss with the Company's independent auditors their respective businesses,
operations and financial matters, provided that the Company is given reasonable
prior notice of and an opportunity to attend any meeting between such auditors
and any Lender, the Administrative Agent or any representative thereof at which
such issues will be discussed. All visits, discussions, and
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examinations by the Administrative Agent shall be at the Company's expense.
10.3 Insurance. Maintain, and cause each Restricted Subsidiary to
maintain, with reputable, financially sound insurance companies (in all cases
rated at least A- by A.M. Best & Co.), insurance to such extent and against such
hazards and liabilities as is customarily maintained by companies similarly
situated (and, in any event, such insurance as may be required by any law or
governmental regulation or any court order or decree); and, upon request of the
Administrative Agent or any Lender, furnish to the Administrative Agent or such
Lender a certificate setting forth in reasonable detail the nature and extent of
all insurance maintained by the Company and its Subsidiaries.
10.4 Compliance with Laws; Maintenance of Property; Payment of Taxes and
Liabilities. (a) Comply, and cause each Restricted Subsidiary to comply, in all
material respects with all applicable laws, rules, regulations and orders the
noncompliance with which would be reasonably likely to have a Material Adverse
Effect; (b) maintain or cause to be maintained, and cause each Restricted
Subsidiary to maintain or cause to be maintained, in good repair, working order
and condition all material properties used in its business, and make, and cause
each Restricted Subsidiary to make, all appropriate repairs, renewals and
replacements of such properties; (c) pay, and cause each Subsidiary to pay,
prior to delinquency, all taxes and other governmental charges against it or any
of its property; provided, however, that the foregoing shall not require the
Company or any Subsidiary to pay any such tax or charge so long as it shall
contest the validity thereof in good faith by appropriate proceedings and shall
set aside on its books adequate reserves with respect thereto; and (d) not, and
not permit any Restricted Subsidiary to, file or consent to the filing of any
consolidated income tax return with any Person other than the Company and its
Subsidiaries.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject
to Section 10.11) cause each Restricted Subsidiary to maintain and preserve, (a)
its existence and good standing in the jurisdiction of its incorporation, (b)
its qualification and good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good
standing would not be reasonably likely to result in a Material Adverse Effect),
and (c) each other corporate franchise the failure or absence of which would
have a Material Adverse Effect.
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10.6 Financial Covenants.
10.6.1 Total Leverage Ratio. Not permit the Total Leverage Ratio to
exceed (a) 6.5:1.0 at any time before the Closing Date, nor (b) 6.0:1.0 at any
time on or after the Closing Date.
10.6.2 Senior Leverage Ratio. Not permit the Senior Leverage Ratio to
exceed (a) 3.5:1.0 at any time before the Closing Date, nor (b) 3.0:1.0 at any
time on or after the Closing Date.
10.6.3 Interest Coverage Ratio. Not permit the Interest Coverage Ratio to
be less than 2.0:1.0 as of any Computation Period.
10.6.4 Computation of Financial Covenants. For purposes of calculating
any financial covenant contained in this Section 10.6, any accounting
adjustments or the reversal of any reserves established in connection therewith
shall not affect the calculation of such financial covenant. Upon the
implementation of any accounting adjustments, the financial statements delivered
hereunder and the financial covenants shall be prepared without regard to such
adjustments until a mutually satisfactory amendment to the financial covenants
has been implemented.
10.7 Limitations on Debt. Not, and not permit any Restricted Subsidiary
to, create, incur, assume or suffer to exist any Debt, except (a) obligations
arising under the Loan Documents; (b) Debt of Restricted Subsidiaries under the
Subsidiary Notes; (c) Debt of Palestine Post under the Jerusalem Post Note,
provided such Debt shall not exceed $18,000,000 in the aggregate at any time;
(d) unsecured Debt of the Company to its Wholly-Owned Restricted Subsidiaries
provided such debt is subordinated to the Obligations and the Senior
Subordinated Notes on terms and conditions satisfactory to the Required Lenders;
(e) Hedging Agreements entered into by the Company; (f) Guarantee Obligations in
respect of any obligation of the Company or any Restricted Subsidiary permitted
under this Agreement; (g) Debt in respect of taxes, assessments or governmental
charges to the extent that payment thereof shall not at the time be required to
be made in accordance with Section 10.4; (h) Debt outstanding on the Amendment
Effective Date and listed on Schedule 10.7 under the heading "Continuing Debt"
and other Debt hereafter incurred by Restricted Subsidiaries in connection with
Liens permitted by Section 10.8, and extensions, renewals and refinancings of
any Debt described in this clause (h) so long as the permitted or available
principal amount thereof is not increased; (i) Debt of Wholly-Owned Restricted
Subsidiaries to or from Wholly-Owned Restricted Subsidiaries; (j) Debt under the
AP-91 Senior Notes; and (k) Debt under the Senior Subordinated Notes and other
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Subordinated Debt under clause (c) of the definition of Subordinated Debt.
10.8 Liens. Not, and not permit any Restricted Subsidiary to, create or
permit to exist any Lien on any of its real or personal properties, assets or
rights of whatsoever nature (whether now owned or hereafter acquired), except
(a) Liens for taxes or other governmental charges not at the time delinquent or
thereafter payable without penalty or being contested in good faith by
appropriate proceedings and, in each case, for which it maintains adequate
reserves in accordance with GAAP; (b) Liens arising in the ordinary course of
business (such as (i) Liens of carriers, warehousemen, mechanics and materialmen
and other similar Liens imposed by law and (ii) Liens incurred in connection
with worker's compensation, unemployment compensation and other types of social
security (excluding Liens arising under ERISA)) or in connection with surety and
appeal bonds, bids, performance bonds and similar obligations for sums not
overdue or being contested in good faith by appropriate proceedings and not
involving any deposits or advances or borrowed money or the deferred purchase
price of property or services, and, in each case, for which it maintains
adequate reserves; (c) Liens identified on Schedule 10.8; (d) any Lien arising
in connection with the acquisition, construction or improvement of tangible
personal property by a Restricted Subsidiary after February 7, 1996 and
attaching only to the property being acquired, constructed or improved, if the
Lien and the Debt secured thereby does not exceed 100% of the cost of such
Acquisition, cost or improvement, as the case may be, nor $3,000,000 in the
aggregate of all such Debt of the Company and its Restricted Subsidiaries at any
one time outstanding; (e) attachments, judgments and other similar Liens, for
sums not exceeding $2,000,000 ($500,000 with respect to any Restricted
Subsidiary) (excluding any portion thereof which is covered by insurance so long
as the insurer is reasonably likely to be able to pay) arising in connection
with court proceedings, provided the execution or other enforcement of such
Liens is effectively stayed and claims secured thereby are being actively
contested in good faith and by appropriate proceedings and have been bonded off
or for which adequate reserves are maintained; (f) easements, party wall
agreements, rights of way, restrictions, minor defects or irregularities in
title and other similar Liens not interfering in any material respect with the
ordinary conduct of the business of the Company and its Restricted Subsidiaries
taken as a whole; (g) leases or subleases granted by the Company or any
Restricted Subsidiary in the ordinary course of its business; (h) extensions,
renewals or replacements of any Lien permitted by the foregoing provisions of
this Section 10.8, but only if the principal amount of the Debt secured thereby
immediately prior to such extension, renewal or replacement is not increased and
such Lien is not extended to any
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other property; (i) Liens pursuant to the Subsidiary Security Agreements; and
(j) Liens in favor of the Administrative Agent.
10.9 Limitation on Restricted Payments. (a) Not, and not permit any
Restricted Subsidiary to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution or
payment on or in respect of the Company's Capital Stock, or make any
payment or other distribution to (including dividends or distributions of
the Capital Stock of any Restricted Subsidiary), or make any other payment
to the direct or indirect holders (in their capacities as such) of the
Company's Capital Stock (other than dividends or distributions payable in
shares of the Company's Qualified Capital Stock or in options, warrants or
other rights to acquire such Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any Capital Stock of the Company or any Capital
Stock of any Affiliate of the Company (other than Capital Stock of any
Wholly-Owned Restricted Subsidiary or Capital Stock of a Person that,
immediately following such repurchase, will become a Wholly-Owned
Restricted Subsidiary) or options, warrants or other rights to acquire such
Capital Stock;
(iii) make any principal payment on, or repurchase, redeem, defease,
retire or otherwise acquire for value, prior to any scheduled principal
payment, sinking fund payment or maturity, any Subordinated Debt;
(iv) declare or pay any dividend or distribution on any Capital Stock
of any Restricted Subsidiary to any Person (other than (x) with respect to
any Capital Stock held by the Company or any of its Wholly-Owned Restricted
Subsidiaries or (y) with respect to Capital Stock held by any other Person
(other than an Affiliate of the Company or an Affiliate of such Affiliate)
made on a pro rata basis consistent with the ownership interests in such
Capital Stock to the owners of such Capital Stock, except that, in the case
of the Capital Stock of a Restricted Subsidiary that is a Guarantor, (i) no
Unmatured Event of Default or Event of Default shall have occurred and be
continuing and (ii) no holders of any other Debt of the Company or any
Restricted Subsidiary shall have an Acceleration Right);
(v) incur, create or assume any guarantee of Debt of any Affiliate of
the Company (other than a Wholly-Owned Restricted Subsidiary of the
Company);
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(vi) make any Investment in any Person (other than any Investments
permitted under Section 10.10);
(vii) pay any Management Fees; or
(viii) designate any Restricted Subsidiary as an Unrestricted
Subsidiary;
(any of the payments described in paragraphs (i) through (viii) above, other
than any such action that is a Permitted Payment (as defined below),
collectively, "Restricted Payments"). Notwithstanding the foregoing, (1) the
Company may make Restricted Payments pursuant to paragraph (i) above in an
amount equal to the sum of (x) the regular quarterly dividend declared by
Hollinger International and (y) the interest payable pursuant to the Holdco
Facility which FDTH is not permitted to pay pursuant to Section 10.9 of the
FDTH Credit Agreement, provided (A) no Unmatured Event of Default or Event of
Default shall have occurred and be continuing or shall result from the payment
of such Restricted Payment; (B) no holders of any other Debt of the Company or
any Restricted Subsidiary shall have an Acceleration Right; and (C) the amount
of the quarterly dividends declared on its Common Stock by Hollinger
International do not exceed $0.10 per share as adjusted for any stock splits,
stock dividends, reverse stock splits and other similar events occurring after
the date hereof; and (2) each Fiscal Quarter the Company may make Restricted
Payments pursuant to paragraph (vii) above to the extent not in excess of the
lesser of (x) Excess Cash Flow and (y) $2,250,000, provided no (A) Unmatured
Event of Default or Event of Default shall have occurred and be continuing or
shall result from the payment of such Restricted Payment, and (B) no holders of
any other Debt of the Company or any Restricted Subsidiary shall have an
Acceleration Right.
(b) Notwithstanding the foregoing so long as (1) no Unmatured Event of
Default or Event of Default has occurred and is continuing or would result
therefrom and (2) no holders of any other Debt of the Company or any Restricted
Subsidiary have an Acceleration Right, the foregoing provisions will not
prohibit the following actions (clauses (i) through (iii) being referred to as
"Permitted Payments"):
(i) dividends paid to Hollinger International after February 7, 1996
to the extent not in excess of the Southam Dividend Amount;
(ii) loans, advances, dividends or distributions by any Restricted
Subsidiary to the Company or any Wholly-Owned Restricted Subsidiary and by
FDTH or, to the extent it has received such funds directly or indirectly
from FDTH, DTH or the Company to Hollinger International for the purpose of
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redeeming shares of Series A Preferred Stock not exceeding in the aggregate
any payments made by Hollinger Inc. to FDTH pursuant to the provisions of
the HTH/FDTH Share Exchange Agreement; and
(iii) tax payments pursuant to the Tax Allocation Agreement to the
extent that the aggregate amount of such payments do not exceed the
aggregate amount of the tax payments that the Company and its Restricted
Subsidiaries would have been required to make if they alone constituted a
single consolidated tax group.
10.10 Investments. Not, and not permit any Restricted Subsidiary to,
make, incur, assume or suffer to exist any Investment in any other Person,
except:
(a) Investments existing on the Amendment Effective Date and identified in
Schedule 10.10;
(b) Cash Equivalent Investments;
(c) Investments by the Company in its Restricted Subsidiaries (subject to
the limitation in Section 10.7(b)) or by any Restricted Subsidiary in its
Wholly-Owned Restricted Subsidiary, in the form of contributions to capital or
loans or advances; provided that, (i) any loans are evidenced by Subsidiary
Notes and Subsidiary Security Agreements which have been pledged pursuant to a
Pledge Agreement and (ii) immediately before and after giving effect to such
Investment, no Unmatured Event of Default or Event of Default shall have
occurred and be continuing;
(d) Investments by the Company or any Restricted Subsidiary in any
Restricted Subsidiary, in the form of capital contributions or loans and
advances existing on the date hereof;
(e) loans or advances made by any Restricted Subsidiary to the Company;
(f) loans or advances to officers and employees of the Company or of any
Restricted Subsidiary for travel or other ordinary business expenses not in
excess of $250,000 in the aggregate at any time;
(g) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale of goods and services in the ordinary course of
business;
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(h) shares of stock, obligations or other securities received in
settlement of claims arising in the ordinary course of business; and
(i) Investments by the Company or a Restricted Subsidiary in Telegraph
Ordinary Shares on the Closing Date pursuant to the Publishing/Telegraph
Subscription Agreement.
Notwithstanding any provision in this Section 10.10, (i) during the period
from the Amendment Effective Date through the Closing Date, the Company shall
not create or make investments in any Subsidiary and (ii) neither the Company
nor any of its Subsidiaries shall make any Investment in AP-91 or its
Subsidiaries, except for investments in connection with scheduled principal
payments on the AP-91 Notes in an amount not to exceed such scheduled principal
payments, unless AP-91 and its Subsidiaries shall have executed Loan Documents
as required by Section 10.28.
10.11 Mergers, Consolidations, Sales, Acquisitions. Not, and not permit
any Restricted Subsidiary to, be a party to any merger, consolidation, Asset
Sale, or to purchase or otherwise acquire all or substantially all of the assets
or any stock of any class of, or any partnership or joint venture interest in,
any other Person except for (a) any such merger or consolidation, sale,
transfer, conveyance, lease or assignment of or by any Wholly-Owned Restricted
Subsidiary into the Company or into, with or to any Wholly-Owned Restricted
Subsidiary, and (b) any such purchase or other acquisition by the Company or any
Wholly-Owned Restricted Subsidiary of the assets or stock of any Wholly-Owned
Restricted Subsidiary, (c) Asset Sales provided (i) no Event of Default or
Unmatured Event of Default has occurred and is continuing or would result
therefrom, (ii) the sales price of any Asset Sale made after the Amendment
Effective Date does not exceed $5,000,000 and the aggregate sales price of all
Asset Sales made after the Amendment Effective Date does not exceed $8,000,000,
and (iii) five Business Days prior to such Asset Sale, the Company shall give
written notice to the Administrative Agent and the Lenders of its proposed Asset
Sale, and (d) Acquisitions provided (i) no Event of Default or Unmatured Event
of Default has occurred and is continuing or would result therefrom, (ii) the
Company complies with Section 10.27, (iii) the total purchase price of all
Acquisitions made after the Amendment Effective Date does not exceed the sum of
(a) $10,000,000 plus (b) the Net Cash Proceeds from Asset Sales permitted under
Section 10.11(c) plus (c) the aggregate amount of all prepayments made pursuant
to Section 6.2.3, and (iv) five Business Days prior to any Acquisition having a
purchase price in excess of $10,000,000, the Required Lenders shall have
approved in advance in their sole and absolute discretion, in writing, any such
acquisition and the terms thereof and the Company shall have
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provided to the Administrative Agent and the Lenders a certificate pursuant to
a form substantially in accordance with Exhibit B (the "Acquisition
Certificate") setting forth (A) a complete description of and financial
information (including financial projections) relating to such Acquisition, (B)
the total purchase price of such Acquisition and the manner of payment thereof
and (C) a calculation of the covenants in Section 10.6 before and after giving
effect to such Acquisition, demonstrating compliance with such covenants, and,
if made in reliance on prepayments made pursuant to Section 6.2.3.,
demonstrating on a pro forma basis that Total Leverage Ratio after such
Acquisition does not exceed 5.0:1.0, and (D) certifying as to the matters in
clauses d(i) and (ii).
10.12 Use of Proceeds. Not use or permit any proceeds of any Loan to be
used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of "purchasing or carrying" any Margin Stock. The
Company will use the proceeds of Loans and Letters of Credit:
(a) to refinance the Existing Credit Extensions;
(b) to pay the purchase price pursuant to the Publishing/Telegraph
Subscription Agreement;
(c) to pay a portion of the transaction costs and expenses associated with
the Scheme (including but not limited to payments pursuant to tax indemnity
agreements);
(d) in the case of Letters of Credit, for issuing standby Letters of
Credit for working capital and general corporate purposes,
(e) to make Permitted Payments,
(f) to make scheduled payments of principal and interest on the AP-91
Senior Notes,
(g) for working capital needs and general corporate purposes of the
Company and its Subsidiaries (subject to any limitations hereunder, including
with respect to any availability to the Company).
10.13 Transactions with Affiliates. Not, and not permit any Restricted
Subsidiary to, enter into or cause, suffer or permit to exist any transaction,
arrangement or contract with any of its other Affiliates which is on terms which
are less favorable than are obtainable from any Person which is not one of its
Affiliates. Without limiting the foregoing, the Company will not, and will not
permit any Restricted Subsidiary to, pay any
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management, consulting or similar fee to any Affiliate other than Management
Fees to the extent permitted under Section 10.9(a)(2).
10.14 Employee Benefit Plans. Maintain, and cause each Restricted
Subsidiary to maintain, each Pension Plan in compliance in all material respects
with all applicable requirements of law and regulations.
10.15 Environmental Covenants.
10.15.1 Environmental Response Obligation. (a) Comply, and cause each
Subsidiary to comply, with any Federal or state judicial or administrative order
requiring the performance at any real property owned, operated or leased by the
Company or any Subsidiary (or in which such Person has a direct or indirect
interest) of activities in response to the release or threatened release of a
Regulated Material, except for the period of time that the Company or such
Subsidiary is diligently in good faith contesting such order; (b) notify the
Administrative Agent within ten days of the receipt of any written claim,
demand, proceeding, action or notice of liability by any Person arising out of
or relating to the release or threatened release of a Regulated Material which
are reasonably likely to give rise to cleanup or remediation liabilities under
Environmental Laws; and (c) notify the Administrative Agent within ten days of
any release, threat of release, or disposal of Regulated Material reported by
the Company or any Subsidiary to any governmental or regulatory authority at any
real property owned, operated, or leased by the Company or any Subsidiary (or in
which such Person has a direct or indirect interest) which are reasonably likely
to give rise to cleanup or remediation liabilities under Environmental Laws.
10.15.2 Environmental Liabilities. (a) Comply, and cause each Subsidiary
to comply, in all material respects with all Environmental Laws the
noncompliance with which would be reasonably likely to have a Material Adverse
Effect; (b) without limiting clause (a), not commence disposal of any Regulated
Material into or onto any real property owned, operated or leased by the Company
or any Subsidiary in violation of any Environmental Law; and (c) without
limiting clause (a), not allow any Lien imposed pursuant to any law, regulation
or order relating to Regulated Materials or the disposal thereof to remain on
any real property owned, operated or leased by the Company or any Subsidiary.
10.16 Unconditional Purchase Obligations. Not, and not permit any
Restricted Subsidiary to, enter into or be a party to any contract for the
purchase of materials, supplies or other property or services, if such contract
requires that payment be made by it regardless of whether or not delivery is
ever made of such materials, supplies or other property or services.
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10.17 Inconsistent Agreements. Not, and not permit any Restricted
Subsidiary to, enter into any agreement containing any provision which would be
violated or breached by any borrowing by the Company hereunder or by the
performance by the Company or any Restricted Subsidiary of any of its
obligations hereunder or under any other Loan Document.
10.18 Further Assurances. Take, and cause each Restricted Subsidiary to
take, such actions as the Administrative Agent may reasonably request from time
to time (including, without limitation, the execution and delivery of
guaranties, security agreements, pledge agreements, stock powers, financing
statements and other documents, the filing or recording of any of the foregoing,
and the delivery of stock certificates and other collateral with respect to
which perfection is obtained by possession) to ensure that (a) the obligations
of the Company hereunder and under the other Loan Documents are secured by 65%
of the issued and outstanding Capital Stock of JPEH and Palestine Post, 55% of
the issued and outstanding common stock of DTH, all Capital Stock of Telegraph
owned directly by the Company, 80% of the issued and outstanding Capital Stock
of STDS, and 100% of the Capital Stock of all other Restricted Subsidiaries
(except AP-91 and its Subsidiaries and the APAC-90 8% Preferred Shares) and
guaranteed by all the Restricted Subsidiaries (other than AP-91's Subsidiaries,
Palestine Post, JPEH, JPPL and STDS) (including, promptly upon the acquisition
or creation thereof, any Restricted Subsidiary created or acquired after the
date hereof), (b) the obligations of each Restricted Subsidiary under its
Subsidiary Note (other than the Jerusalem Post Note and the Subsidiary Notes
made by APAC 95, Sun Times and APHI) are secured by substantially all of the
assets of such Restricted Subsidiary (other than real property), (subject, in
the case of both clause (a) and clause (b), to such exceptions as the
Administrative Agent or the Required Lenders from time to time may permit).
10.19 Amendments to Certain Documents. Not make or agree to any amendment
to or modification of, or waive any of its rights under, any of the terms of (a)
the documents relating to the AP-91 Senior Notes or the Subordinated Debt, (b)
the Tax Allocation Agreement, (c) the Subsidiary Notes or the Subsidiary
Security Agreements or (d) the Publishing/Telegraph Subscription Agreement.
10.20 Conduct of Business. Not, and not permit any Restricted Subsidiary
to, engage in any business other than the Newspaper Business.
10.21 Limitations on Sale and Leaseback Transactions. Not, and not permit
any Restricted Subsidiary to, enter into any arrangement with any Person
providing for the leasing by the Company or any Restricted Subsidiary of any
real or tangible
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personal property, which property has been or is to be sold or transferred by
the Company or such Restricted Subsidiary to such Person in contemplation of
such leasing.
10.22 Tax Allocation Agreement. Not, and not permit any Restricted
Subsidiary to, enter into any tax sharing or similar agreement or arrangement,
other than the Tax Allocation Agreement.
10.23 Fiscal Year. Not, and not permit any Restricted Subsidiary to,
change its Fiscal Year.
10.24 Holding Company Status. Not own any material assets other than
stock of Subsidiaries and shall not permit JPEH, Palestine Post or AP-91 to own
any Subsidiaries other than the Subsidiaries owned by such Person on the
Amendment Effective Date.
10.25 Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries. Not, and not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to (a) pay dividends or make any other distribution on its Capital
Stock to the Company or any other Restricted Subsidiary, (b) pay any Debt owed
to the Company or any other Restricted Subsidiary, (c) make any Investment in
the Company or (d) transfer any of its properties or assets to the Company or
any Restricted Subsidiary, except (i) any encumbrance or restriction pursuant to
the AP-91 Senior Notes, (ii) any encumbrance or restriction, with respect to a
Restricted Subsidiary that is not a Restricted Subsidiary of the Company on the
Effective Date, in existence at the time such Person becomes a Restricted
Subsidiary of the Company and not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary, (iii) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Company or any Restricted Subsidiary and (iv) any
encumbrance or restriction existing under any agreement that extends, renews,
refinances or replaces the agreements containing the encumbrances or
restrictions in the foregoing clauses (i) and (ii) (other than the covenants in
AP-91 Senior Notes); provided that the terms and conditions of any such
encumbrances or restrictions are not materially less favorable to the Lenders
than those under or pursuant to the agreement evidencing the Debt so extended,
renewed, refinanced or replaced.
10.26 Designation and Ownership of Subsidiaries. Not designate any
Restricted Subsidiary as an Unrestricted Subsidiary or any Unrestricted
Subsidiary as a Restricted Subsidiary.
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10.27 New Restricted Subsidiaries, Investments and Acquisitions. As soon
as available and in any event within thirty (30) days after the date of any
Acquisition or Investment or the formation of any new Restricted Subsidiary of
the Company or any of its Restricted Subsidiaries, the Company and its
Restricted Subsidiaries, as appropriate, shall (a) if applicable, cause such
Restricted Subsidiary to execute and deliver (i) a Subsidiary Note and
Subsidiary Security Agreement and (ii) a counterpart of the Subsidiary Guaranty;
(b) pledge and assign to the Administrative Agent for the benefit of the Lenders
such Subsidiary Note and each Subsidiary Security Agreement and all of the
issued and outstanding shares of Capital Stock or other instruments or
securities evidencing ownership of such Restricted Subsidiary beneficially owned
by the Company or any of the Company's Restricted Subsidiaries, as the case may
be, as additional collateral for the Obligations, to constitute part of the
Collateral and to be held by the Administrative Agent on behalf of the Lenders
in accordance with the terms of the Company Pledge Agreement (together with such
stock powers, allonges, instruments, financial statements and other
documentation as in the opinion of the Administrative Agent are appropriate);
and (c) provide evidence of necessary authorizations and one or more opinions of
counsel in form and substance reasonably satisfactory to the Required Lenders
which in the opinion of the Required Lenders is appropriate with respect to such
Acquisition, Investment or new Restricted Subsidiary. Any such document or
agreement executed or issued pursuant to this Section 10.27 shall be a "Loan
Document" for purposes of this Agreement.
10.28 Pledge of AP-91. Promptly, but in any event within thirty (30) days
after the date the AP-91 Senior Notes are paid in full, the Company and AP-91,
as appropriate, shall (a) cause AP-91 and each of its Subsidiaries to execute
and deliver a counterpart of the Subsidiary Guaranty and either (x) a Subsidiary
Note and Subsidiary Security Agreement or (y) the Company Security Agreement;
(b) pledge and assign to the Administrative Agent for the benefit of the Lenders
such Subsidiary Notes and Subsidiary Security Agreements and all of the issued
and outstanding shares of Capital Stock or other instruments or securities
evidencing ownership of AP-91 and its Subsidiaries and any APAC-90 8% Preferred
Shares owned by AP-91 as additional Collateral for the Obligations, to
constitute part of the Collateral and to be held by the Administrative Agent on
behalf of the Lenders in accordance with the terms of the Company Pledge
Agreement (together with such stock powers, allonges, instruments, financing
statements and other documentation as in the opinion of the Administrative Agent
are appropriate) and (c) provide evidence of necessary authorizations and one or
more opinions of counsel in form and substance reasonably satisfactory to the
Required Lenders. Any such document or agreement executed
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or issued pursuant to this Section 10.28 shall be a "Loan Document" for
purposes of this Agreement.
10.29 Operating Leases. Not, and not permit any Restricted Subsidiary to,
create or suffer to exist any obligations for the payment of rent for any
property under lease or agreement to lease if the aggregate annual rental
payments for all such operating leases for the four Fiscal Quarters immediately
following such date of determination shall exceed $5,000,000.
10.30 Scheme Matters. Cause Telegraph to:
(a) not issue and despatch the Scheme Documents without the prior written
consent of the Administrative Agent (such consent shall not be withheld where
the Administrative Agent is satisfied as to the terms and conditions of the
Scheme);
(b) not vary, extend, revise, waive or supplement the terms or conditions
of the Scheme or the Options Proposals without the prior written consent of the
Administrative Agent;
(c) comply with all laws, regulations and procedural requirements in
relation to and in connection with the Scheme;
(d) take all steps necessary for the implementation of the Scheme as soon
as practicable and in a diligent and expeditious manner;
(e) procure that no publicity materials, press releases or announcements
intended to be published in relation to the Scheme (or the funding thereof) or
the Scheme Documents by or on behalf of Telegraph, the Company or any of its
Affiliates shall be made without the consent of the Administrative Agent, such
consent not to be unreasonably withheld or delayed;
(f) provide full written disclosure to the Administrative Agent, as soon
as reasonably practicable, of all information which (i) is material to the
Scheme and (ii) is material to the decision to waive any conditions set out in
the Scheme Documents or this Agreement; and
(g) take all necessary steps to withdraw the Scheme or amend the
Scheme to reflect that this Agreement, the Publishing Credit Agreement and the
Holdco Facility will not be available to finance the Scheme if any Event of
Default occurs or arises prior to the Scheme being consummated.
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10.31 Post-Scheme Matters. Cause FDTH and TelHoldco to, and will itself:
(a) procure that Telegraph shall, as soon as possible, but in any event
within 7 days of the Scheme being consummated, be re-registered as a private
limited company;
(b) procure that, as soon as possible and in any event within 7 days of
the Scheme being consummated, Telegraph and its Subsidiaries, where applicable,
implement and consummate the provisions and procedures contained in Sections
155-158 of the Companies Act 1985 for the purposes of enabling such companies to
grant the security interests and give the guarantees contemplated hereby; and
(c) procure that each of the Telegraph and its Subsidiaries, where
applicable, shall deliver to the Administrative Agent evidence satisfactory to
the Administrative Agent (including auditors' net asset letters addressed to the
Administrative Agent) that each of such companies has complied with the
provisions and procedures required by Sections 155-158 of the Companies Act
1985.
10.32 Scheme Certificate. Upon request of the Administrative Agent in
connection with the Administrative Agent's issuance of any confirmatory letter
required under the Scheme Documents, execute and deliver to the Administrative
Agent a Certificate substantially in the form of Exhibit J.
10.33 AP-91 Further Restricted. Restrict AP-91 from engaging in any
activity other than (a) performing its obligations under documents relating to
the AP-91 Senior Notes, (b) paying dividends or making other distributions to
the Company, and (c) making certain maintenance capital expenditures as
permitted by Section 10.34.
10.34 Capital Expenditures. Not, and not permit any Restricted Subsidiary
to, make or commit to make any Capital Expenditure during any Fiscal Quarter,
commencing with the Fiscal Quarter ending June 30, 1996, unless, after giving
effect to such Capital Expenditure, the aggregate amount of all Capital
Expenditures made by the Company and its Restricted Subsidiaries shall not
exceed $4,500,000 (provided that the aggregate amount of all Capital
Expenditures made by AP-91 and its Subsidiaries during Fiscal Quarter shall not
exceed $1,000,000). In addition, the Company and its Restricted Subsidiaries
may make Capital Expenditures during the term of this Agreement not exceeding
(x) $15,000,000 in the aggregate for the Sun-Times Plant and (y) $4,000,000 in
the aggregate for the Southtown/Star Facility.
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SECTION 11 CONDITIONS OF LENDING
11.1 Documentary Conditions to Amendment Effective Date. This Agreement
shall be and become effective on the date (the "Amendment Effective Date") on
which the Company, the Lenders and the Agents shall have executed and delivered
this Agreement and the Administrative Agent shall have received all of the
following, each duly executed and dated the Amendment Effective Date (or such
earlier date as shall be satisfactory to the Administrative Agent) in form and
substance satisfactory to the Administrative Agent and each (except for the
Notes of which only the originals shall be signed) in sufficient number of
signed counterparts to provide one for each Lender:
11.1.1 Notes. The Notes.
11.1.2 Resolutions. Certified copies of resolutions of the Board of
Directors of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Agreement, the Notes and the other Loan
Documents to which the Company is a party; and certified copies of resolutions
of the Board of Directors of each Guarantor authorizing or ratifying the
execution, delivery and performance by such Guarantor of the Guaranty and the
other Loan Documents to which such Guarantor is a party.
11.1.3 Consents, etc. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance of the Loan Documents by
the Company and each Guarantor.
11.1.4 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary of the Company and each Guarantor certifying
the names of the officer or officers of such entity authorized to sign the Loan
Documents to which such entity is a party, together with a sample of the true
signature of each such officer (it being understood that the Administrative
Agent and each Lender may conclusively rely on each such certificate until
formally advised by a like certificate of any changes therein).
11.1.5 Reaffirmation. A Reaffirmation, substantially in the form of
Exhibit C, executed by the Company and each of its Restricted Subsidiaries which
are a party to any of the Subsidiary Guaranty, the Company Security Agreement,
and the AP-91 Agreement (as amended, modified or supplemented from time to time,
the "Reaffirmation").
11.1.6 Pledge Agreements. A pledge agreement, substantially in the form
of Exhibit E-1, issued by Holdco (as
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amended, supplemented or otherwise modified from time to time, the "Holdco
Pledge Agreement"), and an amended and restated pledge agreement, substantially
in the form of Exhibit E-3, issued by the Company and, to the extent
applicable, each of its Restricted Subsidiaries other than AP-91 and its
Subsidiaries, Palatine Post, JPPL and SPEH (as amended, supplemented or
otherwise modified from time to time, the "Company Pledge Agreement"),
together, in the case of each Pledge Agreement, with the stock certificates or
instruments (including without limitation the Subsidiary Notes) to be pledged
hereunder and any necessary allonges and stock powers executed in blank.
11.1.7 Hollinger International Guaranty. An amended and restated
Guaranty, substantially in the form of Exhibit D, issued by Hollinger
International (as amended, supplemented or otherwise modified from time to time,
the "Hollinger International Guaranty").
11.1.8 Opinion of Counsel for the Company and the Guarantors. The opinion
of Kirkpatrick & Lockhart LLP, counsel for the Company and the Guarantors, in
the form of Exhibit F.
11.1.9 No Material Adverse Effect. Except as disclosed on Schedule 9.5,
since December 31, 1995, no event or events have occurred which, individually or
in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.
11.1.10 Compliance Certificate. A duly completed certificate in the form
of Exhibit B, with appropriate insertions, dated the date of the most recently
ended Fiscal Quarter and signed by one of the chief executive officers, the
chief financial officer, the chief operating officer or the controller of the
Company, containing a computation of each of the financial ratios and
restrictions set forth in Section 10 and to the effect that such officer has not
become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing.
11.1.11 Take-Out of First Chicago. An assignment agreement, substantially
in the form of Exhibit G, executed by First Chicago and evidencing its
resignation as documentation agent relating to and assignment of its rights
under the Existing Credit Agreement and payment of all amounts due and owing
other than the Existing Letters of Credit (including all Commitment Fees and
Letters of Credit Fees due through the Effective Date).
11.1.12 Fees. The Company shall have paid all fees and expenses then due
and payable to the Agents or any Lender under this Agreement (including, to the
extent then billed, all amounts payable pursuant to Section 14.5).
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11.1.13 Other. Such other documents as the Administrative Agent or any
Lender may reasonably request.
11.2 Documentary Conditions to Closing Date. The obligation of each
Lender to make additional Loans and of the Issuing Bank to issue additional
Letters of Credit in excess of $10,000,000 is, in addition to the conditions
precedent specified in Sections 11.1, and 11.3, subject to the prior or
concurrent satisfaction of each of the conditions set forth in this Section 11.2
(and the date on which all such conditions have been satisfied or waived in
writing by the Lenders and the Lenders make loans to the Company in excess of
$10,000,000 is called the "Closing Date").
11.2.1 The Administrative Agent shall have received all of the following,
each duly executed and dated the Closing Date (or such earlier date as shall be
satisfactory to the Administrative Agent) in form and substance satisfactory to
the Administrative Agent, and each in sufficient number of signed counterparts
to provide one for each Lender:
(a) Pledge Agreement. A pledge agreement, substantially in the form of
Exhibit E-2, issued by the Company (such pledge agreement, as amended,
supplemented or otherwise modified from time to time, the "U.K. Pledge
Agreement"), together with the stock certificates or instruments (including
without limitation any Pledged Notes) to be pledged thereunder and allonges and
stock powers executed in blank.
(b) Opinions of Counsel for the Company. The opinions of each of
Kirkpatrick & Lockhart LLP and Clifford Chance, both counsel for the Company.
11.2.2 Holdco Facility and FDTH Credit Agreement. The Administrative
Agent shall have received evidence, reasonably satisfactory to the
Administrative Agent, that each of the Holdco Facility and FDTH Credit Agreement
has closed on terms and conditions reasonably satisfactory to the Administrative
Agent and that sufficient cash will be available to the Company to consummate
the Scheme and to repay certain Telegraph debt, taking into account the Loans
hereunder and the loans under the Holdco Facility and FDTH Credit Agreement.
11.2.3 No Material Adverse Effect. Except as disclosed on Schedule 9.5,
since December 31, 1995, no event or events have occurred which, individually or
in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect.
11.2.4 Approval of the Scheme. The Administrative Agent shall have been
satisfied with the terms and conditions of the
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Scheme, the Scheme Documents and any related document including, without
limitation, (a) the form of recommendation from the Board of Telegraph, (b) the
provision for the acquisition of 100% of the ordinary shares and options of the
Telegraph Ordinary Shares and (c) the maximum, per share price which will be
paid for the shares of Telegraph and the terms of any share or loan note
alternatives.
11.2.5 Scheme Sanction. The Administrative Agent shall have received
evidence and confirmation satisfactory to it and its counsel that (a) the Scheme
has been sanctioned by the English courts, (b) either the Scheme has been
sanctioned by the English courts without any variation, amendment or revision to
the Scheme as described in the Scheme Documents or that the Administrative Agent
has consented in writing to any such variation, amendment or revision, (c)
either none of the conditions to the Scheme have been waived or other
forbearance given by Hollinger International or FDTH (or Telegraph) or that the
Administrative Agent has consented in writing to any such waiver or forbearance
and (iv) that an office copy of the court order has been delivered to the
Registrar of Companies of England and Wales in compliance with the provisions of
Section 425(3) of the Companies Act 1985.
11.2.6 No Litigation Re: Scheme. There shall not exist any litigation or
claims with respect to any aspect of the Scheme, any related transaction or any
other transaction contemplated thereby or hereby or the financing thereof, which
the Administrative Agent reasonably considers to be material.
11.2.7 Consummation of Other Transactions. There shall have occurred
prior or contemporaneous consummation of the Scheme and all related transactions
and other transactions contemplated hereunder including, without limitation,
approval by shareholders of Telegraph in general meeting and by the requisite
majorities of resolutions reducing the share capital of Telegraph, authorizing
the Directors to allot a sufficient number of new Telegraph shares to implement
the Scheme and to alter the Articles of Association of Telegraph to permit the
adoption of put and call option arrangements in respect of Telegraph shares
issued to Telegraph employees on exercise of options under the terms of
Telegraph's share option schemes.
11.2.8 Capital Structure. The Administrative Agent and its counsel shall
be satisfied with the existing and proposed capital structure (both debt and
equity) and corporate structure of Hollinger International and the Company and
its Subsidiaries and all other matters relating to the financial and operating
condition of each of the Company and its Subsidiaries and with the terms and
provisions of the Company's and its Subsidiaries' material contracts.
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11.2.9 Capital Markets. Prior to the meetings of the shareholders of
Telegraph to approve the Scheme, there shall not have been any material
disruption in the capital markets generally which could, in the reasonable good
faith determination of the Administrative Agent, have a materially adverse
effect on the ability to extend, or maintain any commitment to extend, at the
time contemplated hereby, senior secured bank financing of the type contemplated
hereby.
11.2.10 Compliance Certificate. A duly completed certificate in the form
of Exhibit B, with appropriate insertions, dated the date of the most recently
ended Fiscal Quarter and signed by one of the chief executive officers, the
chief financial officer, the chief operating office or the controller of the
Company, containing a computation of each of the financial ratios and
restrictions set forth in Section 10 and to the effect that such officer has not
become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing.
11.2.11 Publishing/Telegraph Subscription Agreement. The
Publishing/Telegraph Subscription Agreement shall have been executed and the
Company shall have paid for the Telegraph shares subject to such agreement.
11.2.12 Fees. The Company shall have paid (or shall have made
arrangements to pay with the proceeds of the initial Loan) all fees and expenses
then due and payable to the Agents or any Lender (including, to the extent then
billed, all amounts payable pursuant to Section 14.6).
11.2.13 Other. Such other documents as the Administrative Agent or any
Lender may reasonably request.
11.3 All Loans and Letters of Credit. The obligation of each Lender to
make each Loan and of the Issuing Bank to issue each Letter of Credit is subject
to the following further conditions precedent that:
11.3.1 No Default, etc. (a) No Event of Default or Unmatured Event of
Default has occurred and is continuing or will result from the making of such
Loan, (b) the warranties of the Company contained in Section 9 (excluding, in
the case of all Loans other than the Loans made on or prior to the Closing Date,
Sections 9.4, 9.6, 9.8 and 9.15 through 9.17) are true and correct as of the
date of such requested Loan or the issuance of such Letter of Credit, with the
same effect as though made on such date and (c) except as disclosed in Schedule
9.5, since the date of the financial statements described in Section 9.4 or, if
later, the date of the most recent financial statements delivered to the Lenders
pursuant to Section 10.1.1 or 10.1.2, no event
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(including, without limitation, any labor controversy, litigation, arbitration,
governmental investigation or proceeding or environmental matter) has occurred
which, in the reasonable good faith judgment of the Required Lenders, may have
a Material Adverse Effect.
11.3.2 Confirmatory Certificate. If requested by the Administrative Agent
or any Lender, the Administrative Agent shall have received (in sufficient
counterparts to provide one to each Lender) a certificate dated the date of such
requested Loan or Letter of Credit and signed by a duly authorized
representative of the Company as to the matters set out in clauses (a) and (b)
of Section 11.3.1 (it being understood that each request by the Company for the
making of a Loan or the issuance of a Letter of Credit shall be deemed to
constitute a warranty by the Company that the conditions precedent set forth in
Section 11.3.1 will be satisfied at the time of the making of such Loan or
issuing such Letter of Credit), together with such other documents as the
Administrative Agent or any Lender may reasonably request in support thereof.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event
of Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
the principal of any Loan; or default, and continuance thereof for five Business
Days, in the payment when due of any interest on any Loan, any reimbursement
obligation with respect to any Letter of Credit or any fee or other amount
payable by the Company hereunder or under any other Loan Document.
12.1.2 Default under Other Debt. (a) Default in the payment when due
(subject to any applicable grace period), whether by acceleration or otherwise,
of any other Debt of Hollinger International, any intermediate Subsidiary
between Hollinger International and the Company, the Company or any Restricted
Subsidiary, or (b) default in the performance or observance of any obligation or
condition (subject to any applicable grace period) with respect to any such
other Debt of Hollinger International, any intermediate Subsidiary between
Hollinger International and the Company, the Company or any Restricted
Subsidiary, if, in the case of either clause (a) or (b) above, the effect of
such default is to permit the holder of such Debt to accelerate the maturity of
(or there is matured and unpaid) such other Debt aggregating $5,000,000
($2,000,000 with respect to any Restricted Subsidiary) or more.
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12.1.3 Other Material Obligations. Default in the payment when due,
whether by acceleration or otherwise, or in the performance or observance of,
any material obligation of, or condition agreed to by, the Company or any
Restricted Subsidiary with respect to any material purchase or lease of goods or
services (except only to the extent that the existence of any such default is
being contested by the Company or such Restricted Subsidiary in good faith and
by appropriate proceedings and appropriate reserves have been made in respect of
such default) but only if the aggregate liability of the Company and the
Restricted Subsidiaries in respect of all such purchases and leases so affected
shall exceed $5,000,000 ($2,000,000 with respect to any Restricted Subsidiary).
12.1.4 Bankruptcy, Insolvency, etc. Hollinger International, any
intermediate Subsidiary between Hollinger International and the Company, the
Company or any Restricted Subsidiary becomes insolvent or generally fails to
pay, or admits in writing its inability or refusal to pay, debts as they become
due; or Hollinger International, any intermediate Subsidiary between Hollinger
International and the Company, the Company or any Restricted Subsidiary applies
for, consents to, or acquiesces in the appointment of a trustee, receiver or
other custodian for Hollinger International, any intermediate Subsidiary between
Hollinger International and the Company, the Company or such Restricted
Subsidiary or any property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for Hollinger
International, any intermediate Subsidiary between Hollinger International and
the Company, the Company or any Restricted Subsidiary or for a substantial part
of the property of any thereof and is not discharged within 60 days; or any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation proceeding
(except the voluntary dissolution, not under any bankruptcy or insolvency law,
of a Restricted Subsidiary), is commenced in respect of Hollinger International,
any intermediate Subsidiary between Hollinger International and the Company, the
Company or any Restricted Subsidiary and if such case or proceeding is not
commenced by Hollinger International, any intermediate Subsidiary between
Hollinger International and the Company, the Company or such Restricted
Subsidiary, it is consented to or acquiesced in by Hollinger International, any
intermediate Subsidiary between Hollinger International and the Company, the
Company or such Restricted Subsidiary, or remains for 60 days undismissed;
Hollinger International, any intermediate Subsidiary between Hollinger
International and the Company, the Company or any Restricted Subsidiary takes
any corporate action to authorize, or in furtherance of, any of the foregoing.
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12.1.5 Non-Compliance with Provisions of This Agreement. Failure by the
Company to comply with or to perform any covenant set forth in Section 10.3,
10.5, 10.6, 10.7 through 10.13, 10.19, 10.26, 10.27 or 10.28 or 10.30 through
10.33; failure by the Company to comply with or to perform any covenant set
forth in Section 10.18 and continuance of such failure for five days after
notice thereof to the Company from the Administrative Agent or any Lender (or,
if such failure cannot be cured with reasonable diligence within said five day
period, such longer period up to a total of 60 days after notice thereof
provided the Company promptly commence a cure within such five day period and
diligently pursues the same); or failure by the Company to comply with or to
perform any other provision of this Agreement (and not constituting an Event of
Default under any of the other provisions of this Section 12) and continuance of
such failure for 30 days after notice thereof to the Company from the
Administrative Agent or any Lender (or, if such failure cannot be cured with
reasonable diligence within said 30 day period, such longer period up to a total
of 60 days after notice thereof provided the Company promptly commence a cure
within such 30 day period and diligently pursues the same).
12.1.6 Warranties. Any warranty made by the Company herein is breached or
is false or misleading in any material respect, or any schedule, certificate,
financial statement, report, notice or other writing furnished by the Company or
any Guarantor to any Agent or any Lender is false or misleading in any material
respect on the date as of which the facts therein set forth are stated or
certified.
12.1.7 Pension Plans. (a) Institution of any steps by the Company or any
other Person to terminate a Pension Plan if as a result of such termination the
Company could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in excess of $5,000,000 or
(b) a contribution failure occurs with respect to any Pension Plan sufficient to
give rise to a Lien under section 302(f) of ERISA.
12.1.8 Judgments. Final judgments which exceed an aggregate of $5,000,000
($2,000,000 with respect to any Restricted Subsidiary) (excluding any portion
thereof which is covered by insurance so long as the insurer is reasonably
likely to be able to pay) shall be rendered against Hollinger International, the
Company or any Restricted Subsidiary and shall not have been discharged or
vacated or had execution thereof stayed pending appeal within 30 days after
entry or filing of such judgments.
12.1.9 Holdco Guaranty. Upon repayment in full of the Holdco Facility,
Holdco neither (a) executes a guaranty of this
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Agreement substantially in the form of the Hollinger International Guaranty,
nor (b) is dissolved into Hollinger International and Hollinger International
concurrently becomes a party to the Holdco Pledge Agreement, as required by the
Hollinger International Guaranty.
12.1.10 Southam Collateral. Hollinger International shall fail to provide
the Southam Collateral as required under Section 4.8 of the Hollinger
International Guaranty.
12.1.11 Invalidity of Guaranty, etc. Any Guaranty shall cease to be in
full force and effect with respect to any Guarantor (other than as expressly
permitted hereunder); any Guarantor shall fail (subject to any applicable grace
period) to comply with or to perform any applicable provision of such Guaranty,
or any Guarantor (or any Person by, through or on behalf of such Guarantor)
shall contest in any manner the validity, binding nature or enforceability of
such Guaranty with respect to such Guarantor.
12.1.12 Invalidity of Collateral Documents, etc. Any Collateral Document
shall cease to be in full force and effect with respect to the Company or any
Guarantor (other than as expressly permitted hereunder); or the Company or any
Guarantor shall fail (subject to any applicable grace period) to comply with or
to perform any applicable provision of any Collateral Document, or the Company
or any Guarantor (or any Person by, through or on behalf of the Company or any
Guarantor) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
12.1.13 Change in Control. A Change in Control shall occur.
12.1.14 Material Adverse Change. The Required Lenders shall have
reasonably determined in good faith that an event has occurred or a condition
exists that has had or will have a Material Adverse Effect.
12.1.15 Ownership of Restricted Subsidiaries. Except as expressly
permitted hereunder, the Company shall fail to own directly or indirectly, free
and clear of all Liens (except the Lien of the Administrative Agent), 100% of
the issued and outstanding Capital Stock of the Restricted Subsidiaries in
existence on the Closing Date for any reason.
12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Notes and all other obligations
hereunder shall become immediately due and payable and the Company shall become
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immediately obligated to deliver to the Administrative Agent cash collateral in
an amount equal to the outstanding face amount of all Letters of Credit, all
without presentment, demand, protest or notice of any kind; and, in the case of
any other Event of Default, the Administrative Agent may (and upon written
request of the Required Lenders shall) declare the Commitments (if they have
not theretofore terminated) to be terminated and/or declare all Notes and all
other obligations hereunder to be due and payable, and/or demand that the
Company immediately deliver to the Administrative Agent cash collateral in an
amount equal to the outstanding face amount of all Letters of Credit, whereupon
the Commitments (if they have not theretofore terminated) shall immediately
terminate and/or all Notes and all other obligations hereunder shall become
immediately due and payable and/or the Company shall immediately become
obligated to deliver to the Administrative Agent cash collateral in an amount
equal to the face amount of all Letters of Credit, all without presentment,
demand, protest or notice of any kind. The Administrative Agent shall promptly
advise the Company of any such declaration, but failure to do so shall not
impair the effect of such declaration. Notwithstanding the foregoing, the
effect as an Event of Default of any event described in Section 12.1.1 or
Section 12.1.4 may be waived by the written concurrence of all of the Lenders,
and the effect as an Event of Default of any other event described in this
Section 12 may be waived by the written concurrence of the Required Lenders.
Any cash collateral delivered hereunder shall be held by the Administrative
Agent and applied to obligations arising in connection with any drawing under a
Letter of Credit. After the expiration or termination of all Letters of
Credit, such cash collateral shall be applied by the Administrative Agent to
any remaining obligations hereunder and any excess shall be delivered to the
Company or as a court of competent jurisdiction may direct.
SECTION 13 THE AGENTS.
13.1 Authorization. Each Lender authorizes the Administrative Agent to
act on behalf of such Lender to the extent provided herein or in any other Loan
Document or any other document or instrument delivered hereunder or in
connection herewith, and to take such other action as may be reasonably
incidental thereto.
13.2 Indemnification. Each Lender agrees to reimburse and indemnify each
Agent for, and hold each Agent harmless against, a share (determined in
accordance with its respective Percentage) of any loss, damage, penalty, action,
judgment, obligation, cost, disbursement, liability or expense (including
attorneys' fees) incurred without gross negligence or willful misconduct on the
part of each Agent arising out of or in connection with the performance of its
respective obligations or the exercise of its
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respective powers hereunder or under any other Loan Document or any other
document or instrument delivered hereunder or in connection herewith, as well
as the costs and expenses of defending against any claim against such Agent
arising hereunder or thereunder.
13.3 Exculpation. Each Agent shall be entitled to rely upon advice of
counsel concerning legal matters, and upon this Agreement, any other Loan
Document and any schedule, certificate, statement, report, notice or other
writing which it believes to be genuine or to have been presented by a proper
Person. None of the Agents nor any of their respective directors, officers,
employees or agents shall (a) be responsible for any recitals, representations
or warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of, this Agreement, any other Loan Document or
any other instrument or document delivered hereunder or in connection herewith,
(b) be responsible for the validity, genuineness, perfection, effectiveness,
enforceability, existence, value or enforcement of any collateral security, (c)
be under any duty to inquire into or pass upon any of the foregoing matters, or
to make any inquiry concerning the performance by the Company or any other
obligor of its obligations, or (d) in any event, be liable as such for any
action taken or omitted by it or them, except for its or their own gross
negligence or willful misconduct. The agency hereby created shall in no way
impair or affect any of the rights and powers of, or impose any duties or
obligations upon, either Agent in its individual capacity.
13.4 Credit Investigation. Each Lender acknowledges that it has made such
inquiries and taken such care on its own behalf as would have been the case had
such Lender's Commitments been granted, the Letters of Credit been issued and
such Lender's Loans been made directly by such Lender to the Company without the
intervention of the Agents or any other Lender. Each Lender agrees and
acknowledges that the Agents make no representations or warranties about the
creditworthiness of the Company or any other party to this Agreement or any
other Loan Document or with respect to the legality, validity, sufficiency or
enforceability of this Agreement or any other Loan Document or the value of any
security therefor.
13.5 Agent and Affiliates. Each Agent in its individual capacity shall
have the same rights and powers hereunder as any other Lender and may exercise
or refrain from exercising the same as though it were not an Agent, and each
Agent and its Affiliates may accept deposits from, make loans to and generally
engage in any kind of business with the Company or any Affiliate thereof as if
it were not an Agent hereunder.
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13.6 Action on Instructions of the Lenders. As to any matters not
expressly provided for by this Agreement (including, without limitation,
enforcement of any Loan Document or collection of the Loans), the Agents shall
not be required to exercise any discretion or take any action, but the Agents
shall in all cases be fully protected in acting or refraining from acting upon
the written instructions from the Lenders. In no event will any Agent be
required to take any action which exposes such Agent to personal liability or
which is contrary to this Agreement, any other Loan Document or applicable law.
The relationship between the Agents and the Lenders is and shall be that of
agent and principal only and nothing herein contained shall be construed to
constitute any Agent a trustee for any Lender or any holder of a participation
in any Loan nor to impose on any Agent duties and obligations other than those
expressly provided for herein.
13.7 Funding Reliance. (a) Unless the Administrative Agent receives
notice from a Lender by 11:00 a.m., New York City time, on the day of a proposed
borrowing that such Lender will not make available to the Administrative Agent
the amount which would constitute its Percentage of such borrowing in accordance
with Section 2.3, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent and, in reliance upon such
assumption, make a corresponding amount available to the Company. If and to the
extent such Lender has not made any such amount available to the Administrative
Agent, such Lender and the Company jointly and severally agree to repay such
amount to the Administrative Agent forthwith on demand, together with interest
thereon at the interest rate applicable to Loans comprising such borrowing (or,
in the case of any Lender which repays such amount within three Business Days,
the Federal Funds Rate). Nothing set forth in this clause (a) shall relieve any
Lender of any obligation it may have to make any Loan hereunder.
(b) Unless the Administrative Agent receives notice from the Company prior
to the due date for any payment hereunder that the Company does not intend to
make such payment, the Administrative Agent may assume that the Company has made
such payment and, in reliance upon such assumption, make available to each
Lender its share of such payment. If and to the extent that the Company has not
made any such payment to the Administrative Agent, each Lender which received a
share of such payment shall repay such share (or the relevant portion thereof)
to the Administrative Agent forthwith on demand, together with interest thereon
at the Federal Funds Rate. Nothing set forth in this clause (b) shall relieve
the Company of any obligation it may have to make any payment hereunder.
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13.8 Collateral Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any Lien
granted to or held by the Administrative Agent upon any Collateral (a) upon
termination of the Commitments and any Hedging Agreements with any Lender and
payment in full of all Loans and all other obligations of the Company under this
Agreement and under any other Loan Document and any Hedging Agreements with any
Lender; (b) constituting property sold or to be sold or disposed of as part of
or in connection with any disposition permitted hereunder; (c) constituting
property in which the Company or any Restricted Subsidiary owned no interest at
the time the Lien was granted or at any time thereafter; (d) constituting
property leased to the Company or any Restricted Subsidiary under a lease which
has expired or been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not intended by the Company
or such Restricted Subsidiary to be, renewed or extended; or (e) subject to the
third sentence of Section 14.1, if approved, authorized or ratified in writing
by the Required Lenders. Upon request by the Administrative Agent at any time,
the Lenders will confirm in writing the Administrative Agent's authority to
release particular types or items of Collateral pursuant to this Section 13.8.
13.9 Resignation. The Administrative Agent may resign as such at any time
upon at least 30 days' prior notice to the Company and the Lenders. The Lenders
shall (with, so long as no Event of Default or Unmatured Event of Default
exists, the prior written consent of the Company, which shall not be
unreasonably withheld or delayed) as promptly as practicable appoint a successor
Administrative Agent. If no successor shall have been so appointed, and shall
have accepted such appointment, within 30 days after the giving of notice of
such resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which shall be a commercial
bank having an office in Chicago, Illinois or New York, New York and having a
combined capital, surplus and undivided profits of at least $500,000,000. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from all further duties and obligations under this
Agreement. After any resignation pursuant to this Section 13.9, the provisions
of this Section 13 shall inure to the benefit of the retiring Administrative
Agent as to any actions taken or omitted to be taken by it while it was
Administrative Agent hereunder.
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SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of any Agent or any Lender
in the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any of them of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent
with respect to, any provision of this Agreement or the Notes shall in any event
be effective unless the same shall be in writing and signed and delivered by the
Company and by Lenders having an aggregate Percentage of not less than the
aggregate Percentage expressly designated herein with respect thereto or, in the
absence of such designation as to any provision of this Agreement or the Notes,
by the Required Lenders, and then any such amendment, modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, modification, waiver or consent (a)
shall amend, modify or waive any condition precedent to any Loan without the
consent of Lenders holding 100% of the Commitments or (b) shall (i) extend or
increase the amount of any Commitment, (ii) extend the date for payment of any
principal of or interest on the Loans or any fees payable hereunder, (iii)
reduce the principal amount of any Loan, the rate of interest thereon or any
fees payable hereunder, (iv) release any Person from its obligations under any
Guaranty or release any substantial part of the collateral granted under the
Collateral Documents except Collateral having a fair market value of less than
$5,000,000 in the aggregate or as otherwise permitted under this Agreement or
the Collateral Documents or (v) change the definition of Required Lenders or the
aggregate Percentage required to effect an amendment, modification, waiver or
consent or amend this Section 14.1 without, in each case, the consent of all
Lenders. No provisions of Section 13 shall be amended, modified or waived
without the consent of the Administrative Agent or the Agents, as the case may
be. No provision relating to Section 2.5, 2.6, 2.7, 2.8, 2.9, 2.11(c) or 5.2(b)
shall be amended, modified or waived without the consent of the Issuing Bank.
14.2 Confirmations. The Company and each holder of a Note agree from time
to time, upon written request received by it from the other, to confirm to the
other in writing (with a copy of each such confirmation to the Administrative
Agent) the aggregate unpaid principal amount of the Loans then outstanding under
such Note.
14.3 Notices. Except as otherwise provided in Sections 2.3, 2.4 and 4.3,
all notices hereunder shall be in writing (including, without limitation,
facsimile transmission) and shall be sent to the applicable party at its address
shown on
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Schedule 14.3 or at such other address as such party may, by written notice
received by the other parties hereto, have designated as its address for such
purpose. Notices sent by facsimile transmission shall be deemed to have been
given when sent; notices sent by mail shall be deemed to have been given three
Business Days after the date when sent by registered or certified mail, postage
prepaid; and notices sent by hand delivery shall be deemed to have been given
when received. For purposes of Sections 2.3, 2.4 and 4.3, the Administrative
Agent shall be entitled to rely on telephonic instructions from any person that
the Administrative Agent in good faith believes is an authorized officer or
employee of the Company and the Company shall hold the Administrative Agent and
each Lender harmless from any loss, cost or expense resulting from any such
reliance.
14.4 Computations. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP applied on a basis consistent with those used in the
preparation of the Company's audited financial statements referred to in clause
(a) of Section 9.4.
14.5 Regulations G, T, U and X. Each Lender represents that it in good
faith is not relying, either directly or indirectly, upon any Margin Stock as
collateral security for the extension or maintenance by it of any credit
provided for in this Agreement.
14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand (a)
all reasonable out-of-pocket costs and expenses of the Administrative Agent
(including the fees and charges of counsel for the Administrative Agent and of
local counsel, if any, who may be retained by said counsel) in connection with
the preparation, execution, delivery and administration of this Agreement, the
other Loan Documents and all other documents provided for herein or delivered or
to be delivered hereunder or in connection herewith (including, without
limitation, any amendment, supplement or waiver to any Loan Document), and (b)
all reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees, court costs and other legal expenses) incurred by the Administrative Agent
and each Lender after an Event of Default in connection with the enforcement of
this Agreement, the other Loan Documents or any such other documents. Each
Lender agrees to reimburse the Administrative Agent for such Lender's pro rata
share (based on its respective Percentage) of any such costs and expenses of the
Administrative Agent not paid by the Company. In addition, the Company agrees
to pay, and to save the Administrative Agent and the Lenders harmless from all
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liability for, any stamp or other taxes which may be payable in connection with
the execution and delivery of this Agreement, the borrowings hereunder, the
issuance of the Notes or the execution and delivery of any other Loan Document
or any other document provided for herein or delivered or to be delivered
hereunder or in connection herewith. All obligations provided for in this
Section 14.6 shall survive repayment of the Loans, cancellation of the Notes
and any termination of this Agreement.
14.7 Subsidiary References. The provisions of this Agreement relating to
Subsidiaries of the Company shall apply only during such times as the Company
has one or more Subsidiaries.
14.8 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
14.9.1 Assignments. Any Lender may, with the prior written consent of the
Company (at all times other than during the existence of an Event of Default),
the Issuing Bank and the Administrative Agent (which consents shall not be
unreasonably delayed or withheld), at any time assign and delegate to one or
more commercial banks or other Persons (any Person to whom such an assignment
and delegation is to be made being herein called an "Assignee"), all or any
fraction of such Lender's Loans and Commitment hereunder and under the FDTH
Credit Agreement (which assignment and delegation shall be of a constant, and
not a varying, percentage of all the assigning Lender's Commitment,
participation in Letters of Credit and Loans hereunder and under the FDTH Credit
Agreement) in a minimum aggregate amount equal to the lesser of (a) the sum of
the assigning Lender's remaining Loans, participation in Letters of Credit and
(to the extent not used) Commitment hereunder and under the FDTH Credit
Agreement and (b) US $10,000,000 in the aggregate; provided, however, that (i)
no assignment and delegation may be made to any Person if, at the time of such
assignment and delegation, the Company would be obligated to pay any greater
amount under Section 7.6 or Section 8 to the Assignee than the Company are then
obligated to pay to the assigning Lender under such Section and (ii) the
Company, the Issuing Bank and the Administrative Agent shall be entitled to
continue to deal solely and directly with such Lender in connection with the
interests so assigned and delegated to an Assignee until the date when all of
the following conditions shall have been met:
(x) five Business Days (or such lesser period of time as the
Administrative Agent and the assigning Lender shall agree) shall have passed
after written notice of such
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assignment and delegation, together with payment instructions, addresses and
related information with respect to such Assignee, shall have been given to the
Company and the Administrative Agent by such assigning Lender and the Assignee,
(y) the assigning Lender and the Assignee shall have executed and
delivered to the Company and the Administrative Agent an assignment agreement
substantially in the form of Exhibit G (an "Assignment Agreement"), together
with any documents required to be delivered thereunder, which Assignment
Agreement shall have been accepted by the Administrative Agent, the Issuing Bank
and, if applicable, the Company, and
(z) the assigning Lender or the Assignee shall have paid the
Administrative Agent a processing fee of $2,500.
From and after the date on which the conditions described above have been met,
(A) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have
the rights and obligations of a Lender hereunder, and (B) the assigning Lender,
to the extent that rights and obligations hereunder have been assigned and
delegated by it pursuant to such Assignment Agreement, shall be released from
its obligations hereunder. The Administrative Agent shall prepare all
necessary documents, if any, in connection with assignments. Within five
Business Days after the effectiveness of any assignment and delegation, the
Company shall execute and deliver to the Administrative Agent (for delivery to
the Assignee and the Assignor, as applicable) a new Note in a principal amount
equal to the sum of the Assignee's Commitment (if any) and, if the assigning
Lender has retained a Commitment or Loans hereunder, a replacement Note in the
principal amount equal to the sum of the Commitment (if any) retained by the
assigning Lender (such Note to be in exchange for, but not in payment of, the
predecessor Note held by such assigning Lender). Each such Note shall be dated
the effective date of such assignment. The assigning Lender shall mark the
predecessor Note "exchanged" and deliver it to the Company. Accrued interest
on that part of the predecessor Note being assigned shall be paid as provided
in the Assignment Agreement. Accrued interest and fees on that part of the
predecessor Note not being assigned shall be paid to the assigning Lender.
Accrued interest and accrued fees shall be paid at the same time or times
provided in the predecessor Note and in this Agreement. Any attempted
assignment and delegation not made in accordance with this Section 14.9.1 shall
be null and void.
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Notwithstanding the foregoing provisions of this Section 14.9.1 or any
other provision of this Agreement, any Lender may at any time assign all or any
portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Lender from any of its obligations hereunder).
14.9.2 Participations. Any Lender may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Lender, the Note held by such Lender, the Commitment of such Lender, the
direct or participation interest of such Lender in any Letter of Credit or any
other interest of such Lender hereunder (any Person purchasing any such
participating interest being herein called a "Participant") provided that such
assignments shall be of a constant and not a varying percentage of the selling
Lender's Commitment, Letters of Credit and Loans. In the event of a sale by a
Lender of a participating interest to a Participant, (x) such Lender shall
remain the holder of its Notes for all purposes of this Agreement, (y) the
Company and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
hereunder and (z) all amounts payable by the Company shall be determined as if
such Lender had not sold such participation and shall be paid directly to such
Lender. No Participant shall have any direct or indirect voting rights
hereunder except with respect to any of the events described in the third
sentence of Section 14.1. Each Lender agrees to incorporate the requirements of
the preceding sentence into each participation agreement which such Lender
enters into with any Participant. The Company agrees that if amounts
outstanding under this Agreement and the Notes are due and payable (as a result
of acceleration or otherwise), each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and any Note and with respect to any Letter of Credit to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement; provided that such right of setoff shall be
subject to the obligation of each Participant to share with the Lenders, and the
Lenders agree to share with each Participant, as provided in Section 7.5. The
Company also agrees that each Participant shall be entitled to the benefits of
Section 8 as if it were a Lender (provided that no Participant shall receive any
greater compensation pursuant to Section 8 than would have been paid to the
participating Lender if no participation had been sold).
14.10 Governing Law. This Agreement and each Note shall be a contract
made under and governed by the internal laws of the State of New York. Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law,
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such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement. All obligations of the Company and
rights of the Agents and the Lenders expressed herein or in any other Loan
Document shall be in addition to and not in limitation of those provided by
applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
14.12 Successors and Assigns. This Agreement shall be binding upon the
Company, the Lenders and the Agents and their respective successors and assigns,
and shall inure to the benefit of the Company, the Lenders, the Issuing Bank and
the Agents and the permitted successors and assigns of the Lenders, the Issuing
Bank and the Agents.
14.13 Indemnification by the Company.
(a) In consideration of the execution and delivery of this Agreement by
the Agents and the Lenders and the agreement to extend the Commitments provided
hereunder, the Company hereby agrees to indemnify, exonerate and hold the
Issuing Bank, each Agent, each Lender and each of the officers, directors,
employees and agents of the Issuing Bank, each Agent and each Lender
(collectively the "Lender Parties" and individually each a "Lender Party") free
and harmless from and against any and all actions, causes of action, suits,
losses, liabilities, damages and expenses, including, without limitation,
reasonable attorneys' fees and charges (collectively therein called the
"Indemnified Liabilities"), incurred by the Lender Parties or any of them as a
result of, or arising out of, or relating to (i) any tender offer, merger,
purchase of stock, purchase of assets or other similar transaction financed or
proposed to be financed in whole or in part, directly or indirectly, with the
proceeds of any of the Loans or Letters of Credit or (ii) the execution,
delivery, performance or enforcement of this Agreement or any other Loan
Document by any of the Lender Parties, except for any such Indemnified
Liabilities as to any Lender Party arising on account of such Lender Party's bad
faith, gross negligence or willful misconduct. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Company hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law.
Nothing set forth above shall be construed to relieve any Lender Party from any
obligation it may have under this Agreement.
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(b) Without limiting the provisions of clause (a) above, the Company
agrees to reimburse each Lender Party for, and indemnify each Lender Party
against, any and all losses, claims, damages, penalties, judgments, liabilities
and expenses (including reasonable attorneys' and consultant's fees) which any
Lender Party may pay, incur or become subject to arising out of or relating to
the use, handling, release, emission, discharge, transportation, storage,
treatment or disposal of any Regulated Material at any real property owned or
leased by the Company or any Restricted Subsidiary or used by the Company or any
Restricted Subsidiary in its business or operations, except to the extent caused
by the acts or omissions of such Lender Party.
14.14 Survival of Indemnities. All obligations provided for in Section
14.13 and in any other indemnity provided the Issuing Bank, any Agent or any
Lender in any other Loan Document shall survive repayment of the Loans,
cancellation of the Notes and any termination of this Agreement or any of the
Loan Documents.
14.15 Confidentiality. The Agents, the Issuing Bank and the Lenders shall
hold all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as such by the Company in accordance with
their customary procedures for handling confidential information of this nature
and in accordance with safe and sound banking practices and, in any event, may
make disclosure on the same confidential basis as provided for herein that is
reasonably required by any actual or bona fide potential transferee or
participant in connection with the contemplated transfer of any Note or
participation therein or in any Letter of Credit or as required or requested by
any governmental agency or representative thereof or pursuant to legal process;
provided that, unless prohibited by applicable law or court order, each Agent,
the Issuing Bank and each Lender shall promptly notify the Company of any
request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Agent, the Issuing Bank or such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information.
14.16 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY
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BE FOUND. EACH OF THE COMPANY, THE ISSUING BANK, EACH AGENT AND EACH LENDER
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.
EACH OF THE COMPANY, THE ISSUING BANK, EACH AGENT AND EACH LENDER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
14.17 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE ISSUING BANK, EACH
AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE,
ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
14.18 Judgment Currency. The obligations of the Company and each
Guarantor in respect of any sum due to any Lender, the Issuing Bank or the
Administrative Agent hereunder, under the Notes or under or in respect of any
other Loan Document shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than the currency in which such sum was originally
denominated (the "Original Currency"), be discharged only to the extent that on
the Business Day following receipt by such Lender, such Issuing Bank, or the
Administrative Agent of any sum adjudged to be so due in the Judgment Currency,
such Lender, such Issuing Bank, or the Administrative Agent, in accordance with
normal banking procedures, purchases the Original Currency with the Judgment
Currency. If the amount of Original Currency so purchased is less than the sum
originally due to such Lender, such Issuing Bank, or the Administrative Agent,
the Company agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such Lender, such Issuing Bank, or the Administrative
Agent, as the case may be, against such loss, and if the amount of Original
Currency so purchased exceeds the sum originally due to such Lender, such
Issuing Bank, or the Administrative Agent, as the case may be, such Lender, such
Issuing Bank, or the Administrative Agent, as the case may be, agrees to remit
such excess to the Company.
92
<PAGE> 100
Delivered at New York, New York, as of the day and year first above
written.
HOLLINGER INTERNATIONAL PUBLISHING INC.
By /s/ Paul B. Healy
------------------------------------
Vice President
<PAGE> 101
TORONTO DOMINION (TEXAS), INC.,
individually and as
Administrative Agent
By /s/ Sophia D. Sgarbi
------------------------------------
Vice President
<PAGE> 102
THE TORONTO-DOMINION BANK,
as Issuing Bank
By /s/ Sophia D. Sgarbi
------------------------------------
Manager Syndications & Credit Administration
<PAGE> 103
EXHIBIT A
FORM OF
NOTE
$__________ May 30, 1996
Chicago, Illinois
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
________________ at the principal office of Toronto-Dominion (Texas), Inc., in
New York, New York, _______________ Dollars ($__________) or, if less, the
aggregate unpaid amount of all Loans made by the payee to the undersigned
pursuant to the Amended and Restated Credit Agreement referred to below, such
amount to be paid at the times set forth in the Amended and Restated Credit
Agreement.
The undersigned further promises to pay interest on the unpaid principal
amount of each Loan evidenced hereby from the date of such Loan until such Loan
is paid in full, payable at the rates and at the times set forth in the Amended
and Restated Credit Agreement. Payments of both principal and interest are to
be made in lawful money of the United States of America.
This Note evidences indebtedness incurred under, and is subject to the
terms and provisions of, the Amended and Restated Credit Agreement, dated as of
May 30, 1996 (herein, as amended or otherwise modified from time to time, called
the "Credit Agreement"), among the undersigned, various financial institutions
(including the payee), The Toronto-Dominion Bank, as issuing bank, and Toronto
Dominion (Texas), Inc., as administrative agent, to which Credit Agreement
reference is hereby made for a statement of the terms and provisions under which
this Note may or must be paid prior to its due date or may have its due date
accelerated.
In addition to and not in limitation of the foregoing and the provisions of
the Credit Agreement, the undersigned further agrees, subject only to any
limitation imposed by applicable law, to pay all reasonable expenses, including
reasonable attorneys' fees and legal expenses, incurred by the holder of this
Note in endeavoring to collect any amounts payable hereunder which are not paid
when due, whether by acceleration or otherwise.
The undersigned hereby waives demand, presentment, protest, and notice of
demand, presentment, protest and nonpayment.
<PAGE> 104
THIS NOTE IS MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
HOLLINGER INTERNATIONAL
PUBLISHING INC.
By_____________________________
Name ________________________
Title________________________
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<PAGE> 105
EXHIBIT B
FORM OF
COMPLIANCE CERTIFICATE
To: Toronto Dominion (Texas), Inc.
as Administrative Agent
Reference is made to the Amended and Restated Credit Agreement, dated as of
May 30, 1996 (herein, as amended or otherwise modified from time to time, called
the "Credit Agreement"), among Hollinger International Publishing Inc. (the
"Company"), various financial institutions, The Toronto-Dominion Bank, as
Issuing Bank, and Toronto Dominion (Texas), Inc., as Administrative Agent. Terms
used but not otherwise defined herein are used herein as defined in the Credit
Agreement.
I. Report. Enclosed herewith is a copy of the [annual
audit/quarterly] report of the Company as at ____________, 19__ (the
"Computation Date"), which report fairly presents the financial condition
and results of operations of the Company and its Restricted Subsidiaries,
as of the Computation Date.
II. Financial Tests. The Company hereby certifies and warrants to
you that the following is a true and correct computation as at the
Computation Date of the following ratios and/or financial restrictions
contained in Section 10 of the Credit Agreement:
A. Section 10.6.1 Total Leverage Ratio.
(1) Funded Debt of the Company and its Restricted Subsidiaries as of
Computation Date:
(a) Debt of the Company and its Restricted Subsidiaries pursuant to
clauses (a), (b), (d), (g), (h) and (i) of the definition of Debt as of the
Computation Date: $_________
(b) Debt of the Company to Restricted Subsidiaries and Debt of
Restricted
<PAGE> 106
Subsidiaries to the Company or other Restricted Subsidiaries as of the
Computation Date: $___________
(c) Item (a) minus Item (b): $________
(2) Operating Cash Flow of the Company and its Restricted Subsidiaries
for Computation Period ending on the Computation Date:
(a) Consolidated Net Income (Loss) of the Company and its Restricted
Subsidiaries for such Computation Period: $_______
(b) the consolidated interest expense and other financing costs of
the Company and its Restricted Subsidiaries deducted in determining Consolidated
Net Income (Loss) for such Computation Period: $________
(c) all depreciation and amortization of assets (including goodwill
and other intangible assets) of the Company and its Restricted Subsidiaries
deducted in determining Consolidated Net Income (Loss) for such Computation
Period: $_______
(d) all federal, state, local and foreign income taxes (whether paid
or deferred) of the Company and its Restricted Subsidiaries deducted in
determining Consolidated Net Income for the immediately preceding 12-month
period: $_______
(e) other non-cash expenses and all extraordinary and non-recurring
expenses
<PAGE> 107
(including all one-time, non-recurring transaction expenses associated with the
Reorganization, the Senior Subordinated Notes, the Existing Credit Agreement, or
the Scheme to the extent such expenses are included in determining Consolidated
Net Income (Loss)) deducted in determining Consolidated Net Income for such
Computation Period: $_______
(f) adjustment resulting from Acquisitions (Item III.I.): $_______
(g) adjustment resulting from Asset Swaps (Item IV.C): $_______
(h) Item (a) plus Item (b) plus Item (c) plus Item (d) plus Item (e)
plus (minus) Item (f) plus (minus) Item (g): $______
(3) Ratio of Item (1)(c) to Item (2)(h): ___ to 1
(4) Maximum Total Leverage Ratio required by Section 10.6.1 as of any
Computation Date before the Closing Date: 6.5 to 1
(5) Maximum Total Leverage Ratio required by Section 10.6.1 as of any
Computation Date on or after the Closing Date: 6.0 to 1
B. Section 10.6.2 Senior Leverage Ratio.
(1) Senior Funded Debt:
(a) Funded Debt of the Company and its Restricted Subsidiaries as of
the Computation Date (Item A.(1)(c)): $_______
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(b) Debt of the Company and its Restricted Subsidiaries as of the
Computation Date pursuant to the Senior Subordinated Notes: $______
(c) Item (a) minus Item (b): $______
(2) Operating Cash Flow (Item A.(2)(h)): $______
(3) Ratio of Item (1)(c) to Item (2): ____ to 1
(4) Maximum Senior Leverage Ratio required by Section 10.6.2 as of any
Computation Date before the Closing Date: 3.5 to 1
(5) Maximum Senior Leverage Ratio required by Section 10.6.2 as of any
Computation Date on or after the Closing Date: 3.0 to 1
C. Section 10.6.3 Interest Coverage Ratio.
(1) Operating Cash Flow for the Computation Period ending on the
Computation Date (from Item A.(2)(h)): $________
(2) Total Interest Expense for the Computation Period ending on the
Computation Date: $________
(3) Ratio of item (1) to item (2): ____ to 1
(4) Minimum Interest Coverage Ratio required by Section 10.6.3 for the
Computation Period ending on the Computation Date:
2.0 to 1
D. Section 10.7 Limitations on Debt.
(1) Debt of Palestine Post under the Jerusalem Post Note at the end of
the Fiscal Quarter ending on Computation Date: $________
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(2) Maximum Debt of Palestine Post permitted at the end of such
Computation Period ending on Computation Date: $18,000,000
E. Section 10.9 Dividends.
(1) Dividends and other distributions and payments paid on Company
Common Stock during Fiscal Quarter ending on Computation Date: $________
(2) Restricted Payments Available for Dividends:
(a) Regular quarterly dividend declared by Hollinger International:
$________
(b) Interest payable pursuant to the Holdco Facility which FDTH is
not permitted to pay pursuant to Section 10.9 of the FDTH Credit Agreement:
$________
(c) Item (a) plus Item (b): $________
(3) Amount of the quarterly dividend per share declared on its Common
Stock by Hollinger International, not to exceed $0.10: $________
F. Section 10.9 Management Fees.
(1) Management Fees paid during Fiscal Quarter ending on Computation
Date: $________
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<PAGE> 110
(2) Operating Cash Flow of the Company and its Restricted Subsidiaries
for the Fiscal Quarter ending on the Computation Date:
(a) Consolidated Net Income (Loss) of the Company and its Restricted
Subsidiaries for the Fiscal Quarter: $_______
(b) the consolidated interest expense and other financing costs of
the Company and its Restricted Subsidiaries deducted in determining Consolidated
Net Income (Loss) for the Fiscal Quarter: $________
(c) all depreciation and amortization of assets (including goodwill
and other intangible assets) of the Company and its Restricted Subsidiaries
deducted in determining Consolidated Net Income (Loss) for the Fiscal Quarter:
$_______
(d) all federal, state, local and foreign income taxes (whether paid
or deferred) of the Company and its Restricted Subsidiaries deducted in
determining Consolidated Net Income for the Fiscal Quarter: $_______
(e) other non-cash expenses and all extraordinary and non-recurring
expenses (including all one-time, non-recurring transaction expenses associated
with the Reorganization, the Senior Subordinated Notes, the Existing Credit
Agreement, or the Scheme to the extent such expenses are included in determining
Consolidated Net Income (Loss)) deducted in determining Consolidated Net Income
for the Fiscal Quarter: $_______
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<PAGE> 111
(f) adjustments for Acquisitions and Asset Swaps: $_______
(g) sum of Items (a) through (f): $_______
(3) Excess Cash Flow:
(a) Operating Cash Flow (Item (2)(g)): $________
(b) Total Interest Expense to the extent actually paid during the
Fiscal Quarter: $________
(c) All scheduled principal payments on Funded Debt other than
obligations under the Loan Documents during the Fiscal Quarter: $________
(d) All Federal, State, Local and Foreign income taxes (actually
paid) of the Company and its Restricted Subsidiaries deducted in determining
Consolidated Net Income (Loss) for the Fiscal Quarter: $________
(e) Restricted Payments actually made pursuant to Section 10.9(a) and
Permitted Payments actually made pursuant to Sections 10.9(b)(i) and 10.9(b)(ii)
during the Fiscal Quarter: $________
(f) Capital Expenditures during the Fiscal Quarter: $________
(g) Sum of Items (b) through (f): $________
(h) Item (a) minus Item (g): $________
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<PAGE> 112
(3) The lesser of Item (2)(h) and $2,250,000: $________
G. Section 10.11 Mergers, Consolidations, etc..
(1) Asset Sales:
(a) Sales prices of each Asset Sale made during the Fiscal Quarter
ending on Computation Date: $________
$________
$________
$________
(b) Maximum sales price of any Asset Sale: $5,000,000
(c) Aggregate sales price of all Asset Sales made after Amendment
Effective Date: $________
(c) Maximum aggregate sales price of all Asset Sales made after
Amendment Effective Date: $8,000,000
(2) Acquisitions:
(a) Total Purchase Price of all Acquisitions made after the Amendment
Effective Date: $________
(b) Net Cash Proceeds from Asset Sales permitted under Section
10.11(c): $________
(c) Aggregate amount of all Capital Infusions: $________
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<PAGE> 113
all Capital Infusions: $_____
(d) The sum of Item (b) plus Item (c) plus $10,000,000: $________
III. Acquisition Annualized Operating Cash Flow. The Company
hereby certifies and warrants to you that the following is a true and
correct computation as at the Computation Date of the Acquisition
Annualized Operating Cash Flow:
A. Operating Cash Flow of Restricted Subsidiaries owned for three
quarters: $_______
B. Item A, divided by 3 and multiplied by 4: $_______
C. Operating Cash Flow of Restricted Subsidiaries owned for two
quarters: $_______
D. Item C, divided by 2 and multiplied by 4: $_______
E. Operating Cash Flow of Restricted Subsidiaries owned for one quarter:
$_______
F. Item C, multiplied by 4: $_______
G. Acquisition Operating Cash Flow (Item A plus Item C plus Item E):
$_______
H. Acquisition Annualized Operating Cash Flow (Item B plus Item D plus
Item F): $_______
I. Company's estimate of Operating Cash Flow of Restricted Subsidiaries
acquired within the Fiscal Quarter, other than those acquired by means of an
Asset Swap: $_______
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<PAGE> 114
J. Actual Operating Cash Flow of Restricted Subsidiaries acquired within
the Fiscal Quarter, other than those acquired by means of an Asset Swap:
$_______
K. Actual Operating Cash Flow during the Fiscal Quarter acquired of all
Restricted Subsidiaries acquired in any of the Three Fiscal Quarters preceding
the current Fiscal Quarter, whether by means of an Acquisition or Asset Swap:
$_______
L. Item I minus Item J minus Item K: $_______
M. Adjustment resulting from Acquisitions (Item H minus Item G plus Item
L:) $_______
IV. Asset Swaps. The Company hereby certifies and warrants to
you that the following is a true and accurate statement regarding Asset
Swaps made during the Fiscal Quarter ending on the Computation Date:
A. Company's estimate of Operating Cash Flow of the Traded-For Newspaper
Assets: $_______
B. Actual Operating Cash Flow of the Traded Newspaper Assets: $_______
C. Adjusted estimate of Operating Cash Flow of the Traded-For Newspaper
Assets (Item A minus Item B): $_______
V. Defaults. The Company hereby further certifies and warrants
to you that no Event of Default or Unmatured Event of Default has occurred
and is continuing.
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<PAGE> 115
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed and delivered by its duly authorized officer this _____ day of
__________, 19__.
HOLLINGER INTERNATIONAL PUBLISHING INC.
By_____________________________
Name___________________________
Title__________________________
<PAGE> 116
EXHIBIT C
FORM OF
REAFFIRMATION
THIS REAFFIRMATION (this "Reaffirmation") dated as of May 30, 1996, is made
by the undersigned (collectively, the "Undersigned" and each an "Undersigned"),
in favor of the Lenders and the Administrative Agent (each as defined below).
W I T N E S S E T H:
WHEREAS, Hollinger International Publishing Inc. (the "Company"), The
Toronto-Dominion Bank, as issuing bank (in such capacity, the "Issuing Bank"),
Toronto Dominion (Texas), Inc., as administrative agent (in such capacity,
together with any successors in such capacity, the "Administrative Agent"), and
The First National Bank of Chicago, as documentation agent, entered into that
certain Credit Agreement, dated as of February 7, 1996, as amended or modified
and in effect on the Amendment Effective Date (the "Existing Credit Agreement")
whereunder certain financial institutions agreed to make revolving loans and to
issue letters of credit in the maximum amount of $100,000,000 (such revolving
loans and letters of credit outstanding on the Amendment Effective Date,
collectively the "Existing Credit Extensions"); and
WHEREAS, each of the Undersigned was a party to one or more of the AP-91
Agreement, the Trademark Security Agreements, the Company Security Agreement,
and the Subsidiary Guaranty (collectively, the "Reaffirmed Documents" and each a
"Reaffirmed Document") relating to the Existing Credit Agreement; and
WHEREAS, the Company desires to refinance the Existing Credit Extensions
and obtain a revolving loan commitment (to include availability for revolving
loans and the issuance of letters of credit) pursuant to which borrowings of
revolving loans in the maximum aggregate principal amount not to exceed
$125,000,000 would be made to the Company; and
WHEREAS, the Company has requested various financial institutions (together
with their respective successors and assigns, collectively the "Lenders" and
each individually a "Lender") to amend and restate the Existing Credit Agreement
on the terms and conditions set forth in the Amended and Restated Credit
Agreement, dated as of an even date herewith, among the Company, the Lenders,
the Issuing Bank, and the Administrative Agent (together with all amendments and
other modifications, if any, from time to time made thereto, the "Amended and
Restated Credit Agreement") to set forth, among other things, the terms and
conditions under which the Lenders thereafter will make credit extensions to the
Company; it being the intention of the Company, the Lenders, and the
Administrative Agent that the Amended and Restated Credit Agreement and the Loan
Documents executed in connection
<PAGE> 117
therewith shall not effect the novation of the obligations of the Company under
the Existing Credit Agreement but be merely a restatement and, where applicable,
an amendment of and substitution for the terms governing such obligations
thereafter; and
WHEREAS, as a condition precedent to the Amendment Effective Date of the
Amended and Restated Credit Agreement, the Undersigned are required to execute
and deliver this Reaffirmation; and
WHEREAS, each Undersigned has duly authorized the execution, delivery, and
performance of this Reaffirmation; and
WHEREAS, it is in the best interests of each Undersigned to execute this
Reaffirmation inasmuch as such Undersigned will derive substantial direct and
indirect benefits from the Loans made from time to time to the Company and the
Letters of Credit issued from time to time for the account of the Company
pursuant to the Amended and Restated Credit Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to make the Loans and issue or participate in Letters of Credit to the Company
pursuant to the Amended and Restated Credit Agreement, each Undersigned agrees,
for the benefit of the Lenders and the Administrative Agent, as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Certain Terms. Capitalized terms used herein that are
defined in the Amended and Restated Credit Agreement shall have the same
meanings when used herein unless otherwise defined herein.
SECTION 1.2. Trademark Security Agreements. "Trademark Security
Agreements," as used in this Reaffirmation, means those four certain Trademark
Securities Agreements, each dated as of February 7, 1996, as amended, modified
or supplemented from time to time, executed by Chicago Sun-Times, Inc., Daily
Southtown Inc., Pioneer Newspapers Inc., and Chicago Sun-Times Features, Inc.,
respectively.
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<PAGE> 118
ARTICLE II.
REAFFIRMATION
SECTION 2.1. Reaffirmation. Each Reaffirmed Document remains in full
force and effect and is hereby ratified and confirmed, and from and after the
date hereof, each reference that appears in any of the Reaffirmed Documents to
the Existing Credit Agreement shall be deemed to be a reference to the Amended
and Restated Credit Agreement.
ARTICLE III.
MISCELLANEOUS PROVISIONS
SECTION 3.1. Loan Document. This Reaffirmation is a Loan Document
executed pursuant to the Amended and Restated Credit Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 3.2. Binding on Successors, Transferees and Assigns; Assignment of
Reaffirmation. This Reaffirmation shall be binding upon each Undersigned and
their respective successors, transferees and assigns, and all references herein
to any Undersigned shall be deemed to include any of such Person's successor or
successors, whether intermediate or remote.
SECTION 3.3. Amendments, etc. No amendment to or waiver of any provision
of this Reaffirmation, nor consent to any departure by any Undersigned herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent and each Undersigned, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 3.4. Addresses for Notices to the Undersigned. All notices
hereunder to any Undersigned shall be in writing (including via facsimile) and
shall be sent to it at the address or facsimile number set forth below its
signature hereto or at such other address or facsimile number as may be
designated by such Undersigned in a written notice received by the
Administrative Agent. Notices sent by facsimile transmission shall be deemed to
have been given when sent; notices sent by mail shall be deemed to have been
given three Business Days after the date when sent by registered or certified
mail, postage prepaid; and notices sent by hand delivery shall be deemed to have
been received when received.
SECTION 3.5. Section Captions. Section captions used in this
Reaffirmation are for convenience of reference only, and shall not affect the
construction of this Reaffirmation.
SECTION 3.6. Severability. Wherever possible each provision of this
Reaffirmation shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Reaffirmation shall be
prohibited by or invalid under such law, such
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<PAGE> 119
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Reaffirmation.
SECTION 3.7. Governing Law, Entire Agreement, Counterparts, etc. This
Reaffirmation shall be governed by and construed in accordance with the laws of
the State of New York without reference to conflicts of laws principles. This
Reaffirmation and the other Loan Documents constitute the entire understanding
among the parties hereto with respect to the subject matter hereof and thereof
and supersede any prior agreements, written or oral, with respect thereto. This
Reaffirmation may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, and each such counterpart shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same Reaffirmation. At any time after the date of this
Reaffirmation, one or more additional persons or entities may become parties
hereto by executing and delivering to the Administrative Agent a counterpart of
this Reaffirmation. Immediately upon such execution and delivery (and without
any further action), each such additional person or entity will become a party
to, and will be bound by all the terms of, this Reaffirmation.
SECTION 3.8. Forum Selection And Consent To Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
REAFFIRMATION OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT ANY ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH UNDERSIGNED HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH
UNDERSIGNED FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. EACH UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
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<PAGE> 120
SECTION 3.9. Waiver of Jury Trial. EACH UNDERSIGNED AND, BY ACCEPTING THE
BENEFITS HEREOF, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS REAFFIRMATION, ANY OTHER
LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR
ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT A JURY.
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<PAGE> 121
IN WITNESS WHEREOF, each Undersigned has caused this Reaffirmation to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
HOLLINGER INTERNATIONAL PUBLISHING, INC.
By:______________________________________
Name: ________________________________
Title: _________________________________
Address: 107-115 South Emma
Box 1000
West Frankfort, Illinois 60611
Facsimile No.: __________
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 122
AMERICAN PUBLISHING (1991) INC.
By: ________________________________________
Name: ________________________________
Title: ________________________________
Address: 107-115 South Emma
Box 1000
West Frankfort, Illinois 60611
Facsimile No.: __________
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 123
APAC-95 INC.
AMERICAN PUBLISHING HOLDINGS INC.
AMERICAN PUBLISHING SERVICES, INC.
VALLEY CABLE T.V., INC.
THE SUN-TIMES COMPANY
AMERICAN PUBLISHING COMPANY
APC 1993, INC.
APMS-93, INC.
CHICAGO SUN-TIMES, INC.
CHICAGO SUN-TIMES FEATURES, INC.
PIONEER NEWSPAPERS INC.
STAR PUBLICATIONS, INC.
By: ______________________________________
Name: ________________________________
Title: ________________________________
Address: 107-115 South Emma
Box 1000
West Frankfort, Illinois 60611
Facsimile No.: __________
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
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<PAGE> 124
APAC-95 INDIANA HOLDINGS, INC.
APAC-95 KANSAS HOLDINGS, INC.
APAC-95 KENTUCKY HOLDINGS, INC.
APAC-95 MISSOURI HOLDINGS, INC.
APAC-95 NEW YORK HOLDINGS, INC.
APAC-95 OHIO HOLDINGS, INC.
APAC-95 OKLAHOMA HOLDINGS, INC.
APAC-95 TEXAS HOLDINGS, INC.
APMS-95 INC.
THE POST PUBLISHING COMPANY
By: ________________________________________
Name: _______________________________
Title: _______________________________
Address: 107-115 South Emma
Box 1000
West Frankfort, Illinois 60611
Facsimile No.: __________
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
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<PAGE> 125
DAILY SOUTHTOWN INC.
APAC-90 INC.
APAC-90 ARKANSAS HOLDINGS, INC.
APAC-90 CALIFORNIA HOLDINGS, INC.
APAC-90 INDIANA HOLDINGS, INC.
APAC-90 KANSAS HOLDINGS, INC.
APAC-90 TEXAS HOLDINGS, INC.
APAC-90 NORTH DAKOTA HOLDINGS, INC.
APAC ILLINOIS HOLDINGS, INC.
APC PENNSYLVANIA HOLDINGS, INC.
APMS-90, INC.
AMERICAN PUBLISHING COMPANY OF KENTUCKY
AMERICAN PUBLISHING COMPANY OF NEBRASKA
AMERICAN PUBLISHING COMPANY OF NORTH CAROLINA
AMERICAN PUBLISHING COMPANY OF TENNESSEE
KIRKSVILLE PUBLISHING COMPANY
MERIDIAN STAR, INC.
THE STATESMAN-EXAMINER, INC.
SOUTHERN SISKIYOU NEWSPAPERS, INC.
By: ________________________________________
Name: _________________________________
Title: ________________________________
Address: 107-115 South Emma
Box 1000
West Frankfort, Illinois 60611
Facsimile No.: ________
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 126
The undersigned is executing a counterpart
hereof for purposes of becoming a party
hereto:
_____________________________________________
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
Address: ____________________________________
Facsimile No.: ______________________________
Attention: __________________________________
<PAGE> 127
EXHIBIT D
FORM OF
AMENDED AND RESTATED
HOLLINGER INTERNATIONAL GUARANTY
THIS AMENDED AND RESTATED GUARANTY (this "Guaranty") dated as of May 30,
1996, is made by HOLLINGER INTERNATIONAL INC., a Delaware corporation (the
"Guarantor"), in favor of the Lenders and the Administrative Agents (each as
defined below).
W I T N E S S E T H:
WHEREAS, Hollinger International Publishing Inc. (the "Company"), The
Toronto-Dominion Bank, as issuing bank (in such capacity, the "Issuing Bank"),
The First National Bank of Chicago, as documentation agent, and Toronto Dominion
(Texas) Inc., as administrative agent (in such capacity, together with any
successors in such capacity, the "Administrative Agent") entered into that
certain Credit Agreement, dated as of February 7, 1996, as amended or modified
and in effect on the Amendment Effective Date (the "Existing Credit Agreement")
whereunder certain financial institutions agreed to make revolving loans and to
issue letters of credit in the maximum amount or $100,000,000 (such revolving
loans and letters of credit outstanding on the Amendment Effective Date,
collectively the "Existing Credit Extensions"); and
WHEREAS, the Guarantor executed and delivered that certain Hollinger
International Guaranty, dated February 7, 1996 (the "Existing Guaranty"),
guarantying the obligations of the Company under the Existing Credit Agreement;
and
WHEREAS, the Company desires to refinance the Existing Credit Extensions
and obtain a revolving loan commitment (to include availability for revolving
loans and the issuance of letters of credit) pursuant to which borrowings of
revolving loans in the maximum aggregate principal amount not to exceed
$125,000,000 would be made to the Company; and
WHEREAS, the Company has requested various financial institutions (together
with their respective successors and assigns, collectively the "Lenders" and
each individually a "Lender") to amend and restate the Existing Credit Agreement
on the terms and conditions set forth in the Amended and Restated Credit
Agreement, dated as of an even date herewith, among the Company, the Lenders,
the Issuing Bank, and the Administrative Agent (together with all amendments and
other modifications, if any, from time to time made thereto, the "Amended and
Restated Credit Agreement") to set forth, among other things, the terms and
conditions under which the Lenders thereafter will make credit extensions to the
Company; it being the intention of the Company, the Lenders, and the
Administrative Agent that the
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Amended and Restated Credit Agreement and the Loan Documents executed in
connection therewith shall not effect the novation of the obligations of
the Company under the Existing Credit Agreement but be merely a
restatement and, where applicable, an amendment of and substitution for
the terms governing such obligations thereafter; and
WHEREAS, as a condition precedent to the Amendment Effective Date of the
Amended and Restated Credit Agreement, the Guarantor is required to execute and
deliver this Guaranty; and
WHEREAS, the Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of the Guarantor to execute this
Guaranty inasmuch as the Guarantor will derive substantial direct and indirect
benefits from the Loans made from time to time to the Company and the Letters
of Credit issued from time to time for the account of the Company pursuant to
the Amended and Restated Credit Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the
Lenders to make the Loans and issue or participate in Letters of Credit
(including the initial Loans and the initial Letter(s) of Credit) to the
Company pursuant to the Amended and Restated Credit Agreement, the Guarantor
agrees, for the benefit of the Lenders and the Administrative Agent, as
follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
Administrative Agent is defined in the first recital.
Amended and Restated Credit Agreement is defined in the fourth recital.
Company is defined in the first recital.
Guaranteed Obligations is defined in Section 2.1 hereof.
Guarantor is defined in the preamble.
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Guaranty is defined in the preamble.
Hedging Agreements means all agreements that are defined to be "Hedging
Agreements" in the Amended and Restated Credit Agreement that are entered into
with any Person who at the time such Hedging Agreement is entered into is a
Lender or an affiliate of a Lender.
Holdco means Hollinger International Publishing Holdings Inc., a Delaware
corporation and wholly owned subsidiary of Guarantor.
Holdco Facility means the Securities Purchase Agreement dated as of May 30,
1996, between Holdco and Toronto Dominion Investments, Inc. providing for a
secured senior exchangeable note facility in the maximum principal amount of
$100,000,000.
HTH/FDTH Share Exchange Agreement means the share exchange agreement dated
as of July 19, 1995, between Hollinger Inc. and FDTH.
Lender is defined in the fourth recital.
Loan Documents means those agreements and other documents defined as "Loan
Documents" in the Amended and Restated Credit Agreement and, in addition, all
Hedging Agreements.
Material Adverse Effect means a material adverse effect on (a) the
condition (financial or otherwise), operations, business, properties, assets or
prospects of the Guarantor and its Subsidiaries taken as a whole or (b) the
ability of the Guarantor to timely and fully perform any of its payment or other
material obligations under this Guaranty or any other Loan Document to which it
is a party.
Wholly-Owned Subsidiary means a Subsidiary of which the Guarantor and/or
its Subsidiaries own, directly or indirectly, all of the outstanding shares of
capital stock other than directors' qualifying shares.
SECTION 1.2. Amended and Restated Credit Agreement Definitions. Unless
otherwise defined herein or the context otherwise requires, capitalized terms
used in this Guaranty, including its preamble and recitals, have the meanings
provided in the Amended and Restated Credit Agreement.
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ARTICLE II.
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. The Guarantor hereby absolutely, unconditionally
and irrevocably as primary obligor and not merely as surety, guarantees the full
and prompt payment when due, whether by acceleration or otherwise, and at all
times thereafter, of all obligations (monetary or otherwise) of the Company to
each of the Lenders and the Administrative Agent, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, which arise out of or in connection with the
Amended and Restated Credit Agreement, the Notes, any Letter of Credit or Letter
of Credit Application, any Hedging Agreement or any other Loan Document, in each
case as the same may be amended, modified, extended or renewed from time to time
(all such obligations being herein collectively called the "Guaranteed
Obligations").
This Guaranty constitutes a guaranty by the Guarantor of payment when due
and not of collection, and the Guarantor specifically agrees that it shall not
be necessary or required that any Agent or any Lender exercise any right, assert
any claim or demand or enforce any remedy whatsoever against the Company (or any
other Person) before or as a condition to the obligations of the Guarantor
hereunder.
SECTION 2.2. Acceleration of Guaranty. The Guarantor agrees that, in the
event of any Event of Default under Section 12.1.4 of the Amended and Restated
Credit Agreement, and if such event shall occur at a time when any of the
Guaranteed Obligations are not then due and payable, the Guarantor shall pay to
the Administrative Agent for the account of the Agents and the Lenders forthwith
the full amount which would be payable hereunder by the Guarantor if all
Liabilities were then due and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all respects
be a continuing, absolute, unconditional and irrevocable guaranty of payment by
the Guarantor, and shall remain in full force and effect until all Guaranteed
Obligations have been paid in full, finally and indefeasibly, all obligations of
the Guarantor hereunder shall have been paid in full, finally and indefeasibly,
and the Commitments, all Letters of Credit, all Hedging Agreements and any other
commitments by the Lenders or the Agents to the Company shall have terminated.
The Guarantor guarantees that the Guaranteed Obligations shall be paid strictly
in accordance with the terms of the Amended and Restated Credit Agreement and
each other Loan Document under which they arise, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of any Agent or any Lender with respect thereto.
The creation or existence from time to time of additional Guaranteed Obligations
to the Administrative Agent or the Lenders or any of them is hereby authorized,
without notice to the Guarantor, and shall in no way impair the rights of the
Administrative Agent or the Lenders or the obligations of the Guarantor under
this
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Guaranty, including the Guarantor's guaranty of such additional Guaranteed
Obligations. The liability of the Guarantor under this Guaranty shall be
absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the Amended and
Restated Credit Agreement, any Note or any other Loan Document;
(b) the failure of the Administrative Agent or any Lender
(i) to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person (including any other guarantor)
under the provisions of the Amended and Restated Credit Agreement, any
Note, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor of,
or collateral securing, any Guaranteed Obligations;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other extension,
compromise or renewal of any Guaranteed Obligation;
(d) any reduction, limitation, impairment or termination of any
Guaranteed Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and the
Guarantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Guaranteed Obligations;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Amended and Restated
Credit Agreement, any Note or any other Loan Document;
(f) (i) any addition, exchange, release, surrender or non-perfection of
any collateral or (ii) any amendment to or waiver or release or addition of, or
consent to departure from, any other guaranty held by the Administrative Agent
or any Lender, securing or supporting any of the Guaranteed Obligations; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Guarantor, the Company,
any surety or any guarantor.
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SECTION 2.4. Reinstatement, etc. The Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Guaranteed Obligations is
rescinded or must otherwise be restored by the Administrative Agent or any
Lender, upon the insolvency, bankruptcy or reorganization of the Company, any
other Person or otherwise, as though such payment had not been made.
SECTION 2.5. Waiver, etc. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and any requirement that any Agent or
any Lender protect, secure, perfect or insure any security interest or Lien, or
any property subject thereto, or exhaust any right or take any action against
the Company or any other Person (including any other guarantor) or entity or any
collateral securing any Guaranteed Obligations.
SECTION 2.6. Waiver of Subrogation and Contribution. Until the Guaranteed
Obligations have been paid in cash indefeasibly in full, the Guarantor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against the Company or any other Person that arise from the existence,
payment, performance or enforcement of the Guarantor's obligations under this
Guaranty or any other Loan Document, including any right of subrogation,
reimbursement, contribution, exoneration, or indemnification, any right to
participate in any claim or remedy of the Administrative Agent or any Lender
against the Company or any other Person or any collateral which the
Administrative Agent or any Lender now has or hereafter acquires, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including the right to take or receive from the Company or any other
Person, directly or indirectly, in cash or other property or by set-off or in
any manner, payment or security on account of such claim or other rights. If any
amount shall be paid to the Guarantor in violation of the preceding sentence and
the Guaranteed Obligations shall not have been paid in cash indefeasibly in full
and the Commitments, all Letters of Credit, all Hedging Agreements and any other
commitments by the Lenders or the Agents to the Company shall not have been
terminated, such amount shall be deemed to have been paid to the Guarantor for
the benefit of, and held in trust for, the Administrative Agent and the Lenders,
and shall forthwith be paid to the Administrative Agent to be credited and
applied upon the Guaranteed Obligations, whether matured or unmatured. The
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Amended and Restated Credit
Agreement and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Amended and Restated Credit Agreement and to induce the Lenders to make Loans
thereunder, the Guarantor represents and warrants to the Agents and the Lenders
that:
SECTION 3.1. Organization, etc. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; the Guarantor is duly qualified to do business in each jurisdiction
where the nature of its business makes such qualification necessary, except
where the failure to be so qualified would not have a Material Adverse Effect;
and the Guarantor has full corporate power and authority to own its property and
conduct its business as presently conducted by it.
SECTION 3.2. Authorization; No Conflict. The execution and delivery by
the Guarantor of this Guaranty and each other Loan Document to which it is
intended to be a party, and the performance by the Guarantor of its obligations
under each Loan Document to which it is intended to be a party are within the
corporate powers of the Guarantor, have been duly authorized by all necessary
corporate action on the part of the Guarantor (including any necessary
shareholder action), have received all necessary governmental approval (if any
shall be required), and do not and will not (a) violate any provision of law or
any order, decree or judgment of any court or other government agency which is
binding on the Guarantor, (b) contravene or conflict with, or result in a breach
of, any provision of the Certificate of Incorporation, By-Laws or other
organizational documents of the Guarantor or of any agreement, indenture,
instrument or other document, or any judgment, order or decree, which is binding
on the Guarantor or (c) result in, or require, the creation or imposition of any
Lien on any property of the Guarantor (other than pursuant to the Loan
Documents).
SECTION 3.3. Validity and Binding Nature. This Guaranty is, and upon the
execution and delivery thereof each other Loan Document to which the Guarantor
is intended to be a party will be, the legal, valid and binding obligation of
the Guarantor, enforceable against the Guarantor in accordance with its terms,
except that enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, fraudulent transfer, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in
equity or at law).
SECTION 3.4. Financial Information. The audited consolidated financial
statements of the Guarantor and its Subsidiaries as at December 31, 1995 and for
the two years then ended and the unaudited consolidated financial statements of
the Guarantor and its Subsidiaries for the three months ended March 31, 1996,
(a) are true and correct in all
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material respects, (b) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
(except as disclosed therein and, in the case of the interim financial
statements, the absence of footnotes) and (c) present fairly the consolidated
financial condition of the Guarantor and its Subsidiaries at such dates and the
results of their operations for the periods then ended.
SECTION 3.5. No Material Adverse Change. Except as disclosed on Schedule
9.5 to the Amended and Restated Credit Agreement, since December 31, 1995, no
event or events have occurred which, individually or in the aggregate, has had
or is reasonably likely to have a Material Adverse Effect.
SECTION 3.6. Litigation and Guarantee Obligations. No litigation
(including, without limitation, derivative actions), arbitration proceeding or
governmental proceeding is pending or, to the Guarantor's knowledge, threatened
against the Guarantor or any of its Subsidiaries which, if adversely determined,
might have a Material Adverse Effect, except as set forth in Schedule 3.6
hereto. Other than any liability incident to such litigation or proceedings,
neither the Guarantor nor any of its Subsidiaries has any material guarantee
obligations not provided for or disclosed in the financial statements referred
to in clause (a) of Section 3.4 or listed in Schedule 3.6 hereto.
SECTION 3.7. Investment Company Act. Neither the Guarantor nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 3.8. Public Utility Holding Company Act. Neither the Guarantor
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 3.9. Solvency, etc. On the Effective Date and immediately prior
to and after giving effect to each borrowing under the Amended and Restated
Credit Agreement and the use of the proceeds thereof, (a) the Guarantor's assets
will exceed its liabilities and (b) the Guarantor will be solvent, will be able
to pay its debts as they mature, will own property with fair saleable value
greater than the amount required to pay its debts and will have capital
sufficient to carry on its business as then constituted.
SECTION 3.10. Information. All written information heretofore or
contemporaneously herewith furnished by the Guarantor to any Lender or any Agent
for purposes of or in connection with the Amended and Restated Credit Agreement
and this Guaranty and the transactions contemplated thereby and hereby is, and
all written information hereafter furnished by or on behalf of the Guarantor to
any Lender or the Administrative Agent pursuant hereto or thereto or in
connection herewith or therewith will
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be, true and accurate in every material respect on the date as of which such
information is dated or certified, and none of such information is or will be
incomplete by omitting to state any material fact necessary to make such
information not misleading.
SECTION 3.11. Senior Subordinated Indenture. The obligations of the
Guarantor under this Guaranty constitute "Senior Guarantor Indebtedness" under
the terms of the Senior Subordinated Indenture.
ARTICLE IV.
COVENANTS
So long as this Guaranty is in effect the Guarantor agrees that, unless at
any time the Required Lenders shall otherwise expressly consent in writing, it
will:
SECTION 4.1. Reports, Certificates and Other Information. Furnish to each
Lender:
SECTION 4.1.1. Annual Report. Promptly when available and in any event
within 90 days after the close of each Fiscal Year, (a) a copy of the annual
report of the Guarantor and its Subsidiaries for such Fiscal Year, including
therein consolidated balance sheets of the Guarantor and its Subsidiaries as of
the end of such Fiscal Year and consolidated statements of earnings and cash
flow of the Guarantor and its Subsidiaries for such Fiscal Year, which report
(i) shall be certified by independent auditors of recognized national standing
selected by the Guarantor and reasonably acceptable to the Required Lenders, in
an audit report which shall be without qualification as to going concern or
scope and (ii) shall be accompanied by a written statement from such auditors to
the effect that in making the examination necessary for the signing of such
audit report they have not become aware of any Event of Default or Unmatured
Event of Default that has occurred and is continuing or, if they have become
aware of any such event, describing it in reasonable detail; and (b) a copy of
the consolidating balance sheets of the Guarantor and its Subsidiaries as of the
end of such Fiscal Year and consolidating statements of earnings and cash flow
for the Guarantor and its Subsidiaries for such Fiscal Year, together with a
certificate of one of the chief executive officer, the chief financial officer,
the chief operating officer or the controller of the Guarantor certifying that
such financial statements fairly present the financial condition and results of
operations of the Guarantor and its Subsidiaries as of the dates and periods
indicated.
SECTION 4.1.2. Quarterly Reports. Promptly when available and in any
event within 45 days after the end of each Fiscal Quarter of each Fiscal Year,
consolidated balance sheets of the Guarantor and its Subsidiaries as of the end
of such calendar month and consolidated statements of earnings and consolidated
statements of cash flow for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the
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last day of such Fiscal Quarter, including a comparison with the corresponding
Fiscal Quarter and period of the previous Fiscal Year together with a
certificate of one of the chief executive officer, the chief financial officer,
the chief operating officer or the controller of the Guarantor to the effect
that such financial statements fairly present the financial condition and
results of operations of the Guarantor and its Subsidiaries as of the dates and
periods indicated, subject to changes resulting from normal year-end
adjustments.
SECTION 4.1.3. Reports to SEC and to Shareholders. Promptly upon the
filing or sending thereof, a copy of (a) any annual, periodic or special report
or registration statement (inclusive of exhibits thereto) filed by the Guarantor
with the SEC or any securities exchange and (b) any report, proxy statement or
similar communication to the Guarantor's public shareholders generally.
SECTION 4.1.4. Notice of Default and Litigation Matters. Promptly (and in
any event within one Business Day in the case of clause (a) and within five days
in the case of clauses (b) through (d)) after any officer of the Guarantor
learns of any of the following, written notice describing the same and the steps
being taken by the Guarantor or the Subsidiary affected thereby with respect
thereto: (a) the occurrence of an Event of Default or an Unmatured Event of
Default; (b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Guarantor to the Lenders which has
been instituted or, to the knowledge of the Guarantor, is threatened against the
Guarantor or any Subsidiary or to which any of the properties of any thereof is
subject which has had or is reasonably likely to have a Material Adverse Effect;
(c) any material adverse development which occurs in any litigation, arbitration
or governmental investigation or proceeding previously disclosed on Schedule 3.6
hereto or pursuant to clause (b); and (d) the occurrence of any other event or
circumstance which has had or is reasonably likely to have a Material Adverse
Effect.
SECTION 4.1.5. Management Reports. Promptly upon the request of the
Administrative Agent or any Lender, copies of all detailed financial and
management reports submitted to the Guarantor by independent auditors in
connection with any annual or interim audit made by such auditors of the books
of the Guarantor.
SECTION 4.1.6. Other Information. Promptly from time to time, such other
information concerning the Guarantor and its Subsidiaries as any Lender or the
Administrative Agent may reasonably request.
SECTION 4.2. Books, Records and Inspections. Keep proper books and
records in which full and correct entries shall be made sufficient to allow the
preparation of financial statements in accordance with generally accepted
accounting principles; permit on reasonable notice and at reasonable times and
intervals any Lender or the Administrative Agent or any representative thereof
to (a) visit and inspect the properties of the Guarantor during normal business
hours, (b) inspect and make extracts from and copies of its books and records,
and
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(c) discuss with its principal officers its businesses, operations and
financial matters. The Guarantor will (i) after the occurrence and during the
continuance of any Event of Default and (ii) otherwise with the consent of the
Company, which consent shall not be unreasonably withheld, also permit any
Lender, the Administrative Agent or any representative thereof to discuss with
the Guarantor's independent auditors its businesses, operations and financial
matters, provided that the Guarantor is given reasonable prior notice of and an
opportunity to attend any meeting between such auditors and any Lender, the
Administrative Agent or any representative thereof at which such issues will be
discussed. All visits, discussions, and examinations by the Administrative
Agent shall be at the Guarantor's expense.
SECTION 4.3. Maintenance of Existence, etc. Maintain and preserve,
(a) its existence and good standing in the jurisdiction of its incorporation
and (b) its qualification and good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good
standing would not be reasonably likely to result in a Material Adverse Effect).
SECTION 4.4. Mergers, Consolidations, Sales. Not, and not permit any of
the Restricted Subsidiaries to, be a party to any merger or consolidation or to
sell all or substantially all the assets of the Guarantor, except for (a) any
such merger or consolidation, sale, transfer, conveyance, lease or assignment
permitted under the Amended and Restated Credit Agreement, (b) any merger by the
Guarantor so long as it is the surviving corporation, or (c) any consolidation
by the Guarantor so long as it does not result in a Change in Control.
SECTION 4.5. Amendments to Certain Documents. Not, and not permit any
Subsidiary to, make or agree to any amendment to or modification of, or waive
any of its rights under, any of the terms of (a) the Series A Preferred Shares,
(b) the HTH/FDTH Share Exchange Agreement or (c) the Tax Allocation Agreement.
SECTION 4.6. Certain Restrictive Agreements. With respect to each of the
Restricted Subsidiaries (other than the Company), not, and not permit such
Restricted Subsidiary to, enter into any agreement or other contract (other than
the Senior Subordinated Indenture) which would impose restrictions on the
ability of the Guarantor to receive, or such Restricted Subsidiary to make or
declare, dividends or other distributions from such Restricted Subsidiary to the
Guarantor that are more restrictive than the restrictions that the Guarantor and
such Restricted Subsidiary are subject to on the Effective Date.
SECTION 4.7. Holdco Guaranty. Upon repayment in full of the Holdco
Facility, either (a)(1) cause Holdco to be dissolved into the Guarantor and
(2) itself become a party to the Holdco Pledge Agreement, or (b) cause Holdco
to execute a guaranty of the Amended and Restated Credit Agreement
substantially in the form of this Agreement.
SECTION 4.8. Southam Collateral. If the CIBC Facility is terminated and the
Holdco Facility is terminated, the Guarantor shall grant to the Administrative
Agent a first priority perfected security interest in the Southam Collateral
pursuant to a pledge agreement
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in form and substance satisfactory to the Administration Agent, and, in the
event the Guarantor is unable to so pledge the Southam Collateral, the
Guarantor shall use its best efforts to cause Limited or any successor owner of
Southam Collateral to grant to the Administrative Agent a first priority
perfected security interest in the Southam Collateral pursuant to a pledge
agreement in form and substance satisfactory to the Administrative Agent.
ARTICLE V.
MISCELLANEOUS PROVISIONS
SECTION 5.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Amended and Restated Credit Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 5.2. Binding on Successors, Transferees and Assigns; Assignment of
Guaranty. This Guaranty shall be binding upon the Guarantor and its successors,
transferees and assigns, and all references herein to the Company and the
Guarantor, respectively, shall be deemed to include any of such Person's
successor or successors, whether intermediate or remote. Any Lender may from
time to time, in accordance with Section 14.9 of the Amended and Restated Credit
Agreement, without notice to the Guarantor, assign or transfer any or all of the
Guaranteed Obligations or any interest therein; and, notwithstanding any such
assignment or transfer or any subsequent assignment or transfer thereof, such
Guaranteed Obligations shall be and remain Guaranteed Obligations for the
purpose of this Guaranty, and each and every immediate and successive assignee
or transferee of any of the Guaranteed Obligations or of any interest therein
shall, to the extent of the interest of such assignee or transferee in the
Guaranteed Obligations, be entitled to the benefits of this Guaranty and shall
be protected to the same extent as if such assignee or transferee were a Lender.
SECTION 5.3. Amendments, etc. No amendment to or waiver of any provision
of this Guaranty, nor consent to any departure by the Guarantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Administrative Agent and the Guarantor, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 5.4. Addresses for Notices to the Guarantor. All notices
hereunder to the Guarantor shall be in writing (including via facsimile) and
shall be sent to it at the address or facsimile number set forth below its
signature hereto or at such other address or facsimile number as may be
designated by the Guarantor in a written notice received by the Administrative
Agent. Notices sent by facsimile transmission shall be deemed to have been
given when sent; notices sent by mail shall be deemed to have been given three
Business Days after the date when sent by registered or certified mail, postage
prepaid; and notices sent by hand delivery shall be deemed to have been received
when received.
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SECTION 5.5. No Waiver; Remedies; Security. In addition to, and not in
limitation of, Section 2.3 and Section 2.5, no failure on the part of any Agent
or any Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law. Pursuant to the Amended and Restated
Credit Agreement, (a) this Guaranty has been delivered to the Administrative
Agent and (b) the Administrative Agent has been authorized to enforce this
Guaranty on behalf of itself, and each of the Lenders. All payments by the
Guarantor pursuant to this Guaranty shall be made to the Administrative Agent
applied to costs, expenses, fees or the ratable benefit of the Lenders, as
applicable. This Guaranty is secured by various collateral documents delivered
by the Guarantor and reference is made to such collateral documents for a
description of the collateral security this Guaranty, the nature and extent of
such collateral and the rights of the parties in and to such collateral.
SECTION 5.6. Section Captions. Section captions used in this Guaranty are
for convenience of reference only, and shall not affect the construction of this
Guaranty.
SECTION 5.7. Setoff. In addition to, and not in limitation of, any rights
of any Agent or any Lender under applicable law, the Administrative Agent or any
Lender shall, upon the occurrence of any Event of Default, have the right to
appropriate and apply to the payment of the obligations of the Guarantor owing
to it hereunder, whether or not then due, and the Guarantor hereby grants to the
Administrative Agent and each Lender a continuing security interest in, any and
all balances, credits, deposits, accounts or moneys of the Guarantor then or
thereafter maintained with the Administrative Agent or such Lender and any and
all property of every kind or description of or in the name of the Guarantor now
or hereafter, for any reason or purpose whatsoever, in the possession or control
of, or in transit to, the Administrative Agent or such Lender or any agent or
bailee therefor.
SECTION 5.8. Fees and Expenses. The Guarantor further agrees to pay all
reasonable expenses (including reasonable attorneys' fees and legal expenses)
paid or incurred by the Administrative Agent or any Lender in endeavoring to
collect the Guaranteed Obligations, or any part thereof, in realizing upon or
protecting any Collateral for this Guaranty, and in enforcing this Guaranty
against the Guarantor.
SECTION 5.9. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 5.10. Governing Law, Entire Agreement, etc. This Guaranty shall
be governed by and construed in accordance with the laws of the State of New
York without reference to conflicts of laws principles. This Guaranty and the
other Loan Documents constitute the entire understanding among the parties
hereto with respect to the subject matter hereof and thereof and supersede any
prior agreements, written or oral, with respect thereto.
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<PAGE> 140
SECTION 5.11. Forum Selection And Consent To Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE GUARANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 5.12. Waiver of Jury Trial. THE GUARANTOR AND (BY ACCEPTING THE
BENEFITS HEREOF) THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THE FOREGOING, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
A JURY.
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<PAGE> 141
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
HOLLINGER INTERNATIONAL INC.
By: ______________________________________
Name:
Title:
Address: 107-115 South Emma, Box 1000
West Frankfort, Illinois 62896
Facsimile No.: (618) 932-6155
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
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<PAGE> 142
HOLDCO PLEDGE AGREEMENT
THIS HOLDCO PLEDGE AGREEMENT (this "Agreement") dated as of May 30, 1996,
is between HOLLINGER INTERNATIONAL PUBLISHING HOLDINGS INC., a Delaware
corporation ("Holdco"), and TORONTO DOMINION (TEXAS), INC. in its capacity as
administrative agent for the Lenders referred to below (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, Hollinger International Publishing Inc. (the "Company"), The
Toronto-Dominion Bank, as issuing bank (in such capacity, the "Issuing Bank"),
The First National Bank of Chicago, as documentation agent, and the
Administrative Agent, entered into that certain Credit Agreement, dated as of
February 7, 1996, as amended or modified and in effect on the Amendment
Effective Date (the "Existing Credit Agreement") whereunder certain financial
institutions agreed to make revolving loans and to issue letters of credit in
the maximum amount or $100,000,000 (such revolving loans and letters of credit
outstanding on the Amendment Effective Date, collectively the "Existing Credit
Extensions"); and
WHEREAS, Hollinger International Inc., a Delaware corporation ("Hollinger
International"), has executed and delivered a guaranty of the obligations of the
Company under the Existing Credit Agreement; and
WHEREAS, Hollinger International pledged as security for the obligations of
the Company under the Existing Credit Agreement all of the outstanding Capital
Stock of the Company, pursuant to that certain Hollinger International Pledge
Agreement, dated February 7, 1996, as amended or modified and in effect on the
Amendment Effective Date (the "Hollinger International Pledge Agreement"); and
WHEREAS, Hollinger International has assigned all of its rights in the
Capital Stock of the Company to Holdco subject to the Hollinger International
Pledge Agreement; and
WHEREAS, the Company desires to refinance the Existing Credit Extensions
and obtain a revolving loan commitment (to include availability for revolving
loans and the issuance of letters of credit) pursuant to which borrowings of
revolving loans in the maximum aggregate principal amount not to exceed
$125,000,000 would be made to the Company; and
WHEREAS, the Company has requested various financial institutions (together
with their respective successors and assigns, collectively the "Lenders" and
each individually a "Lender") to amend and restate the Existing Credit Agreement
on the terms and conditions
<PAGE> 143
set forth in the Amended and Restated Credit Agreement, dated as of an
even date herewith, among the Company, the Lenders, the Issuing Bank,
and the Administrative Agent (together with all amendments and other
modifications, if any, from time to time made thereto, the "Amended and
Restated Credit Agreement") to set forth, among other things, the terms
and conditions under which the Lenders thereafter will make credit
extensions to the Company; it being the intention of the Company, the
Lenders, and the Administrative Agent that the Amended and Restated
Credit Agreement and the Loan Documents executed in connection therewith
shall not effect the novation of the obligations of the Company under
the Existing Credit Agreement but be merely a restatement and, where
applicable, an amendment of and substitution for the terms governing
such obligations thereafter; and
WHEREAS, as a condition precedent to the Amendment Effective Date of the
Credit Agreement, Holdco is required to execute and deliver this Agreement; and
WHEREAS, Holdco has duly authorized the execution, delivery and performance
of this Agreement; and
WHEREAS, it is in the best interests of Holdco to execute this Agreement
inasmuch as Holdco will derive substantial direct and indirect benefits from the
Loans made from time to time to the Company and the Letters of Credit issued
from time to time for the account of the Company pursuant to the Credit
Agreement;
NOW, THEREFORE, for and in consideration of any loan, advance or other
financial accommodation heretofore or hereafter made to the Company under or in
connection with the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. When used herein, the following terms have the following
meanings (such meanings to be applicable to both the singular and plural forms
of such terms):
Collateral - see Section 2 hereof.
Default means the occurrence of any Event of Default (as defined in the
Credit Agreement).
Issuer means the issuer of any of the shares of stock or other securities
representing all or any of the Collateral.
Liabilities means all obligations (monetary or otherwise) of Hollinger
International, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to become
due, which arise out of or in connection with the Credit Agreement, this
Agreement, any other
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<PAGE> 144
Loan Document or any other document or instrument executed in connection
therewith.
Loan Document has the meaning assigned to such term in the Credit
Agreement.
2. Pledge. As security for the payment of all Liabilities, Holdco hereby
pledges to the Administrative Agent for the benefit of the Lenders and the
Administrative Agent, and grants to the Administrative Agent for the benefit of
the Lenders and the Administrative Agent a continuing security interest in, all
of the following:
A. All of the shares of stock and other securities described in Schedule I
hereto, all of the certificates and/or instruments representing such shares of
stock and other securities, and all cash, securities, dividends, rights and
other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
or other securities;
B. All additional shares of stock of any of the Issuers listed in Schedule
I hereto at any time and from time to time acquired by Holdco in any manner, all
of the certificates representing such additional shares, and all cash,
securities, dividends, rights and other property at any time and from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares;
C. All other property hereafter delivered to the Administrative Agent in
substitution for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such property, and all cash, securities,
interest, dividends, rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
D. All products and proceeds of all of the foregoing.
All of the foregoing are herein collectively called the "Collateral".
Holdco agrees to deliver to the Administrative Agent, promptly upon receipt
and in due form for transfer (i.e., endorsed in blank or accompanied by stock or
bond powers executed in blank), any Collateral which may at any time or from
time to time be in or come into the possession or control of Holdco; and prior
to the delivery thereof to the Administrative Agent, such Collateral shall be
held by Holdco separate and apart from its other property and in express trust
for the Administrative Agent.
3. Warranties; Further Assurances. Holdco warrants to the Administrative
Agent and each Lender that: (a) Holdco is (or at the time of any future
delivery, pledge, assignment or transfer thereof will be) the legal and
equitable owner of the Collateral free
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<PAGE> 145
and clear of all liens, security interests and encumbrances of every description
whatsoever other than the security interest created hereunder; (b) assuming
continuous possession by the Administrative Agent, the pledge and delivery of
the Collateral pursuant to this Agreement will create a valid perfected security
interest in the Collateral in favor of the Administrative Agent; (c) all shares
of stock referred to in Schedule I hereto are duly authorized, validly issued,
fully paid and non-assessable; (d) as to each Issuer whose name appears in
Schedule I hereto, the Collateral represents on the date hereof not less than
the applicable percent (as shown in Schedule I hereto) of the total shares of
capital stock issued and outstanding of such Issuer; and (e) the information
contained in Schedule I hereto is true and accurate in all respects.
So long as any of the Liabilities shall be outstanding or any commitment
shall exist on the part of the Administrative Agent or any Lender with respect
to the creation of any Liabilities, Holdco (i) shall not (except as otherwise
permitted pursuant to the Credit Agreement), without the express prior written
consent of the Administrative Agent, (x) sell, assign, exchange, pledge or
otherwise transfer, encumber, or grant any option, warrant or other right to
purchase any Collateral which is pledged hereunder, or (y) otherwise diminish or
impair any of its rights in, to or under any of the Collateral; (ii) shall
execute such Uniform Commercial Code financing statements and other documents
(and pay the costs of filing and recording or re-filing and re-recording the
same in all public offices reasonably deemed necessary or appropriate by the
Administrative Agent) and do such other acts and things, all as the
Administrative Agent may from time to time reasonably request, to establish and
maintain a valid, perfected security interest in the Collateral, including
without limitation marking Holdco's stock books and records to reflect such
security interest, (free of all other liens, claims and rights of third parties
whatsoever) to secure the performance and payment of the Liabilities; (iii) will
execute and deliver to the Administrative Agent such stock powers, endorsements
and similar documents relating to the Collateral, satisfactory in form and
substance to the Administrative Agent, as the Administrative Agent may
reasonably request; and (iv) will furnish the Administrative Agent or any Lender
such information concerning the Collateral as the Administrative Agent or such
Lender may from time to time reasonably request, and will permit the
Administrative Agent or any Lender or any designee of the Administrative Agent
or any Lender, from time to time at reasonable times and on reasonable notice,
to inspect, audit and make copies of and extracts from all records and all other
papers in the possession of Holdco which pertain to the Collateral as set forth
in Section 4.2 of the Guaranty, and will, upon request of the Administrative
Agent at any time when a Default has occurred and is continuing, deliver to the
Administrative Agent all of such records and papers.
4. Holding in Name of Administrative Agent, etc. The Administrative Agent
may from time to time after the occurrence and during the continuance of a
Default, without notice to Holdco, take all or any of the following actions: (a)
transfer all or any part of the Collateral into the name of the Administrative
Agent or any nominee or sub-agent for the Administrative Agent, with or without
disclosing that such Collateral is subject to the lien
-4-
<PAGE> 146
and security interest hereunder, (b) appoint one or more sub-agents or nominees
for the purpose of retaining physical possession of the Collateral, (c) notify
the parties obligated on any of the Collateral to make payment to the
Administrative Agent of any amounts due or to become due thereunder, (d) endorse
any checks, drafts or other writings in the name of Holdco to allow collection
of the Collateral, (e) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with respect thereto, and (f)
take control of any proceeds of the Collateral.
5. Voting Rights, Dividends, Payments etc. (a) Notwithstanding certain
provisions of Section 4 hereof, so long as the Administrative Agent has not
given the notice referred to in paragraph (b) below:
A. Holdco shall be entitled to exercise any and all voting or consensual
rights and powers and stock purchase or subscription rights (but any such
exercise by Holdco of stock purchase or subscription rights may be made only
from funds of Holdco not comprising part of the Collateral) relating or
pertaining to the Collateral constituting stock or any part thereof for any
purpose; provided, however, that Holdco agrees that it will not exercise any
such right or power in any manner which would have a Material Adverse Effect on
the value of such Collateral or any part thereof.
B. Holdco shall be entitled to receive and retain any and all lawful
dividends payable in respect of the Collateral constituting stock which are paid
in cash by any Issuer if such dividends are permitted by the Credit Agreement,
but all dividends and distributions in respect of such Collateral or any part
thereof made in shares of stock or other property or representing any return of
capital, whether resulting from a subdivision, combination or reclassification
of such Collateral or any part thereof or received in exchange for such
Collateral or any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets to which any Issuer may be a party or
otherwise or as a result of any exercise of any stock purchase or subscription
right, shall be and become part of the Collateral hereunder and, if received by
Holdco, shall be forthwith delivered to the Agent in due form for transfer
(i.e., endorsed in blank or accompanied by stock or bond powers executed in
blank) to be held for the purposes of this Agreement.
C. The Administrative Agent shall execute and deliver, or cause to be
executed and delivered, to Holdco, all such proxies, powers of attorney,
dividend orders and other instruments as Holdco may request for the purpose of
enabling Holdco to exercise the rights and powers which it is entitled to
exercise pursuant to clause (A) above and to receive the dividends which it is
authorized to retain pursuant to clause (B) above.
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<PAGE> 147
(b) Upon written notice from the Administrative Agent during the existence
of a Default, and so long as the same shall be continuing, all rights and powers
which Holdco is entitled to exercise pursuant to Section 5(a)(A) hereof, and all
rights of Holdco to receive and retain dividends pursuant to Section 5(a)(B)
hereof, shall forthwith cease, and all such rights and powers shall thereupon
become vested in the Administrative Agent which shall have, during the
continuance of such Default, the sole and exclusive authority to exercise such
rights and powers and to receive such dividends and payments. Any and all money
and other property paid over to or received by the Administrative Agent pursuant
to this paragraph (b) shall be retained by the Administrative Agent as
additional Collateral hereunder and applied in accordance with the provisions
hereof.
6. Remedies. Whenever a Default shall exist and be continuing, the
Administrative Agent may exercise from time to time any rights and remedies
available to it under the Uniform Commercial Code as in effect in New York or
otherwise available to it. Without limiting the foregoing, whenever a Default
shall exist and be continuing the Administrative Agent (a) may, to the fullest
extent permitted by applicable law, without notice, advertisement, hearing or
process of law of any kind, (i) sell any or all of the Collateral, free of all
rights and claims of Holdco therein and thereto, at any public or private sale
or brokers' board and (ii) bid for and purchase any or all of the Collateral at
any such public sale and (b) shall have the right, for and in the name, place
and stead of Holdco, to execute endorsements, assignments, stock powers and
other instruments of conveyance or transfer with respect to all or any of the
Collateral. Holdco hereby expressly waives, to the fullest extent permitted by
applicable law, any and all notices, advertisements, hearings or process of law
in connection with the exercise by the Administrative Agent of any of its rights
and remedies during the continuance of a Default. If any notification of
intended disposition of any of the Collateral is required by law, such
notification, if mailed, shall be deemed reasonably and properly given if mailed
by certified or registered mail at least twenty (20) days before such
disposition, postage prepaid, addressed to Holdco, either at the address of
Holdco shown below, or at any other address of Holdco appearing on the records
of the Administrative Agent. Any proceeds of any of the Collateral may be
applied by the Administrative Agent to the payment of expenses in connection
with the Collateral, including, without limitation, reasonable attorneys' fees
and legal expenses, and any balance of such proceeds may be applied by the
Administrative Agent toward the payment of such of the Liabilities, and in such
order of application, as the Administrative Agent may from time to time elect
(and, after payment in full of all Liabilities, any excess shall be delivered to
Holdco or as a court of competent jurisdiction shall direct).
The Administrative Agent is hereby authorized to comply with any limitation
or restriction in connection with any sale of Collateral as it may be advised by
counsel is necessary in order to (a) avoid any violation of applicable law
(including, without limitation, compliance with such procedures as may restrict
the number of prospective bidders and purchasers and/or further restrict such
prospective bidders or purchasers to persons or entities who will represent and
agree that they are purchasing for their own account for
-6-
<PAGE> 148
investment and not with a view to the distribution or resale of such Collateral)
or (b) obtain any required approval of the sale or of the purchase by any
governmental regulatory authority or official, and Holdco agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner and that the Administrative
Agent shall not be liable or accountable to Holdco for any discount allowed
by reason of the fact that such Collateral is sold in compliance with any such
limitation or restriction.
7. General. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if it takes
such action for that purpose as Holdco shall request in writing, but failure of
the Administrative Agent to comply with any such request shall not of itself be
deemed a failure to exercise reasonable care, and no failure of the
Administrative Agent to preserve or protect any rights with respect to the
Collateral against prior parties, or to do any act with respect to preservation
of the Collateral not so requested by Holdco, shall be deemed of itself a
failure to exercise reasonable care in the custody or preservation of any
Collateral.
No delay on the part of the Administrative Agent in exercising any right,
power or remedy shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement shall be effective unless the same shall be in writing and
signed and delivered by the Administrative Agent and Holdco, and then such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
All obligations of Holdco and all rights, powers and remedies of the
Administrative Agent and the Lenders expressed herein are in addition to all
other rights, powers and remedies possessed by them, including, without
limitation, those provided by applicable law or in any other written instrument
or agreement relating to any of the Liabilities or any security therefor. Except
as expressly set forth in this Agreement or the Loan Documents, in the event of
a Default, or in the observance or performance of the agreements, covenants, and
conditions contained in the Loan Documents or in this Agreement, the
Administrative Agent will proceed solely against the Collateral under this
Agreement and no deficiency, money judgment, or liability shall be sought or
obtained against Holdco, and (without limiting the above) shall have no personal
liability for or in respect of this Agreement, the Loan Documents, or any
Default.
This Agreement shall be construed in accordance with and governed by the
internal laws of the State of New York without reference to conflict of law
principles. Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of
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<PAGE> 149
such provision or the remaining provisions of this Agreement.
This Agreement shall be binding upon Holdco and the Administrative Agent
and their respective successors and assigns, and shall inure to the benefit of
Holdco and the Administrative Agent and the successors and assigns of the
Administrative Agent.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. HOLDCO HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. HOLDCO FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, TO THE ADDRESS OF THE PERSON SPECIFIED IN, OR PURSUANT TO, THE CREDIT
AGREEMENT, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
HOLDCO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT HOLDCO HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, HOLDCO HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
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<PAGE> 150
EACH OF HOLDCO, THE ADMINISTRATIVE AGENT AND, BY ACCEPTING THE BENEFITS
HEREOF, EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY
OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as of
the day and year first written above.
HOLLINGER INTERNATIONAL PUBLISHING
HOLDINGS INC.
By: ________________________________________
Name:
Title:
Address: 107-115 South Emma, Box 1000
West Frankfort, Illinois 62896
Facsimile No.: (618) 932-6155
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
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<PAGE> 151
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
Address:
909 Fannin Suite 1700 By:
Houston, Texas 77010 -----------------------------
Name: Sophia D. Sgarbi
Title: Vice President
<PAGE> 152
SCHEDULE I
TO HOLLINGER INTERNATIONAL PLEDGE AGREEMENT
STOCK
<TABLE>
<CAPTION>
HOLLINGER INTERNATIONAL PUBLISHING HOLDINGS INC.
=========================================================================================================
Pledged Shares
No. of as % of Total
Certificate Pledged Shares Issued Total Shares of
ISSUER No. Shares and Outstanding Issuer Outstanding
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hollinger International Publishing Inc. 2 100 100% 100
=========================================================================================================
</TABLE>
<PAGE> 153
EXHIBIT E-2
FORM OF
UK PLEDGE AGREEMENT
DATED __________________, 1996
TORONTO DOMINION (TEXAS), INC.
- and -
HOLLINGER INTERNATIONAL PUBLISHING INC.
_______________________________________________
DEED OF CHARGE
AND
MEMORANDUM OF DEPOSIT
_______________________________________________
MAYER, BROWN & PLATT
162 Queen Victoria Street
London EC4V 4DB
<PAGE> 154
THIS DEED OF CHARGE AND MEMORANDUM OF DEPOSIT is made the ____ day of
______________, 1996.
BETWEEN:
(1) TORONTO DOMINION (TEXAS), INC. (in its capacity as administrative
agent for the Lenders, as defined below, the "Administrative Agent", which
expression shall be deemed to include its successors and assigns and any person,
firm or company with which it may amalgamate or merge from time to time); and
(2) HOLLINGER INTERNATIONAL PUBLISHING INC., a Delaware corporation (the
"Depositor").
WHEREAS:
(A) Pursuant to the Amended and Restated Credit Agreement dated as of May
__, 1996 (as amended or otherwise modified from time to time, the "Credit
Agreement") among the Depositor, various financial institutions (collectively
the "Lenders" and individually each a "Lender"), The Toronto-Dominion Bank, as
issuing bank, and the Administrative Agent, the Lenders have agreed to make a
U.S.$125,000,000 revolving facility available to the Depositor.
(B) The obligations of the Depositor under the Credit Agreement are to be
secured pursuant to this Deed of Charge and Memorandum of Deposit (as the same
may from time to time be amended, varied, supplemented, novated or modified,
this "Charge and Memorandum").
(C) It is a condition precedent to the making of certain loans under the
Credit Agreement that the Depositor execute and deliver this Charge and
Memorandum.
(D) For and in consideration of any loan, advance or other financial
accommodation heretofore or hereafter made to the Depositor under or in
connection with the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as set forth in this Charge and Memorandum.
NOW IT IS HEREBY DECLARED:
1. Definitions. When used herein, the following terms have the following
meanings (such meanings to be applicable to both the singular and plural forms
of such terms):
<PAGE> 155
Default means the occurrence of any Event of Default (as defined in the
Credit Agreement).
DTH means DT Holdings Limited, a limited liability company incorporated
under the laws of England and Wales.
Issuers means Telegraph and DTH, and either, individually, is an Issuer.
Liabilities means all obligations (monetary or otherwise) of the Depositor,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, which arise out
of or in connection with the Credit Agreement, the Notes, this Charge and
Memorandum, any other Loan Document or any other document or instrument executed
in connection therewith (including any Hedging Agreement (as defined in the
Credit Agreement) entered into with any Person who at the time such Hedging
Agreement is entered into is a Lender or an affiliate thereof).
Loan Document has the meaning assigned to such term in the Credit
Agreement.
Securities has the meaning assigned to such term in Section 2 hereof.
Telegraph means The Telegraph plc, a public limited company incorporated
under the laws of England and Wales.
2. Security for Indebtedness. The Depositor by way of continuing security
for the payment and satisfaction when due of the Liabilities hereby charges by
way of first fixed equitable charge and assigns by way of security to the
Administrative Agent, for the benefit of the Lenders and the Administrative
Agent, all of its right, title and interest in and to the following:
A. All of the shares described in Schedule I hereto listed under the
Depositor's name, all of the certificates and/or instruments representing such
shares and all cash, securities, dividends, rights and other property at any
time and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares;
B. All other property hereafter delivered to the Administrative Agent in
substitution for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such property, and all cash, securities,
interest, dividends, rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
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<PAGE> 156
C. All products and proceeds of all of the foregoing.
All of the foregoing are herein collectively called the "Securities".
3. Continuing Security. The security is to be a continuing security,
notwithstanding any intermediate payment or settlement of accounts or any other
matter whatsoever, for the payment and satisfaction of the Liabilities, as and
when the same shall fall due, and is to be in addition to, and without prejudice
to, any other security which the Administrative Agent or the Lenders may now or
hereafter hold in respect of the Liabilities. The Administrative Agent may at
any time and without reference to the Depositor give up, release, deal with,
vary, exchange or abstain from perfecting or enforcing any other such security
at any time and discharge any party to any other such security, and realise the
same, without in any way affecting or prejudicing the security evidenced by this
Charge and Memorandum.
4. Undertaking to Deposit. The Depositor hereby undertakes to deposit with
the Administrative Agent, to the intent that the same shall be subject in all
respects to the provisions of this Charge and Memorandum: (i) all certificates,
documents of title and other documentary evidence of all rights, bonuses, new
shares, stock, rights to take up securities or other securities of whatever
nature (including without limitation any security resulting from any conversion,
consolidation or subdivision of the Securities or rights arising from a
reduction of capital, liquidation or scheme of arrangement) which at any time
during the continuance of this Charge and Memorandum may be issued in respect of
any of, or attributable to, the Securities; and (ii) transfers of the
Securities, in form and substance satisfactory to the Administrative Agent, duly
executed in blank by the Depositor or its nominee and completed in favour of the
Administrative Agent or otherwise as the Administrative Agent may direct; and
prior to the delivery thereof to the Administrative Agent, such Securities and
other documents shall be held by the Depositor separate and apart from its other
property and in express trust for the Administrative Agent.
The Depositor hereby further undertakes to procure that, within 7 days of
Telegraph being re-registered as a private limited company, Telegraph deliver to
the Depositor replacement certificates in respect of the Securities and the
Depositor shall immediately deposit such replacement certificates, together with
the relevant transfers duly executed and completed as required above, with the
Administrative Agent to the extent that the same shall be subject in all
respects to the provisions of this Charge and Memorandum.
5. Warranties; Further Assurances. The Depositor warrants to the
Administrative Agent and each Lender that: (a) it charges and assigns the
Securities with full title guarantee (and that any future delivery, charge and
assignment or transfer thereof will also be with full title guarantee) and
further that, in each case, the Securities are free and clear of all liens,
security interests and encumbrances of every description whatsoever other than
the security
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<PAGE> 157
interest created hereunder; (b) assuming continuous possession of the Securities
by the Administrative Agent this Charge and the Memorandum and the actions
contemplated hereby are effective to create a valid first fixed equitable charge
and, as the case may be, assignment by way of security in, to or over the
Securities in favour of the Administrative Agent for the benefit of the Lenders;
(c) all shares referred to in Schedule I hereto are duly authorised, validly
issued, fully paid and non-assessable and registered in the name of the
Depositor; (d) as to the Issuers the Securities represent on the date hereof not
less than the applicable percent (as shown in Schedule I hereto) of the total
shares issued and outstanding of the respective Issuer; and (e) the information
contained in Schedule I hereto is true and accurate in all respects.
So long as any of the Liabilities shall be outstanding or any commitment
shall exist on the part of the Administrative Agent or any Lender with respect
to the creation of any Liabilities, the Depositor (i) shall not (except as
otherwise permitted pursuant to the Credit Agreement), without the express prior
written consent of the Administrative Agent, (x) sell, assign, exchange, charge
or otherwise transfer, encumber, or grant any option, warrant or other right to
purchase the Securities or (y) otherwise diminish or impair any of its rights
in, to or under any of the Securities; (ii) shall continue to own and keep
charged hereunder not less than the applicable percent (as shown in Schedule I
hereto) of the total shares issued and outstanding of the respective Issuer;
(iii) shall execute such documents (and pay the costs of filing and recording or
re-filing and re-recording the same in all public offices reasonably deemed
necessary or appropriate by the Administrative Agent) and do such other acts and
things, all as the Administrative Agent may from time to time reasonably
request, to establish and maintain a valid, perfected security interest in the
Securities (free of all other liens, claims and rights of third parties
whatsoever) to secure the performance and payment of the Liabilities; and (iv)
will furnish the Administrative Agent or any Lender such information concerning
the Securities as the Administrative Agent or such Lender may from time to time
reasonably request, and will permit the Administrative Agent or any Lender or
any designee of the Administrative Agent or any Lender, from time to time at
reasonable times and on reasonable notice, to inspect, audit and make copies of
and extracts from all records and all other papers in the possession of the
Depositor which pertain to the Securities as set forth in Section 10.2 of the
Credit Agreement, and will, upon request of the Administrative Agent at any time
when a Default has occurred and is continuing, deliver to the Administrative
Agent all of such records and papers.
6. Holding in Name of Administrative Agent, etc. The Administrative Agent
may from time to time after the occurrence and during the continuance of a
Default, without notice to the Depositor, take all or any of the following
actions: (a) transfer all or any part of the Securities into the name of the
Administrative Agent or any nominee or sub-agent for the Administrative Agent,
with or without disclosing that such Securities are subject to the security
interests hereunder, (b) appoint one or more sub-agents or nominees for the
purpose of retaining physical possession of the Securities, (c) notify the
parties obligated on any of the Securities to make payment to the Administrative
Agent of any amounts due or to
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<PAGE> 158
become due thereunder, (d) endorse any cheques, drafts or other writings in the
name of the Depositor to allow collection of the Securities, (e) enforce
collection of any of the Securities by suit or otherwise, and surrender, release
or exchange all or any part thereof, or compromise or renew for any period
(whether or not longer than the original period) any obligations of any nature
of any party with respect thereto, and (f) take control of any proceeds of the
Securities.
7. Voting Rights, Dividends, Payments etc. (a) Notwithstanding certain
provisions of Section 6 hereof, so long as the Administrative Agent has not
given the notice referred to in paragraph (b) below:
A. The Depositor shall be entitled to exercise any and all voting or
consensual rights and powers and share purchase or subscription rights (but any
such exercise by the Depositor of share purchase or subscription rights may be
made only from funds of the Depositor not comprising part of the Securities)
relating or pertaining to the Securities constituting shares or any part thereof
for any purpose; provided, however, that the Depositor agrees that it will not
exercise any such right or power in any manner which would have a material
adverse effect on the value of such Securities or any part thereof.
B. The Depositor shall be entitled to receive and retain any and all
lawful dividends payable in respect of the Securities constituting shares which
are paid in cash by the Issuer if such dividends are permitted by the Credit
Agreement, but all dividends and distributions in respect of such Securities or
any part thereof made in shares or other property or representing any return of
capital, whether resulting from a subdivision, combination or reclassification
of such Securities or any part thereof or received in exchange for such
Securities or any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets to which the Issuer may be a party or
otherwise or as a result of any exercise of any share purchase or subscription
right, shall be and become part of the Securities hereunder and, if received by
the Depositor, shall, pursuant to and in accordance with the provisions of
Section 4, be forthwith delivered to the Administrative Agent together with
appropriate transfers duly executed in blank to be held for the purposes of this
Charge and Memorandum.
C. The Administrative Agent shall execute and deliver, or cause to be
executed and delivered, to the Depositor, all such proxies, powers of attorney,
dividend orders and other instruments as the Depositor may request for the
purpose of enabling the Depositor to exercise the rights and powers which it is
entitled to exercise pursuant to clause (A) above and to receive the dividends
which it is authorized to retain pursuant to clause (B) above.
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<PAGE> 159
(b) Upon written notice from the Administrative Agent during the existence
of a Default, and so long as the same shall be continuing, all rights and powers
which the Depositor is entitled to exercise pursuant to Section 7(a)(A) hereof
and all rights of the Depositor to receive and retain dividends pursuant to
Section 7(a)(B) hereof shall forthwith cease, and all such rights and powers
shall thereupon become vested in the Administrative Agent which shall have,
during the continuance of such Default, the sole and exclusive authority to
exercise such rights and powers and to receive such dividends and payments. Any
and all money and other property paid over to or received by the Administrative
Agent pursuant to this paragraph (b) shall be retained by the Administrative
Agent as additional Securities hereunder and applied in accordance with the
provisions hereof.
8. Remedies. Whenever a Default shall exist and be continuing, the
Administrative Agent may exercise from time to time any rights and remedies
available to it and, without limiting the foregoing, whenever a Default shall
exist and be continuing the Administrative Agent (a) may, to the fullest extent
permitted by applicable law, without notice, advertisement, hearing or process
of law of any kind, (i) sell any or all of the Securities, free of all rights
and claims of the Depositor therein and thereto, at any public or private sale
and (ii) bid for and purchase any or all of the Securities at any such public
sale; (b) shall have the right, for and in the name, place and stead of the
Depositor, to execute endorsements, assignments, share transfer forms and other
instruments of conveyance or transfer with respect to all or any of the
Securities. The Depositor hereby expressly waives, to the fullest extent
permitted by applicable law, any and all notices, advertisements, hearings or
process of law in connection with the exercise by the Administrative Agent of
any of its rights and remedies during the continuance of a Default. Any
proceeds of any of the Securities may be applied by the Administrative Agent to
the payment of expenses in connection with the Securities, including, without
limitation, reasonable attorneys' fees and legal expenses, and any balance of
such proceeds may be applied by the Administrative Agent toward the payment of
such of the Liabilities, and in such order of application, as the Administrative
Agent may from time to time elect (and, after payment in full of all
Liabilities, any excess shall be delivered to the Depositor or as a court of
competent jurisdiction shall direct).
The Administrative Agent is hereby authorized to comply with any limitation
or restriction in connection with any sale of the Securities as it may be
advised by counsel is necessary in order to (a) avoid any violation of
applicable law (including, without limitation, compliance with such procedures
as may restrict the number of prospective bidders and purchasers and/or further
restrict such prospective bidders or purchasers to persons or entities who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Securities)
or (b) obtain any required approval of the sale or of the purchase by any
governmental regulatory authority or official, and the Depositor agrees that
such compliance shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner and that the Administrative
Agent shall not be liable or accountable to the Depositor for any
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<PAGE> 160
discount allowed by reason of the fact that such Securities are sold in
compliance with any such limitation or restriction.
9. Power of Attorney. In addition, and without limiting the powers of the
Administrative Agent set forth in Section 8, the Depositor hereby irrevocably
and by way of security appoints the Administrative Agent and any person
nominated in writing under the hand of any officer of the Administrative Agent
severally to be its attorney for it and in its name and on its behalf and as its
act and deed to prepare, complete, execute, seal, deliver, lodge and file and
otherwise perfect and do any deed, assurance, agreement, instrument, transfer,
memorandum, form, act or thing and institute and conduct any proceedings which
the Depositor is required to execute and do under this Charge and Memorandum or,
following the occurrence of a Default, which the Administrative Agent may deem
necessary or prudent in order to effect or complete any sale made by the
Administrative Agent of any or all of the Securities or in order to protect,
preserve or realise any or all of the Securities or in order to enforce or
prosecute any rights which the Depositor or the Administrative Agent may enjoy
in respect of or under any or all of the Securities including the giving of
receipts for all payments made under or in respect of all or any of the
Securities and executing and doing all or any of the documents, acts and things
referred to in Section 8 hereof. The Depositor will on request by the
Administrative Agent execute all such transfers, powers of attorney and other
documents as the Administrative Agent may require (i) for the purposes of
perfecting or preserving the rights and interests of the Administrative Agent on
behalf of the Lenders under or pursuant to this Charge and Memorandum or in
respect of all or any of the Securities or (ii) following the occurrence of a
Default to vest all or any of the Securities in the Administrative Agent or its
nominees or a purchaser or transferee.
10. Law of Property Act, 1925. Sections 93 (restricting the rights of
consolidation) and 103 (restricting the right of sale) of the Law of Property
Act, 1925 shall not apply to the security evidenced by this Charge and
Memorandum.
11. General. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Securities if it takes
such action for that purpose as the Depositor shall request in writing, but
failure of the Administrative Agent to comply with any such request shall not of
itself be deemed a failure to exercise reasonable care, and no failure of the
Administrative Agent to preserve or protect any rights with respect to the
Securities against prior parties, or to do any act with respect to preservation
of the Securities not so requested by the Depositor, shall be deemed of itself a
failure to exercise reasonable care in the custody or preservation of the
Securities.
No delay on the part of the Administrative Agent in exercising any right,
power or remedy shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy. No
amendment, modification or waiver of, or consent with
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<PAGE> 161
respect to, any provision of this Charge and Memorandum shall be effective
unless the same shall be in writing and signed and delivered by the
Administrative Agent and the Depositor, and then such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
All obligations of the Depositor and all rights, powers and remedies of the
Administrative Agent and the Lenders expressed herein are in addition to all
other rights, powers and remedies possessed by them, including, without
limitation, those provided by applicable law or in any other written instrument
or agreement relating to any of the Liabilities or any security therefor.
This Agreement shall be binding upon the Depositor and the Administrative
Agent and their respective successors and assigns, and shall inure to the
benefit of the Depositor and the Administrative Agent and the successors and
assigns of the Administrative Agent.
12. Taxes. All payments to be made by the Depositor to any person
hereunder shall be made free and clear of, and without deduction for or on
account of, tax unless the Depositor is required by law to make such a payment
subject to the deduction or withholding of tax, in which case the sum payable by
the Depositor in respect of which such deduction or withholding is required to
be made shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, such person receives and retains (free
from any liability in respect of any such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had no such
deduction or withholding been made or required to be made.
13. Judgment Currency. The obligations of the Depositor, in respect of
any sum due to the Administrative Agent or any Lender hereunder shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other than
the currency in which such sum was originally denominated (the "Original
Currency"), be discharged only to the extent that following receipt by the
Administrative Agent or such Lender of any sum adjudged to be so due in the
Judgment Currency, the Administrative Agent or such Lender, in accordance with
normal banking procedures, purchases the Original Currency with the Judgment
Currency. If the amount of Original Currency so purchased is less than the sum
originally due to the Administrative Agent or such Lender, the Depositor agrees,
as a separate obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent or such Lender, as the case may be, against such loss, and
if the amount of Original Currency so purchased exceeds the sum originally due
to the Administrative Agent or such Lender, as the case may be, the
Administrative Agent or such Lender agrees to remit such excess to the
Depositor.
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<PAGE> 162
14. Governing Law and Jurisdiction.
A. This Charge and Memorandum shall be governed by and construed in
accordance with English law.
B. All parties irrevocably agree for the exclusive benefit of the
Administrative Agent that the High Court of Justice in England is to have
jurisdiction to settle any disputes which may arise out of or in connection with
this Charge and Memorandum and that accordingly any suit, action or proceeding
arising out of or in connection with this Charge and Memorandum (in this Section
14 referred to as "Proceedings") may be brought in such court.
C. Nothing in this Section 14 shall limit the right of the Administrative
Agent to take Proceedings against the Depositor in any other court of competent
jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions
preclude the taking of Proceedings in any other jurisdiction, whether
concurrently or not.
D. The Depositor irrevocably waives any objection which it may have now or
hereafter to the laying of the venue of any Proceedings in any such court as is
referred to in this Section 14 and any claim that any such Proceedings have been
brought in an inconvenient forum and further irrevocably agrees that a judgment
in any Proceedings brought in the English court or in any other court of
competent jurisdiction shall be conclusive and binding upon it and may be
enforced in the courts of any other jurisdiction.
E. The Depositor hereby irrevocably agrees that any writ, judgment or
other notice of process shall be sufficiently and effectively served on it (i)
in connection with proceedings in England, if addressed to the Depositor and
delivered to Norose Notices Limited of Kempson House, P.O. Box 570, Camomile
Street, London EC3A 7AN (ii) to the extent permitted by applicable law, if a
copy thereof is mailed by registered or certified airmail, postage prepaid, to
the address for the time being for the service of notices on it under Clause
14.3 of the Credit Agreement or (iii) if served in any other manner permitted by
applicable law.
F. The Depositor hereby consents generally in respect of any Proceedings
arising out of or in connection with this Charge and Memorandum to the giving of
any relief or the issue of any process in connection with such Proceedings,
including, without limitation, the making, enforcement or execution against any
property or assets or whatsoever of any order or judgment which may be made or
given in such Proceedings.
IN WITNESS WHEREOF the parties hereto have caused this Charge and
Memorandum to be duly executed and delivered as a deed on the day and year first
before written.
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<PAGE> 163
SCHEDULE I
TO DEED OF CHARGE AND MEMORANDUM OF DEPOSIT
SHARES
HOLLINGER INTERNATIONAL PUBLISHING INC.
================================================================================
ISSUER Cert # No. of Shares % Total Outstanding
- --------------------------------------------------------------------------------
The Telegraph plc
- --------------------------------------------------------------------------------
DT Holdings Limited
================================================================================
<PAGE> 164
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
HOLLINGER INTERNATIONAL )
PUBLISHING INC. )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
SIGNED as a Deed )
by [ ] and )
[ ] and )
thereby executed by )
TORONTO DOMINION (TEXAS), INC. )
as its Deed )
Authorised Signatory
Title:
Authorised Signatory
Title:
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<PAGE> 165
EXHIBIT E-3
FORM OF
AMENDED AND RESTATED
COMPANY PLEDGE AGREEMENT
THIS AMENDED AND RESTATED COMPANY PLEDGE AGREEMENT (this "Agreement") dated
as of May 30, 1996, is among HOLLINGER INTERNATIONAL PUBLISHING INC., a Delaware
corporation (the "Company"), the subsidiaries of the Company listed on the
signature page hereof and such other persons or entities which from time to time
become parties hereto as pledgors (collectively, including the Company, the
"Pledgors" and individually each a "Pledgor") and TORONTO DOMINION (TEXAS), INC.
in its capacity as administrative agent for the Lenders referred to below (in
such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Company, The Toronto-Dominion Bank, as issuing bank (in such
capacity, the "Issuing Bank"), The First National Bank of Chicago, as
documentation agent, and the Administrative Agent entered into that certain
Credit Agreement, dated as of February 7, 1996, as amended or modified and in
effect on the Amendment Effective Date (the "Existing Credit Agreement")
whereunder certain financial institutions agreed to make revolving loans and to
issue letters of credit in the maximum amount or $100,000,000 (such revolving
loans and letters of credit outstanding on the Amendment Effective Date,
collectively the "Existing Credit Extensions"); and
WHEREAS, each of the other Pledgors executed and delivered a guaranty (the
"Guaranty") of the obligations of the Company under the Existing Credit
Agreement; and
WHEREAS, in connection with the Guaranty, the Company and certain Pledgors
executed that certain Company Pledge Agreement dated as of February 7, 1996
among the Company, certain Subsidiaries of the Company parties thereto and the
Administrative Agent (the "Original Company Pledge Agreement"); and
WHEREAS, it is in its best interest of the Company to realign the assets of
its United States Newspaper Group (the "Realignment"); and
WHEREAS, in connection with the Realignment, the Company, The Sun-Times
Company ("Sun-Times"), and American Publishing Company ("APC") entered into that
certain Contribution Agreement, dated as of April 1, 1996 (the "Contribution
Agreement"), whereby the Company contributed certain assets to Sun-Times and APC
subject to the Original Company Pledge Agreement; and
WHEREAS, the Company desires to refinance the Existing Credit Extensions
and obtain a revolving loan commitment (to include availability for revolving
loans and the
<PAGE> 166
issuance of letters of credit) pursuant to which borrowings of
revolving loans in the maximum aggregate principal amount not to exceed
$125,000,000 would be made to the Company; and
WHEREAS, the Company has requested various financial institutions (together
with their respective successors and assigns, collectively the "Lenders" and
each individually a "Lender") to amend and restate the Existing Credit Agreement
on the terms and conditions set forth in the Amended and Restated Credit
Agreement, dated as of an even date herewith, among the Company, the Lenders,
the Issuing Bank, and the Administrative Agent (together with all amendments and
other modifications, if any, from time to time made thereto, the "Amended and
Restated Credit Agreement") to set forth, among other things, the terms and
conditions under which the Lenders thereafter will make credit extensions to the
Company; it being the intention of the Company, the Lenders, and the
Administrative Agent that the Amended and Restated Credit Agreement and the Loan
Documents executed in connection therewith shall not effect the novation of the
obligations of the Company under the Existing Credit Agreement but be merely a
restatement and, where applicable, an amendment of and substitution for the
terms governing such obligations thereafter; and
WHEREAS, as a condition precedent to the Amendment Effective Date of the
Amended and Restated Credit Agreement, the Pledgors is required to execute and
deliver this Agreement; and
WHEREAS, the parties desire to amend and restate the Original Company
Pledge Agreement to set forth the new ownership of the Collateral (as defined
below) as a result of the Realignment and Contribution Agreement; it being the
intention of the Company, the Pledgors, the Lenders and the Administrative Agent
that this Agreement and the Loan Documents executed in connection herewith shall
not effect a novation of the obligations of the Company and the Pledgors under
the Original Company Pledge Agreement but merely a restatement and, where
applicable, an amendment of the terms governing such obligations hereafter;
WHEREAS, the Pledgors have duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of the Pledgors to execute this
Agreement inasmuch as the Pledgors will derive substantial direct and indirect
benefits from the Loans made from time to time to the Company and the Letters of
Credit issued from time to time for the account of the Company pursuant to the
Amended and Restated Credit Agreement;
NOW, THEREFORE, for and in consideration of any loan, advance or other
financial accommodation heretofore or hereafter made to the Company under or in
connection with the
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<PAGE> 167
Amended and Restated Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. Definitions. When used herein, the following terms have the following
meanings (such meanings to be applicable to both the singular and plural forms
of such terms):
Collateral - see Section 2 hereof.
Default means the occurrence of any Event of Default (as defined in the
Amended and Restated Credit Agreement).
Issuer means the issuer of any of the shares of stock or other securities
representing all or any of the Collateral.
Liabilities means all obligations (monetary or otherwise) of the Company,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, which arise out
of or in connection with the Amended and Restated Credit Agreement, the Notes,
this Agreement, the Letters of Credit, the Letter of Credit Applications, any
other Loan Document or any other document or instrument executed in connection
therewith (including any Hedging Agreement (as defined in the Amended and
Restated Credit Agreement) entered into with any Person who at the time such
Hedging Agreement is a Lender or an affiliate thereof).
Loan Document has the meaning assigned to such term in the Amended and
Restated Credit Agreement.
Maker means the maker of any of the Subsidiary Notes or other chattel paper
representing any or all of the Collateral.
Subsidiary has the meaning assigned to such term in the Amended and
Restated Credit Agreement.
Subsidiary Notes has the meaning assigned to such term in the Amended and
Restated Credit Agreement.
Subsidiary Security Agreements has the meaning assigned to such term in the
Amended and Restated Credit Agreement.
Unless otherwise defined herein or the context otherwise requires,
capitalized terms used in this Agreement, including its preamble and recitals,
have the meanings provided in the Amended and Restated Credit Agreement.
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<PAGE> 168
2. Pledge. As security for the payment of all Liabilities, each Pledgor
hereby pledges to the Administrative Agent for the benefit of the Lenders and
the Administrative Agent, and grants to the Administrative Agent for the benefit
of the Lenders and the Administrative Agent a continuing security interest in,
all of the following:
A. All of the shares of stock and other securities described in Schedule I
hereto listed under such Pledgor's name, all of the certificates and/or
instruments representing such shares of stock and other securities, and all
cash, securities, dividends, rights and other property at any time and from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares or other securities;
B. All additional shares of stock of any of the Issuers listed in Schedule
I and all additional shares of stock of any other Restricted Subsidiary of any
Pledgor hereto at any time and from time to time acquired by any Pledgor in any
manner, all of the certificates representing such additional shares, and all
cash, securities, dividends, rights and other property at any time and from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares;
C. All of the Subsidiary Notes, Subsidiary Security Agreements,
instruments and chattel paper described in Schedule II hereto listed under such
Pledgor's name, all substitutes therefor or additions thereto, and any interest,
products, proceeds or other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Subsidiary Notes, Subsidiary Security Agreements, instruments and
chattel paper;
D. All additional Subsidiary Notes, Subsidiary Security Agreements,
instruments and chattel paper of any of the Makers listed in Schedule II or any
other Subsidiary of any Pledgor hereto at any time and from time to time
acquired by any Pledgor in any manner, all substitutes therefor or additions
thereto, and any interest, products, proceeds or other property at any time and
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such Subsidiary Notes, Subsidiary Security
Agreements, instruments and chattel paper;
E. All other property hereafter delivered to the Administrative Agent in
substitution for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such property, and all cash, securities,
interest, dividends, rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
F. All products and proceeds of all of the foregoing.
- 4 -
<PAGE> 169
All of the foregoing are herein collectively called the "Collateral".
Each Pledgor agrees to deliver to the Administrative Agent, promptly upon
receipt and in due form for transfer (i.e., endorsed in blank or accompanied by
stock or bond powers executed in blank), any Collateral which may at any time or
from time to time be in or come into the possession or control of such Pledgor;
and prior to the delivery thereof to the Administrative Agent, such Collateral
shall be held by each Pledgor separate and apart from its other property and in
express trust for the Administrative Agent.
3. Warranties; Further Assurances. Each Pledgor warrants to the
Administrative Agent and each Lender that: (a) such Pledgor is (or at the time
of any future delivery, pledge, assignment or transfer thereof will be) the
legal and equitable owner of the Collateral free and clear of all liens,
security interests and encumbrances of every description whatsoever other than
the security interest created hereunder; (b) assuming continuous possession by
the Administrative Agent, the pledge and delivery of the Collateral pursuant to
this Agreement will create a valid perfected security interest in the Collateral
in favor of the Administrative Agent; (c) all shares of stock referred to in
Schedule I hereto are duly authorized, validly issued, fully paid and
non-assessable; (d) as to each Issuer whose name appears in Schedule I hereto,
the Collateral represents on the date hereof not less than the applicable
percent (as shown in Schedule I hereto) of the total shares of capital stock
issued and outstanding of such Issuer; (e) the information contained in Schedule
I hereto is true and accurate in all respects; and (f) the information contained
in Schedule II hereto is true and accurate in all respects.
So long as any of the Liabilities shall be outstanding or any commitment
shall exist on the part of the Administrative Agent or any Lender with respect
to the creation of any Liabilities, each Pledgor (i) shall not (except as
otherwise permitted pursuant to the Amended and Restated Credit Agreement),
without the express prior written consent of the Administrative Agent, (x) sell,
assign, exchange, pledge or otherwise transfer, encumber, or grant any option,
warrant or other right to purchase the stock of any Issuer which is pledged
hereunder, or (y) sell, assign, exchange, pledge or otherwise transfer,
encumber, release, or grant any right to purchase the Subsidiary Notes or
Subsidiary Security Agreements of any Maker which is pledged hereunder, or (z)
otherwise diminish or impair any of its rights in, to or under any of the
Collateral; (ii) as to each Issuer whose name appears on Schedule I hereto,
except as permitted under Section 10.26(b) of the Amended and Restated Credit
Agreement shall continue to own and keep pledged hereunder not less than the
applicable percent (as shown in Schedule I hereto) of the total shares of
capital stock issued and outstanding of such Issuer; (iii) shall execute such
Uniform Commercial Code financing statements and other documents (and pay the
costs of filing and recording or re-filing and re-recording the same in all
public offices reasonably deemed necessary or appropriate by the Administrative
Agent) and do such other acts and things, all as the Administrative Agent may
from time to time reasonably request, to establish and maintain a valid,
perfected security interest in the Collateral (free of all other liens, claims
and rights of third parties whatsoever)
- 5 -
<PAGE> 170
to secure the performance and payment of the Liabilities; (iv) will execute and
deliver to the Administrative Agent such stock powers, endorsements and similar
documents relating to the Collateral, satisfactory in form and substance to the
Administrative Agent, as the Administrative Agent may reasonably request; and
(v) will furnish the Administrative Agent or any Lender such information
concerning the Collateral as the Administrative Agent or such Lender may from
time to time reasonably request, and will permit the Administrative Agent or
any Lender or any designee of the Administrative Agent or any Lender, from time
to time at reasonable times and on reasonable notice, to inspect, audit and
make copies of and extracts from all records and all other papers in the
possession of such Pledgor which pertain to the Collateral as set forth in
Section 10.2 of the Amended and Restated Credit Agreement, and will, upon
request of the Administrative Agent at any time when a Default has occurred and
is continuing, deliver to the Administrative Agent all of such records and
papers.
4. Holding in Name of Administrative Agent, etc. The Administrative Agent
may from time to time after the occurrence and during the continuance of a
Default, without notice to any Pledgor, take all or any of the following
actions: (a) transfer all or any part of the Collateral into the name of the
Administrative Agent or any nominee or sub-agent for the Administrative Agent,
with or without disclosing that such Collateral is subject to the lien and
security interest hereunder, (b) appoint one or more sub-agents or nominees for
the purpose of retaining physical possession of the Collateral, (c) notify the
parties obligated on any of the Collateral to make payment to the Administrative
Agent of any amounts due or to become due thereunder, (d) endorse any checks,
drafts or other writings in the name of any Pledgor to allow collection of the
Collateral, (e) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with respect thereto, and (f)
take control of any proceeds of the Collateral.
5. Voting Rights, Dividends, Payments etc. (a) Notwithstanding certain
provisions of Section 4 hereof, so long as the Administrative Agent has not
given the notice referred to in paragraph (b) below:
A. Each Pledgor shall be entitled to exercise any and all voting or
consensual rights and powers and stock purchase or subscription rights (but any
such exercise by a Pledgor of stock purchase or subscription rights may be made
only from funds of such Pledgor not comprising part of the Collateral) relating
or pertaining to the Collateral constituting stock or any part thereof for any
purpose; provided, however, that each Pledgor agrees that it will not exercise
any such right or power in any manner which would have a material adverse effect
on the value of such Collateral or any part thereof.
- 6 -
<PAGE> 171
B. The Pledgors shall be entitled to receive and retain any and all lawful
dividends payable in respect of the Collateral constituting stock which are paid
in cash by any Issuer if such dividends are permitted by the Amended and
Restated Credit Agreement, but all dividends and distributions in respect of
such Collateral or any part thereof made in shares of stock or other property or
representing any return of capital, whether resulting from a subdivision,
combination or reclassification of such Collateral or any part thereof or
received in exchange for such Collateral or any part thereof or as a result of
any merger, consolidation, acquisition or other exchange of assets to which any
Issuer may be a party or otherwise or as a result of any exercise of any stock
purchase or subscription right, shall be and become part of the Collateral
hereunder and, if received by any Pledgor, shall be forthwith delivered to the
Administrative Agent in due form for transfer (i.e., endorsed in blank or
accompanied by stock or bond powers executed in blank) to be held for the
purposes of this Agreement.
C. The Administrative Agent shall execute and deliver, or cause to be
executed and delivered, to each Pledgor, all such proxies, powers of attorney,
dividend orders and other instruments as such Pledgor may request for the
purpose of enabling such Pledgor to exercise the rights and powers which it is
entitled to exercise pursuant to clause (A) above and to receive the dividends
which it is authorized to retain pursuant to clause (B) above.
D. Each Pledgor shall be entitled to (a) collect all regular payments made
or proceeds received with respect to Collateral constituting the Subsidiary
Notes and (b) enforce and prosecute all rights and remedies available under any
of the Subsidiary Notes or Subsidiary Security Agreements.
(b) Upon written notice from the Administrative Agent during the existence
of a Default, and so long as the same shall be continuing, all rights and powers
which the Pledgors are entitled to exercise pursuant to Section 5(a)(A) hereof,
and all rights of the Pledgors to receive and retain dividends pursuant to
Section 5(a)(B) hereof, and all rights of the Pledgors to receive payments
pursuant to Section 5(a)(D) hereof, shall forthwith cease, and all such rights
and powers shall thereupon become vested in the Administrative Agent which shall
have, during the continuance of such Default, the sole and exclusive authority
to exercise such rights and powers and to receive such dividends and payments.
Any and all money and other property paid over to or received by the
Administrative Agent pursuant to this paragraph (b) shall be retained by the
Administrative Agent as additional Collateral hereunder and applied in
accordance with the provisions hereof.
6. Remedies. Whenever a Default shall exist and be continuing, the
Administrative Agent may exercise from time to time any rights and remedies
available to it under the Uniform Commercial Code as in effect in New York or
otherwise available to it. Without limiting the foregoing, whenever a Default
shall exist and be continuing the Administrative
- 7 -
<PAGE> 172
Agent (a) may, to the fullest extent permitted by applicable law, without
notice, advertisement, hearing or process of law of any kind, (i) sell any or
all of the Collateral, free of all rights and claims of the Pledgors therein
and thereto, at any public or private sale or brokers' board and (ii) bid for
and purchase any or all of the Collateral at any such public sale; (b) shall
have the right, for and in the name, place and stead of the Pledgors, to
execute endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral; and (c)
may, with respect to the Collateral consisting of Subsidiary Notes, declare the
underlying loans immediately due, payable and collectible without notice to any
Pledgor, regardless of maturity, and in that event the underlying loans and
obligations shall become immediately due, payable, and collectible; and
thereupon the Administrative Agent may then or at any time thereafter, in
addition to the remedies of the Administrative Agent and Lenders set forth in
the Amended and Restated Credit Agreement, collect from any Pledgor any
payments or collections theretofore received by such Pledgor pursuant to
Section 5(a)(D) hereof, or sell assign, transfer and deliver the whole of the
Collateral consisting of Subsidiary Notes, or any part thereof, or additions
thereto, or substitutions therefor, in such order as the Administrative Agent
may elect, at public or private sale, at such price or prices, and upon such
terms and conditions as the Administrative Agent in its sole and absolute
discretion may determine, without demand, advertisement, or notice of any kind.
Each Pledgor hereby expressly waives, to the fullest extent permitted by
applicable law, any and all notices, advertisements, hearings or process of law
in connection with the exercise by the Administrative Agent of any of its
rights and remedies during the continuance of a Default. If any notification
of intended disposition of any of the Collateral is required by law, such
notification, if mailed, shall be deemed reasonably and properly given if
mailed by certified or registered mail at least twenty (20) days before such
disposition, postage prepaid, addressed to the Company, either at the address
of the Company shown below, or at any other address of the Company appearing on
the records of the Administrative Agent. Any proceeds of any of the Collateral
may be applied by the Administrative Agent to the payment of expenses in
connection with the Collateral, including, without limitation, reasonable
attorneys' fees and legal expenses, and any balance of such proceeds may be
applied by the Administrative Agent toward the payment of such of the
Liabilities, and in such order of application, as the Administrative Agent may
from time to time elect (and, after payment in full of all Liabilities, any
excess shall be delivered to the Company or as a court of competent
jurisdiction shall direct).
The Administrative Agent is hereby authorized to comply with any limitation
or restriction in connection with any sale of Collateral as it may be advised by
counsel is necessary in order to (a) avoid any violation of applicable law
(including, without limitation, compliance with such procedures as may restrict
the number of prospective bidders and purchasers and/or further restrict such
prospective bidders or purchasers to persons or entities who will represent and
agree that they are purchasing for their own account for investment and not with
a view to the distribution or resale of such Collateral) or (b) obtain any
required approval of the sale or of the purchase by any governmental regulatory
authority or official, and each Pledgor agrees that such compliance shall not
result in such
- 8 -
<PAGE> 173
sale being considered or deemed not to have been made in a commercially
reasonable manner and that the Administrative Agent shall not be liable or
accountable to any Pledgor for any discount allowed by reason of the fact that
such Collateral is sold in compliance with any such limitation or restriction.
7. General. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if it takes
such action for that purpose as any Pledgor shall request in writing, but
failure of the Administrative Agent to comply with any such request shall not of
itself be deemed a failure to exercise reasonable care, and no failure of the
Administrative Agent to preserve or protect any rights with respect to the
Collateral against prior parties, or to do any act with respect to preservation
of the Collateral not so requested by any Pledgor, shall be deemed of itself a
failure to exercise reasonable care in the custody or preservation of any
Collateral.
No delay on the part of the Administrative Agent in exercising any right,
power or remedy shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement shall be effective unless the same shall be in writing and
signed and delivered by the Administrative Agent and each Pledgor, and then such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
All obligations of the Pledgors and all rights, powers and remedies of the
Administrative Agent and the Lenders expressed herein are in addition to all
other rights, powers and remedies possessed by them, including, without
limitation, those provided by applicable law or in any other written instrument
or agreement relating to any of the Liabilities or any security therefor.
This Agreement shall be construed in accordance with and governed by the
laws of the State of New York without reference to conflicts of law principles.
Wherever possible each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
This Agreement shall be binding upon each Pledgor and the Administrative
Agent and their respective successors and assigns, and shall inure to the
benefit of each Pledgor and the Administrative Agent and the successors and
assigns of the Administrative Agent.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an
- 9 -
<PAGE> 174
original, but all such counterparts shall together constitute one and the same
Agreement. At any time after the date of this Agreement, one or more
additional persons or entities may become parties hereto by executing and
delivering to the Administrative Agent a counterpart of this Agreement.
Immediately upon such execution and delivery (and without any further action),
each such additional person or entity will become a party to, and will be bound
by all the terms of, this Agreement.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH PLEDGOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH
PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, TO THE ADDRESS OF THE PERSON SPECIFIED IN, OR PURSUANT
TO, THE AMENDED AND RESTATED CREDIT AGREEMENT, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK. EACH PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY PLEDGOR HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, EACH PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
EACH OF EACH PLEDGOR, THE ADMINISTRATIVE AGENT AND, BY ACCEPTING THE
BENEFITS HEREOF, EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY
NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
- 10 -
<PAGE> 175
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
- 11 -
<PAGE> 176
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as
of the day and year first written above.
HOLLINGER INTERNATIONAL PUBLISHING INC.
By: _______________________________________
Name:
Title:
Address: 107-115 South Emma, Box 1000
West Frankfort, Illinois 62896
Facsimile No.: (618) 932-6155
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 177
APAC-90 INC.
APC 1993, INC.
THE SUN-TIMES COMPANY
AMERICAN PUBLISHING COMPANY
AMERICAN PUBLISHING HOLDINGS INC.
APAC-95 INC.
By: ____________________________________
Name:
Title:
Address: 107-115 South Emma, Box 1000
West Frankfort, Illinois 62896
Facsimile No.: (618) 932-6155
Attention: J. David Dodd
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 178
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
Address:
909 Fannin Suite 1700 By: ___________________________________
Houston, Texas 77010 Name: Sophia D. Sgarbi
Title: Vice President
<PAGE> 179
SCHEDULE I
TO AMENDED AND RESTATED COMPANY PLEDGE AGREEMENT
STOCK
PART A:
<TABLE>
<CAPTION>
HOLLINGER INTERNATIONAL PUBLISHING INC.
=================================================================================================================================
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Publishing Services, Inc. 2 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
Valley Cable TV, Inc. 2 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
American Publishing Company 2 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
The Sun-Times Company A25 34,999.66 100% 34,999.66
(Class A Common)
- ---------------------------------------------------------------------------------------------------------------------------------
The Sun-Times Company 6C 80,873 100% 80,873
(Class C Common)
- ---------------------------------------------------------------------------------------------------------------------------------
The Sun-Times Company W_ 277,877 100% 277,877
(2 Warrants for Class C Common) W_
=================================================================================================================================
</TABLE>
I-1
<PAGE> 180
PART B:
<TABLE>
<CAPTION>
AMERICAN PUBLISHING COMPANY
=================================================================================================================================
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Publishing Holdings Inc. 4 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-95 Inc. 2 100 100% 100
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
AMERICAN PUBLISHING HOLDINGS INC.
=================================================================================================================================
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
APAC-90 Inc. C-3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-90 Inc. P-4 15,000 8% Second 100% 15,000
Series Preferred
- ---------------------------------------------------------------------------------------------------------------------------------
The Palestine Post Limited (Ordinary) 650 65% 1,000
- ---------------------------------------------------------------------------------------------------------------------------------
Jerusalem Post Employees Holding (1983) Ltd. 2.0 50% 4
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
APAC-95 INC.
=================================================================================================================================
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
APAC-95 Indiana Holdings, Inc. 3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-95 Kansas Holdings, Inc. 3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-95 Kentucky Holdings, Inc. 3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
I-2
<PAGE> 181
<TABLE>
<CAPTION>
=================================================================================================================================
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
APAC-95 Missouri Holdings, Inc. 3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-95 New York Holdings, Inc. 3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-95 Ohio Holdings, Inc. 3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-95 Oklahoma Holdings, Inc. 3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-95 Texas Holdings, Inc. 3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APMS-95 Inc. 3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
The Post Publishing Company 12 1 100% 1
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
THE SUN-TIMES COMPANY
=================================================================================================================================
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Chicago Sun-Times Features, Inc. 3 1,000 100% 1,000
- ---------------------------------------------------------------------------------------------------------------------------------
Pioneer Newspapers, Inc. 3 1,000 100% 1,000
- ---------------------------------------------------------------------------------------------------------------------------------
Star Publications, Inc.
(f/k/a Williams Press, Inc.) 82 4,322 100% 4,332
- ---------------------------------------------------------------------------------------------------------------------------------
Sun-Times Distribution Systems, Inc. 3 8,000 80% 10,000
- ---------------------------------------------------------------------------------------------------------------------------------
APC 1993, Inc. 3 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
Daily Southtown Inc. 2 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
Chicago Sun-Times, Inc. 1A 1,000 100% 1,000
=================================================================================================================================
</TABLE>
I-3
<PAGE> 182
<TABLE>
<CAPTION>
APAC-90 INC.
=================================================================================================================================
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Publishing Company of Kentucky 1 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
American Publishing Company of Nebraska 1 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
American Publishing Company of Tennessee 1 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC Illinois Holdings, Inc. 1 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-90 Texas Holdings, Inc. 1 1,000 100% 1,000
- ---------------------------------------------------------------------------------------------------------------------------------
Kirksville Publishing Company 1 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
American Publishing Company
of North Carolina
(f/k/a Tarboro Printing Company) 53 540 100% 540
- ---------------------------------------------------------------------------------------------------------------------------------
Meridian Star, Inc. 76 181 100% 181
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-90 Arkansas Holdings, Inc. 1 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
The Statesman-Examiner, Inc. 29 175 100% 175
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-90 California Holdings, Inc. 1 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-90 Indiana Holdings, Inc. 1 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-90 Kansas Holdings, Inc. 1 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APMS-90, Inc. 1 100 100% 100
=================================================================================================================================
</TABLE>
I-4
<PAGE> 183
<TABLE>
<CAPTION>
=================================================================================================================================
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Southern Siskiyou Newspapers, Inc. 6 1,800 100% 1,800
- ---------------------------------------------------------------------------------------------------------------------------------
APC Pennsylvania Holdings, Inc. 1 100 100% 100
- ---------------------------------------------------------------------------------------------------------------------------------
APAC-90 North Dakota Holdings, Inc. 1 100 100% 100
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
APC 1993, INC.
=================================================================================================================================
ISSUER Cert # No. of Shares % Total Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
APMS-93 Inc. 2 100 100 100
=================================================================================================================================
</TABLE>
I-5
<PAGE> 184
SCHEDULE II
TO AMENDED AND RESTATED COMPANY PLEDGE AGREEMENT
SUBSIDIARY NOTES AND SUBSIDIARY SECURITY AGREEMENTS
PART A:
<TABLE>
<CAPTION>
HOLLINGER INTERNATIONAL PUBLISHING INC.
==================================================================================================================================
Maker Amount Date Issued
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
APAC-95, Inc. $85,000,000 September 28, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
The Sun-Times Company $51,600,000 March 31, 1994
- ----------------------------------------------------------------------------------------------------------------------------------
American Publishing Holdings Inc. 44,978,242 December 31, 1995
New Israeli Shekels
==================================================================================================================================
</TABLE>
PART B:
<TABLE>
<CAPTION>
APAC-95 INC.
==================================================================================================================================
Maker Amount Date Issued
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
APAC-95 Indiana Holdings, Inc. $ 6,000,000 September 28, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-95 Kansas Holdings, Inc. $ 6,000,000 September 28, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-95 Kentucky Holdings, Inc. $10,500,000 September 28, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-95 Missouri Holdings, Inc. $10,000,000 September 28, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-95 New York Holdings, Inc. $22,000,000 September 28, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-95 Ohio Holdings, Inc. $ 7,000,000 September 28, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-95 Oklahoma Holdings, Inc. $ 6,000,000 September 28, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-95 Texas Holdings, Inc. $17,500,000 September 28, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
The Post Publishing Company $ 2,072,357 October 5, 1995
==================================================================================================================================
</TABLE>
II-1
<PAGE> 185
<TABLE>
<CAPTION>
AMERICAN PUBLISHING HOLDINGS INC.
==================================================================================================================================
Maker Amount Date Issued
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
The Palestine Post Limited Capital Note 44,978,242 December 31, 1995
New Israeli Shekels
==================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
APAC-90 INC.
==================================================================================================================================
Maker Amount Date Issued
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
American Publishing Company of Kentucky $ 4,836,975 November 23, 1990
- ----------------------------------------------------------------------------------------------------------------------------------
American Publishing Company of Nebraska $ 5,330,000 June 10, 1990
- ----------------------------------------------------------------------------------------------------------------------------------
American Publishing Company of North Carolina
(formerly known as Tarboro Printing Company) $ 3,140,600 August 5, 1991
- ----------------------------------------------------------------------------------------------------------------------------------
American Publishing Company of Tennessee $ 124,845 November 23, 1990
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-90 Arkansas Holdings, Inc. $ 2,255,000 December 9, 1991
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-90 California Holdings, Inc. $ 1,425,980 May 19, 1993
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-90 Indiana Holdings, Inc. $ 1,375,960 May 19, 1993
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-90 Kansas Holdings, Inc. $ 1,777,520 May 19, 1993
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-90 North Dakota Holdings, Inc. $ 664,200 October 9, 1993
- ----------------------------------------------------------------------------------------------------------------------------------
APAC-90 Texas Holdings, Inc. $22,140,000 December 17, 1990
- ----------------------------------------------------------------------------------------------------------------------------------
APAC Illinois Holdings, Inc. $ 3,970,440 October 22, 1990
- ----------------------------------------------------------------------------------------------------------------------------------
Kirksville Publishing Company $ 4,595,280 August 8, 1990
- ----------------------------------------------------------------------------------------------------------------------------------
Meridian Star, Inc. $16,031,000 June 10, 1990
- ----------------------------------------------------------------------------------------------------------------------------------
Southern Siskiyou Newspapers, Inc. $ 471,500 November 2, 1993
- ----------------------------------------------------------------------------------------------------------------------------------
The Statesman-Examiner, Inc. $ 926,427 January 1, 1993
- ----------------------------------------------------------------------------------------------------------------------------------
APC Pennsylvania Holdings, Inc. $ 779,000 January 1, 1994
==================================================================================================================================
</TABLE>
II-2
<PAGE> 186
EXHIBIT G
FORM OF
ASSIGNMENT AGREEMENT
Reference is made to Section 14.9.1 of the Amended and Restated Credit
Agreement dated as of May 30, 1996, (as amended or otherwise modified, the
"Credit Agreement"), among Hollinger International Publishing Inc., various
financial institutions, The Toronto-Dominion Bank, as issuing bank, and Toronto
Dominion (Texas), Inc., as administrative agent. Unless otherwise defined
herein or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.
_____________________ ("Assignor") and ________________ ("Assignee") hereby
agree as follows:
The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to all of
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to ______% of the Loans, the participation interest in the Letters
of Credit and the Commitment, such purchase and assignment to be effective as of
the effective date set forth herein. After giving effect to such assignment and
delegation, the Assignor's and Assignee's Percentages for the purposes of the
Credit Agreement will be as set forth opposite each such Person's name on the
signature pages hereof.
The effective date of this Agreement shall be the date when the consent of
the Issuing Bank, the Administrative Agent and the Company to this Agreement has
been received and the conditions set forth in clauses (x), (y) and (z) of the
proviso to the first paragraph of Section 14.9.1 of the Credit Agreement shall
be either met or waived. The Assignor hereby instructs the Administrative Agent
to make all payments after the effective date hereof in respect of the interest
assigned hereby directly to the Assignee. The Assignor and the Assignee agree
that all interest and fees accrued up to, but not including, the effective date
of the assignment and delegation being made hereby are the property of the
Assignor, and not the Assignee. The Assignee agrees that, upon receipt of any
such interest or fees, the Assignee will promptly remit the same to the
Assignor.
The Assignee hereby confirms that it has received a copy of the Credit
Agreement and the exhibits related thereto, together with copies of the
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the initial Loans and the issuance of the initial
Letter(s) of Credit thereunder. The Assignee acknowledges and agrees that it
(i) has made and will continue to make such inquiries and has taken and will
take such care on its own behalf as would have been the case had its Commitments
been granted, the Letters of Credit issued and its Loans been made directly by
such Assignee to
<PAGE> 187
the Company without the intervention of any Agent, the Assignor or any other
Lender and (ii) has made and will continue to make, independently and without
reliance upon any Agent, the Assignor or any other Lender and based on such
documents and information as it has deemed appropriate, its own credit analysis
and decisions relating to the Credit Agreement. The Assignee further
acknowledges and agrees that no Agent makes any representations or warranties
about the creditworthiness of the Company or any other party to the Credit
Agreement or any other Loan Document or with respect to the legality, validity,
sufficiency or enforceability of the Credit Agreement or any other Loan Document
or the value of any security therefor.
The Assignor represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim.
The Assignee represents and warrants to the Administrative Agent that, as
of the date hereof, the Company will not be obligated to pay any greater amount
under Section 7.6 or Section 8 of the Credit Agreement than the Company is
obligated to pay to the Assignor under such Sections.
Upon the effectiveness of this Agreement:
(a) the Assignee (i) shall be deemed automatically to have become a
party to the Credit Agreement and have all the rights and obligations of a
"Lender" under the Credit Agreement as if it were an original signatory thereto
to the extent specified in the second paragraph hereof; and (ii) agrees to be
bound by the terms and conditions set forth in the Credit Agreement as if it
were an original signatory thereto; and
(b) the Assignor shall be released from its obligations under the
Credit Agreement to the extent specified in the second paragraph hereof.
The Assignor and the Assignee hereby agree that the [Assignor] [Assignee]
will pay the Administrative Agent the processing fee referred to in Section
14.9.1 of the Credit Agreement.
- 2 -
<PAGE> 188
The Assignee hereby advises each of you of the following administrative
details with respect to the assigned Loans and Commitments:
(A) Address for Notices:
Institution Name:
Address:
Attention:
Telephone:
Facsimile:
(B) Payment Instructions:
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
___________________, 199_.
Percentage = _______ [Insert Name of Assignee]
By: _____________________
Name:
Title:
Adjusted Percentage = _______ [Insert Name of Assignor]
By: ____________________
Name:
Title:
- 3 -
<PAGE> 189
ACCEPTED AND CONSENTED TO
this ____ day of _________, 199_.
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By:__________________________________
Name:_____________________________
Title:____________________________
CONSENTED TO
this ____ day of ________, 199_.
HOLLINGER INTERNATIONAL PUBLISHING INC.
By:__________________________________
Name:_____________________________
Title:____________________________
CONSENTED TO
this __ day of ______, 199_.
THE TORONTO-DOMINION BANK,
as Issuing Bank
By:__________________________________
Name:_____________________________
Title:____________________________
- 4 -
<PAGE> 190
EXHIBIT H
[NAME OF SUBSIDIARY]
NONNEGOTIABLE PROMISSORY NOTE
$____________ ________, __________
______________, 19__
FOR VALUE RECEIVED, the undersigned ___________________ _________, a
___________ corporation (herein called the "Company"), hereby promises to pay to
____________, a Delaware corporation ("________") or to the holder from time to
time of this Promissory Note, the principal sum of
______________________________________ Dollars ($_________), or such lesser
amounts as may be advanced to or for the benefit of the Company by _______
hereunder, all in lawful money of the United States, on ____________, 20__,
together with interest from the date hereof on the unpaid balance of said
principal balance hereof from time to time at a variable rate per annum (based
on a year of 365 or 366 days, as the case may be) equal to two percent (2.0%)
above the Prime Rate. The interest rate shall change automatically from time to
time during the term of this note, effective as of the effective date of each
change in the Prime Rate. As used herein, the term "Prime Rate" shall mean the
prime interest rate per annum announced from time to time by Mellon Bank, N.A.
at its principal office in Pittsburgh, Pennsylvania, as its Prime Rate.
Interest shall be payable monthly in arrears on the last day of each month
in each year during the term hereof, commencing as of the date hereof, until
payment in full.
Payment of both principal and interest shall be made c/o [NAME OF
MANAGEMENT COMPANY], in West Frankfort, Illinois (or such other place as may be
hereafter designated by _______ in writing and delivered to the Company) in
lawful money of the United States of America in immediately available funds. If
any payment of principal or interest on this Promissory Note shall become due on
a Saturday, Sunday, or bank holiday under the laws of the place where payment is
received, such payment shall be made on the next succeeding business day and
such extension of time shall in such case be included in computing interest in
connection with such payment.
The Company shall have the right at any time to prepay, without premium or
penalty, all or any part of the unpaid principal balance of this Promissory
Note, provided that at the time of any
<PAGE> 191
such prepayment, the Company shall also pay all accrued interest on the amount
of such principal sum so prepaid.
If any of the following events ("Events of Default") shall occur:
(a) default by the Company in the payment of any installment of principal
or interest on this Promissory Note when the same becomes due and payable, which
default continues unremedied for a period of five (5) days after notice by
APAC-95 or the holder of this Promissory Note requesting that such default be
cured;
(b) default by the Company in the performance of or compliance with any
other term or covenant contained in this Promissory Note, which default
continues unremedied for a period of thirty (30) days after notice by __________
or the holder of this Promissory Note requesting that such default be cured;
(c) if the Company shall make a general assignment for the benefit of
creditors, or shall file a voluntary petition in bankruptcy, or shall file any
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, or shall file any answer admitting
or not contesting the material allegations of a petition filed against the
Company in any such proceeding or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of the Company; or
(d) if there shall be filed against the Company any petition or
application for relief under any bankruptcy or similar law which is not
discharged within sixty (60) days after such petition;
then, and in any such event, APAC-95 or the holder of this Promissory Note may,
at any time, at its option, by written notice to the Company, declare the
entire amount of principal and interest remaining unpaid on this Promissory
Note due and payable.
In case any one or more Events of Default shall occur and be continuing,
_______ or the holder of this Promissory Note may proceed to protect and enforce
its rights by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any covenant contained in this
Promissory Note, or for an injunction against a violation of any of the terms
hereof, or in aid of the exercise of any power granted hereby or by law. No
course of dealing and no delay on the part of _______ or the holder of this
Promissory Note in exercising any right, power or
- 2 -
<PAGE> 192
remedy shall operate as a waiver thereof or otherwise prejudice rights
of __________ or the holder of his Promissory Note. No right conferred hereby
to _______ or he holder of this Promissory Note shall be exclusive of any other
right referred to herein or now or hereafter available at law, in equity, by
statute or otherwise.
The undersigned waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Promissory Note. In any action on this
Promissory Note, __________ or the holder of this Promissory Note need not
produce or file the original of this Promissory Note, but need only produce or
file a photocopy of this Promissory Note certified by _______ or such holder to
be a true and correct copy of this Promissory Note.
The holder hereof may endorse on the Schedule annexed hereto and made a
part hereof the amount of any optional payments or prepayments on account of the
principal hereof; provided that the failure to make any such endorsement shall
not affect the obligations of the Company hereunder.
This Promissory Note is nonnegotiable; it may, however, be assigned with
the consent of the Company.
This Promissory Note is secured by a Security Agreement dated as of the
date hereof between the Company and __________.
ATTEST: [NAME OF SUBSIDIARY]
By: ___________________________ By: ______________________________
Kenneth L. Serota, J. David Dodd
Secretary Executive Vice President and
Chief Executive Officer
(Corporate Seal)
- 3 -
<PAGE> 193
SCHEDULE
TO
PROMISSORY NOTE
OF
[NAME OF SUBSIDIARY]
Amount of
Date Payment/Repayment
---- -----------------
<PAGE> 194
EXHIBIT I
[NAME OF OPERATING SUBSIDIARY]
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement"), made as of the ____ day of
___________, 19__ between [NAME OF OPERATING SUBSIDIARY], a ___________
corporation (the "Company"), and [NAME OF HOLDING COMPANY PARENT], a Delaware
corporation ("_________")
WITNESSETH:
WHEREAS, all of the issued and outstanding shares of the Company's common
stock, par value $1.00 per share, are owned of record by _____________;
WHEREAS, the Company issued a promissory note dated September 28, 1995 to
_____ (the "Note") in original principal amount of $__________ to evidence
indebtedness incurred or to be incurred by the Company as a result of loans or
advances made or to be made to the Company by in connection with the acquisition
of certain newspapers and related businesses, payment of consideration under
certain noncompetition agreements and any additional advances which may be made
by to the Company from time to time;
NOW, THEREFORE, in consideration of the Debt (as hereinafter defined) and
other good and valuable consideration, receipt of which is hereby acknowledged
by the Company, the parties hereto, intending to be legally bound hereby,
covenant and agree as follows:
Section 1. Definitions. In addition to other terms defined elsewhere in
this Agreement, the following words and terms shall have the following meanings,
respectively, unless the context clearly requires otherwise:
(a) "Accounts Receivable" shall mean, with respect to the Company, any
right of the Company to payment for goods sold or leased or services rendered.
(b) "Collateral" shall mean, collectively, all the Company's present and
future right, title and interest in and to the following property, whether now
or hereafter existing or acquired and wherever located: (i) all General
Intangibles and other similar property, (ii) all Accounts Receivable, (iii) all
equipment (as defined in the UCC), (iv) all inventory (as defined in the UCC),
(v) all books and records of the Company with respect to the foregoing, (vi) all
products and proceeds of any of
<PAGE> 195
the foregoing (including insurance policies and proceeds), and (vii) all
guaranties, claims, rights, remedies and privileges relating to any of the
foregoing.
(c) "Debt" means, collectively, (i) all indebtedness and obligations,
whether of principal, interest, fees, expenses or otherwise, of the Company to
________ now existing or hereafter incurred, including, without limitation, the
obligations of the Company to ____________ evidenced by the Note, together with
any and all amendments, extensions, renewals, refinancing or refundings thereof,
in whole or in part, (ii) all costs and expenses, including without limitation
reasonable attorney's fees incurred by _________ in the collection of any of the
indebtedness referred to in clause (i) above, and (iii) any advances made by
_______ for the maintenance, preservation, protection or enforcement of, or
realization upon, any property or assets now or hereafter made subject to a
mortgage, pledge, lien or security interest granted pursuant to the Note, or
pursuant to any agreement, instrument or note relating to any of the foregoing,
including without limitation advances for taxes, insurance, repairs and the
like.
(d) "General Intangibles" shall mean any personal property (including
choses in action) other than goods and accounts, including without limitation
the Company's subscription lists, advertisers lists, goodwill, trademarks, trade
names and copyrights and all the Company's right, title and interest in and to
the publications listed on Annex 1 attached hereto, as amended or modified from
time to time (collectively, the "Publications").
(e) "Lien" includes, without limitation, any security interest, pledge,
bailment, lease, mortgage, conditional sale or title retention agreement,
charge, claim, encumbrance or lien.
(f) "Permitted Liens" shall mean Liens otherwise permitted by _________ as
may be set forth in writing from time to time and delivered to the Company.
(g) "Prior Security Interest" means an enforceable, perfected security
interest under the UCC which is prior to all Liens, except Liens for taxes not
yet due and payable to the extent given priority by statute.
(h) "Proceeds" shall mean whatever is received when Collateral is sold,
exchanged, collected or otherwise disposed of, both cash and non-cash, including
proceeds of insurance paid or payable on Collateral.
(i) "UCC" shall mean the Uniform Commercial Code as
<PAGE> 196
in effect in any applicable jurisdiction.
Section 2. Creation and Confirmation of Security Interest. As security
for the full and timely payment and performance of the Debt, the Company hereby
grants to and creates in favor of, a security interest under the UCC in and to
the Collateral.
Section 3. Provisions Applicable to the Collateral. The parties agree
that the following provisions shall be applicable to the Collateral, and the
Company covenants and agrees that during the term of this Agreement:
(a) Books and Records. The Company will keep accurate and complete books
and records concerning the Collateral. The Company will promptly furnish to, at
such times and in such form and substance as may be requested, information and
documents relating to the Collateral and to the Company's financial condition,
business, assets or liabilities.
(b) Inspection. ______ shall have the right, at any reasonable time and
from time to time, to inspect the Collateral and to examine and make copies of
any extracts from the books and records of the Company concerning the
Collateral.
(c) Maintenance of Collateral: Payment of Taxes, etc. The Company agrees
that it will maintain the Collateral now or hereafter owned or acquired by it,
and every part thereof, in good condition, reasonable wear and tear alone
excepted, and will pay and discharge all taxes, levies and other impositions
levied thereon (except such thereof as are being contested in good faith by
appropriate proceedings diligently conducted) as well as the cost of repairs to
or maintenance of the same. If the Company fails to do so, _______ may pay the
cost of such repairs or maintenance and such taxes, levies or impositions for
the account of the Company and add the amount thereof to the Debt.
(d) Risk of Loss: Insurance. Risk of loss of, damage to or destruction
of the Collateral is and shall remain upon the Company. If the Company tails to
obtain and maintain policies of insurance on the Collateral as agreed by
__________ or the Company fails to pay the premiums thereon when due, _______
may do so for the account of the Company and add the cost thereof to the Debt.
The Company hereby assigns and sets over to ___________ all moneys which may
become payable on account of all insurance covering Collateral, including
without limitation any return of unearned premiums which may be due upon
cancellation of any such insurance, and directs the insurers to pay directly to
any amount so
<PAGE> 197
due. __________, its officers, employees, and authorized agents, are hereby
irrevocably appointed the attorneys-in-fact of the Company to endorse any draft
or check that may be payable to the Company in order to collect the proceeds of
such insurance or any return of unearned premiums. Any balance of insurance
proceeds remaining in the possession of _________ after payment in full of the
Debt shall be paid to the Company or its order as the Company shall instruct
____________.
(e) Title and Liens. The Company represents, warrants and covenants that
it has and will have good and marketable title to the Collateral from time to
time owned or acquired by it, free and clear of all Liens except for Permitted
Liens, and that it will defend such title against the claims and demands of all
persons whomsoever, and that the security interest granted, created and
confirmed by the Company in favor of _________ hereunder is, and shall remain, a
Prior Security Interest.
(f) Negative Pledge. The Company will not (i) sell, assign or otherwise
transfer any Collateral or any portion thereof or interest therein or otherwise
do or permit anything to be done that may impair the Collateral as security
hereunder, (ii) borrow against the Collateral from any person, firm or
corporation, (iii) grant, create or permit to attach or exist any Lien in any of
the Collateral except for Permitted Liens and Liens in favor of _________, (iv)
permit any levy or attachment to be made against any of the Collateral, or (v)
permit any financing statement to be on file with respect to any of the
Collateral except financing statements in favor of _______ or its respective
successors or assignees.
(g) Notification of _________. The Company will immediately notify
_________ of (i) all losses of or damage to Collateral, (ii) any adverse change
in the Company's financial condition or business affairs, (iii) any default, or
any event or condition which with the passage of time might result in a default,
under this Agreement and (iv) any Event of Default (as defined in the Note).
(h) Delivery of Proceeds. Upon notice from _________, the Company shall
deliver all proceeds of Collateral, cash and non-cash, to ____________ forthwith
upon receipt in the original form in which received, with such endorsements or
assignments by the Company as may be deemed necessary by ___________ to permit
collection, and the Company hereby irrevocably authorizes and empowers
___________, its officers, employees and agents, to endorse the Company's name
on all checks, drafts, money
<PAGE> 198
orders and other media of payment to delivered to __________ and such
endorsements or assignments shall for all purposes be deemed to have been made
by the Company prior to any endorsement or assignment thereof by ______.
__________ may use any convenient or customary means for the purpose of
collecting such checks, drafts, money orders or other media of payment.
(i) Continuing Company Action. The Company shall take all necessary
action, at its own cost and expense, to observe and perform its agreements and
covenants, and keep its representations and warranties true, correct and
complete, under this Agreement. The Company's agreements, covenants,
representations and warranties under this Agreement are continuing ones, shall
at all times remain true, correct and complete and shall at all times be
observed and performed and shall relate to each item of Collateral upon its
coming into existence and at all times thereafter.
Section 4. Preservation and Protection of Security Interest. The Company
will faithfully preserve and protect 's security interest in the Collateral and
will, at its own cost and expense, cause said security interest to be perfected
and continued perfected, and for such purpose the Company will from time to time
at the request of _________ execute and file or record, or cause to be filed or
recorded, such instruments, documents and notices, including without limitation
security agreements, financing statements and continuation statements, and take
such other action (including pledge, assignment and delivery of Collateral to
________), as __________ may deem necessary or advisable from time to time in
order to perfect and continue perfected said security interest. The Company
will do all such other acts and things and will execute and deliver all such
other instruments and documents, including without limitation, further security
agreements, pledges, endorsements, assignments, and notices, as ___________ may
deem necessary or advisable from time to time in order to perfect and preserve
the priority of said security interest in the Collateral. _________ and its
officers, employees and authorized agents, or any of them, are hereby
irrevocably appointed the attorneys-in-fact of the Company to do, at the
Company's expense, all acts and things which ____________ may deem necessary or
advisable to preserve, perfect and continue perfected _______'s security
interest in the Collateral, including without limitation the signing of
financing, continuation or other similar statements and notices on behalf of the
Company.
Section 5. ___________'s Rights with Respect to Collateral. Any provision
contrary notwithstanding, __________ may at its option and at any time, whether
or not an Event of Default (as defined in the Note) has occurred, do any or all
of the following:
(a) Take such action as _________ deems appropriate
<PAGE> 199
to maintain, repair, protect and insure the Collateral, to attach, perfect,
continue, preserve and protect ______'s security interest in the Collateral, to
perform, keep, observe and render true and correct any and all covenants,
agreements, representations and warranties of the Company hereunder and to add
all liabilities, obligations, costs and expenses incurred in connection with the
foregoing to the Debt.
(b) Inspect, audit and verify the Collateral, including reviewing all of
the Company's books and records and copying and making excerpts therefrom.
(c) Endorse in the name of the Company any instrument, howsoever received
by _________, representing Collateral or Proceeds of any of the Collateral.
Section 6. Events of Default and Remedies. If an Event of Default (as
defined in the Note) shall have occurred or if the Company fails to perform any
covenant or agreement with respect thereto, including without limitation those
provided in this Agreement or in any other agreement now or hereafter existing
providing collateral to secure repayment of the Debt, _________ shall have the
right without demand or notice of any kind to declare all or any part of the
Debt to be due and payable, and ___________ shall have and may exercise all the
rights and remedies available to a secured party under the UCC in effect at the
time, and such other rights and remedies as are set forth in the Note and as may
be provided by law. In such event, the Company, at the request of _______,
shall assemble the Collateral at such locations as _________ shall designate and
may sell the same at public or private sale as provided in the UCC. The proceeds
of any sale, collection or other disposition of the Collateral shall be applied
by ___________ in payment of the Debt, including the costs and expenses of the
sale or collection, including without limitation, reasonable attorneys' fees,
and as otherwise required by law, and to particular obligations comprising the
Debt and against principal and/or interest in such amounts as ___________ in its
discretion may elect, and any surplus shall be paid to the Company, its
successors or assigns, or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction shall determine. Written notice of
sale mailed to the Company at its address shown below at least five (5) days
prior to such sale shall be deemed reasonable notice. The Company shall remain
liable to __________ for and shall pay to _______ any deficiency which may
remain after such sale or collection.
Upon any sale of any of the Collateral, _________ may purchase all or any
of the Collateral being sold, free from any equity or right of redemption. The
Company waives and releases any right to require ____________ to collect any of
the Debt from any other of the Collateral or from any other security or source
under any theory or marshalling of assets, or otherwise, and specifically
authorizes ____________ to apply any of the Collateral against any
<PAGE> 200
of the Debt in any manner that _______ may determine.
Section 7. Care of Collateral. The Company assumes full responsibility
for taking any and all steps to preserve rights with respect to the Collateral
against prior parties. __________ shall be deemed to have exercised reasonable
care in the custody and preservation of such of the Collateral as may be in
___________'s possession if _________ takes such action for that purpose as the
Company shall request in writing, provided that such requested action shall not,
in the judgment of __________, impair the security interest in such Collateral,
and provided further that such written request is received by __________ in
sufficient time to permit __________ to take the requested action.
Section 8. Continuing Validity of Obligations. The agreements and
obligations of the Company hereunder are continuing agreements and obligations,
and are absolute and unconditional irrespective of the genuineness, validity or
enforceability of the Note or any other instrument or instruments now or
hereafter evidencing the Debt or any part thereof or any other agreement or
agreements now or hereafter entered into by __________ and the Company pursuant
to which the Debt or any part thereof is evidenced or secured or of any other
circumstance which might otherwise constitute a legal or equitable discharge of
such agreements and obligations; without limitation of the foregoing, such
agreements and obligations shall continue in full force and effect as long as
the Debt or any part thereof remains outstanding and unpaid and shall remain in
full force and effect without regard to and shall not be released, discharged or
in any way affected by (i) any renewal, refinancing or refunding of the Debt in
whole or in part, (ii) any extension of the time of payment of the Note or other
obligation, instrument or instruments now or hereafter evidencing the debt or
any part thereof, (iii) any release or discharge of or accord and satisfaction
with the Company, (iv) any compromise or settlement with respect to the Debt or
any part thereof, or any forbearance or indulgence extended to the Company, (v)
any amendment to or modification of the terms of the Note or other obligations,
instrument or instruments now or hereafter evidencing the Debt or any part
thereof or any other agreement or agreements now or hereafter entered into by
which the Debt or any part thereof is issued or secured, (vi) any substitution,
exchange or release of, or failure to preserve, perfect or protect, or other
dealing in respect of, the Collateral or any other property or any security for
the payment of the Debt or any part thereof, (vii) any bankruptcy, insolvency,
arrangement, composition, assignment for the benefit of creditors, appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestor (or other similar official) of the Company or for any substantial
portion of its or their property, or similar proceeding commenced by or against
the Company, (viii) any surrender or cancellation of the Note by _______, or
(ix) any other matter or thing whatsoever whereby the agreements and obligations
of the Company hereunder, would or might otherwise be released or discharged.
<PAGE> 201
Section 9. Governing Law. This Agreement shall be deemed to be a contract
under the laws of the State of ___________ and the execution and delivery hereof
and the terms and provisions hereof shall be governed by and construed in
accordance with the laws of the State of _________, including without limitation
the _____________ Uniform Commercial Code, as amended from time to time.
Section 10. Defeasance. Upon payment in full of the Debt, this Agreement
shall terminate and be of no further force and effect; and in such event ______
will, at the expense of the Company, redeliver and reassign to the Company its
remaining Collateral and take all action necessary to terminate the security
interest of _______ in the Collateral. Until such time, however, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
Section 11. Miscellaneous. By taking any and all action permitted by this
Agreement or by applicable law, ________ shall not be deemed to have assumed any
obligation or liability to any supplier or debtor of the Company or to any other
third party, and the Company agrees to indemnify ______ and hold it harmless in
respect of any claim asserted by any such person except for claims based on
_________'s own gross negligence or willful misconduct.
The enumeration of __________'s rights and remedies set forth in this
Agreement is not intended to be exhaustive and the exercise by ________ of any
right or remedy shall not preclude the exercise of any other rights or remedies,
all of which shall be cumulative and shall be in addition to any other right or
remedy given hereunder, or under any other agreement between the parties or
which may now or hereafter exist at law or in equity or by suit or otherwise.
No delay on the part of _________ in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
the exercise of any other right, power or privilege or shall be construed to be
a waiver of any default. No course of dealing between the Company and _________
or its agents or employees shall be effective to change, modify or discharge any
provision of this Agreement or to constitute a waiver of any default.
____________ shall not, under any circumstances or in any event whatsoever, have
any liability for any error or omission or delay of any kind occurring in the
liquidation of any Collateral, including the settlement, collection or payment
of any Collateral, or for any damage resulting therefor.
If any provision of this Agreement is held invalid or unenforceable to any
extent or in any application, the remainder of this Agreement, or the
application of such provision to different persons or circumstances or in
different jurisdictions, shall not be affected thereby.
The Company and ___________ may from time to time add to
<PAGE> 202
or amend the list of Publications included within the Collateral by means of
one or more written amendments to this Agreement, so long as any such amendment
shall be in writing and executed by each of the Company and __________.
All notices, statements, requests and demands under this Agreement shall be
deemed to have been made when mailed first class, postage prepaid, to each party
at the address set forth below or as it may otherwise direct in writing.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed and delivered this Security Agreement as of the day
and year first above written.
<PAGE> 203
ATTEST: [NAME OF OPERATING COMPANY
SUBSIDIARY]
By:_____________________________ By:_________________________________
Kenneth L. Serota, J. David Dodd,
Secretary Executive Vice President and
Chief Financial Officer
Address:
ATTEST: [NAME OF HOLDING COMPANY PARENT]
By:_____________________________ By:_________________________________
Kenneth L. Serota, J. David Dodd,
Secretary Executive Vice President and
Chief Financial Officer
Address: c/o [MANAGEMENT COMPANY]
107-115 South Emma Street
West Frankfort, Illinois
62896
<PAGE> 204
ANNEX 1
<PAGE> 205
EXHIBIT J
FORM OF
SCHEME CERTIFICATE
To: The Toronto-Dominion Bank,
as Administrative Agent under the U.K. Credit Agreement
Toronto Dominion (Texas), Inc.
as Administrative Agent under the U.S. Credit Agreement
Toronto Dominion Investments Inc.
as Collateral Agent under the Holdco Facility
Reference is made to:
1. the Credit Agreement, dated as of May 30, 1996 (herein, as amended
or otherwise modified from time to time, called the "U.K. Credit Agreement"),
among First DT Holdings Limited (the "U.K. Borrower"), various financial
institutions (the "U.K. Lenders"), and The Toronto Dominion Bank as issuing
bank and administrative agent;
2. the Amended and Restated Credit Agreement, dated as of May 30, 1996
(herein, as amended or otherwise modified from time to time, called the "U.S.
Credit Agreement"), among Hollinger International Publishing Inc. (the "U.S.
Borrower"), various financial institutions (the "U.S. Lenders"), The
Toronto-Dominion Bank, as issuing bank, and Toronto Dominion (Texas), Inc. as
administrative agent; and
3. the Securities Purchase Agreement, dated as of May 30, 1996
(herein, as amended or otherwise modified from time to time, called the "Holdco
Facility" and, together with the U.K. Credit Agreement and the U.S. Credit
Agreement, the "Facilities"), among Hollinger International Publishing Holdings
Inc. ("Holdco"), Hollinger International Inc. ("Hollinger International"), and
Toronto Dominion Investments Inc. as collateral agent ("TD" and, together with
the U.K. Lenders and the U.S. Lenders, the "Lenders").
Terms used but not otherwise defined herein are used herein as defined in
the relevant Facility.
<PAGE> 206
Each of the U.K. Borrower, the U.S. Borrower, Holdco, and Hollinger
International hereby certify, with respect to each Facility to which they are a
party or a guarantor, as the case may be, that:
1. no Event of Default or Unmatured Event of Default has occurred and
is continuing under such Facility or would result if Loans were to be advanced
thereunder or the Scheme was to become effective as at the date of this
certificate;
2. the representations and warranties contained in such Facility are
true and correct as at the date of this certificate;
3. no event has occurred since December 31, 1995 which may have a
Material Adverse Effect; and
4. each Obligor would, if the Loan were advanced on the date of this
certificate, be able to comply with its obligations under or in respect to the
Facility including, in particular, its ability to satisfy the conditions
precedent and financial covenants applicable to such Obligor.
-2-
<PAGE> 207
IN WITNESS WHEREOF, each of the U.K. Borrower, the U.S. Borrower, Holdco,
and Hollinger have caused this Certificate to be executed and delivered by its
duly authorized officers this _____ day of __________, 19__.
FIRST DT HOLDINGS LIMITED
By:____________________________
Name___________________________
Title__________________________
HOLLINGER INTERNATIONAL PUBLISHING INC.
By_____________________________
Name___________________________
Title__________________________
HOLLINGER INTERNATIONAL PUBLISHING
HOLDINGS INC.
By_____________________________
Name___________________________
Title__________________________
HOLLINGER INTERNATIONAL INC.
By_____________________________
Name___________________________
Title__________________________
-3-
<PAGE> 208
EXHIBIT K
TAX ALLOCATION AGREEMENT
THIS AGREEMENT, made as of the 31st day of March, 1994, among AMERICAN
PUBLISHING COMPANY, a Delaware corporation ("AMERICAN"), APAC-90 INC., a
Delaware corporation ("APAC-90"), AMERICAN PUBLISHING (1991) INC., a Delaware
corporation ("APC (1991)"), APC 1993, INC., a Delaware corporation ("APC 1993"),
VALLEY CABLE TV, INC., a California corporation ("VALLEY"), and THE SUN-TIMES
COMPANY, a Delaware corporation ("SUN-TIMES").
WITNESSETH THAT:
WHEREAS, American is the common parent of an affiliated group of
corporations that file a consolidated United States federal income tax return
("CONSOLIDATED RETURN");
WHEREAS, APAC-90, APC (1991), APC 1993, Valley and Sun-Times are first-tier
subsidiaries of American;
WHEREAS, American, APAC-90, APC (1991), APC 1993, Valley and Sun-Times and
the subsidiaries of APAC-90, APC (1991), APC 1993, Valley and Sun-Times, are
affiliated corporations and join with American (such group of corporations are
referred to as the "AFFILIATED GROUP") in the filing of a Consolidated Return;
<PAGE> 209
WHEREAS, the Affiliated Group desires to allocate the consolidated "federal
income tax liability" (as determined under Section 1.1502-2 of the Federal
income tax regulations) among the members of the Affiliated Group; and
WHEREAS, the Affiliated Group desires to establish a method for reimbursing
American for the payment of such consolidated federal income tax liability, and
for allocating among the Members of the Affiliated Group certain benefits and
burdens which arise from the filing of consolidated federal income tax returns.
NOW, THEREFORE, in consideration of the mutual covenants set forth below,
and intending to be legally bound hereby, the parties hereto hereby agree as
follows:
1. Definitions.
(a) For purposes of this Agreement:
(i) "AFFILIATED GROUP" and "CONSOLIDATED RETURN" shall have the
meanings set forth in the recitals to this Agreement.
(ii) "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
(iii) "MEMBER" shall have the meaning set forth in Code Sections 1501
to 1504 and Regulations relating to such Code Sections.
- 2 -
<PAGE> 210
(iv) "REGULATIONS" means the Treasury Regulations promulgated under
the Code.
2. Consolidated Federal Income Tax Return.
(a) American, APAC-90, APC (1991), APC 1993, Valley and Sun-Times agree to
join, and to cause all of their respective subsidiaries to join, with American
in the filing of a Consolidated Return for each year in which such corporations
are members of the Affiliated Group and for which American files a Consolidated
Return.
(b) American shall be responsible for payment to the Internal Revenue
Service of any and all estimated and final federal income tax liabilities
(including additions to tax, penalties and interest) of the Affiliated Group and
each of its Members for each taxable year during which this Agreement is in
effect.
3. Tax Allocation.
(a) In order to charge as well as compensate Members of the Affiliated
Group for the use of items of income, deduction, credits against tax, or net
operating losses in arriving at the consolidated federal income tax liability of
the Affiliated Group, the Members of the Affiliated Group agree to determine and
allocate the quarterly estimates of and final determination of the Affiliated
Group's consolidated federal tax liability among themselves in the following
manner:
- 3 -
<PAGE> 211
(i) Each Member of the Affiliated Group will be allocated an amount
equal to its respective separate return tax liability. For purposes of
this Paragraph 3, the separate return tax liability of each Member shall be
computed, without giving effect to the carryover of losses or tax credits
from prior years, in a manner consistent with the provisions of Regulations
Section 1.1552-1(a)(2)(ii).
(ii) If the amount of the Affiliated Group's consolidated federal
income tax liability is less than the sum of the aggregate separate return
tax liabilities of the Members as a result of losses or tax credits of a
Member (including losses or tax credits carried over from prior years), the
decrease in tax liability resulting therefrom shall be allocated to that
Member. A member may have a "negative" income tax liability as a result of
such an allocation.
(iii) If the amount of the Affiliated Group's consolidated federal
income tax liability is different than the sum of the separate return tax
liabilities of the Members for a reason not described in subparagraph
3(a)(ii), such difference shall be allocated among the Members of the
Affiliated Group in an equitable manner as determined by American.
- 4 -
<PAGE> 212
4. Tax Allocation Payments.
(a) Upon request by American, each Member shall promptly pay cash in an
amount which is sufficient to pay such Member's quarterly estimated separate
return tax liability as determined in Paragraph 3. In addition, each Member
shall pay American cash to pay the difference, if any, between its separate
return tax liability for the year as determined in Paragraph 3 and any quarterly
estimated separate return tax payments made by such Member with respect to such
tax year on or before the due date of such final tax payment. The difference, if
any, between the portion of the consolidated federal income tax liability or
refund (including a "negative" income tax liability) allocated to each Member,
determined in accordance with Paragraph 3, and the amount paid by such Member to
American, in accordance with Paragraph 4, for each taxable period shall be
payable by such Member to American or by American to such Member, as the case
may be, upon the filing date of the Affiliated Group's Consolidated Return for
such taxable period.
(b) If the consolidated federal income tax liability of the Affiliated
Group is adjusted for any taxable period, whether by means of an amended return,
claim for refund, or after audit by the Internal Revenue Service, the liability
allocable to each Member shall be recomputed under Paragraph 3 of this Agreement
to give effect to such adjustments. In the case of a refund, American shall
make payment to each Member for its
- 5 -
<PAGE> 213
share of the refund, determined in a manner consistent with the principles of
Paragraph 3 of this Agreement, within thirty (30) days after the refund is
received by American, and in the case of an increase in tax liability, each
Member shall pay to American its allocable share of such increased tax
liability within thirty (30) days after receiving notice of such liability from
American. If any interest is to be paid or received as a result of a
consolidated federal income tax deficiency or refund, such interest shall be
allocated to the Members in the ratio each Member's change in consolidated
federal income tax liability bears to the total change in tax liability. Any
penalty shall be allocated upon such basis as American deems just and proper in
view of all applicable circumstances.
5. State Tax Liability.
If the Affiliated Group or any smaller group of Members files a tax return
on a consolidated, combined or unitary basis with any state or locality, the tax
liability under such consolidated, combined or unitary return shall be allocated
among the Members of the group filing such return in accordance with the
principles of Paragraph 3 hereof and payments of applicable state and local
taxes shall be paid or refunded in accordance with the principles of Paragraph 4
hereof.
6. Indemnification.
American agrees to indemnify and hold each Member harmless from and against
any and all liabilities for any tax
- 6 -
<PAGE> 214
(including interest and penalties thereon) for any taxable year to which this
Agreement applies; provided, however, that the amount of such indemnity as to a
Member shall be reduced by, and shall offset, any payment required to be made
by such Member to American pursuant to this Agreement.
7. Administration.
(a) The provisions of this Agreement shall be administered by American.
(b) The calculation of the amounts allocated and payable under this
Agreement shall be performed in good faith by the employees or agents designated
by American, APAC-90, APC (1991), APC 1993, Valley and Sun-Times. If requested
by any Member, such calculation shall be reviewed by the independent accounting
firm that then audits the books of American. Absent manifest error, the
determination of such firm following such review shall be conclusive and binding
upon the parties to this Agreement.
8. Addition or Termination of Member.
(a) If any corporation becomes an includible Member of the Affiliated
Group, it shall be subject to and shall benefit from this Agreement and shall be
treated in all respects as a member of the Affiliated Group. American, APAC-90,
APC (1991), APC (1993), Valley and Sun-Times shall cause each new
- 7 -
<PAGE> 215
Member of the Affiliated Group to execute one or more instruments evidencing
such inclusion.
(b) In the event that a Member of the Affiliated Group ceases to be a
Member of the Affiliated Group, the rights and obligations of such party and
each other party to this Agreement shall survive.
9. Successors.
This Agreement shall be binding on and inure to the benefit of any
successor or assignee, by merger, acquisition of assets or otherwise, of any of
the parties hereto to the same extent as if such successor or assignee had been
an original party to this Agreement.
10. Miscellaneous.
(a) The paragraph headings used in this Agreement are for reference
purposes only and do not control or affect the meaning or interpretation of any
term or provision of this Agreement.
(b) The interpretation and construction of this Agreement, and all matters
relating hereto, shall be governed by the laws of the Commonwealth of
Pennsylvania except for its rules relating to conflict of laws.
- 8 -
<PAGE> 216
(c) This Agreement may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
- 9 -
<PAGE> 217
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed as of the date first set forth above.
WITNESS: AMERICAN PUBLISHING COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Title: Executive Vice-President
ATTEST: APAC-90 INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING (1991) INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APC 1993, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: VALLEY CABLE TV, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: THE SUN-TIMES COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
- 10 -
<PAGE> 218
JOINDER IN
TAX ALLOCATION AGREEMENT DATED MARCH 31, 1994
The undersigned do hereby join in and become parties to the Tax Allocation
Agreement dated March 31, 1994 with the same effect as if the undersigned had
been original parties thereto.
ATTEST: AMERICAN GLOBE PUBLISHING COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING COMPANY
OF ARKANSAS
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING COMPANY
OF ILLINOIS
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING COMPANY
OF INDIANA
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
<PAGE> 219
ATTEST: AMERICAN PUBLISHING COMPANY
OF KANSAS
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING COMPANY
OF MICHIGAN
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING COMPANY
OF MISSISSIPPI
/s/ Jerry H. Owens By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING COMPANY
OF NEBRASKA
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING COMPANY
OF NEW YORK
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
<PAGE> 220
ATTEST: AMERICAN PUBLISHING COMPANY
OF OHIO
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING COMPANY
OF PENNSYLVANIA
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING COMPANY
OF TEXAS
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING MANAGEMENT
SERVICES, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APC FLORIDA HOLDINGS, INC.
/s/ Jerry H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
<PAGE> 221
ATTEST: APC MISSOURI HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APC WESTERN HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APMS-90 INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: BERKSHIRE NEWSPAPERS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: BLACKFOOT PUBLISHING COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: CUMBERLAND NEWSPAPERS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
<PAGE> 222
ATTEST: EVENING NEWS COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: GRAND FORKS PUBLISHING COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: IONIA SENTINEL-STANDARD, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: KIRKSVILLE PUBLISHING COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: MERIDIAN STAR, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: MID-IOWA NEWSPAPER GROUP, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
<PAGE> 223
ATTEST: THE NAUGATUCK NEWS CORPORATION
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: SIDNEY PUBLISHING COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: STERLING PUBLISHING COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: UNITED MEDIA GROUP, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: WOODWARD PUBLISHING COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
assistant Secretary Title: Executive Vice-President
ATTEST: AMERICAN PUBLISHING COMPANY
OF KENTUCKY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
<PAGE> 224
ATTEST: AMERICAN PUBLISHING COMPANY
OF TENNESSEE
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APAC ILLINOIS HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APAC-90 TEXAS HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: THE NAUGATUCK REALTY COMPANY
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APC 1991 ARKANSAS HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
<PAGE> 225
ATTEST: APC MINNESOTA HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APAC-90 ARKANSAS HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APAC-90 CALIFORNIA HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APAC-90 INDIANA HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APAC-90 KANSAS HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APAC-90 NORTH DAKOTA HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
<PAGE> 226
ATTEST: AMERICAN PUBLISHING COMPANY OF
NORTH CAROLINA
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: LIVINGSTON SHOPPING NEWS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: THE STATESMAN EXAMINER, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: SOUTHERN SISKIYOU NEWSPAPERS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APC PENNSYLVANIA HOLDINGS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
ATTEST: APMS-93 INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Assistant Secretary Title: Executive Vice-President
<PAGE> 227
WITNESS: CHICAGO SUN-TIMES, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Title: Executive Vice-President
WITNESS: CHICAGO SUN-TIMES FEATURES, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Title: Executive Vice-President
WITNESS: PIONEER NEWSPAPERS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Title: Executive Vice-President
WITNESS: STAR PUBLICATIONS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Title: Executive Vice-President
WITNESS: SUN-TIMES DISTRIBUTION SYSTEMS, INC.
/s/ JERRY H. OWENS By: J. DAVID DODD
- ------------------------ ---------------------------------
Title: Executive Vice-President
<PAGE> 1
EXHIBIT 10.05
FIRST AMENDMENT AGREEMENT
THIS FIRST AMENDMENT AGREEMENT (this "Amendment"), dated as of August 6,
1996, is among HOLLINGER INTERNATIONAL PUBLISHING INC. (the "Company"), the
Lenders listed on the signature pages hereto (the "Lenders" and each a
"Lender"), THE FIRST NATIONAL BANK OF CHICAGO ("First Chicago"), as
Documentation Agent, THE TORONTO-DOMINION BANK, as Issuing Bank (the "Issuing
Bank"), and TORONTO DOMINION (TEXAS), INC. ("TD Texas"), as Administrative
Agent;
W I T N E S E T H:
WHEREAS, the Company, the Issuing Bank and TD Texas are parties to that
certain Amended and Restated Credit Agreement dated as of May 30, 1996 (the
"Credit Agreement");
WHEREAS, TD Texas wishes to assign certain portions of its Commitment under
the Credit Agreement to certain Lenders and the parties desire to appoint
Toronto Dominion Securities (USA), Inc., as Arranger, First Chicago as Managing
Agent and Documentation Agent, Bank of America National Trust and Savings
Association as Managing Agent, and Barclays Bank PLC as Managing Agent and
Syndication Agent under the Credit Agreement; and
WHEREAS, the parties hereto wish to increase the Commitments and amend the
Credit Agreement as hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of the premises and
the mutual agreements herein contained, hereby agree as follows:
SECTION 1 CREDIT AGREEMENT DEFINITIONS. Capitalized terms used herein that
are defined in the Credit Agreement shall have the same meaning when used herein
unless otherwise defined herein.
SECTION 2 AMENDMENTS TO CREDIT AGREEMENT. Effective on (and subject to
the occurrence of) the First Amendment Effective Date (as defined below), the
Credit Agreement shall be amended as follows:
2.1 Amendments to Section 1. Section 1 of the Credit Agreement is amended
as follows:
(a) The definition of "Agents" is amended in its entirety to read as
follows:
<PAGE> 2
Agents means the Administrative Agent, the Documentation Agent and any
co-agent named from time to time by the Administrative Agent and the Company.
(b) The definition of "Collateral Document" is amended by inserting the
following at the end thereof:
and any other document executed from time to time pursuant to which a Lien is
granted in favor of the Administrative Agent to secure the obligations of the
Company under the Loan Documents or the obligations of any Guarantor under any
Loan Document to which it is party, including, without limitation, any documents
executed pursuant to Section 10.7, 10.8 or 10.35 or as required under Section
12.1.9 or 12.1.10.
(c) Clause (b)(ii) of the definition of "Excess Cash Flow" is amended by
deleting the words "obligations under the Loan Documents" and inserting therefor
the words "scheduled principal payments on the AP 91 Senior Notes".
(d) The definition of "Guarantor" is amended in its entirety to read as
follows:
Guarantor means (a) as of the Closing Date, Hollinger International,
Holdco, and each of the Company's Restricted Subsidiaries listed on Schedule 9.8
other than the Subsidiaries of AP-91, Palestine Post, JPEH, JPPL and STDS, (b)
thereafter, the Persons referred to in clause (a) and each other Person which
from time to time executes and delivers a counterpart of the Subsidiary
Guaranty.
(e) The definition of "Guaranties" is amended in its entirety to read as
follows:
Guaranties means the Hollinger International Guaranty, the Subsidiary
Guaranty and the Holdco Guaranty.
(f) The definition of "Holdco Pledge Agreement" is amended in its entirety
to read as follows:
Holdco Pledge Agreement means the Amended and Restated Holdco Pledge
Agreement dated as of the Closing Date issued by Holdco and Hollinger
International (as amended, supplemented or otherwise modified from time to
time).
(g) The definition of "Operating Cash Flow" is amended by inserting the
following at the end thereof:
<PAGE> 3
Notwithstanding the foregoing, for purposes of calculating Excess Cash
Flow, Operating Cash Flow shall not be adjusted for Acquisitions or Asset Swaps.
(h) The definition of "Telegraph" is amended in its entirety to read as
follows:
Telegraph means, (a) prior to its registration as a private limited
company, The Telegraph plc, a public limited liability company incorporated
under the laws of England and Wales and (b) thereafter, Telegraph Group Limited,
a limited liability company incorporated under the laws of England and Wales.
(i) Section 1 is amended by adding the following definitions in the
proper alphabetical order:
Additional Commitment means the $50,000,000 increase to the Original
Commitment pursuant to this Amendment.
Documentation Agent means First Chicago.
First Amendment Agreement means the First Amendment Agreement dated August
6, 1996, among the Company, the Lenders, the Issuing Bank, the Documentation
Agent, and the Administrative Agent.
First Chicago means The First National Bank of Chicago.
Holdco Guaranty means the Guaranty dated as of the Closing Date issued by
Holdco, as amended, supplemented or otherwise modified from time to time.
Original Commitment means the $100,000,000 commitment under the Existing
Credit Agreement as continued under this Agreement.
Purchase Option has the meaning set out in the Scheme Circular.
(j) Second Reaffirmation has the meaning set forth in Section 4(b) of the
First Amendment Agreement.
2.2 Section 2.2. Section 2.2 of the Credit Agreement is amended by adding
the following at the end of the third sentence thereof:
3
<PAGE> 4
"and (iv) the Dollar Equivalent of all Eurocurrency Loans denominated in
Sterling shall not exceed $140,000,000."
2.3 Section 2.3 of the Credit Agreement is amended by adding the following
new sentence at the end thereof:
"All loans shall be deemed to be made pursuant to that portion of the
Commitment attributable to the Additional Commitment, until such Additional
Commitment has been fully advanced, unless the Company otherwise specifies to
the Administrative Agent in writing at the time of such borrowing."
2.4 Section 6.1.2. Section 6.1.2 of the Credit Agreement is amended in
its entirety to read as follows:
(a) On each date that is one Business Day after the receipt by the
Company, its Restricted Subsidiaries or any Unrestrictive Subsidiary formed
after the Effective Date of Net Cash Proceeds (other than Net Cash Proceeds
received in connection with Asset Sales permitted under Section 10.11(c)), the
Commitment shall, without further action, automatically and permanently be
reduced by an amount equal to such Net Cash Proceeds.
(b) On the date that TelHoldco receives any special dividend on shares of
Telegraph paid pursuant to the Scheme, the Commitment shall, without further
action, automatically and permanently be reduced by an amount equal to such
dividend.
2.5 Section 6.1. Section 6.1 of the Credit Agreement is amended by adding
the following new subsection 6.1.3 thereto:
6.1.3. All Reductions. All reductions of the Commitment (whether
voluntary or mandatory) shall be deemed to be reductions of that portion of the
Commitment attributable to the Additional Commitment unless the Company
otherwise specifies to the Administrative Agent in writing at the time of such
reduction.
2.6 Section 6.2.5. Section 6.2.5 of the Credit Agreement is amended by
inserting the following at the end thereof:
All prepayments of Loans (whether voluntary or mandatory) shall first be
applied to repayment of Loans advanced pursuant to the Original Commitment
unless the Company otherwise specifies to the Administrative Agent in writing at
the time of such prepayment.
4
<PAGE> 5
2.7 Section 10.1.3. Section 10.1.3 of the Credit Agreement is amended by
inserting, following the words "the chief executive officer", the words ", the
Vice President of Finance".
2.8 Section 10.6.2. Section 10.6.2 of the Credit Agreement is amended in
its entirety to read as follows:
10.6.2 Senior Leverage Ratio. Not permit the Senior Leverage Ratio to
exceed 3.5:1.0 at any time.
2.9 Section 10.7(h). Section 10.7(h) of the Credit Agreement is amended
by deleting the words "Amendment Effective Date" and inserting therefor the
words "Closing Date".
2.10 Section 10.8. Section 10.8 of the Credit Agreement is amended by
inserting following the words "(whether now owned or hereafter acquired)," the
words "including, without limitation, the Capital Stock of DTH,".
2.11 Section 10.11. Section 10.11(c)(ii) of the Credit Agreement is
amended (i) by deleting the figure "$5,000,000" and inserting "$6,000,000"
therefor and (ii) deleting the figure "$8,000,000" and inserting "$9,000,000"
therefor.
2.12 Section 10.12(e). Section 10.12(e) of the Credit Agreement is amended
in its entirety to read as follows:
(e) to make Restricted Payments permitted under Section 10.9(a)(1) and
(2) and Permitted Payments permitted under Section 10.9(b)(iii).
2.13 Section 10.18. Clause (a) of Section 10.18 of the Credit Agreement is
amended in its entirety to read as follows:
(a) The obligations of the Company hereunder and under the other Loan
Documents are secured by 65% of the issued and outstanding Capital Stock of
Palestine Post, 50% of the issued and outstanding Capital Stock of JPEH, 80% of
the issued and outstanding Capital Stock of STDS, and 100% of the capital stock
of all other Restricted Subsidiaries (except AP-91 and its Subsidiaries and
APAC-90 8% Preferred Shares) and guaranteed by all the Restricted Subsidiaries
(other than AP-91's Subsidiaries, Palestine Post, JPEH, JPPL and STDS)
(including, promptly upon the acquisition or creation thereof, any Restricted
Subsidiary created or acquired after the date hereof),
2.14 Section 10.35. Section 10 of the Credit Agreement is amended by
inserting the following Section 10.35 at the end thereof:
5
<PAGE> 6
10.35. Additional Collateral. Promptly upon termination of the Holdco
Facility, pledge (or cause Hollinger International to pledge) any promissory
notes executed by FDTH in favor of the Company, Hollinger International or any
intermediate subsidiary between the Company and Hollinger International)
pursuant to the Holdco Pledge Agreement together with such endorsements and
other documentation, including evidence of necessary authorization and opinions
of counsel, as in the opinion of the Administrative Agent are appropriate.
2.15 Section 11.2.2. Section 11.2.2 of the Credit Agreement is amended in
its entirety to read as follows:
11.2.2 Holdco Facility and FDTH Credit Agreement. The Administrative
Agent shall have received evidence, reasonably satisfactory to the
Administrative Agent, that each of the Holdco Facility and the FDTH Credit
Agreement has closed on terms and conditions reasonably satisfactory to the
Administrative Agent (or equity and/or debt proceeds are available in lieu of
the Holdco Facility and/or a portion of the commitments under the FDTH Credit
Agreement) and that sufficient cash will be available to the Company to
consummate the Scheme and to repay certain Telegraph debt, taking into account
the Loans hereunder and the loans under the Holdco Facility and the FDTH Credit
Agreement (or equity and/or debt proceeds in lieu thereof).
2.16 Section 11.2. Section 11.2 of the Credit Agreement is amended by
inserting a new Section 11.2.14 as follows:
11.2.14 DTH/FDTH Preference Share Agreement. Hollinger Inc. shall have
entered into an agreement with the Administrative Agent in form and substance
satisfactory to the Administrative Agent whereby Hollinger Inc. agrees not to
exercise its rights under the DTH/FDTH Preference Share Agreement dated October
13, 1995 between Hollinger Inc. and Hollinger International.
2.17 Section 12.1.5. Section 12.1.5 of the Credit Agreement is amended by
inserting the words "or 10.35" immediately following the words "Section 10.18".
2.18 Section 12.1.12. Section 12.1.12 of the Credit Agreement is amended
by inserting, after the words "any Guarantor" each time they appear, the phrase
"or, any other Person other than the Administrative Agent who is a party to a
Collateral Document".
2.19 Schedule 1.1. Schedule 1.1 of the Credit Agreement is deleted and
Schedule 1.1 hereto is substituted therefor.
6
<PAGE> 7
2.20 Schedule 10.7. Schedule 10.7 of the Credit Agreement is deleted in
its entirety and Schedule 10.7 attached hereto is substituted therefor.
2.21 Schedule 14.3. Schedule 14.3 of the Credit Agreement is deleted in
its entirety and Schedule 14.3 attached hereto is substituted therefor, and the
Company hereby notifies the Administrative Agent and the Lenders that notices
under all Loan Documents to all Guarantors should be given to the address set
forth on Schedule 14.3
2.22 Exhibit B. Exhibit B to the Credit Agreement is deleted in its
entirety and Exhibit B to this Amendment is substituted therefor.
2.23 Exhibit E. Exhibit E-2 of the Credit Agreement is amended by deleting
references to the stock of DTH appearing on Schedule I thereto.
SECTION 3 REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders
and the Administrative Agent to execute and deliver this Amendment, the Company
hereby represents and warrants to each Lender and to the Administrative Agent
that:
(a) no Event of Default or Unmatured Event of Default has occurred and is
continuing or will result from the execution and delivery or effectiveness of
this Amendment; and
(b) the warranties of the Company contained in Section 9 of the Credit
Agreement are true and correct as of the date hereof, with the same effect as
though made on such date.
SECTION 4 CONDITIONS TO EFFECTIVENESS. The amendments set forth in Section
2 hereof shall become effective on the date (the "First Amendment Effective
Date") when the Administrative Agent shall have received all of the following,
each in form and substance satisfactory to the Administrative Agent:
(a) six counterparts of this Amendment executed by all of the parties
hereto;
(b) six reaffirmations executed by each Guarantor and Holdco
substantially in the form of Exhibit A hereto (the "Second Reaffirmation");
(c) a Note duly executed by the Company in favor of each Lender and
substantially in the form of Exhibit A to the Credit Agreement;
7
<PAGE> 8
(d) certified copies of the resolutions of the Board of Directors of the
Company, Holdco and the Guarantors authorizing or ratifying the execution,
delivery and performance of the Loan Documents required to be delivered by it
hereunder;
(e) a certificate of an authorized officer of the Company as to
satisfaction of items set forth in Section 3 of this Amendment;
(f) an opinion of Kirkpatrick & Lockhart LLP, counsel to the Company and
the Guarantors, in form and substance satisfactory to the Administrative Agent;
and
(g) such other documents as the Administrative Agent or any Lender may
reasonably request;
provided, however, that the amendments provided for in Section 2.2 of this
Amendment establishing a Sterling sublimit and in Section 2.14 of this Amendment
increasing the Commitment from $125,000,000 to $150,000,000 shall only be
effective upon (i) satisfaction of the conditions set forth in Sections 4(a)
through 4(f) above, (ii) termination of the Holdco Facility and (iii) reduction
in the commitments under FDTH Credit Agreement by $75,000,000.
SECTION 5 APPLICATION OF DEBT/EQUITY PROCEEDS. Hollinger International
entered into underwriting agreements on August 1, 1996 to issue (a) 10,000,000
shares of its Class A Common Stock (the "Equity Offering"), plus an additional
1,500,000 shares subject to over-allotment options (the "Equity Greenshoe") and
(b) 18,000,000 9.75% Preferred Redeemable Increased Dividend Equity Securities
(the "PRIDES Offering") depositary shares representing one half share of Series
B Convertible Preferred Stock, plus an additional 2,700,000 PRIDES subject to
over-allotment options (the "PRIDES Greenshoe"). The Lenders agree that
notwithstanding the provisions of Section 6 of the Credit Agreement, the
Debt/Equity Proceeds from the Equity Offering, the PRIDES Offering, the Equity
Greenshoe, if any, and the PRIDES Greenshoe, if any (collectively the
"Equity/PRIDE Proceeds") shall be applied as follows:
(a) the first $100,000,000 of Equity/PRIDE Proceeds shall be used to
replace the funds which would have been provided by the Holdco Facility,
(b) the next $75,000,000 of Equity/PRIDE Proceeds shall be used to
replace the funds which would have been available absent the $75,000,000
mandatory commitment reduction under the FDTH Credit Agreement, and
8
<PAGE> 9
(c) thereafter, 50% of the Equity/PRIDE Proceeds remaining after the
applications required under subsections (a) and (b) above shall be applied as a
permanent repayment of the CIBC Credit Facility such repayment to be made within
ten Business Days of receipt of such Equity/PRIDE Proceeds and 50% may be
retained by Hollinger International.
SECTION 6 FIRST AMENDMENT EFFECTIVE DATE ASSIGNMENTS. By its execution of
this Amendment TD Texas agrees, and by its execution of this Amendment each of
the lenders set forth on Schedule 1.1 attached hereto other than TD Texas (each
an "Assignee Lender" and collectively the "Assignee Lenders") agrees, that:
(a) effective as of the First Amendment Effective Date, (i) TD Texas (the
"Assignor Lender") will sell and assign an interest in and to 16.666666667% of
the Assignor Lender's respective rights and obligations under the Commitment and
its participation in Letters of Credit existing as of the First Amendment
Effective Date (such Commitment and participation in Letters of Credit of the
Assignor Lender being the "Assigned Interests") to each Assignee Lender, and
(ii) after giving effect to and on the First Amendment Effective Date, each
Assignee Lender will purchase and assume the Assigned Interests;
(b) as of the First Amendment Effective Date, prior to giving effect to
any assignment, purchase or assumption under this Section 5 as of such date, the
Assignor Lender represents and warrants, as to the assignment effected by the
Assignor Lender, that as of the Effective Date: (i) it has 100% of the
Commitment under the Credit Agreement; and (ii) that the Assignor Lender is the
legal and beneficial owner of the Assigned Interests being assigned by it
hereunder and that such Assigned Interests are free and clear of any adverse
claim or encumbrance by the Assignor Lender;
(c) each of the Assignor Lender and each Assignee Lender confirms and
agrees with each other as to the assignment effected by the Assignor Lender and
to the purchase and assumption effected by such Assignee Lender, as the case may
be, as follows: (i) except as set forth in Section 6(b), the Assignor Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Credit Agreement or this Amendment or with respect to the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement, any other "Loan Document" (as defined in the Credit
Agreement), this Amendment or any other Loan
9
<PAGE> 10
Document; (ii) the Assignor Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
or any Guarantor or the performance or observance by the Company or any
Guarantor of any of its obligations under the Credit Agreement, any other "Loan
Document" (as defined in the Credit Agreement), this Amendment or any other Loan
Document; (iii) each Assignee Lender confirms that it has received such
documents and information as it has deemed appropriate to make its own credit
analysis and decision to execute and deliver this Amendment and agrees that it
shall have no recourse against, any Agent, the Issuing Bank, the Assignor Lender
or any other Lender with respect to any matters relating to the Credit Agreement
or this Amendment; and (iv) each Assignee Lender will, independently and without
reliance upon any Agent, the Issuing Bank or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement and the other Loan Documents;
(d) effective as of the First Amendment Effective Date, (i) each Assignee
Lender shall be and be deemed a party to the Credit Amendment and, to the extent
provided in this Amendment, have the rights and obligations of a Lender
hereunder and (ii) the Assignor Lender shall, to the extent provided herein,
relinquish its rights and be released from its obligations under the Credit
Amendment as to any assignment effected pursuant to this Section 6;
(e) effective as of the First Amendment Effective Date, First Chicago
shall be appointed Documentation Agent under the Credit Agreement; and
(f) from and after the First Amendment Effective Date, the Administrative
Agent shall make all payments under this Amendment in respect of the Assigned
Interests assigned hereby (including, all payments of principal, interest and
commitment fees with respect thereto) to each Assignee Lender as a Lender
hereunder.
SECTION 7 GENERAL.
7.1 Reaffirmation of Loan Documents. From and after the date hereof, each
reference that appears in any other Loan Document to the Credit Agreement shall
be deemed to be a reference to the Credit Agreement as amended hereby. As
amended hereby, the Credit Agreement is hereby reaffirmed, approved and
confirmed in every respect, and shall remain in full force and effect.
10
<PAGE> 11
7.2 Counterparts; Effectiveness. This Amendment may be executed by the
parties hereto in any number of counterparts and by the different parties on
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Agreement.
7.3 Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. THIS AMENDMENT CONSTITUTES THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDES ANY PRIOR AGREEMENTS WITH RESPECT THERETO.
7.4 Loan Document. Each of this Amendment and the Reaffirmation is a Loan
Document.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
HOLLINGER INTERNATIONAL PUBLISHING INC.
By: /s/ KENNETH SEROTA
-------------------------
Vice President
<PAGE> 13
THE TORONTO-DOMINION BANK, as Issuing Bank
By: /s/ SOPHIA D. SGARBI
-----------------------------
Mgr. Syndications &
Credit Admin.
<PAGE> 14
TORONTO DOMINION (TEXAS), INC.,
individually, as Managing Agent
and as Administrative Agent
By: /s/ SOPHIA D. SGARBI
------------------------
Vice President
<PAGE> 15
THE FIRST NATIONAL BANK OF CHICAGO,
individually, as Managing Agent
and as Documentation Agent
By: /s/ JEFFREY B. BAKALAR
---------------------------
Vice President
<PAGE> 16
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, individually
and as Managing Agent
By: /s/ RUSSELL D. SOLOMON
-------------------------
Vice President
<PAGE> 17
BARCLAYS BANK PLC, individually, as
Managing Agent and as Syndication
Agent
By: /s/ FRANK J. SISINNI
------------------------
Director
<PAGE> 18
Exhibit A to
First Amendment
Agreement
FORM OF
SECOND REAFFIRMATION
THIS SECOND REAFFIRMATION (this "Second Reaffirmation")dated as of August
6, 1996, is made by the undersigned (collectively, the "Undersigned" and each an
"Undersigned"), in favor of the Lenders and the Administrative Agent (each as
defined below).
W I T N E S S E T H:
WHEREAS, Hollinger International Publishing Inc. (the "Company"), The
Toronto-Dominion Bank, as issuing bank (in such capacity, the "Issuing Bank")
and Toronto Dominion (Texas), Inc., as administrative agent (in such capacity,
together with any successors in such capacity, the "Administrative Agent")
entered into that Amended and Restated Credit Agreement dated as of May 30, 1996
(the "Amended and Restated Credit Agreement") whereunder certain financial
institutions agreed to make revolving loans and to issue letters of credit in
the maximum amount of $125,000,000; and
WHEREAS, each of the Undersigned was a party to one or more of the AP-91
Agreement, the Trademark Security Agreements, the Company Security Agreement,
the Hollinger International Guaranty, the Holdco Pledge Agreement, the Company
Pledge Agreement, the Reaffirmation and the Subsidiary Guaranty (collectively,
the "Reaffirmed Documents" and each a "Reaffirmed Document") relating to the
Amended and Restated Credit Agreement; and
WHEREAS, the Company desires to increase the revolving loan commitment
under the Amended and Restated Credit Agreement (to include availability for
revolving loans and the issuance of letters of credit) pursuant to which
borrowings of revolving loans in the maximum aggregate principal amount not to
exceed $150,000,000 would be made to the Company and to make certain other
amendments; and
WHEREAS, the Company has requested various financial institutions (together
with their respective successors and assigns, collectively the "Lenders" and
each individually a "Lender") to amend the Credit Agreement on the terms and
conditions set forth in the First Amendment Agreement, dated as of an even date
herewith, among the Company, the Lenders, the Issuing Bank, and the
Administrative Agent (the "First Amendment Agreement") to set forth, among other
things, the terms and conditions under which the Lenders thereafter will make
credit extensions to the Company; and
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<PAGE> 19
WHEREAS, as a condition precedent to the First Amendment Effective Date of
the First Amendment Agreement, the Undersigned are required to execute and
deliver this Second Reaffirmation; and
WHEREAS, each Undersigned has duly authorized the execution, delivery, and
performance of this Second Reaffirmation; and
WHEREAS, it is in the best interests of each Undersigned to execute this
Second Reaffirmation inasmuch as such Undersigned will derive substantial direct
and indirect benefits from the Loans made from time to time to the Company and
the Letters of Credit issued from time to time for the account of the Company
pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to enter into the First Amendment Agreement, each Undersigned agrees, for the
benefit of the Lenders and the Administrative Agent, as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Certain Terms. Capitalized terms used herein that are
defined in the Amended and Restated Credit Agreement shall have the same
meanings when used herein unless otherwise defined herein.
SECTION 1.2. Trademark Security Agreements. "Trademark Security
Agreements," as used in this Reaffirmation, means those four certain Trademark
Securities Agreements, each dated as of February 7, 1996, as amended, modified
or supplemented from time to time, executed by Chicago Sun-Times, Inc., Daily
Southtown Inc., Pioneer Newspapers Inc., and Chicago Sun-Times Features, Inc.,
respectively.
ARTICLE II.
REAFFIRMATION
SECTION 2.1. Reaffirmation. Each Reaffirmed Document remains in full
force and effect and is hereby ratified and confirmed, and from and after the
date hereof, each reference that appears in any of the Reaffirmed Documents to
the Amended and Restated Credit Agreement shall be deemed to be a reference to
the Amended and Restated Credit Agreement as amended by the First Amendment
Agreement.
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<PAGE> 20
SECTION 2.2. Subsidiary Note Acceleration. Each Undersigned which is the
maker of a Subsidiary Note pledged to the Administrative Agent for the benefit
of the Lenders hereby consents to acceleration of its Subsidiary Note in
accordance with the terms of Section 6(c) of the Company Pledge Agreement.
ARTICLE III.
MISCELLANEOUS PROVISIONS
SECTION 3.1. Loan Document. This Second Reaffirmation is a Loan Document
executed pursuant to the Amended and Restated Credit Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 3.2. Binding on Successors, Transferees and Assigns; Assignment of
Reaffirmation. This Second Reaffirmation shall be binding upon each Undersigned
and their respective successors, transferees and assigns, and all references
herein to any Undersigned shall be deemed to include any of such Person's
successor or successors, whether intermediate or remote.
SECTION 3.3. Amendments, etc. No amendment to or waiver of any provision
of this Second Reaffirmation, nor consent to any departure by any Undersigned
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent and each Undersigned, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 3.4. Addresses for Notices to the Undersigned. All notices
hereunder to any Undersigned shall be in writing (including via facsimile) and
shall be sent to it at the address or facsimile number set forth below its
signature hereto or at such other address or facsimile number as may be
designated by such Undersigned in a written notice received by the
Administrative Agent. Notices sent by facsimile transmission shall be deemed to
have been given when sent; notices sent by mail shall be deemed to have been
given three Business Days after the date when sent by registered or certified
mail, postage prepaid; and notices sent by hand delivery shall be deemed to have
been received when received.
SECTION 3.5. Section Captions. Section captions used in this Second
Reaffirmation are for convenience of reference only, and shall not affect the
construction of this Second Reaffirmation.
SECTION 3.6. Severability. Wherever possible each provision of this
Second Reaffirmation shall be interpreted in such manner as to be effective and
valid under applicable law, but if any
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<PAGE> 21
provision of this Second Reaffirmation shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Second Reaffirmation.
SECTION 3.7. Governing Law, Entire Agreement, Counterparts, etc. This
Second Reaffirmation shall be governed by and construed in accordance with the
laws of the State of New York without reference to conflicts of laws principles.
This Second Reaffirmation and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and thereof and supersede any prior agreements, written or oral, with respect
thereto. This Second Reaffirmation may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Reaffirmation. At any
time after the date of this Second Reaffirmation, one or more additional persons
or entities may become parties hereto by executing and delivering to the
Administrative Agent a counterpart of this Second Reaffirmation. Immediately
upon such execution and delivery (and without any further action), each such
additional person or entity will become a party to, and will be bound by all the
terms of, this Second Reaffirmation.
SECTION 3.8. Forum Selection And Consent To Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SECOND
REAFFIRMATION OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT ANY ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH UNDERSIGNED HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH
UNDERSIGNED FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. EACH UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
SECTION 3.9. Waiver of Jury Trial. EACH UNDERSIGNED AND, BY ACCEPTING THE
BENEFITS HEREOF, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
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<PAGE> 22
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS SECOND REAFFIRMATION, ANY OTHER LOAN DOCUMENT AND ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THE FOREGOING, AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.
A-5
<PAGE> 23
IN WITNESS WHEREOF, each Undersigned has caused this Second
Reaffirmation to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
HOLLINGER INTERNATIONAL INC.
HOLLINGER INTERNATIONAL PUBLISHING HOLDINGS
INC. HOLLINGER INTERNATIONAL PUBLISHING INC.
By:_______________________________
Name:_____________________________
Title:____________________________
Address: 606 N. Van Buren
Marion, Illinois 62959
Facsimile No.:____________________
Attention:________________________
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 24
AMERICAN PUBLISHING (1991) INC.
By:__________________________________
Name:________________________________
Title:_______________________________
Address: 606 N. Van Buren
Marion, Illinois 62959
Facsimile No.:_______________________
Attention:___________________________
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 25
APAC-95 INC.
AMERICAN PUBLISHING HOLDINGS INC.
AMERICAN PUBLISHING SERVICES, INC.
VALLEY CABLE T.V., INC.
THE SUN-TIMES COMPANY
AMERICAN PUBLISHING COMPANY
APC 1993, INC.
APMS-93, INC.
CHICAGO SUN-TIMES, INC.
CHICAGO SUN-TIMES FEATURES, INC.
PIONEER NEWSPAPERS INC.
STAR PUBLICATIONS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
Address: 606 N. Van Buren
Marion, Illinois 62959
Facsimile No.:_____________________
Attention:_________________________
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 26
APAC-95 INDIANA HOLDINGS, INC.
APAC-95 KANSAS HOLDINGS, INC.
APAC-95 KENTUCKY HOLDINGS, INC.
APAC-95 MISSOURI HOLDINGS, INC.
APAC-95 NEW YORK HOLDINGS, INC.
APAC-95 OHIO HOLDINGS, INC.
APAC-95 OKLAHOMA HOLDINGS, INC.
APAC-95 TEXAS HOLDINGS, INC.
APMS-95 INC.
THE POST PUBLISHING COMPANY
By:________________________________
Name:______________________________
Title:_____________________________
Address: 606 N. Van Buren
Marion, Illinois 62959
Facsimile No.:_____________________
Attention:_________________________
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 27
DAILY SOUTHTOWN INC.
APAC-90 INC.
APAC-90 ARKANSAS HOLDINGS, INC.
APAC-90 CALIFORNIA HOLDINGS, INC.
APAC-90 INDIANA HOLDINGS, INC.
APAC-90 KANSAS HOLDINGS, INC.
APAC-90 TEXAS HOLDINGS, INC.
APAC-90 NORTH DAKOTA HOLDINGS, INC.
APAC ILLINOIS HOLDINGS, INC.
APC PENNSYLVANIA HOLDINGS, INC.
APMS-90, INC.
AMERICAN PUBLISHING COMPANY OF KENTUCKY
AMERICAN PUBLISHING COMPANY OF NEBRASKA
AMERICAN PUBLISHING COMPANY OF
NORTH CAROLINA
AMERICAN PUBLISHING COMPANY OF TENNESSEE
KIRKSVILLE PUBLISHING COMPANY
MERIDIAN STAR, INC.
THE STATESMAN-EXAMINER, INC.
SOUTHERN SISKIYOU NEWSPAPERS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
Address: 606 N. Van Buren
Marion, Illinois 62959
Facsimile No.:_____________________
Attention:_________________________
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Facsimile No.: (312) 321-0629
Attention: Kenneth L. Serota
<PAGE> 28
SCHEDULE 14.3
ADDRESSES FOR NOTICES
HOLLINGER INTERNATIONAL PUBLISHING INC.
Address: 10 Toronto Street
Toronto, Ontario M5C2B7
Attention: Jack Boultbee
Facsimile: (416) 364-0832
With a copy to:
Address: 401 North Wabash Avenue
Chicago, Illinois 60611
Attention: Kenneth L. Serota
Facsimile: (312) 321-0629
With a copy to:
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222
Attention: Jerry H. Owens
Facsimile: (412) 355-6501
TORONTO DOMINION (TEXAS), INC.
Address: 909 Fannin, Suite 1700
Houston, Texas 77010
Attention: Manager, Agency
Facsimile: (713) 951-9921
THE TORONTO-DOMINION BANK
Address: U.S.A. Division
31 West 52nd Street
New York, New York 10019
Attention: Robert Stevens
Facsimile: (212) 262-1928
<PAGE> 29
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
Address: 335 Madison Avenue
New York, New York 10017
Attention: Russ Solomon
Facsimile: (212) 503-7173
BARCLAYS BANK PLC
Address: 388 Market Street
Suite 1700
San Francisco, California 94111
Attention: Frank Sisinni
Facsimile: (415) 765-4760
THE FIRST NATIONAL BANK OF CHICAGO
Address: 1 First National Plaza
Suite 0629
Chicago, Illinois 60670
Attention: John Speer
Facsimile: (312) 732-8587
A-2
<PAGE> 30
SCHEDULE 10.7
DEBT
<PAGE> 1
Exhibit 99.01
P R E S S R E L E A S E
FOR IMMEDIATE RELEASE
Contact:
Paul B. Healy, Vice President Jack A. Boultbee
Investor Relations Chief Financial Officer
and Corporate Development Hollinger International Inc. and
Hollinger International Inc. Hollinger Inc. (Canada)
(212) 536-4025 (416) 363-8721
NEW YORK, AUGUST 9, 1996--HOLLINGER INTERNATIONAL INC. (NYSE: HLR) announces
the completion of the successful sale of 11,500,000 of its Class A Common Stock
and 20,700,000 9 3/4% Preferred Redeemable Increased Dividend Equity Securities
(PRIDES(SM)), following the exercise by the underwriters of their
over-allotment options.
Issue price of the Class A Common Stock and the PRIDES(SM) was $9.75 per share,
a 5.5% increase in price compared to those shares issued in February 1996. The
last sale price of the Class A Common Stock as reported on the NYSE composite
tape on August 8, 1996, was $10.25 per share. Both categories of securities
were substantially over-subscribed.
The aggregate net proceeds of these offerings to the Company of US $308.6
million are being used, first, to finance a portion of the Company's
acquisition of the minority shares of The Telegraph plc (U.K.) and to pay
outstanding indebtedness of The Telegraph and related transaction costs, and
second, to pay a portion of the Company's bank indebtedness used to finance the
purchase of additional common shares of Southam Inc. Finally, the balance will
be used for general corporate purposes, including working capital.
The Company's chief financial officer, J. A. Boultbee, commented: "This is a
very satisfactory assimilation of the privatization of The Telegraph, and the
purchase of control of Southam Inc., Canada's largest newspaper publisher,
particularly given recent unsettled market conditions. As a result of these
successful offerings the balance sheet of the Company has been significantly
strengthened, enhancing the Company's financing and corporate flexibility."
Hollinger International, through subsidiaries and affiliated companies, is a
leading publisher of English-language newspapers in the United States, the
United Kingdom, Australia, Canada and Israel. Included among the 131 daily
newspapers which the Company owns or has an interest in are the Chicago
Sun-Times and The Daily Telegraph. These 131 newspapers have a worldwide daily
combined circulation of approximately 4.3 million. In addition, the company
owns or has an interest in 379 non-daily newspapers as well as magazines and
other publications.
