UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
Hollinger International Inc.
(Name of Issuer)
Class A Common Stock, par value $.01 per share
(Title of Class of Securities)
435569 10 8
--------------------------------------
(CUSIP Number)
Charles G. Cowan, Q.C.
Vice-President and Secretary
Hollinger Inc.
10 Toronto Street
Toronto, Ontario
Canada M5C 2B7
(416) 363-8721
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
June 14, 1996
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ] .
Check the following box if a fee is being paid with this
statement [ ]. (A fee is not required only if the filing person:
(1) has a previous statement on file reporting beneficial
ownership of more than five percent of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter the disclosures provided
in a prior cover page.
<PAGE>
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D/A
CUSIP No. 435569 10 8
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Hollinger Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP*
a [ ]
b [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
7 SOLE VOTING POWER
NUMBER OF 54,391,797
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
9 SOLE DISPOSITIVE POWER EACH
54,391,797 REPORTING
10 SHARED DISPOSITIVE POWER PERSON
0 WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
54,391,797
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
69.0%
14 TYPE OF REPORTING PERSON*
HC (Hollinger Inc. is a parent holding
company. See Item 5.<PAGE>
SCHEDULE 13D/A
CUSIP No. 435569 10 8
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
The Ravelston Corporation Limited
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP*
a [ ]
b [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ontario, Canada
7 SOLE VOTING POWER
NUMBER OF 54,391,797
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
9 SOLE DISPOSITIVE POWER EACH
54,391,797 REPORTING
10 SHARED DISPOSITIVE POWER PERSON
0 WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
54,391,797
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
69.0%
14 TYPE OF REPORTING PERSON*
HC (The Ravelston Corporation Limited is a
parent holding company. See Item 4.)
<PAGE>
SCHEDULE 13D/A
CUSIP No. 435569 10 8
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Conrad M. Black
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
a [ ]
b [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
7 SOLE VOTING POWER
54,481,397
NUMBER OF
8 SHARED VOTING POWER SHARES
0 BENEFICIALLY
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 54,481,397
REPORTING
10 SHARED DISPOSITIVE POWER PERSON
0 WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
54,481,397
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
69.0%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 13D/A
(Amendment No. 3)
This Schedule 13D/A, Amendment No. 3 (the "Amendment"),
amends and restates in its entirety the Schedule 13D of the
filing persons dated October 20, 1995, as amended by Amendment
No. 1 thereto dated February 7, 1996 and by Amendment No. 2
thereto dated March 7, 1996.
Item 1. Security and Issuer.
This Schedule relates to the Class A Common Stock, par
value $.01 per share (CUSIP Number: 435569 10 8) ("Class A Common
Stock"), of Hollinger International Inc., a Delaware corporation
formerly named American Publishing Company (the "Issuer"). The
Issuer's principal executive office is located at 401 North
Wabash Avenue, Chicago, Illinois 60611. There are 58,065,754
shares of Class A Common Stock outstanding.
Item 2. Identity and Background.
The persons filing this Schedule are Hollinger Inc.,
The Ravelston Corporation Limited ("Ravelston") and The Hon.
Conrad M. Black. Set forth below is certain information relating
to these filing persons, and, with respect to Hollinger Inc. and
Ravelston, information relating to their respective directors and
executive officers:
Hollinger Inc.
(a) Name: Hollinger Inc.
(b) Address: 10 Toronto Street
Toronto, Ontario, Canada M5C 2B7
(c) Principal
Business: Hollinger Inc. is an international
newspaper company, which, directly and
through its subsidiaries and associated
companies (including the Issuer), is
engaged primarily in the publishing,
printing and distribution of newspapers
and magazines in the United Kingdom, the
United States, Canada, Australia and
Israel.
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<PAGE>
(d),(e) Certain
Proceedings: During the last five years, Hollinger
Inc. has not been the subject of any of
the type of legal proceedings specified
in Items 2(d) and (e) of Schedule 13D.
(f) Citizenship: Hollinger Inc. is a corporation
organized and existing under the laws of
Canada.
Ravelston
(a) Name: The Ravelston Corporation Limited
(b) Address: 10 Toronto Street
Toronto, Ontario, Canada M5C 2B7
(c) Principal
Business: Investment holding company.
(d),(e) Certain
Proceedings: During the last five years, Ravelston
has not been the subject of any of the
type of proceedings specified in Items
2(d) and (e) of Schedule 13D.
(f) Citizenship: Ravelston is a corporation organized and
existing under the laws of the Province
of Ontario, Canada.
Directors and Executive Officers of Hollinger Inc. and
Ravelston (Including Mr. Black):
Unless otherwise noted, the business address of each of
the individuals listed below is 10 Toronto Street, Toronto,
Ontario, Canada M5C 2B7. During the last five years, none of the
individuals listed below has been the subject of any of the type
of legal proceedings specified in Items 2(d) and (e) of Schedule
13D.
Positions with
Hollinger Inc.,
Ravelston and the Principal
Name (Citizenship) Issuer Occupation
----------------- ----------------- ----------
Peter Y. Atkinson Vice-President, Vice-President and
(Canada) General Counsel and General Counsel of
Director of Hollinger Hollinger Inc.
Inc.
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<PAGE>
Positions with
Hollinger Inc.,
Ravelston and the Principal
Name (Citizenship) Issuer Occupation
----------------- ----------------- ----------
Ralph M. Barford Director of Hollinger President of
(Canada) Inc. Valleydene
Corporation Limited
(investment
company), Suite
1903, 20 Eglinton
Avenue West,
Toronto, Ontario,
Canada M4R 1K8
Barbara Amiel Vice-President, Journalist; Vice-
Black Editorial and President,
(Canada) Director of Hollinger Editorial of
Inc.; Vice-President, Hollinger Inc.
Editorial of the
Issuer
The Hon. Conrad M. Chairman of the Chairman of the
Black, P.C., O.C. Board, Chief Board and Chief
(Canada) Executive Officer and Executive Officer
a Director of of Hollinger Inc.
Hollinger Inc.,
Ravelston and the
Issuer
G. Montegu Black Director of Hollinger Chairman and
(Canada) Inc. President of
Txibanguan Limited
(investment holding
company), 1969
Leslie Street,
North York,
Ontario, Canada M3B
2M3
J. A. Boultbee Vice-President, Vice-President,
(Canada) Finance and Treasury Finance and
and Director of Treasury of
Hollinger Inc. and Hollinger Inc.
Ravelston; Vice-
President, Finance
and Treasury of the
Issuer
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<PAGE>
Positions with
Hollinger Inc.,
Ravelston and the Principal
Name (Citizenship) Issuer Occupation
----------------- ----------------- ----------
Tullio Cedraschi Director of Hollinger President and Chief
(Canada) Inc. Executive Officer
of CN Investment
Division, Canadian
National Railway
Company (railway
company), 5 Place
Ville Marie, Suite
1515, Box 11002,
Montreal, Quebec,
Canada H3C 4T2
Dixon S. Chant Deputy Chairman of Deputy Chairman of
(Canada) the Board and the Board of
Director of Hollinger Hollinger Inc.
Inc., Ravelston and
the Issuer
Daniel W. Colson Director of Hollinger Deputy Chairman and
(Canada) Inc.; Chief Executive Chief Executive of
of The Telegraph plc The Telegraph plc
and Director of the (newspaper
Issuer publishing
company), 1 Canada
Square, Canary
Wharf, London,
England E14 5DT
Charles G. Cowan, Vice-President, Vice-President and
Q.C. Secretary and Secretary of
(Canada) Director of Hollinger Hollinger Inc.
Inc. and Ravelston
Frederick A. Controller of Controller of
Creasey Hollinger Inc. and Hollinger Inc.
(Canada) Ravelston; Group
Corporate Controller
of the Issuer
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<PAGE>
Positions with
Hollinger Inc.,
Ravelston and the Principal
Name (Citizenship) Issuer Occupation
----------------- ----------------- ----------
Pierre Des Marais Director of Hollinger President and Chief
II Inc. Executive Officer
(Canada) of UniM dia Inc.
(newspaper
publishing
company), Suite
3200, 600 de
Maisonneuve
Boulevard West,
Montreal, Quebec,
Canada H3A 3J2
Garth H. Director of Hollinger Chairman and Chief
Drabinsky, O.C. Inc. Executive Officer
(Canada) of Livent Inc.
(musical theatre
company)
Fredrik S. Eaton, Director of Hollinger Chairman, Executive
O.C. Inc. Committee, Eaton's
(Canada) of Canada Limited
(retail company),
15th Floor, 250
Yonge Street,
Toronto, Ontario,
Canada M5B 1C8
R. Donald Director of Hollinger Chairman of the
Fullerton Inc. Executive
(Canada) Committee, Canadian
Imperial Bank of
Commerce (chartered
bank), Suite 3620,
Commerce Court
West, Toronto,
Ontario, Canada M5L
1A2
Marianne Godwin Vice President, Vice President,
Strategic and Strategic and
Corporate Development Corporate
of Hollinger Inc. Development of
Hollinger Inc.
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<PAGE>
Positions with
Hollinger Inc.,
Ravelston and the Principal
Name (Citizenship) Issuer Occupation
----------------- ----------------- ----------
Allan E. Gotlieb, Director of Hollinger Chairman, Burson-
C.C. Inc. Marsteller, Canada
(Canada) (public relations
counsellors), Suite
5300, Commerce
Court West,
Toronto, Ontario
M5L 1B9
Henry H. Ketcham Director of Hollinger President and Chief
III Inc. Executive Officer
(Canada) of West Fraser
Timber Co. Ltd.
(forestry company)
Robert W. Legg Treasurer of Treasurer of
(Canada) Hollinger Inc. and Hollinger Inc.
Ravelston
F. David Radler President, Chief President and Chief
(Canada) Operating Officer and Operating Officer
Director of Hollinger of Hollinger Inc.,
Inc. and the Issuer; 1827 West 5th
President and Avenue, 2nd Floor,
Director of Ravelston Vancouver, British
Columbia, Canada
V6J 1P5
Maureen J. Sabia Director of Hollinger Lawyer, Corporate
(Canada) Inc. Director and
President of
Maureen Sabia
International
(consulting
company)
Tatiana Samila Assistant Controller Assistant
(Canada) of Hollinger Inc. and Controller of
Ravelston Hollinger Inc.
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<PAGE>
Positions with
Hollinger Inc.,
Ravelston and the Principal
Name (Citizenship) Issuer Occupation
----------------- ----------------- ----------
Peter G. White Director of Hollinger Chairman of the
(Canada) Inc.; Executive Vice- Board of UniM dia
President and Inc. (newspaper
Director of Ravelston publishing company)
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to a Share Exchange Agreement dated as of July
19, 1995 between the Issuer and Hollinger Inc., which is
incorporated by reference herein as Exhibit 2, Hollinger Inc.
acquired 33,610,754 shares of the Issuer's Class A Common Stock
(the "Class A Shares") and 739,500 shares of non-voting Series A
Redeemable Convertible Preferred Stock, par value $.01 per share
(the "Series A Preferred Shares"), on October 13, 1995 in
connection with a corporate reorganization of the international
newspaper interests of Hollinger Inc. and the Issuer (the
"Reorganization"). The Class A Shares and the Series A Preferred
Shares were issued to Hollinger Inc. in exchange for all of the
outstanding ordinary share capital of DT Holdings Limited
("DTH"). At closing, Hollinger Inc. and the Issuer entered into
the DTH/FDTH Preference Share Agreement which requires the Issuer
to compensate Hollinger Inc. for its potential liability to
holders of certain preference shares of DTH and its subsidiary
First DT Holdings Limited ("FDTH") pursuant to Hollinger Inc.'s
existing credit support commitments, which could be affected by
future actions taken by Hollinger Inc., the Issuer, DTH and FDTH.
Hollinger Inc. beneficially owns 14,990,000 shares of
the Issuer's Class B Common Stock, par value $.01 per share (the
"Class B Shares"). The Class B Shares were issued to Hollinger
Inc. in May 1994 in connection with a recapitalization effected
by the Issuer concurrently with the initial public offering of
its Class A Common Stock. The Class B Shares were issued to
Hollinger Inc. in consideration for (i) the conversion of
$44,500,000 in intercompany indebtedness owed by the Issuer to
Hollinger Inc., (ii) the conversion of the common stock of the
Issuer then held by Hollinger Inc. (which represented 100% of the
Issuer's common stock at that time) and (iii) the transfer of
Hollinger Inc.'s 99.3% interest in Jerusalem Post Publications
Limited.
In May 1994, Conrad Black Capital Corporation acquired
9,600 shares of Class A Common Stock for cash. Mr. Black is the
- 12 -
<PAGE>
sole shareholder and Chairman of Conrad Black Capital
Corporation. In addition, Mr. Black has been granted options to
purchase 80,000 shares of the Issuer's Class A Common Stock
pursuant to the Issuer's 1994 Stock Option Plan.
Item 4. Purpose of Transaction.
Hollinger Inc. currently owns shares of both classes of
the Issuer's Common Stock representing approximately 88% of the
combined voting power of such classes (without giving effect to
any conversion of the Series A Preferred Shares). As a result,
Hollinger Inc. is in a position to control the outcome of
substantially all actions of the Issuer requiring stockholder
approval, including the election of the entire Board of Directors
of the Issuer. Subject to the fiduciary responsibilities of the
directors of the Issuer to all stockholders and the terms of
certain agreements defining the ongoing relationships between
Hollinger Inc. and the Issuer, Hollinger Inc., through its
ability to control the outcome of any election of directors, is
able to direct management policy, strategic direction and
financial decisions of the Issuer.
Ravelston effectively controls Hollinger Inc. through
its direct or indirect control or direction over 46.4% of the
outstanding common shares of Hollinger Inc. This percentage
includes Hollinger Inc. common shares held by the Ravelston Trust
and the following direct and indirect subsidiaries of Ravelston:
Argus Corporation Limited, 176264 Canada Limited, 2753430 Canada
Limited, 176268 Canada Limited and 176295 Canada Limited. The
Ravelston Trust was formed pursuant to a Trust Agreement dated as
of October 31, 1991 among Ravelston, the Canadian Imperial Bank
of Commerce ("CIBC") and Mr. Black, J. A. Boultbee and R.
Geoffrey Browne, as trustees (the "Trustees"). The Trustees have
granted Ravelston an irrevocable proxy to vote all of the
Hollinger Inc. common shares held by the Ravelston Trust as long
as the Ravelston Trust holds such common shares. As the holder
of 100 units of the Ravelston Trust, Ravelston has the right to
direct the disposition of 100 of the Hollinger Inc. common shares
held by the Ravelston Trust. As the holder of the remaining
5,531,915 units of the Ravelston Trust, CIBC has the right to
direct the disposition of 5,531,915 of the Hollinger Inc. common
shares held by the Ravelston Trust. Conrad Black Capital
Corporation holds 65.3% of the common shares of Ravelston. Mr.
Black is the sole shareholder and Chairman of Conrad Black
Capital Corporation.
As a result of the performance of their duties as
directors and officers of the Issuer, certain directors and
officers of Hollinger Inc. and Ravelston, including Mr. Black,
expect to have continually under consideration various plans or
proposals which may relate to or might result in one or more of
the matters described in paragraphs (a) through (j), inclusive,
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<PAGE>
of Item 4 of Schedule 13D. Any such plans or proposals would,
however, be subject to consideration and approval by the Board of
Directors of the Issuer.
On April 24, 1996, the Board of Directors of the Issuer
announced a recommended proposal by the Issuer to acquire all of
the outstanding ordinary shares of The Telegraph plc ("The
Telegraph") not presently controlled by the Issuer (the
"Telegraph Minority Shares"). The consideration to be paid to
the holders of the Telegraph Minority Shares would consist of (i)
cash of 5.60 ($8.68 as of May 31, 1996) per share; (ii) a
special cash dividend of 10p ($0.15 as of May 31, 1996) per
share; (iii) a contingent cash payment to be made by FDTH if The
Telegraph's approximate 25% interest in John Fairfax Holdings
Limited 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. In addition, outstanding Telegraph
options, to the extent permitted by their terms, will become
vested and paid in cash as part of the transaction. The total
consideration payable by the Issuer (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) is
estimated at approximately $453 million as of May 31, 1996. The
acquisition will be affected 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 would become
an indirect wholly owned subsidiary of the Issuer. Consummation
of the Scheme will require the approval of a majority in number,
representing three-fourths in value, of the holders of the
Telegraph Minority Shares present and voting at meetings of The
Telegraph's shareholders, as well as the approval of an English
court. It is presently expected that the Scheme, if approved,
would become 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 (including
Issuer subsidiaries) would be made on or about August 8, 1996.
The Issuer has entered into definitive agreements with
certain financial institutions for short-term bank credit
facilities and bridge financing in the aggregate amount of
approximately $600 million to provide the necessary financing for
the Scheme and to repay outstanding indebtedness of The
Telegraph.
On May 24, 1996, a wholly owned subsidiary of Hollinger
Inc. purchased from a subsidiary of Power Corporation of Canada
("Power") the 16,349,743 common shares (the "Power Shares") of
Southam Inc. ("Southam") held by Power, representing
approximately 21.5% of Southam's outstanding common shares, at a
price of Cdn.$18 per share. This purchase increases the Issuer's
and Hollinger Inc.'s combined holdings in Southam to
- 14 -
<PAGE>
approximately 41% of Southam's outstanding common shares,
including 19.5% which is currently held indirectly by the Issuer.
The Issuer will have the right to acquire a substantial equity
interest in the subsidiary company which purchased the Power
Shares. Hollinger Inc. intends to further increase its holdings
in Southam through permissible off-market transactions to or
above 50% of Southam's outstanding common shares and may also,
subject to market and other conditions, seek to acquire all
Southam common shares not owned or controlled by Hollinger Inc.
or the Issuer through an offer of the Issuer's Class A common
stock or securities convertible into or exchangable for such
stock.
The purchase of the Power Shares was financed by the
Issuer through a short-term bank credit facility (the "Southam
Facility") in the amount of Cdn.$300 million between the Issuer
and CIBC. The Southam Facility is guaranteed by Hollinger Inc.
and matures on November 25, 1996. The funds under the Southam
Facility were advanced by the Issuer to a Canadian subsidiary of
Hollinger Inc. as an intercompany loan. The Hollinger Inc.
guarantee of the Southam Facility is secured by a pledge of the
Power Shares, 7,539,028 shares of Class A Common Stock of the
Issuer held by Canada Limited and 14,990,000 shares of the
Company's Class B Common Stock held by Ontario Limited. Existing
registration rights agreements and security agreements entered
into by Hollinger Inc. and its Canadian lenders have been amended
to reflect the pledges under the Southam Facility. See Item 6.
On June 14, 1996 the Issuer filed a registration
statement with the Securities and Exchange Commission in
connection with a proposed underwritten public offering of
13,000,000 shares of Class A Common Stock, plus an additional
1,950,000 shares that are subject to an over-allotment option to
be granted to the underwriters. Concurrently with this equity
offering, the Issuer plans to raise approximately $250 million
pursuant to an underwritten public offering of securities which
will be mandatorily exchangeable into shares of Class A Common
Stock in 1999. These offerings are expected to be made in the
third quarter of 1996, subject to market conditions. Funds
raised from these offerings, to the extent available, would be
used to replace or repay portions of the Scheme financing
arrangements and to repay a portion of the Southam Facility.
In addition, the Issuer has stated its intention that
it or a subsidiary will issue approximately $325 million
principal amount of debt securities after completion of the
equity offering, subject to market conditions and other factors.
The Issuer anticipates that proceeds from such this debt offering
would be used to repay a portion of the bank indebtedness
incurred in connection with the Scheme.
- 15 -
<PAGE>
In the first quarter of 1996 the Issuer increased its
quarterly dividend to $0.10 per share of Common Stock. This
dividend is four times greater than the former regular quarterly
dividend of $0.025 per share which had been paid since the third
quarter of 1994. In its announcement of the dividend, the Board
of Directors of the Issuer stated that it believes that the
increase in the dividend is warranted by the Issuer's increased
financial capacity as a result of the Reorganization and the
consummation of recent debt and equity offerings. However, the
declaration and payment by the Issuer of future dividends on its
Common Stock will depend on the Issuer's results of operations,
financial condition and cash requirements, the ability of its
United States and foreign subsidiaries (principally The Telegraph
plc) to pay dividends and make other payments to the Company
under applicable law and subject to restrictions contained in
existing and future loan agreements, the preference share terms
and other financing obligations to third parties relating to such
United States or foreign subsidiaries of the Issuer, as well as
foreign and United States tax liabilities with respect to
dividends and other payments from those entities, and other
factors deemed relevant by the Board of Directors of the Issuer.
As stockholders, the filing persons intend to
periodically review and evaluate the market for the Issuer's
Common Stock, the Issuer's business, prospects and financial
condition, general economic conditions and other opportunities
available to the filing persons. On the basis of such periodic
reviews and evaluations, the filing persons may, subject to
certain restrictions imposed by the Share Exchange Agreement and
the Lock-up Agreements as described in Item 6 hereof, determine
to increase or decrease their investment in the Common Stock
through purchases, sales, gifts, or other means of acquisition or
disposition. Among other things, Hollinger Inc. may sell a
portion of the Class A Shares in a secondary offering or
otherwise. The filing persons do not currently anticipate that
any sales, if made, would reduce their beneficial ownership to
less than 50% of the combined voting power of the Issuer's Class
A and Class B Common Stock.
Item 5. Interest in Securities of the Issuer.
Hollinger Inc. and Ravelston
(a) Amount Beneficially Owned: 54,391,797 shares of Class
A Common Stock; 69.0% (calculated pursuant to Rule 13d-
3). Comprised of the following: (i) 10,121,726 shares
of Class A Common Stock held directly by Hollinger
Inc.; (ii) 7,539,028 shares of Class A Common Stock
held by 3184081 Canada Limited ("Canada Limited"), a
wholly owned subsidiary of Hollinger Inc.; (iii)
15,950,000 shares of Class A Common Stock held by
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<PAGE>
1159670 Ontario Limited ("Ontario Limited"), an
indirect wholly owned subsidiary of Hollinger Inc.;
(iv) 14,990,000 shares of Class A Common Stock that may
be acquired at any time by the conversion of 14,990,000
shares of Class B Common Stock held by Ontario Limited;
and (v) at an initial conversion price of $14.00 per
share, 5,791,043 shares of Class A Common Stock that
may be acquired at any time by the conversion of
739,500 shares of Series A Preferred Stock held
directly by Hollinger Inc. (taking each share of Series
A Preferred Stock at Cdn.$146.625 and assuming an
exchange rate of $1.00 per Cdn.$1.3374, as in effect on
October 13, 1995, the date on which such shares were
acquired). The number of shares of Class A Common
Stock into which the Series A Preferred Shares may be
converted will fluctuate from time to time based on
changes in the conversion rate and/or exchange rate.
Through its relationship with Hollinger Inc. described
in Item 4 hereof, Ravelston may be deemed to
beneficially own all of the securities of the Issuer
that are held by Hollinger Inc. and its subsidiaries.
(b) Voting Power; Dispositive Power: Hollinger Inc. has
the sole power to vote or to direct the vote of and to
dispose of or direct the disposition of 54,391,797
shares of Class A Common Stock. Through its
relationship with Hollinger Inc. described in Item 4
hereof, Ravelston may also be deemed to have the sole
power to vote or to direct the vote of these shares.
(c) Not applicable.
(d) Right to Receive Dividends or Proceeds: Canada Limited
and Ontario Limited have the right to receive the
dividends from or the proceeds from the sale of the
securities which they hold. The shares of Class A
Common Stock held by Canada Limited constitute 13.0% of
the outstanding shares of Class A Common Stock. The
shares of Class A and Class B Common Stock held by
Ontario Limited constitute 42.4% of the outstanding
shares of Class A and Class B Common Stock.
(e) Not applicable.
The amount and percentage of Class A Common Stock
beneficially owned by Hollinger Inc. and Ravelston exclude 89,600
shares of Class A Common Stock beneficially owned by Mr. Black.
Pursuant to Rule 13d-4, Hollinger Inc. and Ravelston hereby
expressly disclaim beneficial ownership of such shares.
- 17 -
<PAGE>
Directors and Executive Officers of Hollinger Inc. and
Ravelston (Other Than Mr. Black):
Except as described below, the directors and executive
officers of Hollinger Inc. and Ravelston (other than Mr. Black)
do not beneficially own any shares of Class A Common Stock.
Barbara Amiel Black, Mr. Black's wife, disclaims beneficial
ownership of any shares of Class A Common Stock beneficially
owned by Mr. Black.
Number of Shares of
Name Class A Common Stock
Beneficially Owned*
J. A. Boultbee 6,000
Dixon S. Chant 17,500
Charles G. Cowan, Q.C. 6,000
F. David Radler 29,600
* Includes shares subject to presently exercisable
options or options exercisable within 60 days of June
14, 1996 under the Issuer's 1994 Stock Option Plan as
follows: Mr. Boultbee, 6,000 shares; Mr. Chant, 10,000
shares; Mr. Cowan, 6,000 shares; and Mr. Radler, 20,000
shares.
Mr. Black
(a) Amount Beneficially Owned: 54,481,397 shares of Class
A Common Stock; 69.0% of class (calculated pursuant to
Rule 13d-3). Comprised of the following: (i)
54,391,797 shares of Class A Common Stock beneficially
owned by Hollinger Inc. and Ravelston; (ii) 9,600
shares of Class A Common Stock held by Conrad Black
Capital Corporation; and (iii) 80,000 shares of Class A
Common Stock that may be acquired by Mr. Black upon the
exercise of all outstanding options held by him,
whether or not presently exercisable or exercisable
within 60 days of June 14, 1996.
(b) Voting Power; Dispositive Power: Through his
relationships with Hollinger Inc., Ravelston and Conrad
Black Capital Corporation described in Item 4 hereof,
and through his personal holdings, Mr. Black may be
deemed to have the sole power to vote or to direct the
vote of and to dispose of or direct the disposition of
54,481,397 shares of Class A Common Stock.
(c) Not applicable.
(d) Not applicable.
- 18 -
<PAGE>
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
The Issuer's Restated Certificate of Incorporation, as
amended, provides that holders of Class B Common Stock are
entitled to ten votes per share and holders of Class A Common
Stock are entitled to one vote per share. The holders of Class A
Common Stock and Class B Common Stock vote together as a single
class on all matters on which stockholders may vote, except when
class voting is required by applicable law or on a vote to issue
or increase the authorized number of shares of Class B Common
Stock. Dividends must be paid on both the Class A Common Stock
and the Class B Common Stock at any time dividends are paid on
either.
Each share of Class B Common Stock is convertible at
any time at the option of the holder into one share of Class A
Common Stock and is transferable by Hollinger Inc. to a
subsidiary or an affiliate. In addition, each share of Class B
Common Stock is automatically convertible into a share of Class A
Common Stock at the time it is sold, transferred or otherwise
disposed of by Hollinger Inc. or a subsequent permitted
transferee to any third party (other than a subsidiary or an
affiliate of Hollinger Inc. or such subsequent permitted
transferee) unless such purchaser or transferee offers to
purchase all shares of Class A Common Stock from the holders
thereof for an amount per share equal to the amount per share
received by the holder of the Class B Common Stock (a "Permitted
Transaction").
Notwithstanding the foregoing paragraph, any holder of
Class B Common Stock may pledge his or its shares of Class B
Common Stock to a pledgee pursuant to a bona fide pledge of such
shares as collateral security for indebtedness due to the
pledgee, provided that such shares shall not be transferred to or
registered in the name of the pledgee and shall remain subject to
the transfer restrictions described in the foregoing paragraph.
In the event that shares of Class B Common Stock are so pledged,
the pledged shares shall not be converted automatically into
Class A Common Stock. However, if any such pledged shares become
subject to any foreclosure, realization or other similar action
of the pledgee, they shall be converted automatically into shares
of Class A Common Stock unless they are sold in a Permitted
Transaction.
The Issuer's Restated Certificate of Incorporation, as
amended, also provides that no sale, transfer or other
disposition of the Series A Preferred Shares shall be valid
- 19 -
<PAGE>
unless made to a subsidiary or affiliate of Hollinger Inc. or
unless the Issuer, by resolution adopted by its Board of
Directors, shall first have consented to the proposed transfer
and approved the proposed transferee (the "Series A Transfer
Restriction"). Notwithstanding the foregoing sentence, any
holder of Series A Preferred Shares may pledge such shares to a
pledgee pursuant to a bona fide pledge of such shares as
collateral security for indebtedness or other obligations due to
the pledgee, provided that such shares shall remain subject to,
and upon foreclosure, realization or other similar action by the
pledgee, shall be transferred only in accordance with, the Series
A Transfer Restriction.
Pursuant to the terms of the Hypothecation of Specific
Securities dated October 13, 1995 by Hollinger Inc. in favor of
CIBC, a copy of which is attached hereto as Exhibit 3, Hollinger
Inc. has pledged the Class A Shares, the Class B Shares and the
Series A Preferred Shares to CIBC as collateral security for the
obligations of Hollinger Inc. and certain affiliated companies
under a Cdn.$117,000,000 demand operating facility and a
Cdn.$75,000,000 364-day revolving debt facility (together, the
"CIBC Facilities"). The CIBC Facilities require compliance by
Hollinger Inc. with certain financial and other covenants and are
subject to standard default and other provisions.
On February 29, 1996 Hollinger Inc. transferred
15,950,000 Class A Shares and the Class B Shares, subject to the
pledge to secure the CIBC Facilities, to Ontario Limited.
Pursuant to the terms of a Securities Pledge Agreement dated
February 29, 1996 (the "February Securities Pledge Agreement"), a
copy of which is attached hereto as Exhibit 7, Ontario Limited
has pledged the 15,950,000 Class A Shares held by it as
collateral security for its obligations under a Cdn.$90,000,000
Credit Agreement dated February 29, 1996 (the "Credit Agreement")
among Ontario Limited, Hollinger Inc., CIBC, as agent for the
Lenders, and CIBC, The Toronto-Dominion Bank and The Bank of Nova
Scotia (collectively, the "Lenders"). The obligations of Ontario
Limited under the Credit Agreement are guaranteed by Hollinger
Inc. and certain of its Canadian subsidiaries. The Credit
Agreement requires compliance by Hollinger and Ontario Limited
with certain financial and other covenants and is subject to
standard default and other provisions.
On May 24, 1996, in connection with the guarantee (the
"Guarantee") by Hollinger Inc., Canada Limited and Ontario
Limited of the obligations of the Issuer under the Southam
Facility, Ontario Limited and Canada Limited entered into
securities pledge agreements with CIBC (the "May Securities
Pledge Agreements"), copies of which are attached hereto as
Exhibits 9 and 10. Pursuant to these agreements, the 7,539,028
shares of Class A Common Stock held by Canada Limited and the
14,990,000 shares of Class B Common Stock held by Ontario Limited
- 20 -
<PAGE>
are pledged as security for the guarantee. The Southam Facility
contains covenants customary in such transactions and is subject
to standard default and other provisions.
Certain registration rights agreements, attached hereto
as Exhibits 4, 8 and 11, were entered into in connection with the
above-described pledges. These agreements provide for
registration (either within a certain time period of execution of
the registration rights agreement or upon foreclosure) under the
Securities Act of 1933, as amended, of the pledged shares of
Class A Common Stock and the shares of Class A Common Stock into
which other pledged securities are convertible.
Under the Share Exchange Agreement, Hollinger Inc. and
the Issuer have agreed that if the Issuer proposes to effect a
public offering of its equity or equity-linked securities for
cash, or to issue equity-linked securities in any acquisition by
the Issuer of the stock or assets of an unrelated corporation or
entity, at any time during the 24 months following the closing
date, the Issuer's efforts to raise capital through such offering
shall have priority over any proposal by Hollinger Inc. to effect
a public offering or sale of the Issuer's equity securities by
Hollinger Inc., unless a majority of the disinterested members of
an Independent Committee of the Issuer's Board of Directors shall
otherwise agree. For these purposes, an "Independent Committee"
means a committee of the Issuer's Board the majority of the
members of which are not employees or directors of Hollinger Inc.
or employees of the Issuer, or another committee of the Issuer's
Board whose membership satisfies any more restrictive
requirements of independence of any securities exchange or market
in which the Issuer's equity securities are traded or listed. If
during such period Hollinger Inc. proposes to sell or otherwise
dispose of any shares of Series A Preferred Stock (other than
certain transfers to Hollinger Inc. subsidiaries or affiliates
and pledges) or to offer or sell publicly any shares of Class A
Common Stock held by it or its affiliates, it shall first consult
with the Independent Committee so as not to interfere with any
planned capital market activities of the Issuer to be undertaken
within this period.
The Share Exchange Agreement also provides that, until
the second anniversary of the closing date, Hollinger Inc. shall
not, without the prior approval of the Independent Committee,
purchase outstanding shares of Class A Common Stock in the market
from time to time except in conformity with applicable rules and
regulations of the Securities and Exchange Commission or propose
or undertake (or enter into an agreement or commitment to propose
or undertake) any transaction or series of transactions that
would constitute a Rule 13e-3 transaction (as such term is
defined in Rule 13e-3(a)(3) promulgated under the Securities
Exchange Act of 1934, as amended) with respect to the Issuer (a
"Going Private Transaction") unless Hollinger Inc., as a
- 21 -
<PAGE>
condition to the consummation of such Going Private Transaction,
provides that a majority of the disinterested members of the
Independent Committee shall have (i) approved the terms and
conditions of the Going Private Transaction and shall have
recommended that the Issuer's stockholders vote in favor or
accept the terms thereof and (ii) received from its financial
advisor a written fairness opinion for inclusion in the proxy or
information statement (or other similar disclosure documents) to
be delivered to stockholders of the Issuer in connection with the
Going Private Transaction.
As a preliminary step to the Reorganization described
in Item 3 hereof, the HTH Shares (as defined below) were acquired
by FDTH. The HTH Shares are currently pledged by Hollinger Inc.
in connection with Cdn.$125 million of debentures issued by
Hollinger Inc. which are due on November 1, 1998. Pursuant to
the Share Exchange Agreement, Hollinger Inc. has agreed that its
redemption rights as a holder of the Series A Preferred Shares
(and the redemption rights of any subsequent transferee) are
conditional upon its delivery to FDTH of clear title to the HTH
Shares or common shares of Southam Inc., free of liens, pledges,
charges and encumbrances, subject to certain exceptions. For
these purposes, "HTH Shares" means FDTH's one-half ownership
interest in Hollinger-Telegraph Holdings Inc., a joint venture
company through which the Issuer and The Telegraph plc own their
interests in Southam Inc. With respect to the Series A Preferred
Shares, the Share Exchange Agreement also provides that so long
as any of the Series A Preferred Shares are held by Hollinger
Inc. or any of its affiliates, the Issuer will not with respect
to such shares take any action to effect or approve any reduction
in the conversion price, redeem such shares or amend or modify
the terms of such shares, unless such action has been approved by
a majority of the disinterested members of the Independent
Committee.
In connection with the offering of the Issuer's Class A
Common Stock consummated on February 7, 1996, Hollinger Inc., the
Issuer and certain of the directors and officers of the Issuer,
including Mr. Black, entered into contractual lock-up agreements
(the Lock-Up Agreements") providing that they will not sell,
contract to sell or grant any option or warrant to purchase
(other than the grant of stock options pursuant to the Issuer's
existing employee stock option plan) or otherwise dispose of any
shares of Class A Common Stock or any securities convertible into
or exercisable or exchangeable for Class A Common Stock for a
period of 180 days after February 1, 1996, without the prior
written consent of Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), other than the shares of Class A
Common Stock that were sold in the offering and up to 2,500,000
additional shares of Class A Common Stock that may otherwise be
sold by the Issuer. The written consent of Merrill Lynch was
obtained prior to the consummation of the transactions effected
- 22 -
<PAGE>
by the Share Transfer Agreement, the February Securities Pledge
Agreement and the May Securities Pledge Agreements.
Item 7. Materials to Be Filed as Exhibits.
Exhibit No. Description
1 Joint Filing Agreement dated October 20, 1995,
among Hollinger Inc., The Ravelston
Corporation Limited and The Hon. Conrad M.
Black, P.C., O.C. (individually and on behalf
of Conrad Black Capital Corporation).
2 Share Exchange Agreement dated as of July 19,
1995 between American Publishing Company and
Hollinger Inc. (incorporated by reference to
the definitive proxy statement of the Issuer
dated September 28, 1995).
3 Hypothecation of Specific Securities dated
October 13, 1995 by Hollinger Inc. in favor of
the Canadian Imperial Bank of Commerce.
4 Letter agreement dated October 13, 1995
between Hollinger Inc. and the Canadian
Imperial Bank of Commerce.
5 Letter agreement dated February 5, 1996
between Hollinger Inc. and certain
underwriters.
6 Letter agreement dated February 1, 1996
between The Hon. Conrad M. Black, P.C., O.C.
and certain underwriters.
7 Securities Pledge Agreement dated February 29,
1996 by 1159670 Ontario Limited in favor of
the Canadian Imperial Bank of Commerce, as
agent for certain lenders.
8 Registration Rights Agreement dated February
29, 1996 among Hollinger Inc., 1159670 Ontario
Limited and certain lenders.
9 Securities Pledge Agreement dated May 24, 1996
by 1159670 Ontario Limited in favor of the
Canadian Imperial Bank of Commerce.
10 Securities Pledge Agreement dated May 24, 1996
by 3184081 Canada Limited in favor of the
Canadian Imperial Bank of Commerce.
- 23 -
<PAGE>
11 Letter agreement dated May 24, 1996 among
Hollinger Inc., Hollinger International Inc.,
1159670 Ontario Limited, 3184081 Canada
Limited and the Canadian Imperial Bank of
Commerce (omitting Schedules A and B).
- 24 -
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Date: June 17, 1996
HOLLINGER INC.
By: /s/ C.G. Cowan
------------------------
Charles G. Cowan, Q.C.
Title: Vice-President and
Secretary
THE RAVELSTON CORPORATION LIMITED
By: /s/ C.G. Cowan
---------------------------
Charles G. Cowan, Q.C.
Title: Vice-President and
Secretary
By: /s/ Conrad M. Black
---------------------------
The Hon. Conrad M. Black,
P.C., O.C., individually and
on behalf of Conrad Black
Capital Corporation
Title: Chairman of Conrad Black
Capital Corporation
- 25 -
<PAGE>
EXHIBIT INDEX
Exhibit Description
No.
1 Joint Filing Agreement dated October 20,
1995, among Hollinger Inc., The
Ravelston Corporation Limited and The
Hon. Conrad M. Black, P.C., O.C.
(individually and on behalf of Conrad
Black Capital Corporation) (previously
filed).
2 Share Exchange Agreement dated as of
July 19, 1995 between American
Publishing Company and Hollinger Inc.
(incorporated by reference to the
definitive proxy statement of the Issuer
dated September 28, 1995).
3 Hypothecation of Specific Securities
dated October 13, 1995 by Hollinger Inc.
in favor of the Canadian Imperial Bank
of Commerce (previously filed).
4 Letter agreement dated October 13, 1995
between Hollinger Inc. and the Canadian
Imperial Bank of Commerce (previously
filed).
5 Letter agreement dated February 5, 1996
between Hollinger Inc. and certain
underwriters (previously filed).
6 Letter agreement dated February 1, 1996
between The Hon. Conrad M. Black, P.C.,
O.C. and certain underwriters
(previously filed).
7 Securities Pledge Agreement dated
February 29, 1996 by 1159670 Ontario
Limited in favor of the Canadian
Imperial Bank of Commerce, as agent for
certain lenders (previously filed).
8 Registration Rights Agreement dated
February 29, 1996 among Hollinger Inc.,
1159670 Ontario Limited and certain
lenders (previously filed).
- 26 -
<PAGE>
9 Securities Pledge Agreement dated May
24, 1996 by 1159670 Ontario Limited in
favor of the Canadian Imperial Bank of
Commerce (filed herewith).
10 Securities Pledge Agreement dated May
24, 1996 by 3184081 Canada Limited in
favor of the Canadian Imperial Bank of
Commerce (filed herewith).
11 Letter agreement dated May 24, 1996
among Hollinger Inc., Hollinger
International Inc., 1159670 Ontario
Limited, 3184081 Canada Limited and the
Canadian Imperial Bank of Commerce
(omitting Schedules A and B) (filed
herewith).
- 27 -
SECURITIES PLEDGE AGREEMENT
---------------------------
TO: CANADIAN IMPERIAL BANK OF COMMERCE
Commerce Court West - 7th Floor
Toronto, Ontario
M5L 1A2
WHEREAS in order to secure the due payment and performance
of the Obligations (as defined below), the undersigned (the
"Debtor") has agreed to pledge the Pledged Securities (as defined
below) to Canadian Imperial Bank of Commerce (the "Bank");
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are conclusively acknowledged by the
parties hereto, the Debtor hereby agrees as follows:
1. DEFINED TERMS. In this Agreement, the following words have
the following meanings:
"Companies" means the corporations, companies, partnerships,
limited partnerships, trusts and other entities listed under the
heading "Companies" in Schedule "A" and their respective
successors;
"Default" means a failure to pay any of the Obligations when
due;
"Lien" means a mortgage, hypothec, title retention, pledge,
lien, charge, security interest or other encumbrance whatsoever,
whether fixed or floating and howsoever created or arising;
"Obligations" means all present and future indebtedness and
liabilities of every kind, nature and description (whether direct
or indirect, joint or several, absolute or contingent, matured or
unmatured) of the Debtor to the Bank under or pursuant to the
guarantee dated the date hereof made by the Debtor in favour of
the Bank in respect of Hollinger International Inc. and any
unpaid balance thereof; and
"Pledged Securities" means the securities listed under the
heading "Pledged Securities" in Schedule "A", together with any
other securities in the capital of the Companies owned by the
Debtor from time to time.
2. PLEDGE. As general and continuing collateral security for
the payment and performance of all Obligations, the Debtor hereby
assigns and pledges to and in favour of the Bank, and the Debtor
hereby grants to the Bank a continuing security interest in the
following (collectively, the "Collateral"): (i) the Pledged
Securities, together with any replacements thereof and
<PAGE>
- 2 -
substitutions therefor, and all certificates and instruments
evidencing or representing such securities; (ii) all dividends,
whether in cash, kind or stock, received or receivable upon or in
respect of any of the Pledged Securities and all moneys or other
property payable or paid on account of any return or repayment of
capital in respect of any of the Pledged Securities or otherwise
distributed in respect thereof or which will in any way be
charged to, or payable or paid out of, the capital of any of the
Companies on account of the Pledged Securities; (iii) all other
property that may at any time be received or receivable by or
otherwise distributed to the Debtor in respect of, or in
substitution for, or in exchange for, any of the foregoing; and
(iv) all cash, securities and other proceeds of the foregoing and
all rights and interests of the Debtor in respect thereof or
evidenced thereby, including all moneys received from time to
time by the Debtor in connection with the sale or other
disposition of any of the Pledged Securities; provided, however,
that the Debtor will not sell or otherwise dispose of any of the
Pledged Securities or purport to do any of the foregoing without
the prior written consent of the Bank.
3. DELIVERY OF PLEDGED SECURITIES. The certificates
representing the Pledged Securities duly endorsed by the
appropriate person in blank for transfer or accompanied by powers
of attorney satisfactory to the Bank will forthwith be delivered
to and remain in the custody of the Bank or its nominee. All
Pledged Securities may, at the option of the Bank, be registered
in the name of the Bank or its nominee. If the Bank so requests,
the certificates representing the Pledged Securities will also be
guaranteed by a Canadian chartered bank.
4. REPRESENTATIONS AND WARRANTIES. The Debtor hereby
represents and warrants to the Bank and acknowledges that the
Bank is relying thereon, notwithstanding any investigation by the
Bank or otherwise, that: (i) the Debtor is the lawful owner of
the Collateral, free and clear of any and all Liens or claims of
others other than any Lien granted by the Debtor to the Bank
hereunder or Liens in favour of Canadian Imperial Bank of
Commerce, with full right to deliver, assign, pledge and charge
the Collateral to the Bank pursuant hereto; (ii) the Pledged
Securities represent all of the issued and outstanding shares in
the capital of each of the Companies held by the Debtor;
(iii) the Pledged Securities are validly issued, fully paid and
non-assessable; (iv) there is no existing agreement, option,
right or privilege capable of becoming an agreement or option
pursuant to which the Debtor would be required to sell or
otherwise dispose of any of the Pledged Securities; (v) except as
otherwise agreed by the Bank in writing, the Liens granted by the
Debtor to the Bank pursuant to this Agreement constitute Liens on
the Collateral in favour of the Bank which are prior to all other
Liens on the Collateral other than Liens in favour of Canadian
Imperial Bank of Commerce, whether created by the Debtor or any
<PAGE>
- 3 -
other Person, and in existence on the date hereof; (vi) the
Debtor has the power and authority and the legal right to execute
and deliver, to perform its obligations under, and to grant the
Lien on the Collateral pursuant to, this Agreement and the Debtor
has taken all necessary corporate action to authorize its
execution, delivery and performance of, and grant of the Lien on
the Collateral pursuant to, this Agreement; (vii) this Agreement
constitutes a legal, valid and binding obligation of the Debtor,
enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general
principles of equity; (viii) the execution, delivery and
performance of this Agreement will not violate any provision or
requirement of any law or contractual obligation of the Debtor
and will not result in the creation or imposition of any Lien on
any of the properties or revenues of the Debtor pursuant to any
requirement of law or contractual obligation of the Debtor;
(ix) no consent or authorization of, filing with, or other act by
or in respect of, any arbitrator or governmental authority and no
consent of any other person (including any shareholder or
creditor of the Debtor), is required in connection with the
execution, delivery, performance, validity or enforceability of
this Agreement, except for such as have been obtained or made and
are in full force and effect, and the terms of which have been
disclosed to the Bank; and (x) no litigation, investigation or
proceeding of or before any arbitrator or governmental authority
is pending or, to the knowledge of the Debtor, threatened by or
against the Debtor or against any of its properties or revenues
which may materially adversely affect the business, property or
financial or other condition of the Debtor.
5. COVENANTS. The Debtor covenants and agrees with the Bank
that: (i) at any time and from time to time, upon the written
request of the Bank, and at the sole expense of the Debtor, the
Debtor will promptly and duly execute and deliver such further
instruments and documents and take such further action as the
Bank may request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers
herein granted, including the filing or execution of any
financing or financing change statements under any applicable
legislation in effect in any jurisdiction with respect to the
Liens created hereby; (ii) the Debtor authorizes the Bank to file
any such financing or financing change statement without the
signature of the Debtor to the extent permitted by applicable
law; (iii) the Debtor will not create, incur or permit to exist,
but will defend the Collateral against, and will take such other
action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and Liens in
favour of Canadian Imperial Bank of Commerce and other than as
permitted in writing by the Bank; (iv) the Debtor will not sell,
transfer, lease or otherwise dispose of any of the Collateral
<PAGE>
- 4 -
except as permitted in writing by the Bank; and (v) the Debtor
will ensure that at the request of the Bank, all Pledged
Securities are registered in the name of the Bank or its nominee,
that the certificates representing the Pledged Securities will be
forthwith delivered to and remain in the custody of the Bank or
its nominee, and that all certificates, instruments or other
documents representing or evidencing any Pledged Securities
acquired or issued subsequent to the date hereof will be
registered in the name of the Bank or its nominee and will
forthwith after issuance be delivered to, and remain in the
custody of, the Bank or its nominee.
6. RIGHTS AND DUTIES OF BANK. The Bank will have and be
entitled to exercise all such powers hereunder as are
specifically delegated to the Bank by the terms hereof, together
with such powers as are incidental thereto. The Bank may execute
any of its duties hereunder by or through agents and will be
entitled to retain counsel and to act in reliance upon the advice
of such counsel concerning all matters pertaining to its duties
hereunder. The Bank and any nominee on its behalf will be bound
to exercise in the holding of the Pledged Securities and other
Collateral only the same degree of care as it would exercise with
respect to similar property of its own held in the same place.
Neither the Bank, nor any nominee acting on behalf of the Bank,
nor any director, officer or employee of the Bank or such
nominee, will be liable for any action taken or admitted to be
taken by it hereunder or in connection herewith except for its
own gross negligence or wilful misconduct.
7. VOTING RIGHTS. Unless a Default has occurred and is
continuing, the Debtor will be entitled to exercise all voting
power from time to time exercisable in respect of the Pledged
Securities and give consents, waivers and ratifications in
respect thereof. Immediately upon the occurrence and during the
continuance of any Default, all such rights of the Debtor to vote
and give consents, waivers and ratifications will cease and the
Bank will be entitled to exercise all such voting rights and to
give all consents, waivers and ratifications as permitted by the
Bank.
8. DIVIDENDS. Unless a Default has occurred and is continuing,
the Debtor will, subject to any agreement with the Bank to the
contrary, be entitled to receive any and all cash dividends and
other distributions on the Pledged Securities which it is
otherwise entitled to receive. If a Default has occurred and is
continuing, the Bank will have the sole and exclusive right and
authority to receive and retain the dividends and other
distributions which the Debtor would otherwise be authorized to
receive. Any money and other property paid over to or received
by the Bank pursuant to the provisions of this Section 8 will be
retained by the Bank as additional Collateral hereunder and be
applied in accordance with the provisions hereof.
<PAGE>
- 5 -
9. REMEDIES. If a Default has occurred and is continuing, the
Bank may, without notice to or the consent of the Debtor or any
other person (other than as required by applicable law), take all
or any of the following actions:
(a) transfer all or any part of the Collateral into the name of
the Bank or any nominee on behalf of the Bank, with or
without disclosing that such Collateral is subject to the
Lien hereunder;
(b) notify any parties obligated on any of the Collateral to
make payment to the Bank of any amounts due or to become due
thereunder;
(c) exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options
pertaining to any of the Pledged Securities as if it were
the absolute owner thereof;
(d) from time to time realize upon, collect, sell, transfer,
assign, give options to purchase, or otherwise dispose of
and deliver the Pledged Securities and other Collateral, or
any part thereof, in such a manner as may seem to it
advisable, and for the purposes thereof each and every
requirement relating thereto and prescribed by law or
otherwise is hereby waived to the extent permitted by law;
(e) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any
part of any property in addition to the Collateral, securing
any of the Obligations, or compromise or extend or renew for
any period (whether or not longer than the original
period) any obligations of any nature of any party with
respect to any property; and
(f) to the extent permitted by applicable law, the Bank may
purchase any or all of the Pledged Securities and other
Collateral, whether in connection with a sale made under the
power of sale herein contained or pursuant to judicial
proceedings or otherwise;
provided, however, that the Bank will not be bound to deal with
the Pledged Securities and other Collateral as aforesaid, and
will not be liable for any loss which may be occasioned by any
failure to do so and no action of the Bank permitted hereunder
will impair or affect any rights of the Bank in and to the
Collateral.
10. APPLICATION OF PROCEEDS. After payment of expenses as
provided in Section 11 hereof, the balance of any proceeds
received by the Bank in or in connection with realizing,
collecting, selling, transferring, delivering or obtaining
<PAGE>
- 6 -
payment of the Collateral or any part thereof may be held by the
Bank and may, as and when the Bank thinks fit, be applied on
account of such part of the Obligations as to the Bank seems
best, without prejudice to the Bank's claims upon the Debtor for
any deficiency.
11. PAYMENT OF EXPENSES. The Bank may charge on its own behalf
and also pay to others all out-of-pocket expenses of the Bank and
others retained by the Bank, incurred in connection with
realizing, collecting, selling, transferring, delivering or
obtaining payment of the Pledged Securities or any other
Collateral or any part thereof, or in connection with the
administration or amendment of this Agreement or incidental to
the care, safe keeping, or otherwise of any and all of the
Collateral, and may deduct the amount of such sums from any
proceeds of the Collateral. The Debtor agrees to indemnify and
hold harmless the Bank from and against any and all liability
incurred by the Bank, or any nominee, agent or employees of the
Bank hereunder or in connection herewith, unless such liability
was due to wilful misconduct or gross negligence on the part of
the Bank or such nominee or agent.
12. ASSIGNMENT. This Agreement will be binding upon the Debtor
and its successors and permitted assigns and will enure to the
benefit of and be enforceable by the Bank and its respective
successors and assigns. The Debtor will not assign all or any
part of this Agreement without the Bank's prior written consent.
13. NO WAIVER; CUMULATIVE REMEDIES. The Bank will not by any
act, delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any
breach of any of the terms and conditions hereof. No failure to
exercise, nor any delay in exercising, on the part of the Bank,
any right, power or privilege hereunder will operate as a waiver
thereof.
14. COMMUNICATION. All communications provided for or permitted
hereunder shall be in writing, personally delivered to an officer
or other responsible employee of the addressee or sent by
registered mail, charges prepaid, or by telecopy, to the address
or telecopy number set forth opposite the name of the Debtor in
the execution pages of this Agreement, in the case of the Debtor,
and to Canadian Imperial Bank of Commerce, Head Office, Commerce
Court West, 7th Floor, Toronto, Ontario M5L 1A2 (Attention:
Vice-President, Global Media & Telecommunications) (Telecopy:
(416) 980-2801), in the case of the Bank, or to such other
address as the applicable party hereto may from time to time
designate to the other in such manner. Any communication so
personally delivered shall be deemed to have been validly and
effectively given on the date of such delivery. Communications
so sent by telecopy shall be deemed to have been validly and
effectively given on the business day next following the day on
<PAGE>
- 7 -
which it is sent. Communications so sent by mail shall be deemed
to have been validly and effectively given on the fifth business
day next following the day on which it is sent.
15. DEALINGS BY BANK. The Bank may grant extensions of time and
other indulgences, take and give up security, accept
compositions, grant releases and discharges and otherwise deal
with the Debtor and any third party having dealings with the
Debtor, and with the Collateral or any part thereof, and with
other security and sureties, as the Bank may see fit, all without
prejudice to the Obligations or to the rights of the Bank under
this Agreement. The Bank will be accountable only for amounts
that the Bank actually receives as a result of the exercise of
such powers, and neither the Bank nor any of its officers,
directors, employees or agents will be responsible to the Debtor
for any act or failure to act hereunder, except for its or their
own gross negligence or wilful misconduct.
16. NON-EXCLUSIVITY OF REMEDIES. This Agreement and the Liens
arising hereunder are in addition to and not in substitution for
any other security now or hereafter held by the Bank in respect
of the Debtor, the Obligations or the Collateral. No remedy for
the enforcement of the rights of the Bank hereunder will be
exclusive of or dependent on any other such remedy but any one or
more of such remedies may from time to time be exercised
independently or in combination.
17. POWER OF ATTORNEY. The Debtor hereby irrevocably
constitutes and appoints the Bank and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact, with full irrevocable power and authority in
the place and stead of the Debtor and in the name of the Debtor
or in its own name, from time to time in the Bank's discretion,
for the purpose of carrying out the terms of this Agreement, to
take any and all appropriate action, to do, make and execute any
and all statements, acts, matters, documents, instruments and
things which may be necessary or desirable to accomplish the
purposes of this Agreement and from time to time to exercise all
rights and powers and to perform all acts of ownership in respect
to the Pledged Securities to the same extent as the Debtor might
have done were it not for this Agreement. The Debtor hereby
ratifies all that said attorneys will lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled
with an interest and will be irrevocable until the Obligations
have been paid and performed in full.
18. NO MERGER. Neither the taking and holding of the Pledged
Securities and other Collateral nor the obtaining of any judgment
by the Bank will operate as a merger of any Obligation or any
other indebtedness or liability of the Debtor to the Bank or
operate to prejudice the security constituted by this Agreement.
<PAGE>
- 8 -
19. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such
provision in any other jurisdiction.
20. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of Ontario.
21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements,
representations, warranties and covenants made by or on behalf of
the Debtor herein are material, will be considered to have been
relied upon by the Bank and will survive the execution and
delivery of this Agreement or any investigation made at any time
by or on behalf of the Bank and any disposition or payment of the
Obligations until repayment in full thereof.
22. ACKNOWLEDGEMENT OF RECEIPT. The Debtor acknowledges receipt
of an executed copy of this Agreement.
DATED: May 24, 1996.
ADDRESS 1159670 ONTARIO LIMITED
10 Toronto Street
Toronto, Ontario By: /s/ C.G. Cowan
M5K 1N2 -------------------------
Name: Charles G. Cowan
Attention: President Title: Vice President &
Secretary
Facsimile: (416) 364-2088
By: /s/ J.A. Boutlbee
-------------------------
Name: J.A. Boultbee
Title: President
Schedule A - Pledged Securities
<PAGE>
SCHEDULE "A"
-----------
Certificate
Companies Pledged Securities Number
--------- ------------------ ----------
No. Class
----------------------
1. Hollinger International Inc. 14,990,000 Class B B0001
Common Stock
SECURITIES PLEDGE AGREEMENT
---------------------------
TO: CANADIAN IMPERIAL BANK OF COMMERCE
Commerce Court West - 7th Floor
Toronto, Ontario
M5L 1A2
WHEREAS in order to secure the due payment and performance
of the Obligations (as defined below), the undersigned (the
"Debtor") has agreed to pledge the Pledged Securities (as defined
below) to Canadian Imperial Bank of Commerce (the "Bank");
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are conclusively acknowledged by the
parties hereto, the Debtor hereby agrees as follows:
1. DEFINED TERMS. In this Agreement, the following words have
the following meanings:
"Companies" means the corporations, companies, partnerships,
limited partnerships, trusts and other entities listed under the
heading "Companies" in Schedule "A" and their respective
successors;
"Default" means a failure to pay any of the Obligations when
due;
"Lien" means a mortgage, hypothec, title retention, pledge,
lien, charge, security interest or other encumbrance whatsoever,
whether fixed or floating and howsoever created or arising;
"Obligations" means all present and future indebtedness and
liabilities of every kind, nature and description (whether direct
or indirect, joint or several, absolute or contingent, matured or
unmatured) of the Debtor to the Bank under or pursuant to the
guarantee dated the date hereof made by the Debtor in favour of
the Bank in respect of Hollinger International Inc. and any
unpaid balance thereof; and
"Pledged Securities" means the securities listed under the
heading "Pledged Securities" in Schedule "A", together with any
other securities in the capital of the Companies owned by the
Debtor from time to time (other than 15,950,000 Class A Common
Stock of Hollinger International Inc. presently owned by the
Debtor and evidenced or represented by share certificate #A0358).
2. PLEDGE. As general and continuing collateral security for
the payment and performance of all Obligations, the Debtor hereby
assigns and pledges to and in favour of the Bank, and the Debtor
<PAGE>
- 2 -
hereby grants to the Bank a continuing security interest in the
following (collectively, the "Collateral"): (i) the Pledged
Securities, together with any replacements thereof and
substitutions therefor, and all certificates and instruments
evidencing or representing such securities; (ii) all dividends,
whether in cash, kind or stock, received or receivable upon or in
respect of any of the Pledged Securities and all moneys or other
property payable or paid on account of any return or repayment of
capital in respect of any of the Pledged Securities or otherwise
distributed in respect thereof or which will in any way be
charged to, or payable or paid out of, the capital of any of the
Companies on account of the Pledged Securities; (iii) all other
property that may at any time be received or receivable by or
otherwise distributed to the Debtor in respect of, or in
substitution for, or in exchange for, any of the foregoing; and
(iv) all cash, securities and other proceeds of the foregoing and
all rights and interests of the Debtor in respect thereof or
evidenced thereby, including all moneys received from time to
time by the Debtor in connection with the sale or other
disposition of any of the Pledged Securities; provided, however,
that the Debtor will not sell or otherwise dispose of any of the
Pledged Securities or purport to do any of the foregoing without
the prior written consent of the Bank.
3. DELIVERY OF PLEDGED SECURITIES. The certificates
representing the Pledged Securities duly endorsed by the
appropriate person in blank for transfer or accompanied by powers
of attorney satisfactory to the Bank will forthwith be delivered
to and remain in the custody of the Bank or its nominee. All
Pledged Securities may, at the option of the Bank, be registered
in the name of the Bank or its nominee. If the Bank so requests,
the certificates representing the Pledged Securities will also be
guaranteed by a Canadian chartered bank.
4. REPRESENTATIONS AND WARRANTIES. The Debtor hereby
represents and warrants to the Bank and acknowledges that the
Bank is relying thereon, notwithstanding any investigation by the
Bank or otherwise, that: (i) the Debtor is the lawful owner of
the Collateral, free and clear of any and all Liens or claims of
others other than any Lien granted by the Debtor to the Bank
hereunder or Liens in favour of Canadian Imperial Bank of
Commerce, with full right to deliver, assign, pledge and charge
the Collateral to the Bank pursuant hereto; (ii) the Pledged
Securities represent all of the issued and outstanding shares in
the capital of each of the Companies held by the Debtor (other
than 15,950,000 Class A Common Stock of Hollinger International
Inc. referred to in the definition of "Pledged Securities");
(iii) the Pledged Securities are validly issued, fully paid and
non-assessable; (iv) there is no existing agreement, option,
right or privilege capable of becoming an agreement or option
pursuant to which the Debtor would be required to sell or
otherwise dispose of any of the Pledged Securities; (v) except as
<PAGE>
- 3 -
otherwise agreed by the Bank in writing, the Liens granted by the
Debtor to the Bank pursuant to this Agreement constitute Liens on
the Collateral in favour of the Bank which are prior to all other
Liens on the Collateral other than Liens in favour of Canadian
Imperial Bank of Commerce, whether created by the Debtor or any
other Person, and in existence on the date hereof; (vi) the
Debtor has the power and authority and the legal right to execute
and deliver, to perform its obligations under, and to grant the
Lien on the Collateral pursuant to, this Agreement and the Debtor
has taken all necessary corporate action to authorize its
execution, delivery and performance of, and grant of the Lien on
the Collateral pursuant to, this Agreement; (vii) this Agreement
constitutes a legal, valid and binding obligation of the Debtor,
enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general
principles of equity; (viii) the execution, delivery and
performance of this Agreement will not violate any provision or
requirement of any law or contractual obligation of the Debtor
and will not result in the creation or imposition of any Lien on
any of the properties or revenues of the Debtor pursuant to any
requirement of law or contractual obligation of the Debtor;
(ix) no consent or authorization of, filing with, or other act by
or in respect of, any arbitrator or governmental authority and no
consent of any other person (including any shareholder or
creditor of the Debtor), is required in connection with the
execution, delivery, performance, validity or enforceability of
this Agreement, except for such as have been obtained or made and
are in full force and effect, and the terms of which have been
disclosed to the Bank; and (x) no litigation, investigation or
proceeding of or before any arbitrator or governmental authority
is pending or, to the knowledge of the Debtor, threatened by or
against the Debtor or against any of its properties or revenues
which may materially adversely affect the business, property or
financial or other condition of the Debtor.
5. COVENANTS. The Debtor covenants and agrees with the Bank
that: (i) at any time and from time to time, upon the written
request of the Bank, and at the sole expense of the Debtor, the
Debtor will promptly and duly execute and deliver such further
instruments and documents and take such further action as the
Bank may request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers
herein granted, including the filing or execution of any
financing or financing change statements under any applicable
legislation in effect in any jurisdiction with respect to the
Liens created hereby; (ii) the Debtor authorizes the Bank to file
any such financing or financing change statement without the
signature of the Debtor to the extent permitted by applicable
law; (iii) the Debtor will not create, incur or permit to exist,
but will defend the Collateral against, and will take such other
<PAGE>
- 4 -
action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and Liens in
favour of Canadian Imperial Bank of Commerce and other than as
permitted in writing by the Bank; (iv) the Debtor will not sell,
transfer, lease or otherwise dispose of any of the Collateral
except as permitted in writing by the Bank; and (v) the Debtor
will ensure that at the request of the Bank, all Pledged
Securities are registered in the name of the Bank or its nominee,
that the certificates representing the Pledged Securities will be
forthwith delivered to and remain in the custody of the Bank or
its nominee, and that all certificates, instruments or other
documents representing or evidencing any Pledged Securities
acquired or issued subsequent to the date hereof will be
registered in the name of the Bank or its nominee and will
forthwith after issuance be delivered to, and remain in the
custody of, the Bank or its nominee.
6. RIGHTS AND DUTIES OF BANK. The Bank will have and be
entitled to exercise all such powers hereunder as are
specifically delegated to the Bank by the terms hereof, together
with such powers as are incidental thereto. The Bank may execute
any of its duties hereunder by or through agents and will be
entitled to retain counsel and to act in reliance upon the advice
of such counsel concerning all matters pertaining to its duties
hereunder. The Bank and any nominee on its behalf will be bound
to exercise in the holding of the Pledged Securities and other
Collateral only the same degree of care as it would exercise with
respect to similar property of its own held in the same place.
Neither the Bank, nor any nominee acting on behalf of the Bank,
nor any director, officer or employee of the Bank or such
nominee, will be liable for any action taken or admitted to be
taken by it hereunder or in connection herewith except for its
own gross negligence or wilful misconduct.
7. VOTING RIGHTS. Unless a Default has occurred and is
continuing, the Debtor will be entitled to exercise all voting
power from time to time exercisable in respect of the Pledged
Securities and give consents, waivers and ratifications in
respect thereof. Immediately upon the occurrence and during the
continuance of any Default, all such rights of the Debtor to vote
and give consents, waivers and ratifications will cease and the
Bank will be entitled to exercise all such voting rights and to
give all consents, waivers and ratifications as permitted by the
Bank.
8. DIVIDENDS. Unless a Default has occurred and is continuing,
the Debtor will, subject to any agreement with the Bank to the
contrary, be entitled to receive any and all cash dividends and
other distributions on the Pledged Securities which it is
otherwise entitled to receive. If a Default has occurred and is
continuing, the Bank will have the sole and exclusive right and
authority to receive and retain the dividends and other
<PAGE>
- 5 -
distributions which the Debtor would otherwise be authorized to
receive. Any money and other property paid over to or received
by the Bank pursuant to the provisions of this Section 8 will be
retained by the Bank as additional Collateral hereunder and be
applied in accordance with the provisions hereof.
9. REMEDIES. If a Default has occurred and is continuing, the
Bank may, without notice to or the consent of the Debtor or any
other person (other than as required by applicable law), take all
or any of the following actions:
(a) transfer all or any part of the Collateral into the name of
the Bank or any nominee on behalf of the Bank, with or
without disclosing that such Collateral is subject to the
Lien hereunder;
(b) notify any parties obligated on any of the Collateral to
make payment to the Bank of any amounts due or to become due
thereunder;
(c) exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options
pertaining to any of the Pledged Securities as if it were
the absolute owner thereof;
(d) from time to time realize upon, collect, sell, transfer,
assign, give options to purchase, or otherwise dispose of
and deliver the Pledged Securities and other Collateral, or
any part thereof, in such a manner as may seem to it
advisable, and for the purposes thereof each and every
requirement relating thereto and prescribed by law or
otherwise is hereby waived to the extent permitted by law;
(e) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any
part of any property in addition to the Collateral, securing
any of the Obligations, or compromise or extend or renew for
any period (whether or not longer than the original
period) any obligations of any nature of any party with
respect to any property; and
(f) to the extent permitted by applicable law, the Bank may
purchase any or all of the Pledged Securities and other
Collateral, whether in connection with a sale made under the
power of sale herein contained or pursuant to judicial
proceedings or otherwise;
provided, however, that the Bank will not be bound to deal with
the Pledged Securities and other Collateral as aforesaid, and
will not be liable for any loss which may be occasioned by any
failure to do so and no action of the Bank permitted hereunder
<PAGE>
- 6 -
will impair or affect any rights of the Bank in and to the
Collateral.
10. APPLICATION OF PROCEEDS. After payment of expenses as
provided in Section 11 hereof, the balance of any proceeds
received by the Bank in or in connection with realizing,
collecting, selling, transferring, delivering or obtaining
payment of the Collateral or any part thereof may be held by the
Bank and may, as and when the Bank thinks fit, be applied on
account of such part of the Obligations as to the Bank seems
best, without prejudice to the Bank's claims upon the Debtor for
any deficiency.
11. PAYMENT OF EXPENSES. The Bank may charge on its own behalf
and also pay to others all out-of-pocket expenses of the Bank and
others retained by the Bank, incurred in connection with
realizing, collecting, selling, transferring, delivering or
obtaining payment of the Pledged Securities or any other
Collateral or any part thereof, or in connection with the
administration or amendment of this Agreement or incidental to
the care, safe keeping, or otherwise of any and all of the
Collateral, and may deduct the amount of such sums from any
proceeds of the Collateral. The Debtor agrees to indemnify and
hold harmless the Bank from and against any and all liability
incurred by the Bank, or any nominee, agent or employees of the
Bank hereunder or in connection herewith, unless such liability
was due to wilful misconduct or gross negligence on the part of
the Bank or such nominee or agent.
12. ASSIGNMENT. This Agreement will be binding upon the Debtor
and its successors and permitted assigns and will enure to the
benefit of and be enforceable by the Bank and its respective
successors and assigns. The Debtor will not assign all or any
part of this Agreement without the Bank's prior written consent.
13. NO WAIVER; CUMULATIVE REMEDIES. The Bank will not by any
act, delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any
breach of any of the terms and conditions hereof. No failure to
exercise, nor any delay in exercising, on the part of the Bank,
any right, power or privilege hereunder will operate as a waiver
thereof.
14. COMMUNICATION. All communications provided for or permitted
hereunder shall be in writing, personally delivered to an officer
or other responsible employee of the addressee or sent by
registered mail, charges prepaid, or by telecopy, to the address
or telecopy number set forth opposite the name of the Debtor in
the execution pages of this Agreement, in the case of the Debtor,
and to Canadian Imperial Bank of Commerce, Head Office, Commerce
Court West, 7th Floor, Toronto, Ontario M5L 1A2 (Attention:
Vice-President, Global Media & Telecommunications) (Telecopy:
<PAGE>
- 7 -
(416) 980-2801), in the case of the Bank, or to such other
address as the applicable party hereto may from time to time
designate to the other in such manner. Any communication so
personally delivered shall be deemed to have been validly and
effectively given on the date of such delivery. Communications
so sent by telecopy shall be deemed to have been validly and
effectively given on the business day next following the day on
which it is sent. Communications so sent by mail shall be deemed
to have been validly and effectively given on the fifth business
day next following the day on which it is sent.
15. DEALINGS BY BANK. The Bank may grant extensions of time and
other indulgences, take and give up security, accept
compositions, grant releases and discharges and otherwise deal
with the Debtor and any third party having dealings with the
Debtor, and with the Collateral or any part thereof, and with
other security and sureties, as the Bank may see fit, all without
prejudice to the Obligations or to the rights of the Bank under
this Agreement. The Bank will be accountable only for amounts
that the Bank actually receives as a result of the exercise of
such powers, and neither the Bank nor any of its officers,
directors, employees or agents will be responsible to the Debtor
for any act or failure to act hereunder, except for its or their
own gross negligence or wilful misconduct.
16. NON-EXCLUSIVITY OF REMEDIES. This Agreement and the Liens
arising hereunder are in addition to and not in substitution for
any other security now or hereafter held by the Bank in respect
of the Debtor, the Obligations or the Collateral. No remedy for
the enforcement of the rights of the Bank hereunder will be
exclusive of or dependent on any other such remedy but any one or
more of such remedies may from time to time be exercised
independently or in combination.
17. POWER OF ATTORNEY. The Debtor hereby irrevocably constitutes
and appoints the Bank and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact,
with full irrevocable power and authority in the place and stead
of the Debtor and in the name of the Debtor or in its own name,
from time to time in the Bank's discretion, for the purpose of
carrying out the terms of this Agreement, to take any and all
appropriate action, to do, make and execute any and all
statements, acts, matters, documents, instruments and things
which may be necessary or desirable to accomplish the purposes of
this Agreement and from time to time to exercise all rights and
powers and to perform all acts of ownership in respect to the
Pledged Securities to the same extent as the Debtor might have
done were it not for this Agreement. The Debtor hereby ratifies
all that said attorneys will lawfully do or cause to be done by
virtue hereof. This power of attorney is a power coupled with an
interest and will be irrevocable until the Obligations have been
paid and performed in full.
<PAGE>
- 8 -
18. NO MERGER. Neither the taking and holding of the Pledged
Securities and other Collateral nor the obtaining of any judgment
by the Bank will operate as a merger of any Obligation or any
other indebtedness or liability of the Debtor to the Bank or
operate to prejudice the security constituted by this Agreement.
19. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such
provision in any other jurisdiction.
20. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of Ontario.
21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements,
representations, warranties and covenants made by or on behalf of
the Debtor herein are material, will be considered to have been
relied upon by the Bank and will survive the execution and
delivery of this Agreement or any investigation made at any time
by or on behalf of the Bank and any disposition or payment of the
Obligations until repayment in full thereof.
22. ACKNOWLEDGEMENT OF RECEIPT. The Debtor acknowledges receipt
of an executed copy of this Agreement.
DATED: May 24, 1996.
ADDRESS 3184081 CANADA LIMITED
10 Toronto Street
Toronto, Ontario By: /s/ C.G. Cowan
M5K 1N2 --------------------
Name: Charles G. Cowan
Attention: President Title: Vice President &
Secretary
Facsimile: (416) 364-2088
By: /s/ J.A. Boultbee
-------------------
Name: J. A. Boultbee
Title: President
Schedule A - Pledged Securities
<PAGE>
SCHEDULE "A"
------------
Certificate
Companies Pledged Securities Number
--------- ------------------ -----------
No. Class
-----------------
1. Hollinger International Inc. 7,539,028 Class A A0499
Common Stock
Canadian Imperial Bank of Commerce
Commerce Court West, 7th Floor
Toronto, Ontario
M5H 3T7
Dear Sirs:
Re: Registration Rights
-------------------------
Reference is made to a registration rights undertaking
made by Hollinger Inc. in favour of Canadian Imperial Bank of
Commerce ("CIBC") dated October 13, 1995 (the "1995 Agreement")
and attached hereto as Schedule A and a registration rights
undertaking dated February 29, 1996 (the "1996 Agreement") made
by Hollinger Inc. and 1159670 Ontario Limited ("Ontario") in
favour of CIBC, The Toronto-Dominion Bank and the Bank of Nova
Scotia and attached hereto as Schedule B.
Each of the undersigned agree that the 1995 Agreement
is hereby amended as follows:
(i) Clause (i), (ii) and (iii) of the first full paragraph
of page 2 shall be deleted and the following
substituted therefor:
"(i) Hollinger or Ontario or the U.S. Subsidiary is in
default under any present or future indebtedness or
liabilities to the Bank secured by the Pledged
Securities, (ii) you have or intend to effect
foreclosure upon the Pledged Securities in accordance
with your rights under any applicable security
documents or to exercise your power of sale rights
under any applicable security documents, as follows:".
(ii) The fourth line of page 2 shall be amended by adding
immediately after the word "Hollinger" the following ",
the U.S. Subsidiary or 1159670 Ontario Limited
("Ontario").
(iii) The last full paragraph of the 1995 Agreement shall be
deleted in its entirety.
Each of the undersigned agree that the 1996 Agreement
is hereby amended vis-a-vis the undersigned and CIBC as follows:
(i) The definition of "Pledged Shares" shall be amended to
include 7,539,028 shares of Class A Common Stock
pledged by 3184081 Canada Limited ("Canada") to CIBC
pursuant to a securities pledge agreement dated on or
<PAGE>
about the date hereof, such shares having been
transferred directly or indirectly, by Hollinger to
Canada subject to the 1995 Pledge (as defined in the
1996 Agreement).
(ii) All references to "Hollinger and Ontario" shall be
deemed to be references to "Hollinger, Ontario, Canada
and the U.S. Subsidiary".
(iii) All references to "Hollinger Inc. or its subsidiaries"
shall be deemed to be references to "Hollinger,
Ontario, Canada and the U.S. Subsidiary or their
respective subsidiaries".
(iv) All references to the "Banks" shall be deemed to be
references to the "Banks (including CIBC)".
(v) The last full paragraph of page 2 shall be amended by
inserting immediately after the "," in the second line,
the following: "and the U.S. Subsidiary agrees to
effect".
(vi) The registration referred to in the last full paragraph
of page 2 and the last full paragraph of page 3 shall
be effected no later that 90 days following the 29th
day of February, 1996 provided that any amendment to
such registration required to effect a registration
which extends to the 7,539,028 shares of Class A Common
Stock pledged by Canada as referred to above shall be
effected within 60 days of the date hereof.
(vii) The last paragraph of the 1996 Agreement shall be
amended by (1) adding "and the pledge by Ontario of
14,990,000 shares of Class B Common Stock to the Bank
pursuant to a securities pledge agreement made by
Ontario on or about the date hereof" immediately after
the "," in the third line, (2) adding "as amended by
this Agreement" after "1995" in the third line; and (3)
by deleting the reference to Hollinger in the first
line on page 5 and substituting therefore "Hollinger,
Ontario and the U.S. subsidiary".
DATED May 24, 1996
HOLLINGER INC. HOLLINGER INTERNATIONAL INC.
By: /s/ C.G. Cowan By: /s/ C.G. Cowan
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<PAGE>
1159670 ONTARIO LIMITED 3184081 CANADA LIMITED
By: /s/ C.G. Cowan By: /s/ C.G. Cowan
---------------------- ------------------------
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