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EXHIBIT 10.02
HTH/FDTH SHARE EXCHANGE AGREEMENT - AMENDMENT
THIS AGREEMENT made this 18th day of March, 1997,
BETWEEN: XXXXXXXXX INC., a corporation continued under the laws of
Canada ("Xxxxxxxxx")
AND: XXXXXXXXX CANADIAN PUBLISHING HOLDINGS INC., a corporation
amalgamated under the laws of New Brunswick ("HCPH").
WHEREAS, Xxxxxxxxx is contemplating a reorganization of certain shareholdings
and debt obligations of certain of Xxxxxxxxx'x subsidiaries (the "Southam
Consolidation");
WHEREAS, Xxxxxxxxx and First DT Holdings Inc. ("FDTH") concluded an agreement
dated as of July 19, 1995 (the "HTH/FDTH Share Exchange Agreement") providing
for the acquisition by FDTH from Xxxxxxxxx of all of Xxxxxxxxx'x right, title
and interest in and to 129,324,500 common shares in the capital of
Xxxxxxxxx-Telegraph Holdings Inc. beneficially owned by Xxxxxxxxx (the "HTH
Shares");
WHEREAS, pursuant to various corporate reorganisations, all of FDTH's rights
and obligations under the HTH/FDTH Share Exchange Agreement have been
transferred to and assumed by HCPH;
WHEREAS, Xxxxxxxxx and HCPH have ongoing rights and obligations under, among
others, Sections 3(a) and (b) and Section 8(c) of the HTH/FDTH Share Exchange
Agreement pertaining to the delivery to HCPH of stock certificates representing
some or all of the HTH Shares;
WHEREAS, the HTH Shares are currently pledged to and registered in the name of
the Montreal Trust Company of Canada (the "Trustee") in its capacity as trustee
under the Trust Indenture dated December 1, 1993 relating to the 7%
Southam-Linked Debentures of Xxxxxxxxx due November 1, 1998 (the "Pledge");
WHEREAS, pursuant to the terms of the proposed Southam Consolidation, among
other things, the HTH Shares pledged to the Trustee under the Pledge will be
released, 5,874,282 common shares in the capital of Southam Inc. ("Southam")
will be pledged to the Trustee pursuant to the Pledge (the "Southam Shares")
and HTH will be dissolved;
AND WHEREAS, the parties hereto have determined that it is in their best
interests to amend the HTH/FDTH Share Exchange Agreement as provided for herein
to account for the dissolution of HTH and the Southam Consolidation;
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NOW, THEREFORE, in consideration of the premises, the agreements and the
covenants contained herein and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereby agree
as follows:
1. Capitalised terms used herein which are not otherwise defined in this
Amendment have the same meanings as are ascribed to them in the
HTH/FDTH Share Exchange Agreement.
2. The parties' respective rights and obligations under Sections 3 and
8(c) of the HTH/FDTH Share Exchange Agreement are amended as provided
for herein.
3. Xxxxxxxxx covenants that:
(a) prior to April 1, 1999, Xxxxxxxxx upon five days' notice to
HCPH may from time to time deliver to HCPH stock certificates
representing some or all of the Southam Shares, and on or
before April 1, 1999, Xxxxxxxxx shall deliver to HCPH stock
certificates representing all of the Southam Shares not
previously delivered to HCPH; and
(b) notwithstanding paragraph 3(a) hereof, HCPH may at any time,
on not less than 30 days' written demand, require Xxxxxxxxx
to deliver to HCPH stock certificates representing some or
all of the Southam Shares;
in each in each case free and clear of the Pledge and all Encumbrances
whatsoever, together with:
(c) a certificate signed on behalf of Xxxxxxxxx by the
Vice-President, Finance and Treasury of Xxxxxxxxx
substantially in the form attached as Exhibit E to the
HTH/FDTH Share Exchange Agreements; and
(d) the legal opinion of counsel to Xxxxxxxxx substantially in
the form attached as Exhibit F to the HTH/FDTH Share Exchange
Agreement.
4. The parties agree that HCPH shall not be required to accept delivery
of any Southam Shares if HCPH has notice of any adverse claim or
interest with respect to the ownership thereof or of any Encumbrance
with respect thereto or if Xxxxxxxxx has not otherwise complied with
its obligations under Section 3 hereof.
5. If Xxxxxxxxx shall not comply with its obligations in Section 3(a) or
Section 3(b) hereof, Xxxxxxxxx shall immediately pay to HCPH an
amount, in Canadian dollars, equal to the greater of:
(a) C$119,508,770 or, if some but not all of the Southam Shares
have been delivered, the product of C$16.7266 (the "Southam
Purchase Price") and the number of Southam Shares which have
not been delivered; and
(b) the product of the Fair Market Value of a common share of
Southam and the number of Southam Shares which have not been
delivered.
For the purposes of this Section 5, the "Fair Market Value" of a
common share of Southam shall mean an amount per common share of
Southam equal to the simple average of the closing price for a common
share of Southam on The Toronto Stock Exchange for each of the
business days in Toronto, Ontario, on which there was a closing price
not
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falling more than 20 business days before the earlier of (A) April 1,
1999, in the case of a failure by Xxxxxxxxx to comply with its
covenant in Section 3(a) and (B) the date on which a demand under
Section 3(b) is made by HCPH.
6. Upon payment in full of the amount due from Xxxxxxxxx under Section 5
hereof, HCHP shall (i) reconvey to Xxxxxxxxx HCPH's right, title
and interest in the Southam Shares not previously delivered by
Xxxxxxxxx and (ii) release Xxxxxxxxx from the covenant in Section 3
hereof in respect of that number of Southam Shares for which payment
has been received by HCPH under Section 5 hereof provided further that
if Southam shall pay a dividend, or make a distribution, on its common
shares in the form of capital stock of the same or another
corporation, or subdivide its outstanding common shares into a greater
number of common shares, or combine its outstanding common shares into
a smaller number of common shares, or effect a reorganisation or
reclassification of its capital stock, or amalgamate, enter into an
arrangement or consolidation or merge with or into another entity
(other than an amalgamation, arrangement, consolidation or merger
which does not result in a reclassification or change of the
outstanding common shares of Southam), reference in this Agreement to
"Southam Shares" or to the "common shares of Southam" shall include
any securities distributed with respect to any such shares or into
which any such shares shall be converted, changed or reclassified or
for which any such shares shall be exchanged, and the "Southam
Purchase Price" referred to in Section 5 hereof shall be adjusted, to
the end that the rights of HCPH under Sections 5 and 6 hereof shall be
unchanged, as nearly as may be, notwithstanding the occurrence of such
event and provided further that if the average price of common shares
of Southam cannot be determined in accordance with the Section 5
definition of "Fair Market Value", such price shall be the "market
price" of common shares of Southam otherwise determined in accordance
with Section 183 of the Regulation to the Securities Act (Ontario).
7. If any event shall occur which shall require the determination of the
Fair Market Value of a Southam Share, or an adjustment under Section 6
hereof, the determination of such value or adjustment shall be made in
good faith by the directors of HCPH and they shall provide Xxxxxxxxx
with a certificate certifying such value or adjustment and providing
in reasonable detail the event requiring and the manner of computing
such value or adjustment, as the case may be. If Xxxxxxxxx shall
dispute such determination, the question shall be conclusively
determined by such firm of independent auditors (who shall act as
experts and not arbitrators) as may be chosen by agreement of
Xxxxxxxxx and HCPH from among the six largest firms of auditors in the
Province of Ontario, Canada ("Eligible Auditors") or, failing such
agreement, such firm of Eligible Auditors as shall be chosen by the
Chief Justice of the Supreme Court of Ontario, and its determination
of such value or adjustment shall be conclusive and binding upon both
Xxxxxxxxx and HCPH.
8. This Amendment shall be governed by and construed in accordance with
the laws of the Province of Ontario and of Canada applicable therein.
Each party hereto submits to the non-exclusive jurisdiction of the
courts of competent jurisdiction of the Province of Ontario in
connection with any dispute arising out of or related to this
Agreement.
9. This Amendment may be executed in one or more counterparts none of
which need contain the signatures of all parties, each of which shall
be deemed an original, and all of which together shall constitute one
and the same instrument.
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10. This Amendment constitutes the entire understanding among the parties
hereto with respect to the amendment of Sections 3 and 8(c) of the
HTH/FDTH Share Exchange Agreement and supersedes all prior
discussions, negotiations, agreements and understandings (both written
and oral) between the parties with respect to the subject matter set
out herein.
11. As amended hereby, the HTH/FDTH Share Exchange Agreement is hereby
reaffirmed, approved and confirmed in every respect, and remains in
full force and effect with such changes as are required to be made
thereto in order to take account of the Southam Consolidation,
including the substitution of the Southam Shares for the HTH Shares
under the Pledge and the dissolution of HTH, and to give effect to the
amendments to that agreement set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
XXXXXXXXX INC.
By:
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Xxxxxxx X. Xxxxx
Vice-President and Secretary
XXXXXXXXX CANADIAN PUBLISHING HOLDINGS
INC.
By:
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Xxxxxxx X. Xxxxx
Vice-President
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Pursuant to the provisions of Section 5(h)(i) of the Telegraph Share Exchange
Agreement dated July 19, 1995 between Xxxxxxxxx Inc. and Xxxxxxxxx
International Inc. (formerly American Publishing Company), Xxxxxxxxx
International Inc. hereby consents to the amendments to the HTH/FDTH Share
Exchange Agreement provided for herein.
DATED as of the date first written above.
XXXXXXXXX INTERNATIONAL INC.
By:
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Xxxxxxx X. Xxxxxx
Vice President - Law and
Finance and Secretary
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