EXHIBIT 2.03 STERLING PURCHASE AGREEMENT DATED AS OF APRIL 18, 1997

EXHIBIT 2.03

STERLING PURCHASE AGREEMENT

DATED AS OF APRIL 18, 1997

BETWEEN

XXXXXXXXX INC.

AND

XXXXXXXXX CANADIAN PUBLISHING HOLDINGS INC.

STERLING PURCHASE AGREEMENT

TABLE OF CONTENTS

ARTICLE 1.
SALE AND PURCHASE OF SHARES.

1.1. Purchase Price............................................................................................ 1
1.2. Net Working Capital Adjustment............................................................................ 2
1.3. Purchase Price Allocations................................................................................ 3

ARTICLE 2.
CLOSING; DELIVERY OF SHARES AND NOTES.

2.1. Date and Place............................................................................................ 4
2.2. Delivery of Shares and Notes.............................................................................. 4

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX AND THE VENDOR.

3.1. Due Incorporation; Authority Concerning this Agreement.................................................... 4
3.2. Capitalization; Title to Shares and Assets; Subsidiaries.................................................. 5
3.3. Newspaper Financial Statements............................................................................ 6
3.4. Indebtedness; Absence of Undisclosed Liabilities.......................................................... 7
3.5. Governmental Filings...................................................................................... 7
3.6. No Violations............................................................................................. 7
3.7. Litigation and Other Proceedings.......................................................................... 8
3.8. Compliance with Laws...................................................................................... 8
3.9. Material Facts Disclosed.................................................................................. 8
3.10. Brokers and Finders....................................................................................... 9
3.11. Due Incorporation; Authority Concerning the Notes......................................................... 9
3.12. Taxes..................................................................................................... 9
3.13. Employment Matters........................................................................................10
3.14. Certain Forecasts.........................................................................................10
3.15. Principal Amount of the Notes.............................................................................10

ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF HCPH.

4.1. Due Incorporation; Authority Concerning this Agreement....................................................10
4.2. Governmental Filings......................................................................................10
4.3. No Violations.............................................................................................11
4.4. Brokers and Finders.......................................................................................11

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ARTICLE 5.
COVENANTS OF THE PARTIES.

5.1. Standstill................................................................................................12
5.2. Assignment of Rights......................................................................................13
5.3. Non-Competition...........................................................................................13
5.4. Ownership Changes.........................................................................................14

ARTICLE 6.
CONDITIONS TO THE OBLIGATIONS OF HCPH.

6.1. Representations and Warranties True.......................................................................14
6.2. Performance by Xxxxxxxxx..................................................................................15
6.3. Legal Opinions............................................................................................15
6.4. No Suits or Proceedings Challenging Transaction...........................................................15
6.5. Certain Consents..........................................................................................15
6.6. Income Tax Act............................................................................................15
6.7. RBC Dominion Fairness Opinion.............................................................................15
6.8. Other Transaction Documents...............................................................................16

ARTICLE 7.
CONDITIONS TO THE OBLIGATIONS OF XXXXXXXXX

7.1. Representations and Warranties True.......................................................................16
7.2. Performance by HCPH.......................................................................................17
7.3. No Suits or Proceedings Challenging Transaction...........................................................17
7.4. Certain Consents..........................................................................................17
7.5. Income Tax Act............................................................................................17
7.6. RBC Dominion Fairness Opinion.............................................................................17
7.7. Other Transaction Documents...............................................................................18

ARTICLE 8.
TERMINATION.

8.1. Termination by Mutual Consent.............................................................................18
8.2. Termination by either Xxxxxxxxx or HCPH...................................................................18
8.3. Termination by Xxxxxxxxx..................................................................................18
8.4. Termination by HCPH.......................................................................................19
8.5. Effect of Termination and Abandonment.....................................................................19

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ARTICLE 9.
INDEMNIFICATION.

9.1. Indemnity.................................................................................................19
9.2. Limitations...............................................................................................19

ARTICLE 10.
MISCELLANEOUS.

10.1. Survival..................................................................................................20
10.2. Certain Expenses..........................................................................................20
10.3. Dollar Amounts............................................................................................20
10.4. Further Assurances........................................................................................20
10.5. Press Releases, Announcements and Communications..........................................................21
10.6. Amendment and Modification................................................................................21
10.7. Waiver of Compliance; Consents............................................................................21
10.8. Notices...................................................................................................21
10.9. Assignment................................................................................................24
10.10. Governing Law and Jurisdiction............................................................................24
10.11. Counterparts..............................................................................................24
10.12. No Third Party Beneficiaries..............................................................................24
10.13. Interpretation............................................................................................24
10.14. Entire Agreement..........................................................................................24

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LIST OF SCHEDULES

Schedule A List of Newspapers and Related Publications
Schedule 3.2.1 Bank Indebtedness of Xxxxxxxxx and Encumbrances Affecting the Shares
Schedule 3.2.2(A) Credit Facilities of Xxxxxxxxx and Sterling and its Subsidiaries
Schedule 3.2.2(B) Permitted Encumbrances
Schedule 3.2.2(C) Registrations to be Discharged
Schedule 3.2.2(D) Encumbrances Relating to Leased Assets and Properties
Schedule 3.2.3 Shares Owned by Sterling and its Subsidiaries
Schedule 3.4 Undisclosed Liabilities
Schedule 3.13 Employment Matters
Schedule 5.2 Acquisition Agreements
Schedule 6.3(a) Form of Opinion of Tory Xxxx XxxXxxxxxxx & Binnington
Schedule 6.3(b) Form of Opinion of Xxxxxxxx Xxxxxxxxxx
Schedule 6.3(c) Form of Opinion of Xxxxxxx XxXxxxxx Stirling Scales

THE SCHEDULES TO THIS AGREEMENT HAVE NOT BEEN FILED WITH THIS EXHIBIT BUT WILL
BE FILED SUPPLEMENTALLY UPON REQUEST.

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INDEX OF DEFINED TERMS

DEFINED TERMS SECTION IN WHICH DEFINED
------------- ------------------------

Arbitrator Section 1.3.1
Canadian Newspaper Group Section 3.3
Class A Stock Recitals
Class B Stock Recitals
Closing Section 2.1
Closing Date Section 2.1
Encumbrances Section 2.2
Governmental Entity Section 3.5
HCPH Recitals
HCPH Shares Section 5.4
Xxxxxxxxx Recitals
Interim Period Section 1.1.2.1
International Section 3.14
Newspaper Financial Statements Section 3.3
Newspaper Assets Recitals
Newspapers Recitals
Notes Section 1.1.1
Permitted Encumbrances Section 3.2.2
Proceedings Section 3.7
RBC Dominion Securities Section 4.4
Shares Section 1.1.1
Special Committee Section 3.14
Sterling Recitals
Sterling Promissory Notes Encumbrances Section 3.2.1
Sterling Promissory Notes Recitals
Total Purchase Price Section 1.1.1
Transferred Newspapers Section 1.2.1
UniMedia Promissory Note Recitals

STERLING PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT, made as of this 18th day of April, 1997,
between XXXXXXXXX INC., a corporation continued under the laws of Canada
("XXXXXXXXX"), and XXXXXXXXX CANADIAN PUBLISHING HOLDINGS INC., a corporation
formed under the laws of the Province of New Brunswick ("HCPH").

WITNESSETH:

WHEREAS, Xxxxxxxxx has agreed to transfer to HCPH its indirect
interests in the daily newspapers and related publications listed on Schedule A
attached hereto and certain other assets, tangible and intangible, related
thereto (collectively, the "NEWSPAPERS");

WHEREAS, prior to the consummation of the sale transaction contemplated
hereby, Xxxxxxxxx intends to reorganize its interests in the Newspapers with the
result that Xxxxxxxxx will own (i) all of the outstanding shares in the capital
of Sterling Newspapers Company, a Nova Scotia unlimited liability company
("STERLING") which together will own directly and indirectly through
subsidiaries, the tangible and intangible assets of the Newspapers
(collectively, the "NEWSPAPER ASSETS") and (ii) secured promissory notes
receivable in the aggregate principal amount of Cdn. $293,264,998 from Sterling
(the "STERLING PROMISSORY NOTES");

WHEREAS, as part of the reorganization of Xxxxxxxxx'x interest in the
assets of UniMedia Newspapers Company and its subsidiaries, Xxxxxxxxx will also
own on the Closing Date a promissory note receivable from UniMedia Group Inc. in
the principal amount of Cdn. $25,188,258 (the "UNIMEDIA PROMISSORY NOTE");

WHEREAS, Xxxxxxxxx is proposing to sell all of the outstanding shares
of Sterling, the Sterling Promissory Notes and the UniMedia Promissory Note to
HCPH in exchange for cash;

NOW THEREFORE, in consideration of the premises and the respective
covenants herein contained, the parties, intending to be legally bound, hereby
agree as follows:

ARTICLE 1.
SALE AND PURCHASE OF SHARES.

1.1. PURCHASE PRICE

1.1.1. Upon the terms and subject to the conditions set forth
herein, Xxxxxxxxx shall sell, transfer and deliver to HCPH at Closing
(as hereinafter defined) all of the issued and outstanding shares of
Sterling (the "SHARES"), the Sterling Promissory Notes and the UniMedia
Promissory Note (collectively, the "Notes") for a purchase price of
Cdn. $330,602,000 (the "TOTAL PURCHASE

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PRICE") subject to adjustment pursuant to Section 1.1.2. The Total
Purchase Price shall be payable in cash in immediately available
Canadian dollars at the Closing.

1.1.2. The Total Purchase Price shall be:

1.1.2.1. increased by an amount equal to interest thereon
calculated from and including January 1, 1997 to but excluding the
Closing Date (the "INTERIM PERIOD") at an annual rate equal to
7.75%;

1.1.2.2. decreased (increased) by an amount equal to the aggregate
pre-tax net cash receipts (disbursements) generated by the
Newspapers on a stand-alone basis without bank debt during the
Interim Period in respect of their operations during the Interim
Period which has been appropriated by Xxxxxxxxx or any of its
subsidiaries (other than Sterling and its respective subsidiaries)
including, without limitation, through the operation of
Xxxxxxxxx'x concentration account, payment of dividends, return of
capital or management fees (other than as contemplated by section
1.2); and

1.1.2.3. increased by an amount equal to the notional tax
liability attributable to the operating income of the Transferred
Newspapers (as defined below) during the Interim Period calculated
using a tax rate of 44% and assuming that the Transferred
Newspapers were the only assets of Xxxxxxxxx for such period.

The net increase (decrease) to the Total Purchase Price resulting from
the adjustments set out above shall be paid in Canadian dollars by HCPH
to Xxxxxxxxx or vice versa, as applicable, within 60 days of the
Closing Date. If the parties cannot agree (for these purposes, HCPH
shall not have agreed to any adjustments unless agreed to by all of its
shareholders and the independent financial advisor to International) on
the net amount of such adjustments within such period the disputed
issues shall be resolved by an Arbitrator in the manner set out in
section 1.3.

1.2. NET WORKING CAPITAL ADJUSTMENT

The parties agree that any working capital surplus or deficit of the
Newspapers as at December 31, 1996 shall be for the account of Xxxxxxxxx to be
settled as follows.

1.2.1. In connection with the reorganization of Xxxxxxxxx'x
interests in the Newspapers describe in the second recital of this
Agreement, Xxxxxxxxx will transfer to Sterling all of the operating
assets (other than cash) of those Newspapers operated directly by it
(the "TRANSFERRED NEWSPAPERS"). On this transfer, Xxxxxxxxx will
retain the net cash receipts (disbursements) of the

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Transferred Newspapers generated prior to the date of such transfer. As
of December 31, 1996 the Transferred Newspapers had aggregate positive
working capital estimated to be Cdn. $15,084,712 (subject to final
review and revision in connection with the post-closing adjustments)
which amount will be for the credit of Xxxxxxxxx. Any net cash receipts
(disbursements) of the Transferred Newspapers in respect of their
operations after December 31, 1996 shall be for the account of HCPH as
contemplated in section 1.1.2.2.

1.2.2. As of December 31, 1996 the predecessor companies of
Sterling had aggregate positive working capital estimated to be Cdn.
$2,839,105 (subject to final review and revision in connection with the
post-closing adjustments) which amount will be paid as a dividend by
Sterling to Xxxxxxxxx prior to the Closing Date.

1.2.3. As soon as practicable after the Closing Date, Xxxxxxxxx
shall deliver to HCPH an unaudited statement of the working capital of
the Newspapers as at December 31, 1996 (with pro-forma adjustments
required to reflect the expenditure of amounts to eliminate
Encumbrances on the assets of the Newspapers relating to long-term or
short-term debt) together with any information in respect of the
operations of the Newspapers during the Interim Period required to
calculate the adjustment to the Total Purchase Price contemplated by
section 1.1.2.2.

1.3. PURCHASE PRICE ALLOCATIONS

1.3.1. The parties agree that the Total Purchase Price will be
allocated among the Newspaper Assets owned by Sterling on the basis of
the fair market value of such assets. If the parties have not agreed to
a final allocation on or prior to December 31, 1997, any disputed
aspects of the allocation shall be resolved not more than sixty (60)
calendar days after such date by a nationally recognized accounting
firm mutually agreed upon by HCPH and Xxxxxxxxx having no material
relationship with HCPH or Xxxxxxxxx or their respective affiliates (the
"ARBITRATOR"). The resolution of such disputed aspects by the
Arbitrator shall in all respects be final, binding and conclusive on
the parties hereto, and the allocation shall incorporate such
resolution. The costs, expenses and fees of the Arbitrator shall be
borne equally by HCPH and Xxxxxxxxx.

1.3.2. The purchase price allocated to the Shares,
Sterling Promissory Notes and to the UniMedia Promissory
Notes shall be allocated as follows:

1.3.2.1. Shares - Cdn. $12,148,744;

1.3.2.2. Sterling Promissory Notes - Cdn. $293,264,998; and

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1.3.2.3. UniMedia Promissory Note - Cdn. $25,188,258.

ARTICLE 2.
CLOSING; DELIVERY OF SHARES AND NOTES.

2.1. DATE AND PLACE

Subject to the fulfilment or waiver of the respective covenants and
conditions set forth herein, the closing of the transactions contemplated hereby
(the "CLOSING") will take place at the offices of Tory Xxxx XxxXxxxxxxx &
Binnington, Suite 3000, Xxxxx Xxxxx, Xxxxxxx-Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx
X0X 0X0, at 10:00 a.m., local time, on the first business day subsequent to the
satisfaction or waiver of all conditions set forth in Articles 6 and 7 hereof,
or at such other time and place as the parties hereto may determine (the date on
which the Closing occurs being hereinafter referred to as the "CLOSING DATE").

2.2. DELIVERY OF SHARES AND NOTES

At the Closing, Xxxxxxxxx shall deliver (i) stock certificates
representing all of the Shares, accompanied by stock transfer forms duly
executed in blank in respect of the Shares and (ii) an assignment of the Notes
in each case with a consent to such assignment of the issuer thereof, against
delivery by HCPH of the Total Purchase Price. Xxxxxxxxx shall deliver the Shares
and the Notes to HCPH free and clear of any mortgage, pledge, lien, encumbrance,
charge, security interest, pledge, right of first refusal, option, adverse claim
of ownership or use, or any other encumbrance of any kind or nature whatsoever
(collectively, "Encumbrances").

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX AND THE VENDOR.

Xxxxxxxxx hereby represents and warrants to HCPH as follows:

3.1. DUE INCORPORATION; AUTHORITY CONCERNING THIS AGREEMENT.

3.1.1. Xxxxxxxxx is a corporation subsisting under the laws of
Canada. Sterling is an unlimited liability company existing under the
laws of Nova Scotia. Each of Xxxxxxxxx and Sterling has the requisite
corporate power and authority to carry on its business and operations
as presently conducted by it and to own, lease and operate its
properties and assets. Xxxxxxxxx has the requisite corporate power and
authority to execute and deliver this Agreement, to perform its
obligations hereunder, and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement, the
performance by Xxxxxxxxx of its obligations hereunder, and the
consummation by Xxxxxxxxx of the transactions contemplated hereby have
been duly and validly authorized by all necessary

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corporate action on the part of Xxxxxxxxx. This Agreement has been duly
and validly executed and delivered by Xxxxxxxxx and (assuming due and
valid authorization, execution and delivery by HCPH) constitutes the
legal, valid and binding agreement of Xxxxxxxxx, enforceable in
accordance with its terms.

3.1.2. There has been no order or resolution for the winding up of
Sterling, and no appointment of a receiver, administrative receiver or
administrator with respect thereto.

3.2. CAPITALIZATION; TITLE TO SHARES AND ASSETS; SUBSIDIARIES

3.2.1. The authorized share capital of Sterling consists solely of
Common Shares, of which 1,000 Common Shares are issued and outstanding
and held by Xxxxxxxxx. The Shares constitute the only voting securities
of Sterling and the Shares are validly issued, fully paid and
non-assessable. Except as set forth in Schedule 3.2.1 attached hereto,
Xxxxxxxxx has good and marketable title to the Shares, the Sterling
Promissory Notes and the UniMedia Promissory Note, free and clear of
any Encumbrances, and has full right and authority to transfer and
deliver the Shares and Notes to HCPH as contemplated hereby. Upon
consummation of the transactions contemplated hereby, Xxxxxxxxx will
have transferred to HCPH good and marketable title to the Shares, the
Sterling Promissory Notes and the UniMedia Promissory Note, free and
clear of all Encumbrances, except specific Encumbrances relating to the
Sterling Promissory Notes in favour of Xxxxxxxxx, such Encumbrances to
be assigned to HCPH (the "STERLING PROMISSORY NOTES ENCUMBRANCES").
There are no outstanding or authorized subscriptions, agreements
(other than this Agreement), options, warrants, calls or other
commitments, rights (including conversion rights) or privileges
(whether pre-emptive or contractual) pursuant to which either Sterling
is or may become obligated to issue, sell or transfer any shares of its
capital or any debt or other security of Sterling which is convertible
or exchangeable into, or evidences the right to subscribe for, any
share capital of Sterling. There are no shareholder agreements, voting
trust agreements, rights of first refusal, options to purchase, or
restrictions upon transfer or alienability of or with respect to the
Shares, or any other similar agreement or understanding otherwise
affecting the Shares.

3.2.2. Sterling owns, or as of Closing will own, directly or
through wholly-owned subsidiaries, good and marketable title, free and
clear of any Encumbrances, to all of the tangible and intangible assets
of every kind and nature (including intellectual property), used in or
held for use in the business and operations of the Newspapers as
historically conducted by Xxxxxxxxx, directly or indirectly through its
subsidiaries, except for (A) Encumbrances arising under the credit
facilities of Xxxxxxxxx and Sterling described in Schedule 3.2.2(A),
all of

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which will be released and terminated as of the Closing Date; (B)
Encumbrances and leasehold interests in real properties described on
Schedule 3.2.2(B) which will remain in effect as of the Closing
(collectively, the "PERMITTED ENCUMBRANCES"); (C) Encumbrances in
effect as of the Closing Date described on Schedule 3.2.2(C) which will
be discharged at the expense of Xxxxxxxxx as soon as practicable but in
no event later than 28 days after the Closing Date; and (D)
Encumbrances relating to leased assets and properties described in
Schedule 3.2.2(D).

3.2.3. Except as set forth on Schedule 3.2.3 attached hereto,
Sterling does not own directly or indirectly through subsidiaries
securities representing or convertible into more than 5% of the
outstanding capital stock of any corporation or more than 5% of the
equity interest in any partnership or other entity. The authorized and
issued share capital and any other outstanding securities of each such
corporation, partnership or other entity are set forth on Schedule
3.2.3. Except as set forth on Schedule 3.2.3, in the case of each such
corporation, partnership or other entity, the securities owned by
Sterling constitute all of the issued and outstanding share capital of
such corporation, partnership or other entity, and all the securities
are validly issued, fully paid and non-assessable with no personal
liability attached to the ownership thereof. Except as set forth on
Schedule 3.2.3, the Company has good and marketable title to the
securities of the corporations, partnerships and other entities
reflected on Schedule 3.2.3, free and clear of all Encumbrances. Except
as set forth on Schedule 3.2.3, there are no outstanding or authorized
subscriptions, agreements (other than this Agreement), options,
warrants, calls or other commitments, rights (including conversion
rights) or privileges (whether pre-emptive or contractual) pursuant to
which any such corporation, partnership or other entity is or may
become obligated to issue, sell or transfer any shares of its capital
or any debt or other security convertible into or evidencing the right
to subscribe for any share capital of any such corporation, partnership
or other entity.

3.3. NEWSPAPER FINANCIAL STATEMENTS.

Xxxxxxxxx has delivered to HCPH an unaudited balance sheet of the
Newspapers and certain other Canadian newspapers and publications of Xxxxxxxxx
and its subsidiaries other than Sterling (collectively, the "CANADIAN NEWSPAPER
GROUP") on a combined basis as at December 31 1995 and 1996 and unaudited
combined statements of earnings, shareholders' interests and changes in
financial position for the respective periods ended December 31, 1994, 1995 and
1996 (collectively, the "NEWSPAPER FINANCIAL STATEMENTS"). The Newspaper
Financial Statements (i) have been prepared in accordance with the books and
records of Hollinger, Sterling, and the other subsidiaries of Xxxxxxxxx and the
Newspapers, (ii) present fairly in all material respects the financial position
of the Canadian Newspaper Group as at the dates indicated and the results of
operations and cash flows of the Canadian Newspaper Group on a

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combined basis as of the dates and for the respective periods indicated, and
(iii) have been prepared in conformity with Canadian generally accepted
accounting principles as described in note 1 to the Newspaper Financial
Statements. The Canadian Newspaper Group is comprised of the Newspapers, the
Newspaper Intangible Assets (as defined in the UniMedia Class A Stock Purchase
Agreement (the "UniMedia A Agreement") dated the date hereof made between
Xxxxxxxxx, UniMedia Holding Company ("UHC") and International) and the Newspaper
Tangible Assets (as defined in the UniMedia Class B Stock Purchase Agreement
(the "UniMedia B Agreement") dated the date hereof made between Xxxxxxxxx, UHC
and International).

3.4. INDEBTEDNESS; ABSENCE OF UNDISCLOSED LIABILITIES.

Sterling does not have any outstanding indebtedness for borrowed money,
capitalized leases or any other indebtedness not incurred in the ordinary course
of business (including without limitation any indebtedness of any affiliate or
associated corporation of Sterling or of any other person that is guaranteed,
directly or indirectly, by Sterling) other than those matters disclosed in the
Newspaper Financial Statements or the notes thereto or as set forth on Schedule
3.4 hereto. Since December 31, 1996, neither Sterling nor any of the Newspapers
has incurred any liabilities or obligations of any nature, whether accrued,
contingent or otherwise, which reasonably could be expected to have,
individually or in the aggregate, a material adverse effect on the business,
assets, financial condition or results of operations of Sterling or the
Newspapers, taken as a whole.

3.5. GOVERNMENTAL FILINGS.

No notice, report or other filing is required to be made by Xxxxxxxxx
or Sterling or any of the Newspapers with, nor is any material consent,
registration, approval, permit or authorization required to be obtained by them
from any governmental or regulatory authority, agency, court, commission or
other similar entity, domestic or foreign ("Governmental Entity") in connection
with the execution and delivery of this Agreement by Xxxxxxxxx or the
consummation by it of the transactions contemplated hereby.

3.6. NO VIOLATIONS.

The execution and delivery of this Agreement by Xxxxxxxxx does not, and
the consummation by it of the transactions contemplated hereby will not, require
the consent or approval of any unrelated party or constitute or result in (i) a
breach or violation of, or a default (or an event which with notice or lapse of
time or both would become a default) under, Xxxxxxxxx'x Articles or By-laws or
the Articles (or other comparable governing documents) or By-laws of Sterling or
(ii) a breach or violation of, a default (or an event which with notice or lapse
of time or both would become a default) under, a right to terminate, amend,
cancel, or accelerate, or the creation of a lien, pledge, security interest or
other encumbrance on assets (with or without the giving of notice or the lapse
of time) pursuant to, any provision of any material agreement, lease, contract,
note, mortgage, indenture, arrangement or other obligation of Xxxxxxxxx or

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Sterling or any law, statute, rule, ordinance or regulation or judgment, decree,
order, award, injunction or governmental or non-governmental permit or license
to which Xxxxxxxxx or Sterling is subject or by which Xxxxxxxxx or Sterling or
any of them or their respective properties is bound or affected, except, in the
case of clause (ii) above, (A) such breaches, violations, defaults,
terminations, amendments, cancellations, accelerations, encumbrances or changes
that, individually or in the aggregate, have not had and are not reasonably
likely to have a material adverse effect on Sterling and (B) certain provisions
of the existing loan agreements of Xxxxxxxxx described in Schedule 3.2.2(A)
attached hereto.

3.7. LITIGATION AND OTHER PROCEEDINGS.

There is no court, administrative, regulatory or similar proceeding,
arbitration or other dispute settlement procedure, investigation or inquiry by
or before any Governmental Entity or any similar matter or proceeding
(collectively "PROCEEDINGS") against or involving Xxxxxxxxx or Sterling with
respect to any of the Newspapers (whether in progress or threatened), which if
determined adversely would be likely to have a material adverse effect on
Xxxxxxxxx and Sterling or the Newspapers; and there is no judgment, decree,
injunction, rule, award or order of any Governmental Entity outstanding against
Xxxxxxxxx or Sterling with respect to any of the Newspapers.

3.8. COMPLIANCE WITH LAWS.

To Xxxxxxxxx'x best knowledge, Sterling is conducting the business and
operations of the Newspapers directly and indirectly through subsidiaries in
compliance with all statutes, laws, rules, regulations, ordinances, decrees and
orders applicable to them and the Newspapers and the ownership of their assets,
which are in effect as of the date hereof (including, without limitation, those
relating to environmental and health and safety matters), except for violations
which would not be likely to have a material adverse effect on Sterling and its
consolidated subsidiaries, taken as a whole. Neither Xxxxxxxxx nor Sterling has
received any written complaint or written notice from any Governmental Entity
alleging that they or any of the Newspapers has violated any law, ordinance,
regulation or order and, to Xxxxxxxxx'x best knowledge, no such complaint or
notice is threatened, except those violations which would not be likely to have
a material adverse effect on Sterling and its consolidated subsidiaries, taken
as a whole.

3.9. MATERIAL FACTS DISCLOSED.

Xxxxxxxxx and its management have disclosed to HCPH all facts known to
them relating to the Newspapers and the cash flow generated therefrom which
could reasonably be expected to be material to an intending purchaser of the
Shares.

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3.10. BROKERS AND FINDERS.

Neither Xxxxxxxxx nor any of their respective officers, directors or
employees has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby, except that Xxxxxxxxx has
retained Xxxxx Van Essen & Associates as its financial advisor.

3.11. DUE INCORPORATION; AUTHORITY CONCERNING THE NOTES

The issuance, execution and delivery of the Notes by Sterling and
UniMedia Company and the performance of their obligations thereunder have been
duly and validly authorized by all necessary corporate action on the part of
Sterling and UniMedia Company. The Notes have been duly and validly executed and
delivered by Sterling and UniMedia Company, as the case may be, and constitute
the legal, valid and binding agreement of Sterling and UniMedia Company, as the
case may be, enforceable in accordance with their terms.

3.12. TAXES

3.12.1. Xxxxxxxxx and Sterling (or a predecessor thereof) have
paid, or accrued on the Newspaper Financial Statements, all foreign,
federal, provincial and local taxes in respect of the Newspapers and
filed or caused to be filed all tax returns on or prior to the Closing
Date required to be filed in respect of the Newspapers and accurately
reported in all material respects all information required to be
included on such returns in respect of the Newspapers. Neither
Xxxxxxxxx nor Sterling (nor any predecessor thereof) has received
written notice of or otherwise has actual knowledge of an audit or
examination currently in progress of any tax return of the Newspapers.
There are no proposed assessments of taxes asserted in writing against
Xxxxxxxxx or Sterling (or any predecessor thereof) in respect of any of
the Newspapers or proposed adjustments asserted in writing to any tax
returns filed by Xxxxxxxxx or Sterling (or any predecessor thereof) in
respect of any of the Newspapers. None of Xxxxxxxxx or Sterling (or any
predecessor thereof) is a party to any material action or proceeding by
any governmental authority for assessment or collection of taxes or
penalties or interest in respect of the Newspapers, nor has any
material claim for such assessment or collection been asserted in
writing against any of them.

3.12.2. The Canadian Newspaper Group qualifies as "Canadian
newspapers or periodicals" as defined in section 19 of the Income Tax
Act (Canada) and, after giving effect to the transactions contemplated
by this Agreement, the UniMedia A Agreement, the UniMedia B Agreement
and the Exchange Agreement (as defined in the UniMedia A Agreement),
the Canadian Newspaper Group will continue to so qualify.

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3.13. EMPLOYMENT MATTERS

Schedule 3.13 sets forth the collective bargaining agreements that
expire within seven (7) years of the date hereof with respect to the Newspapers.
Except as referred to in Schedule 3.13, there is no material work stoppage or
other concerted action or material grievance, strike or dispute existing or
threatened against any of the Newspapers. Except as set out in Schedule 3.13,
Xxxxxxxxx, Xxxxxxxx and the Newspapers are in material compliance with all
applicable laws and regulations relating to employees of the Newspapers,
including those related to terms and conditions of employment, collective
bargaining and discrimination.

3.14. CERTAIN FORECASTS

The financial forecasts of the Canadian Newspaper Group that were
provided by Xxxxxxxxx to the special committee (the "SPECIAL COMMITTEE") made up
of the independent directors of the Board of Directors of Xxxxxxxxx
International Inc. ("INTERNATIONAL") (i) were developed by management of
Xxxxxxxxx and its subsidiaries based on information that management of Xxxxxxxxx
and Sterling prepared in good faith, (ii) utilize assumptions which management
of Xxxxxxxxx and Sterling believe to be reasonable under the circumstances,
(iii) represent the good faith estimate and judgment of management of Xxxxxxxxx,
as of the date of such forecasts, of the Canadian Newspaper Group's expected
future financial performance and (iv) do not reflect the expected results of any
newspaper or publication that is not included in the Canadian Newspaper Group or
omit the expected results of any newspapers or publication that is included in
the Canadian Newspaper Group.

3.15. PRINCIPAL AMOUNT OF THE NOTES

Each of the Notes evidence the indebtedness of Sterling and UniMedia
Company, as the case may be, in the full principal amount as set out in the
Note.

ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF HCPH.

HCPH hereby represents and warrants to Xxxxxxxxx as follows:

4.1. DUE INCORPORATION; AUTHORITY CONCERNING THIS AGREEMENT.

HCPH is a corporation incorporated and existing and in good standing
under the laws of the Province of New Brunswick. HCPH has the requisite
corporate power and authority to carry on its business and operations as
presently conducted by it and to own, lease and operate its properties and
assets. HCPH has the requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder, and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by HCPH, the performance by HCPH of its obligations hereunder and the
consummation by HCPH of the transactions

17
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contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of HCPH. This Agreement has been duly and validly
executed and delivered by HCPH and (assuming due and valid authorization,
execution and delivery by Xxxxxxxxx) constitutes the legal, valid and binding
agreement of HCPH and is enforceable in accordance with its terms.

4.2. GOVERNMENTAL FILINGS.

No notice, report or other filing is required to be made by HCPH with,
nor is any material consent, registration, approval, permit or authorization
required to be obtained by HCPH from any Governmental Entity in connection with
the execution and delivery of this Agreement, payment of the Total Purchase
Price or the consummation by HCPH of the transactions contemplated hereby.

4.3. NO VIOLATIONS.

The execution and delivery of this Agreement by HCPH does not, and the
consummation by HCPH of any of the transactions contemplated hereby will not,
require the consent or approval of any unrelated party or constitute or result
in (i) a breach or violation of, or a default (or an event which with notice or
lapse of time or both would become a default) under the Articles (or other
comparable constating documents) or By-laws of HCPH, (ii) a breach or violation
of, a default (or an event which with notice or lapse of time or both would
become a default) under, a right to terminate, amend, cancel or accelerate, or
the creation of a lien, pledge, security interest or other encumbrance on assets
(with or without the giving of notice or the lapse of time) pursuant to, any
provision of any material agreement, lease, contract, note, mortgage, indenture,
arrangement or other obligation of HCPH, or any law, statute, rule, ordinance or
regulation or judgment, decree, order, award, injunction or governmental or
non-governmental permit or license to which HCPH is subject to or by which HCPH
or any property of HCPH is bound or affected, except, in the case of clause (ii)
above, such breaches, violations, defaults, terminations, amendments,
cancellations, accelerations, encumbrances or changes that, individually or in
the aggregate, have not had and are not reasonably likely to have a material
adverse effect on HCPH.

4.4. BROKERS AND FINDERS.

None of HCPH nor any of its respective officers, directors or employees
has employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or finders' fees in connection with
the transactions contemplated hereby, except that the Special Committee has
retained RBC Dominion Securities Inc. ("RBC DOMINION SECURITIES") as its
financial advisor.

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ARTICLE 5.
COVENANTS OF THE PARTIES.

5.1. STANDSTILL.

Xxxxxxxxx agrees that from the date hereof to the Closing Date or the
earlier termination of this Agreement in accordance with Article 8 hereof, and
except as otherwise consented to in writing by HCPH or as specifically required,
permitted or contemplated by this Agreement, it will:

5.1.1. not sell, lease, assign, transfer or otherwise dispose of
any of the Shares or any interests therein, or create or permit any
Encumbrances affecting the Shares (other than those Encumbrances
referred to on Schedules 3.2.1 and 3.2.2(A) attached hereto, all of
which will be terminated on or prior to Closing);

5.1.2. not approve, consent to or take any action in furtherance
of any plan, scheme, transaction or series of transactions whereby
Sterling would undertake a merger, consolidation, amalgamation, or
sale, lease, transfer, assignment or other disposition of all or any
significant portion of its properties or assets, or otherwise resulting
in a change in control of Sterling or any of the Newspapers;

5.1.3. not approve, consent to or take any action in furtherance
of any plan, scheme, transaction or series of transactions whereby
Sterling would incur any indebtedness for borrowed money or create any
Encumbrances affecting any of their assets, other than (A)
indebtedness incurred pursuant to the credit facilities described in
Schedule 3.2.2(A) and (B) Encumbrances arising in the ordinary course
of business which constitute Permitted Encumbrances; or

5.1.4. not approve, consent to or take any action in furtherance
of any plan, scheme, transaction or series of transactions whereby
Sterling would (A) alter, amend or repeal any provision of its Articles
or By-laws (or similar governing documents), (B) declare, set aside,
make or pay any dividends (in cash or otherwise) or other distributions
on or with respect to its share capital other than as contemplated
herein or (C) increase or reclassify the number of shares authorized or
issued and outstanding of its share capital or grant any option,
warrant, call, commitment, right or agreement of any character relating
to its share capital or any securities convertible or exchangeable into
its share capital.

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5.2. ASSIGNMENT OF RIGHTS

At the request of HCPH, Xxxxxxxxx shall use commercially reasonable
efforts to enforce its contractual rights regarding the representations and
warranties and other covenants it may have under the terms of the acquisition
agreements, listed on Schedule 5.2 attached hereto, by which Xxxxxxxxx or any of
its subsidiaries acquired any of the Newspapers or their respective assets. At
the request of HCPH, Xxxxxxxxx shall assign such contractual rights to HCPH. To
the extent that any such acquisition agreements are not assignable, or any
required consent of another party is not obtained, this Agreement shall not
constitute an assignment thereof, an attempted assignment thereof or an
agreement to effect such an assignment, if such assignment or attempted
assignment would constitute a breach or violation or a default under any such
acquisition agreement. If any such consent cannot be obtained, Xxxxxxxxx shall
cooperate with HCPH in any reasonable arrangement designed to provide to HCPH
the benefits intended to be assigned with respect to the relevant acquisition
agreements, including enforcement at the cost and for the account of HCPH of any
and all rights of Xxxxxxxxx against the other party thereto arising out of the
breach or violation thereof by such other party or otherwise.

5.3. NON-COMPETITION

5.3.1. Xxxxxxxxx agrees that neither it nor any of its
subsidiaries will, for a period of five (5) years after the Closing
Date, without the prior written consent of HCPH, either directly or
indirectly, undertake or carry on or be engaged or have any financial
interest in any newspaper, shopper or other similar publication
carrying advertising, for which the circulation or distribution is
primarily in the communities where the Newspapers are currently
published or within a radius of ten (10) miles of the centre point of
any such community (such geographic area being hereinafter referred to
as the "Restricted Area"); provided, however, that the foregoing
provisions shall not apply to (A) the publication or the future
acquisition of any publication that is circulated to a national market
so long as such newspaper does not publish or distribute any regional,
community, zoned or similar edition in the Restricted Area; (B) the
ownership, directly or indirectly, of less than five percent (5%) of
any class of securities of any publicly-traded company; or (C) for
greater certainty, prohibit the interest that Xxxxxxxxx has in HCPH,
Southam Inc., The Financial Post Company, Saturday Night Magazine
Limited, and their respective subsidiaries and operations.

5.3.2. Xxxxxxxxx acknowledges that in the event of any violation
of the covenants contained in this section 5.3.1 hereof, HCPH's damages
will be difficult to ascertain and HCPH's remedy at law will be
inadequate. Accordingly, Xxxxxxxxx agrees that, in addition to such
remedies as HCPH may have at law, HCPH shall be entitled to specific
performance of such covenants hereunder and to an injunction to prevent
any continuing violation thereof.

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5.3.3. If any of the provisions of or covenants contained in this
section hereof is hereafter construed to be invalid or unenforceable in
any jurisdiction, the same shall not affect the remainder of the
provisions or the enforceability thereof in any other jurisdiction,
which shall be given full effect, without regard to the invalidity or
unenforceability in such other jurisdiction. If any of the provisions
of or covenants contained herein is held to be unenforceable in any
jurisdiction because of the duration or geographical scope thereof, the
parties agree that the court making such determination shall have the
power to reduce the duration or geographical scope of such provision or
covenant and, in its reduced form, said provision or covenant shall be
enforceable; provided, however, that the determination of such court
shall not affect the enforceability of section 5.3.1 in any other
jurisdiction.

5.4. OWNERSHIP CHANGES

Xxxxxxxxx owns, through wholly-owned subsidiaries, 50 Series A
Preferred Shares in the capital of HCPH (the "HCPH SHARES"), representing 50% of
the outstanding voting stock of HCPH. Xxxxxxxxx will not, either directly or
indirectly through its subsidiaries or affiliates, issue, sell, exchange,
assign, transfer, dispose, mortgage, charge, pledge, encumber, grant a security
interest in or otherwise deal with any security of Xxxxxxxxx or any of its
subsidiaries or affiliates, in any manner which is materially prejudicial to the
direct or indirect interests of International in the Canadian Newspaper Group by
reason of changes in ownership that would cause a material adverse impact on the
profitability, ownership or operation of the Canadian Newspaper Group by reason
of section 19 of the Income Tax Act (Canada).

ARTICLE 6.
CONDITIONS TO THE OBLIGATIONS OF HCPH.

The obligations of HCPH to consummate the transactions contemplated
hereby are subject to the fulfilment of the following conditions, any one or
more of which may be waived by HCPH:

6.1. REPRESENTATIONS AND WARRANTIES TRUE.

At the Closing Date, the representations and warranties of Xxxxxxxxx
contained in this Agreement shall be true and correct in all material respects
at and as of such date and time as if made on and as of such date and time,
other than any such representations and warranties which are made as of a
specified earlier date, which shall be true and correct in all material respects
at and as of such date; and as of the Closing Date, Xxxxxxxxx shall have
delivered to HCPH certificates to such effect signed by an officer of Xxxxxxxxx
acceptable to HCPH.

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6.2. PERFORMANCE BY XXXXXXXXX.

From the date of this Agreement, each of the obligations of Xxxxxxxxx
to be performed by it on or before the Closing Date pursuant to the terms of
this Agreement shall have been duly performed in all material respects at and as
of the Closing Date; and at the Closing Date, Xxxxxxxxx shall have delivered to
HCPH certificates to such effect signed by an officer of Xxxxxxxxx acceptable to
HCPH.

6.3. LEGAL OPINIONS.

HCPH shall have been furnished with opinions of Tory Xxxx XxxXxxxxxxx &
Xxxxxxxxxx, Xxxxxxxx Xxxxxxxxxx and Xxxxxxx XxXxxxxx Stirling Scales, each dated
as of the Closing Date and substantially in the forms attached hereto as
Schedules 6.3(a), 6.3(b) and 6.3(c), respectively, to this Agreement.

6.4. NO SUITS OR PROCEEDINGS CHALLENGING TRANSACTION.

There shall be no pending or threatened suits, actions, proceedings,
governmental inquiries or investigations of any kind which seek to enjoin,
prevent or otherwise interfere with the transactions contemplated hereby or
otherwise question the validity or legality of such transactions.

6.5. CERTAIN CONSENTS.

Xxxxxxxxx, Xxxxxxxx and HCPH shall have obtained all consents from
unrelated parties and Governmental Entities required to consummate the
transactions contemplated by this Agreement.

6.6. INCOME TAX ACT.

Prior to the Closing Date there shall have been no
amendment to the Income Tax Act (Canada) including Section 19 thereof that
would have a material adverse impact on the profitability, ownership or
operation by HCPH of the Newspapers after giving effect to the transactions
contemplated hereby and there shall have been no xxxx read in Parliament that
would have such material adverse impact if enacted into law.

6.7. RBC DOMINION FAIRNESS OPINION.

International shall have obtained from RBC Dominion Securities an
opinion in form satisfactory to the Special Committee to the effect that the
aggregate consideration to be paid for the Canadian Newspaper Group by
International (either directly, or indirectly through HCPH) pursuant to (i) this
Agreement, (ii) the UniMedia A Agreement, (iii) the UniMedia B Agreement and
(iv) the Exchange Agreement (including the term sheets attached thereto) is
fair, from a financial point of view, to International and the holders of
International's common stock

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and Series B Convertible Preferred Stock other than Xxxxxxxxx.

6.8. OTHER TRANSACTION DOCUMENTS.

HCPH shall have received on or prior to the Closing Date:

6.8.1. certificates evidencing the incumbency of the officers of
Xxxxxxxxx executing this Agreement on its behalf and of their authority
to do so;

6.8.2. certified copies of the Articles and By-laws (or similar
governing documents) of Sterling;

6.8.3. certificates of status (or the equivalent under the laws of
their respective jurisdictions of incorporation) of recent date for
Xxxxxxxxx and Sterling;

6.8.4. certified copies of the resolutions of the Board of
Directors of Xxxxxxxxx authorizing the transactions contemplated
hereunder to take place on the Closing Date;

6.8.5. stock certificates representing all of the Shares
registered in the name of Xxxxxxxxx together with customary searches of
public records in Nova Scotia reasonably satisfactory to counsel to
HCPH and to its lenders confirming that such interests are free and
clear of any Encumbrances; and

6.8.6. customary documentation reasonably satisfactory to counsel
to HCPH and to its lenders confirming (A) an undertaking from
Xxxxxxxxx'x lenders to release of all obligations of Sterling, its
subsidiaries and the Newspapers with respect to indebtedness of
Xxxxxxxxx or of any other person and the Encumbrances arising under the
credit facilities described on Schedule 3.2.2(A) and (B) that the
shares of Sterling, the Newspaper Assets, the Sterling Promissory Notes
and the UniMedia Promissory Note are free and clear of any Encumbrances
other than Permitted Encumbrances and the Sterling Promissory Notes
Encumbrances.

ARTICLE 7.
CONDITIONS TO THE OBLIGATIONS OF XXXXXXXXX

The obligations of Xxxxxxxxx to consummate the transactions
contemplated hereby are subject to the fulfilment of the following conditions,
any one or more of which may be waived by Xxxxxxxxx:

7.1. REPRESENTATIONS AND WARRANTIES TRUE.

As of the Closing Date, the representations and warranties of HCPH
contained in this Agreement shall be true and correct in all material respects
at and as of such date and time as

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if made on and as of such date and time, other than any such representations and
warranties which are made as of a specified earlier date, which shall be true
and correct in all material respects at and as of such specified date; and at
the Closing Date HCPH shall have delivered to Xxxxxxxxx a certificate to such
effect signed by officers of HCPH acceptable to Xxxxxxxxx.

7.2. PERFORMANCE BY HCPH.

From the date of this Agreement, each of the obligations of HCPH to be
performed on or before the Closing Date pursuant to the terms of this Agreement
shall have been duly performed in all material respects at the Closing Date and
at the Closing Date HCPH shall have delivered to Xxxxxxxxx a certificate to such
effect signed on behalf of HCPH by officers of HCPH acceptable to Xxxxxxxxx.

7.3. NO SUITS OR PROCEEDINGS CHALLENGING TRANSACTION.

7.4. CERTAIN CONSENTS.

Xxxxxxxxx, Xxxxxxxx and HCPH shall have obtained all consents from
unrelated parties and Governmental Entities required to consummate the
transactions contemplated by this Agreement.

7.5. INCOME TAX ACT.

Prior to the Closing Date there shall have been no amendment to the
Income Tax Act (Canada), including Section 19 thereof that would have a material
adverse impact on the profitability, ownership or operation by HCPH of the
Newspapers after giving effect to the transactions contemplated hereby and there
shall have been no xxxx read in Parliament that would have such material adverse
impact if enacted into law.

7.6. RBC DOMINION FAIRNESS OPINION.

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7.7. OTHER TRANSACTION DOCUMENTS.

Xxxxxxxxx shall have received on or prior to the Closing Date:

7.7.1. certificate evidencing the incumbency of the officers of
HCPH executing this Agreement on its behalf and their authority to do
so;

7.7.2. certified copy of the charter documents and by-laws of HCPH;

7.7.3. certificate of good standing of recent date for HCPH; and

7.7.4. certified copies of the resolutions of the Board of
Directors of HCPH authorizing the transactions contemplated hereunder
to take place on the Closing Date.

ARTICLE 8.
TERMINATION.

8.1. TERMINATION BY MUTUAL CONSENT.

This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing Date by the mutual
consent of Xxxxxxxxx and HCPH by action of their respective Boards of Directors.

8.2. TERMINATION BY EITHER XXXXXXXXX OR HCPH.

This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by action of the Board of Directors of either Xxxxxxxxx
or HCPH if: (i) the Closing shall not have occurred on or before December 31,
1997; or (ii) a Governmental Entity of competent jurisdiction shall have issued
an order, or taken any other action, permanently restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby,
and such order or other action shall have become final and not appealable;
provided, however, that in the case of a termination pursuant to clause (i)
above, the terminating party shall not have breached or failed to perform in any
material respect its obligations under this Agreement.

8.3. TERMINATION BY XXXXXXXXX.

This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing Date by action of the
Board of Directors of Xxxxxxxxx if there has been a material breach or failure
to perform by HCPH of any covenant or agreement contained in this Agreement
which is not curable or, if curable, is not cured within five (5) days after
written notice of such breach is given by Xxxxxxxxx to HCPH as the case may be.

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8.4. TERMINATION BY HCPH.

This Agreement may be terminated and the transactions contemplated
hereby may be abandoned prior to the Closing Date by action of the Board of
Directors of HCPH if there has been a material breach or failure to perform by
Xxxxxxxxx of any covenant or agreement contained in this Agreement which is not
curable or, if curable, is not cured within five (5) days after written notice
of such breach is given to Xxxxxxxxx.

8.5. EFFECT OF TERMINATION AND ABANDONMENT.

In the event of the termination and abandonment of this Agreement,
Xxxxxxxxx, Xxxxxxxx and HCPH shall have no obligation or liability to the
others.

ARTICLE 9.
INDEMNIFICATION.

9.1. INDEMNITY

Xxxxxxxxx shall indemnify and save HCPH harmless for and from any loss,
damages or deficiencies suffered by HCPH or by Sterling or any subsidiary
thereof as a result of any breach of representation, warranty or covenant on the
part of Xxxxxxxxx contained in this Agreement and all claims, demands, costs and
expenses, including legal fees, in respect of the foregoing.

9.2. LIMITATIONS

The obligations of Xxxxxxxxx to indemnify HCPH in accordance with the
foregoing shall be subject to the following:

9.2.1. any claim arising as a result of a breach of (i) a
representation or warranty contained in Article 3 or (ii) a covenant
contained in Article 5 shall be made not later than the date on which
pursuant to Section 10.1 such representation, warranty or covenant
terminated;

9.2.2. their obligation to indemnify HCPH (except in respect of
any obligations to indemnify arising from section 3.10) shall only
apply if indemnification claims, in the aggregate, exceed Cdn.
$1,000,000 in which case they shall be liable therefor only to the
extent that such claims exceed Cdn. $500,000 to a maximum aggregate
amount equal to the Total Purchase Price.

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ARTICLE 10.
MISCELLANEOUS.

10.1. SURVIVAL.

Only the agreements and covenants of the parties contained in Articles
5 and 10, and Section 8.5 hereof shall survive the Closing Date without time
limit, except as otherwise specified therein. All representations, warranties
and other agreements and covenants shall be deemed to be conditions of the
transactions contemplated hereby and shall not survive the Closing Date;
provided, however, that the representations and warranties of Xxxxxxxxx
contained in Sections 3.1, 3.2, 3.11 and 3.15 hereof and the representations and
warranties of HCPH contained in Section 4.1 hereof shall survive the Closing
Date without time limit and the representations and warranties of Xxxxxxxxx
contained in Sections 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.12.2, 3.13 and
3.14 and the representations and warranties of HCPH contained in Sections 4.2,
4.3 and 4.4 shall survive until the second anniversary of the Closing Date and
the representations and warranties by Xxxxxxxxx made in Section 3.12.1 shall
survive for the applicable statute of limitations. If the transactions
contemplated hereby shall be abandoned and this Agreement terminated, only the
agreements and covenants of the parties contained in Sections 10.1, 10.2, 10.5,
10.10, 10.12 and 10.14 hereof shall survive such abandonment and termination.

10.2. CERTAIN EXPENSES.

Whether or not the transactions contemplated hereby are consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby will be paid by the party incurring such costs
and expenses.

10.3. DOLLAR AMOUNTS.

Except as expressly indicated, all dollar amounts in this Agreement are
stated in and shall be interpreted to be in United States dollars.

10.4. FURTHER ASSURANCES.

Each of the parties shall use its reasonable commercial efforts to
perform and fulfil all conditions and obligations on its part to be performed
and fulfilled under this Agreement, to the end that the transactions
contemplated by this Agreement shall be fully carried out. From time to time as
and when requested by HCPH or their successors or assigns, Xxxxxxxxx shall
execute and deliver such deeds and other instruments of transfer and shall take
or cause to be taken such further or other actions as shall be necessary or
advisable in order to carry out the purpose and intention of this Agreement or
to vest or perfect in HCPH, or to confirm of record or otherwise to HCPH, title
to and possession of all of the Shares. From time to time as and when requested
by Xxxxxxxxx or its successors and assigns, HCPH shall execute and deliver such
further deeds and

- 21 -

other instruments and shall take or cause to be taken such further or other
actions as shall be necessary or advisable in order to carry out the purpose and
intention of this Agreement.

10.5. PRESS RELEASES, ANNOUNCEMENTS AND COMMUNICATIONS.

No press release or other public announcements related to this
Agreement or the transactions contemplated hereby will be issued after the date
hereof by one party without the prior approval of the other party, such approval
not to be unreasonably withheld or delayed, except for any public disclosure
that any party in good faith believes is required by law or by obligations
relating to any securities exchange or market. The parties agree to use
reasonable efforts to consult with each other before taking any action that
would require the issuance of any press release or other public announcement
with respect to this Agreement or the transactions contemplated hereby.

10.6. AMENDMENT AND MODIFICATION.

This Agreement may be amended, modified or supplemented at any time
prior to or after the Closing Date, but only by written agreement that
identifies this Agreement and is signed by all of the parties hereto. Any
amendment, modification or supplement hereto shall be effective as to HCPH only
if in writing approved by all of the shareholders of HCPH.

10.7. WAIVER OF COMPLIANCE; CONSENTS.

Except as otherwise provided in this Agreement, any failure of any of
the parties to comply with any obligation, representation, warranty, covenant,
agreement or condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, representation, warranty, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing. HCPH shall not waive,
nor shall HCPH be deemed to waive, any obligations of Xxxxxxxxx hereunder or any
other benefits to HCPH arising hereunder or any other benefits to HCPH arising
under this Agreement unless approved by all of the shareholders of HCPH.

10.8. NOTICES.

All notices, demands and other communications hereunder shall be in
writing and shall be deemed to have been given when received if delivered by
hand, courier or by facsimile transmission to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

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(a) If to Xxxxxxxxx:

Xxxxxxxxx Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0

Attention: Xxxxx X. Xxxxxxxx
Vice-President and General Counsel

Facsimile No.: (000) 000-0000

Copies to:

Tory Xxxx XxxXxxxxxxx & Binnington
Suite 3000, Aetna Tower
P.O. Box 270
Toronto-Dominion Centre
Toronto, Ontario
Canada M5K 1N2

Attention: Xxxx XxXxxxxxxx

Facsimile No.: (000) 000-0000

Xxxxxx Grey Easton
3100 Vancouver Centre
P.O. Box 11504
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
Xxxxxx X0X 0X0

Attention: Xxxxxx X. Xxxxx

Facsimile No.: (000) 000-0000

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(b) If to HCPH:

Xxxxxxxxx Canadian Publishing Holdings Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0

Attention: Xxxxxxx X. Xxxxxx,
Vice President

Facsimile No.: (000) 000-0000

Copies to:

Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
X.X.X.

Attention: Xxxxx X. Xxxxx

Facsimile No.: (000) 000-0000

Xxxxxxxxx International Inc.
Special Committee
c/o Xxxxxxx X. Xxxxx, Chairman
0 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000

Facsimile No.: (000) 000-0000

Copies to:

Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
X.X.X.

Attention: Xxxxxx X. Block

Facsimile No.: (000) 000-0000

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10.9. ASSIGNMENT.

Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned by any party hereto without the prior
written consent of the other parties hereto. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, successors and assigns.

10.10. GOVERNING LAW AND JURISDICTION.

This Agreement shall be governed by and construed in accordance with
the laws of Ontario. Each party hereto submits to the non-exclusive jurisdiction
of the courts of competent jurisdiction of Ontario in connection with any
dispute arising out of or related to this Agreement.

10.11. COUNTERPARTS.

This Agreement 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.

10.12. NO THIRD PARTY BENEFICIARIES.

No person who is not a party to this Agreement shall be deemed to be a
beneficiary of any provision of this Agreement, and no such person shall have
any claim, cause of action, right or remedy pursuant to this Agreement.

10.13. INTERPRETATION.

The descriptive headings contained in this Agreement are for
convenience of reference only and shall have no effect on the interpretation or
meaning hereof. The word "Agreement" refers to the body of this Agreement and
all Schedules attached hereto or referred to herein. "Herein," "hereof" and the
like refer to this Agreement as a whole. As used in this Agreement, the singular
shall include the plural, the plural shall include the singular and each gender
shall include all genders.

10.14. ENTIRE AGREEMENT.

This Agreement, including the Schedules attached hereto (and any other
instruments executed and delivered at the Closing), embodies the entire
agreement and understanding of the parties hereto with respect to the transfer
of the Shares and the Notes to HCPH. The Schedules hereto are an integral part
of this Agreement and are incorporated by reference herein. This Agreement
supersedes all prior discussions, negotiations, agreements and understandings
(both written and oral) between the parties with respect to the transfer of the
Shares and the Notes to HCPH hereunder.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

XXXXXXXXX INC.

By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Xxxxx X. Xxxxxxxx
Vice-President and General Counsel

XXXXXXXXX CANADIAN PUBLISHING
HOLDINGS INC.

By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Xxxxxxx X. Xxxxxx
Vice President-Law and Finance and
Secretary

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EXHIBIT 2.03 STERLING PURCHASE AGREEMENT DATED AS OF APRIL 18, 1997

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