XXXXXXXXX CANADIAN PUBLISHING HOLDINGS INC.
AND
XXXXXXXXX INTERNATIONAL INC.
AND
MONTREAL TRUST COMPANY OF CANADA
TRUSTEE
EXCHANGE INDENTURE
PROVIDING FOR THE EXCHANGE OF
NON-VOTING SPECIAL SHARES
July 18, 1997
TABLE OF CONTENTS
ARTICLE 1.
INTERPRETATION
1.1. Definitions......................................................
1.2. Interpretation Not Affected by Headings..........................
1.3. Extended Meaning.................................................
1.4. Applicable Law...................................................
1.5. Language.........................................................
1.6. Time of Essence..................................................
1.7. Severability.....................................................
1.8. Business Day.....................................................
1.9. Currency.........................................................
ARTICLE 2.
EXCHANGE OF SPECIAL SHARES
2.1. Mandatory Exchange...............................................
2.2. Optional Exchange................................................
2.3. Election to Pay Cash.............................................
2.4. Relating to the Issue of Class A Shares..........................
2.5. Relating to the Purchase by HII of the Special Shares............
2.6. Fractions of Class A Shares......................................
2.7. Nature of HII's Exchange Obligation..............................
ARTICLE 3.
ADJUSTMENTS
3.1. Changes Affecting the Class A Shares..............................
3.2. No Changes to Special Shares......................................
3.3. Rules Applicable to Adjustments...................................
3.4. Certificate as to Adjustment......................................
4.1. General Covenants of HII..........................................
4.2. Shareholder Material..............................................
4.3. Trustee's Remuneration and Expenses...............................
4.4. Maintenance of Listing............................................
4.5. Status as a Reporting Company.....................................
ARTICLE 5.
MEETINGS OF SPECIAL SHAREHOLDERS
5.1. Right to Convene Meetings.........................................
5.2. Notice............................................................
5.3. Chairman..........................................................
5.4. Quorum............................................................
5.5. Power to Adjourn..................................................
5.6. Show of Hands.....................................................
5.7. Poll and Voting...................................................
5.8. Regulations.......................................................
5.9. Corporation, HII, Trustee and Counsel may be Represented..........
5.10 Powers Exercisable by Extraordinary Resolution....................
5.11 Meaning of Extraordinary Resolution...............................
5.12 Powers Cumulative.................................................
5.13 Minutes...........................................................
5.14 Instruments in Writing............................................
5.15 Binding Effect of Resolutions.....................................
5.16 Holdings by HII or Its Affiliates Disregarded.....................
ARTICLE 6.
SUPPLEMENTAL INDENTURES
6.1. Supplemental Indentures...........................................
6.2. Successor Corporations............................................
ARTICLE 7.
CONCERNING THE TRUSTEE
7.1. Trust Indenture Legislation........................................
7.2. Rights and Duties of Trustee.......................................
7.3. Evidence, Experts and Advisers.....................................
7.4. Documents, Monies, etc. Held by Trustee............................
7.5. Actions by Trustee to Protect Interests............................
7.6. Trustee Not Required to Give Security...............................
7.7. Protection of Trustee...............................................
7.8. Replacement of Trustee..............................................
7.9. Conflict of Interest................................................
7.10 Indemnity...........................................................
7.11 Acceptance of Trust.................................................
7.12 Trustee Not to be Appointed Receiver................................
7.13 Authorization to Carry on Business..................................
ARTICLE 8.
GENERAL
8.1. Notice to the Corporation, HII and the Trustee......................
8.2. Notice to the Special Shareholders..................................
8.3. Mail Service Interruption...........................................
8.4. Counterparts and Formal Date........................................
8.5. Satisfaction and Discharge of Indenture.............................
8.6. Provisions of Indenture for the Sole Benefit of Parties and Holders.
SCHEDULE A
SCHEDULE B
THIS EXCHANGE INDENTURE made as of July 18, 1997.
B E T W E E N:
XXXXXXXXX CANADIAN PUBLISHING HOLDINGS
INC., a corporation amalgamated under
the Business Corporations Act (New
Brunswick)
(the "Corporation")
- and -
XXXXXXXXX INTERNATIONAL INC., a corporation
incorporated under the laws of the State of Delaware
("HII")
- and -
MONTREAL TRUST COMPANY OF CANADA, a trust
company incorporated under the laws of Canada and duly
authorized t carry on the trust business in each province
of Canada
(the "Trustee")
RECITALS
The Corporation will issue on the date hereof 6,552,445 Special Shares in
connection with its purchase of common shares of Southam Inc. pursuant
to the Corporation's offer dated May 15, 1997 as amended on June 12,
1997 and June 25, 1997 and may issue from time to time additional
Special Shares subject to the rights and obligations of this
Indenture.
The Special Shares will be exchanged automatically with HII on the
Mandatory Exchange Date and will be exchangeable at the option of the
Holder on any Optional Exchange Date in each case for newly issued
Class A Shares on the terms and conditions described herein.
The foregoing recitals are made as representations and statements of fact
by the Corporation and HII and not by the Trustee.
NOW THEREFORE THIS INDENTURE WITNESSES that for good and valuable
consideration mutually given and received, the receipt and sufficiency of
which is hereby acknowledged, it is hereby agreed and declared as follows:
ARTICLE
INTERPRETATION
Definitions
In this Indenture, unless there is something in the subject
matter or context inconsistent therewith or unless otherwise expressly
provided:
"Accelerated Exchange Date" means the Mandatory Exchange Date if
the Mandatory Exchange Date is earlier than June 26, 2000.
"Acceleration Event" means any of the following events, written
notice of which shall be delivered to the Trustee by HII or the
Corporation, failing which the Trustee shall be deemed to have no knowledge
of such events:
an order shall be made or an effective resolution shall be passed
for the winding-up or liquidation of the Corporation, HII or HIP;
any proceeding shall be instituted against any of the Corporation,
HII or HIP or applying to a substantial part of its property or
assets seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, dissolution, winding-up, reorganization,
arrangement, adjustment, protection, relief of composition of it
or any substantial part of its property or debt under any law
relating to bankruptcy, insolvency or reorganization or relief of
debt or seeking an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any
substantial part of its property or assets and such proceeding
shall have continued undismissed or unstayed for 60 days, or a
creditor or creditors of the Corporation, HII or HIP or any other
interested party shall privately appoint a receiver, trustee or
similar official for any substantial part of the property or
assets of the Corporation, HII or HIP, and, if the Corporation,
HII or HIP shall be contesting such appointment in good faith,
such appointment shall continue for 60 days or any such action or
proceeding shall have been consented to or not expeditiously
opposed by the Corporation, HII or HIP;
any proceeding shall be instituted by any of the Corporation, HII or
HIP seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, dissolution, winding-up, adjustment, protection,
relief or composition of it or any of its property or debt or
making a proposal with respect to it under any law relating to
bankruptcy, insolvency or reorganization or relief of debts or
seeking an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any of its
property or assets, or the Corporation, HII or HIP shall take
corporate action to authorize any such proceeding;
a default in payment of any principal due under the Bank Credit
Facility or default, and
continuance thereof for five Business Days in payment when due of
any interest on any Loan (as defined in the Bank Credit
Facility), any reimbursement obligation with respect to any
Letter of Credit (as defined in the Bank Credit Facility) or any
fee or other amount payable by any Borrower (as defined in the
Bank Credit Facility) under the Bank Credit Facility or any other
Loan Document (as defined in the Bank Credit Facility) or default
in payment (after the expiry of any cure or grace period) of the
principal of or any interest on any other indebtedness of the
Corporation, HII or HIP which, in the aggregate, exceeds U.S.
$25,000,000; or
there shall have occurred the acceleration of the maturity of Debt (as
such term is defined in the Bank Credit Facility) of either of
the Corporation or HIP under the Bank Credit Facility upon any
Event of Default (as such term is defined in the Bank Credit
Facility) under the Bank Credit Facility or any other
indebtedness of the Corporation, HII or HIP which, in the
aggregate, exceeds U.S. $25,000,000.
"Affiliate" means any person directly or indirectly controlling,
controlled by or under direct or indirect common control with, HII. A
person shall be deemed to control a body corporate if such person
possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such body corporate, whether
through the ownership of voting securities, by contract, or otherwise.
"Applicable Legislation" has the meaning set out in section .
"ASE" means the Alberta Stock Exchange.
"Bank Credit Facility" means the Second Amended and Restated
Credit Agreement dated as of April 7, 1997 among, inter alia, the
Corporation, HIP and certain financial institutions, as the same may be
amended or supplemented from time to time.
"Base Amount" means U.S. $8.88 less the amount of any dividends
which have been paid per share (to a maximum of U.S. $1.67) on the Special
Shares, from time to time, from the date hereof to the Exchange Date.
"Business Day" means any day, other than a Saturday or Sunday, on
which banks and other financial institutions are open for business in
Xxxxxxx, Xxxxxxx.
"Class A Share Reorganization" has the meaning set out in section
3.1.1.
"Class A Shares" means shares of Class A Common Stock of HII, as
such shares may be reclassified or changed from time to time as
contemplated by section 3.1.
"Corporation" means Xxxxxxxxx Canadian Publishing Holdings Inc.
and includes any successor corporation to or of the Corporation which has
complied with section .
"Counsel" means a barrister or solicitor or a firm of barristers
and solicitors (who may be counsel for the Corporation) retained by the
Trustee or retained by HII and acceptable to the Trustee, acting
reasonably.
"Current Market Price" of the Class A Shares means, as at any
date, the weighted average trading price of the Class A Shares on the NYSE
for the period of 20 consecutive trading days (whether or not Class A
Shares traded on such day) ending on (and including) the Determination Date
for such date or, if such shares are not then listed on the NYSE, on any
stock exchange on which such shares are listed as the Directors may select
for this purpose, or if such shares are not listed on any stock exchange,
in such over-the-counter market as the Directors with the approval of the
Trustee may select for such purpose.
"Determination Date" means, in respect of any date, the 14th day
preceding such date.
"Director" means a director of HII for the time being and
"Directors" means the board of directors of HII or, whenever duly
empowered, the executive committee (if any) of the board of directors of
HII, for the time being, and reference without more to action by the
Directors means action by the directors of HII as a board or action by the
executive committee of the board as a committee.
"Dividends Paid in the Ordinary Course" means dividends paid on
the Class A Shares in any financial year of HII whether in (i) cash; (ii)
securities of HII including rights, options or warrants (but excluding
rights, options or warrants referred to in section 3.1.2); or (iii)
property or other assets of HII, provided that the amount or value of such
dividends in the aggregate (any such securities, property or other assets
so distributed to be valued at the fair market value thereof as determined
conclusively by action by the Directors) does not in any such financial
year exceed the greater of:
150% of the aggregate amount of or value of dividends paid by HII
on the Class A Shares in its immediately preceding financial
year; and
100% of the consolidated net income of HII (before extraordinary
items but after dividends payable on all shares ranking
prior to or on a parity with respect to the payment of
dividends with the Class A Shares) for its immediately
preceding financial year as shown in the audited
consolidated financial statements of HII for such financial
year.
"Exchange Date" means the Mandatory Exchange Date or any Optional
Exchange Date.
"Exchange Form" has the meaning set out in section .
"Exchange Ratio" has the meaning set out in section_2.2.1.
"Extraordinary Resolution" has the meaning set out in section .
"HII" means Xxxxxxxxx International Inc., a Delaware corporation,
and includes any successor corporation to or of HII which has complied with
section .
"HII's auditors" means an independent firm of chartered
accountants duly appointed as auditors of HII.
"HII Capital Reorganization" has the meaning set out in section
3.1.3.
"HIP" means Xxxxxxxxx International Publishing Inc., a Delaware
corporation.
"Indenture", "this Indenture", "Indenture", "this Indenture",
"hereto", "herein", "hereby", "hereunder", "hereof" and similar expressions
refer to this Indenture and not to any particular Article, section,
subsection, paragraph, subparagraph, clause, subclause or other portion
hereof, and include any and every supplemental indenture; and "supplemental
indenture" and "indenture supplemental hereto" include any and every
indenture, deed or instrument supplemental or ancillary hereto or in
implementation hereof; and the expressions "Article", "section",
"subsection", "paragraph", "subparagraph", "clause" and "subclause"
followed by a number and/or a letter mean and refer to the specified
Article, section, subsection, paragraph, subparagraph, clause or subclause
of this Indenture.
"Mandatory Exchange" means an exchange of Special Shares for
Class<0- 95>A Shares pursuant to section<0- 95>2.1.
"Mandatory Exchange Date" means the earlier of June 26, 2000, or
the date on which an Acceleration Event first occurs.
"Mandatory Exchange Notice" has the meaning set out in section .
"Mandatory Exchange Number" means, as of any date, the Base
Amount divided by 95% of the Current Market Price of Class A Shares on such
date.
"NYSE" means the New York Stock Exchange.
"Officers' Certificate" of any person (other than a natural
person) means a written certificate signed in the name of such person by
any two of its Chairman, Chief Executive Officer, President, any
Vice-President, Treasurer, any Assistant Treasurer, Controller, any
Assistant Controller, Secretary and any Assistant Secretary, and may
consist of one or more certificates so executed.
"Optional Exchange" means an exchange of Special Shares for
Class_A Shares pursuant to section_2.2.
"Optional Exchange Date" means the date on which the Trustee
receives the documents specified in section 2.2.2 duly tendered by a Holder
in respect of the exercise of his optional exchange right pursuant to
section 2.2.1.
"person" means a natural person, corporation, body corporate,
partnership, joint
venture or other unincorporated association, trust, government or
governmental authority and pronouns have a similar extended meaning.
"Shelf Registration Statement" has the meaning set out in section
(d).
"Special Shares" means the Non-Voting Special Shares of the
Corporation.
"Special Share Certificate" means a certificate evidencing one or
more Special Shares issued by the Corporation.
"Special Shareholders" or "Holders" means the persons whose names
are for the time being entered in the registers maintained by or on behalf
of the Corporation as holders of Special Shares.
"Special Shareholders' Request" means an instrument signed in one
or more counterparts by Special Shareholders holding in the aggregate not
less than 25% of the aggregate number of Special Shares then outstanding
requesting the Trustee to take the action or proceeding specified therein.
"successor corporation" has the meaning set out in section .
"Trustee" means Montreal Trust Company of Canada and any
successors to Montreal Trust Company of Canada for the time being in the
trusts hereby created.
"TSE" means The Toronto Stock Exchange.
"U.S. Securities Act" means the United States Securities Act of
1933.
Interpretation Not Affected by Headings
The division of this Indenture into Articles, sections and other
subdivisions, the provision of a table of contents and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Indenture.
Extended Meaning
Words importing the singular number only shall include the plural
and vice versa, and words importing the masculine gender shall include the
feminine and neuter genders and vice versa.
Applicable Law
[NYCORP2:429431.1:4575C:9/12/97-- 2:49pm]
This Indenture shall be governed by and construed in accordance
with the laws of the Province of Ontario and the laws of Canada applicable
therein. The parties hereto irrevocably attorn to the non-exclusive
jurisdiction of the courts of the Province of Ontario with respect to
matters arising under this Indenture.
Language
The parties hereto expressly request and require that this
Indenture and all other documents related thereto be drawn up in English.
Les parties aux presentes conviennent et exigent que cette acte de fiducie
et tous les documents qui s'y rattachent soient rediges en anglais.
Time of Essence
Time shall be of the essence of this Indenture.
Severability
Each of the provisions in this Indenture is distinct and
severable and a declaration of invalidity or unenforceability of any such
provision or part thereof by a court of competent jurisdiction shall not
affect the validity or enforceability of any of the other provisions
hereof.
Business Day
Whenever any action is required to be taken under this Indenture
on or as of a day that is not a Business Day, that action must be taken on
or as of the next day that is a Business Day.
Currency
Any reference in this Indenture to "dollars" or the sign "$"
shall be deemed to be a reference to lawful money of the United States of
America.
ARTICLE
EXCHANGE OF SPECIAL SHARES
Mandatory Exchange
Subject to sections 2.3 and 2.6, on the Mandatory Exchange
Date each Special Share shall be exchanged automatically (without any
further action on the part of the Holder or HII) by the Holder thereof
with HII for the Mandatory Exchange Number calculated as of the
Mandatory Exchange Date of newly issued Class A Shares to be issued by
HII. Subject to sections 2.3 and 2.6, not later than seven days prior
to the Mandatory Exchange Date if it is not an Accelerated Exchange
Date and forthwith after an Accelerated Exchange Date, HII shall
provide the Trustee with an Officers' Certificate of HII showing the
computation of the number of Class A Shares to be delivered per
Special Share.
Not later than 14 days and not earlier than 30 days prior to
the Mandatory
Exchange Date if it is not an Accelerated Exchange Date and forthwith
after an Accelerated Exchange Date, HII shall send to the Special
Shareholders and to the Trustee an exchange notice (the "Mandatory
Exchange Notice") substantially in the form attached hereto as
Schedule "A" together with an exchange form (the "Exchange Form")
substantially in the form attached as Schedule "B".
In order to receive certificates representing the Class A
Shares and cash, if any, to which any Holder is entitled pursuant to
this section .1, the Holder must surrender to the Trustee, at any time
on or after the Mandatory Exchange Date, the documents specified in
section 2.2.2 in the manner set out in such section. The provisions of
sections 2.2.3, 2.2.4, 2.2.5, 2.2.6 and 2.2.7 shall apply, mutatis
mutandis, to a Mandatory Exchange. Whether or not a Holder has so
surrendered the certificate(s) evidencing his Special Shares, on and
as of the Mandatory Exchange Date each Holder shall be deemed to have
transferred his Special Shares to HII and from the Mandatory Exchange
Date each Holder shall have no rights as a shareholder of the
Corporation in respect of such Special Shares.
HII shall satisfy its obligations on a Mandatory Exchange or
Optional Exchange without withholding any tax.
Optional Exchange
Each Holder shall have the right at his option at any time
after December_23, 1997 to exchange any or all of his Special
Shares with HII for the following number (each, an "Exchange Ratio")
of newly issued Class A Shares to be issued by HII per Special Share:
Optional Exchange Date No. of Class A
Shares
After December 23, 1997 but on or before June_23, 1998 0.510
Thereafter but on or before December_23, 1998 0.530
Thereafter but on or before June 23, 1999 0.550
Thereafter but on or before December 23, 1999 0.570
Thereafter but on or before June 8, 2000 0.590
Thereafter but before June 26, 2000 0.602
Each Holder may exercise his right pursuant to section 2.2.1
by depositing with the Trustee at its stock and bond transfer
department in its principal stock transfer office in the Cities of
Toronto, Montreal or Vancouver (or at such additional place or places
as may be decided by HII from time to time with the approval of the
Trustee), or by mailing to the Trustee at its stock and bond transfer
department in the Trustee's principal stock transfer office in the
City of Toronto, the Special Share Certificate(s) evidencing his
Special Shares, together with an Exchange Form duly completed and
executed by the Holder or his executors or administrators or other
legal representatives or his or their attorney duly appointed by an
instrument in writing in form and manner satisfactory to the Trustee.
The Exchange Form shall be deemed not to be duly completed if the name
and mailing address of the Holder do not appear legibly thereon or
such Exchange Form is not signed by the Holder, his executors,
administrators, other legal representatives or such Holder's attorney
duly appointed. The Trustee shall notify HII promptly after its
receipt of documents pursuant to this section 2.2.2.
The Exchange Form shall specify the person or persons in
whose name or names the Class A Shares are to be registered, his or
their address or addresses and the number of Class A Shares to be
issued to each such person if more than one is so specified, provided
that the Special Shareholder shall only be entitled to direct his
entitlement to the Class A Shares in a manner permitted by applicable
securities legislation.
If any of the Class A Shares to be issued in exchange for
the Special Shares are to be issued to a person or persons other than
the Special Shareholder in accordance with the provisions of section
hereof, the Holder's signature shall be guaranteed by a Canadian
chartered bank, by a trust company that is a member of the Trust
Companies Association of Canada, by a member firm of the TSE or of the
Montreal Exchange, or by a member of the National Association of
Securities Dealers of the United States and the Special Shareholder
shall pay to the Trustee all requisite stamp or security transfer
taxes or other governmental charges exigible in connection with the
issue of such Class A Shares to such other person or persons or shall
establish to the satisfaction of the Trustee that such taxes and
charges have been paid.
HII shall send or cause to be sent to each Holder as soon as
practicable and in any event within 10 Business Days after an Optional
Exchange Date or, in the case of a Mandatory Exchange, the surrender
of his Special Share Certificate(s) and duly completed
Exchange Form in accordance with this Article : (i) a certificate or
certificates for the Class A Shares to which the Holder is entitled;
or (ii) if HII has elected in accordance with section to satisfy all
or any part of its obligations on exchange of Special Shares by the
payment of cash, that amount of cash payable or that combination of
cash and certificates for Class A Shares to which the Holder is
entitled.
HII shall pay to the Trustee sufficient funds in lawful
money of the United States of America to permit the Trustee to make
any payment to be made to Special Shareholders on the date that such
payment is due pursuant to this Article . Any such payment by HII to
the Trustee shall be in same day U.S. funds, by wire as follows:
If the U.S. funds are from the United States:
Pay: Bank of Nova Scotia
New York Agency
00 Xxxx Xxxxxx
ABA# 000000000
For Payment to: Xxxx xx Xxxx Xxxxxx, Xxxxxxx
Transit #: 00000
For Further Credit to: Montreal Trust Company of Canada,
Toronto
Account: 086008-13
If the U.S. funds are wired from within Canada or any other
country, other than the United States:
Pay: Bank of Nova Scotia
International Banking Division
Toronto, Ontario
For Payment to: Bank of Xxxx Xxxxxx, Xxxxxxx
Transit #: 80002
For Further Credit to: Montreal Trust Company of Canada,
Toronto
Account #: 086008-13
The Trustee will give notice to HII of any changes in its
instructions for receipt of wire transferred funds. In no event shall the
Trustee be required to make payment to holders unless and until it has
received the funds from HII.
Certificates evidencing all Special Shares exchanged
pursuant to this Article shall be delivered by the Trustee to HII.
During the month of May, 2000 HII shall publish a notice
once in the national edition of The Globe and Mail or The Financial
Post or other daily newspaper(s) providing national distribution
reasonably acceptable to the Trustee, setting out the terms of
Optional Exchange for the period commencing after June<0- 95>8, 2000
and the terms of Mandatory Exchange.
Election to Pay Cash
Notwithstanding anything in this Indenture to the contrary,
the obligation of HII to issue Class A Shares on the exchange of
Special Shares as contemplated by section or section 2.2 may be
satisfied at the option of HII:
in the case of a Mandatory Exchange, with respect to all or any
portion of the Base Amount by payment in cash in lawful
money of the United States of America of that portion of the
Base Amount for each Special Share so designated by HII in
accordance with section ; and
in the case of an Optional Exchange, with respect to any or all
of the Class A Shares issuable on such Optional Exchange, by
payment in cash in lawful money of the United States of
America of an amount per Class A Share equal to the price
per share for the last trade of a board lot of Class A
Shares on the NYSE prior to the Optional Exchange Date.
HII shall exercise its right pursuant to section in the case
of a Mandatory Exchange by so specifying in the Mandatory Exchange
Notice and in the case of an Optional Exchange by giving notice to the
Trustee within three Business Days following an Optional Exchange
Date. HII shall, not later than three Business Days following an
Optional Exchange Date and at least seven days prior to the Mandatory
Exchange Date if it is not an Accelerated Exchange Date and forthwith
after an Accelerated Exchange Date, provide the Trustee with an
Officers' Certificate of HII showing the computation of the number of
Class A Shares (if any) to be delivered per Special Share and of the
cash (if any) to be paid per Special Share.
Relating to the Issue of Class A Shares
A Holder shall be treated as the shareholder of record of
the Class A Shares issued on exchange of his Special Shares effective
on the relevant Exchange Date and to have become entitled to all
substitutions therefor, all income earned thereon or accretions
thereto and all dividends or distributions (including stock dividends
and dividends or distributions in kind) thereon and arising
thereafter, and before such Class A Shares are delivered or sent and
in the event that the Trustee receives the same, it shall hold the
same
in trust for the benefit of such Holder.
HII shall at all times reserve and keep available out of its
authorized Class A Shares (if the number thereof is or becomes
limited) solely for the purpose of issue and delivery upon exchange of
the Special Shares and shall issue to Holders such number of Class A
Shares as shall be issuable upon exchange in accordance with this
Article 2. All Class A Shares which shall be so issuable shall be duly
and validly issued as fully paid and non-assessable.
HII shall comply with all applicable securities legislation
regulating the issue and delivery of Class A Shares upon exchange of
the Special Shares and shall cause to be listed and posted for trading
such Class A Shares on each stock exchange on which the Class A Shares
are then listed.
HII shall from time to time promptly pay or make provisions
satisfactory to the Trustee for the payment of all taxes and charges
which may be imposed by the laws of Canada or any province thereof
(except income tax or security transfer tax, if any) which shall be
payable with respect to the issuance or delivery of Class A Shares to
Holders upon exchange of the Special Shares pursuant to the terms of
this Indenture.
Relating to the Purchase by HII of the Special Shares
Provided HII shall have fulfilled its obligations on an Exchange
Date pursuant to this Article , HII shall be treated as the shareholder of
record of the Special Shares acquired by it pursuant to this Article 2 and
shall be entered on the register as owner of such Special Shares effective
on the Exchange Date and to have become entitled to all substitutions
therefor, all income earned thereon or accretions thereto and all dividends
or distributions (including stock dividends and dividends or distributions
in kind) thereon arising thereafter and before such Special Shares are
delivered or sent to the Trustee pursuant hereto.
Fractions of Class A Shares
HII shall not issue a fraction of a Class A Share on the exchange
of any Special Share. To the extent that the Holder of a Special Share is
entitled to receive on the exchange thereof a fraction of a Class A Share,
HII shall make an appropriate cash payment in lieu of fractional shares.
The amount of cash payment shall be equal to the fraction of the Class A
Share to which the Holder would be entitled multiplied by (a) in the case
of a Mandatory Exchange, the Base Amount and (b) in the case of an Optional
Exchange, the price per share for the last trade of a board lot of Class A
Shares on the NYSE prior to the Optional Exchange Date, in each case
rounded up to the nearest whole cent. HII shall, no later than three
Business Days following an Optional Exchange Date and at least seven days
prior to the Mandatory Exchange Date if it is not an Accelerated Exchange
Date, and forthwith after an Accelerated Exchange Date, provide the Trustee
with an Officers' Certificate of HII showing, in the case of a Mandatory
Exchange, the Base Amount for the purposes of the calculation in this
section 2.6 or, in the case of an Optional
Exchange, the price per Class A Share for the last trade of a board lot on
the NYSE prior to the Optional Exchange Date for the purposes of the
calculation in this section 2.6.
Nature of HII's Exchange Obligation
The obligation of HII to acquire Special Shares on a Mandatory
Exchange or Optional Exchange hereunder is a direct unsecured obligation of
HII ranking pari passu with all other unsecured claims against it.
ARTICLE
ADJUSTMENTS
Changes Affecting the Class A Shares
If and whenever at any time after the date hereof and prior
to the Mandatory Exchange Date HII:
issues Class A Shares or securities exchangeable for or
convertible into Class A Shares to all or substantially all
the holders of Class_A Shares as a stock dividend or
other distribution (other than a Dividend Paid in the
Ordinary Course);
makes a distribution on its outstanding Class A Shares payable in
Class_A Shares or securities exchangeable for or
convertible into Class_A Shares (other than as a
Dividend Paid in the Ordinary Course);
subdivides its outstanding Class_A Shares into a greater
number of Class_A Shares; or
consolidates its outstanding Class_A Shares into a smaller
number of Class_A Shares,
(any of such events in clauses (a) through (d) being called a "Class A
Share Reorganization"), then the Exchange Ratios will be adjusted
effective immediately after the effective date or record date for the
happening of a Class A Share Reorganization, as the case may be, at
which the holders of Class A Shares are determined for the purpose of
the Class A Share Reorganization, by multiplying each Exchange Ratio
in effect immediately prior to such effective date or record date by a
fraction, the numerator of which will be the number of Class A Shares
outstanding immediately after giving effect to such Class A Share
Reorganization (including, in the case where securities exchangeable
for or convertible into Class A Shares are distributed, the number of
Class A Shares that would have been outstanding had all such
securities been exchanged for or converted into Class A Shares on such
effective date or record date) and the denominator of which will be
the number of Class A Shares outstanding on such effective date or
record date before giving effect to such Class A Share Reorganization.
If and whenever at any time after the date hereof and prior
to the Exchange Date HII fixes a record date for the issue of rights,
options or warrants to all or substantially all the holders of Class A
Shares under which such holders are entitled, during a period expiring
not more than 45 days after the date of such issue (the "Rights
Period"), to subscribe for or purchase Class_A Shares or
securities exchangeable for or convertible into Class_A Shares
at a price per share to the holder (or at an exchange or conversion
price per share during the Rights Period to the holder in the case of
securities exchangeable for or convertible into Class A Shares) of
less than 95% of the Current Market Price calculated as of such record
date (any of such events being called a "Rights Offering"), then each
Exchange Ratio will be adjusted effective immediately after the end of
the Rights Period by multiplying such Exchange Ratio in effect
immediately prior to the end of the Rights Period by a fraction:
the numerator of which will be the number of Class A Shares
outstanding, or the number of Class A Shares which would be
outstanding if all the exchangeable or convertible
securities were exchanged for or converted into Class_A
Shares during the Rights Period, after giving effect to the
Rights Offering and including the number of Class A Shares
actually issued or subscribed for during the Rights Period
upon exercise of the rights, warrants or options under the
Rights Offering; and
the denominator of which will be the aggregate of:
the number of Class A Shares outstanding as of the record
date for the Rights Offering; and
a number determined by dividing (1) either (A) the
product of the number of Class A Shares issued or
subscribed for during the Rights Period upon the
exercise of the rights, warrants or options under the
Rights Offering and the price at which such Class_A
Shares are offered, or, as the case may be, (B) the
product of the exchange or conversion price of such
securities exchangeable for or convertible into Class_A
Shares and the number of Class_A Shares for or into
which the securities so offered pursuant to the Rights
Offering could have been exchanged or converted during
the Rights Period, by (2) the Current Market Price of
the Class_A Shares calculated as of the record date for
the Rights Offering.
Any Holder who has made an Optional Exchange in accordance with
section_2.2 during the period beginning immediately after the record
date for a Rights Offering and ending on the last day of the Rights
Period for the Rights Offering will, in addition to the Class_A Shares
issued to that Holder on such Optional Exchange, be entitled to that
number of additional Class_A Shares equal to the result obtained when
the difference, if any, between the
Exchange Ratio as adjusted for such Rights Offering pursuant to this
subsection and the applicable Exchange Ratio in effect on the date of
such Optional Exchange is multiplied by the number of Special Shares
exchanged pursuant to such Optional Exchange by such Holder. Such
additional Class A Shares will be deemed to have been issued to the
Holder immediately following the end of the Rights Period and a
certificate for such additional Class A Shares will be delivered to
such Holder within 15 Business Days following the end of the Rights
Period.
If and whenever at any time after the date hereof and prior
to the Mandatory Exchange Date, HII fixes a record date for the issue
or the distribution to all or substantially all the holders of Class A
Shares of (i) securities of HII, including rights, options or warrants
to acquire securities of HII or any of its property or assets
(including evidences of indebtedness) or (ii) any property or other
assets (including evidences of indebtedness) and if such issuance or
distribution does not constitute a Dividend Paid in the Ordinary
Course, a Class A Share Reorganization or a Rights Offering (any of
such non-excluded events being called a "Special Distribution"), each
Exchange Ratio will be adjusted effective immediately after such
record date by multiplying such Exchange Ratio by a fraction:
the numerator of which will be the product of the number of
Class A Shares outstanding on such record date and the
Current Market Price of the Class_A Shares calculated
as of such record date; and
the denominator of which will be:
the product of the number of Class A Shares outstanding on
such record date and the Current Market Price of the
Class A Shares on such record date; less
the fair market value, as determined by action by the
Directors (whose determination will be conclusive), to
the holders of Class A Shares of such securities or
property or other assets so issued or distributed in
the Special Distribution.
To the extent that any Special Distribution is not so made, the
Exchange Ratio will be readjusted effective immediately to the
Exchange Ratio which would then be in effect based upon such
securities or property or other assets as actually distributed.
If and whenever at any time after the date hereof and prior
to the Mandatory Exchange Date there is a reclassification of the
Class A Shares at any time outstanding or change of the Class A Shares
into other shares or into other securities or other capital
reorganization (other than a Class A Share Reorganization), or a
consolidation, amalgamation, arrangement or merger of HII with or into
any other corporation or other entity (other than a consolidation,
amalgamation, arrangement or merger which does not result in any
reclassification of the outstanding Class A Shares or a change of the
Class A Shares into other shares), or a transfer of the undertaking or
assets of HII as an entirety or substantially as an entirety to
another corporation or other entity in which the holders of Class A
Shares are entitled to receive shares, other securities or other
property (any of such events being called an "HII Capital
Reorganization"), a Special Shareholder will be entitled to receive on
any Exchange Date, and shall accept in lieu of Class A Shares, the
aggregate
number of shares, other securities or other property which such Holder
would have been entitled to receive as a result of such HII Capital
Reorganization if, on the effective date thereof, the Holder had been
the registered holder of the number of Class A Shares which such
Holder would have received if the Exchange Date were immediately prior
to such effective date, subject in all such cases, to HII's rights
under section 2.3. If determined appropriate by the Directors,
appropriate adjustments will be made as a result of any such HII
Capital Reorganization in the application of the provisions set forth
in this Article with respect to the rights and interests thereafter of
Special Shareholders to the end that the provisions set forth in this
Article will thereafter correspondingly be made applicable as nearly
as may reasonably be in relation to any shares, other securities or
other property thereafter deliverable upon the exercise of any Special
Shares. Any such adjustment will be made by and set forth in an
indenture supplemental hereto approved by the Directors and entered
into pursuant to the provisions of Article 6 and will for all purposes
be conclusively deemed to be an appropriate adjustment.
No Changes to Special Shares
The Corporation shall not at any time after the date hereof and
prior to the Mandatory Exchange Date take any of the actions referred to in
section_3.1 in respect of the Special Shares. If, contrary to the
foregoing, the Corporation takes any of such actions, the terms of
Mandatory Exchange and Optional Exchange shall be adjusted effective
immediately after the effective date or record date thereof to ensure that
the entitlement of Holders pursuant to this Indenture is not affected
adversely thereby.
Rules Applicable to Adjustments
For the purposes of section and :
The adjustments provided for in sections and are cumulative
and will be made successively whenever an event referred to therein
occurs, subject to the following subsections of this section.
No adjustment of the Exchange Ratios will be required unless
such adjustment would result in a change of at least 1% in the
applicable Exchange Ratios; provided, however, that any adjustments
which, except for the provisions of this subsection would otherwise
have been required to be made, will be carried forward and taken into
account in any subsequent adjustment.
If at any time a dispute arises with respect to adjustments
provided for in sections and , such dispute will be conclusively
determined by HII's auditors or if they are unable or unwilling to
act, by such other firm of independent chartered accountants as may be
selected by action by the Directors and any such determination will be
binding upon HII, the Corporation, the Trustee and the Holders of
Special Shares; such auditors or accountants will be given access to
all necessary records of the Corporation and HII. If any such
determination is made, HII will deliver an Officers' Certificate to
the Trustee describing such determination.
If after the date of this Indenture the Corporation or HII
takes any action affecting the Special Shares or Class A Shares,
respectively, other than action described in sections and , which in
the opinion of the Directors would materially affect the rights of the
Special Shareholders, the Exchange Ratios or other terms of Article 2
will be adjusted in such manner, if any, and at such time, by action
by the Directors, in their sole discretion, as they may determine to
be equitable in the circumstances, but subject in all cases to any
necessary regulatory approvals, including any approval required by any
stock exchange on which the Special Shares or Class A Shares may be
listed. Failure of the taking of action by the Directors so as to
provide for an adjustment on or prior to the effective date of any
action by the Corporation or HII affecting the Special Shares or Class
A Shares, respectively, will be conclusive evidence that the Directors
have determined that it is equitable to make no adjustment in the
circumstances.
If the Corporation or HII sets a record date to determine
the holders of Class A Shares to take any action and thereafter and
before the taking of such action, legally abandons its plan to take
such other action, then no adjustment will be required by reason of
the setting of such record date.
As a condition precedent to the taking of any action which
might require any adjustment, HII will take any corporate action which
may, in the opinion of Counsel, be necessary in order that HII have
unissued and reserved in its authorized capital stock and may validly
and legally issue as fully paid and non-assessable all the shares or
other securities which all the holders of such Special Shares are
entitled to receive on the full exercise thereof in accordance with
the provisions thereof.
The Trustee shall not at any time be under any duty or
responsibility to any Holder to determine whether any facts exist
which may require any adjustment contemplated by Article , nor to
verify the nature or extent of any such adjustment when made, or the
method employed in making the same.
Certificate as to Adjustment
Immediately after the occurrence of any event that requires an
adjustment or readjustment as provided in sections and , HII will deliver
an Officers' Certificate to the Trustee specifying the nature of the event
requiring the adjustment and the amount of the adjustment necessitated
thereby and setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based, which certificate and
the amount of the adjustment specified therein will be verified by HII's
auditors and will be conclusive and binding on all parties in interest.
When so approved, HII will forthwith give notice to the Special
Shareholders in the manner provided in section specifying the event
requiring such adjustment or readjustment and the results thereof.
ARTICLE
COVENANTS OF HII AND THE CORPORATION
General Covenants of HII
HII covenants with the Trustee that:
so long as the Special Shares have not been exchanged pursuant to
the terms and conditions hereof, it will at all times comply with
all provisions of this Indenture to be complied with by it;
it will cause the Class A Shares and the certificates representing
the Class A Shares issuable upon exchange of the Special Shares
to be issued and delivered in accordance with the terms hereof as
fully paid and non-assessable shares;
so long as the Special Shares have not been exchanged pursuant to
the terms and conditions hereof, it will maintain its corporate
existence;
HII shall, at its cost, file with the United States Securities and
Exchange Commission and shall use all reasonable efforts to cause
to be declared effective on or before December_23, 1997 a
registration statement (the "Shelf Registration Statement") on
Form S-3 under the U.S. Securities Act relating to the issuance
of Class A Shares by HII to the Holders upon the consummation of
the Mandatory Exchange or any Optional Exchange pursuant to
Article 2 hereof. HII shall maintain the effectiveness of the
Shelf Registration Statement until the earlier of (i) the date
that is 15 days after the Mandatory Exchange Date and (ii) the
date on which all Special Shares shall have been exchanged for
Class A Shares. In the event that HII is unable to have the Shelf
Registration Statement as described above declared effective, HII
shall use all reasonable efforts to cause to be declared
effective on or before December 31, 1997 a Shelf Registration
Statement relating to the resale of Class A Shares issued by HII
to the Holders upon the consummation of the Mandatory Exchange or
any Optional Exchange pursuant to Article 2 hereof. HII shall
maintain the effectiveness of any such Shelf Registration
Statement for resales until the earlier of (i) 2 years after the
date on which the last Special Shares have been issued, (ii) such
time as all Special Shares have been sold or disposed of pursuant
to the Shelf Registration Statement and (iii) such time as all
Special Shares may be freely sold under restriction under the
Securities Act; and
HII shall use all reasonable efforts to obtain on or prior to
December_23, 1997 a rating of the Special Shares from two
credit rating agencies one of which will be Standard & Poor's
Corporation or Xxxxx'x Investors Services, Inc.
Shareholder Material
HII, at its own expense, will arrange for any continuous
disclosure documentation and other informational material provided by HII
to holders of Class A Shares to be mailed to all Holders at the same time
that such material is provided to shareholders of HII.
Trustee's Remuneration and Expenses
HII covenants that it will pay to the Trustee from time to time
reasonable
remuneration for its services hereunder and will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in the administration or execution
of the trusts created hereby (including the reasonable fees and
disbursements of its Counsel and all other advisers and assistants not
regularly in its employ), both before any default hereunder and thereafter
until all duties of the Trustee under such trusts are finally and fully
performed, except any such expenses, disbursements or advances as may arise
from the negligence or wilful misconduct of the Trustee.
Maintenance of Listing
The Corporation will use its best efforts to ensure that all
of the outstanding Special Shares shall be listed and posted or
admitted for trading on the facilities of the TSE until the Mandatory
Exchange Date.
HII will use its best efforts to ensure that its Class A
Shares shall be listed and posted or admitted for trading on the
facilities of the NYSE until and on the Mandatory Exchange Date.
Status as a Reporting Company
The Corporation covenants that, for as long as any Special Shares
are outstanding, it will at all times comply with all provisions of this
Indenture to be complied with by it and use its reasonable best efforts to
maintain its status as a reporting issuer not in default under the
legislation administered by the Ontario Securities Commission or under any
similar provincial legislation of any of the other provinces of Canada or
any similar Canadian federal legislation hereinafter enacted.
ARTICLE
MEETINGS OF SPECIAL SHAREHOLDERS
Right to Convene Meetings
The Trustee may at any time and from time to time, and shall on
receipt of a written request of HII or the Corporation or of a Special
Shareholders' Request, convene a meeting of the Special Shareholders to
consider matter(s) relating to this Indenture provided that the Trustee is
funded and indemnified to its reasonable satisfaction by HII or the
Corporation or by the Special Shareholders signing such Special
Shareholders' Request against the costs which may be incurred in connection
with the calling and holding of such meeting. If the Trustee fails to give
notice to convene a meeting within 10 Business Days after the receipt of a
written request of HII or the Corporation or a Special Shareholders'
Request and indemnity given as aforesaid, HII, the Corporation or such
Special Shareholders, as the case may be, may convene such meeting. Every
such meeting shall be held in the City of Toronto or at such other place as
may be approved or determined by the Trustee.
Notice
At least 10 days' prior notice of any meeting of Special
Shareholders shall be given by the Corporation to the Special Shareholders
in the manner provided for in section and a copy
of such notice shall be delivered to the Trustee unless the meeting has
been called by the Trustee, and to HII or the Corporation unless the
meeting has been called by it. Such notice shall state the time and place
of the meeting, the general nature of the business to be transacted and
shall contain such information as is reasonably necessary to enable the
Holders to make a reasoned decision on the matter but it shall not be
necessary for any such notice to set out the terms of any resolution to be
proposed or any of the provisions of this Article 5. The notice convening
any such meeting may be signed by an appropriate officer of the Trustee or
of HII or the Corporation or the person designated by the Special
Shareholders, as the case may be.
Chairman
The Trustee may nominate in writing an individual to be Chairman
of the meeting and if no individual is so nominated, or if the individual
so nominated is not present within 15 minutes after the time fixed for the
holding of the meeting, the Special Shareholders present in person or by
proxy shall appoint an individual present to be Chairman.
Quorum
Subject to the provisions of section , at any meeting of the
Special Shareholders a quorum shall consist of Special Shareholders present
in person or represented by proxy holding at least 25% of the Special
Shares then outstanding, provided that at least two persons entitled to
vote thereat are personally present. If a quorum of the Holders shall not
be present within one half-hour from the time fixed for holding any
meeting, the meeting, if summoned by the Holders or on a Special
Shareholders' Request, shall be dissolved; but in any other case the
meeting shall be adjourned to the same day in the next week (unless such
day is not a Business Day in which case it shall be adjourned to the next
following Business Day) at the same time and place to the extent possible
and, subject to the provisions of section , no notice of the adjournment
need be given. Any business may be brought before or dealt with at an
adjourned meeting which might have been dealt with at the original meeting
in accordance with the notice calling the same. At the adjourned meeting
the Special Shareholders present in person or represented by proxy shall
form a quorum and may transact the business for which the meeting was
originally convened, notwithstanding that they may not represent at least
25% of the Special Shares then outstanding. No business shall be transacted
at any meeting unless a quorum is present at the commencement of business.
Power to Adjourn
The Chairman of any meeting at which a quorum of the Special
Shareholders is present may, with the consent of the meeting, adjourn any
such meeting, and no notice of such adjournment need be given except such
notice, if any, as the meeting may prescribe.
Show of Hands
Every question submitted to a meeting shall be decided in the
first place by a majority of the votes given on a show of hands, except
that votes on an extraordinary resolution
shall be given in the manner hereinafter provided. At any such meeting,
unless a poll is duly demanded as herein provided, a declaration by the
Chairman that a resolution has been carried or carried unanimously or by a
particular majority or lost or not carried by a particular majority shall
be conclusive evidence of the fact.
Poll and Voting
On every extraordinary resolution, and when demanded by the
Chairman or by one or more of the Special Shareholders acting in person or
by proxy on any other question submitted to a meeting and after a vote by
show of hands, a poll shall be taken in such manner as the Chairman shall
direct. Questions other than those required to be determined by
extraordinary resolution shall be decided by a majority of the votes cast
on the poll. On a show of hands, every person who is present and entitled
to vote, whether as a Special Shareholder or as proxy for one or more
absent Special Shareholders, or both, shall have one vote. On a poll, each
Special Shareholder present in person or represented by a proxy duly
appointed by instrument in writing shall be entitled to one vote in respect
of each Special Share held by him. A proxy need not be a Special
Shareholder. The Chairman of any meeting shall be entitled, both on a show
of hands and on a poll, to vote in respect of the Special Shares, if any,
held or represented by him.
Regulations
Subject to the provisions of this Indenture, the Trustee or HII,
with the approval of the Trustee, or the Corporation, with the approval of
the Trustee, may from time to time make and from time to time vary such
regulations as it shall consider necessary for:
the setting of a record date for a meeting for the purpose of
determining Special Shareholders entitled to receive notice and
to vote at a meeting;
the deposit of instruments appointing proxies at some approved place
other than the place at which the meeting is to be held and
enabling particulars of such instruments appointing proxies to be
mailed, cabled or telegraphed before the meeting to the
Corporation or to the Trustee at the place where the same is to
be held and for the voting of proxies so deposited as though the
instruments themselves were produced at the meeting;
the form of the instrument of proxy; and
generally for the calling of meetings of Special Shareholders and the
conduct of business thereat.
Any regulations so made shall be binding and effective and the
votes given in accordance therewith shall be valid and shall be counted.
Save as such regulations may provide, the only persons who shall be
recognized at any meeting as a Special Shareholder, or be entitled to vote
or be present at the meeting in respect thereof (subject to section ),
shall be Special Shareholders or persons holding proxies of Special
Shareholders.
Corporation, HII, Trustee and Counsel may be Represented
The Corporation, HII and the Trustee, by their respective
directors, officers and employees, and the counsel for each of the
Corporation, HII, the Special Shareholders and the Trustee may attend any
meeting of the Special Shareholders, but shall have no vote except, with
respect to the Trustee only, in its capacity as a Special Shareholder.
Powers Exercisable by Extraordinary Resolution
In addition to all other powers conferred upon them relating to
this Indenture by any other provisions of this Indenture or by law, the
Special Shareholders at a meeting shall have the power, exercisable from
time to time by extraordinary resolution:
subject to the prior written consent of the TSE and, so long as the
Special Shares are listed on the ASE, the ASE, to agree with the
Corporation and HII to any modification, alteration, compromise
or arrangement of the rights of Special Shareholders or the
Trustee in its capacity as trustee hereunder or on behalf of the
Special Shareholders against the Corporation, whether such rights
arise under this Indenture or otherwise;
to amend or repeal any extraordinary resolution previously passed or
sanctioned by the Special Shareholders;
to restrain any Special Shareholder from taking or instituting any
suit, action or proceeding against the Corporation or HII for the
enforcement of any of the covenants on the part of the
Corporation or HII contained in this Indenture or to enforce any
of the rights of the Special Shareholders;
to direct any Special Shareholder who, as such, has brought any
suit, action or proceeding to stay or discontinue or otherwise
deal with any such suit, action or proceeding, upon payment of
the costs, charges and expenses reasonably and properly incurred
by such Special Shareholder in connection therewith;
to assent to any change in or omission from the provisions contained
in this Indenture or any ancillary or supplemental instrument
which may be agreed to by HII and the Corporation (where the
Corporation may reasonably be affected), and to authorize the
Trustee to concur in and execute any ancillary or supplemental
indenture embodying the change or omission;
to remove the Trustee or its successor in office and to appoint a
new trustee or trustees to take the place of the Trustee so
removed; and
to assent to any compromise or arrangement with any creditor or
creditors or any class or classes of creditors, whether secured
or otherwise, and with holders of any shares or other securities
of the Corporation.
Meaning of Extraordinary Resolution
The expression "extraordinary resolution" when used in this
Indenture means, subject as hereinafter in this section and in section
provided, a resolution proposed at a meeting of Special Shareholders
duly convened for that purpose in accordance with section and held in
accordance with the provisions of this Article 5 at which there are
present in person or represented by proxy Special Shareholders holding
at least 25% of the outstanding Special Shares and passed by the
affirmative votes of Special Shareholders holding not less than 66
2/3% of the Special Shares represented at the meeting and voted on the
poll upon such resolution excluding Special Shares owned legally or
beneficially by HII or any of its Affiliates.
If, at any meeting called for the purpose of passing an
extraordinary resolution, Special Shareholders holding at least 25% of
the then outstanding Special Shares are not present in person or by
proxy within one half-hour after the time appointed for the meeting,
then the meeting, if convened by Special Shareholders or on a Special
Shareholders' Request, shall be dissolved; but in any other case it
shall stand adjourned to such day, being not less than ten nor more
than fifteen days later, and to such place and time as may be
appointed by the Chairman. Not less than seven days' prior notice
shall be given of the time and place of such adjourned meeting in the
manner provided in sections , and . Such notice shall state that at
the adjourned meeting the Special Shareholders present in person or
represented by proxy shall form a quorum but it shall not be necessary
to set forth the purposes for which the meeting was originally called
or any other particulars. At the adjourned meeting the Special
Shareholders present in person or represented by proxy shall form a
quorum and may transact the business for which the meeting was
originally convened and a resolution proposed at such adjourned
meeting and passed by the requisite vote as provided in section shall
be an extraordinary resolution within the meaning of this Indenture
notwithstanding that Special Shareholders holding at least 25% of the
then outstanding Special Shares are not present in person or
represented by proxy at such adjourned meeting.
Votes on an extraordinary resolution shall always be given
on a poll and no demand for a poll on an extraordinary resolution
shall be necessary.
Powers Cumulative
It is hereby declared and agreed that any one or more of the
powers or any combination of the powers in this Indenture stated to be
exercisable by the Special Shareholders by extraordinary resolution or
otherwise may be exercised from time to time and the exercise of any one or
more of such powers or any combination of powers from time to time shall
not be deemed to exhaust the right of the Special Shareholders to exercise
such powers or combination of powers then or thereafter from time to time.
Minutes
Minutes of all resolutions and proceedings at every meeting of
Special Shareholders shall be made and duly entered in books to be from
time to time provided for that purpose by the Trustee at the expense of
HII, and any such minutes as aforesaid, if signed by the Chairman of the
meeting at which such resolutions were passed or proceedings had, or by the
Chairman of the next succeeding meeting of the Special Shareholders, shall
be prima facie evidence of the matters therein
stated and, until the contrary is proved, every such meeting in respect of
the proceedings of which minutes shall have been made shall be deemed to
have been duly convened and held, and all resolutions passed thereat or
proceedings taken shall be deemed to have been duly passed and taken.
Instruments in Writing
All actions which may be taken and all powers that may be
exercised by the Special Shareholders at a meeting held as provided in this
Article may also be taken and exercised by Special Shareholders (excluding
Special Shares held by HII or its Affiliates) holding not less than 66-2/3%
of the then outstanding Special Shares by an instrument in writing signed
in one or more counterparts by such Special Shareholders in person or by
attorney duly appointed in writing, and the expression "extraordinary
resolution" when used in this Indenture shall include an instrument so
signed.
Binding Effect of Resolutions
Every resolution and every extraordinary resolution passed in
accordance with the provisions of this Article at a meeting of Special
Shareholders shall be binding upon all the Special Shareholders, whether
present at or absent from such meeting, and every instrument in writing
signed by Special Shareholders in accordance with section shall be binding
upon all the Special Shareholders, whether signatories thereto or not, and
each and every Special Shareholder and the Trustee (subject to the
provisions for indemnity herein contained) shall be bound to give effect
accordingly to every such resolution and instrument in writing. In the case
of an instrument in writing the Trustee shall give a copy of such
instrument in writing in the manner contemplated in sections and to all
Special Shareholders, HII and the Corporation as soon as is reasonably
practicable.
Holdings by HII or Its Affiliates Disregarded
In determining whether Special Shareholders holding the required
number of Special Shares are present at a meeting of Special Shareholders
for the purpose of determining a quorum or have concurred in any consent,
waiver, extraordinary resolution, Special Shareholders' Request or other
action under this Indenture, Special Shares owned legally or beneficially
by HII or any of its Affiliates shall be disregarded. The Trustee may rely
on an Officers' Certificate of HII in determining which Special Shares, if
any, are owned legally or beneficially by HII or its Affiliates. HII shall,
forthwith upon the Trustee's written request, file with the Trustee an
Officers' Certificate of HII setting forth as at the date of such
certificate the number of Special Shares owned legally or beneficially by
HII or its Affiliates.
ARTICLE
SUPPLEMENTAL INDENTURES
Supplemental Indentures
From time to time HII, the Corporation (where the Corporation may
reasonably be affected) and the Trustee may, subject to the provisions of
this Indenture, and they shall, when so directed by this Indenture, execute
and deliver by their proper officers, indentures or instruments
supplemental hereto, which thereafter shall form part hereof, for any one
or more or all of the following purposes:
setting forth adjustments in the application of the provisions of
Article ;
adding to the provisions hereof such additional covenants and
enforcement provisions as in the opinion of counsel to HII are
necessary or advisable, provided that the same are not in the
opinion of the Trustee prejudicial to the interests of the
Special Shareholders;
giving effect to any extraordinary resolution passed as provided in
Article ;
making such provisions not inconsistent with this Indenture as may be
necessary or desirable with respect to matters or questions
arising hereunder provided that such provisions are not, in the
opinion of the Trustee, prejudicial to the interest of the
Special Shareholders hereunder;
amending any of the provisions of this Indenture or relieving HII or
the Corporation from any of the obligations, conditions or
restrictions herein contained, provided that no such amendment or
relief shall be or become operative or effective if, in the
opinion of the Trustee, such amendment or relief impairs any of
the rights of the Special Shareholders or of the Trustee, and
provided further that the Trustee may in its sole discretion
decline to enter into any such supplemental indenture which in
its opinion may not afford adequate protection to the Trustee
when the same shall become operative; and
for any other purpose not inconsistent with the terms of this
Indenture, including the correction or rectification of any
ambiguities, defective or inconsistent provisions, errors or
omissions herein, provided that, in the opinion of the Trustee,
the rights of the Trustee and of the Special Shareholders are in
no way prejudiced thereby.
Successor Corporations
In the case of the consolidation, amalgamation, arrangement,
merger or transfer of the undertaking or assets of the Corporation as
an entirety or substantially as an entirety to another corporation
("successor corporation"), the successor corporation resulting from
such consolidation, amalgamation, arrangement, merger or transfer (if
not the Corporation) shall be a corporation incorporated under the
laws of Canada or one of the provinces thereof and shall expressly
assume, by supplemental indenture satisfactory in form to the Trustee
and executed and delivered to the Trustee, the due and punctual
performance and observance of each and every covenant and condition of
this Indenture to be performed and observed by the Corporation.
In the case of the consolidation, amalgamation, arrangement
or merger of HII with or into another corporation or the transfer of
the undertaking or assets of HII as an entirety, or substantially as
an entirety to another corporation ("successor corporation"), the
successor corporation resulting from such consolidation, amalgamation,
arrangement, merger or transfer (if not HII) shall expressly assume,
by supplemental indenture satisfactory in form to the Trustee and
executed and delivered to the Trustee, the due and punctual
performance and observance of each and every covenant and condition of
this Indenture to be performed and observed by HII.
ARTICLE
CONCERNING THE TRUSTEE
Trust Indenture Legislation
In this Article, the term "Applicable Legislation" means the
provisions of any statute of Canada or a province thereof, and of
regulations under any such statute, relating to trust indentures
and/or to the rights, duties and obligations of trustees and of
corporations under trust indentures, to the extent that such
provisions are at the time in force and applicable to this Indenture.
If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with a mandatory requirement of
Applicable Legislation, such mandatory requirement shall prevail.
HII, the Corporation (to the extent applicable) and the
Trustee agree that each will at all times in relation to this
Indenture and any action to be taken hereunder observe and comply with
and be entitled to the benefit of Applicable Legislation.
Rights and Duties of Trustee
In the exercise of the rights and duties prescribed or
conferred by the terms of this Indenture, the Trustee shall act
honestly and in good faith with a view to the best interests of the
Special Shareholders and shall exercise that degree of care, diligence
and skill that a reasonably prudent trustee would exercise in
comparable circumstances. No provision of this Indenture shall be
construed to relieve the Trustee from, or require any other person to
indemnify the Trustee against, liability for its own negligence,
wilful misconduct or bad faith.
The Trustee shall not be bound to do or take any act, action
or proceeding for the enforcement of any of the obligations of HII or
the Corporation under this Indenture unless and until it shall have
received a Special Shareholders' Request specifying the act, action or
proceeding which the Trustee is requested to take. The obligation of
the Trustee to commence or continue any act, action or proceeding for
the purpose of enforcing any rights of the Trustee or the Special
Shareholders hereunder shall be conditional upon the Special
Shareholders furnishing, when required by notice in writing by the
Trustee, sufficient funds to commence or continue such act, action or
proceeding and an indemnity
reasonably satisfactory to the Trustee to protect and hold harmless
the Trustee against the costs, charges and expenses and liabilities to
be incurred thereby and any loss and damage it may suffer by reason
thereof. None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers unless indemnified as
aforesaid.
The Trustee may, before commencing or at any time during the
continuance of any such act, action or proceeding, require the Special
Shareholders, at whose instance it is acting, to deposit with the
Trustee the Special Shares held by them, for which Special Shares the
Trustee shall issue receipts.
Every provision of this Indenture that by its terms relieves
the Trustee of liability or entitles it to rely upon any evidence
submitted to it is subject to the provisions of Applicable
Legislation, of section and of section .
The Trustee shall retain the right not to act and shall not
be held liable for refusing to act unless it has received clear and
reasonable documentation which complies with the terms of this
Indenture. Such documentation must not require the exercise of any
discretion or independent judgment unless pursuant to the terms of
this Indenture.
In the event of any disagreement arising regarding the terms
of this Indenture, the Trustee shall be entitled, at its option, to
refuse to comply with any or all demands whatsoever until the dispute
is settled either by agreement amongst the various parties or by a
court of competent jurisdiction.
Evidence, Experts and Advisers
In addition to the reports, certificates, opinions and other
evidence required by this Indenture, HII and the Corporation, as the
case may be, shall furnish to the Trustee such additional evidence of
compliance with any provision hereof in such form as may be prescribed
by Applicable Legislation, or as the Trustee may reasonably require by
written notice to HII or the Corporation.
In the exercise of its rights and duties hereunder, the
Trustee may, if it is acting in good faith, rely as the truth of the
statements and the accuracy of the opinions expressed therein, upon
statutory declarations, opinions, reports, written requests, consents,
certificates or orders of HII or the Corporation, as the case may be,
or other evidence furnished to the Trustee, provided that such
evidence complies with Applicable Legislation and the Trustee examines
the same and determines that such evidence complies with the
applicable requirements of this Indenture.
Whenever Applicable Legislation requires that evidence
referred to in section_ be in the form of a statutory
declaration, the Trustee may accept such statutory declaration in lieu
of a certificate of HII or the Corporation, as the case may be,
required by any provision hereof. Any such statutory declaration may
be made by any officer of the HII or the Corporation as the case may
be.
Proof of the execution of an instrument in writing,
including a Special
Shareholders' Request, by any Special Shareholder may be made by the
certificate of a notary public, or other officer with similar powers,
that the person signing such instrument acknowledged to him the
execution thereof, or by an affidavit of a witness to such execution
or in any other manner which the Trustee may consider adequate.
The Trustee may employ or retain such counsel, accountants,
appraisers or other experts or advisers as it may reasonably require
for the purpose of determining and discharging its duties hereunder
and may pay reasonable remuneration for all services so performed by
any of them, without taxation of costs of any counsel, and shall not
be responsible for any misconduct on the part of any of them. Such
remuneration is to be paid by HII subject to section<0- 95>.
Documents, Monies, etc. Held by Trustee
Any securities, documents of title or other instruments that
may at any time be held by the Trustee subject to the trusts hereof
may be placed in the deposit vaults of the Trustee or of any Canadian
chartered bank or trust company or deposited for safekeeping with any
such bank or trust company. Unless herein otherwise expressly
provided, any monies so held, pending the application or withdrawal
thereof under any provisions of this Indenture, may be deposited in
the name of the Trustee in any Canadian chartered bank or trust
company, including the Trustee's deposit department, at the rate of
interest (if any) then current on similar deposits or may be deposited
in such institutions or invested in such securities as HII may consent
to. All interest or other income received by the Trustee in respect of
such deposits and investments shall belong to HII.
Actions by Trustee to Protect Interests
Subject to the provisions of this Indenture and applicable
law, the Trustee shall have the power to institute and to maintain
such actions and proceedings as it may consider necessary or expedient
to preserve, protect or enforce its interests and the interests of the
Special Shareholders.
Trustee Not Required to Give Security
The Trustee shall not be required to give any bond or
security in respect of the execution of the trusts and powers of this
Indenture or otherwise.
Protection of Trustee
By way of supplement to the provisions of any law for the time
being relating to trustees, it is expressly declared and agreed as follows:
The Trustee shall not be liable for or by reason of any
statements of fact or
recitals in this Indenture (except the representation contained in
section ) or be required to verify the same, but all such statements
or recitals are and shall be deemed to be made by HII or the
Corporation, as the case may be.
Nothing herein contained shall impose any obligation on the
Trustee to see to or to require evidence of the registration or filing
(or renewal thereof) of this Indenture or any instrument ancillary or
supplemental hereto.
The Trustee shall not be bound to give notice to any person
of the execution hereof.
The Trustee shall not incur any liability or responsibility
whatsoever or be in any way responsible for the consequence of any
breach on the part of HII or the Corporation of any of the covenants
herein contained or of any acts of any directors, officers, employees,
agents or servants of HII or the Corporation, as the case may be.
The Trustee will process all proffered transfers of Special
Shares in good faith upon the presumption that such transfers are
permissible pursuant to all applicable legislation and the terms of
this Indenture. The transferor and transferee are solely responsible
for ensuring compliance with any applicable securities laws, and the
Trustee shall have no obligation to ensure compliance with any laws
applicable to the issue or transfer of any Special Shares.
The Trustee shall incur no liability with regard to the
delivery or non-delivery of any certificate, whether delivered by
hand, mail or other means.
The Trustee shall disburse monies according to this
Indenture only to the extent that monies have been deposited with it.
The countersignature of the Trustee on the Special Share
Certificates shall not be construed as a representation or warranty by
the Trustee as to the validity of this Indenture or the Special
Shares, and the Trustee shall in no respect be liable or answerable
for the use made of the Special Shares or any of them.
Replacement of Trustee
The Trustee may resign its trust and be discharged from all
further duties and liabilities hereunder by giving to the Corporation
and HII not less than 30 days' prior notice in writing or such shorter
prior notice as HII may accept as sufficient. The Special Shareholders
by extraordinary resolution shall have the power at any time to remove
the existing Trustee and to appoint a new trustee. In the event of the
Trustee resigning or being removed as aforesaid or being dissolved,
becoming bankrupt, going into liquidation or otherwise becoming
incapable of acting hereunder, HII shall forthwith appoint a new
trustee unless a new trustee has already been appointed by the Special
Shareholders; failing such appointment by HII, the retiring Trustee or
any Special Shareholder may apply to a justice of the Ontario Court of
Justice, General Division, on such notice as such justice may direct,
for the appointment of a new trustee at HII's expense; but any new
trustee so appointed by HII or by the Court shall be subject to
removal as aforesaid by the Special Shareholders. Any new trustee
appointed under any provision of this section shall be a corporation
authorized to carry on the business of a trust company in each of the
Provinces of Canada. On any such appointment the new trustee shall be
vested with the same powers, rights, duties and responsibilities as if
it had been originally named herein as Trustee without any further
assurance, conveyance, act or deed; but there shall be immediately
executed, at the expense of HII, all such conveyances or other
instruments as may, in the opinion of counsel, be necessary or
advisable for the purpose of assuring the same to the new trustee,
provided that, any resignation or removal of the Trustee and
appointment of a successor trustee shall not become effective until
the successor trustee shall have executed an appropriate instrument
accepting such appointment and, at the request of HII, the predecessor
Trustee, upon payment of its outstanding remuneration and expenses,
shall execute and deliver to the successor trustee an appropriate
instrument transferring to such successor trustee all rights and
powers of the Trustee hereunder.
Upon the appointment of a successor trustee, HII shall
promptly notify the Special Shareholders thereof in the manner
provided for in section or .
Any corporation into or with which the Trustee may be merged
or consolidated or amalgamated, or any corporation succeeding to the
trust business of the Trustee, shall be the successor to the Trustee
hereunder without any further act on its part or of any of the parties
hereto provided that such corporation would be eligible for
appointment as a new Trustee under section .
Conflict of Interest
The Trustee represents to HII that, at the time of execution
and delivery hereof, no material conflict of interest exists in the
Trustee's role as fiduciary hereunder and agrees that in the event of
a material conflict of interest, it will eliminate the same or resign
its trust hereunder to a successor trustee approved by HII. If any
such material conflict of interest exists or hereafter shall exist,
the validity and enforceability of this Indenture shall not be
affected in any manner whatsoever by reason thereof.
Subject to section , the Trustee, in its personal or any
other capacity, may buy, lend upon and deal in securities of HII or
the Corporation and generally may contract and enter into financial
transactions with HII or the Corporation or any subsidiary of HII or
the Corporation without being liable to account for any profit made
thereby.
Indemnity
The Trustee will at all times be indemnified and saved harmless
by HII from and against all claims, demands, losses, actions, causes of
action, costs, charges, expenses, damages and liabilities whatsoever
arising in connection with this Exchange Indenture including, without
limitation, those arising out of or related to actions taken or omitted to
be taken by the Trustee contemplated hereby, legal fees and disbursements
on a solicitor and client basis and costs and expenses incurred in
connection with the enforcement of this indemnity, which the Trustee may
suffer or incur, whether at law or in equity, in any way caused by or
arising, directly or indirectly,
in respect of any act, deed, matter or thing whatsoever made, done,
acquiesced in or omitted in or about or in relation to the execution of its
duties as Trustee. The foregoing provisions of this Section do not apply to
the extent that in any circumstances there has been a failure by the
Trustee or its directors, officers, employees or agents to act honestly and
in good faith or to discharge the Trustee's obligations under Section
hereof. This indemnity will survive the termination or discharge of this
Exchange Indenture and the resignation or removal of the Trustee.
Acceptance of Trust
The Trustee hereby accepts the trusts in this Indenture declared
and provided for and agrees to perform the same upon the terms and
conditions herein set forth.
Trustee Not to be Appointed Receiver
The Trustee and any person related to the Trustee shall not be
appointed a receiver or receiver and manager or liquidator of all or any
part of the assets or undertaking of HII or the Corporation.
Authorization to Carry on Business
The Trustee represents to HII that it is duly authorized and
qualified to carry on the business of a trust company in each of the
Provinces of Canada.
ARTICLE
GENERAL
Notice to the Corporation, HII and the Trustee
Unless herein otherwise expressly provided, any notice to be
given hereunder to the Corporation, HII or the Trustee shall be deemed
to be validly given if delivered or if sent by first class insured
mail, postage prepaid or if sent by facsimile:
if to the Corporation:
00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx, X0X 0X0
Fax: (000) 000-0000
Attention: President
if to HII
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx, 00000
Fax: (000) 000-0000
Attention: Vice-President, Law & Finance and Secretary
if the Trustee:
Montreal Trust Company of Canada
000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx, X0X 0X0
Fax: (000) 000-0000
Attention: Manager, Corporate Trust Services
and any such notice delivered in accordance with the foregoing shall
be deemed to have been received on the date of delivery if that date
is a Business Day or, if mailed, on the fifth Business Day following
the date of the postmark on such notice.
HII, the Corporation or the Trustee, as the case may be, may
from time to time notify the others in the manner provided in section
of a change of address which from the effective date of such notice
and until changed by like notice, shall be the address of HII, the
Corporation or the Trustee, as the case may be, for all purposes of
this Indenture. A copy of any notice of change of address given
pursuant to this section shall be available for inspection at the
principal corporate office of the Trustee in the City of Toronto by
Special Shareholders during normal business hours.
Notice to the Special Shareholders
Any notice to Special Shareholders under the provision of this
Indenture shall be deemed to be validly given, subject to section , if
delivered or if sent by first class mail, postage prepaid, to the holders
at their addresses appearing in one of the registers herein before
mentioned. Any notice so delivered shall be deemed to have been received on
the date of delivery if that date is a Business Day or, if mailed, on the
fifth Business Day following the date on which it was mailed. Accidental
error or omission in giving notice of accidental failure to give notice to
any Special Shareholder shall not invalidate any action or proceeding
founded thereon.
Mail Service Interruption
If by reason of any interruption of mail service, actual or
threatened, any notice to be given to the Special Shareholders, the
Trustee, HII or the Corporation would reasonably be unlikely to reach
its destination in the ordinary course of mail, such notice shall be
valid and effective only if:
in the case of the Trustee, HII or the Corporation, delivered
to an officer of the party to which it is addressed or if
sent to such party, at the appropriate address in accordance
with section , by facsimile or other means of prepaid
transmitted or recorded communication; and
in the case of Special Shareholders, published once in the
national edition of The Globe and Mail or The Financial Post
and in such other place or places and manner, if any, as the
Trustee may require.
Any notice given to the Special Shareholders by publication
shall be deemed to have been given on the last day on which
publication shall have been effected in all of the cities in which
publication is required pursuant to section .
Counterparts and Formal Date
This Indenture may be executed in several counterparts, each of
which when so executed shall be deemed to be an original and such
counterparts together shall constitute one and the same instrument and
notwithstanding their date of execution shall be deemed to be dated as of
July 18, 1997.
Satisfaction and Discharge of Indenture
Upon the Mandatory Exchange Date, this Indenture, except to the
extent that Class A Shares, certificates therefor and cash, if any, have
not been transferred and delivered hereunder or the Trustee, HII or the
Corporation has not performed any of its obligations hereunder, shall cease
to be of further effect and the Trustee, on demand of and at the cost and
expense of HII and upon delivery to the Trustee of a certificate of HII and
the Corporation stating that all conditions precedent to the satisfaction
and discharge of this Indenture have been complied with and upon payment to
the Trustee of the fees and other remuneration payable to the Trustee,
shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture.
Provisions of Indenture for the Sole Benefit of Parties and
Holders
Nothing in this Indenture, expressed or implied, shall give or be
construed to give to any person other than the parties hereto and the
Holders any legal or equitable right, remedy or claim under this Indenture,
or under any covenant or provision therein contained, all such covenants
and provisions being for the sole benefit of the parties hereto and the
Special Shareholders.
IN WITNESS WHEREOF the parties hereto have executed this
Indenture under the hands of their proper officers in that behalf.
XXXXXXXXX CANADIAN PUBLISHING
HOLDINGS INC.
By:.........................................
XXXXXXXXX INTERNATIONAL INC.
By:.........................................
MONTREAL TRUST COMPANY OF
CANADA
By:..........................................
By:..........................................
SCHEDULE A
Form of Mandatory Exchange Notice
XXXXXXXXX INTERNATIONAL INC.
NON-VOTING SPECIAL SHARES OF
XXXXXXXXX CANADIAN PUBLISHING HOLDINGS INC.
MANDATORY EXCHANGE NOTICE
-------------------------
To: Holders of Non-Voting Special Shares ("Special Shares") of Xxxxxxxxx
Canadian Publishing Holdings Inc. ("HCPH")
Notice is hereby given pursuant to section 2.1.2 of the Exchange
Indenture dated as of July 18, 1997 between Xxxxxxxxx International Inc.
(the "Corporation"), HCPH and Montreal Trust Company of Canada as trustee
(the "Trustee") that each Special Share will be automatically exchanged on
June 26, 2000 (the "Mandatory Exchange Date") for the Mandatory Exchange
Number as of the Mandatory Exchange Date of shares of Class A Common Stock
("Class A Shares") of the Corporation. The Mandatory Exchange Number as of
the Mandatory Exchange Date of Class A Shares will be calculated as the
Base Amount divided by 95% of the weighted average trading price of Class A
Shares on the New York Stock Exchange for the 20 consecutive trading days
ending on ( 2000 [the 14th trading day prior to the Mandatory Exchange
Date] (the "Current Market Price of Class A Shares"). The Base Amount is
U.S.$8.88 less the amount of any dividends which have been paid per share
(to a maximum of U.S.$1.67) on the Special Shares. [The following dividends
have been paid to date:] The Corporation will provide holders of the
Special Shares with notice of any dividend paid subsequent to the date
hereof as soon as practicable after the occurrence thereof.
On and after the Mandatory Exchange Date, a holder's rights as
holders of Special Shares cease, except the right to receive Class A Shares
and/or cash for Special Shares surrendered in accordance with this notice.
[Pursuant to section of the Exchange Indenture, the Corporation
hereby irrevocably elects to pay to holders of Special Shares cash equal to
(% of the Base Amount per Special Share on the exchange of Special Shares].
In order to effect the exchange of his Special Shares, a holder
is required to deliver to the Trustee at any of the following stock
transfer offices:
[set out addresses of stock and bond transfer offices in Toronto,
Montreal and Vancouver]
an exchange form in the form annexed hereto duly completed and executed by
such holder or his executors or administrators or other legal
representatives or his or their attorney duly appointed by instrument in
form and execution satisfactory to the Trustee, together with the
certificate or certificates representing the holder's Special Shares to
which such notice relates. Class A Shares and cash, if any, to which the
holder is entitled will not be released until such form and certificate(s)
are delivered to the Trustee as set out above.
DATED: , 2000
SCHEDULE B
Form Of Exchange Form
EXCHANGE FORM
To: XXXXXXXXX INTERNATIONAL INC.
and to: MONTREAL TRUST COMPANY OF CANADA
The undersigned registered holder of Non-Voting Special Shares
("Special Shares") of Xxxxxxxxx Canadian Publishing Holdings Inc. ("HCPH")
bearing Certificate No(s). hereby delivers such Special
Shares and irrevocably directs that on the exchange of the Special Shares
in accordance with the terms of the Exchange Indenture dated July 18, 1997
(the "Exchange Indenture") among Xxxxxxxxx International Inc., HCPH and
Montreal Trust Company of Canada, the shares of Class A Common Stock of
Xxxxxxxxx International Inc. and any cash or property in lieu thereof or in
addition thereto be delivered to the person indicated below or, in the
absence of instructions below, to the registered holder of the Special
Shares. The undersigned acknowledges that the shares of Class A Common
Stock and any cash or property in lieu thereof or in addition thereto will
be forwarded within 10 business days of the surrender of this form duly
completed by the undersigned, together with the certificate(s) representing
the Special Shares (provided that in the case of a mandatory exchange such
10-day period shall not commence prior to the Mandatory Exchange Date). (If
shares of Class A Common Stock are to be issued in the name of a person
other than the holder, all requisite transfer taxes must be tendered by the
undersigned).
Dated:
(Signature of Registered Holder)
---------------------------------------
Name of Person (other than registered
holder of the attached Special Shares)
in which shares of Class A Common Stock
of Xxxxxxxxx International Inc. are to
be registered and/or cheque to be made
payable.
---------------------------------------
Address of such Person
(Street Address, City, Province/State
and Postal/Zip Code)
Social Insurance/Social
Security Number of such Person:
------------------------------------
Taxpayer Identification
Number of such Person (if applicable):
-------------------------------
Signature Guarantee:
-------------------------------- --------------------------------
Authorized Officer Name of Institution
Note: If shares of Class A Common Stock or any cash or property in lieu
thereof or in addition thereto are to be delivered to a person other than
the holder, the signature of the holder must be guaranteed by a Canadian
chartered bank, by a trust company that is a member of the Trust Company
Association of Canada, by a member firm of The Toronto Stock Exchange or
the Montreal Exchange, or by a member of the National Association of
Securities Dealers of the United States. Notarized or witnessed signatures
are not acceptable as guaranteed signatures.
