EXHIBIT 10.2
EXECUTION COPY
FACILITATION AGREEMENT
This Facilitation Agreement (this "Agreement") is made by and between XXXXXXXXX
INTERNATIONAL INC. and XXXXXXXXX CANADIAN NEWSPAPERS, LIMITED PARTNERSHIP
(together, on a joint and several basis, "Xxxxxxxxx") and 3815668 CANADA INC.
(the "Issuer") and acknowledged and agreed as to Sections 3(b) and 4 hereof by
XXXXXXXXX CANADIAN PUBLISHING HOLDINGS CO. (formerly Southam Inc.)and HCN
PUBLICATIONS COMPANY (together with Xxxxxxxxx, the "Xxxxxxxxx Parties") and
agreed as to Sections 3(a) and 3(b) hereof by CANWEST GLOBAL COMMUNICATIONS
CORP. ("CanWest"), as of October 7, 2004.
RECITALS
WHEREAS, Xxxxxxxxx Participation Trust (the "Trust") issued 12 1/8% Senior
Notes due 2010 (the "Trust Notes") under an Amended and Restated Trust Agreement
dated as of August 24, 2001 and a Supplemental Trust Agreement dated as of
December 7, 2001, each between Xxxxxxxxx International Inc. and First Union
Trust Company, National Association, as trustee (collectively, as amended and
supplemented from time to time, the "Trust Agreement");
WHEREAS, the Participation Agreement dated as of August 17, 2001 by and
among Xxxxxxxxx and the Trust was amended and restated by the Amended and
Restated Participation Agreement dated as of November 30, 2001 by and among
Xxxxxxxxx and the Trust (as amended and supplemented from time to time, the
"Participation Agreement") and the Trust owns the participation interest (the
"Participation Interest") granted by the Participation Agreement in, as of the
date hereof, CDN$785,179,588 aggregate principal amount of the Fixed Rate
Subordinated Debentures due 2010 (the "Old Notes) issued by the Issuer pursuant
to an indenture dated November 15, 2000 among the parties thereto (as amended
and supplemented from time to time, the "Old Notes Indenture");
WHEREAS, the Issuer proposes to effect, through an affiliate, an exchange
offer and consent solicitation (the "Exchange Offer") in which the Issuer's
affiliate will offer to exchange for the Trust Notes new securities of the
Issuer that will, upon amalgamation of the Issuer and CanWest Media Inc. become
obligations of the resulting entity (which will also be named CanWest Media
Inc.), upon the date of their first issuance (the "New Notes") and references
herein to the "Issuer" include the entity resulting from such amalgamation, as
the context requires;
WHEREAS, the Issuer proposes to issue and sell additional New Notes in
order to fund the payments to Xxxxxxxxx described in Section 3(a) hereof;
WHEREAS, pursuant to the Exchange Offer, the Issuer proposes to solicit
from the holders of the Trust Notes consents to certain proposed amendments to
the Trust Agreement (the "Proposed Trust Amendments") and instructions to
consent to certain proposed amendments to the Old Notes and the Old Notes
Indenture (the "Proposed Indenture
Amendments" and together with the instructions and the Proposed Trust
Amendments, the "Proposed Amendments and Instructions");
WHEREAS, the Proposed Amendments and Instructions will also include an
instruction to the trustee under the Trust Agreement (the "Trust Trustee") to
cause the conversion of the Participation Interest into ownership of the related
Old Notes by the Trust, and to cause the dissolution, winding up and liquidation
of the Trust and, if the Exchange Offer is consummated, the Issuer intends to
cause its affiliate to instruct the Trust Trustee to take any actions necessary
to complete the distribution of the Trust's assets, the termination of the
Trust, and other transactions related thereto, including the monetization of the
Trust's assets by sale of the Old Notes to the Issuer for consideration
sufficient to result in the payments contemplated by this Agreement (the actions
described in this recital, collectively, being the "Plan"), as a result of which
Xxxxxxxxx and the Issuer will each derive certain economic benefits;
WHEREAS, the Issuer and Xxxxxxxxx wish to memorialize their mutual
understanding as to the terms upon which the Trust will be wound up if the
Exchange Offer is consummated and to provide for Xxxxxxxxx'x facilitation of the
successful consummation of the Proposed Amendments and Instructions and the
Plan;
NOW, in consideration of the following and for other good and valuable
consideration, the parties hereby agree as follows:
1. Representations and Warranties.
(a) Xxxxxxxxx hereby represents and warrants that:
(i) it has provided to the Issuer, between September 23, 2004 and
the date hereof, full, complete and accurate copies of (x) the
Trust Agreement and any and all amendments thereto, (y) the
Participation Agreement and any and all amendments thereto and
(z) any and all other written understandings relating to
either such agreement to which it is a party;
(ii) to its knowledge (having inquired of the officers currently
employed by Xxxxxxxxx that have responsibility for dealing
with the Trust and the Trust Trustee, inquired of the Trust
Trustee, and reviewed relevant Xxxxxxxxx files) there is no
unpaid liability of, or claim against, the Trust other than
the claims of the holders of the Trust Notes pursuant to the
terms thereof;
(iii) to its knowledge (having inquired of the officers currently
employed by Xxxxxxxxx that have responsibility for dealing
with the Trust and the Trust Trustee and reviewed relevant
Xxxxxxxxx files) the Trust has no Trust property other than
the Participation Interest and its right to receive payments
in respect of shortfalls resulting from currency differentials
under Section 9.01 of the Trust Agreement;
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(iv) to its knowledge (having inquired of the officers currently
employed by Xxxxxxxxx that have responsibility for dealing
with the Trust and the Trust Trustee and reviewed relevant
Xxxxxxxxx files) no action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Trust or any of its property is
pending or threatened,
(v) it is, and will be on the settlement date of the Exchange
Offer (the "Settlement Date") immediately prior to transfer of
the Old Notes to the Trust in accordance with the Plan, the
sole legal and beneficial owner (subject to the Participation
Interest) of, and has good title to, the entire
CDN$871,873,305 principal amount outstanding of the Old Notes,
free and clear of (I) any mortgage, pledge, lien, security
interest, charge, hypothecation, or other encumbrance,
security agreement, security arrangement or adverse claim
against title of any kind, (II) purchase or option agreement
or put arrangement, (III) subordination agreement or
arrangement or (IV) agreement to create or effect any of the
foregoing and its ownership of the Old Notes is not subject to
any prior sale, transfer, assignment or participation by
Xxxxxxxxx, or any agreement by Xxxxxxxxx to assign, convey,
transfer or participate, in whole or in part, in each case
other than the rights granted to the Trust under the
Participation Agreement, and
(vi) no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator is
pending or to the best of Xxxxxxxxx'x knowledge threatened
against Xxxxxxxxx that would materially adversely affect its
ownership of the Old Notes or the transactions contemplated
hereby.
(b) Each of Xxxxxxxxx and the Issuer hereby represents and warrants
that: (i) it has full power and authority and has taken all action
necessary, to enter into and perform its obligations under this Agreement
(and, in the case of Xxxxxxxxx, the Participation Agreement); (ii) this
Agreement (and, in the case of Xxxxxxxxx, the Participation Agreement) has
been duly and validly authorized, executed and delivered by it,
constitutes its legal, valid and binding obligation and is enforceable
against it in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time to time in
effect and to general principles of equity); and (iii) the execution,
performance and delivery of this Agreement will not (and, in the case of
Xxxxxxxxx, execution, performance and delivery of the Participation
Agreement has not and will not) result in it violating any applicable law
or breaching or otherwise impairing any of its obligations.
The respective agreements, representations, warranties, indemnities and other
statements of the parties hereto set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any party hereto and will
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survive consummation of the Exchange Offer, Proposed Amendments and Instructions
and Plan and delivery of the payments provided for in Section 3(a) hereof.
2. Undertakings by Xxxxxxxxx. Xxxxxxxxx hereby agrees to use its
reasonable best efforts to facilitate the consummation of the Proposed
Amendments and Instructions and the Plan, provided that (x) Xxxxxxxxx shall not
be required pursuant hereto (i) to undertake any action or effort that would
violate law or the terms of the Trust Agreement or the Participation Agreement
or (ii) to provide any opinions of counsel and (y) Xxxxxxxxx may provide, in
giving any instruction hereunder that would otherwise irrevocably prejudice its
rights under the Old Notes, the Old Notes Indenture, the Participation Agreement
or the Trust Agreement, that such instruction shall cease to have force and
effect and be void ab initio should the Exchange Offer fail to be consummated
within 120 days of the date hereof. Such efforts shall include, but are not
limited to, the following:
(a) Xxxxxxxxx shall take all actions reasonably requested by the
Issuer to facilitate identification of the beneficial owners of the Trust
Notes by the Issuer and its agents in connection with the Exchange Offer.
(b) Immediately upon receipt of all required instructions or
consents (i) in respect of the Trust Agreement, from the Trust Note
holders and (ii) in respect of the Old CanWest Indenture, from the Trust
Trustee, Xxxxxxxxx shall take all actions reasonably requested by the
Issuer to amend the Trust Agreement, the Old Notes and the Old CanWest
Indenture pursuant to the Proposed Amendments and Instructions on the
expiration date of the Exchange Offer, without regard to any additional
time or period allowed to complete such actions under the relevant
agreements.
(c) Immediately upon receipt of instructions from the Trust Trustee
on the Settlement Date that the Trust is invoking its right under the
Participation Agreement to convert the Participation Interest into
ownership of Old Notes by the Trust, Xxxxxxxxx shall take all actions
reasonably requested by the Issuer to transfer the Old Notes to the Trust
on such date, without regard to any additional time or period allowed to
complete such actions under the relevant agreements.
(d) Xxxxxxxxx shall take all actions reasonably requested by the
Issuer to facilitate the dissolution of the Trust, the winding up and
liquidation of the Trust, the distribution of the Trust's assets and the
termination of the Trust in accordance with the Plan and this Agreement.
(e) Xxxxxxxxx shall take all actions reasonably requested by the
Issuer to cause the trustee under the Old Notes Indenture (the "Indenture
Trustee") and the Trust Trustee to communicate with and cooperate with the
Issuer in the consummation of the Proposed Amendments and Instructions and
the Plan.
(f) Subsequent to the date hereof, Xxxxxxxxx shall not consent to
any amendment (other than the Proposed Amendments and Instructions) to the
Participation Agreement or the Trust Agreement without the prior written
consent of
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the Issuer and shall provide to the Issuer a copy of any notice issued or
received by Xxxxxxxxx pursuant to the Participation Agreement or the Trust
Agreement promptly upon issuance or receipt, provided that this provision
shall cease to have further force and effect should the Exchange Offer
fail to be consummated within 120 days of the date hereof.
(g) Xxxxxxxxx shall take all other actions reasonably requested by
the Issuer to facilitate consummation of the Proposed Amendments and
Instructions and the Plan.
If the Exchange Offer fails to be consummated within 120 days of the date
hereof, the Issuer and Xxxxxxxxx shall cooperate and use reasonable best
efforts to make effective any reversal of force and effect of a Xxxxxxxxx
instruction pursuant to the first sentence of this section.
The terms of the Proposed Trust Amendments and the Proposed Indenture
Amendments will provide that they will become effective upon the
acceptance of Trust Notes tendered in the Exchange Offer on the expiration
date of the Exchange Offer but that their effect will be retroactively
revoked if the Residual Amount and the Non-Participated Notes Purchase
Amount are not paid on the Settlement Date.
3. Wind Up of Trust and Distributions to Xxxxxxxxx.
(a) If the Exchange Offer is consummated, and the Trust is wound up
as a result, the parties hereto agree, and CanWest agrees, that the
resulting distribution by the Trust to Xxxxxxxxx shall consist exclusively
of a cash payment in the amount of the Residual Amount (as defined in
Annex A). In addition, Xxxxxxxxx agrees to sell to the Issuer, and the
Issuer agrees to purchase, CDN$86,693,717 principal amount of Old Notes
(consisting of the Old Notes that are not subject to the Participation
Interest) for an aggregate cash purchase price in an amount determined as
set forth in Annex A under the heading "Non-Participated Notes Purchase
Amount", for settlement on the Settlement Date (if the Exchange Offer is
consummated). Further, to the extent that Xxxxxxxxx receives the Residual
Amount (as defined in Annex A) in cash from the Trust, Xxxxxxxxx agrees to
pay the Reimbursement Amount (as defined in Annex A) in cash to the
affiliate of the Issuer that acquires the Trust Notes in respect of a
portion of such affiliate's cost in acquiring the Trust Notes.
(b) Upon the payment of the Residual Amount and the Non-Participated
Notes Purchase Amount as described in Section 3(a), Xxxxxxxxx hereby
expressly waives and releases any other claims under the Trust Agreement,
the Old Notes Indenture or the Old Notes, or arising out of the
dissolution of the Trust, the winding up and liquidation of the Trust, the
distribution of the Trust's assets or the termination of the Trust or
consummation of the Plan, against the Trust, the Trust Trustee, the
Indenture Trustee, the Issuer or any of their affiliates (including, but
not limited to, CanWest), and agrees to remise, release and forever
discharge the Issuer, its affiliates
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(including, but not limited to, CanWest) and the Trust, and their
successors and assigns, of and from any claim, demand, action and cause of
action, and liability of every kind and nature, for and on account of any
and every matter whatsoever arising from the Trust Agreement, the Old
Notes, the Old Notes Indenture and the Participation Agreement, or arising
out of the dissolution of the Trust, the winding up and liquidation of the
Trust, the distribution of the Trust's assets or the termination of the
Trust or the consummation of the Plan; provided, however, that nothing
contained in this Agreement is intended to affect any liability or
responsibility under the Transaction Agreement dated July 30, 2000 between
Xxxxxxxxx, Xxxxxxxxx Canadian Publishing Holdings Co. (formerly Southam
Inc.), HCN Publications Company and CanWest Global Communications
Corporation, for the avoidance of doubt, all existing claims thereunder,
including for any adjustment of the Purchase Price (as defined in the
Transaction Agreement), shall continue undisturbed and, to the extent
previously payable through cancellation or issuance of Old Notes, be
payable in cash. The parties agree that no adjustment to the principal
amount outstanding of Old Notes shall be undertaken pursuant to the
Transaction Agreement or Section 2.18 of the Old Notes Indenture
subsequent to the date hereof.
If, as a result of the Proposed Amendments and Instructions being
implemented, the Participation Interest is converted into ownership of Old
Notes by the Trust and the Residual Amount and the Non-Participated Notes
Purchase Amount are not paid to Xxxxxxxxx within five business days
thereafter, CanWest agrees to reimburse Xxxxxxxxx for any damages to
Xxxxxxxxx directly resulting from (x) the reset of the interest rate
applicable to the Old Notes caused by such conversion or (y) the release
of the guarantee in respect of the Old Notes caused by such conversion.
(c) The Issuer is under no obligation to proceed with the Exchange
Offer and if the Issuer proceeds with the Exchange Offer it may at any
time and in its sole discretion, terminate, amend, extend or suspend the
Exchange Offer, or waive any related condition.
4. Confidentiality. Each of the Xxxxxxxxx Parties hereby agrees to keep
confidential and not disclose to any third party (other than its attorneys and
accountants upon their agreement to keep such matters confidential) or refer to
publicly any non-public information provided to it by or on behalf of the Issuer
or its affiliates relating to the Exchange Offer, the Proposed Amendments and
Instructions or the Plan (the "Confidential Information"), including the
contents of this Agreement, without the Issuer's prior written consent, not to
be unreasonably withheld or delayed. Notwithstanding the foregoing, Xxxxxxxxx
may:
(a) immediately after the signing of this Agreement, publicly issue
on one or more newswire services and file with the Canadian securities
regulatory authorities a press release substantially in the form of Annex
B attached hereto;
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(b) file a brief summary of this Agreement (substantially in the
form of Annex B hereto) with the U.S. Securities and Exchange Commission
under cover of Form 8-K, which brief summary shall not include a copy of
this Agreement;
(c) file a brief summary of this Agreement substantially in the form
of Annex B attached hereto with the Canadian securities regulatory
authorities as a "Material Change Report" on Form 51-102F3, which report
shall not include a copy of this Agreement, but which shall include the
press release referred to in paragraph (a) above;
(d) simultaneously with Xxxxxxxxx'x next filing with the U.S.
Securities and Exchange Commission under cover of either Form 10-K or Form
10-Q, file a copy of this Agreement as an exhibit to such Form 10-K or
Form 10-Q, along with a brief summary of this Agreement in such Form 10-K
or Form 10-Q, which summary shall be substantially in the form of Annex B
hereto;
(e) include disclosure substantially in the form of Annex B attached
hereto in any disclosure document prepared in connection with, or in
response to, any offer made to acquire units of Xxxxxxxxx Canadian
Newspapers, Limited Partnership; and
(f) disclose the Confidential Information, including providing a
copy of this Agreement, as may be required or appropriate in response to
any summons, subpoena, request from a regulatory body or otherwise in
connection with any litigation, arbitration, governmental investigation or
other court or similar proceeding or to comply with any applicable law,
order, regulation, ruling, stock exchange rule, regulatory request or
accounting disclosure rule or standard (including, without limitation, any
securities law, regulation or rule) that is not provided for in the
preceding clauses (each, a "Required Disclosure"), provided that Xxxxxxxxx
shall use its reasonable best efforts to notify the Issuer prior to making
a Required Disclosure and shall cooperate with the Issuer in seeking an
appropriate protective order or confidential treatment, where applicable.
Notwithstanding the foregoing, any restriction contained in this provision on
disclosing copies of this Agreement or the terms set forth therein shall
terminate upon the earlier to occur of (i) the filing by Xxxxxxxxx of a copy of
this Agreement with the U.S. Securities and Exchange Commission as an exhibit to
Form 10-K or Form 10-Q by as contemplated in clause (iii) above, (ii) the filing
of a copy of this Agreement by the Issuer or CanWest with the U.S. Securities
and Exchange Commission or comparable Canadian securities regulatory authority
or (iii) the Settlement Date.
5. Governing Law: THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO
BE PERFORMED THEREIN.
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6. Expenses: Each party hereto shall bear its own expenses in carrying out
the terms hereof.
7. Counterparts: This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.
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Agreed and accepted as of the date first written above:
XXXXXXXXX INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
XXXXXXXXX CANADIAN NEWSPAPERS,
LIMITED PARTNERSHIP,
By its general partner, Xxxxxxxxx
Canadian Newspapers X.X.Xxx.
By: /s/ Xxxxx X. Xxxx
-------------------------------------
3815668 CANADA INC.
By: /s/ Xxxx XxXxxxx, /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Acknowledged and agreed as to Section 3(b) and 4 above:
XXXXXXXXX CANADIAN PUBLISHING
HOLDINGS CO.
(formerly Southam Inc.)
By: /s/ Xxxxx X. Xxxx
-------------------------------------
HCN PUBLICATIONS COMPANY
By: /s/ Xxxxx X. Xxxx
-------------------------------------
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Acknowledged and agreed as to Section 3(a) and 3(b) above:
CANWEST GLOBAL COMMUNICATIONS CORP.
By: /s/ Xxxxxxx Xxxxxxx
------------------------
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ANNEX A
NON-PARTICIPATED NOTES PURCHASE AMOUNT
The "Non-Participated Notes Purchase Amount" shall mean the U.S. dollar amount
determined pursuant to the following formula:
D x NP
RESIDUAL AMOUNT
The "Residual Amount" shall mean the U.S. dollar amount determined pursuant to
the following formula:
F - Z
REIMBURSEMENT AMOUNT
The "Reimbursement Amount" shall mean the U.S. dollar amount determined pursuant
to the following formula:
(D x NP) + (F- Z) - A
Where:
- A equals 0.985 x (NP + FexG), where:
- NP equals the accreted value (being par plus accrued interest) of
the Non-Participated Notes (as defined below) as of the Settlement
Date converted into U.S. dollars at the Spot Rate (as defined
below);
- FexG is equal to (40% x Z x ((1/0.6482) - the Spot Rate)) / the Spot
Rate;
- B equals the aggregate U.S. dollar principal amount of New Notes delivered to
tendering holders of the Trust Notes on the Settlement Date, plus the amount of
U.S. dollars payable to non-tendering holders of Trust Notes by the Trust on the
date of completion of winding-up of the Trust;
- C equals A + B;
- D equals (i) C divided by (ii) the accreted value (being par plus accrued
interest) of all the Old Notes as of the Settlement Date converted into U.S.
dollars at the Spot Rate;
A-1
- F equals (i) D multiplied by (ii) the accreted value (being par plus accrued
interest) of the Participated Notes (as defined below) as of the Settlement Date
converted into U.S. dollars at the Spot Rate; and
- Z equals the accreted value (being par plus accrued interest) in U.S. dollars
of all the Trust Notes as of the Settlement Date.
For purposes of the above definitions, the following terms shall have the
following meanings:
"Non-Participated Notes", means the aggregate principal amount of Old Notes that
is not subject to the Participation Interest.
"Participated Notes", means the aggregate principal amount of Old Notes that is
subject to the Participation Interest.
"Spot Rate" shall mean the noon rate of exchange as reported by the Bank of
Canada expressed in Canadian dollars per U.S. dollar, for the date of the
"withdrawal deadline" (as defined in the Offering Memorandum).
A-2
ANNEX B
In November 2000, Xxxxxxxxx International Inc. ("Xxxxxxxxx
International") and Xxxxxxxxx Canadian Newspapers, Limited Partnership ("HCNLP",
and together with Xxxxxxxxx International, "Xxxxxxxxx"), received approximately
Cdn $766.8 million aggregate principal amount of 12.125% Fixed Rate Subordinated
Debentures due November 15, 2010 (the "CanWest Debentures") issued by a
wholly-owned subsidiary of CanWest Global Communications Corp. ("CanWest")
called 3815668 Canada Inc (the "Issuer"). The CanWest Debentures are guaranteed
by CanWest and were issued to Xxxxxxxxx in partial payment for the sale by
Xxxxxxxxx of certain Canadian newspaper and internet assets to CanWest. In 2001,
Xxxxxxxxx International and HCNLP sold participations in approximately Cdn. $757
million principal amount of the CanWest Debentures to a special purpose trust
(the "Participation Trust"). Notes of the Participation Trust, denominated in
U.S. dollars (the "Trust Notes"), were in turn issued and sold by the
Participation Trust to third parties. As a result of the periodic interest
payments on the CanWest Debentures made in kind and a partial redemption by the
Issuer of the CanWest Debentures in 2003, as of July 31, 2004, there were
outstanding approximately Cdn. $872 million aggregate principal amount of
CanWest Debentures. Xxxxxxxxx International and HCNLP are the record owners of
all of these CanWest Debentures, but as of July 31, 2004, beneficially owned
only approximately Cdn $5 million and Cdn $82 million principal amount
respectively of CanWest Debentures, with the balance beneficially owned by the
Participation Trust.
On October 7, 2004, Xxxxxxxxx International and HCNLP entered into a
Facilitation Agreement (the "Facilitation Agreement") with the Issuer and
CanWest, which Facilitation Agreement is part of a larger transaction in which
the Issuer proposes to offer to exchange the Trust Notes for new debentures to
be issued by the Issuer (the "CanWest Exchange Offer"). The CanWest Exchange
Offer is or will be subject to a number of conditions, including that at least
two-thirds of the outstanding principal amount of Trust Notes be tendered in the
CanWest Exchange Offer. The CanWest Exchange Offer will be commenced on or
around October 7, 2004, and is expected to close on or around the 25th
succeeding business day, subject to CanWest's right to extend, amend the terms
of, or withdraw the CanWest Exchange Offer. In the Facilitation Agreement,
Xxxxxxxxx has agreed, among other things, (i) to use its reasonable best efforts
to facilitate the CanWest Exchange Offer and (ii) to sell to the Issuer for cash
all of the CanWest Debentures beneficially owned by Xxxxxxxxx. Xxxxxxxxx'x
obligation to sell the CanWest Debentures to the Issuer, and the Issuer's
obligation to purchase the CanWest Debentures, is conditioned upon the closing
of the CanWest Exchange Offer. There can be no assurance that this transaction
will be completed. If it is completed, the specific amount received by Xxxxxxxxx
International and HCNLP will depend upon the prevailing exchange rate between
the U.S. dollar and the Canadian dollar. Assuming an exchange rate of US $0.7922
per Cdn $1.00 (the "Assumed Rate"), upon completion, the cash proceeds to be
received by Xxxxxxxxx International will be approximately US $38 million and the
cash proceeds to be received by HCNLP will be approximately US $78 million. This
amount will increase if the
Canadian dollar becomes stronger than the Assumed Rate, and will decrease if the
Canadian dollar becomes weaker than the Assumed Rate.
