EXECUTION VERSION
FUNDING AGREEMENT
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This FUNDING AGREEMENT (this "Agreement"), is dated as of February 17,
2004, by and between Xxxxxxxxx Inc., a corporation incorporated under the
Canada Business Corporations Act (the "Company"), and Press Holdings
International Limited, a corporation incorporated under the laws of Jersey
("PHIL").
W I T N E S S E T H :
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WHEREAS, on January 18, 2004, The Ravelston Corporation Limited, a
corporation incorporated under the laws of the Province of Ontario
("Ravelston"), and Xxxxxx X. Xxxxx, The Xxxx Xxxxx of Crossharbour, PC (Can),
OC, KCSG ("Xxxx Xxxxx"), entered into a tender and shareholder support and
acquisition agreement with PHIL pursuant to which and upon the terms and
conditions set forth therein, among other things, Ravelston and Xxxx Xxxxx
agreed to tender all of the (a) Retractable Common Shares, (b) Exchangeable
Non-Voting Preference Shares Series II and (c) Retractable Non-Voting
Preference Shares Series III (together with the Retractable Common Shares and
the Exchangeable Non-Voting Preference Shares Series II, the "Shares"), of the
Company owned or controlled, directly or indirectly, by them in the offers by
PHIL, through its wholly-owned subsidiary, Press Acquisition Inc., a
corporation incorporated under the Canada Business Corporations Act ("PAI"), to
purchase any and all of the issued and outstanding Shares;
WHEREAS, on January 27, 2004, PHIL, through PAI, commenced the offers
to purchase (collectively, the "Equity Tender Offer") any and all of the issued
and outstanding Shares, which Equity Tender Offer is scheduled to expire at
8:00 a.m., New York City time, on March 3, 2004, unless extended or withdrawn
in accordance with the terms and conditions thereof;
WHEREAS, in order to facilitate consummation of the transactions
contemplated by the Equity Tender Offer, the Company proposes to offer to
purchase (the "Debt Tender Offer") any and all of its outstanding 11.875%
Senior Secured Notes due 2011 (the "Notes"), issued pursuant to the terms of
the Indenture, dated as of March 10, 2003, by and among the Company, Ravelston
Management Inc., as guarantor, 504468 N.B. Inc., as guarantor, Ravelston, Sugra
Limited and Wachovia Trust Company, National Association, as trustee, and the
Company has agreed to pay (a) $1,250.00 per $1,000.00 principal amount of the
Notes validly tendered (and not withdrawn) in the Debt Tender Offer on or prior
to 5:00 p.m., New York City time, on March 18, 2004, as such date may be
extended pursuant to the terms of the Debt Tender Offer (the "Debt Tender Offer
Expiration Date"), (b) with respect to Notes validly tendered (and not
withdrawn) in the
Debt Tender Offer on or prior to 5:00 p.m., New York City time, on March 3,
2004, a consent payment, in connection with the Company's solicitation of
consents (the "Consents") made simultaneously with the Debt Tender Offer, of
$30.00 per $1,000.00 principal amount of the Notes and (c) accrued and unpaid
interest on Notes validly tendered (and not withdrawn) in the Debt Tender Offer
to, but not including, the payment date; the amounts set forth in subparagraphs
(a) through (c) above, shall be collectively referred to as the "Debt Tender
Offer Consideration";
WHEREAS, as the Company is in serious financial difficulty and in
order to facilitate consummation of the transactions contemplated by the Equity
Tender Offer, the Company has requested that PHIL provide funding sufficient to
permit the Company to pay the Debt Tender Offer Consideration;
WHEREAS, as the Company is in serious financial difficulty and in
order to facilitate consummation of the transactions contemplated by the Equity
Tender Offer, the Company has requested that PHIL be responsible for the
payment of, and pay or cause to be paid for, the out-of-pocket fees and
expenses actually incurred by the Company in connection with the making and
consummation of the Debt Tender Offer, including, but not limited to, the fees
and expenses payable to (a) X.X. Xxxx & Co., Inc. pursuant to the Information
Agent Agreement, dated February 14, 2004, by and among the parties thereto, (b)
Wilmington Trust Company pursuant to the Depositary Agent Agency Agreement,
dated February 17, 2004, by and among the parties thereto, (c) UBS Securities
LLC pursuant to the Dealer Manager Agreement, dated February 17, 2004, by and
among the parties thereto and (d) Xxxxxxx Printers pursuant to existing
arrangements with PHIL; the fees and expenses set forth in subparagraphs (a)
through (d) above, shall be collectively referred to as the "Debt Tender Offer
Expenses", which for the avoidance of doubt shall not include the Debt Tender
Offer Consideration; and
WHEREAS, PHIL has agreed to fund the Debt Tender Offer Consideration
and the Debt Tender Offer Expenses, subject to the terms and conditions
contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties agree as follows:
1. Funding Commitment.
(a) PHIL agrees to loan, advance or otherwise make available to the
Company funds in an amount sufficient to pay the Debt Tender Offer
Consideration (the "Funds"), on terms no less favorable to the Company
than if the Funds were obtained from a person or company dealing at
arm's length with the Company, which Funds shall be used by the
Company for the express purpose of paying the Debt Tender Offer
Consideration. The obligation of PHIL to loan, advance or
otherwise make available to the Company the Funds shall be subject to
the receipt by PHIL of a duly executed Debt Tender Offer Funding
Notice, the form of which is attached hereto as Annex A, and the
satisfaction or waiver of the conditions set forth on Annex B hereto.
Upon receipt of a duly executed Debt Tender Offer Funding Notice and
the satisfaction or waiver of the conditions set forth on Annex B
hereto, PHIL shall promptly and, in any event, within two business
days, transmit or cause the transmission of the Funds, in immediately
available funds, to the account specified in such Notice. Concurrently
with such funding, the Company agrees to execute and deliver to PHIL
such documents or instruments evidencing such funding as shall be
mutually agreed upon.
(b) PHIL shall be responsible for the payment of, and shall pay or
cause to be paid for, the Debt Tender Offer Expenses as and when the
Debt Tender Offer Expenses (or any portion thereof) become due and
payable (after taking into account any grace periods and extensions).
Notwithstanding the foregoing, XXXX xxx elect to provide to the
Company the necessary funds to fund all or a portion of the Debt
Tender Offer Expenses and the Company shall make such payments
directly, which for the avoidance of doubt shall not obviate the
obligation of PHIL for the satisfaction of the Debt Tender Offer
Expenses to the extent not so satisfied with the funds provided by
PHIL for such purpose. The Company agrees that it will not enter into
or amend or modify any agreements, arrangements or understandings
related to the Debt Tender Offer fees and expenses, except (i) for
those agreements or arrangements discussed in the second-to-last
WHEREAS clause above (existing as of their respective dates), and (ii)
as otherwise expressly agreed in writing by PHIL.
2. Termination. The Debt Tender Offer Consideration funding commitment of
PHIL hereunder shall terminate on the earlier to occur of (i) the Debt
Tender Offer being terminated or withdrawn in accordance with its
terms and (ii) the Equity Tender Offer being terminated or withdrawn
in accordance with its terms. Notwithstanding anything to the contrary
in this Agreement and subject to Section 1(b) above, the funding
commitment of PHIL with respect to the Debt Tender Offer Expenses
shall not terminate until all such amounts due and payable shall have
been paid or otherwise satisfied.
3. Fees and Expenses. Each party hereto shall pay all costs and expenses
incurred by it in connection with the execution and delivery of this
Agreement, and all the transactions contemplated thereby, including,
without limitation, fees of legal counsel, except to the extent such
costs and expenses constitute Debt Tender Offer Expenses as
contemplated by this Agreement.
4. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of
New York, without regard to conflicts of law. Each of the parties
irrevocably submits in the first instance to the exclusive
jurisdiction of the United States District Court for the Southern
District of New York and, if jurisdiction is not found therein, then
to the exclusive jurisdiction of any court of the State of New York
located in New York City in any action, suit or proceeding arising out
of this Agreement, and agrees that any such action, suit or proceeding
shall be brought only in such applicable court; provided, however,
that such consent to jurisdiction is solely for the purpose referred
to in this Section 4 and shall not be deemed to be a general
submission to the jurisdiction of such applicable court or in the
State of New York other than for such purpose, nor shall it be deemed
to amend the choice of jurisdiction in any other document between the
parties. Each of the parties irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to
the laying of the venue of any such action, suit or proceeding brought
in such applicable court. Each of the parties further irrevocably
waives and agrees not to plead or claim that any such action, suit or
proceeding brought in such applicable court has been brought in an
inconvenient forum.
5. Assignment. This Agreement shall not be assigned by either party
hereto without the prior written consent of the other party hereto,
and any such attempted assignment shall be void and of no effect;
provided, however, that nothing contained in this Section 5 shall
prohibit PHIL from assigning its obligations under this Agreement to
any affiliate of PHIL or from granting participations in its funding
obligations hereunder pursuant to arrangements satisfactory to PHIL so
long as PHIL remains liable that such funding be provided, unless
otherwise agreed by the Company.
6. Counterparts. This Agreement may be executed by facsimile and in any
number of counterparts, each of which shall constitute an original and
all of which together shall be considered one and the same agreement.
7. No Third Party Beneficiary. This Agreement is for the sole benefit of
the parties and their permitted assigns, and nothing expressed or
implied herein shall give or be construed to give any person, other
than the parties and such assigns, any legal or equitable rights
hereunder.
8. Amendment and Supplement of Debt Tender Offer Documents. The Company
agrees not to amend or supplement the offering and ancillary documents
relating to the Debt Tender Offer from and after the date of this
Agreement, without the prior written consent of PHIL in its sole
discretion; provided, however, that the Company at any time may amend
or supplement such documents if it is advised
by outside legal counsel to the Company that such amendment or
supplement is required under applicable law, regulatory authority or
stock exchange requirements or by a court of competent jurisdiction.
In the event the Company has been so advised by outside legal counsel
that such an amendment or supplement is required, the Company shall
provide to PHIL and its advisors (i) a copy of the form and content of
the proposed disclosure and the method of dissemination and (ii) a
reasonable opportunity to review and comment on the proposed
disclosure to the extent practicable under the circumstances.
Notwithstanding the foregoing, the Company may make reasonable
determinations in good faith as to the validity, form or eligibility
(including time of receipt) of tenders of Notes or notices of
withdrawal or revocations of Consents without the consent of PHIL.
9. Amendment; Waiver. This Agreement may not be amended or modified nor
any provision hereof waived by the parties except by an instrument in
writing signed by each of the parties. The failure of any of the
parties to assert any of its rights under this Agreement shall not
constitute a waiver of such rights.
10. Entire Agreement. This Agreement (together with the Annexes hereto,
which form an integral part hereof) constitutes the entire agreement
with respect to the subject matter hereof and supersedes all prior
agreements and undertakings, both written and oral, between the
parties with respect to the subject matter hereof.
11. Disclosure. The Company and PHIL will consult with each other prior to
making any public announcement concerning this Agreement and the
transactions contemplated hereby; provided, however, that a party
hereto may at any time make a public disclosure if it is advised by
outside legal counsel to such party that such disclosure is required
under applicable law, regulatory authority or stock exchange
requirements or by a court of competent jurisdiction and the
disclosing party agrees to provide to the other party (i) a copy of
the form and content of the proposed disclosure and the method of
dissemination and (ii) a reasonable opportunity to review and comment
on the proposed disclosure to the extent practicable under the
circumstances.
12. Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Each of the parties has had the
opportunity to review and comment on this Agreement and consult with
outside legal counsel, and, therefore, no adverse presumption shall be
made against the drafting party. Nothing contained in this Agreement
shall be deemed to create or evidence a joint venture, partnership,
agency relationship or other similar arrangement between the parties,
or that the parties are in any other manner affiliated, and it is the
express intention
of the parties that no such arrangement be formed or created. All
dollar amounts in this Agreement and the Annexes hereto are
denominated in U.S. dollars.
(The remainder of this page is intentionally left blank.)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered by their duly authorized representatives as of the
day and year first above written.
Press Holdings International Limited
By: /s/ XXXXX XXXXXXX
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Name: Sir Xxxxx Xxxxxxx
Title: President
XXXXXXXXX INC.
By: /s/ XXXXX X. XXXXX
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Name:
Title:
ANNEX A
DEBT TENDER OFFER
FUNDING NOTICE
[________], 2004
Press Holdings International Limited
Le Montaigne
0 Xxxxxx xx Xxxxxx Xxxxxxxx
Xxxxx Xxxxx, Xxxxxx 00000
To whom it may concern:
Notice is provided pursuant to Section 1 of the Funding Agreement
dated as of February 17, 2004 (the "Funding Agreement"), by and between
Xxxxxxxxx Inc., a corporation incorporated under the Canada Business
Corporations Act (the "Company"), and Press Holdings International Limited, a
corporation incorporated under the laws of Jersey ("PHIL"). Terms used in this
Debt Tender Offer Funding Notice and not otherwise defined herein shall have
the meanings attributed thereto in the Funding Agreement.
1. The Company has completed the Debt Tender Offer and has accepted
for purchase Notes having an aggregate principal amount of $[____________].
2. The Company requests that PHIL or its designee advance to the
Company the amount of $[_______], as calculated below:
Debt Tender Offer consideration payable to holders of Notes
tendered on or before the Debt Tender Offer Expiration Date $[___________]
Consent payment payable to holders of Notes tendered
on or prior to 5:00 p.m., New York City time,
on March 3, 2004 $[___________]
Note Interest $[___________]
Debt Tender Offer Expenses (to the extent not paid by PHIL) $[___________]
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Total to be Funded $[___________]
3. The amount set forth above in the line captioned "Total to be
Funded" is to be transmitted promptly and, in any event, within two business
days, in immediately available funds to:
[Name of Bank]
[Address of Bank]
[Bank Routing Number]
For Credit to Xxxxxxxxx Inc.
[Xxxxxxxxx Inc. Account Number]
Reference: Debt Tender Offer Consideration
4. The undersigned certifies that conditions (b), (c), (d), (e) and
(f) set forth set forth in Annex B to the Funding Agreement have been satisfied
as of the date hereof.
Sincerely,
XXXXXXXXX INC.
By:
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Name:
Title:
ANNEX B
Conditions to Funding the Debt Tender Offer Consideration
The funding of the Debt Tender Offer Consideration shall be subject to
the following conditions, each of which shall be for the exclusive benefit of
PHIL and may be waived only in writing by PHIL in its sole discretion. Any
determination by PHIL concerning any event or other matter described in the
following conditions shall be final and binding upon the Company.
(a) Equity Tender Offer Condition. PAI has taken up and paid for
all of the Shares owned or controlled, directly or
indirectly, by Ravelston and Xxxx Xxxxx tendered pursuant to
the Equity Tender Offer in accordance with the terms and
conditions thereof.
(b) Requisite Consents Condition. The Company shall have received
valid consents from the holders of an aggregate principal
amount of Notes that represent no less than a majority of the
aggregate principal amount of Notes outstanding as of the
Debt Tender Offer Expiration Date. It being understood that
the Company may make reasonable determinations in good faith
as to the validity, form or eligibility (including time of
receipt) of tenders of Notes (and thereby delivery of
Consents) or notices of withdrawal or revocations of Consents
without the consent of PHIL.
(c) Acceptance of Notes; No Waivers. The Notes tendered in the
Debt Tender Offer shall have been accepted for purchase by
the Company, and the Company shall not have, in whole or in
part, waived or deemed any condition not applicable to the
Debt Tender Offer, except for such waivers as to which PHIL
shall have given its prior written consent, and all of such
conditions shall have been satisfied or so waived. It being
understood that the Company may make reasonable
determinations in good faith as to the validity, form or
eligibility (including time of receipt) of tenders of Notes
(and thereby delivery of Consents) or notices of withdrawal
or revocations of Consents without the consent of PHIL.
(d) Enforceability. This Agreement shall have been duly and
validly authorized, executed and delivered by the Company and
(assuming the due authorization, execution and delivery of
this Agreement by PHIL) shall constitute a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms and shall remain in full force and
effect.
(e) Bar to Purchase. Neither the performance of this Agreement
nor the consummation of the Debt Tender Offer in accordance
with its terms shall be the subject of any law, order,
decree, judgment, rule, regulation, or resolution of any
court, governmental authority or arbitrator the effect of
which is to enjoin or otherwise prevent the performance of
this Agreement
or the consummation of the Debt Tender Offer in accordance
with its terms.
(f) No Amendments or Supplements. No amendments or supplements to
the offering and ancillary documents relating to the Debt
Tender Offer have been made from and after the date of this
Agreement, which have not been consented to prior thereto in
writing by PHIL. It being understood that the Company may
make reasonable determinations in good faith as to the
validity, form or eligibility (including time of receipt) of
tenders of Notes (and thereby delivery of Consents) or
notices of withdrawal or revocations of Consents without the
consent of PHIL.
