-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SEkMLvi/FPdVNILZjkkAtOCjg2Bxbwl9vlEEJlZNSzq7E9Up32//z9/OH5ssAi2V JN8I6SvCpMeyzxsUj1cIZg== 0000898431-96-000136.txt : 19960829 0000898431-96-000136.hdr.sgml : 19960829 ACCESSION NUMBER: 0000898431-96-000136 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960828 SROS: NYSE GROUP MEMBERS: BLACK CONRAD M GROUP MEMBERS: HOLLINGER INC GROUP MEMBERS: RAVELSTON CORP LTD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HOLLINGER INTERNATIONAL INC CENTRAL INDEX KEY: 0000868512 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 953518892 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-43563 FILM NUMBER: 96621899 BUSINESS ADDRESS: STREET 1: 401 NORTH WABAH AVENUE STREET 2: SUITE 740 CITY: CHICAGO STATE: IL ZIP: 60611 BUSINESS PHONE: 3123212299 MAIL ADDRESS: STREET 1: 401 NORTH WABASH AVE STREET 2: SUITE 740 CITY: CHICAGO STATE: IL ZIP: 60611 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN PUBLISHING COMPANY DATE OF NAME CHANGE: 19940204 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HOLLINGER INC CENTRAL INDEX KEY: 0000911707 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 135691211 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1827 WEST 5TH AVE STREET 2: VANCOUVER BRITISH COLUMBIA CITY: CANADA V6J 1P5 STATE: A1 BUSINESS PHONE: 6047324443 MAIL ADDRESS: STREET 1: 10 TORONTO ST STREET 2: TORONTO ONTARIO CITY: CANADA M5C 2B7 STATE: A6 SC 13D/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 4) Hollinger International Inc. (Name of Issuer) Class A Common Stock, par value $.01 per share (Title of Class of Securities) 435569 10 8 -------------------------------------- (CUSIP Number) Charles G. Cowan, Q.C. Vice-President and Secretary Hollinger Inc. 10 Toronto Street Toronto, Ontario Canada M5C 2B7 (416) 363-8721 ----------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 7, 1996 ----------------------------------------------------------------- (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d- 1(b)(3) or (4), check the following box [ ] . Check the following box if a fee is being paid with this statement [ ]. (A fee is not required only if the filing person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7). NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D/A CUSIP No. 435569 10 8 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Hollinger Inc. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* a [ ] b [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Canada 7 SOLE VOTING POWER NUMBER OF 54,391,797 SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY 9 SOLE DISPOSITIVE POWER EACH 54,391,797 REPORTING 10 SHARED DISPOSITIVE POWER PERSON 0 WITH 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 54,391,797 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.2% 14 TYPE OF REPORTING PERSON* HC (Hollinger Inc. is a parent holding company. See Item 5.) SCHEDULE 13D/A CUSIP No. 435569 10 8 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The Ravelston Corporation Limited 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* a [ ] b [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Ontario, Canada 7 SOLE VOTING POWER NUMBER OF 54,391,797 SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY 9 SOLE DISPOSITIVE POWER EACH 54,391,797 REPORTING 10 SHARED DISPOSITIVE POWER PERSON 0 WITH 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 54,391,797 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.2% 14 TYPE OF REPORTING PERSON* HC (The Ravelston Corporation Limited is a parent holding company. See Item 4.) SCHEDULE 13D/A CUSIP No. 435569 10 8 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Conrad M. Black 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP a [ ] b [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Canada 7 SOLE VOTING POWER 54,546,397 NUMBER OF 8 SHARED VOTING POWER SHARES 0 BENEFICIALLY OWNED BY 9 SOLE DISPOSITIVE POWER EACH 54,546,397 REPORTING 10 SHARED DISPOSITIVE POWER PERSON 0 WITH 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 54,546,397 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.3% 14 TYPE OF REPORTING PERSON* IN SECURITIES AND EXCHANGE COMMISSION SCHEDULE 13D/A (Amendment No. 4) This Schedule 13D/A, Amendment No. 4 (the "Amendment"), relates to the Class A Common Stock, par value $.01 per share (CUSIP Number: 435569 10 8) ("Class A Common Stock"), of Hollinger International Inc., a Delaware corporation (the "Issuer"). On August 7, 1996 the Issuer completed a public offering of 10,000,000 shares of its Class A Common Stock. The underwriters' over-allotment option was exercised in full, resulting in the issuance of an additional 1,500,000 shares of Class A Common Stock on August 14, 1996. As a result, there are 69,565,754 shares of Class A Common Stock outstanding. This Amendment restates in their entirety Items 4, 5, 6 and 7 of the Schedule 13D of the filing persons dated October 20, 1995, as amended by Amendment No. 1 thereto dated February 7, 1996, Amendment No. 2 thereto dated March 7, 1996 and Amendment No. 3 thereto dated June 17, 1996 (collectively, the "Amended Schedule 13D"). No other Items of the Amended Schedule 13D are being amended at this time. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Amended Schedule 13D. Item 4. Purpose of Transaction. Hollinger Inc. beneficially owns shares of both classes of the Issuer's Common Stock representing approximately 83.6% of the combined voting power of such classes (without giving effect to the future issuance of Class A Common Stock in connection with the Issuer's PRIDES (as defined below) or upon conversion of the Series A Preferred Shares). As a result, Hollinger Inc. is in a position to control the outcome of substantially all actions of the Issuer requiring stockholder approval, including the election of the entire Board of Directors of the Issuer. Subject to the fiduciary responsibilities of the directors of the Issuer to all stockholders and the terms of certain agreements defining the ongoing relationships between Hollinger Inc. and the Issuer, Hollinger Inc., through its ability to control the outcome of any election of directors, is able to direct management policy, strategic direction and financial decisions of the Issuer. Ravelston effectively controls Hollinger Inc. through its direct or indirect control or direction over 46.7% of the outstanding common shares of Hollinger Inc. This percentage includes Hollinger Inc. common shares held by the Ravelston Trust and the following direct and indirect subsidiaries of Ravelston: Argus Corporation Limited, 176264 Canada Limited, 2753430 Canada Limited, 176268 Canada Limited and 176295 Canada Limited. The - 6 - Ravelston Trust was formed pursuant to a Trust Agreement dated as of October 31, 1991 among Ravelston, the Canadian Imperial Bank of Commerce ("CIBC") and Mr. Black, J. A. Boultbee and R. Geoffrey Browne, as trustees (the "Trustees"). The Trustees have granted Ravelston an irrevocable proxy to vote all of the Hollinger Inc. common shares held by the Ravelston Trust as long as the Ravelston Trust holds such common shares. As the holder of 100 units of the Ravelston Trust, Ravelston has the right to direct the disposition of 100 of the Hollinger Inc. common shares held by the Ravelston Trust. As the holder of the remaining 5,531,915 units of the Ravelston Trust, CIBC has the right to direct the disposition of 5,531,915 of the Hollinger Inc. common shares held by the Ravelston Trust. Conrad Black Capital Corporation holds 65.3% of the common shares of Ravelston. Mr. Black is the sole shareholder and Chairman of Conrad Black Capital Corporation. As a result of the performance of their duties as directors and officers of the Issuer, certain directors and officers of Hollinger Inc. and Ravelston, including Mr. Black, expect to have continually under consideration various plans or proposals which may relate to or might result in one or more of the matters described in paragraphs (a) through (j), inclusive, of Item 4 of Schedule 13D. Any such plans or proposals would, however, be subject to consideration and approval by the Board of Directors of the Issuer. On May 24, 1996, a wholly owned Canadian subsidiary of Hollinger Inc. purchased from a subsidiary of Power Corporation of Canada ("Power") the 16,349,743 common shares (the "Power Shares") of Southam Inc. ("Southam") held by Power, representing approximately 21.5% of Southam's outstanding common shares, at a price of Cdn.$18 per share. This purchase increases the Issuer's and Hollinger Inc.'s combined holdings in Southam to approximately 41% of Southam's outstanding common shares, including 19.5% which is currently held indirectly by the Issuer. Hollinger Inc. intends to further increase its holdings in Southam through permissible transactions to or above 50% of Southam's outstanding common shares and may also, subject to market and other conditions, seek to acquire all Southam common shares not owned or controlled by Hollinger Inc. or the Issuer through an offer of the Issuer's Class A Common Stock or securities convertible into or exchangeable for such stock. Hollinger Inc. and the Issuer have agreed to combine their interests in Southam so that the Issuer will hold indirectly non- voting common shares and voting preference shares representing one half of the voting power and all of the common equity of their combined interests. Hollinger Inc. will hold voting preference shares representing one half of the voting power and with a nominal amount of paid-up capital which will not be entitled to any payments, including dividends, other than a liquidation preference on the nominal amount. Hollinger Inc. and - 7 - the Issuer expect this transaction to occur promptly following the July 22, 1996 Southam shareholders' meeting. In addition, the Issuer intends to seek a ruling from Revenue Canada that would permit the Issuer to hold indirectly 100% of the common equity interests in Southam held by the Issuer and Hollinger Inc. without affecting Southam's status as a Canadian publisher of newspapers and periodicals. If such ruling is received and approval is obtained under the Investment Act Canada, the full ownership of the equity interests in Southam held by Hollinger Inc. and the Issuer would be transferred to the Issuer. If the Issuer obtains control of Southam (through share ownership or otherwise), Southam's results of operation will be consolidated for accounting purposes. The purchase of the Power Shares was financed by the Issuer through a short-term bank credit facility (the "Southam Facility") in the amount of Cdn.$300 million between the Issuer and CIBC, which assigned a portion of its interest in the loan to The Bank of Nova Scotia. Approximately Cdn.$75 million of the Southam Facility was repaid with net proceeds of the August 1996 Offerings (as defined below). The Southam Facility is guaranteed by Hollinger Inc. and matures on November 25, 1996. The funds under the Southam Facility were advanced by the Issuer to a Canadian subsidiary of Hollinger Inc. as an intercompany loan. The Hollinger Inc. guarantee of the Southam Facility is secured by a pledge of the Power Shares, 7,539,028 shares of Class A Common Stock of the Issuer held by Canada Limited and 14,990,000 shares of the Issuer's Class B Common Stock held by Ontario Limited. Existing registration rights agreements and security agreements entered into by Hollinger Inc. and its Canadian lenders have been amended to reflect the pledges under the Southam Facility. See Item 6. On August 7, 1996 the Issuer completed a public offering of 10,000,000 shares of its Class A Common Stock. The underwriters' over-allotment option was exercised in full, resulting in the issuance of an additional 1,500,000 shares of Class A Common Stock on August 14, 1996. Concurrently, the issuer completed a public offering of 20,700,000 Preferred Redeemable Increased Dividend Equity Securities ("PRIDES") (together with the August 1996 Class A Common Stock offering, the "August 1996 Offerings"). Proceeds of the August 1996 Offerings were used to, among other things, finance a portion of the acquisition of the minority shares of The Telegraph plc by the Issuer. In addition, the Issuer has stated that it may, through a subsidiary or an affiliate, issue high yield debt securities, or other debt or equity securities, possibly including a security which would allow the Issuer to monetize its interest in John Fairfax Holdings Limited; however, no decision has been made as to whether or not the Issuer will proceed, when to proceed or the - 8 - specific type of instrument that it would use. The Issuer anticipates that it would apply the net proceeds from any such offering for one or more of the following: (i) the repayment of bank indebtedness, (ii) the redemption of the DTH and the FDTH preference shares, and (iii) other corporate purposes, including capital expenditures and acquisitions. In the first quarter of 1996 the Issuer increased its quarterly dividend to $0.10 per share of Common Stock. As an international holding company, the Issuer's ability to declare and pay dividends in the future with respect to its Common Stock will be dependent, among other factors, upon its results of operations, financial condition and cash requirements, the ability of its United States and foreign subsidiaries (principally The Telegraph plc) to pay dividends and make other payments to the Issuer under applicable law and subject to restrictions contained in existing and future loan agreements, the prior payment of dividends to holders of PRIDES and Series A Preferred Stock, the preference share terms and other financing obligations to third parties relating to such United States or foreign subsidiaries of the Issuer, as well as foreign and United States tax liabilities with respect to dividends and other payments from those entities. As stockholders, the filing persons intend to periodically review and evaluate the market for the Issuer's Common Stock, the Issuer's business, prospects and financial condition, general economic conditions and other opportunities available to the filing persons. On the basis of such periodic reviews and evaluations, the filing persons may, subject to certain restrictions imposed by the Share Exchange Agreement and the Lock-up Agreements as described in Item 6 hereof, determine to increase or decrease their investment in the Common Stock through purchases, sales, gifts, or other means of acquisition or disposition. Among other things, Hollinger Inc. may sell a portion of the Class A Shares in a secondary offering or otherwise. The filing persons do not currently anticipate that any sales, if made, would reduce their beneficial ownership to less than 50% of the combined voting power of the Issuer's Class A and Class B Common Stock. Item 5. Interest in Securities of the Issuer. Hollinger Inc. and Ravelston (a) Amount Beneficially Owned: 54,391,797 shares of Class A Common Stock; 60.2% (calculated pursuant to Rule 13d- 3). Comprised of the following: (i) 10,121,726 shares of Class A Common Stock held directly by Hollinger Inc.; (ii) 7,539,028 shares of Class A Common Stock held by 3184081 Canada Limited ("Canada Limited"), a - 9 - wholly owned subsidiary of Hollinger Inc.; (iii) 15,950,000 shares of Class A Common Stock held by 1159670 Ontario Limited ("Ontario Limited"), an indirect wholly owned subsidiary of Hollinger Inc.; (iv) 14,990,000 shares of Class A Common Stock that may be acquired at any time by the conversion of 14,990,000 shares of Class B Common Stock held by Ontario Limited; and (v) at an initial conversion price of the Canadian dollar equivalent of $14.00 per share, 5,791,043 shares of Class A Common Stock that may be acquired at any time by the conversion of 739,500 shares of Series A Preferred Stock held directly by Hollinger Inc. (taking each share of Series A Preferred Stock at Cdn.$146.625 and assuming an exchange rate of $1.00 per Cdn.$1.3374, as in effect on October 13, 1995, the date on which such shares were acquired). The number of shares of Class A Common Stock into which the Series A Preferred Shares may be converted will fluctuate from time to time based on changes in the conversion rate and/or exchange rate. Through its relationship with Hollinger Inc. described in Item 4 hereof, Ravelston may be deemed to beneficially own all of the securities of the Issuer that are held by Hollinger Inc. and its subsidiaries. (b) Voting Power; Dispositive Power: Hollinger Inc. has the sole power to vote or to direct the vote of and to dispose of or direct the disposition of 54,391,797 shares of Class A Common Stock. Through its relationship with Hollinger Inc. described in Item 4 hereof, Ravelston may also be deemed to have the sole power to vote or to direct the vote of these shares. (c) Not applicable. (d) Right to Receive Dividends or Proceeds: Canada Limited and Ontario Limited have the right to receive the dividends from or the proceeds from the sale of the securities which they hold. The shares of Class A Common Stock held by Canada Limited constitute 10.8% of the outstanding shares of Class A Common Stock. The shares of Class A and Class B Common Stock held by Ontario Limited constitute 36.6% of the outstanding shares of Class A and Class B Common Stock. (e) Not applicable. The amount and percentage of Class A Common Stock beneficially owned by Hollinger Inc. and Ravelston exclude 154,600 shares of Class A Common Stock beneficially owned by Mr. Black. Pursuant to Rule 13d-4, Hollinger Inc. and Ravelston hereby expressly disclaim beneficial ownership of such shares. - 10 - Directors and Executive Officers of Hollinger Inc. and Ravelston (Other Than Mr. Black): Except as described below, the directors and executive officers of Hollinger Inc. and Ravelston (other than Mr. Black) do not beneficially own any shares of Class A Common Stock. Barbara Amiel Black, Mr. Black's wife, disclaims beneficial ownership of any shares of Class A Common Stock beneficially owned by Mr. Black. Number of Shares of Name Class A Common Stock Beneficially Owned* J. A. Boultbee 6,000 Dixon S. Chant 17,500 Charles G. Cowan, Q.C. 6,000 F. David Radler 29,600 * Includes shares subject to presently exercisable options or options exercisable within 60 days of August 7, 1996 under the Issuer's 1994 Stock Option Plan as follows: Mr. Boultbee, 6,000 shares; Mr. Chant, 10,000 shares; Mr. Cowan, 6,000 shares; and Mr. Radler, 20,000 shares. Mr. Black (a) Amount Beneficially Owned: 54,546,397 shares of Class A Common Stock; 60.3% of class (calculated pursuant to Rule 13d-3). Comprised of the following: (i) 54,391,797 shares of Class A Common Stock beneficially owned by Hollinger Inc. and Ravelston; (ii) 9,600 shares of Class A Common Stock held by Conrad Black Capital Corporation; and (iii) 145,000 shares of Class A Common Stock that may be acquired by Mr. Black upon the exercise of all outstanding options held by him, whether or not presently exercisable or exercisable within 60 days of August 7, 1996. (b) Voting Power; Dispositive Power: Through his relationships with Hollinger Inc., Ravelston and Conrad Black Capital Corporation described in Item 4 hereof, and through his personal holdings, Mr. Black may be deemed to have the sole power to vote or to direct the vote of and to dispose of or direct the disposition of 54,546,397 shares of Class A Common Stock. (c) Transactions During Past 60 Days: On August 1, 1996 Mr. Black was granted options to acquire 65,000 shares of Class A Common Stock under the Issuer's 1994 Stock Option Plan. - 11 - (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. The Issuer's Restated Certificate of Incorporation, as amended, provides that holders of Class B Common Stock are entitled to ten votes per share and holders of Class A Common Stock are entitled to one vote per share. The holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters on which stockholders may vote, except when class voting is required by applicable law or on a vote to issue or increase the authorized number of shares of Class B Common Stock. Dividends must be paid on both the Class A Common Stock and the Class B Common Stock at any time dividends are paid on either. Each share of Class B Common Stock is convertible at any time at the option of the holder into one share of Class A Common Stock and is transferable by Hollinger Inc. to a subsidiary or an affiliate. In addition, each share of Class B Common Stock is automatically convertible into a share of Class A Common Stock at the time it is sold, transferred or otherwise disposed of by Hollinger Inc. or a subsequent permitted transferee to any third party (other than a subsidiary or an affiliate of Hollinger Inc. or such subsequent permitted transferee) unless such purchaser or transferee offers to purchase all shares of Class A Common Stock from the holders thereof for an amount per share equal to the amount per share received by the holder of the Class B Common Stock (a "Permitted Transaction"). Notwithstanding the foregoing paragraph, any holder of Class B Common Stock may pledge his or its shares of Class B Common Stock to a pledgee pursuant to a bona fide pledge of such shares as collateral security for indebtedness due to the pledgee, provided that such shares shall not be transferred to or registered in the name of the pledgee and shall remain subject to the transfer restrictions described in the foregoing paragraph. In the event that shares of Class B Common Stock are so pledged, the pledged shares shall not be converted automatically into Class A Common Stock. However, if any such pledged shares become subject to any foreclosure, realization or other similar action of the pledgee, they shall be converted automatically into shares of Class A Common Stock unless they are sold in a Permitted Transaction. - 12 - The Issuer's Restated Certificate of Incorporation, as amended, also provides that no sale, transfer or other disposition of the Series A Preferred Shares shall be valid unless made to a subsidiary or affiliate of Hollinger Inc. or unless the Issuer, by resolution adopted by its Board of Directors, shall first have consented to the proposed transfer and approved the proposed transferee (the "Series A Transfer Restriction"). Notwithstanding the foregoing sentence, any holder of Series A Preferred Shares may pledge such shares to a pledgee pursuant to a bona fide pledge of such shares as collateral security for indebtedness or other obligations due to the pledgee, provided that such shares shall remain subject to, and upon foreclosure, realization or other similar action by the pledgee, shall be transferred only in accordance with, the Series A Transfer Restriction. Pursuant to the terms of the Hypothecation of Specific Securities dated October 13, 1995 by Hollinger Inc. in favor of CIBC, a copy of which is attached hereto as Exhibit 3, Hollinger Inc. has pledged the Class A Shares, the Class B Shares and the Series A Preferred Shares to CIBC as collateral security for the obligations of Hollinger Inc. and certain affiliated companies under a Cdn.$117,000,000 demand operating facility and a Cdn.$75,000,000 364-day revolving debt facility (together, the "CIBC Facilities"). The CIBC Facilities require compliance by Hollinger Inc. with certain financial and other covenants and are subject to standard default and other provisions. On February 29, 1996 Hollinger Inc. transferred 15,950,000 Class A Shares and the Class B Shares, subject to the pledge to secure the CIBC Facilities, to Ontario Limited. Pursuant to the terms of a Securities Pledge Agreement dated February 29, 1996 (the "February Securities Pledge Agreement"), a copy of which is attached hereto as Exhibit 7, Ontario Limited has pledged the 15,950,000 Class A Shares held by it as collateral security for its obligations under a Cdn.$90,000,000 Credit Agreement dated February 29, 1996 (the "Credit Agreement") among Ontario Limited, Hollinger Inc., CIBC, as agent for the Lenders, and CIBC, The Toronto-Dominion Bank and The Bank of Nova Scotia (collectively, the "Lenders"). The obligations of Ontario Limited under the Credit Agreement are guaranteed by Hollinger Inc. and certain of its Canadian subsidiaries. The Credit Agreement requires compliance by Hollinger and Ontario Limited with certain financial and other covenants and is subject to standard default and other provisions. On May 24, 1996 in connection with the guarantee (the "Guarantee") by Hollinger Inc., Canada Limited and Ontario Limited of the obligations of the Issuer under the Southam Facility, Ontario Limited and Canada Limited entered into securities pledge agreements with CIBC, copies of which are attached hereto as Exhibits 9 and 10. On July 17, 1996 - 13 - supplemental securities pledge agreements, copies of which are attached hereto as Exhibits 12 and 13, were entered into to reflect the syndication of the Southam Facility. Pursuant to these agreements, the 7,539,028 shares of Class A Common Stock held by Canada Limited and the 14,990,000 shares of Class B Common Stock held by Ontario Limited are pledged as security for the guarantee. The Southam Facility contains covenants customary in such transactions and is subject to standard default and other provisions. Certain registration rights agreements, attached hereto as Exhibits 4, 8 and 11, were entered into in connection with the above-described pledges. These agreements provide for registration (either within a certain time period of execution of the registration rights agreement or upon foreclosure) under the Securities Act of 1933, as amended, of the pledged shares of Class A Common Stock and the shares of Class A Common Stock into which other pledged securities are convertible. Under the Share Exchange Agreement, Hollinger Inc. and the Issuer have agreed that if the Issuer proposes to effect a public offering of its equity or equity-linked securities for cash, or to issue equity-linked securities in any acquisition by the Issuer of the stock or assets of an unrelated corporation or entity, at any time during the 24 months following the closing date, the Issuer's efforts to raise capital through such offering shall have priority over any proposal by Hollinger Inc. to effect a public offering or sale of the Issuer's equity securities by Hollinger Inc., unless a majority of the disinterested members of an Independent Committee of the Issuer's Board of Directors shall otherwise agree. For these purposes, an "Independent Committee" means a committee of the Issuer's Board the majority of the members of which are not employees or directors of Hollinger Inc. or employees of the Issuer, or another committee of the Issuer's Board whose membership satisfies any more restrictive requirements of independence of any securities exchange or market in which the Issuer's equity securities are traded or listed. If during such period Hollinger Inc. proposes to sell or otherwise dispose of any shares of Series A Preferred Stock (other than certain transfers to Hollinger Inc. subsidiaries or affiliates and pledges) or to offer or sell publicly any shares of Class A Common Stock held by it or its affiliates, it shall first consult with the Independent Committee so as not to interfere with any planned capital market activities of the Issuer to be undertaken within this period. The Share Exchange Agreement also provides that, until the second anniversary of the closing date, Hollinger Inc. shall not, without the prior approval of the Independent Committee, purchase outstanding shares of Class A Common Stock in the market from time to time except in conformity with applicable rules and regulations of the Securities and Exchange Commission or propose - 14 - or undertake (or enter into an agreement or commitment to propose or undertake) any transaction or series of transactions that would constitute a Rule 13e-3 transaction (as such term is defined in Rule 13e-3(a)(3) promulgated under the Securities Exchange Act of 1934, as amended) with respect to the Issuer (a "Going Private Transaction") unless Hollinger Inc., as a condition to the consummation of such Going Private Transaction, provides that a majority of the disinterested members of the Independent Committee shall have (i) approved the terms and conditions of the Going Private Transaction and shall have recommended that the Issuer's stockholders vote in favor or accept the terms thereof and (ii) received from its financial advisor a written fairness opinion for inclusion in the proxy or information statement (or other similar disclosure documents) to be delivered to stockholders of the Issuer in connection with the Going Private Transaction. As a preliminary step to the Reorganization described in Item 3 hereof, the HTH Shares (as defined below) were acquired by FDTH. The HTH Shares are currently pledged by Hollinger Inc. in connection with Cdn.$125 million of debentures issued by Hollinger Inc. which mature on November 1, 1998. Pursuant to the Share Exchange Agreement, Hollinger Inc. has agreed that its redemption rights as a holder of the Series A Preferred Shares (and the redemption rights of any subsequent transferee) are conditional upon its delivery to FDTH of clear title to the HTH Shares or common shares of Southam Inc., free of liens, pledges, charges and encumbrances, subject to certain exceptions. For these purposes, "HTH Shares" means FDTH's one-half ownership interest in Hollinger-Telegraph Holdings Inc., a joint venture company through which the Issuer and The Telegraph plc own 14,290,000 Southam common shares (18.9%). With respect to the Series A Preferred Shares, the Share Exchange Agreement also provides that so long as any of the Series A Preferred Shares are held by Hollinger Inc. or any of its affiliates, the Issuer will not with respect to such shares take any action to effect or approve any reduction in the conversion price, redeem such shares or amend or modify the terms of such shares, unless such action has been approved by a majority of the disinterested members of the Independent Committee. In connection with the August 1996 Offerings, Hollinger Inc., the Issuer and certain of the directors and officers of the Issuer, including Mr. Black, entered into contractual lock-up agreements (the Lock-Up Agreements") providing that they will not sell, contract to sell or grant any option or warrant to purchase or otherwise dispose of any shares of Class A Common Stock or PRIDES or any securities convertible into or exercisable or exchangeable for Class A Common Stock or PRIDES for a period of 90 days after August 1, 1996, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), other than the shares of Common Stock and PRIDES that - 15 - were sold by the Issuer in the August 1996 Offerings and that are issuable in connection with the PRIDES, the shares under a shelf registration statement relating to the shares of Class A Common Stock of the Issuer owned by Hollinger Inc. and pledged to certain lenders, the issuance of securities in connection with the formation of the entity that will hold Hollinger Inc.'s and the Issuer's combined interests in Southam and related intercompany transactions, and options to purchase shares under the Issuer's 1994 Stock Option Plan. Item 7. Materials to Be Filed as Exhibits. Exhibit No. Description 1 Joint Filing Agreement dated October 20, 1995, among Hollinger Inc., The Ravelston Corporation Limited and The Hon. Conrad M. Black, P.C., O.C. (individually and on behalf of Conrad Black Capital Corporation). 2 Share Exchange Agreement dated as of July 19, 1995 between American Publishing Company and Hollinger Inc. (incorporated by reference to the definitive proxy statement of the Issuer dated September 28, 1995). 3 Hypothecation of Specific Securities dated October 13, 1995 by Hollinger Inc. in favor of the Canadian Imperial Bank of Commerce. 4 Letter agreement dated October 13, 1995 between Hollinger Inc. and the Canadian Imperial Bank of Commerce. 5 Letter agreements dated August 1, 1996 between Hollinger Inc. and certain underwriters. 6 Letter agreements dated August 1, 1996 between The Hon. Conrad M. Black, P.C., O.C. and certain underwriters. 7 Securities Pledge Agreement dated February 29, 1996 by 1159670 Ontario Limited in favor of the Canadian Imperial Bank of Commerce, as agent for certain lenders. 8 Registration Rights Agreement dated February 29, 1996 among Hollinger Inc., 1159670 Ontario Limited and certain lenders. - 16 - 9 Securities Pledge Agreement dated May 24, 1996 by 1159670 Ontario Limited in favor of the Canadian Imperial Bank of Commerce. 10 Securities Pledge Agreement dated May 24, 1996 by 3184081 Canada Limited in favor of the Canadian Imperial Bank of Commerce. 11 Letter agreement dated May 24, 1996 among Hollinger Inc., Hollinger International Inc., 1159670 Ontario Limited, 3184081 Canada Limited and the Canadian Imperial Bank of Commerce (omitting Schedules A and B). 12 Securities Pledge Agreement dated July 17, 1996 by 1159670 Ontario Limited in favor of Canadian Imperial Bank of Commerce as agent for certain lenders. 13 Securities Pledge Agreement dated July 17, 1996 by 3184081 Canada Limited in favor of the Canadian Imperial Bank of Commerce as agent for certain lenders. - 17 - SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: August 28, 1996 HOLLINGER INC. By: /s/ C.G. Cowan --------------------------- Charles G. Cowan, Q.C. Title: Vice-President and Secretary THE RAVELSTON CORPORATION LIMITED By: /s/ C.G. Cowan --------------------------- Charles G. Cowan, Q.C. Title: Vice-President and Secretary By: /s/ Conrad M. Black -------------------------- The Hon. Conrad M. Black, P.C., O.C., individually and on behalf of Conrad Black Capital Corporation Title: Chairman of Conrad Black Capital Corporation - 18 - EXHIBIT INDEX Exhibit Description No. 1 Joint Filing Agreement dated October 20, 1995, among Hollinger Inc., The Ravelston Corporation Limited and The Hon. Conrad M. Black, P.C., O.C. (individually and on behalf of Conrad Black Capital Corporation) (previously filed). 2 Share Exchange Agreement dated as of July 19, 1995 between American Publishing Company and Hollinger Inc. (incorporated by reference to the definitive proxy statement of the Issuer dated September 28, 1995). 3 Hypothecation of Specific Securities dated October 13, 1995 by Hollinger Inc. in favor of the Canadian Imperial Bank of Commerce (previously filed). 4 Letter agreement dated October 13, 1995 between Hollinger Inc. and the Canadian Imperial Bank of Commerce (previously filed). 5 Letter agreements dated August 1, 1996 between Hollinger Inc. and certain underwriters (filed herewith). 6 Letter agreements dated August 1, 1996 between The Hon. Conrad M. Black, P.C., O.C. and certain underwriters (filed herewith). 7 Securities Pledge Agreement dated February 29, 1996 by 1159670 Ontario Limited in favor of the Canadian Imperial Bank of Commerce, as agent for certain lenders (previously filed). 8 Registration Rights Agreement dated February 29, 1996 among Hollinger Inc., 1159670 Ontario Limited and certain lenders (previously filed). - 19 - 9 Securities Pledge Agreement dated May 24, 1996 by 1159670 Ontario Limited in favor of the Canadian Imperial Bank of Commerce (previously filed). 10 Securities Pledge Agreement dated May 24, 1996 by 3184081 Canada Limited in favor of the Canadian Imperial Bank of Commerce (previously filed). 11 Letter agreement dated May 24, 1996 among Hollinger Inc., Hollinger International Inc., 1159670 Ontario Limited, 3184081 Canada Limited and the Canadian Imperial Bank of Commerce (omitting Schedules A and B) (previously filed). 12 Securities Pledge Agreement dated July 17, 1996 by 1159670 Ontario Limited in favor of Canadian Imperial Bank of Commerce as agent for certain lenders. 13 Securities Pledge Agreement dated July 17, 1996 by 3184081 Canada Limited in favor of the Canadian Imperial Bank of Commerce as agent for certain lenders. - 20 - EX-5 2 Exhibit 5 August 1, 1996 MERRILL LYNCH & CO. BEAR, STEARNS & CO. INC. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION as Representatives of the several Underwriters c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner Smith Incorporated Merrill Lynch World Headquarters North Tower World Financial Center New York, New York 10281-1201 MERRILL LYNCH INTERNATIONAL LIMITED BEAR, STEARNS INTERNATIONAL LIMITED DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION CIBA WOOD GUNDY SECURITIES PLC TD SECURITIES INC. as Lead Manager of the several Managers MERRILL LYNCH CANADA INC. CIBC WOOD GUNDY SECURITIES INC. as Sub-Underwriters c/o Merrill Lynch International Limited Ropemaker Place 25 Ropemaker Street Lond ECZ4 9D4 England Ladies and Gentlemen: The undersigned understands that you and certain other firms propose to enter into a U.S. Purchase Agreement and an International Purchase Agreement providing for the purchase by you and such other firms named in each such Purchase Agreement (the "Underwriters") of shares (the "Shares") of Class A Common Stock, par value $.01 per share (the "Class A Common Stock"), of Hollinger International Inc. (the "Company"). In consideration of the execution of the Purchase Agreements and the purchase of the Shares by the Underwriters and for other good and valuable consideration, the undersigned hereby irrevocably agrees that without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, the undersigned will not sell, contract to sell or otherwise dispose of any shares of Class A Common Stock or any securities convertible into or exercisable or exchangeable for Class A Common Stock, or grant any options or warrants to purchase any shares of Class A Common Stock or any securities convertible into or exercisable or exchangeable for Class A Common Stock for a period of 90 days after the date of the final prospectus relating to the offering of the Shares to the public by the Underwriters, except as provided in the Purchase Agreements, the Purchase Agreement of even date herewith relating to the PRIDES offered by the Company, the shelf Registration Statement on Form S-3 (No. 333-04697) relating to the shares of Class A Common Stock held by Hollinger Inc., the issuance of securities in connection with the formation of the entity that will hold Hollinger Inc.'s and the Company's combined interests in Southam and related intercompany transactions, and options to purchase shares under the Company's 1994 Stock Option Plan. The undersigned agrees that the provisions of this agreement shall be binding also upon the successors, assigns, heirs and personal representatives of the undersigned. In furtherance of the foregoing, the Company and First Chicago Trust Company of New York, its Transfer Agent, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this letter agreement. It is understood that, if the Purchase Agreements do not become effective, or if the Purchase Agreements (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for any delivery of the Shares, you will release us from our obligations under this letter agreement. Very truly yours, HOLLINGER INC. By: /s/ Peter Y. Atkinson ------------------------------ Name: Peter Y. Atkinson Title: Vice President and General Counsel August 1, 1996 MERRILL LYNCH & CO. BEAR, STEARNS & CO. INC. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION as Representatives of the several Underwriters c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner Smith Incorporated Merrill Lynch World Headquarters North Tower World Financial Center New York, New York 10281-1201 Ladies and Gentlemen: The undersigned understands that you and certain other firms propose to enter into a Purchase Agreement providing for the purchase by you and such other firms named in each such Purchase Agreement (the "Underwriters") of 9 3/4% Preferred Redeemable Increased Dividend Equity Securities ("PRIDES") of Hollinger International Inc. (the "Company"). In consideration of the execution of the Purchase Agreement and the purchase of the PRIDES by the Underwriters and for other good and valuable consideration, the undersigned hereby irrevocably agrees that without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, the undersigned will not sell, contract to sell or otherwise dispose of any PRIDES or any securities convertible into or exercisable or exchangeable for PRIDES, or grant any options or warrants to purchase any shares of PRIDES or any securities convertible into or exercisable or exchangeable for PRIDES for a period of 90 days after the date of the final prospectus relating to the offering of the Shares to the public by the Underwriters, except as provided in the Purchase Agreement, the Purchase Agreements of even date herewith relating to the shares of Class A Common Stock offered by the Company, the shelf Registration Statement on Form S-3 (No. 333-04697) relating to the shares of Class A Common Stock held by Hollinger Inc., the issuance of securities in connection with the formation of the entity that will hold Hollinger Inc.'s and the Company's combined interests in Southam and related intercompany transactions, and options to purchase shares under the Company's 1994 Stock Option Plan. The undersigned agrees that the provisions of this agreement shall be binding also upon the successors, assigns, heirs and personal representatives of the undersigned. In furtherance of the foregoing, the Company and First Chicago Trust Company of New York, its Transfer Agent, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this letter agreement. It is understood that, if the Purchase Agreement does not become effective, or if the Purchase Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for any delivery of the PRIDES, you will release us from our obligations under this letter agreement. Very truly yours, HOLLINGER INC. By: /s/ Peter Y. Atkinson ------------------------------ Name: Peter Y. Atkinson Title: Vice President and General Counsel EX-6 3 Exhibit 6 August 1, 1996 MERRILL LYNCH & CO. BEAR, STEARNS & CO. INC. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION as Representatives of the several Underwriters c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner Smith Incorporated Merrill Lynch World Headquarters North Tower World Financial Center New York, New York 10281-1201 MERRILL LYNCH INTERNATIONAL LIMITED BEAR, STEARNS INTERNATIONAL LIMITED DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION CIBA WOOD GUNDY SECURITIES PLC TD SECURITIES INC. as Lead Manager of the several Managers MERRILL LYNCH CANADA INC. CIBC WOOD GUNDY SECURITIES INC. as Sub-Underwriters c/o Merrill Lynch International Limited Ropemaker Place 25 Ropemaker Street Lond ECZ4 9D4 England Ladies and Gentlemen: The undersigned understands that you and certain other firms propose to enter into a U.S. Purchase Agreement and an International Purchase Agreement providing for the purchase by you and such other firms named in each such Purchase Agreement (the "Underwriters") of shares (the "Shares") of Class A Common Stock, par value $.01 per share (the "Class A Common Stock"), of Hollinger International Inc. (the "Company"). In consideration of the execution of the Purchase Agreements and the purchase of the Shares by the Underwriters and for other good and valuable consideration, the undersigned hereby irrevocably agrees that without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, the undersigned will not sell, contract to sell or otherwise dispose of any shares of Class A Common Stock or any securities convertible into or exercisable or exchangeable for Class A Common Stock, or grant any options or warrants to purchase any shares of Class A Common Stock or any securities convertible into or exercisable or exchangeable for Class A Common Stock for a period of 90 days after the date of the final prospectus relating to the offering of the Shares to the public by the Underwriters, except as provided in the Purchase Agreements, the Purchase Agreement of even date herewith relating to the PRIDES offered by the Company, the shelf Registration Statement on Form S-3 (No. 333-04697) relating to the shares of Class A Common Stock held by Hollinger Inc., the issuance of securities in connection with the formation of the entity that will hold Hollinger Inc.'s and the Company's combined interests in Southam and related intercompany transactions, and options to purchase shares under the Company's 1994 Stock Option Plan. The undersigned agrees that the provisions of this agreement shall be binding also upon the successors, assigns, heirs and personal representatives of the undersigned. In furtherance of the foregoing, the Company and First Chicago Trust Company of New York, its Transfer Agent, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this letter agreement. It is understood that, if the Purchase Agreements do not become effective, or if the Purchase Agreements (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for any delivery of the Shares, you will release us from our obligations under this letter agreement. Very truly yours, /s/ Conrad M. Black ------------------------------ Name: Conrad M. Black Title: Chairman and Chief Executive Officer August 1, 1996 MERRILL LYNCH & CO. BEAR, STEARNS & CO. INC. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION as Representatives of the several Underwriters c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner Smith Incorporated Merrill Lynch World Headquarters North Tower World Financial Center New York, New York 10281-1201 Ladies and Gentlemen: The undersigned understands that you and certain other firms propose to enter into a Purchase Agreement providing for the purchase by you and such other firms named in each such Purchase Agreement (the "Underwriters") of 9 3/4% Preferred Redeemable Increased Dividend Equity Securities ("PRIDES") of Hollinger International Inc. (the "Company"). In consideration of the execution of the Purchase Agreement and the purchase of the PRIDES by the Underwriters and for other good and valuable consideration, the undersigned hereby irrevocably agrees that without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, the undersigned will not sell, contract to sell or otherwise dispose of any PRIDES or any securities convertible into or exercisable or exchangeable for PRIDES, or grant any options or warrants to purchase any shares of PRIDES or any securities convertible into or exercisable or exchangeable for PRIDES for a period of 90 days after the date of the final prospectus relating to the offering of the Shares to the public by the Underwriters, except as provided in the Purchase Agreement, the Purchase Agreements of even date herewith relating to the shares of Class A Common Stock offered by the Company, the shelf Registration Statement on Form S-3 (No. 333-04697) relating to the shares of Class A Common Stock held by Hollinger Inc., the issuance of securities in connection with the formation of the entity that will hold Hollinger Inc.'s and the Company's combined interests in Southam and related intercompany transactions, and options to purchase shares under the Company's 1994 Stock Option Plan. The undersigned agrees that the provisions of this agreement shall be binding also upon the successors, assigns, heirs and personal representatives of the undersigned. In furtherance of the foregoing, the Company and First Chicago Trust Company of New York, its Transfer Agent, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this letter agreement. It is understood that, if the Purchase Agreement does not become effective, or if the Purchase Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for any delivery of the PRIDES, you will release us from our obligations under this letter agreement. Very truly yours, /s/ Conrad M. Black ------------------------------ Name: Conrad M. Black Title: Chairman and Chief Executive Officer EX-12 4 Exhibit 12 SECURITIES PLEDGE AGREEMENT --------------------------- TO: CANADIAN IMPERIAL BANK OF COMMERCE Commerce Court West - 7th Floor Toronto, Ontario M5L 1A2 WHEREAS in order to secure the due payment and performance of the Obligations (as defined below), the undersigned (the "Debtor") has agreed to pledge the Pledged Securities (as defined below) to Canadian Imperial Bank of Commerce, as agent (in that capacity, the "Agent") for the benefit of the lenders (collectively, the "Lenders", the present Lenders being Canadian Imperial Bank of Commerce and The Bank of Nova Scotia) from time to time parties to the credit commitment agreement titled "Summary of Terms and Conditions" dated May 24, 1996 among Hollinger International Inc., Hollinger Inc., Canadian Imperial Bank of Commerce and the Agent (as supplemented by an assignment agreement dated as of July 17, 1996 among Hollinger International Inc., Canadian Imperial Bank of Commerce and The Bank of Nova Scotia and as further supplemented, amended or restated from time to time, the "Credit Agreement"). THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are conclusively acknowledged by the parties hereto, the Debtor hereby agrees as follows: 1. DEFINED TERMS. In this Agreement, the following words have the following meanings: "Companies" means the corporations, companies, partnerships, limited partnerships, trusts and other entities listed under the heading "Companies" in Schedule "A" and their respective successors; "Default" means a failure to pay any of the Obligations when due; "Lien" means a mortgage, hypothec, title retention, pledge, lien, charge, security interest or other encumbrance whatsoever, whether fixed or floating and howsoever created or arising; "Obligations" means all present and future indebtedness and liabilities of every kind, nature and description (whether direct or indirect, joint or several, absolute or contingent, matured or unmatured) of the Debtor to the Agent and the Lenders under or pursuant to the guarantee dated the date hereof made by the - 1 - Debtor in favour of the Agent in respect of Hollinger International Inc. and any unpaid balance thereof; and "Pledged Securities" means the securities listed under the heading "Pledged Securities" in Schedule "A", together with any other securities in the capital of the Companies owned by the Debtor from time to time. 2. PLEDGE. As general and continuing collateral security for the payment and performance of all Obligations, the Debtor hereby assigns and pledges to and in favour of the Agent, and the Debtor hereby grants to the Agent a continuing security interest in the following (collectively, the "Collateral"): (i) the Pledged Securities, together with any replacements thereof and substitutions therefor, and all certificates and instruments evidencing or representing such securities; (ii) all dividends, whether in cash, kind or stock, received or receivable upon or in respect of any of the Pledged Securities and all moneys or other property payable or paid on account of any return or repayment of capital in respect of any of the Pledged Securities or otherwise distributed in respect thereof or which will in any way be charged to, or payable or paid out of, the capital of any of the Companies on account of the Pledged Securities; (iii) all other property that may at any time be received or receivable by or otherwise distributed to the Debtor in respect of, or in substitution for, or in exchange for, any of the foregoing; and (iv) all cash, securities and other proceeds of the foregoing and all rights and interests of the Debtor in respect thereof or evidenced thereby, including all moneys received from time to time by the Debtor in connection with the sale or other disposition of any of the Pledged Securities; provided, however, that the Debtor will not sell or otherwise dispose of any of the Pledged Securities or purport to do any of the foregoing without the prior written consent of the Agent. 3. DELIVERY OF PLEDGED SECURITIES. The certificates representing the Pledged Securities duly endorsed by the appropriate person in blank for transfer or accompanied by powers of attorney satisfactory to the Agent will forthwith be delivered to and remain in the custody of the Agent or its nominee. All Pledged Securities may, at the option of the Agent, be registered in the name of the Agent or its nominee. If the Agent so requests, the certificates representing the Pledged Securities will also be guaranteed by a Canadian chartered bank. 4. REPRESENTATIONS AND WARRANTIES. The Debtor hereby represents and warrants to the Agent and acknowledges that the Agent is relying thereon, notwithstanding any investigation by the Agent or any Lender or otherwise, that: (i) the Debtor is the lawful owner of the Collateral, free and clear of any and all Liens or claims of others other than any Lien granted by the Debtor to the Agent hereunder or Liens in favour of Canadian - 2 - Imperial Bank of Commerce, with full right to deliver, assign, pledge and charge the Collateral to the Agent pursuant hereto; (ii) the Pledged Securities represent all of the issued and outstanding shares in the capital of each of the Companies held by the Debtor; (iii) the Pledged Securities are validly issued, fully paid and non-assessable; (iv) there is no existing agreement, option, right or privilege capable of becoming an agreement or option pursuant to which the Debtor would be required to sell or otherwise dispose of any of the Pledged Securities; (v) except as otherwise agreed by the Agent in writing, the Liens granted by the Debtor to the Agent pursuant to this Agreement constitute Liens on the Collateral in favour of the Agent which are prior to all other Liens on the Collateral other than Liens in favour of Canadian Imperial Bank of Commerce, whether created by the Debtor or any other Person, and in existence on the date hereof; (vi) the Debtor has the power and authority and the legal right to execute and deliver, to perform its obligations under, and to grant the Lien on the Collateral pursuant to, this Agreement and the Debtor has taken all necessary corporate action to authorize its execution, delivery and performance of, and grant of the Lien on the Collateral pursuant to, this Agreement; (vii) this Agreement constitutes a legal, valid and binding obligation of the Debtor, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity; (viii) the execution, delivery and performance of this Agreement will not violate any provision or requirement of any law or contractual obligation of the Debtor and will not result in the creation or imposition of any Lien on any of the properties or revenues of the Debtor pursuant to any requirement of law or contractual obligation of the Debtor; (ix) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or governmental authority and no consent of any other person (including any shareholder or creditor of the Debtor), is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement, except for such as have been obtained or made and are in full force and effect, and the terms of which have been disclosed to the Agent; and (x) no litigation, investigation or proceeding of or before any arbitrator or governmental authority is pending or, to the knowledge of the Debtor, threatened by or against the Debtor or against any of its properties or revenues which may materially adversely affect the business, property or financial or other condition of the Debtor. 5. COVENANTS. The Debtor covenants and agrees with the Agent that: (i) at any time and from time to time, upon the written request of the Agent, and at the sole expense of the Debtor, the Debtor will promptly and duly execute and deliver such further instruments and documents and take such further action as the - 3 - Agent may request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including the filing or execution of any financing or financing change statements under any applicable legislation in effect in any jurisdiction with respect to the Liens created hereby; (ii) the Debtor authorizes the Agent to file any such financing or financing change statement without the signature of the Debtor to the extent permitted by applicable law; (iii) the Debtor will not create, incur or permit to exist, but will defend the Collateral against, and will take such other action as is necessary to remove, any Lien or claim on or to the Collateral, other than the Liens created hereby and Liens in favour of Canadian Imperial Bank of Commerce and other than as permitted in writing by the Agent; (iv) the Debtor will not sell, transfer, lease or otherwise dispose of any of the Collateral except as permitted in writing by the Agent; and (v) the Debtor will ensure that at the request of the Agent, all Pledged Securities are registered in the name of the Agent or its nominee, that the certificates representing the Pledged Securities will be forthwith delivered to and remain in the custody of the Agent or its nominee, and that all certificates, instruments or other documents representing or evidencing any Pledged Securities acquired or issued subsequent to the date hereof will be registered in the name of the Agent or its nominee and will forthwith after issuance be delivered to, and remain in the custody of, the Agent or its nominee. 6. RIGHTS AND DUTIES OF AGENT. The Agent will have and be entitled to exercise all such powers hereunder as are specifically delegated to the Agent by the terms hereof, together with such powers as are incidental thereto. The Agent may execute any of its duties hereunder by or through agents and will be entitled to retain counsel and to act in reliance upon the advice of such counsel concerning all matters pertaining to its duties hereunder. The Agent and any nominee on its behalf will be bound to exercise in the holding of the Pledged Securities and other Collateral only the same degree of care as it would exercise with respect to similar property of its own held in the same place. Neither the Agent, nor any Lender, nor any nominee acting on behalf of the Agent or any Lender, nor any director, officer or employee of the Agent or any Lender or such nominee, will be liable for any action taken or admitted to be taken by it hereunder or in connection herewith except for its own gross negligence or wilful misconduct. 7. VOTING RIGHTS. Unless a Default has occurred and is continuing, the Debtor will be entitled to exercise all voting power from time to time exercisable in respect of the Pledged Securities and give consents, waivers and ratifications in respect thereof. Immediately upon the occurrence and during the continuance of any Default, all such rights of the Debtor to vote and give consents, waivers and ratifications will cease and the - 4 - Agent will be entitled to exercise all such voting rights and to give all consents, waivers and ratifications as permitted by the Agent. 8. DIVIDENDS. Unless a Default has occurred and is continuing, the Debtor will, subject to any agreement with the Agent to the contrary, be entitled to receive any and all cash dividends and other distributions on the Pledged Securities which it is otherwise entitled to receive. If a Default has occurred and is continuing, the Agent will have the sole and exclusive right and authority to receive and retain the dividends and other distributions which the Debtor would otherwise be authorized to receive. Any money and other property paid over to or received by the Agent pursuant to the provisions of this Section 8 will be retained by the Agent as additional Collateral hereunder and be applied in accordance with the provisions hereof. 9. REMEDIES. If a Default has occurred and is continuing, the Agent may, without notice to or the consent of the Debtor or any other person (other than as required by applicable law), take all or any of the following actions: (a) transfer all or any part of the Collateral into the name of the Agent or any Lender or any nominee on behalf of the Agent or any Lender, with or without disclosing that such Collateral is subject to the Lien hereunder; (b) notify any parties obligated on any of the Collateral to make payment to the Agent or any Lender of any amounts due or to become due thereunder; (c) exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any of the Pledged Securities as if it were the absolute owner thereof; (d) from time to time realize upon, collect, sell, transfer, assign, give options to purchase, or otherwise dispose of and deliver the Pledged Securities and other Collateral, or any part thereof, in such a manner as may seem to it advisable, and for the purposes thereof each and every requirement relating thereto and prescribed by law or otherwise is hereby waived to the extent permitted by law; (e) enforce collection of any of the Collateral by suit or otherwise, and surrender, release or exchange all or any part of any property in addition to the Collateral, securing any of the Obligations, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect to any property; and - 5 - (f) to the extent permitted by applicable law, the Agent or any Lender may purchase any or all of the Pledged Securities and other Collateral, whether in connection with a sale made under the power of sale herein contained or pursuant to judicial proceedings or otherwise; provided, however, that the Agent and the Lenders will not be bound to deal with the Pledged Securities and other Collateral as aforesaid, and will not be liable for any loss which may be occasioned by any failure to do so and no action of the Agent or any Lender permitted hereunder will impair or affect any rights of the Agent or any Lender in and to the Collateral. 10. APPLICATION OF PROCEEDS. After payment of expenses as provided in Section 11 hereof, the balance of any proceeds received by the Agent in or in connection with realizing, collecting, selling, transferring, delivering or obtaining payment of the Collateral or any part thereof may be held by the Agent and may, as and when the Agent thinks fit, be applied on account of such part of the Obligations as to the Agent seems best, without prejudice to the Agent's and the Lenders' claims upon the Debtor for any deficiency. 11. PAYMENT OF EXPENSES. The Agent may charge on its own behalf and also pay to others all out-of-pocket expenses of the Agent and others retained by the Agent, incurred in connection with realizing, collecting, selling, transferring, delivering or obtaining payment of the Pledged Securities or any other Collateral or any part thereof, or in connection with the administration or amendment of this Agreement or incidental to the care, safe keeping, or otherwise of any and all of the Collateral, and may deduct the amount of such sums from any proceeds of the Collateral. The Debtor agrees to indemnify and hold harmless the Agent and the Lenders from and against any and all liability incurred by the Agent, any Lender or any nominee, agent or employees of the Agent or any Lender hereunder or in connection herewith, unless such liability was due to wilful misconduct or gross negligence on the part of the Agent or Lender or such nominee or agent. 12. ASSIGNMENT. This Agreement will be binding upon the Debtor and its successors and permitted assigns and will enure to the benefit of and be enforceable by the Agent and the Lenders and their respective successors and assigns. The Debtor will not assign all or any part of this Agreement without the Agent's prior written consent. 13. NO WAIVER; CUMULATIVE REMEDIES. Neither the Agent nor any Lender will by any act, delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on - 6 - the part of the Agent or any Lender, any right, power or privilege hereunder will operate as a waiver thereof. 14. COMMUNICATION. All communications provided for or permitted hereunder shall be in writing, personally delivered to an officer or other responsible employee of the addressee or sent by registered mail, charges prepaid, or by telecopy, to the address or telecopy number set forth opposite the name of the Debtor in the execution pages of this Agreement, in the case of the Debtor, and to Canadian Imperial Bank of Commerce, Head Office, Commerce Court West, 7th Floor, Toronto, Ontario M5L 1A2 (Attention: Vice-President, Global Media & Telecommunications) (Telecopy: (416) 980-2801), in the case of the Agent and the Lenders, or to such other address as the applicable party hereto may from time to time designate to the other in such manner. Any communication so personally delivered shall be deemed to have been validly and effectively given on the date of such delivery. Communications so sent by telecopy shall be deemed to have been validly and effectively given on the business day next following the day on which it is sent. Communications so sent by mail shall be deemed to have been validly and effectively given on the fifth business day next following the day on which it is sent. 15. DEALINGS BY AGENT AND LENDERS. The Agent and the Lenders may grant extensions of time and other indulgences, take and give up security, accept compositions, grant releases and discharges and otherwise deal with the Debtor and any third party having dealings with the Debtor, and with the Collateral or any part thereof, and with other security and sureties, as the Agent and the Lenders may see fit, all without prejudice to the Obligations or to the rights of the Agent and the Lenders under this Agreement. The Agent and the Lenders will be accountable only for amounts that the Agent or any Lender actually receives as a result of the exercise of such powers, and neither the Agent nor any Lender nor any of their officers, directors, employees or agents will be responsible to the Debtor for any act or failure to act hereunder, except for its or their own gross negligence or wilful misconduct. 16. NON-EXCLUSIVITY OF REMEDIES. This Agreement and the Liens arising hereunder are in addition to and not in substitution for any other security now or hereafter held by the Agent or any Lender in respect of the Debtor, the Obligations or the Collateral. No remedy for the enforcement of the rights of the Agent and the Lenders hereunder will be exclusive of or dependent on any other such remedy but any one or more of such remedies may from time to time be exercised independently or in combination. 17. POWER OF ATTORNEY. The Debtor hereby irrevocably constitutes and appoints the Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact, with full irrevocable power and authority in - 7 - the place and stead of the Debtor and in the name of the Debtor or in its own name, from time to time in the Agent's discretion, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action, to do, make and execute any and all statements, acts, matters, documents, instruments and things which may be necessary or desirable to accomplish the purposes of this Agreement and from time to time to exercise all rights and powers and to perform all acts of ownership in respect to the Pledged Securities to the same extent as the Debtor might have done were it not for this Agreement. The Debtor hereby ratifies all that said attorneys will lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and will be irrevocable until the Obligations have been paid and performed in full. 18. NO MERGER. Neither the taking and holding of the Pledged Securities and other Collateral nor the obtaining of any judgment by the Agent or any Lender will operate as a merger of any Obligation or any other indebtedness or liability of the Debtor to the Agent or any Lender or operate to prejudice the security constituted by this Agreement. 19. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction. 20. GOVERNING LAW. This Agreement will be governed by and construed in accordance with the laws of Ontario. 21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements, representations, warranties and covenants made by or on behalf of the Debtor herein are material, will be considered to have been relied upon by the Agent and the Lenders and will survive the execution and delivery of this Agreement or any investigation made at any time by or on behalf of the Agent or any Lender and any disposition or payment of the Obligations until repayment in full thereof. - 8 - 22. ACKNOWLEDGEMENT OF RECEIPT. The Debtor acknowledges receipt of an executed copy of this Agreement. DATED: As of July 17, 1996. ADDRESS 1159670 ONTARIO LIMITED 10 Toronto Street Toronto, Ontario By: /s/ J. A. Boultbee M5K 1N2 --------------------------- Name: J. A. Boultbee Title: Vice-President, Finance & Treasury Attention: President Facsimile: (416) 364-2088 By: /s/ Peter Y. Atkinson c/s -------------------------- Name: Peter Y. Atkinson Title: Vice-President and General Counsel Schedule A - Pledged Securities - 9 - SCHEDULE "A" ------------ Certificate Companies Pledged Securities Number --------- --------------------------- ----------- No. Class --------------------------- 1. Hollinger 14,990,000 Class B B0001 International Common Inc. Stock EX-13 5 Exhibit 13 SECURITIES PLEDGE AGREEMENT --------------------------- TO: CANADIAN IMPERIAL BANK OF COMMERCE Commerce Court West - 7th Floor Toronto, Ontario M5L 1A2 WHEREAS in order to secure the due payment and performance of the Obligations (as defined below), the undersigned (the "Debtor") has agreed to pledge the Pledged Securities (as defined below) to Canadian Imperial Bank of Commerce, as agent (in that capacity, the "Agent") for the benefit of the lenders (collectively, the "Lenders", the present Lenders being Canadian Imperial Bank of Commerce and The Bank of Nova Scotia) from time to time parties to the credit commitment agreement titled "Summary of Terms and Conditions" dated May 24, 1996 among Hollinger International Inc., Hollinger Inc., Canadian Imperial Bank of Commerce and the Agent (as supplemented by an assignment agreement dated as of July 17, 1996 among Hollinger International Inc., Canadian Imperial Bank of Commerce and The Bank of Nova Scotia and as further supplemented, amended, restated or replaced from time to time, the "Credit Agreement"). THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are conclusively acknowledged by the parties hereto, the Debtor hereby agrees as follows: 1. DEFINED TERMS. In this Agreement, the following words have the following meanings: "Companies" means the corporations, companies, partnerships, limited partnerships, trusts and other entities listed under the heading "Companies" in Schedule "A" and their respective successors; "Default" means a failure to pay any of the Obligations when due; "Lien" means a mortgage, hypothec, title retention, pledge, lien, charge, security interest or other encumbrance whatsoever, whether fixed or floating and howsoever created or arising; "Obligations" means all present and future indebtedness and liabilities of every kind, nature and description (whether direct or indirect, joint or several, absolute or contingent, matured or unmatured) of the Debtor to the Agent and the Lenders under or pursuant to the guarantee dated the date hereof made by the Debtor in favour of the Agent in respect of Hollinger International Inc. and any unpaid balance thereof; and - 1 - "Pledged Securities" means the securities listed under the heading "Pledged Securities" in Schedule "A", together with any other securities in the capital of the Companies owned by the Debtor from time to time (other than 15,950,000 Class A Common Stock of Hollinger International Inc. presently owned by the Debtor and evidenced or represented by share certificate #A0358). 2. PLEDGE. As general and continuing collateral security for the payment and performance of all Obligations, the Debtor hereby assigns and pledges to and in favour of the Agent, and the Debtor hereby grants to the Agent a continuing security interest in the following (collectively, the "Collateral"): (i) the Pledged Securities, together with any replacements thereof and substitutions therefor, and all certificates and instruments evidencing or representing such securities; (ii) all dividends, whether in cash, kind or stock, received or receivable upon or in respect of any of the Pledged Securities and all moneys or other property payable or paid on account of any return or repayment of capital in respect of any of the Pledged Securities or otherwise distributed in respect thereof or which will in any way be charged to, or payable or paid out of, the capital of any of the Companies on account of the Pledged Securities; (iii) all other property that may at any time be received or receivable by or otherwise distributed to the Debtor in respect of, or in substitution for, or in exchange for, any of the foregoing; and (iv) all cash, securities and other proceeds of the foregoing and all rights and interests of the Debtor in respect thereof or evidenced thereby, including all moneys received from time to time by the Debtor in connection with the sale or other disposition of any of the Pledged Securities; provided, however, that the Debtor will not sell or otherwise dispose of any of the Pledged Securities or purport to do any of the foregoing without the prior written consent of the Agent. 3. DELIVERY OF PLEDGED SECURITIES. The certificates representing the Pledged Securities duly endorsed by the appropriate person in blank for transfer or accompanied by powers of attorney satisfactory to the Agent will forthwith be delivered to and remain in the custody of the Agent or its nominee. All Pledged Securities may, at the option of the Agent, be registered in the name of the Agent or its nominee. If the Agent so requests, the certificates representing the Pledged Securities will also be guaranteed by a Canadian chartered bank. 4. REPRESENTATIONS AND WARRANTIES. The Debtor hereby represents and warrants to the Agent and acknowledges that the Agent is relying thereon, notwithstanding any investigation by the Agent or any Lender or otherwise, that: (i) the Debtor is the lawful owner of the Collateral, free and clear of any and all Liens or claims of others other than any Lien granted by the Debtor to the Agent hereunder or Liens in favour of Canadian Imperial Bank of Commerce, with full right to deliver, assign, - 2 - pledge and charge the Collateral to the Agent pursuant hereto; (ii) the Pledged Securities represent all of the issued and outstanding shares in the capital of each of the Companies held by the Debtor (other than 15,950,000 Class A Common Stock of Hollinger International Inc. referred to in the definition of "Pledged Securities"); (iii) the Pledged Securities are validly issued, fully paid and non-assessable; (iv) there is no existing agreement, option, right or privilege capable of becoming an agreement or option pursuant to which the Debtor would be required to sell or otherwise dispose of any of the Pledged Securities; (v) except as otherwise agreed by the Agent in writing, the Liens granted by the Debtor to the Agent pursuant to this Agreement constitute Liens on the Collateral in favour of the Agent which are prior to all other Liens on the Collateral other than Liens in favour of Canadian Imperial Bank of Commerce, whether created by the Debtor or any other Person, and in existence on the date hereof; (vi) the Debtor has the power and authority and the legal right to execute and deliver, to perform its obligations under, and to grant the Lien on the Collateral pursuant to, this Agreement and the Debtor has taken all necessary corporate action to authorize its execution, delivery and performance of, and grant of the Lien on the Collateral pursuant to, this Agreement; (vii) this Agreement constitutes a legal, valid and binding obligation of the Debtor, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity; (viii) the execution, delivery and performance of this Agreement will not violate any provision or requirement of any law or contractual obligation of the Debtor and will not result in the creation or imposition of any Lien on any of the properties or revenues of the Debtor pursuant to any requirement of law or contractual obligation of the Debtor; (ix) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or governmental authority and no consent of any other person (including any shareholder or creditor of the Debtor), is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement, except for such as have been obtained or made and are in full force and effect, and the terms of which have been disclosed to the Agent; and (x) no litigation, investigation or proceeding of or before any arbitrator or governmental authority is pending or, to the knowledge of the Debtor, threatened by or against the Debtor or against any of its properties or revenues which may materially adversely affect the business, property or financial or other condition of the Debtor. 5. COVENANTS. The Debtor covenants and agrees with the Agent that: (i) at any time and from time to time, upon the written request of the Agent, and at the sole expense of the Debtor, the Debtor will promptly and duly execute and deliver such further - 3 - instruments and documents and take such further action as the Agent may request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including the filing or execution of any financing or financing change statements under any applicable legislation in effect in any jurisdiction with respect to the Liens created hereby; (ii) the Debtor authorizes the Agent to file any such financing or financing change statement without the signature of the Debtor to the extent permitted by applicable law; (iii) the Debtor will not create, incur or permit to exist, but will defend the Collateral against, and will take such other action as is necessary to remove, any Lien or claim on or to the Collateral, other than the Liens created hereby and Liens in favour of Canadian Imperial Bank of Commerce and other than as permitted in writing by the Agent; (iv) the Debtor will not sell, transfer, lease or otherwise dispose of any of the Collateral except as permitted in writing by the Agent; and (v) the Debtor will ensure that at the request of the Agent, all Pledged Securities are registered in the name of the Agent or its nominee, that the certificates representing the Pledged Securities will be forthwith delivered to and remain in the custody of the Agent or its nominee, and that all certificates, instruments or other documents representing or evidencing any Pledged Securities acquired or issued subsequent to the date hereof will be registered in the name of the Agent or its nominee and will forthwith after issuance be delivered to, and remain in the custody of, the Agent or its nominee. 6. RIGHTS AND DUTIES OF AGENT. The Agent will have and be entitled to exercise all such powers hereunder as are specifically delegated to the Agent by the terms hereof, together with such powers as are incidental thereto. The Agent may execute any of its duties hereunder by or through agents and will be entitled to retain counsel and to act in reliance upon the advice of such counsel concerning all matters pertaining to its duties hereunder. The Agent and any nominee on its behalf will be bound to exercise in the holding of the Pledged Securities and other Collateral only the same degree of care as it would exercise with respect to similar property of its own held in the same place. Neither the Agent, nor any Lender, nor any nominee acting on behalf of the Agent or any Lender, nor any director, officer or employee of the Agent or any Lender or such nominee, will be liable for any action taken or admitted to be taken by it hereunder or in connection herewith except for its own gross negligence or wilful misconduct. 7. VOTING RIGHTS. Unless a Default has occurred and is continuing, the Debtor will be entitled to exercise all voting power from time to time exercisable in respect of the Pledged Securities and give consents, waivers and ratifications in respect thereof. Immediately upon the occurrence and during the continuance of any Default, all such rights of the Debtor to vote - 4 - and give consents, waivers and ratifications will cease and the Agent will be entitled to exercise all such voting rights and to give all consents, waivers and ratifications as permitted by the Agent. 8. DIVIDENDS. Unless a Default has occurred and is continuing, the Debtor will, subject to any agreement with the Agent to the contrary, be entitled to receive any and all cash dividends and other distributions on the Pledged Securities which it is otherwise entitled to receive. If a Default has occurred and is continuing, the Agent will have the sole and exclusive right and authority to receive and retain the dividends and other distributions which the Debtor would otherwise be authorized to receive. Any money and other property paid over to or received by the Agent pursuant to the provisions of this Section 8 will be retained by the Agent as additional Collateral hereunder and be applied in accordance with the provisions hereof. 9. REMEDIES. If a Default has occurred and is continuing, the Agent may, without notice to or the consent of the Debtor or any other person (other than as required by applicable law), take all or any of the following actions: (a) transfer all or any part of the Collateral into the name of the Agent or any Lender or any nominee on behalf of the Agent or any Lender, with or without disclosing that such Collateral is subject to the Lien hereunder; (b) notify any parties obligated on any of the Collateral to make payment to the Agent or any Lender of any amounts due or to become due thereunder; (c) exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any of the Pledged Securities as if it were the absolute owner thereof; (d) from time to time realize upon, collect, sell, transfer, assign, give options to purchase, or otherwise dispose of and deliver the Pledged Securities and other Collateral, or any part thereof, in such a manner as may seem to it advisable, and for the purposes thereof each and every requirement relating thereto and prescribed by law or otherwise is hereby waived to the extent permitted by law; (e) enforce collection of any of the Collateral by suit or otherwise, and surrender, release or exchange all or any part of any property in addition to the Collateral, securing any of the Obligations, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect to any property; and - 5 - (f) to the extent permitted by applicable law, the Agent or any Lender may purchase any or all of the Pledged Securities and other Collateral, whether in connection with a sale made under the power of sale herein contained or pursuant to judicial proceedings or otherwise; provided, however, that the Agent and the Lenders will not be bound to deal with the Pledged Securities and other Collateral as aforesaid, and will not be liable for any loss which may be occasioned by any failure to do so and no action of the Agent or any Lender permitted hereunder will impair or affect any rights of the Agent or any Lender in and to the Collateral. 10. APPLICATION OF PROCEEDS. After payment of expenses as provided in Section 11 hereof, the balance of any proceeds received by the Agent in or in connection with realizing, collecting, selling, transferring, delivering or obtaining payment of the Collateral or any part thereof may be held by the Agent and may, as and when the Agent thinks fit, be applied on account of such part of the Obligations as to the Agent seems best, without prejudice to the Agent's and the Lenders' claims upon the Debtor for any deficiency. 11. PAYMENT OF EXPENSES. The Agent may charge on its own behalf and also pay to others all out-of-pocket expenses of the Agent and others retained by the Agent, incurred in connection with realizing, collecting, selling, transferring, delivering or obtaining payment of the Pledged Securities or any other Collateral or any part thereof, or in connection with the administration or amendment of this Agreement or incidental to the care, safe keeping, or otherwise of any and all of the Collateral, and may deduct the amount of such sums from any proceeds of the Collateral. The Debtor agrees to indemnify and hold harmless the Agent and the Lenders from and against any and all liability incurred by the Agent, any Lender or any nominee, agent or employees of the Agent or any Lender hereunder or in connection herewith, unless such liability was due to wilful misconduct or gross negligence on the part of the Agent or Lender or such nominee or agent. 12. ASSIGNMENT. This Agreement will be binding upon the Debtor and its successors and permitted assigns and will enure to the benefit of and be enforceable by the Agent and the Lenders and their respective successors and assigns. The Debtor will not assign all or any part of this Agreement without the Agent's prior written consent. 13. NO WAIVER; CUMULATIVE REMEDIES. Neither the Agent nor any Lender will by any act, delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on - 6 - the part of the Agent or any Lender, any right, power or privilege hereunder will operate as a waiver thereof. 14. COMMUNICATION. All communications provided for or permitted hereunder shall be in writing, personally delivered to an officer or other responsible employee of the addressee or sent by registered mail, charges prepaid, or by telecopy, to the address or telecopy number set forth opposite the name of the Debtor in the execution pages of this Agreement, in the case of the Debtor, and to Canadian Imperial Bank of Commerce, Head Office, Commerce Court West, 7th Floor, Toronto, Ontario M5L 1A2 (Attention: Vice-President, Global Media & Telecommunications) (Telecopy: (416) 980-2801), in the case of the Agent and the Lenders, or to such other address as the applicable party hereto may from time to time designate to the other in such manner. Any communication so personally delivered shall be deemed to have been validly and effectively given on the date of such delivery. Communications so sent by telecopy shall be deemed to have been validly and effectively given on the business day next following the day on which it is sent. Communications so sent by mail shall be deemed to have been validly and effectively given on the fifth business day next following the day on which it is sent. 15. DEALINGS BY AGENT AND LENDERS. The Agent and the Lenders may grant extensions of time and other indulgences, take and give up security, accept compositions, grant releases and discharges and otherwise deal with the Debtor and any third party having dealings with the Debtor, and with the Collateral or any part thereof, and with other security and sureties, as the Agent and the Lenders may see fit, all without prejudice to the Obligations or to the rights of the Agent and the Lenders under this Agreement. The Agent and the Lenders will be accountable only for amounts that the Agent or any Lender actually receives as a result of the exercise of such powers, and neither the Agent nor any Lender nor any of their officers, directors, employees or agents will be responsible to the Debtor for any act or failure to act hereunder, except for its or their own gross negligence or wilful misconduct. 16. NON-EXCLUSIVITY OF REMEDIES. This Agreement and the Liens arising hereunder are in addition to and not in substitution for any other security now or hereafter held by the Agent or any Lender in respect of the Debtor, the Obligations or the Collateral. No remedy for the enforcement of the rights of the Agent and the Lenders hereunder will be exclusive of or dependent on any other such remedy but any one or more of such remedies may from time to time be exercised independently or in combination. 17. POWER OF ATTORNEY. The Debtor hereby irrevocably constitutes and appoints the Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact, with full irrevocable power and authority in - 7 - the place and stead of the Debtor and in the name of the Debtor or in its own name, from time to time in the Agent's discretion, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action, to do, make and execute any and all statements, acts, matters, documents, instruments and things which may be necessary or desirable to accomplish the purposes of this Agreement and from time to time to exercise all rights and powers and to perform all acts of ownership in respect to the Pledged Securities to the same extent as the Debtor might have done were it not for this Agreement. The Debtor hereby ratifies all that said attorneys will lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and will be irrevocable until the Obligations have been paid and performed in full. 18. NO MERGER. Neither the taking and holding of the Pledged Securities and other Collateral nor the obtaining of any judgment by the Agent or any Lender will operate as a merger of any Obligation or any other indebtedness or liability of the Debtor to the Agent or any Lender or operate to prejudice the security constituted by this Agreement. 19. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction. 20. GOVERNING LAW. This Agreement will be governed by and construed in accordance with the laws of Ontario. 21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements, representations, warranties and covenants made by or on behalf of the Debtor herein are material, will be considered to have been relied upon by the Agent and the Lenders and will survive the execution and delivery of this Agreement or any investigation made at any time by or on behalf of the Agent or any Lender and any disposition or payment of the Obligations until repayment in full thereof. - 8 - 22. ACKNOWLEDGEMENT OF RECEIPT. The Debtor acknowledges receipt of an executed copy of this Agreement. DATED: As of July 17, 1996. ADDRESS 3184081 CANADA LIMITED 10 Toronto Street Toronto, Ontario By: /s/ J. A. Boultbee M5K 1N2 ------------------------- Name: J. A. Boultbee Title: Vice-President, Finance & Treasury Attention: President Facsimile: (416) 364-2088 By: /s/ Peter Y. Atkinson c/s ------------------------ Name: Peter Y. Atkinson Title: Vice-President and General Counsel Schedule A - Pledged Securities - 9 - SCHEDULE "A" ------------ Certificate COMPANIES PLEDGED SECURITIES NUMBER --------- ------------------ ----------- NO. CLASS ------------------ 1. Hollinger International 7,539,028 Class A A0499 Inc. Common Stock -----END PRIVACY-ENHANCED MESSAGE-----