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EXHIBIT 10.19
BUSINESS OPPORTUNITIES AGREEMENT
AS AMENDED AND RESTATED AS OF FEBRUARY 7, 1996
This Agreement (the "AGREEMENT") is made as of this
7th day of February, 1996 by and between
HOLLINGER INTERNATIONAL INC., a
Delaware corporation formerly named
American Publishing Company (the "COMPANY"),
and HOLLINGER INC., a corporation continued
under the laws of Canada
("HOLLINGER").
WHEREAS, the Company and Hollinger, in connection with the
initial
public offering of the Company's Class A
Common Stock in May 1994, entered into
a Business Opportunities Agreement dated
May 11, 1994 (the "1994 BUSINESS
OPPORTUNITIES AGREEMENT"), whereby they
stated their desire that the Company
would be Hollinger's principal vehicle for
engaging in the newspaper business in
the United States and Israel and set forth
certain principles governing the
start-up, acquisition, development and
operation of newspaper and other media
business in the United States and Israel by
the Company;
WHEREAS, on October 13, 1995, pursuant to the terms of a Share
Exchange Agreement dated as of July 19,
1995 (the "SHARE EXCHANGE AGREEMENT"),
the Company and Hollinger reorganized their
international newspaper interests by
means of the transfer to the Company of
Hollinger's 58.4% indirect interest in
The Telegraph plc, a corporation organized
under the laws of England ("THE
TELEGRAPH") (including The Telegraph's
approximate 25% interest in John Fairfax
Holdings Limited, an Australian newspaper
and magazine publisher ("FAIRFAX")),
an option to acquire an additional 5.2% of
The Telegraph's ordinary shares from
another shareholder, and Hollinger's direct
and indirect 19.3% interest in
Southam Inc., a Canadian newspaper and
magazine publisher ("SOUTHAM"), in
exchange for 33,610,754 shares of
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Class A Common Stock of the Company and
739,500 shares of the Company's newly
created, non-voting Series A Redeemable
Convertible Preferred Stock (the
"REORGANIZATION");
WHEREAS, pursuant to Section 5(d) of the Share Exchange
Agreement,
the Company and Hollinger amended and
restated the 1994 Business Opportunities
Agreement to reflect the objectives and
effects of the Reorganization, effective
October 13, 1995;
WHEREAS, on February 7, 1996 the Company completed an
underwritten
public offering of 14,000,000 shares of
Class A Common Stock (plus an additional
2,100,000 shares subject to the
Underwriters' overallotment option) (the
"Offering") and, in connection with the
Offering, the Company and Hollinger
agreed that it would be appropriate to
further amend and restate the Business
Opportunities Agreement as provided herein,
effective as of the date hereof;
WHEREAS, in accordance with the terms of the 1994 Business
Opportunities Agreement, the Audit
Committee of the Board of Directors of the
Company has approved this Agreement as an
amendment and restatement of the 1994
Business Opportunities Agreement;
WHEREAS, after giving effect to the Offering Hollinger owns
approximately 66.5% of the total
outstanding shares of both classes of the
Company's Common Stock and 88.2% of the
combined voting power of both classes of
the Company's Common Stock;
WHEREAS, Hollinger's long-term business objective is to operate
successfully in the Newspaper Business (as
defined herein) and in the Media
Business (as defined herein) in numerous
geographic regions throughout the
world, as market conditions and available
resources permit;
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WHEREAS, pursuant to the terms of that certain Co-operation
Agreement dated June 23, 1992 between
Hollinger and The Telegraph (the
"CO-OPERATION AGREEMENT"), a copy of which
is attached hereto as Annex A and
which will remain in effect following the
Reorganization, Hollinger has
undertaken to restrict its activities and
the activities of entities controlled
by it in respect to Newspaper and Media
Businesses carried on within the
Telegraph Territory (as defined
herein);
WHEREAS, the parties desire that the Company will be
Hollinger's
principal vehicle for engaging in the
Newspaper Business and Related Media
Businesses (as defined herein) in the
United States, Israel and, through The
Telegraph, in the Telegraph Territory and
that in the normal course of its
business the Company intends to seek
additional newspaper and related media
assets for acquisition and development in
these areas;
WHEREAS, the parties also desire that, through its investment
in
Southam, the Company will engage in the
Newspaper Business in Canada; and
WHEREAS, for their convenience and mutual benefit the parties
hereto
wish to set forth herein the principles
governing the start-up, acquisition,
development and operation of Newspaper and
Media Businesses in the United
States, Israel, the Telegraph Territory and
Canada by the Company and Hollinger.
NOW, THEREFORE, for and in consideration of the recitals set
forth
above and the agreements, rights,
obligations and covenants contained herein,
the parties hereto, intending to be legally
bound, hereby agree as follows:
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ARTICLE I
DEFINITIONS
1.1 PARTICULAR TERMS. As used in this Agreement, the following
terms
shall have the meanings ascribed to them
below:
(a) "AFFILIATE" shall mean for any Person, another Person
directly or indirectly controlling,
controlled by or under common control with
such Person; provided, however, that for
the purposes of this Agreement, neither
the Company nor any Person controlled by
the Company shall be deemed to be an
Affiliate of Hollinger and neither
Hollinger nor any Person who is controlled by
Hollinger other than through its ownership
of shares of the Company shall be
deemed to be an Affiliate of the Company.
For the purposes hereof, "control,"
"controlling" and "controlled" shall mean
the power, direct or indirect, of a
Person to direct the business and affairs
of another generally whether by share
ownership, agreement or otherwise.
(b) "AUDIT COMMITTEE" shall mean the Audit Committee of the
Board of Directors of the Company, which
committee shall at all times consist of
directors a majority of whom are
Independent Directors.
(c) "BENEFICIAL OWNERSHIP" shall have the meaning attributed
to such term under Section 13(d) of the
United States Securities Exchange Act of
1934.
(d) "INDEPENDENT DIRECTORS" shall mean directors of the
Company who are not (i) employees, officers
or directors (or former employees,
officers or directors) of Hollinger or any
of its Subsidiaries or Affiliates
(other than the Company) or (ii) employees
or officers (or former employees or
officers) of the Company or any of its
Subsidiaries.
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(e) "MEDIA BUSINESS" shall mean the business of the broadcast
of radio, television, cable and satellite
programs (including national, regional
or local radio, television, cable and
satellite programs).
(f) "NEWSPAPER BUSINESS" shall mean the business of publishing
and distributing (including distributing by
electronic means) newspapers,
magazines and other paid or free
publications having national, regional, local
or targeted markets, including publications
having limited or no news or
editorial content such as shopper and other
"total market coverage" publications
and similar publications.
(g) "PERSON" shall mean any individual, partnership,
corporation, business trust, joint stock
company, trust, unincorporated
association, joint venture, or other entity
of whatever nature.
(h) "RELATED MEDIA BUSINESS" shall mean any Media Business
that is an Affiliate of, or is owned or
operated in conjunction with, a
Newspaper Business owned or controlled by
the Company and its Subsidiaries or
Hollinger, as the case may be, as a result
of an acquisition or otherwise.
(i) "SUBSIDIARY" shall mean any corporation 50% or more of the
voting power of the capital stock of which
is held directly or indirectly by
Hollinger or the Company, as the case may
be.
(j) "TELEGRAPH TERRITORY" shall have the meaning ascribed
thereto in the Co-operation Agreement.
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(k) "UNITED STATES" shall mean the United States of America,
including the states thereof and the
District of Columbia.
1.2 OTHER TERMS. Other capitalized teams shall have the
meanings
ascribed to them elsewhere in this
Agreement.
ARTICLE II
CORPORATE OPPORTUNITY, ALLOCATION AND
CONFLICTS OF INTEREST
2.1 CORPORATE OPPORTUNITY GENERALLY. This Section 2.1 sets
forth
general principles which underlie the
corporate structure of the Company and
Hollinger following the Reorganization and
which provide a framework whereby
Hollinger and the Company will resolve
conflicts over business opportunities.
The benefits and obligations of these
principles are to apply to the Company and
Hollinger so long as Hollinger and its
Affiliates have beneficial-ownership of
more than 50% of the voting power of the
Company's outstanding securities.
2.2 ALLOCATION OF OPPORTUNITIES. (a) The parties hereby agree
that,
subject to certain exceptions set forth in
Section 3.8 below, opportunities
relating to the start-up, acquisition,
development and operation of a Newspaper
Business and Related Media Business in the
United States, Israel and the
Telegraph Territory shall be allocated to
the Company and its Subsidiaries
subject to the limitations of the
Co-Operation Agreement, and opportunities
relating to the start-up, acquisition,
development and operation of a Newspaper
Business and Related Media Business in
Canada shall be allocated to Hollinger.
Subject to the terms of the Co-Operation
Agreement, with respect to
opportunities in the Media Business other
than in a Related Media Business as
provided above, Hollinger intends to
reserve the opportunity to itself or such
of its Subsidiaries or Affiliates or the
Company's Subsidiaries or Affiliates as
Hollinger,
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in its reasonable and good faith judgment,
believes will be best able to develop
such opportunity in light of such factors
as the nature and requirements of the
opportunity (including financial
requirements), the respective levels of
relevant experience of the Company and
Hollinger and their respective
Subsidiaries and Affiliates, the similarity
of the opportunity to and
compatibility with the respective then
existing operations, facilities and plans
of the Company and Hollinger and their
respective Subsidiaries and Affiliates,
and the requirements of applicable law
relating to broadcasting or other aspects
of the Media Business.
(b) For the purposes of this Agreement, a Newspaper Business
is conducted in the United States, Israel
or Canada if, based on estimates
deemed reasonable by the parties, 25% or
more of the readers of a newspaper,
magazine or other publication published as
part of such business are persons
resident in the United States, Israel or
Canada, as the case may be. Different
editions of a newspaper or other
publication published under the same title
shall be treated as one newspaper or other
publication if substantially similar.
For the purpose of this Agreement, a
Related Media Business is conducted in the
United States, Israel or Canada if, based
on estimates deemed reasonable by the
parties, 25% or more of the listeners,
viewers, or subscribers or other
customers of such Media Business are
located in the United States, Israel or
Canada, as the case may be.
(c) Nothing in this Agreement is intended to modify or
contravene the Co-operation Agreement.
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ARTICLE III
RESTRICTIONS; PERMITTED INVESTMENTS
3.1 INVESTMENT IN THE TELEGRAPH. For so long as Hollinger and
its
Affiliates have beneficial ownership of 50%
or more of the voting power of the
Company's outstanding securities, neither
Hollinger nor a Subsidiary (other than
the Company or any of its Subsidiaries) or
an Affiliate of Hollinger will
acquire beneficial ownership of any voting
securities of The Telegraph except
indirectly as a result of the ownership or
acquisition of securities of the
Company; provided, however, that the
foregoing clause shall, not restrict any
individual who may be deemed to be an
Affiliate of Hollinger from acquiring
beneficial ownership of securities of The
Telegraph through any equity-based
compensation program conducted by The
Telegraph for its officers, directors or
key employees.
3.2 COMPLIANCE WITH CO-OPERATION AGREEMENT. The Company and
Hollinger hereby acknowledge that pursuant
to the terms of the Co-operation
Agreement, Hollinger has undertaken to
restrict its activities and the
activities of entities controlled by it in
respect of Newspaper and Media
Businesses carried on in the Telegraph
Territory on the terms and conditions set
out therein. For so long as Hollinger and
its Affiliates have beneficial
ownership of 50% or more of the voting
power of the Company's outstanding
securities, neither the Company nor
Hollinger shall, without the other's prior
written consent, directly or indirectly in
any manner whatsoever including,
without limitation, e
