HOLLINGER CANADIAN PUBLISHING
HOLDINGS CO.
THIS
INDENTURE made as of the 19 th day of August, 2008
HOLLINGER
CANADIAN PUBLISHING HOLDINGS CO., a company incorporated under the
laws of Nova Scotia
(the “Settlor”)
ARB LIMITED, a
company incorporated under the laws of Ontario
(the “Trustee”)
A. Sun-Times
Media Group, Inc. (“STMG”), formerly known as Hollinger
International Inc., is a corporation incorporated under the laws of
Delaware;
B. The
Settlor is a direct and indirect wholly-owned subsidiary of
STMG;
C. A special
committee established by the Board of STMG resolved on
June 10, 2008 to create the Trust (as hereinafter
defined);
D. STMG and
the Settlor entered into an agreement dated August 19, 2008
whereby the Settlor, for the consideration as provided thereunder,
agreed to establish the Trust;
E. The
Trustee is a company controlled and operated by Mr. Claude
Thomson;
E. By
agreement in writing of all of the shareholders of the Settlor, the
Settlor has been directed to enter into and to carry into effect
its obligations under this Indenture, and an officer or director of
the Settlor has been authorized to execute this Indenture on behalf
of the Settlor and to execute any other documents and take any
other steps as may be necessary to enable the Settlor to carry into
effect and to perform its obligations under this Indenture;
and
F. The
Settlor has paid to the Trustee the sum of $10 million to
establish a trust fund for the defence of and payment of Liability
Claims (as hereinafter defined) to be administered by the Trustee
in accordance with the terms of this Indenture.
NOW THERFORE it is
agreed and declared as follows:
Where used in this
Indenture, the following expressions shall have the following
respective meanings:
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(a)
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“Actions” means the
following actions commenced in the Ontario Superior Court of
Justice: Black v. Breeden et al., Court File No. 04-CV-26370CM1;
Black v. Breeden et al., Court File No. 04-CV-265298CM1; Black
v. Breeden et al., Court File No. 04-CV-265299CM2; Black v. Breeden
et al., Court File No. 04-CV-270773CM1; Black v. Breeden et
al., Court File No. 04-CV-276761CM2; and Black v. Breeden et
al., Court File No. 05-CV-285535PD2.
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(b)
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“Beneficiaries” has the
meaning ascribed to it in Section 2.5.
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(c)
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“Capital” means the sum
of $10 million in cash or equivalents paid by the Settlor to
the Trustee to establish the Trust, or such lesser amount held by
the Trustee from time to time following the payment of a Liability
Claim or Liability Claims from the said sum, to or on behalf of a
Beneficiary, and any property into which the said sum or sum
remaining from time to time may be converted, and for greater
certainty, does not mean interest on the said sum, dividends or
capital accretions thereon.
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(d)
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“Fund” means the sum of
$10 million in cash or cash equivalents paid by the Settlor to
the Trustee, together with interest and other revenues generated
thereby and any further contributions hereafter made thereto and
any property into which all of the foregoing may be
converted.
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(e)
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“Liability Claim” means
any costs, charges, damages, awards, settlements, liabilities,
fines, penalties, statutory obligations, professional fees
(including retainers paid in advance of the delivery of
professional services), insurance deductibles and other expenses of
whatever nature or for which the Beneficiaries, or any of them, may
become personally liable as a result of the Actions, or as a result
of a claim or other proceeding brought by a Beneficiary against the
Trustee for the purpose of enforcing entitlement under the terms of
this Indenture.
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(f)
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“Termination Date” has
the meaning defined in Section 5.1.
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(g)
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“Trust” has the meaning
defined in Section 2.1.
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(h)
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“Trustee’s
Expenses” has the meaning defined in
Section 3.1.
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ARTICLE 2
CREATION OF THE TRUST
2.1
Declaration of the Trust
The Trustee
acknowledges receipt of the Capital from the Settlor and agrees to
hold it, any other property which may be transferred or assigned to
the Trustee by the Settlor and any interest or other income or
other property from time to time forming part of the Fund, upon the
trusts and subject to the powers and provisions contained in this
Indenture (the “Trust”).
The Trust is
intended and is hereby declared to be irrevocable. Prior to the
Termination Date defined in Section 5.1, no part of the
Capital from the Fund shall be paid or loaned or applied to or for
the benefit of the Settlor, in any manner or circumstance
whatsoever, other than pursuant to an order of a Court of competent
jurisdiction or in accordance with an amendment to this Indenture
made under Section 4.4.
The name of the
Trust shall be the STMG Trust.
The purpose of the
Trust is to provide for the payment to, or on behalf of, the
Beneficiaries of Liability Claims in circumstances when STMG is
either unable or unwilling to do so, any such payment to be a
distribution of Capital to the Beneficiary in respect of its
capital interest in the Trust.
The Capital
beneficiaries of the Trust (collectively, the
“Beneficiaries”) are the following directors, officers,
consultants and advisors, and former directors, officers,
consultants and advisors of STMG and their respective successors,
assigns and heirs:
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(a)
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Richard C. Breeden
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(b)
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Richard C. Breeden &
Co.
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(c)
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Gordon A. Paris
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(d)
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James R. Thompson
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(e)
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Richard D. Burt
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(f)
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Graham W. Savage
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(g)
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Raymond G.H. Seitz
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(h)
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Paul B. Healy
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(i)
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Shmuel Meitar
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(j)
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Henry A. Kissinger; and
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the income and
residual capital beneficiary of the Trust is the
Settlor.
Subject to
Article 3, the Trustee shall pay from the Capital an amount
with respect to a Liability Claim directly to, or to the order of,
the relevant Beneficiary or Beneficiaries or, if applicable, his or
her legal representative, as the case may be.
2.6 Trust
Not to Constitute Insurance
The Trust does not
constitute insurance.
ARTICLE 3
PAYMENT OF TRUSTEE’S EXPENSES AND OF CLAIMS
3.1 Payment
of Trustee’s Expenses
The Trustee is
authorized to pay all expenses of the Trust, including any
reasonable fees, expenses and disbursements of the Trustee and his
professional advisors, and taxes related to the Trust
(collectively, the “Trustee’s Expenses”) out of
the Fund.
3.2 Receipt
and Analysis of Claims
A Beneficiary
shall request the payment of a Liability Claim from the Trustee,
providing the amount and details of the Liability Claim or
potential Liability Claim and the circumstances in which it arose
in writing.
The Trustee may
require, in support of any such request, any supporting information
the Trustee considers relevant, acting reasonably. Such supporting
information may include confirmation from STMG that it is unable or
unwilling to satisfy the Liability Claim.
The Trustee is
authorized to obtain from such advisors as it, in its discretion
considers advisable, such additional advice and analysis as the
Trustee considers to be reasonably necessary in making a
determination as to any of the matters set out above. The Trustee
is entitled to reimbursement from the Fund for such expenses as it
may incur acting reasonably in these regards. Receipt by the
Trustee of information as to a Liability Claim or potential
Liability Claim in accordance with this Section 3.2 in no way
commits the Trustee to pay the Liability Claim or potential
Liability Claim from the Fund.
Prior to the
Termination Date (or thereafter, in the case of Liability Claims
made to the Trustee that are outstanding on the Termination Date),
after analysis in accordance with Section
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3.2, the
Trustee shall pay any Liability Claim out of the Capital. The
Trustee shall deliver to the Settlor and STMG notice of any
payments to be made to a Beneficiary at least three
(3) business days prior to making such payment.
Notwithstanding
the foregoing, the Trustee may delay payment in whole or in part of
any Liability Claim, pending a determination of the adequacy of the
Capital to pay Liability Claims.
In administering
the Trust, the Trustee may consider each Liability Claim as it
arises and shall have no obligation to maintain an even hand among
the Beneficiaries entitled to make claims for distribution of
Capital hereunder.
Nothing in this
Indenture shall require the Trustee to make any payment if it
believes it may result in a claim against the Trustee
personally.
In no event will
the Trustee pay any amount of a Liability Claim unless it is
satisfied, acting reasonably, that STMG is unable or unwilling to
satisfy the Liability Claim.
In no event will
the total amount paid hereunder in respect of Liability Claims
exceed $10 million.
3.4 No
Liability for Insufficient Funds
Except as provided
in Section 4.1, the Trustee shall not be liable to any person
(including any Beneficiary or the Settlor) in the event that the
Capital is insufficient to pay in full or in part any Liability
Claim under this Indenture. Furthermore, the Trustee shall have no
obligation to seek or demand any further monies from the Settlor or
any other person.
3.5 Notice
of Amounts in the Fund
The Trustee shall,
not less frequently than quarterly, provide notice to the Settlor
of the then current amount of the Capital and the Fund.
3.6 Payment
of Income and Amounts in Excess of Capital
The Trustee shall,
as soon as possible after December 31 of each year prior to
the Termination Date, pay all amounts in excess of the Capital, net
of Trustee’s Expenses, to the Settlor in its capacity as the
income beneficiary, for its own use absolutely.
ARTICLE 4
CONCERNING THE TRUSTEE
4.1
Limitation of Liability
The Trustee shall
have no personal liability to any other person arising from
contractual relationships or commitments of the Trustee and is
authorized to require that any such contractual relationship or
commitment shall include a provision confirmatory of this sentence.
The Trustee shall incur no liability to the Settlor or
Beneficiaries or any other person with respect to the performance
of the responsibilities of the Trustee hereunder except for damages
that may
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be caused by
the deliberate or willful misconduct of the Trustee. The Trustee is
hereby indemnified and saved harmless by the Settlor and the Trust
from and against all claims, losses, damages, costs, penalties,
fines
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