<PAGE>
Exhibit 10.31
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SHARE PURCHASE AGREEMENT
BETWEEN
HCPH CANADIAN NEWSPAPER HOLDINGS CO.
AND
GLACIER VENTURES INTERNATIONAL CORP.
AND
6490239 CANADA INC.
AND
HOLLINGER INTERNATIONAL INC.
AND
JAMISON NEWSPAPERS INC.
MADE AS OF
DECEMBER 19, 2005
SALE OF SHARES OF GREAT WEST NEWSPAPER GROUP LTD.
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MCCARTHY TETRAULT LLP
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TABLE OF CONTENTS
SHARE PURCHASE AGREEMENT
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ARTICLE 1 -
INTERPRETATION.................................................
2
1.01
Definitions....................................................
2
1.02
Knowledge......................................................
7
1.03
Headings.......................................................
7
1.04
Extended
Meanings.............................................. 7
1.05
Accounting
Principles.......................................... 8
1.06
Currency.......................................................
8
1.07
Schedules......................................................
8
ARTICLE 2 - PURCHASE AND
SALE.............................................. 8
2.01
Purchase
and Sale and Purchase Price........................... 8
2.02
Closing
and Deliverables.......................................
8
2.03
Hollinger
International Guarantee.............................. 9
2.04
Glacier
Guarantee..............................................
9
2.05
Taxes..........................................................
10
ARTICLE 3 - REPRESENTATIONS AND
WARRANTIES................................. 10
3.01
Vendor's
Representations and Warranties........................ 10
3.02
Survival
of Vendor's and Hollinger International's
Representations, Warranties and Covenants......................
12
3.03
Purchaser's Representations and Warranties.....................
12
3.04
Survival
of Purchaser's Representations, Warranties
and Covenants..................................................
13
3.05
Glacier's
Representations and Warranties....................... 14
3.06
Survival
of Glacier's Representations, Warranties
and Covenants..................................................
15
3.07
Investigation..................................................
15
3.08
No
Inducement or Reliance; Independent Assessment..............
15
3.09
Release........................................................
16
ARTICLE 4 - COVENANTS RELATING TO CONDUCT OF
BUSINESS...................... 16
4.01
Appropriate Action; Consents; Filings..........................
16
4.02
Preservation of Books and Records..............................
17
4.03
Tax
Matters....................................................
18
4.04
Mail;
Payments.................................................
19
4.05
Indemnity
Cooperation Agreement................................ 19
4.06
Purchasing
Parties' Pre-Closing Reorganization Steps........... 20
4.07
Hollinger
Pre-Closing Reorganization Steps..................... 20
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ARTICLE 5 -
CONDITIONS.....................................................
21
5.01
Conditions
to Obligations of Each Party........................ 21
5.02
Conditions
for the Benefit of the Purchaser and Glacier........ 21
5.03
Conditions
for the Benefit of the Vendor....................... 22
ARTICLE 6 -
INDEMNIFICATION................................................
22
6.01
Indemnification................................................
22
ARTICLE 7 - PUBLICATION STATUS
INDEMNITY................................... 28
7.01
Publication Status Indemnity...................................
28
7.02
Claims
Process and Limits......................................
29
ARTICLE 8 -
TERMINATION....................................................
29
8.01
Termination....................................................
29
8.02
Effect of
Termination.......................................... 30
ARTICLE 9 -
GENERAL........................................................
30
9.01
Further
Assurances.............................................
30
9.02
Time of
the Essence............................................
31
9.03
Commissions....................................................
31
9.04
Confidentiality and Public Announcements.......................
31
311
9.05
Benefit of
the Agreement....................................... 31
9.06
Entire
Agreement...............................................
31
9.07
Amendments
and Waiver.......................................... 31
9.08
Assignment.....................................................
32
9.09
Notices........................................................
32
9.10
Severability...................................................
34
9.11
Parties in
Interest............................................ 34
9.12
Expenses.......................................................
34
9.13
Governing
Law; Attornment...................................... 35
9.14
Counterparts; Facsimile........................................
35
9.15
Waiver.........................................................
35
9.16
Disclaimer.....................................................
35
9.17
Waiver of
Jury Trial........................................... 36
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SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of the 19th day of December, 2005;
BETWEEN:
HCPH CANADIAN NEWSPAPER HOLDINGS CO., a corporation
incorporated
under the laws of Nova Scotia, and any successor in interest
thereto (hereinafter referred to, in either case, as the
"Vendor"),
OF THE FIRST PART,
- and -
6490239 CANADA INC., a corporation incorporated under the laws
of
Canada (hereinafter referred to as the "Purchaser),
OF THE SECOND PART,
- and -
GLACIER VENTURES INTERNATIONAL CORP., a corporation
incorporated
under the laws of British Columbia (hereinafter referred to as
the "Glacier"),
OF THE THIRD PART,
- and -
HOLLINGER INTERNATIONAL INC., a corporation governed by the
laws
of the State of Delaware (hereinafter referred to as "Hollinger
International"),
OF THE FOURTH PART,
- and -
JAMISON NEWSPAPERS INC., a corporation governed by the laws of
Alberta (hereinafter referred to as "Jamison"),
OF THE FIFTH PART.
WHEREAS the Vendor is the beneficial and registered owner of
the
Shares, being 17,540 Class A shares of Great West Newspaper Group
Ltd. (the
"Corporation"), a corporation incorporated under the laws of
Canada;
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AND WHEREAS the Vendor desires to sell and the Purchaser desires
to
purchase the Shares upon and subject to the terms and conditions
hereinafter set
forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the
respective representations, warranties, covenants and agreements
contained
herein, the parties hereto agree as follows:
ARTICLE 1 - INTERPRETATION
1.01 DEFINITIONS
In this Agreement, unless something in the subject matter or
context
is inconsistent therewith:
(a)
"Affiliate", with
respect to the relationship between two or more
corporations, has the meaning attributed to "affiliated bodies
corporate" under the Canada Business Corporations Act as of the
date
of this Agreement and, with respect to the relationship between two
or
more Persons any of which is not a corporation, a Person is deemed
to
be an Affiliate of another Person if one of them is Controlled by
the
other or if both are Controlled by the same Person, and
"Affiliated"
has a corresponding meaning;
(b)
"Applicable Law"
means:
(i) any domestic or
foreign statute, law (including common and civil
law), code, ordinance, rule, regulation, restriction or by-law
(zoning or otherwise); or
(ii) any judgement, order, writ, injunction, decision, ruling,
decree
or award;
of any Governmental Entity, statutory body or regulatory authority
to
the extent only that the same is legally binding on the Person
referred to in the context in which the term is used;
(c)
"Agreement" means this
agreement and all amendments made hereto by
written agreement between the Vendor, Hollinger International,
Glacier
and the Purchaser;
(d)
"Books and Records"
means all books, records, files and papers of the
Corporation and the Subsidiary, including computer manuals,
computer
data, financial and Tax working papers, financial and Tax books
and
records, business reports, business plans and projections, sales
and
advertising materials, sales and purchases records and
correspondence,
trade association files, research and development records, lists
of
present and former customers and suppliers, personnel and
employment
records (including benefit plan records), minute and share
certificate
books, and all copies and recordings of the foregoing;
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(e)
"Business Day" means a
day other than a Saturday, Sunday or statutory
holiday in Ontario;
(f)
"Closing" means the
closing of the purchase and sale of the Shares
contemplated by this Agreement;
(g)
"Closing Date" is
defined in Section 2.02(1);
(h)
"Consent" is defined
in Section 4.01;
(i)
"Contract" means any
agreement, contract, indenture, lease, deed of
trust, option or other legally binding commitment or obligation in
the
nature of a contract, whether oral or written, for which there
are
continuing rights or obligations;
(j)
"Control", with
respect to the relationship with a Person, means:
(i) if that Person is
a corporation, the holding (other than by way
of security) of Equity Securities of that Person to which are
attached more than 50% of the votes that may be cast for the
election of directors and those votes are sufficient, if
exercised, to elect a majority of the board of directors; or
(ii) the right, directly or indirectly, to direct or cause the
direction of the management of the affairs of that Person,
whether by ownership of Equity Securities, by Contract or
otherwise;
and "Controls" and "Controlled" have corresponding meanings;
(k)
"Corporation" means
Great West Newspaper Group Ltd., a corporation
incorporated under the laws of Canada;
(l)
"Deductible" is
defined in Section 6.01(3);
(m)
"Disclosure Letter"
means the disclosure letter of the Vendor attached
hereto as Schedule 1.01(m);
(n)
"Encumbrance" means
any lien, pledge, charge, claim, security,
interest, contingent sale or title retention agreement, option,
deed
of trust, mortgage, conditional sales agreement, right of first
refusal or other right of a third party substantially
equivalent
thereto;
(o)
"End Date" is defined
in Section 8.01(2);
(p)
"Equity Securities"
means any shares of a corporation, partnership
units or interests or similar securities;
(q)
"Filing" is defined in
Section 4.01(1);
(r)
"Fundata" means
Fundata Canada Inc.;
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(s)
"Funding
Determination" means a determination made by the Government
of Canada that any Indemnity Subsidiary is required to repay to
the
Government of Canada the amount of any Government of Canada
Funding,
only to the extent that such Government of Canada Funding was
received
prior to the Time of Closing and relates to a period ending on
or
prior to the Time of Closing and only to the extent that any
Indemnity
Subsidiary is, at any time, required by the Government of Canada
to
repay such amount because the publications to which the funding
relates were determined not to meet the relevant Canadian
ownership
and control requirements during such period;
(t)
"GAAP" means generally
accepted accounting principles in Canada,
applicable as of date hereof and, in respect of the financial
statements of any Person, applied on a basis consistent with
those
applied in previous periods of such Person unless otherwise
required
under GAAP;
(u)
"Government of Canada
Funding" means financial support that has been
provided by the Government of Canada to any Indemnity
Subsidiary
pursuant to the Department of Canadian Heritage's Canada Magazine
Fund
or Publications Assistance Program;
(v)
"Governmental Entity"
means any domestic or foreign government,
whether federal, provincial, state, territorial, local,
regional,
municipal, or other political jurisdiction, and any agency,
authority,
instrumentality,
court, tribunal, board, commission, bureau,
arbitrator, arbitration tribunal or other tribunal, or any
quasi-governmental or other entity, insofar as it exercises a
legislative, judicial, regulatory, administrative, expropriation
or
taxing power or function of or pertaining to government, as well
as
any stock exchange;
(w)
"Great West Agreement"
means the shareholders agreement in respect of
the Corporation dated February 28, 1997;
(x)
"Hollinger Pre-Closing
Reorganization Steps" mean the transactions
referred to in Schedule 4.07;
(y)
"Income", in respect
of any period, means the income of the
Corporation or an Indemnity Subsidiary or Mountain View
Publishing
Inc. as determined for purposes of the ITA for such period;
(z)
"Indemnification
Event" means an event, occurrence or state of affairs
for which a Party is expressly indemnified hereunder;
(aa)
"Indemnification Notice" means a written notice in reasonable
detail
delivered by the Vendor to the Purchasing Parties or either of
them,
or by the Purchasing Parties or either of them to the Vendor,
as
applicable, stating a demand for indemnification in accordance
with
Section 6.01 or in connection with the Publication Status
Indemnity;
(bb)
"Indemnified Party" is defined in Section 6.01(7);
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(cc)
"Indemnifying Party" is defined in Section 6.01(7);
(dd)
"Indemnity Cooperation Agreement" is defined in Section 4.05;
(ee)
"Indemnity Subsidiaries" means Tall Taylor, Gazette Press Ltd.,
Bonnyville Nouvelle Ltd. and the Limited Partnership, and
"Indemnity
Subsidiary" means any one such entity;
(ff)
"Insurance Benefits" is defined in Section 6.01(10);
(gg)
"ITA" means the Income Tax Act (Canada), R.S.C. 1985 (5th Supp.) c.
1,
and the regulations promulgated thereunder, as amended from time
to
time;
(hh)
"Letter of Intent" means the letter agreement between Hollinger
International and Glacier dated December 15, 2005 in respect of
the
transactions contemplated hereby;
(ii)
"Limited Partnership" means the Great West Newspapers Limited
Partnership described in the Purchasing Parties' Pre-Closing
Reorganization Steps;
(jj)
"Losses" means any and all financial losses, damages,
liabilities,
obligations, penalties, encumbrances, assessments, costs and
expenses
sustained, suffered or incurred by the Party seeking
indemnification
as a direct result of any Indemnification Event; provided,
however,
that Losses shall not include any indirect or consequential or
punitive losses or damages, lost profits or lost revenue;
(kk)
"Material Adverse Change" or "Material Adverse Effect" means
any
change or effect that has or could be reasonably expected to have
a
material and adverse effect on the business, assets or
financial
condition of the Corporation and the Subsidiary, taken as a whole,
and
"Materially Adversely Effect" has a corresponding meaning;
(ll)
"Non-Competition Agreement" means the agreement to be entered into
by
Glacier, the Purchaser, Hollinger International and the Vendor
contemporaneously with Closing whereby, in consideration for the
sum
of $1,000, each of the Vendor and Hollinger International will
agree
not to compete with the Corporation following Closing;
(mm)
"Ordinary Course" means, with respect to an action taken by a
Person,
that the action is consistent with the past practices of the
Person
and is
taken in the normal day-to-day operations of the Person and,
with respect to Hollinger International and any subsidiary of
Hollinger International (other than the Corporation and the
Subsidiary) since January 17, 2004;
(nn)
"Party" means the Vendor, the Purchaser, Jamison, Glacier or
Hollinger
International, as the case may be;
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(oo)
"Person" means an individual, corporation, partnership, joint
venture,
trust, limited liability company, unincorporated organization or
other
entity, or a Governmental Entity;
(pp)
"Publication Status Indemnity" means, collectively, the
indemnities
granted by the Vendor in Sections 7.01(1) and (2) of this
Agreement;
(qq)
"Purchase Price" is defined in Section 2.01(1);
(rr)
"Purchasing Parties" means the Purchaser and Glacier;
(ss)
"Purchasing Parties' Pre-Closing Reorganization Steps" means
the
transactions referred to in Schedule 4.06;
(tt)
"Representation and Warranty Losses" is defined in Section
6.01(3);
(uu)
"Representatives", with respect to a Party, means its
directors,
officers, employees, auditors, agents and other representatives
and
advisors;
(vv)
"Safe Income" means the income earned or realized by the
Corporation
and each Indemnity Subsidiary and Mountain View Publishing Inc.
for
purposes of section 55 of the ITA for the period ending at the
safe-income determination time, as defined in subsection 55(1) of
the
ITA, for the series of transactions that includes the purchase of
the
Shares under this Agreement;
(ww)
"Section 19 Claim" means any claim, action, suit or proceeding
or
other demand, whether at law or in equity, brought before a court
and
asserted against any Indemnity Subsidiary, and either: (i)
arising
from a Section 19 Reassessment in respect of a Person, to the
extent
that such Section 19 Reassessment relates to expenses incurred by
the
Person prior to the Time of Closing; or (ii) arising from
damages
suffered by a Person who publishes a newspaper in a market in
Canada,
to the extent that such damages arose as a direct result of the
failure of a newspaper produced or published by such Indemnity
Subsidiary to qualify as a Canadian newspaper, as defined in
subsection 19(5) of the ITA or an analogous provision of a
provincial
taxing statute, during any period ending prior to the Time of
Closing;
(xx)
"Section 19 Reassessment" means, in respect of a Person, an
assessment
or a reassessment issued to the Person by the Canada Revenue Agency
or
provincial taxing authority, solely on the basis of subsection
19(1)
of the ITA or an analogous provision of a provincial taxing
statute,
from which no appeal lies disallowing a deduction claimed by
the
Person for
expenses incurred for advertising space in an issue of a
newspaper produced and published by an Indemnity Subsidiary;
(yy)
"Shares" means 17,540 Class A shares of the Corporation;
(zz)
"Subsidiaries" means Tall Taylor and Gazette Press Ltd.;
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(aaa) "Tall Taylor" means Tall-Taylor Publishing Ltd.;
(bbb) "Tax" or "Taxes" means all taxes, charges, fees, levies,
imposts and
other assessments, including all income, sales, use, goods and
services, value added, capital, capital gains, alternative, net
worth,
transfer, profits, withholding, payroll, employer health,
excise,
franchise, real property and personal property taxes, and any
other
taxes, customs duties, fees, assessments, royalties, duties,
deductions, compulsory loans or similar charges in the nature of
a
tax, including Canada Pension Plan and provincial pension plan
contributions, employment insurance payments and workers
compensation
premiums, together with any instalments, and any interest, fines
and
penalties, imposed by any governmental authority (including
federal,
state, provincial, municipal and foreign governmental
authorities),
whether disputed or not;
(ccc) "Tax Returns" means any return, declaration, report, schedule
or
information statement with respect to Taxes required to be filed
with
the Canada Revenue Agency or any other Governmental Entity;
(ddd) "Time of Closing" means 9:00 a.m. (Vancouver time) on the
Closing
Date;
(eee) "Title Representation and Warranty Losses" is defined in
Section
6.01(5); and
(fff) "Vue Claims" means the claims advanced by 783783 Alberta Ltd.
against
Jamison, among others, in the statement of claim issued out of
the
Office of the Clerk of the Court of Queen's Bench of Alberta on
October 27, 2005; provided, however, that Vue Claims shall not
include
any new claims unrelated to the Publication Status Indemnity
advanced
in any amendment made to such statement of claim after the Time
of
Closing.
1.02 KNOWLEDGE
Any reference to "knowledge of the Vendor" or to phrases of
similar
import shall mean only the actual knowledge of Gordon Paris, Peter
Lane or David
Dodd.
1.03 HEADINGS
The division of this Agreement into Articles and Sections and
the
insertion of headings are for convenience of reference only and
shall not affect
the construction or interpretation of this Agreement. The terms
"this
Agreement", "hereof", "hereunder" and similar expressions refer to
this
Agreement and not to any particular Article, Section or other
portion hereof and
include any agreement supplemental hereto. Unless something in the
subject
matter or context is inconsistent therewith, references herein to
Articles and
Sections are to Articles and Sections of this Agreement.
1.04 EXTENDED MEANINGS
In this Agreement words importing the singular number only
shall
include the plural and vice versa, words importing the masculine
gender shall
include the feminine and neuter
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genders and vice versa and words importing persons shall include
individuals,
partnerships, associations, trusts, unincorporated organizations
and
corporations.
1.05 ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to a calculation to
be
made in accordance with generally accepted accounting principles,
such reference
shall be deemed to be to GAAP.
1.06 CURRENCY
All references to currency herein are to lawful money of
Canada.
1.07 SCHEDULES
The following are the Schedules annexed hereto and incorporated
by
reference and deemed to be part hereof:
Schedule 1.01(M) - Disclosure
Letter;
Schedule 4.05 -
Indemnity Cooperation Agreement;
Schedule 4.06 -
Purchasing Parties' Pre-Closing Reorganization
Steps;
Schedule 4.07 -
Hollinger Pre-Closing Reorganization Steps; and
Schedule 5.01(1)(B) - Consents and Filings.
ARTICLE 2 - PURCHASE AND SALE
2.01 PURCHASE AND SALE AND PURCHASE PRICE
(1)
Upon and subject to the terms and conditions contained herein,
the
Vendor shall, at the Time of Closing, sell the Shares to the
Purchaser and the
Purchaser shall purchase the Shares from the Vendor for a total
purchase price
of Cdn.$32,000,000 (hereinafter referred to as the "Purchase
Price").
(2)
The Purchase Price shall be paid and satisfied by the Purchaser at
the
Time of Closing by wire transfer of immediately available funds to
an account or
accounts specified by the Vendor against delivery to the Purchaser
of a share
certificate or certificates evidencing the Shares duly endorsed for
transfer to
the Purchaser.
2.02 CLOSING AND DELIVERABLES
(1)
Subject to the terms and conditions contained herein, the Closing
shall
take place as soon as practicable but, in any event, within five
(5) Business
Days after satisfaction or waiver of the conditions set forth in
Article 5
hereof (other than conditions which, by their terms, are to be
satisfied at the
Closing) (the "Closing Date") at the offices of Farris, Vaughan,
Wills & Murphy
LLP, 700 W. Georgia Street, Vancouver, British Columbia.
(2)
At the Closing, the Vendor shall deliver to the Purchaser the
following:
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(a)
share certificates
representing the Shares duly endorsed for transfer
to the Purchaser or accompanied by duly executed stock transfer
powers;
(b)
the officer's
certificates referred to in Section 5.02(1)(b), (c) and
(d);
(c)
written resignations
of each of the nominees of the Vendor to the
board of directors of the Corporation;
(d)
executed counterparts
of the Indemnity Cooperation Agreement signed by
the Vendor and Hollinger International; and
(e)
executed counterparts
of the Non-Competition Agreement signed by the
Vendor and Hollinger International.
(3)
At the Closing, the Purchaser shall deliver to the Vendor the
following:
(a)
payment of the
Purchase Price in Canadian dollars by wire transfer of
immediately available funds to an account or accounts specified by
the
Vendor;
(b)
an officer's
certificate in accordance with Section 5.03(1)(c);
(c)
executed counterparts
of the Indemnity Cooperation Agreement signed by
each Indemnity Subsidiary; and
(d)
executed counterparts
of the Non-Competition Agreement signed by
Glacier and the Purchaser.
2.03 HOLLINGER INTERNATIONAL GUARANTEE
Hollinger International hereby unconditionally and irrevocably
guarantees the due and punctual performance by the Vendor of its
obligations
under this Agreement as the same may be amended, changed or
replaced, settled,
compromised or otherwise modified, from time to time and
irrespective of any
bankruptcy, insolvency, dissolution, winding-up or termination of
the existence
of the Vendor, the Purchaser, Glacier or any successor or assignee
thereof, as
the case may be, including, without limitation, the unconditional
and
irrevocable guarantee of the payment of all indemnification claims
for which the
Vendor is liable to the Purchasing Parties or the Indemnity
Subsidiaries
pursuant to this Agreement. Hollinger International shall be liable
to the
Purchasing Parties or the Indemnity Subsidiaries if and only to the
extent that
it is established that the Vendor is so liable. The Purchasing
Parties are not
required to exhaust all remedies against the Vendor prior to
proceeding against
Hollinger International under this guarantee. In no event shall the
liability of
Hollinger International to the Purchasing Parties or the Indemnity
Subsidiaries
hereunder be greater than that of the Vendor to the Purchaser
hereunder.
2.04 GLACIER GUARANTEE
Glacier
hereby unconditionally and irrevocably guarantees the due and
punctual performance by the Purchaser of its obligations under this
Agreement,
as the same may be amended, changed or replaced, settled,
compromised or
otherwise modified, from time to time and irrespective
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of any bankruptcy, insolvency, dissolution, winding-up or
termination of the
existence of the Vendor, the Purchaser, Glacier or any successor or
assignee
thereof, as the case may be, including, without limitation, the
payment of all
indemnification claims for which the Purchaser is liable to the
Vendor pursuant
to this Agreement. Glacier shall be liable to the Vendor if and
only to the
extent that it is established that the Purchaser is so liable. The
Vendor is not
required to exhaust all remedies against the Purchaser prior to
proceeding
against Glacier under this guarantee. In no event shall the
liability of Glacier
to the Vendor hereunder be greater than that of the Purchaser to
the Vendor
hereunder.
2.05 TAXES
The Purchaser shall pay any sales, use, transfer, excise, stamp
or
other similar taxes imposed by reason of the sale of the Shares,
excluding, for
greater certainty, any income taxes, capital or capital gains taxes
of the
Vendor pursuant to this Agreement, and any deficiency, interest or
penalty with
respect to such taxes.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
3.01 VENDOR'S REPRESENTATIONS AND WARRANTIES
(1)
The Vendor represents and warrants to the Purchasing Parties
that,
except as disclosed in the Disclosure Letter:
(a)
the Vendor is the
beneficial and registered owner of the Shares and
will (subject to the Hollinger Pre-Closing Reorganization Steps) be
on
the Closing Date the legal and beneficial owner of the Shares
with
good and marketable title thereto, free and clear of all
Encumbrances;
(b)
the Vendor is
incorporated, organized and existing under the laws of
the jurisdiction of its incorporation, the Vendor has good and
sufficient power, authority and right to enter into and deliver
this
Agreement and the Vendor has the power, authority and right to
transfer the legal and beneficial title and ownership of the Shares
to
the Purchaser free and clear of all Encumbrances;
(c)
this Agreement has
been duly authorized, executed and delivered by,
and constitutes a valid and legally binding obligation of, the
Vendor,
enforceable against the Vendor in accordance with its terms subject
to
general principles of equity and to applicable bankruptcy,
insolvency,
reorganization and other laws of general application limiting
the
enforcement of creditors' rights generally and to the fact that
specific performance is an equitable remedy available only in
the
discretion of the court;
(d)
there is no contract,
option or any other right of another binding
upon the Vendor or capable of becoming a contract, option or
right
binding upon the Vendor to sell, transfer, assign, pledge,
charge,
mortgage or in any other way dispose of or encumber any of the
Shares
other than pursuant to the provisions of this Agreement;
<PAGE>
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(e)
neither the entering
into nor the delivery of this Agreement nor the
completion of the transactions contemplated hereby by the Vendor
will
result in the violation of:
(i) any of the
provisions of the constating documents or by-laws of
the Vendor; or
(ii) any Contract to which the Vendor is a party or the Vendor
is
bound;
except where such violation would not have a material adverse
effect
on the ability of the Vendor to carry out its obligations
hereunder;
(f)
no approval, order,
consent of or filing with any Governmental Entity
is required in connection with the execution and delivery by
the
Vendor of this Agreement or any other documents and agreements to
be
delivered under this Agreement or the performance of the
obligations
of the Vendor under this Agreement or any other documents and
agreements to be delivered under this Agreement except where
the
failure to obtain such approval, order or consent or make such
filing
would not have a material adverse effect on the ability of the
Vendor
to carry out its obligations hereunder;
(g)
the Vendor is not a
non-resident person within the meaning of section
116 of the Income Tax Act (Canada);
(h)
to the knowledge of
the Vendor, neither the Corporation nor any of the
Subsidiaries is a party to any court proceeding arising as a
result
of, or in relation to, the investigation of the Special Committee
of
the Board of Directors of Hollinger International and, to the
knowledge of the Vendor, there are no facts or circumstances
that
would be reasonably likely to result in the Corporation or the
Subsidiaries becoming involved in any court action or proceeding,
as a
defendant, related to the matters raised in the report of the
Special
Committee of the Board of Directors of Hollinger International;
and
(i)
to the knowledge of
the Vendor, there is no existing litigation in the
United States against the Corporation or the Subsidiaries.
(2)
Hollinger International represents and warrants to the
Purchasing
Parties that, except as disclosed in the Disclosure Letter:
(a)
Hollinger
International is incorporated, organized and existing under
the laws of the jurisdiction of its incorporation, and
Hollinger
International has good and sufficient power, authority and right
to
enter into and deliver this Agreement;
(b)
this Agreement has
been duly authorized, executed and delivered by,
and constitutes a valid and legally binding obligation of,
Hollinger
International, enforceable against Hollinger International in
accordance with its terms subject to general principles of equity
and
to applicable bankruptcy, insolvency, reorganization and other laws
of
general application limiting the enforcement of
<PAGE>
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creditors' rights generally and to the fact that specific
performance
is an equitable remedy available only in the discretion of the
court;
(c)
neither the entering
into nor the delivery of this Agreement nor the
completion of the transactions contemplated hereby by Hollinger
International will result in the violation of:
(i) any of the
provisions of the constating documents or by-laws of
Hollinger International; or
(ii) any Contract to which Hollinger International is a party or
is
bound;
except where such violation would not have a material adverse
effect
on the ability of Hollinger International to carry out its
obligations
hereunder; and
(d)
no approval, order,
consent of or filing with any Governmental Entity
is required in connection with the execution and delivery by
Hollinger
International of this Agreement or any other documents and
agreements
to be delivered under this Agreement or the performance of the
obligations of Hollinger International under this Agreement or
any
other documents and agreements to be delivered under this
Agreement
except where the failure to obtain such approval, order or consent
or
make such filing would not have a material adverse effect on
the
ability of Hollinger International to carry out its obligations
hereunder.
3.02 SURVIVAL OF VENDOR'S AND HOLLINGER INTERNATIONAL'S
REPRESENTATIONS,
WARRANTIES AND COVENANTS
(1)
The representations and warranties of the Vendor and Hollinger
International set forth in Section 3.01 (other than those set forth
in Section
3.01(1)(a) and 3.01(1)(d)) shall survive the completion of the sale
and purchase
of the Shares herein provided for and, notwithstanding such
completion, shall
continue in full force and effect for the benefit of the Purchasing
Parties for
a period of 24 months from the Closing Date. The representations
and warranties
of the Vendor set forth in Section 3.01(1)(a) and 3.01(1)(d) shall
survive the
completion of the sale and purchase of the Shares herein provided
for and,
notwithstanding such completion, shall continue in full force and
effect for the
benefit of the Purchasing Parties for a period of 36 months from
the Closing
Date.
(2)
The covenants of the Vendor set forth in this Agreement shall
survive
the completion of the sale and purchase of the Shares herein
provided for and,
notwithstanding such completion, shall continue in full force and
effect for the
benefit of the Purchasing Parties in accordance with the terms
thereof.
3.03 PURCHASER'S REPRESENTATIONS AND WARRANTIES
(1)
The Purchaser represents and warrants to the Vendor that:
(a)
the Purchaser is a
corporation duly incorporated, organized and
subsisting under the laws of Canada;
<PAGE>
-13-
(b)
the Purchaser has good
and sufficient power, authority and right to
enter into and deliver this Agreement and to complete the
transactions
to be completed by the Purchaser contemplated hereby;
(c)
this Agreement has
been duly authorized, executed and delivered by the
Purchaser and constitutes a valid and legally binding obligation
of
the Purchaser, enforceable against the Purchaser in accordance
with
its terms subject to general principles of equity and to
applicable
bankruptcy, insolvency, reorganization and other laws of
general
application limiting the enforcement of creditors' rights
generally
and to the
fact that specific performance is an equitable remedy
available only in the discretion of the court;
(d)
neither the entering
into nor the delivery of this Agreement nor the
completion of the transactions contemplated hereby by the
Purchaser
will result in the violation of:
(i) any of the
provisions of the constating documents or by-laws of
the Purchaser; or
(ii) any Contract to which the Purchaser is a party or by which
the
Purchaser is bound;
except where such violation would not have a material adverse
effect
on the ability of the Purchaser to carry out its obligations
hereunder;
(e)
the Purchaser is a
Canadian within the meaning of the Investment
Canada Act (Canada);
(f)
the Purchaser will, at
Closing, have available funds sufficient to
consummate the transactions contemplated hereby; and
(g)
no approval, order,
consent of or filing with any Governmental Entity
is required in connection with the execution and delivery by
the
Purchaser of this Agreement or any other documents and agreements
to
be delivered under this Agreement or the performance of the
obligations of the Purchaser under this Agreement or any other
documents and agreements to be delivered under this Agreement
except
where the failure to obtain such approval, order or consent or
make
such filing would not have a material adverse effect on the
Purchaser
or its ability to carry out its obligations hereunder.
3.04 SURVIVAL OF PURCHASER'S REPRESENTATIONS, WARRANTIES AND
COVENANTS
(1)
The representations and warranties of the Purchaser set forth
in
Section 3.03 shall survive the completion of the sale and purchase
of the Shares
herein provided for and, notwithstanding such completion, shall
continue in full
force and effect for the benefit of the Vendor for a period of 24
months from
the Closing Date.
<PAGE>
-14-
(2)
The covenants of the Purchaser set forth in this Agreement
shall
survive the completion of the sale and purchase of the Shares
herein provided
for and, notwithstanding such completion, shall continue in full
force and
effect for the benefit of the Vendor in accordance with the terms
thereof.
3.05 GLACIER'S REPRESENTATIONS AND WARRANTIES
(1)
Glacier represents and warrants to the Vendor and the Purchaser
that:
(a)
Glacier is a
corporation duly incorporated, organized and subsisting
under the laws of Canada;
(b)
Glacier has good and
sufficient power, authority and right to enter
into and deliver this Agreement and to complete the transactions to
be
completed by Glacier contemplated hereby;
(c)
this Agreement has
been duly authorized, executed and delivered by
Glacier and constitutes a valid and legally binding obligation
of
Glacier, enforceable against Glacier in accordance with its
terms
subject to general principles of equity and to applicable
bankruptcy,
insolvency, reorganization and other laws of general
application
limiting the enforcement of creditors' rights generally and to
the
fact that specific performance is an equitable remedy available
only
in the discretion of the court;
(d)
neither the entering
into nor the delivery of this Agreement nor the
completion of the transactions contemplated hereby by Glacier
will
result in the violation of:
(i) any of the
provisions of the constating documents or by-laws of
Glacier; or
(ii) any Contract to which Glacier is a party or by which Glacier
is
bound;
except where such violation would not have a material adverse
effect
on the ability of Glacier to perform its obligations hereunder;
(e)
Glacier is a Canadian
within the meaning of the Investment Canada Act
(Canada); and
(f)
no approval, order,
consent of or filing with any Governmental Entity
is required in connection with the execution and delivery by
Glacier
of this Agreement or any other documents and agreements to be
delivered under this Agreement or the performance of the
obligations
of Glacier under this Agreement or any other documents and
agreements
to be delivered under this Agreement except where the failure
to
obtain such approval, order or consent or make such filing would
not
have a material adverse effect on Glacier or its ability to carry
out
its obligations hereunder.
<PAGE>
-15-
3.06 SURVIVAL OF GLACIER'S REPRESENTATIONS, WARRANTIES AND
COVENANTS
(1)
The representations and warranties of Glacier set forth in Section
3.05
shall survive the completion of the sale and purchase of the Shares
herein
provided for and, notwithstanding such completion, shall continue
in full force
and effect for the benefit of the Vendor and the Purchaser for a
period of 24
months from the Closing Date.
(2)
The covenants of Glacier set forth in this Agreement shall survive
the
completion of the sale and purchase of the Shares herein provided
for and,
notwithstanding such completion, shall continue in full force and
effect for the
benefit of the Vendor and the Purchaser, as the case may be, in
accordance with
the terms thereof.
3.07 INVESTIGATION
Glacier and the Purchaser are knowledgeable about the industry
in
which the Corporation and the Subsidiaries operate (and the
Purchaser currently
manages the business of the Corporation) and are experienced in the
acquisition
and management of businesses. The Purchaser and Glacier acknowledge
that they
have been advised by the Vendor and Hollinger International that
neither the
Vendor, Hollinger International nor their respective Affiliates are
or have been
involved in the day-to-day management of the Corporation or the
Subsidiaries nor
do they or have they exercised any material oversight in respect of
the
management of the Corporation or the Subsidiaries. Glacier and
its
Representatives have been afforded reasonable access to the Books
and Records,
Contracts, facilities and personnel of the Corporation and the
Subsidiaries for
purposes of conducting a due diligence investigation of the
Corporation and the
Subsidiaries. Glacier has conducted a reasonable due diligence
investigation of
the Corporation and the Subsidiaries and has received answers to
all inquiries
which it has made with respect to the Corporation and the
Subsidiaries and their
respective businesses.
3.08 NO INDUCEMENT OR RELIANCE; INDEPENDENT ASSESSMENT
(1)
Neither the Purchaser nor Glacier has been induced by or relied
upon
any representations, warranties or statements, whether express or
implied, made
by the Vendor, Hollinger International (or their Affiliates or
Representatives)
that are not expressly set forth herein (including the Disclosure
Letter),
whether or not any such representations, warranties or statements
were made in
writing or orally.
(2)
The Purchaser and Glacier acknowledge that none of the Vendor,
Hollinger International or their Affiliates or Representatives
makes, will make
or has made any representation or warranty, express or implied, as
to the
prospects of the Corporation, the Subsidiaries or their respective
businesses
for the Purchaser or Glacier or with respect to any forecasts,
projections or
business plans made
