EXHIBIT 99.1
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RELEASE AND SETTLEMENT AGREEMENT
THIS RELEASE AND SETTLEMENT AGREEMENT (this "Agreement") is entered into
this 16th day of March 2007 between F. Xxxxx Xxxxxx ("Xxxxxx") and Sun-Times
Media Group, Inc., a Delaware corporation f/k/a Xxxxxxxxx International Inc.
("STMG"), (together, the "Parties").
WHEREAS by resolutions dated June 19, 2003, and January 20, 2004, the STMG
Board of Directors formed and authorized a Special Committee (the "SC") to
investigate and file suit regarding, among other things, various related-party
transactions and payments, and to take any actions necessary to recover assets
and damages for STMG; and
WHEREAS on August 30, 2004, STMG filed the SC's report of investigation
(the "SC Report") with the U.S. District Court for the Northern District of
Illinois in the action titled SEC X. XXXXXXXXX INTERNATIONAL INC., Case No.
04-C-0366, and with the U.S. Securities & Exchange Commission on SEC Form 8-K,
and the SC Report made allegations, INTER ALIA, regarding certain conduct of
Xxxxxx; and
WHEREAS on January 28, 2004, the SC filed a complaint on STMG's behalf in
the U.S. District Court for the Northern District of Illinois against Xxxxxx
and others alleging various legal claims based on alleged breaches of fiduciary
duties and conversion of company assets in an action captioned XXXXXXXXX
INTERNATIONAL INC. X. XXXXXXXXX INC., ET AL., Case No. 04-C-0698, and
subsequent amendments on May 7 and October 29, 2004 (the "Illinois Action");
and
WHEREAS Xxxxxx has agreed to enter into this Agreement to (i) settle and
finally resolve all actual and potential claims, except for any claims arising
from STMG's July 2000 sale of four newspaper publications to Bradford
Publishing Company ("Bradford") as that transaction is described in paragraphs
301-317 of STMG's Second Amended Complaint in the Illinois Action (the
"Bradford Transaction Claims"), that have been or could have been brought by or
on behalf of STMG (a) in the Illinois Action; (b) arising out of the conduct
and events alleged in the SC Report; or (c) concerning any other claims that
could have been brought by or on behalf of STMG relating to Xxxxxx'x service to
STMG as an officer or director; and (ii) reduce further expense, inconvenience,
and the distraction of burdensome and protracted litigation; and
WHEREAS STMG is simultaneously entering into settlement agreements with
(i) North American Newspapers Ltd. f/k/a XX Xxxxxx Ltd. ("NANL"), referred to
herein as the "NANL Settlement Agreement"; (ii) Horizon Publications Inc.;
Horizon Publications (U.S.A.) Inc.; Horizon Arkansas Publications Inc.; Horizon
Blackfoot Publications Inc.; Horizon California Publications Inc.; Horizon
Connecticut Publications Inc.; Horizon Florida Publications Inc.; Horizon
Hawaii Publications Inc.; Horizon Illinois Publications Inc.; Horizon Indiana
Publications Inc.; Horizon Mississippi Publications Inc.; Horizon North
Carolina Publications Inc.; Horizon North Dakota Publications Inc. (f/k/a
Horizon Idaho Publications Inc.); Horizon Ohio Publications Inc.; Horizon
Vermont Publications Inc.; Horizon Washington Publications Inc. (f/k/a Terra
Holdings Inc.); Horizon Publications Management Services Inc.; Leeming
Communications Company; Review Publications Inc.; Westbourne Investments Inc.;
Continental Newspapers Ltd. (f/k/a Horizon Operations Ltd.); and Continental
Newspapers (Canada) Ltd. (f/k/a Horizon Operations (Canada), Ltd.), referred to
herein as the "Horizon Settlement Agreement"; and (iii) Bradford, referred to
herein as the "Bradford Settlement Agreement";(1) and
WHEREAS the SC has approved the settlement reflected in this Agreement as
fair, reasonable, adequate, and in the best interests of STMG and its
shareholders;
NOW THEREFORE IN CONSIDERATION OF THE COVENANTS SET FORTH BELOW AND OTHER
GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS
ACKNOWLEDGED, STMG and Xxxxxx agree as follows:
1. XXXXXX SETTLEMENT AMOUNT. STMG acknowledges that in early November
2003, Xxxxxx volunteered to repay and subsequently in 2003 and 2004 did make
repayments to STMG totaling approximately U.S.$8.65 million as restitution,
including interest, for certain non-competition-styled payments Xxxxxx received
from the proceeds of STMG's 1999 and 2000 sales of U.S. community newspaper
assets. Simultaneously upon execution of this Agreement by both Parties, Xxxxxx
will: (i) pay to STMG the additional sum of U.S.$21.35 million ("the Xxxxxx
Settlement Amount");(2) and (ii) cause NANL to pay to STMG the NANL Settlement
Amount as that term is defined in the NANL Settlement Agreement. The sum of all
the payments to STMG described in this paragraph 1, together with the Horizon
Settlement Amount as that term is defined in the Horizon Settlement Agreement,
shall constitute the "Xxxxxx/Horizon Settlement Amount."
2. BRADFORD TRANSACTION ALLOCATION AMOUNT. STMG will set aside $500,000
of the NANL Settlement Amount as that term is defined in the NANL Settlement
Agreement. That money, referred to herein as the "Bradford Transaction
Allocation Amount," shall be held separately by STMG in accordance with the
terms of paragraph 6 below.
3. APPORTIONMENT OF XXXXXX SETTLEMENT AMOUNT. The amount in clause (i) of
paragraph 1 above includes restitution in full, plus interest through August
31, 2006, at the average Federal Discount Rate at the time of the transaction
+500 bps, for the following transactions:
a. CANWEST NON-COMPETITION PAYMENT: U.S.$16.5 million;
b. OSPREY NON-COMPETITION PAYMENTS: U.S.$3.1 million; and
The amount in clause (i) of paragraph 1 above also includes the
following allocation to portions of STMG's asserted damages on the following
items:
c. STOCK OPTIONS: U.S.$750,000; and
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(1) The Parties acknowledge that Horizon and Bradford, through their respective
separate and independent counsel, have separately reviewed and approved the
Horizon Settlement Agreement and the Bradford Settlement Agreement.
(2) As part of this Agreement, Xxxxxx will receive credits against the Xxxxxx
Settlement Amount from STMG for the following disputed items: (i) a credit of
U.S.$135,492 for proceeds from Xxxxxxxxx Canadian Newspaper Limited Partnership
options that Xxxxxx attempted to purchase in February 2004; and (ii) a credit
of U.S.$37,687.50 for a calculation error that occurred when Xxxxxx exercised
STMG options in December 2003 and January 2004.
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d. REIMBURSEMENT OF ADVANCED ATTORNEYS' FEES AND EXPENSES: U.S.$1
million.
4. COOPERATION. After the completion of his trial testimony in the
criminal matters pending with respect to certain of the transactions involved
in this agreement, Xxxxxx agrees to be available to STMG's and the SC's
representatives and counsel, subject to reasonable requests at mutually
agreeable times and locations, for the purpose of being interviewed by STMG's
and the SC's representatives and counsel with respect to the matters involved
in the Illinois Action, the SC Report, and Xxxxxx'x service as an STMG officer
or director. Xxxxxx is entitled to have his counsel attend all of Xxxxxx'x
meetings with STMG's and the SC's representatives and counsel. In the event of
any claimed breach of Xxxxxx'x obligations under this paragraph that remains
uncured for more than fourteen days following written notice by STMG to Xxxxxx,
the Parties acknowledge and agree that STMG's sole remedy shall be to apply for
a decree of specific performance.
5. MUTUAL RELEASE AND SETTLEMENT. Upon payment in full of the
Xxxxxx/Horizon Settlement Amount and subject to paragraph 7(a) below, STMG and
its affiliates (except Xxxxxxxxx Inc. and its subsidiaries that are not
subsidiaries of STMG), subsidiaries, and divisions, and their predecessors,
successors, and assigns (collectively, the "STMG Releasors") do hereby fully,
finally, and forever release Xxxxxx and any of his spouse, heirs, family
members, successors, assigns, survivors, and executors, and 0714179 BC Ltd.,
655730 BC Ltd., Sherbrooke Leasing Ltd., and P & R Investments Inc.
(collectively, the "Xxxxxx Releasees") from any and all rights, interests,
obligations, debts, dues, sums of money, accounts, reckonings, damages, claims,
actions, allegations, causes of action, counterclaims, or demands whatsoever,
whether known or unknown, in law or in equity, that have been or that could be
asserted by the STMG Releasors from the beginning of time through the date
hereof against the Xxxxxx Releasees, except the Bradford Transaction Claims
(the "Settled Claims"). Xxxxxx and any and all of his spouse, heirs, family
members, successors, assigns, survivors, and executors, and 0714179 BC Ltd.,
655730 BC Ltd., Sherbrooke Leasing Ltd., and P & R Investments Inc.
(collectively, the "Xxxxxx Releasors") do hereby fully, finally, and forever
release STMG and its current and former agents, advisors (except KPMG LLP, and
any of its predecessor or successor partnerships, which are addressed below in
paragraph 10), representatives, affiliates, subsidiaries, divisions, officers,
directors, employees, and attorneys (except Torys LLP and any of its
predecessor or successor partnerships, which are addressed below in paragraph
11) and their predecessors, successors, and assigns (collectively, the "STMG
Releasees")(3) from any and all rights, interests, advancement and
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(3) To the extent that the Xxxxxx Releasors' release extends to Xxxxxx X.
Xxxxx, Xxxxxxx Xxxxx Black, Xxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xxxx X.
Xxxxxx, The Ravelston Corporation Ltd., or Xxxx X. Xxxx, it is limited to
claims based on their conduct in their capacity as STMG officers, directors,
employees, or agents. In addition, to the extent that the Xxxxxx Releasors have
defenses or affirmative defenses against Xxxxxx X. Xxxxx, Xxxxxxx Xxxxx Black,
Xxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xxxx X. Xxxxxx, The Ravelston Corporation
Ltd., or Xxxx X. Xxxx that are based on their conduct in their capacity as STMG
officers, directors, employees, or agents, the Xxxxxx Releasors' release does
not preclude the Xxxxxx Releasors from pursuing those defenses or affirmative
defenses (but not claims, including affirmative claims, counterclaims, or
cross-claims) in any pending or future litigation. Further, to the extent that
the Xxxxxx Releasors have claims, defenses, or affirmative defenses against
Xxxxxxxxx Inc. that may be pursued in response to Xxxxxxxxx Inc.'s proposed
counterclaims in the Illinois Action, Xxxxxxxxx Inc.'s litigation in Canada, or
any other current or future claims brought by or on Xxxxxxxxx Inc.'s behalf
against any of the Xxxxxx Releasors, the Xxxxxx Releasors' release does not
preclude the Xxxxxx Releasors from pursuing those claims, defenses, or
affirmative defenses in any pending or future litigation.
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indemnification obligations, debts, dues, sums of money, accounts, reckonings,
damages, claims, actions, allegations, causes of action, counterclaims, or
demands whatsoever, whether known or unknown, in law or in equity, that Xxxxxx
has or will have or that have been or could be asserted by the Xxxxxx Releasors
from the beginning of time through the date hereof against the STMG Releasees.
For purposes of clarification only, the releases provided under this paragraph
include extinguishing (i) STMG's right to seek the return of attorneys' fees
and expenses that have been advanced to Xxxxxx under Article IX(b) of STMG's
by-laws; and (ii) Xxxxxx'x right to seek any further advancement or
indemnification of past, present, or future attorneys' fees and expenses from
STMG. The releases provided under this paragraph do not release Xxxxxx or STMG
from their respective obligations under this Agreement.
6. BRADFORD TRANSACTION CLAIMS RELEASE. Upon payment of the Bradford
Settlement Amount, as that term is defined in the Bradford Settlement
Agreement, or STMG's filing of a suit against Bradford to enforce the payment
terms of the Bradford Settlement Agreement: (i) STMG releases Xxxxxx from the
Bradford Transaction Claims, in accordance with the terms of the releases
provided in paragraph 5 above; and (ii) all restrictions on the Bradford
Transaction Allocation Amount are removed. If the Bradford Settlement Amount,
as that term is defined in the Bradford Settlement Agreement, is not paid and
STMG declares the payment and release provisions in the Bradford Settlement
Agreement null and void, then STMG: (i) does not release Xxxxxx under this
Agreement from the Bradford Transaction Claims; (ii) shall have the option to
pursue the Bradford Transaction Claims against Xxxxxx in any court; and (iii)
will continue to hold the Bradford Transaction Allocation Amount until (i) STMG
obtains a judgment against Xxxxxx on the Bradford Transaction Claims (in which
case the Bradford Transaction Allocation Amount will be used to offset the
amount of that judgment), or (ii) STMG and Xxxxxx settle the Bradford
Transaction Claims (in which case the Bradford Transaction Allocation Amount
will be used to offset the amount of that settlement), or (iii) Xxxxxx is found
not liable on the Bradford Transaction Claims (in which case STMG will return
to Xxxxxx the Xxxxxxxx Transaction Allocation Amount). Further, if the Bradford
Settlement Amount, as that term is defined in the Bradford Settlement
Agreement, is not paid, and STMG declares the payment and release provisions in
the Bradford Settlement Agreement null and void and pursues the Bradford
Transaction Claims against Bradford, but not does not include Xxxxxx as a
defendant in that action within six months of filing it against Bradford, then
(i) STMG releases Xxxxxx from the Bradford Transaction Claims, in accordance
with the terms of the releases provided in paragraph 5 above; and (ii) all
restrictions on the Bradford Transaction Allocation Amount are removed. If STMG
exercises its option to pursue the Bradford Transaction Claims against Xxxxxx,
STMG shall also bring suit against Bradford in the same action and court to
pursue the Bradford Transaction Claims.
7. INSURANCE SUBROGATION & RELEASE BY XXXXXX OF AMERICAN HOME AND CHUBB.
(a) STMG is not releasing the subrogation rights, if any, that
STMG's insurers might have against Xxxxxx.
(b)(1) In accordance with paragraph 12 of STMG's Policy Release
Agreement with Chubb Insurance Company of Canada ("Chubb") (the "Chubb Policy
Release Agreement") and paragraph 8 of STMG's Policy Release Agreement with
American Home Assurance Company ("American Home") as amended (the "American
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Home Policy Release Agreement") (collectively, the "Policy Release
Agreements"), Xxxxxx wishes to release his rights, if any, under policies Chubb
and American Home have issued to STMG and its affiliates. The Chubb Policy
Release Agreement (without exhibits) is attached hereto as Exhibit A for
reference and the American Home Policy Release Agreement (without exhibits) is
attached hereto as Exhibit B for reference. It is the Parties' intent that the
release contained in paragraph 7(b)(2) below, combined with the release in
paragraph 5 above, will extinguish the subrogation rights, if any, and Claims
(as defined in the Policy Release Agreements), if any, that Chubb and American
Home may have against Xxxxxx.
(b)(2) Xxxxxx, on his own behalf and on behalf of any and all of his
present, former and future associates, partners, representatives, agents,
assigns, family members, heirs, executors and administrators, or any of them,
and his attorneys and all persons acting by, through, or on behalf of any of
them, hereby releases, discharges, and covenants not to xxx Xxxxx or American
Home and each of their present, former, and future parents, divisions,
subsidiaries, affiliates, associates, representatives, predecessors,
successors, owners, assigns, administrators, and their present, former, or
future directors, agents, partners, principals, officers, employees, trustees,
insurers, and reinsurers, representatives or any of them, and their attorneys
and all persons acting by, through, under, or on behalf of any of them
(collectively, the "Insurer Releasees") from, against, and for any and all
claims, rights, demands, losses, expenses, actions, or causes of action, in law
or in equity, of any kind or nature whatsoever, known or unknown, suspected or
unsuspected, vested or contingent, arising or accruing from the beginning of
time through the date hereof (collectively, "Insurer Claims"), that arise out
of or relate in any way to any and all policies issued by one of the Insurer
Releasees to Xxxxxx, STMG, or an affiliate of STMG, the Delaware Settlement (as
defined in the Policy Release Agreements), the Underlying Actions (as defined
in the Policy Release Agreements), the Ontario Proceeding (as defined in the
Policy Release Agreements), or any fact, circumstance or situation alleged in
the Underlying Actions (as defined in the Policy Release Agreements) (all such
Insurer Claims collectively, the "Released Insurer Claims"). The Released
Insurer Claims include without limitation any and all Insurer Claims for or
allegations of extracontractual liability, "bad faith" or unfair claims
handling practices, or any violations of any similar, comparable, or equivalent
provision or principle of either statutory or common law of any jurisdiction,
with respect to or arising from or in any way relating to the Released Insurer
Claims. The Released Insurer Claims shall include all claims that were asserted
in the Underlying Actions (as defined in the Policy Release Agreements) and the
Related Claims (as defined in the Policy Release Agreements). Notwithstanding
anything to the contrary contained herein: (a) the release contained in this
paragraph and the Chubb Policy Release Agreement have no effect on any policy
issued by any of the Chubb Releasees (as defined in the Chubb Policy Release
Agreement) other than the Excess Policy (as defined in the Chubb Policy Release
Agreement) and do not release any Claim (as defined in the Chubb Policy Release
Agreement) under any other policy issued by any of the Chubb Releasees (as
defined in the Chubb Policy Release Agreement) other than the Excess Policy (as
defined in the Chubb Policy Release Agreement); (b) the release contained in
this paragraph and the American Home Policy Release Agreement have no effect
on, and the Released Insurer Claims do not include, any Claim (as defined in
the American Home Policy Release Agreement) or rights under any insurance
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policy issued by an American Home Releasee (as defined in the American Home
Policy Release Agreement) to Xxxxxxxxx International (as defined in the
American Home Policy Release Agreement), Ravelston (as defined in the American
Home Policy Release Agreement), or Xxxxxxxxx Inc. (as defined in the American
Home Policy Release Agreement); (c) the Released Insurer Claims shall not
include any Claims (as defined in the Policy Release Agreements) to enforce the
terms of the Policy Release Agreements; (d) the Released Insurer Claims shall
not include any Claims (as defined in the Policy Release Agreements) by, on
behalf of or against any person or entity identified in Exhibit D to the Policy
Release Agreements or any other insured under the American Home Policies (as
defined in the American Home Policy Release Agreement) or the Excess Policy (as
defined in the Chubb Policy Release Agreement) who have not signed the Policy
Release Agreements or on whose behalf the Policy Release Agreements have not
been signed or any other person or entity whose claims are not released in the
Policy Release Agreements; (e) the Released Insurer Claims shall not include
any Claims (as defined in the Policy Release Agreements) preserved in paragraph
8 of the American Home Policy Release Agreement and paragraph 12 of the Chubb
Policy Release Agreement; and (f) the Released Insurer Claims shall not include
any Claims (as defined in the Policy Release Agreements) against any broker
acting in its capacity as broker on behalf of Xxxxxxxxx International (as
defined in the Policy Release Agreements) or any other insured in connection
with the American Home Policies (as defined in the American Home Policy Release
Agreement) or the Excess Policy (as defined in the Chubb Policy Release
Agreement). Xxxxxx'x release of the Released Insurer Claims is made for the
direct benefit of the Insurer Releasees. (b)(3) If any of the Insurer Releasees
asserts that the release contained in paragraph 7(b)(2) above is not in a form
substantially similar to the releases provided for in paragraphs 7 and 8 of the
Chubb Policy Release Agreement or in paragraphs 3 and 4 of the American Home
Policy Release Agreement, the Parties agree to amend this Agreement to conform
the release contained in paragraph 7(b)(2) to the releases in the Policy
Release Agreements.
(b)(4) Subject to the provisions of paragraphs 7(b)(1), 7(b)(2), and
7(b)(3) above, Xxxxxx'x release of the Insurer Releasees shall be null and void
if it is adjudicated that Xxxxxx'x release is not in a form substantially
similar to the releases provided for in paragraphs 7 and 8 of the Chubb Policy
Release Agreement or in paragraphs 3 and 4 of the American Home Policy Release
Agreement, or that the Insurer Releasees otherwise have subrogation rights or
Claims (as defined in the Policy Release Agreements) against Xxxxxx.
(c) In the event STMG releases all of its claims under policy
1000807 (the "Third Layer Policy") against ACE INA Insurance Company, Royal &
SunAlliance Insurance Company of Canada, and Zurich Insurance Company
(collectively, the "Third Layer Insurers"), STMG shall obtain a waiver of any
subrogation rights the Third Layer Insurers have against Xxxxxx, if any,
arising from payments made by the Third Layer Insurers on behalf of, or to,
STMG under the Third Layer Policy; provided, however, that STMG shall obtain
such a subrogation waiver for Xxxxxx only if Xxxxxx provides a release to the
Third Layer Insurers in a form substantially the same as the release STMG
provides to the Third Layer Insurers in STMG's release of its claims under the
Third Layer Policy.
8. FUTURE SETTLEMENTS BY STMG. STMG shall attempt, in good faith, to
obtain the release of Xxxxxx and NANL for all claims and allegations in the
Illinois Action and the SC Report from each settling party in any and all
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future settlements of claims or allegations in the Illinois Action, the SC
Report, and any other claims that could have been brought by STMG against
Xxxxxx or NANL relating to Xxxxxx'x service to STMG as a director or officer.
Subject to the terms of paragraph 7(c) of this Agreement, nothing in this
provision shall (i) require STMG to accept any lesser settlement consideration
from a future settling party in exchange for a release of Xxxxxx or NANL; or
(ii) prevent STMG from entering into a settlement with a party that ultimately
refuses to release Xxxxxx or NANL.
9. MUTUAL WAIVER OF RIGHTS UNDER SECTION 1542 OF THE CALIFORNIA CIVIL
CODE. The STMG Releasors and the Xxxxxx Releasors are hereby deemed to have
waived any and all rights, to the extent permitted by law, under Section 1542
of the California Civil Code or any other similar state or federal law,
provincial or territorial law, or principle of common law that may have the
effect of limiting the releases set forth herein. Section 1542 of the
California Civil Code provides: "A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time
of executing the release, which if known by him must have materially affected
his settlement with the debtor."
10. LIMITED RELEASE OF KPMG LLP. The Xxxxxx Releasors agree that they will
not seek contribution, indemnification, reimbursement, or any other form of
claims over from KPMG LLP, including its Canadian and United States limited
liability partnerships, and any of their predecessor or successor partnerships
(all together, the "KPMG Entities"), for any portion of the Xxxxxx/Horizon
Settlement Amount. The Xxxxxx Releasors further agree that they will not assert
claims against any of the KPMG Entities for any tax compliance services, tax
consulting services, or economic consulting services, as those terms are used
in the letters in which STMG engaged the KPMG Entities, that any of the KPMG
Entities provided to STMG or its subsidiaries. For reference purposes only,
samples of letters in which STMG or its subsidiaries engaged the KPMG Entities
are attached as Exhibits C-E hereto. Subject to the previous two sentences,
this Agreement does not in any way limit the Xxxxxx Releasors' ability to
pursue claims against any of the KPMG Entities for (i) any audit services, as
that term is used in the letters in which STMG or its subsidiaries engaged the
KPMG Entities, that any of the KPMG Entities provided to STMG or its
subsidiaries; or (ii) contribution, indemnification, or reimbursement for any
amounts other than the Xxxxxx/Horizon Settlement Amount.
11. LIMITED RELEASE OF TORYS LLP. The Xxxxxx Releasors agree that they
will not seek contribution, indemnification, reimbursement, or any other form
of claims over from Torys LLP, or any of its predecessor or successor
partnerships, for any portion of the Xxxxxx/Horizon Settlement Amount. This
Agreement does not in any way limit the Xxxxxx Releasors' ability to pursue
claims against Torys LLP, or any of its predecessor or successor partnerships,
for contribution, indemnification, or reimbursement for any amounts other than
the Xxxxxx/Horizon Settlement Amount.
12. ISMISSAL OF STMG'S CLAIMS AGAINST XXXXXX IN THE ILLINOIS ACTION. STMG
agrees to move, within fourteen days of payment of the Xxxxxx/Horizon
Settlement Amount, for an order in the Illinois Action (i) dismissing with
prejudice its claims, except the Bradford Transaction Claims, against Xxxxxx in
the Illinois Action; and (ii) dismissing without prejudice the Bradford
Transaction Claims against Xxxxxx. Xxxxxx agrees to consent to that motion. It
is a condition of STMG's agreement in this provision that the Court's dismissal
order in the Illinois Action expressly provides that it is without prejudice to
STMG's ability to pursue the Bradford Transaction Claims against Xxxxxx in
accordance with paragraphs 6 and 17 of this Agreement.
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13. STATUTE OF LIMITATIONS TOLLING. If STMG exercises its option to
declare the payment and release provisions in the Bradford Settlement Agreement
null and void and exercises its option to pursue the Bradford Transaction
Claims against Xxxxxx and Xxxxxxxx, then the statute of limitations on STMG's
claims against Xxxxxx shall be deemed to have been tolled from the date of this
Agreement through the date that STMG brings such claims.
14. STMG REPRESENTATION AND WARRANTY REGARDING AGREEMENT. STMG represents
and warrants as follows: (i) it is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware; (ii) it
has all requisite power and authority to execute and deliver this Agreement;
(iii) the execution and delivery by STMG of this Agreement will not conflict
with or result in any violation or breach of or default under any provision of
the certificate of incorporation and by-laws of STMG or any contract to which
STMG is a party; (iv) no consent or approval of any person is required in
connection with the execution and delivery of this Agreement; and (v) this
Agreement is legal, valid, binding, and enforceable against STMG in accordance
with its terms.
15. POTENTIAL JUDGMENT REDUCTION. In accordance with 10 Del. C. Section
6304(b), and if and to the extent applicable any other statute or law
discharging and barring contribution or similar claims against a released or
settled party, including but not limited to 740 Ill. Comp. Stat. Xxx. 100/2(d),
in the event that judgment reduction is determined to be necessary and
appropriate under applicable law, this Agreement reduces, to the extent, if at
all appropriate, by Xxxxxx'x PRO RATA share, if any, of the liability, the
damages recoverable by STMG in any action or claim involving the Settled Claims
that STMG has filed, will file, could file, or that could have been filed on
its behalf derivatively against a person other than Xxxxxx. Xxxxxx acknowledges
and agrees that the court or tribunal before which any such STMG action or
claim is brought will have the necessary authority and jurisdiction to make
findings as to the joint tort-feasor status, if at all, and proportionate
liability, if any, or lack thereof, of Xxxxxx for STMG's damages, regardless of
whether Xxxxxx is a party to such action or claim. Xxxxxx further agrees to
cooperate with all reasonable requests for documents or other evidentiary
materials, whether from STMG or any other party, in connection with any action
or claim involving the Settled Claims in which findings may be required as to
the joint tort-feasor status and/or proportionate liability, or lack thereof,
of Xxxxxx. Xxxxxx also agrees not to move to stay or dismiss a claim or action
involving the Settled Claims brought by STMG against someone other than Xxxxxx,
provided, however, that this shall not affect Xxxxxx'x right to seek dismissal
or any other relief with respect to any claims asserted in such actions against
the Xxxxxx Releasees.
16. PRESS RELEASE. Any STMG press release announcing this Agreement will
be made available to Xxxxxx for review and comment on a confidential basis
prior to its release, but final approval on the contents of the release will
remain solely with STMG.
17. GOVERNING LAW; CHOICE OF FORUM; JURY WAIVER. This Agreement and any
claim related directly or indirectly to this Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of law principles thereof. All disputes arising out of or
relating to this Agreement or its breach may be resolved in the U.S. District
Court for the Northern District of Illinois, and Xxxxxx and STMG hereby submit
and attorn to the jurisdiction and venue of that court. For purposes of
clarification only, this clause does not preclude STMG from bringing the
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Bradford Transaction Claims against Xxxxxx in a court in the State of Delaware.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT
TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE ARISING OUT OF
THIS AGREEMENT.
18. COUNTERPARTS AND DELIVERY. This Agreement may be signed in any number
of counterparts, all of which together shall constitute one and the same
instrument. This Agreement may be executed and delivered by fax transmission or
by transmission in PDF or similar electronic document format.
19. SEVERABILITY. If any provision of this Agreement is found to be
unenforceable in whole or in part, it shall be construed or limited in such a
way as to make it enforceable, consistent with the intentions of the Parties as
set out in this Agreement. If such construction or limitation is not possible,
the unenforceable provision will be stricken, and the remaining provisions of
this Agreement will remain valid and enforceable.
20. ADMISSIBILITY. This Agreement may be filed and used in any action or
proceeding as may be necessary to enforce or seek relief with respect to the
Agreement.
21. NO ADMISSION. This Agreement does not in any manner constitute
Xxxxxx'x or STMG's admission of liability, wrongdoing, or responsibility, or
lack thereof. Nor is it an admission by the Parties of any matter.
22. SUCCESSORS. This Agreement shall apply to Xxxxxx, as well any and all
of his spouse, heirs, family members, successors, assigns, survivors, and
executors, and 0714179 BC Ltd., 655730 BC Ltd., Sherbrooke Leasing Ltd., and P
& R Investments Inc. Except as otherwise expressly provided in this Agreement,
this Agreement also shall apply and inure to the benefit of STMG and its
subsidiaries, and any successors of STMG or its subsidiaries that STMG may
designate.
23. NO WAIVER. Any failure by any party to insist upon the strict
performance by the other party of any of the provisions of this Agreement shall
not be deemed a waiver of any of the provisions hereof, and such party,
notwithstanding such failure, shall have the right thereafter to insist upon
strict performance of any and all of the provisions of this Agreement to be
performed by such other party.
24. NOTICE. Any notices required to be given under this Agreement shall be
in writing and shall be made by fax or e-mail transmission to the fax numbers
and e-mail addresses set out below:
To: F. Xxxxx Xxxxxx
Alberta Newspaper Group
Xxxxx 000
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
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With a copy to: Jenner & Block LLP
000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxx@xxxxxx.xxx
To: Sun-Times Media Group, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 00 Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. XxXxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxxxx@xxxxxxxxxxxxx.xxx
With a copy to: O'Melveny & Xxxxx LLP
Times Square Tower
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxxxx@xxx.xxx
25. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
Xxxxxx and STMG and supersedes and replaces any and all prior negotiations,
understandings, promises, representations, inducements, and discussions,
whether written or oral. This Agreement may not be changed or modified except
in writing signed by both Xxxxxx and STMG.
26. KNOWLEDGE AND UNDERSTANDING. Xxxxxx acknowledges that he has read this
Agreement in consultation with competent counsel and understands and
acknowledges the significance and consequence of it and executes it voluntarily
with full understanding of its consequences.
Agreed to this 16th day of March 2007 by:
SUN-TIMES MEDIA GROUP, INC. F. XXXXX XXXXXX
By: /s/ Xxxxxx Xxxxx /s/ F. Xxxxx Xxxxxx
----------------------------------- -----------------------------------
Name: Xxxxxx Xxxxx
--------------------------------
Title: Chairman, STMG Special Committee
--------------------------------
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