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EXHIBIT 99.11
As of November 15, 1996
Canadian Imperial Bank of Commerce
Xxxxxxxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
- and -
The Bank of Nova Scotia
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
- and -
The Toronto-Dominion Bank
00 Xxxx Xxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Sirs:
Registration Rights Understanding
Pursuant to the terms of the Hypothecation of Specific Securities dated
October 13, 1995 (the "Hypothecation") by Xxxxxxxxx Inc. in favour of Canadian
Imperial Bank of Commerce ("CIBC"), Xxxxxxxxx Inc. pledged 33,610,754 shares of
Class A Common Stock (the "Outstanding Pledged Shares") of Xxxxxxxxx
International Inc. ("HII"), 14,990,000 shares of Class B Common Stock of HII
and certain other securities of HII held by Xxxxxxxxx Inc. to CIBC as
collateral security for all present and future obligations of Xxxxxxxxx Inc. to
CIBC.
Xxxxxxxxx Inc. subsequently transferred, subject to the Hypothecation,
beneficial ownership of 7,539,028 of the Outstanding Pledged Shares to 3184081
Canada Limited (now 503264 N.B. Inc.), a wholly-owned subsidiary of Xxxxxxxxx
Inc. ("N.B. Inc."), registered and beneficial ownership of 15,950,00 of the
Outstanding Pledged Shares and beneficial ownership of all of the Class B
Common Stock to 1159670 Ontario Limited, a wholly-owned subsidiary of Xxxxxxxxx
Inc. ("Ontario Limited"). As used in this agreement, unless the context
otherwise requires, "Xxxxxxxxx Inc." refers to Xxxxxxxxx Inc. and its
wholly-owned subsidiaries, including but not limited to N.B. Inc. and Ontario
Limited.
Pursuant to the terms of a Securities Pledge Agreement dated February 29,
1996 (the "Ontario Limited Securities Pledge Agreement"), Ontario Limited has
pledged the 15,950,000
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Outstanding Pledged Shares held by it (the "Ontario Limited Shares") as
collateral security for its obligations under a $90,000,000 Credit Agreement
dated as of February 29, 1996 (as amended, supplemented, restated or replaced
from time to time, the "Ontario Limited Facility") among Ontario Limited,
Xxxxxxxxx Inc., CIBC as agent for the Lenders, and CIBC, The Toronto-Dominion
Bank and The Bank of Nova Scotia (collectively, the "Lenders"). CIBC as agent
under the Ontario Limited Facility together with (i) CIBC in its own capacity
under the Hypothecation and (ii) CIBC as agent under the Southam Facility (as
defined herein) are hereinafter referred to as the "Pledgees".
Pursuant to the terms of a Securities Pledge Agreement dated as of May 24,
1996, a second Securities Pledge Agreement dated as of July 17, 1996 to reflect
the syndication on July 17, 1996 of the Southam Facility (as defined herein)
equally between CIBC and The Bank of Nova Scotia and a third Securities Pledge
Agreement dated on or about the date hereof to reflect the continuance of
3184081 Canada Limited in New Brunswick (the "N.B. Inc. Securities Pledge
Agreements"), N.B. Inc. has pledged the 7,539,028 Outstanding Pledged Shares
held by it (the "N.B. Inc. Shares") as collateral security for its obligations
to CIBC and The Bank of Nova Scotia under a Guarantee of the Southam Facility
dated as of May 24, 1996, a second Guarantee dated as of July 17, 1996 to
reflect the syndication of the Southam Facility equally between CIBC and The
Bank of Nova Scotia and a third guarantee of the Southam Facility dated on or
about the date hereof to reflect the continuance of 3184081 Canada Limited in
New Brunswick (the "N.B. Inc. Guarantees").
Pursuant to the terms of a Securities Pledge Agreement dated as of May 24,
1996, and a second Securities Pledge Agreement dated as of July 17, 1996 to
reflect the syndication on July 17, 1996 of the Southam Facility equally
between CIBC and The Bank of Nova Scotia (the "Ontario Limited Securities
Pledge Agreements"), Ontario Limited has pledged the Class B Common Stock as
collateral security for its obligations to CIBC and The Bank of Nova Scotia
under a Guarantee of the Southam Facility dated as of May 24, 1996, and a
second Guarantee dated as of July 17, 1996 to reflect the syndication of the
Southam Facility equally between CIBC and The Bank of Nova Scotia (the "Ontario
Limited Guarantees"). For purposes hereof, the "Southam Facility" means the
credit facility established pursuant to a credit commitment agreement titled
"Summary of Terms and Conditions" dated May 24, 1996 between Xxxxxxxxx Inc.,
HII and CIBC, as supplemented by an assignment agreement dated as of July 17,
0000 xxxxx XXX, XXXX and The Bank of Nova Scotia, as replaced by a credit
agreement dated on or about the date hereof between, among others, CIBC as
agent, CIBC, The Bank of Nova Scotia, HII, Xxxxxxxxx, Ontario Limited and N.B.
Inc. and as amended, supplemented, restated, replaced from time to time.
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A registration statement (including a prospectus) on Form S-3 (No.
333-04697) has been filed under the Securities Act of 1933, as amended (the
"Securities Act") with the Securities and Exchange Commission on May 29, 1996
and will shortly be amended by Amendment No. 1 thereto to be filed by the
undersigned on or about November 25, 1996 (the "Registration Statement") that
relates to an aggregate of 48,600,754 shares (the "Pledged Shares") of Class A
Common Stock of HII. HII hereby agrees to use its best efforts to have the
Registration Statement declared effective by the Securities and Exchange
Commission on or before November 30, 1996. The Pledged Shares comprise the
Outstanding Pledged Shares and 14,990,000 Pledged Shares (the "Conversion
Pledged Shares"), the shares of Class A Common Stock into which all of the
outstanding shares of HII's Class B Common Stock, all owned of record by
Xxxxxxxxx Inc. (and beneficially owned by Ontario Limited), would be
automatically converted into, pursuant to the terms of HII's Restated
Certificate of Incorporation, as amended, upon transfer of such shares of Class
B Common Stock to the Pledgees. The Outstanding Pledged Shares were registered
under the Securities Act pursuant to the terms of a Registration Rights
Agreement dated February 29, 1996, as amended on May 24, 1996 (the
"Registration Rights Agreement"). The Conversion Pledged Shares will be
registered under the Securities Act on or before November 30, 1996 pursuant to
the terms of agreements among the Company, Xxxxxxxxx Inc. and CIBC, including,
without limitation, the terms of the CIBC Letter Agreement dated October 13,
1995, as amended on May 24, 1996 (the "CIBC Letter Agreement").
No offers or sales of the Pledged Shares may be made by the Pledgees
pursuant to the Registration Statement, and prospectus included therein, unless
appropriate post-effective amendments or supplements are made to reflect facts
or events arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement and to include any material information with respect to
the plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement. HII
may require each Pledgee to furnish HII such information regarding such Pledgee
and the distribution of the Pledged Shares as HII may from time to time
reasonably request in writing.
This is to confirm our undertaking and agreement that if (i) Xxxxxxxxx
Inc. or HII or Ontario Limited or N.B. Inc. or any other person is in default
on indebtedness now or hereafter outstanding under agreements or arrangements
secured by the Pledged Shares and (ii) the Pledgees have or intend to effect
foreclosure upon the Pledged Shares in accordance with their rights under any
applicable security documents or to exercise
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their power of sale rights under any applicable security documents, upon
written request from any of the Pledgees, the undersigned (HII, Xxxxxxxxx Inc.,
Ontario Limited and N.B. Inc.) shall take all further steps necessary,
including filing the necessary amendments or supplements to the Registration
Statement and the prospectus included therein, to permit the sale of all or any
part of the Pledged Shares pursuant to the prospectus included in the
Registration Statement, as amended.
The Pledgees agree that, upon receipt of any notice from HII of the
happening of any event as a result of which the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, they will forthwith discontinue the
Pledgees' disposition of Pledged Shares pursuant to the Registration Statement
until the Pledgees' receipt of the copies of the amended or supplemented
Registration Statement (or prospectus included therein) contemplated by the
preceding sentence of this letter agreement (which the undersigned shall file
as a contemplated by the preceding sentence of this Agreement).
Xxxxxxxxx and HII will pay all reasonable expenses incurred by the
Pledgees in connection with the sale of the Pledged Shares, including
underwriting discounts or commission and reasonable fees and disbursements of
counsel to the Pledgees.
Yours very truly,
Xxxxxxxxx Inc.
By: /s/ XXXXX X. XXXXXXXX
Name: Xxxxx X. Xxxxxxxx
Title: Vice-President & General Counsel
Xxxxxxxxx International Inc.
By: /s/ X.X. XXXXXXXX
Name: X.X. Xxxxxxxx
Title: Vice President and
Chief Financial Officer
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1159670 Ontario Limited
By: /s/ XXXXX X. XXXXXXXX
Name: Xxxxx X. Xxxxxxxx
Title: Vice-President & General Counsel
503264 N.B. Inc.
By: /S/ X.X. XXXXXXXX
Name: X.X. Xxxxxxxx
Title: President
Acknowledged and agreed to this 15th day of November, 1996.
Canadian Imperial Bank of Commerce
By: /s/ ILLEGIBLE
Name:
Title:
The Toronto-Dominion Bank
By: /S/ X. X. XXXXXXX
Name: X. X. Xxxxxxx
Title: Manager, Communications Finance
The Bank of Nova Scotia
By: /s/ ILLEGIBLE
Name:
Title:
