GOLDEN BOOKS PUBLISHING COMPANY, INC., as issuer
AND
THE GUARANTORS NAMED HEREIN
AND
HSBC BANK USA, as Trustee
-------------------
INDENTURE
Dated as of , 1999
----------
-------------------
$87,000,000
10% Senior Secured Notes Due 2004
CROSS-REFERENCE TABLE
TIA Section Indenture Section
----------- -----------------
310 (a) (1)...............................................................7.10
(a) (2)...................................................................7.10
(a) (3)...................................................................N.A.
(a) (4)...................................................................N.A.
(a) (5)...................................................................7.10
(b)..........................................................7.08; 7.10; 13.02
(c).......................................................................N.A.
311 (a)...................................................................7.11
(b).......................................................................7.11
(c).......................................................................N.A.
312 (a)...................................................................2.05
(b)......................................................................13.03
(c)......................................................................13.03
313 (a)...................................................................7.06
(b) (1)..................................................................12.03
(b) (2)...................................................................7.06
(c)................................................................7.06; 13.02
(d).......................................................................7.06
314 (a)............................................................4.10; 13.02
(b)......................................................................12.02
(c) (1)............................................................7.02; 13.04
(c) (2)............................................................7.02; 13.04
(c) (3)...................................................................N.A.
(d)........................................................12.03, 12.04, 12.05
(e).......................................................................N.A.
(f).......................................................................N.A.
315(a).................................................................7.01(b)
(b)................................................................7.05; 12.02
(c)....................................................................7.01(a)
(d)....................................................................7.01(c)
(e).......................................................................6.11
316(a) (last sentence)....................................................2.09
(a) (1) (A)...............................................................6.05
(a) (1) (B)...............................................................6.04
(a) (2)...................................................................N.A.
(b).......................................................................6.07
317 (a) (1)...............................................................6.08
(a) (2)...................................................................6.09
(b).......................................................................2.04
i
318 (a)..................................................................13.01
(c)......................................................................13.01
-------------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
ii
TABLE OF CONTENTS
Page
ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE.................1
SECTION 1.01. Definitions..........................................1
SECTION 1.02. Incorporation by Reference of TIA...................13
SECTION 1.03. Rules of Construction...............................13
ARTICLE TWO THE SENIOR NOTES..........................................14
SECTION 2.01. Form and Dating.....................................14
SECTION 2.02. Execution and Authentication........................14
SECTION 2.03. Registrar and Paying Agent..........................15
SECTION 2.04. Paying Agent to Hold Assets in Trust................16
SECTION 2.05. Securityholder Lists................................16
SECTION 2.06. Transfer and Exchange...............................16
SECTION 2.07. Replacement Senior Notes............................17
SECTION 2.08. Outstanding Senior Notes............................17
SECTION 2.09. Treasury Senior Notes...............................18
SECTION 2.10. Temporary Senior Notes..............................18
SECTION 2.11. Cancellation........................................18
SECTION 2.12. Defaulted Interest..................................19
SECTION 2.13. CUSIP Number........................................19
ARTICLE THREE REDEMPTION................................................19
SECTION 3.01. Notices to Trustee..................................19
SECTION 3.02. Selection of Senior Notes to Be Redeemed............20
SECTION 3.03. Notice of Redemption................................20
SECTION 3.04. Effect of Notice of Redemption......................21
SECTION 3.05. Deposit of Redemption Price.........................21
SECTION 3.06. Senior Notes Redeemed in Part.......................21
SECTION 3.07. Optional Redemption.................................22
SECTION 3.08. Mandatory Redemption................................22
SECTION 3.09. Mandatory Redemption Upon Asset Sale................22
ARTICLE FOUR COVENANTS.................................................22
SECTION 4.01. Payment of Senior Notes.............................22
SECTION 4.02. Maintenance of Office or Agency.....................23
SECTION 4.03. Limitation on Restricted Payments...................23
SECTION 4.04. Maintenance of Net Worth............................23
SECTION 4.05. Corporate Existence.................................26
SECTION 4.06. Payment of Taxes and Other Claims...................26
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SECTION 4.07. Maintenance of Properties and Insurance.............27
SECTION 4.08. Compliance Certificate; Notice of Default...........27
SECTION 4.09. Compliance with Laws................................28
SECTION 4.10. Commission Reports..................................29
SECTION 4.11. Waiver of Stay, Extension or Usury Laws.............29
SECTION 4.12. Limitation on Transactions with Affiliates..........29
SECTION 4.13. Limitation on Incurrences of Additional Indebtedness30
SECTION 4.14. Limitation on Payment Restrictions Affecting
Subsidiaries.......................................31
SECTION 4.15. Limitation on Liens.................................31
SECTION 4.16. Restrictions on Sale and Ownership of Subsidiaries..31
SECTION 4.17. Limitation on Change of Control.....................32
SECTION 4.18. Limitation on Asset Sales...........................33
SECTION 4.19. Guarantees of Certain Indebtedness..................34
SECTION 4.20. Limitation on License Agreements and
Distribution Agreements.............................35
SECTION 4.21. Subsidiaries........................................35
SECTION 4.22. After Acquired Collateral...........................35
ARTICLE FIVE SUCCESSOR CORPORATION.....................................36
SECTION 5.01. Limitation on Merger, Etc...........................36
SECTION 5.02. Successor Corporation Substituted...................37
ARTICLE SIX DEFAULT AND REMEDIES......................................38
SECTION 6.01. Events of Default...................................38
SECTION 6.02. Acceleration........................................40
SECTION 6.03. Other Remedies......................................41
SECTION 6.04. Waiver of Past Defaults.............................41
SECTION 6.05. Control by Majority.................................41
SECTION 6.06. Limitation on Suits.................................42
SECTION 6.07. Rights of Holders to Receive Payment................42
SECTION 6.08. Collection Suit by Trustee..........................42
SECTION 6.09. Trustee May File Proofs of Claim....................43
SECTION 6.10. Priorities..........................................43
SECTION 6.11. Undertaking for Costs...............................43
SECTION 6.12. Event of Default from Willful Action................44
SECTION 6.13. Rights and Remedies Cumulative......................44
SECTION 6.14. Delay or Omission Not Waiver........................44
ARTICLE SEVEN TRUSTEE...................................................44
SECTION 7.01. Duties of Trustee...................................45
SECTION 7.02. Rights of Trustee...................................46
SECTION 7.03. Individual Rights of Trustee........................46
SECTION 7.04. Trustee's Disclaimer................................47
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SECTION 7.05. Notice of Default...................................47
SECTION 7.06. Reports by Trustee to Holders.......................47
SECTION 7.07. Compensation and Indemnity..........................47
SECTION 7.08. Replacement of Trustee..............................48
SECTION 7.09. Successor Trustee by Merger, Etc....................49
SECTION 7.10. Eligibility; Disqualification.......................49
SECTION 7.11. Preferential Collection of Claims Against
Publishing..........................................49
ARTICLE EIGHT LEGAL DEFEASANCE AND COVENANT DEFEASANCE..................50
SECTION 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance..........................................50
SECTION 8.02. Legal Defeasance and Discharge......................50
SECTION 8.03. Covenant Defeasance.................................50
SECTION 8.04. Conditions to Legal or Covenant Defeasance..........51
SECTION 8.05. Deposited U.S. Legal Tender and U.S. Government
Obligations to be Held in Trust; Other
Miscellaneous Provisions............................52
SECTION 8.06. Repayment to Publishing.............................53
SECTION 8.07. Reinstatement.......................................53
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVER........................54
SECTION 9.01. Without Consent of Holders..........................54
SECTION 9.02. With Consent of Holders.............................55
SECTION 9.03. Compliance with TIA.................................56
SECTION 9.04. Revocation and Effect of Consents...................57
SECTION 9.05. Notation on or Exchange of Senior Notes.............57
SECTION 9.06. Trustee to Sign Amendments, Etc.....................58
ARTICLE TEN MEETINGS OF SECURITYHOLDERS...............................58
SECTION 10.01. Purposes for Which Meetings May Be Called...........58
SECTION 10.02. Manner of Calling Meetings..........................58
SECTION 10.03. Call of Meetings by Publishing or Holders...........59
SECTION 10.04. Who May Attend and Vote at Meetings.................59
SECTION 10.05. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment.................59
SECTION 10.06. Voting at the Meeting and Record to Be Kept.........60
SECTION 10.07. Exercise of Rights of Trustee or Securityholders
May Not Be Hindered or Delayed by Call of Meeting...61
ARTICLE ELEVEN GUARANTEE OF SENIOR NOTES.................................61
SECTION 11.01. Unconditional Guarantee.............................61
SECTION 11.02. Seniority of Guarantee..............................62
SECTION 11.03. Severability........................................62
SECTION 11.04. Release of a Guarantor..............................63
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SECTION 11.05. Limitation of Guarantor's Liability.................63
SECTION 11.06. Guarantors May Consolidate, etc., on Certain Terms..63
SECTION 11.07. Contribution........................................64
SECTION 11.08. Waiver of Subrogation...............................64
SECTION 11.09. Execution of Guarantee..............................65
SECTION 11.10. Guarantee Unconditional, Etc........................65
SECTION 11.11. Additional Guarantors...............................66
SECTION 11.12. Waiver of Stay, Extension or Usury Laws.............66
ARTICLE TWELVE COLLATERAL AND SECURITY...................................67
SECTION 12.01. Collateral Agreements...............................67
SECTION 12.02. Recording and Opinions..............................67
SECTION 12.03. Release of Collateral...............................68
SECTION 12.04. Certificates of Publishing..........................69
SECTION 12.05. Certificates of the Trustee.........................69
SECTION 12.06. Authorization of Actions to be Taken by the Trustee
Under the Collateral Agreement......................69
SECTION 12.07. Authorization of Receipt of Funds by the Trustee
Under the Collateral Agreement......................70
SECTION 12.08. Termination of Security Interest....................70
ARTICLE THIRTEEN MISCELLANEOUS.......................................70
SECTION 13.01. TIA Controls........................................70
SECTION 13.02. Notices.............................................70
SECTION 13.03. Communications by Holders with Other Holders........71
SECTION 13.04. Certificate and Opinion as to Conditions Precedent..72
SECTION 13.05. Statements Required in Certificate or Opinion.......72
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar...........72
SECTION 13.07. Legal Holidays......................................73
SECTION 13.08. Governing Law.......................................73
SECTION 13.09. No Adverse Interpretation of Other Agreements.......73
SECTION 13.10. No Recourse Against Others..........................73
SECTION 13.11. Successors..........................................73
SECTION 13.12. Duplicate Originals.................................73
SECTION 13.13. Severability........................................74
SECTION 13.14. Table of Contents, Headings, Etc....................74
SIGNATURES..................................................................75
Exhibit A - Form of Note...................................................A-1
Note: This Table of Contents shall not, for any purpose, be deemed to be
part of the Indenture.
vi
INDENTURE dated as of _________________, 1999 among GOLDEN BOOKS
PUBLISHING COMPANY, INC., a Delaware corporation ("Publishing"), the GUARANTORS
(as defined below), and HSBC BANK USA, as Trustee (the "Trustee").
Publishing has duly authorized the creation of an issue of 10%
Senior Secured Notes due __________, 2004 (the "Senior Notes"), and, to provide
therefor, Publishing has duly authorized the execution and delivery of this
Indenture. The Senior Notes will be secured by a lien and security interest in
the Collateral (as defined) maintained with the Collateral Agent (as defined)
pursuant to the terms of the Collateral Agreements (as defined). The Senior
Notes will be jointly and severally guaranteed, on an unconditional senior
secured basis, by the Guarantors (as defined). All things necessary to make the
Senior Notes, when duly issued and executed by Publishing, and authenticated and
delivered hereunder, the valid obligations of Publishing and the Guarantors and
to make this Indenture a valid and binding agreement of Publishing and the
Guarantors, have been done.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of Publishing's 10%
Senior Secured Notes due 2004 and any additional Senior Notes issued pursuant to
this Indenture:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"ADJUSTED NET ASSETS" of a Person at any date shall mean the lesser
of the amount by which (i) the fair value of the property of such Person exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and calculated in accordance with the
definition of Indebtedness), but excluding liabilities under the Guarantee, of
such Person at such date and (ii) the present fair salable value of the assets
of such Person at such date exceeds the amount that will be required to pay the
probable liability of such Person on its debts (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date and after
giving effect to any collection from any Subsidiary of such Person in respect of
the obligations of such Subsidiary under the Guarantee), excluding debt in
respect of the Guarantee, as they become absolute and matured.
"AFFILIATE" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the
terms "affiliated," "controlling" and "controlled" have meanings correlative to
the foregoing. For purposes of Section 4.12 hereof, the term "Affiliate" shall
include any Person who, as a result of any transaction described therein, would
become an Affiliate.
"AFFILIATE TRANSACTION" shall have the meaning provided in Section
4.12.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"ASSET SALE" means, for any Person, any direct or indirect sale,
transfer, issuance, conveyance, lease (other than operating leases entered into
in the ordinary course of business), assignment, or other disposition or series
of sales, transfers or other dispositions (including, without limitation, by
merger or consolidation, pursuant to any sale and leaseback transaction or by
exchange of assets and whether by operation of law or otherwise) made by such
Person or any of its Subsidiaries to any Person of any assets of such Person or
any of its Subsidiaries including, without limitation, assets consisting of any
Capital Stock, Partnership Interest or other securities held by such Person or
any of its Subsidiaries, and any Capital Stock or Partnership Interest issued by
any Subsidiary of such Person (but not including any Capital Stock or
Partnership Interest issued by such Person). Notwithstanding the foregoing,
"Asset Sale" shall not include (i) sales of products and services in the
ordinary course of business or (ii) with respect to Parent or any of its
Subsidiaries, sales or other dispositions of capital assets which are obsolete
or otherwise no longer necessary for the business of any such Person, but only
to the extent that the aggregate proceeds received from the sale or other
disposition of any such assets do not exceed $250,000 in any Yearly Period.
"ASSET SALE CLOSING DATE" shall have the meaning provided in Section
4.18.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.
"BOARD RESOLUTION" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"BUSINESS DAY" means a day that is not a Saturday, Sunday or a day
on which banking institutions in New York City are not required to be open.
2
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
corporate stock, including each class of common stock and preferred stock of
such Person, including Preferred Stock.
"CAPITALIZED LEASE OBLIGATION" means obligations under a lease that
is required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligations shall
be the capitalized amount of such obligations determined in accordance with
GAAP.
"CASH EQUIVALENTS" means (i) obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof, or obligations
issued by any agency or instrumentality thereof and backed by the full faith and
credit of the United States of America, (ii) commercial paper rated the highest
grade by Xxxxx'x Investors Service, Inc. and Standard & Poor's Ratings Service
and maturing not more than one year from the date of creation thereof, (iii)
time deposits with, and certificates of deposit and banker's acceptances issued
by, any bank having capital surplus and undivided profits aggregating at least
$500 million and maturing not more than one year from the date of creation
thereof, (iv) repurchase agreements that are secured by a perfected security
interest in an obligation described in clause (i) and are with any bank
described in clause (iii) and (v) readily marketable direct obligations issued
by any state of the United States of America or any political subdivision
thereof having one of the two highest rating categories obtainable from either
Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings Service.
"CHANGE OF CONTROL" means one of (i) the acquisition after the Issue
Date, in one or more transactions, of beneficial ownership (within the meaning
of Rule 13d-3 under the Exchange Act) by any Person or entity or any group of
Persons or entities who constitute a group (within the meaning of Section
13(d)(3) of the Exchange Act) of any securities of Publishing or Parent such
that, as a result of such acquisition, such Person, entity or group either (a)
beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, more than 50% of Publishing's or Parent's then
outstanding voting securities entitled to vote on a regular basis for a majority
of the Board of Directors of Publishing or Parent (or in the event of a merger
or consolidation of Publishing or Parent with or into any Person, more than 50%
of the surviving entity's then outstanding voting securities entitled to vote on
a regular basis for a majority of the Board of Directors of such surviving
entity) or (b) otherwise has the ability to elect, directly or indirectly, a
majority of the members of Publishing's or Parent's Board of Directors; or (ii)
a change in the composition of the Board of Directors of Publishing or Parent
such that a majority of the members of the Board of Directors of Publishing or
Parent are not Continuing Directors; or (iii) an Asset Sale of all or
substantially all of the assets of Parent, Publishing and their Subsidiaries
(taken as a whole) to any Person that is not either Publishing or Parent.
"CHANGE OF CONTROL OFFER" shall have the meaning provided in Section
4.17.
3
"CHANGE OF CONTROL PAYMENT" shall have the meaning provided in
Section 4.17.
"CHANGE OF CONTROL PAYMENT DATE" shall have the meaning provided in
Section 4.17.
"COLLATERAL" shall mean the First Lien Collateral and Second Lien
Collateral.
"COLLATERAL AGREEMENTS" means, collectively, the Security Agreement,
the Copyright Assignment, the Trademark Assignment, the Mortgage and any other
document or instrument executed or delivered in connection with any of the
foregoing, in each case, as the same may be in force from time to time.
"COLLATERAL AGENT" shall have the meaning set forth in the Security
Agreement.
"COMMISSION" means the Securities and Exchange Commission.
A "CONTINUING DIRECTOR" means, as of any date of determination, any
member of the Board of Directors (not including, for purposes of this
definition, any committee of the full Board of Directors) of Publishing or
Parent who (i) was a member of such Board of Directors on the Issue Date or (ii)
was nominated for election or elected to such Board of Directors with the
affirmative vote of a majority of the Continuing Directors who were members of
such Board at the time of such nomination or election or, in the case of
Publishing's Board of Directors (so long as Publishing is a Wholly-Owned
Subsidiary of Parent), with the approval of a majority of the Continuing
Directors of Parent.
"COPYRIGHT ASSIGNMENT" means the Copyright Security Interest
Agreement, dated as of the Issue Date, by Publishing and the Guarantors in favor
of the Collateral Agent, in the form of Exhibit [___],as amended and
supplemented from time to time in accordance with its terms.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"DEFICIENCY DATE" shall have the meaning provided in Section 4.04.
"DEFICIENCY OFFER" shall have the meaning provided in Section 4.04.
4
"DEFICIENCY REPURCHASE AMOUNT" shall have the meaning provided in
Section 4.04.
"DEFICIENCY REPURCHASE DATE" shall have the meaning provided in
Section 4.04.
"DISQUALIFIED CAPITAL STOCK" means, with respect to any Person, any
Capital Stock of such Person or its Subsidiaries that, by its terms, by the
terms of any agreement related thereto or by the terms of any security into
which it is convertible, puttable or exchangeable, is, or upon the happening of
an event or the passage of time would be, required to be redeemed or repurchased
by such Person or its Subsidiaries, including at the option of the holder, in
whole or in part, or has, or upon the happening of an event or passage of time
would have, a redemption or similar payment due, in each instance on or prior to
the Maturity Date.
"EVENT OF DEFAULT" shall have the meaning provided in Section 6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission thereunder.
"FIRST LIEN COLLATERAL" shall mean all right, title and interest of
Publishing, Parent or any of their respective Subsidiaries in First Lien
Collateral (as defined in the Security Agreement).
"FOREIGN EXCHANGE AGREEMENT" means any foreign exchange contract,
currency swap agreement or other similar agreement designed to protect against
fluctuations in currency values.
"GAAP" means generally accepted accounting principles as in effect
in the United States of America as of the date of this Indenture.
"GUARANTEE" means the Guarantee set forth in Article 11 and any
additional guarantee of Senior Notes.
"GUARANTOR" means Parent, Golden Books Home Video, Inc., LRM
Acquisition Corp., and Golden Books Publishing (Canada) Inc., Chunky Monkey
Music, LLC, Xxxxxxxx Xxxx Music, LLC, XxXxxxxxx Music, LLC, XxXxxxxxx-Xxxxx
Publishing, LLC, XxXxxxxxx-Xxxxx, Inc., XxXxxxxxx-Xxxxx Music, LLC, SLE
Productions, Inc., Summerdawn Music, LLC, Xxxxx Xxxxx Enterprises, Inc. and any
other Subsidiary of Parent that may be organized from time to time, and their
successors.
"HOLDER" or "SECURITYHOLDER" means the Person in whose name a Senior
Note is registered on the Registrar's books.
5
"INDEBTEDNESS" means with respect to any Person, without
duplication: (i) all liabilities, contingent or otherwise, of such Person (a)
for borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such Person or only to a portion thereof), (b) evidenced by bonds,
notes, debentures, drafts accepted or similar instruments or letters of credit
or representing the balance deferred and unpaid of the purchase price of any
property (other than any such balance that represents an account payable or any
other monetary obligation to a trade creditor created, incurred, assumed or
guaranteed by such Person in the ordinary course of business of such Person in
connection with obtaining goods, materials or services, which account is not
overdue by more than 90 days, according to the original terms of sale), or (c)
for the payment of money relating to a Capitalized Lease Obligation; (ii)
reimbursement obligations of such Person with respect to letters of credit;
(iii) obligations of such Person with respect to Interest Swap Obligations and
Foreign Exchange Agreements; (iv) all liabilities of others of the kind
described in the preceding clause (i), (ii) or (iii) that such Person has
guaranteed, that have been incurred by a partnership in which it is a general
partner (to the extent such Person is liable, contingently or otherwise,
therefor) or that is otherwise its legal liability (other than endorsements for
collection in the ordinary course of business); and (v) all obligations of
others secured by a Lien to which any of the properties or assets (including,
without limitation, leasehold interests and any other tangible or intangible
property rights) of such Person are subject, whether or not the obligations
secured thereby shall have been assumed by such Person or shall otherwise be
such Person's legal liability (provided that if the obligations so secured have
not been assumed by such Person or are not otherwise such Person's legal
liability, such obligations shall be deemed to be in an amount equal to the
lesser of the fair market value of such properties or assets or the amount
necessary to discharge such Lien, as determined in good faith by the Board of
Directors of such Person, which determination shall be evidenced by a Board
Resolution). The amount of Indebtedness of any Person at any date shall be the
outstanding principal amount of all unconditional obligations described above,
as such amount would be reflected on a balance sheet prepared in accordance with
GAAP, and the maximum liability at such date of such Person for any contingent
obligations described above.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"INDEPENDENT FINANCIAL ADVISOR" means Xxxxxxxx Xxxxx Xxxxxx and
Xxxxx or any successor thereto; provided, however, that if Xxxxxxxx Xxxxx Xxxxxx
and Xxxxx or any successor thereto shall not be reasonably available to perform
the function called for by such definition, Independent Financial Advisor shall
mean an investment banking, accounting or appraisal firm of national standing
(i) which does not, and whose directors, officers and employees or Affiliates do
not, have a direct or indirect ownership interest or material direct or indirect
financial interest in the Parent or any of its Subsidiaries or Affiliates,
provided that ownership of three percent (3%) or less of the issued and
outstanding shares of capital stock of the Parent shall not constitute having a
direct or indirect financial interest in the Parent or any of its Subsidiaries
or Affiliates, and (ii) which, in the judgment of the disinterested members of
the
6
Board of Directors of the Parent, is independent and qualified to perform the
task for which it is to be engaged.
"INTEREST PAYMENT DATE" means the stated maturity of an installment
of interest on the Senior Notes.
"INTEREST SWAP OBLIGATION" means any obligation of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a fixed or floating rate of interest on a
stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or floating rate of interest on the same notional
amount; provided that the term "Interest Swap Obligation" shall also include
interest rate exchange, collar, cap, swap option or similar agreements providing
interest rate protection.
"INVESTMENT" by any Person means any investment or acquisition by
such Person, in any transaction or series of related transactions, whether by a
purchase of assets, share purchase, capital contribution, loan, advance (other
than reasonable loans and advances to employees for moving and travel expenses,
as salary advances, incurred, in each case, in the ordinary course of business
consistent with past practice) or similar credit extension constituting
Indebtedness of another Person, and any guarantee of Indebtedness of any other
Person (other than a guarantee under the New Credit Facility or this Indenture).
"ISSUE DATE" means the date of first issuance of the Senior Notes
under this Indenture.
"LENDER" means the lender under the New Credit Facility.
"LIEN" means any mortgage, pledge, lien, encumbrance, charge or
adverse claim affecting title or resulting in an encumbrance against real or
personal property, or a security interest of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof, any
option or other agreement to sell which is intended to constitute or create a
security interest, mortgage, pledge or lien (other than bona fide options and
agreements for the sale of assets), and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).
"MATURITY DATE" means , 2004.
---------------------
"MINIMUM NET WORTH" means $
----------------.
"MORTGAGE" means the Real Estate Mortgage, Assignment of Rents and
Security Agreement, dated as of the Issue Date between Publishing and Trustee,
creating Liens on and related to the Premises (as defined in the Mortgage),
including the Mortgaged Property (as defined in the Mortgage) secured by and
described in the Real Estate Mortgage, Assignment
7
and Rents and Security Agreement, and any other similar document or instrument
executed in connection therewith.
"NET CASH PROCEEDS" means Net Proceeds in the form of cash or Cash
Equivalents.
"NET PROCEEDS" means with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents
received by Publishing, Parent or any of their respective Subsidiaries from such
Asset Sale.
"NET PROCEEDS REDEMPTION" shall have the meaning provided in Section
4.18.
"NET WORTH" as of any date means, with respect to any Person, the
lesser of (i) the amount of the equity of the holders of Capital Stock of such
Person that would appear on the balance sheet of such Person as of such date,
determined in accordance with GAAP, adjusted to exclude (to the extent included
in such equity) the amount of equity attributable to any Disqualified Capital
Stock or (ii) the Adjusted Net Assets of such Person.
"NEW CREDIT FACILITY" means the New Credit Facility, dated as of the
Issue Date by and among Publishing, [certain of its Subsidiaries] and Lender,
together with the notes, security agreements, guarantees and other documents
related thereto, as the same may be amended, extended, renewed, restated,
supplemented or otherwise modified from time to time, pursuant to which Lender
may loan up to $45 million to [Publishing], [which amount may be increased to
$60 million in accordance with Section 4.13(b)(ii) during such periods in which
the New Credit Facility Increase Test is met], and any agreement governing
Indebtedness incurred to refund or refinance the entirety of the borrowings and
commitments then outstanding or permitted to be outstanding under such New
Credit Facility or such agreement. Publishing shall promptly notify the Trustee
of any such refunding or refinancing of the New Credit Facility.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the President, any Vice President, the Chief Financial Officer, the
Controller, or the Secretary of such Person.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Officers or by an officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 13.04 and 13.05.
8
"OPINION OF COUNSEL" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee complying with the requirements of
Sections 13.04 and 13.05. Unless otherwise required by the Trustee, the legal
counsel may be an employee of or counsel to Parent or the Trustee.
"PARENT" shall mean Golden Books Family Entertainment, Inc.
"PARTNERSHIP INTEREST" means any general or limited partnership
interest and any interest as a member of a limited liability company.
"PAYING AGENT" means the office or agency maintained by Publishing
where Senior Notes may be presented or surrendered for payment, except that, for
the purposes of Articles Three and Eight of this Indenture relating to
redemption of the Senior Notes and satisfaction and discharge of this Indenture,
respectively, and Sections 4.04, 4.17 and 4.18 hereof, the Paying Agent shall
not be Publishing or any Subsidiary.
"PAYMENT RESTRICTION" means, with respect to a Subsidiary of any
Person, any encumbrance, restriction or limitation, whether by operation of the
terms of its charter or by reason of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation, on the ability of (i)
such Subsidiary to (a) pay dividends or make other distributions on its Capital
Stock or make payments on any obligation, liability or Indebtedness owed to such
Person or any other Subsidiary of such Person, (b) make loans or advances to
such Person or any other Subsidiary of such Person, or (c) transfer any of its
properties or assets to such Person or any other Subsidiary of such Person, or
(ii) such Person or any other Subsidiary of such Person to receive or retain any
such (a) dividends, distributions or payments, (b) loans or advances, or (c)
transfer of properties or assets.
"PERMITTED BUSINESS INVESTMENT" means any capital expenditure or
Investment in each case directly related to the business of Parent or any of its
Subsidiaries as it is conducted as of the Issue Date (as any such business may
be extended or expanded in the ordinary course of business (including pursuant
to prior Permitted Business Investments) following the Issue Date to similar or
related businesses); provided, however, that any Investment in the capital stock
of another Person shall only be a Permitted Business Investment hereunder if
such Person is, or as a result of such Investment becomes, a Wholly-Owned
Subsidiary and a Guarantor and provided further that the aggregate of all
Permitted Business Investments in any Yearly Period shall not exceed $[5]
million.
"PERMITTED INVESTMENT" by any Person means (i) any Permitted
Business Investment, (ii) cash and Cash Equivalents, (iii) Investments existing
on the Issue Date, and (iv) Investments by Parent or any Wholly-Owned Subsidiary
of Parent in Parent or Publishing (other than any such Investments which would
constitute Stock Payments or Restricted Debt Prepayments).
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"PERMITTED LIENS" shall mean (i) Liens for taxes, assessments, and
governmental charges to the extent not required to be paid under this Indenture;
(ii) statutory Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen, or other like Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate process of law, and for which a reserve
or other appropriate provision, if any, as shall be required by GAAP shall have
been made; (iii) pledges or deposits in the ordinary course of business to
secure lease obligations or nondelinquent obligations under workers'
compensation, unemployment insurance or similar legislation; (iv) Liens to
secure the performance of public statutory obligations that are not delinquent,
appeal bonds, performance bonds or other obligations of a like nature (other
than for borrowed money); (v) Liens arising under government contracts in the
ordinary course of business that do not secure any Indebtedness; (vi) easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect with the
business of Parent or any Subsidiary of Parent incurred or arising in the
ordinary course of business; (vii) rights of banks to set off deposits against
debts owed to said banks; (viii) any interest or title of a lessor in the
property subject to any lease, other than any such interest or title resulting
from or arising out of a default by Parent or any Subsidiary of Parent of its
obligations under such lease; (ix) any other Liens imposed by operation of law
which do not materially affect Parent's or any of its Subsidiaries' ability to
perform its obligations under this Indenture; (x) any Liens arising under this
Indenture, (xi) with respect to First Lien Collateral, Liens arising under the
New Credit Facility which are junior in all respects to all Liens arising under
this Indenture, at least to the extent provided on Exhibit [___] hereto, and
(xii) with respect to Second Lien Collateral, Liens arising under the New Credit
Facility.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"PLAN OF LIQUIDATION" means, with respect to any Person, a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise) (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such Person to holders of
Capital Stock of such Person.
"PREFERRED STOCK" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred or preference stock, whether outstanding on the date
hereof or issued after the date of this Indenture, and including, without
limitation, all classes and series of preferred or preference stock of such
Person.
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"PUBLISHING" means Golden Books Publishing Company, Inc. until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"QUALIFIED CAPITAL STOCK" means, with respect to any Person, any
Capital Stock of such Person that is not Disqualified Capital Stock.
"RECORD DATE" means the Record Dates specified in the Senior Notes;
provided that if any such date is not a Business Day, the Record Date shall be
the first day immediately preceding such specified day that is a Business Day.
"REDEMPTION DATE," when used with respect to any Senior Note to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Senior Notes.
"REDEMPTION PRICE," when used with respect to any Senior Note to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Senior Notes.
"REGISTRAR" shall have the meaning provided in Section 2.03.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of the Issue Date, between Publishing and certain Holders, in
the form of Exhibit [___].
"RESTRICTED DEBT PREPAYMENT" means any purchase, redemption,
defeasance (including, but not limited to, in substance or legal defeasance) or
other acquisition or retirement for value, directly or indirectly, by Parent or
any of its Subsidiaries, prior to the scheduled maturity or prior to any
scheduled repayment of principal or sinking fund payment, as the case may be, in
respect of Indebtedness of Parent or any of its Subsidiaries that is subordinate
in right of payment to the Senior Notes.
"RESTRICTED PAYMENT" means any (i) Stock Payment, (ii) Investment
(other than a Permitted Investment) or (iii) Restricted Debt Prepayment.
"SECOND LIEN COLLATERAL" shall have the meaning provided in the
Security Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"SECURITY AGREEMENT" means that certain Security Agreement, dated as
of the date of this Indenture and substantially in the form attached as Exhibit
B hereto, as such agreement may be amended, modified or supplemented from time
to time.
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"SENIOR NOTES" means Publishing's 10% Senior Secured Notes due ____,
2004, as amended or supplemented from time to time in accordance with the terms
hereof, that are issued pursuant to this Indenture.
"STOCK PAYMENT" means, with respect to any Person, (i) the
declaration or payment by such Person, directly or indirectly, either in cash or
in property, of any dividend on (except, in the case of Parent, dividends
payable solely in Qualified Capital Stock of Parent), or the making by such
Person or any of its Subsidiaries of any other distribution in respect of, such
Person's Capital Stock or any warrants, rights or options to purchase or acquire
shares of any class of such Capital Stock, or (ii) the redemption, repurchase,
retirement or other acquisition for value by such Person or any of its
Subsidiaries, directly or indirectly, of such Person's or any of its
Subsidiaries' Capital Stock or any warrants, rights or options to purchase or
acquire shares of any class of such Capital Stock other than, in the case of
Parent, through the issuance in exchange therefor solely of Qualified Capital
Stock of Parent; provided, however, that in the case of a Subsidiary of Parent,
the term "Stock Payment" shall not include any such payment with respect to its
Capital Stock or warrants, rights or options to purchase or acquire shares of
any class of its Capital Stock if such payment is made to Parent or a
Wholly-Owned Subsidiary of Parent that is a Guarantor as of the Issue Date.
"SUBSIDIARY" means, with respect to any Person, (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is, at the date of determination, directly or indirectly,
owned by such Person, by one or more subsidiaries of such Person or by such
Person and one or more subsidiaries of such Person or (ii) a partnership in
which such Person or a subsidiary of such Person is, at the date of
determination, a general partner of such partnership, or if such Person or its
subsidiary is entitled to receive more than 50% of the assets of such
partnership upon its dissolution, or (iii) any limited liability company or any
other Person (other than a corporation or a partnership) in which such Person, a
subsidiary of such Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination, has (a) at least a
majority ownership interest or (b) the power to elect or direct the election of
a majority of the directors or other governing body of such Person.
"SURVIVING PERSON" shall have the meaning provided in Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture.
"TRADEMARK ASSIGNMENT" means the Trademark Security Interest
Agreement, dated as of the Issue Date, by Publishing in favor of the Collateral
Agent, in the form of Exhibit [___], as amended and supplemented from time to
time in accordance with its terms.
"TRUST OFFICER" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
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"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations
of, or non-callable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"U.S. LEGAL TENDER" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"WHOLLY-OWNED SUBSIDIARY" means a subsidiary of a specified Person
all of the shares of Capital Stock, or, if applicable, all of the Partnership
Interests, of which (other than directors' qualifying shares) are at the time
directly or indirectly owned by the specified Person or owned by a Wholly-Owned
Subsidiary of the specified Person.
"YEARLY PERIOD" means each fiscal year (consisting of not less than
four fiscal quarters) of Parent and Publishing; provided that the first Yearly
Period shall begin on the Issue Date and shall end on December 31, 1999.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Senior Notes.
"obligor" on the indenture securities means Publishing, any
Guarantor, or any other obligor on the Senior Notes or the Guarantee.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
and not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(7) "including" is not intended to be a limiting term.
ARTICLE TWO
THE SENIOR NOTES
SECTION 2.01. Form and Dating.
The Senior Notes, the notations thereon relating to the Guarantee
and the Trustee's certificate of authentication shall be substantially in the
form of Exhibit A. The Senior Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage. Publishing and the Trustee shall
approve the form of the Senior Notes and any notation, legend or endorsement on
them. Each Senior Note shall be dated the date of its authentication.
The terms and provisions contained in the Senior Notes and the
Guarantee shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, Publishing, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall sign,
or one Officer shall sign and one Officer or an Assistant Secretary (each of
whom shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Senior Notes for Publishing by manual or facsimile
signature. Each Guarantor shall execute the Guarantee in the manner set forth in
Section 11.09.
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If an Officer whose signature is on a Senior Note was an Officer at
the time of such execution but no longer holds that office at the time the
Trustee authenticates the Senior Note, the Senior Note shall be valid
nevertheless.
A Senior Note shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Senior Note.
The signature shall be conclusive evidence that the Senior Note has been
authenticated under this Indenture.
The Trustee shall authenticate Senior Notes for original issue in
the aggregate principal amount of up to $87,000,000 upon a written order of
Publishing in the form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of Senior Notes to be authenticated and the date on
which the Senior Notes are to be authenticated. The aggregate principal amount
of Senior Notes outstanding at any time may not exceed $87,000,000, except as
provided in Section 2.07 and except as provided in Section 4.01 with respect to
payment of interest by the issuance of additional Senior Notes. Upon the written
order of Publishing in the form of an Officers' Certificate, the Trustee shall
authenticate Senior Notes in substitution of Senior Notes originally issued to
reflect any name change of Publishing.
The Trustee may appoint an authenticating agent reasonably
acceptable to Publishing to authenticate Senior Notes. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Senior Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Publishing and
Affiliates of Publishing.
The Senior Notes shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
Publishing shall maintain an office or agency in New York, New York
where (a) Senior Notes may be presented or surrendered for registration of
transfer or for exchange ("Registrar"), (b) Senior Notes may be presented or
surrendered for payment ("Paying Agent") and (c) notices and demands to or upon
Publishing in respect of the Senior Notes and this Indenture may be served.
Publishing may also from time to time designate one or more other offices or
agencies where the Senior Notes may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve
Publishing of its obligation to maintain an office or agency in New York, New
York for such purposes. Publishing may act as its own Registrar or Paying Agent
except that for the purposes of Articles Three and Eight and Sections 4.04, 4.17
and 4.18, neither Parent nor any of its Subsidiaries or Affiliates shall act as
Paying Agent. The Registrar shall keep a register of the Senior Notes and of
their transfer and exchange. Publishing, upon notice to the Trustee, may have
one or more co-Registrars and one or more
15
additional paying agents reasonably acceptable to the Trustee. The term "Paying
Agent" includes any additional paying agent. Publishing initially appoints the
Trustee as Registrar and Paying Agent until such time as the Trustee has
resigned or a successor has been appointed.
Publishing shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. Publishing shall notify the Trustee, in advance, of the name and
address of any such Agent. If Publishing fails to maintain a Registrar or Paying
Agent, the Trustee shall act as such.
SECTION 2.04. Paying Agent to Hold Assets in Trust.
Publishing shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Senior Notes (whether such assets have been
distributed to it by Publishing or any other obligor on the Senior Notes), and
shall notify the Trustee of any Default by Publishing (or any other obligor on
the Senior Notes) in making any such payment. If Parent or its Subsidiary or
Affiliate acts as Paying Agent, it shall segregate such assets and hold them as
a separate trust fund. Publishing at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default, upon written request to a Paying Agent, require such Paying Agent to
distribute all assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that shall have been
delivered by Publishing (or other obligor or guarantor on the Senior Notes) to
the Paying Agent, the Paying Agent shall have no further liability for such
assets.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, Publishing shall furnish to the
Trustee on or before each Interest Payment Date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, which list
may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
When Senior Notes are presented to the Registrar or a co-Registrar
with a request to register the transfer of such Senior Notes or to exchange such
Senior Notes for an equal principal amount of Senior Notes of other authorized
denominations, the Registrar or coRegistrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
provided, however, that the Senior Notes surrendered for transfer or
16
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to Publishing and the Registrar or co-Registrar,
duly executed by the Holder thereof or his attorney duly authorized in writing.
To permit registrations of transfers and exchanges, Publishing shall execute and
the Trustee shall authenticate Senior Notes at the Registrar's or coRegistrar's
request. No service charge shall be made for any registration of transfer or
exchange, but Publishing may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Sections 2.02, 2.07, 2.10, 3.03, 3.06, 4.04,
4.17, 4.18 or 9.05). The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of any Senior Note (i) during a period
beginning at the opening of business 15 days before the day of any selection of
Senior Notes for redemption under Section 3.02 and ending at the close of
business on such day of selection and (ii) selected for redemption in whole or
in part pursuant to Article Three, except the unredeemed portion of any Senior
Note being redeemed in part.
SECTION 2.07. Replacement Senior Notes.
If a mutilated Senior Note is surrendered to the Trustee or if the
Holder of a Senior Note claims that the Senior Note has been lost, destroyed or
wrongfully taken, Publishing shall issue and the Trustee shall authenticate a
replacement Senior Note if the Trustee's requirements are met. If required by
the Trustee or Publishing, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both Publishing and the Trustee, to
protect Publishing, the Trustee or any Agent from any loss which any of them may
suffer if a Senior Note is replaced. Publishing may charge such Holder for its
reasonable, out-of-pocket expenses in replacing a Senior Note, including
reasonable fees and expenses of counsel.
Every replacement Senior Note is an additional obligation of
Publishing and is guaranteed by each Guarantor in the same manner as other
Senior Notes duly issued hereunder.
SECTION 2.08. Outstanding Senior Notes.
Senior Notes outstanding at any time are all the Senior Notes that
have been authenticated by the Trustee except those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Senior Note does not cease to be outstanding because Publishing,
the Guarantors or any of their respective Affiliates holds the Senior Note.
If a Senior Note is replaced pursuant to Section 2.07 (other than a
mutilated Senior Note surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Senior
Note is held by a bona fide purchaser. A mutilated Senior Note ceases to be
outstanding upon surrender of such Senior Note and replacement thereof pursuant
to Section 2.07.
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If on a Redemption Date or the Maturity Date the Paying Agent (other
than Parent or its Subsidiary or Affiliate) holds U.S. Legal Tender or U.S.
Government Obligations sufficient to pay all of the principal and interest due
on the Senior Notes payable on that date, then on and after that date such
Senior Notes (to the extent of the principal amount redeemed, in the case of a
partial redemption) cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.09. Treasury Senior Notes.
In determining whether the Holders of the required principal amount
of Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by Publishing, the Guarantors or any of their respective Affiliates shall
be disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Senior Notes that the Trustee knows or has reason to know are so owned shall be
disregarded.
Publishing shall notify the Trustee, in writing (which notice shall
constitute actual notice for purposes of the foregoing sentence), when it, the
Guarantors or any of their respective Affiliates repurchases or otherwise
acquires Senior Notes, of the aggregate principal amount of such Senior Notes so
repurchased or otherwise acquired and such other information as the Trustee may
reasonably request and the Trustee shall be entitled to rely thereon.
SECTION 2.10. Temporary Senior Notes.
Until definitive Senior Notes are ready for delivery, Publishing may
prepare and the Trustee shall authenticate temporary Senior Notes. Temporary
Senior Notes shall be substantially in the form of definitive Senior Notes but
may have variations that Publishing considers appropriate for temporary Senior
Notes. Without unreasonable delay, Publishing shall prepare and the Trustee
shall authenticate definitive Senior Notes in exchange for temporary Senior
Notes, without charge to the Holder. Until so exchanged, the temporary Senior
Notes shall be entitled to the same benefits under this Indenture as definitive
Senior Notes.
SECTION 2.11. Cancellation.
Publishing at any time may deliver Senior Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Senior Notes surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than Parent or its Subsidiary or Affiliate), and no one else, shall
cancel and, at the written direction of Publishing, shall dispose of all Senior
Notes surrendered for transfer, exchange, payment or cancellation. Subject to
Section 2.07, Publishing may not issue new Senior Notes to replace Senior Notes
that it has paid or delivered to the Trustee for cancellation. If Parent or any
of its Subsidiaries shall acquire any of the Senior Notes, such acquisition
shall not operate as a redemption or satisfaction of the Indebtedness
18
represented by such Senior Notes unless and until the same are surrendered to
the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
If Publishing defaults in a payment of interest on the Senior Notes,
it shall, unless the Trustee fixes another record date pursuant to Section 6.10,
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest, to the Persons who are Holders on a subsequent special
record date, which date shall be the fifteenth day next preceding the date fixed
by Publishing for the payment of defaulted interest or the next succeeding
Business Day if such date is not a Business Day. At least 15 days before the
subsequent special record date, Publishing shall mail to each Holder, with a
copy to the Trustee, a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest, and interest payable on
such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
Publishing in issuing the Senior Notes shall use a "CUSIP" number
and the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Senior Notes, and that reliance may be placed
only on the other identification numbers printed on the Senior Notes.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If Publishing elects to redeem Senior Notes pursuant to Section 3.07
hereof, it shall notify the Trustee of the Redemption Date and the principal
amount of Senior Notes to be redeemed and whether it wants the Trustee to give
notice of redemption to the Holders at least 30 days (unless shorter notice
shall be satisfactory to the Trustee, as evidenced in a writing signed on behalf
of the Trustee) but not more than 60 days before the Redemption Date. Any such
notice may be canceled at any time prior to notice of such redemption being
mailed to any Holder and shall thereby be void and of no effect.
Publishing shall give each notice provided for in this Section 3.01,
at its expense, at least 30 days before the applicable Redemption Date (unless a
shorter notice period shall be satisfactory to the Trustee, as evidenced in a
writing signed on behalf of the Trustee), together with an Officers' Certificate
and an Opinion of Counsel stating that such redemption shall comply with the
conditions contained herein and in the Senior Notes.
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SECTION 3.02. Selection of Senior Notes to Be Redeemed.
If fewer than all of the Senior Notes are to be redeemed, the
Trustee shall select the Senior Notes to be redeemed by lot or by such other
method as the Trustee shall determine to be fair and appropriate and in such
manner as complies with applicable legal and other requirements, if any.
The Trustee shall make the selection from the Senior Notes
outstanding and not previously called for redemption and shall promptly notify
Publishing in writing of the Senior Notes selected for redemption and, in the
case of any Senior Note selected for partial redemption, the principal amount
thereof to be redeemed. Senior Notes in denominations of $1,000 may be redeemed
only in whole. The Trustee may select for redemption portions (equal to $1,000
or any integral multiple thereof) of the principal of Senior Notes that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Senior Notes called for redemption also apply to portions of Senior Notes called
for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days (unless shorter notice shall be satisfactory to the
Trustee, as evidenced in a writing signed on behalf of the Trustee) but not more
than 60 days before a Redemption Date, Publishing shall mail a notice of
redemption by first class mail to each Holder whose Senior Notes are to be
redeemed at its registered address. At Publishing's request, the Trustee shall
give the notice of redemption in Publishing's name and at Publishing's expense.
Each notice for redemption shall identify the Senior Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Senior Notes called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price and accrued
interest, if any;
(5) that, unless Publishing defaults in making the redemption
payment, interest on Senior Notes called for redemption ceases
to accrue on and after the Redemption Date, and the only
remaining right of the Holders of such Senior Notes is to
receive payment of the Redemption Price upon surrender to the
Paying Agent of the Senior Notes redeemed;
(6) if any Senior Note is being redeemed in part, the portion of
the principal amount of such Senior Note to be redeemed and
that, after the Redemption Date, and upon surrender of such
Senior Note, a new Senior Note or
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Senior Notes in aggregate principal amount equal to the
unredeemed portion thereof will be issued;
(7) if fewer than all the Senior Notes are to be redeemed, the
identification of the particular Senior Notes (or portion
thereof) to be redeemed, as well as the aggregate principal
amount of Senior Notes to be redeemed and the aggregate
principal amount of Senior Notes to be outstanding after such
partial redemption; and
(8) the Paragraph of the Senior Notes pursuant to which the Senior
Notes are to be redeemed.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Senior Notes called for redemption become due and payable on the Redemption Date
and at the Redemption Price. Upon surrender to the Trustee or Paying Agent, such
Senior Notes called for redemption shall be paid at the Redemption Price.
SECTION 3.05. Deposit of Redemption Price.
On or before the Redemption Date, Publishing shall deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price of all
Senior Notes to be redeemed on that date (other than Senior Notes or portions
thereof called for redemption on that date which have been delivered by
Publishing to the Trustee for cancellation). The Paying Agent shall promptly
return to Publishing any U.S. Legal Tender so deposited which is not required
for that purpose upon the written request of Publishing, except with respect to
monies owed as obligations to the Trustee pursuant to Article Seven.
If Publishing complies with the preceding paragraph, then, unless
Publishing defaults in the payment of such Redemption Price and accrued
interest, if any, interest on the Senior Notes to be redeemed will cease to
accrue on and after the applicable Redemption Date, whether or not such Senior
Notes are presented for payment.
SECTION 3.06. Senior Notes Redeemed in Part.
Upon surrender of a Senior Note that is to be redeemed in part, the
Trustee shall authenticate for the Holder a new Senior Note or Senior Notes
equal in principal amount to the unredeemed portion of the Senior Note
surrendered.
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SECTION 3.07. Optional Redemption.
The Senior Notes will be redeemable, at the option of Publishing, in
whole at any time or in part from time to time, on and after the Issue Date, at
the following Redemption Prices (expressed as percentages of the principal
amount), if redeemed during the twelve-month period commencing on _________of
the year set forth below, plus, in each case, accrued interest thereon to the
Redemption Date:
YEAR PERCENTAGE
1999 ................................ 105.00%
2000 ................................ 103.33%
2001 ................................ 101.25%
2002 and thereafter.................. 100.00%
SECTION 3.08. Mandatory Redemption.
The Senior Notes shall be mandatorily redeemable by Publishing, in
part in an amount equal to $8,333,333 principal amount of Senior Notes, on each
of _____________, 2002, _____________, 2003, and ______________, 2003 (each, a
Redemption Date) at a Redemption Price equal to 100% of the principal amount
plus accrued interest thereon to the applicable Redemption Date.
SECTION 3.09. Mandatory Redemption Upon Asset Sale.
The Senior Notes shall be mandatorily redeemable by Publishing, in
whole or in part, upon any Asset Sale of Collateral (except, in the case of
Second Lien Collateral, to the extent the proceeds of such Asset Sale are used
to permanently repay the New Credit Facility in accordance with Section
4.18(a)(ii)(A)) at the Redemption Price specified in Section 3.07, in an amount
equal to the Net Cash Proceeds of such Asset Sale.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Senior Notes.
Publishing shall punctually pay the principal of and interest on the
Senior Notes on the dates and in the manner provided in the Senior Notes. An
installment of principal of or interest on the Senior Notes shall be considered
paid on the date it is due if the Trustee or Paying Agent (other than Parent or
its Subsidiary or Affiliate) holds on that date U.S. Legal Tender (or other
consideration permitted to be paid by the terms of such Senior Notes) designated
for and sufficient to pay all principal, premium and interest then due.
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During the period in which Senior Notes are permitted by their terms
to pay interest thereon at a rate of 13.5% per annum by the issuance of
additional Senior Notes, Publishing shall notify the Trustee in writing of its
election to pay interest on such Senior Notes through the issuance of additional
Senior Notes and the aggregate amount of such additional Senior Notes to be
issued not less than 10 nor more than 45 days prior to the Record Date for the
Interest Payment Date on which additional Senior Notes will be issued. On each
such interest payment date, the Trustee shall authenticate additional Senior
Notes for original issuance to each Holder on the relevant Record Date in the
aggregate principal amount required to pay such interest. Each such additional
Senior Note is an additional obligation of Publishing and the Guarantors and
shall be governed by, and entitled to the benefits of, this Indenture and shall
be subject to the terms of this Indenture (including the guarantee provisions)
and shall rank pari passu with and be subject to the same terms (including the
rate of interest from time to time payable thereon) as the Senior Notes (except,
as the case may be, with respect to the issuance date and aggregate principal
amount).
Publishing shall pay interest on overdue principal at the rate borne
by the Senior Notes and it shall pay interest on overdue installments of
interest at the same rate, to the extent lawful.
SECTION 4.02. Maintenance of Office or Agency.
Publishing shall maintain in New York, New York, the office or
agency required under Section 2.03 hereof. Publishing shall give prior notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time Publishing shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.02.
SECTION 4.03. Limitation on Restricted Payments.
Publishing shall not, and shall cause each of its Subsidiaries not
to, and Parent shall not, and shall cause each of its Subsidiaries not to,
directly or indirectly, make any Restricted Payment.
SECTION 4.04. Maintenance of Net Worth.
(a) If Parent's Net Worth at the end of each of any two consecutive
fiscal quarters (the last day of the second such fiscal quarter being referred
to as the "Deficiency Date") is equal to or less than the Minimum Net Worth,
then Publishing will be required to make an offer to all holders of Senior Notes
(a "Deficiency Offer") to purchase, on a pro rata basis, on or before the last
day of the next following fiscal quarter or, in the event that the Deficiency
Date is the last day of Publishing's fiscal year, the 45th day after the last
day of the next following fiscal quarter (the "Deficiency Repurchase Date"),
$8.7 million aggregate principal amount of Senior
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Notes or, if a lesser principal amount of Senior Notes is outstanding at the
Deficiency Date, all of the Senior Notes then outstanding (the "Deficiency
Repurchase Amount") at a purchase price equal to the percentage specified in
Section 3.07 of the principal amount thereof plus accrued interest to the
Deficiency Repurchase Date. Publishing may credit against the principal amount
of any Senior Notes to be acquired in any Deficiency Offer 100% of the principal
amount of Senior Notes acquired by Publishing through purchase, optional
redemption, exchange or otherwise (but not pursuant to a mandatory redemption)
during the 180-day period ending on the Deficiency Date and surrendered for
cancellation. Publishing, however, may not credit Senior Notes against the
Deficiency Repurchase Amount if such Senior Notes were previously used as a
credit against any other required payment pursuant to this Indenture. To the
extent holders properly tender Senior Notes in an amount exceeding the
Deficiency Repurchase Amount, Senior Notes of tendering holders will be
repurchased on a pro rata basis (based on amounts tendered) in integral
multiples of $1,000 principal amount. In no event shall the failure of Parent's
Net Worth to equal or exceed the Minimum Net Worth at the end of any fiscal
quarter be counted toward the making of more than one Deficiency Offer.
Publishing shall notify the Trustee prior to the making of any
Deficiency Offer whether Publishing elects to credit Senior Notes against its
obligation to make a payment pursuant to a Deficiency Offer as provided above
and set forth the amount of the credit and the basis provided above for such
credit (including identification of any previously canceled Senior Notes not
theretofore made the basis for the credit to a Deficiency Repurchase Amount or
other required prepayment), and shall deliver such Senior Notes with such
notice.
Parent shall give the Trustee notice that its Net Worth is equal to
or less than the Minimum Net Worth at the end of any fiscal quarter in which its
Net Worth is equal to or less than such amount if such quarter is one of the
first three quarters of any fiscal year of Parent, within 60 days after the end
of such quarter and, if such quarter is the fourth quarter of any fiscal year of
Parent, within 90 days after the end of such fiscal year. The Trustee shall
notify the Holders that it has received such a notice from Parent within 10 days
after it receives such notice. Failure to give such notices shall not affect the
obligations of Parent or Publishing pursuant to this Section 4.04.
(b) Notice of a Deficiency Offer shall be sent, by first class mail,
by Publishing to all Holders, with a copy to the Trustee, not less than 30 days
nor more than 45 days before the Deficiency Repurchase Date at their last
registered address. The Deficiency Offer shall remain open from the time of
mailing until five days (or such shorter period as may be required under
applicable law) before the Deficiency Repurchase Date. The notice shall be
accompanied by a copy of the information regarding Parent required to be
contained in a Quarterly Report filed pursuant to the Exchange Act on Form 10-Q
(x) for Parent's first fiscal quarter if the Deficiency Date is the last day of
Parent's second fiscal quarter, (y) for Parent's second fiscal quarter if the
Deficiency Date is the last day of Parent's third fiscal quarter or (z) for
Parent's third fiscal quarter if the Deficiency Date is the last day of Parent's
last fiscal quarter. If the Deficiency Date is the last day of Parent's first
fiscal quarter, a copy of the information
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required to be contained in an Annual Report to Shareholders pursuant to Rule
14a-3 under the Exchange Act for the fiscal year ending immediately prior to
such Deficiency Date and in an Annual Report filed pursuant to the Exchange Act
on Form 10-K for such fiscal year shall accompany the notice. If Parent is not
subject to the requirements of Section 13 or 15(d) of the Exchange Act, the
notice shall be accompanied by financial statements, including any notes thereto
(and, in the case of a fiscal year end, an auditors' report of a firm of
established national reputation reasonably satisfactory to the Trustee),
comparable to that which Parent would have been required to include in such
Quarterly Reports or Annual Report to Shareholders, as the case may be. The
notice shall contain all instructions and materials necessary to enable such
Holders to tender Senior Notes pursuant to the Deficiency Offer. The notice,
which shall govern the terms of the Deficiency Offer, shall state:
(1) that the Deficiency Offer is being made pursuant to this
Section 4.04;
(2) the Deficiency Repurchase Amount, the purchase price
(including the amount of accrued interest) and the Deficiency Repurchase Date;
(3) whether Publishing has elected to credit against the
Deficiency Repurchase Amount, and has delivered to the Trustee for cancellation,
the Senior Notes that are to be made the basis for such credit and, if so, the
amount of such Senior Notes;
(4) that any Senior Note not tendered or accepted for payment
will continue to accrue interest;
(5) that any Senior Note accepted for payment pursuant to the
Deficiency Offer becomes due and payable on the Deficiency Repurchase Date, and
that, unless Publishing defaults in making payment therefor, such Senior Note
shall cease to accrue interest after the Deficiency Repurchase Date;
(6) that Holders electing to have a Senior Note purchased
pursuant to a Deficiency Offer will be required to surrender the Senior Note,
with the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Senior Note completed, to the Paying Agent at the address specified in the
notice at least five days before the Deficiency Repurchase Date;
(7) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than two Business Days prior to the
Deficiency Repurchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Senior Notes
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have the Senior Note purchased;
(8) that if Senior Notes in a principal amount in excess of
the principal amount of Senior Notes to be acquired pursuant to this Section
4.04 are tendered and not
25
withdrawn pursuant to the Deficiency Offer, Publishing shall purchase Senior
Notes on a pro rata basis (with such adjustments as may be deemed appropriate by
Publishing so that only Senior Notes in denominations of $ 1,000 or integral
multiples of $1,000 shall be acquired); and
(9) that Holders whose Senior Notes were purchased only in
part will be issued new Senior Notes equal in principal amount to the
unpurchased portion of the Senior Notes surrendered.
On or before a Deficiency Repurchase Date, Publishing shall (i)
accept for payment Senior Notes or portions thereof tendered pursuant to the
Deficiency Offer (on a pro rata basis if required pursuant to paragraph (8)
above), (ii) deposit with the Paying Agent U.S. Legal Tender or Senior Notes
acquired in the manner described in the first paragraph of this Section 4.04
sufficient to pay the purchase price of all Senior Notes or portions thereof so
accepted or to be credited against the Deficiency Repurchase Amount and (iii)
deliver to the Trustee Senior Notes so accepted together with an Officers'
Certificate stating the Senior Notes or portions thereof accepted for payment by
Publishing. The Paying Agent shall promptly mail or deliver to Holders of Senior
Notes so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Senior Note equal in principal amount to any unpurchased portion of the Senior
Note surrendered. Any Senior Notes not so accepted shall be promptly mailed or
delivered by Publishing to the Holder thereof. Publishing will publicly announce
the results of the Deficiency Offer on the Business Day next following a
Deficiency Repurchase Date. For purposes of this Section 4.04, the Trustee shall
act as the Paying Agent.
SECTION 4.05. Corporate Existence.
Except as otherwise permitted by Article Five, Parent and Publishing
shall and shall cause their Subsidiaries to do or cause to be done all things
necessary to preserve and keep in full force and effect their respective
corporate existence and the corporate, partnership or other existence of each of
their respective Subsidiaries in accordance with the respective organizational
documents of each such entity and the rights (charter and statutory), licenses
and franchises of Parent, Publishing and each of their Subsidiaries; provided,
however, that each of Parent and Publishing shall not be required to preserve,
with respect to itself, any right, license or franchise, and with respect to any
of its Subsidiaries, any such right, license or franchise, or the corporate,
partnership or other existence of such Subsidiaries, if the Board of Directors
of Parent and Publishing shall determine that the preservation thereof is no
longer desirable in the conduct of the business of Parent, Publishing and their
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders.
SECTION 4.06. Payment of Taxes and Other Claims.
Each of Parent and Publishing shall and shall cause their
Subsidiaries to pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (i) all
26
taxes, assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon them or any
of their Subsidiaries or properties of them or any of their Subsidiaries and
(ii) all lawful claims for labor, materials and supplies that, if unpaid, might
by law become a Lien upon the property of them or any of their Subsidiaries;
provided, however, that Parent, Publishing and their Subsidiaries shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim if either (a) the amount, applicability or validity
thereof is being contested in good faith by appropriate proceedings and an
adequate reserve has been established therefor to the extent required by GAAP or
(b) the failure to make such payment or effect such discharge (together with all
other such failures) would not have a material adverse effect on the financial
condition or results of operations of Parent, Publishing and their Subsidiaries
taken as a whole.
SECTION 4.07. Maintenance of Properties and Insurance.
(a) Parent and Publishing shall cause all properties used or useful
to the conduct of its business or the business of any of their Subsidiaries to
be maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereto, all as in their
judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times unless the
failure to so maintain such properties (together with all other such failures)
would not have a material adverse effect on the financial condition or results
of operations of Parent, Publishing and their Subsidiaries taken as a whole;
provided, however, that nothing in this Section 4.07 shall prevent Parent,
Publishing or any of their Subsidiaries from discontinuing the operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal would not be disadvantageous in any material respect
to the Holders and is either (i) in the ordinary course of business, or (ii) is
otherwise permitted by this Indenture.
(b) Parent and Publishing shall provide or cause to be provided, for
itself and each of its Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of Parent and Publishing are adequate and appropriate for the
conduct of the business of Parent and Publishing and their Subsidiaries in a
prudent manner, with reputable insurers or with the government of the United
States of America or an agency or instrumentality thereof, in such amounts, with
such deductibles, and by such methods as shall be either (i) consistent with
past practices of Parent, Publishing or the applicable Subsidiary or (ii)
customary, in the reasonable, good faith opinion of Parent and Publishing, for
corporations similarly situated in the industry.
SECTION 4.08. Compliance Certificate; Notice of Default.
(a) Each of Parent and Publishing shall deliver to the Trustee
within 120 days after the end of Publishing's fiscal year an Officers'
Certificate, complying with Section 314(a)(4) of the TIA, stating that a review
of its activities and the activities of its Subsidiaries during the
27
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether each has kept, observed, performed
and fulfilled its obligations under this Indenture and further stating, as to
each such Officer signing such certificate, that to the best of his knowledge
each of Parent and Publishing and their Subsidiaries during such preceding
fiscal year has kept, observed, performed and fulfilled each and every such
covenant and no event of default under the New Credit Facility, Default or Event
of Default occurred during such year or, if such signers do know of such an
event of default, Default or Event of Default, the certificate shall describe
the event of default, Default or Event of Default and its status with
particularity. The Officers' Certificate shall also notify the Trustee should
Publishing elect to change the manner in which it fixes its fiscal year end.
(b) Publishing shall deliver to the Trustee within 120 days after
the end of each fiscal year a written statement by Publishing's independent
certified public accountants stating (A) that their audit examination has
included a review of the terms of this Indenture and the Senior Notes as they
relate to accounting matters, and (B) whether, in connection with their audit
examination, any Default has come to their attention and if such a Default has
come to their attention, specifying the nature and period of existence thereof.
(c) Each of Parent and Publishing shall and shall cause each of
their Subsidiaries to deliver to the Trustee, forthwith upon becoming aware, and
in any event within 5 days after the occurrence, of (i) any Default or Event of
Default in the performance of any covenant, agreement or condition contained in
this Indenture; (ii) any event of default under the New Credit Facility or any
event of default under any other bond, debenture, note or other evidence of
Indebtedness of Parent, Publishing or any of their respective Subsidiaries, or
under any mortgage, indenture or other instrument (as that term is used in
Section 6.01(4)); and (iii) any decline in Net Worth such that the Net Worth is
equal to or less than the Minimum Net Worth at the end of any fiscal quarter or
any subsequent increase in Net Worth above such amount at the end of any fiscal
quarter, an Officers' Certificate specifying with particularity such event.
SECTION 4.09. Compliance with Laws.
Each of Parent and Publishing shall comply, and shall cause each of
their respective Subsidiaries to comply, with all applicable statutes, rules,
regulations, orders and restrictions of the United States of America, all states
and municipalities thereof, and of any governmental department, commission,
board, regulatory authority, bureau, agency and instrumentality of the
foregoing, in respect of the conduct of their respective businesses and the
ownership of their respective properties, except such as are being contested in
good faith and by appropriate proceedings and except for such noncompliances as
would not in the aggregate have a material adverse effect on the financial
condition or results of operations of Parent, Publishing and their Subsidiaries
taken as a whole.
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SECTION 4.10. Commission Reports.
Whether or not required by the rules and regulations of the
Commission, so long as any Senior Notes are outstanding, Parent will furnish to
the Holders of Senior Notes all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if Parent was required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by Parent's
certified independent accountants. In addition, whether or not required by the
rules and regulation of the Commission, Publishing will file a copy of all such
information with the Commission for public availability and make such
information available to investors who request it in writing.
Parent shall file with the Trustee, within 5 days after it files the
same with the Commission, copies of the quarterly and annual reports and the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) required
to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act. Parent and Publishing shall also comply with the other provisions of TIA
Section 314(a).
SECTION 4.11. Waiver of Stay, Extension or Usury Laws.
Each of Publishing and the Guarantors covenant (to the extent that
each may lawfully do so) that it will not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive any
of Publishing or the Guarantors from paying all or any portion of the principal
of or interest on the Senior Notes or the Guarantee as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that each may
lawfully do so) each of Publishing and the Guarantors hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.12. Limitation on Transactions with Affiliates.
(a) Parent and Publishing shall not and shall not permit any of
their respective Subsidiaries to (i) sell, lease, transfer, issue or otherwise
dispose of any of its properties or assets or securities to, (ii) purchase any
property, assets or securities from, (iii) make any Investment in, or (iv) enter
into or suffer to exist any contract or agreement with or for the benefit of, an
Affiliate of Parent, Publishing or any of their respective Subsidiaries (an
"Affiliate Transaction"), other than Affiliate Transactions permitted under the
following paragraph, unless the Board of Directors of Parent, pursuant to a
Board Resolution, reasonably and in good faith determines that such Affiliate
Transaction is fair to Parent, Publishing or such Subsidiary, as the case may
be,
29
and is on terms at least as favorable as might reasonably have been obtainable
at such time from an unaffiliated party. All Affiliate Transactions (and each
series of related Affiliate Transactions which are similar or part of a common
plan) involving aggregate payments or other property with a fair market value in
excess of $2,000,000 shall be approved by a majority of the disinterested
members of the Board of Directors of Parent, such approval to be evidenced by a
Board Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. In addition, neither
Publishing, Parent nor any of their Subsidiaries shall enter into an Affiliate
Transaction or series of related Affiliate Transactions involving or having a
value of more than $5 million to Publishing, Parent or any Subsidiary unless
Publishing, Parent or such Subsidiary has received an opinion from an
Independent Financial Advisor to the effect that the financial terms of such
Affiliate Transaction are fair to Publishing, Parent or such Subsidiary or are
at least as favorable as might reasonably have been obtained at such time from
an unaffiliated party.
(b) The provisions of the foregoing paragraph shall not apply to (i)
reasonable and customary fees and compensation paid to, and indemnity (other
than for fraud or intentional misrepresentation) provided on behalf of,
officers, directors, employees or consultants of Publishing, Parent or any of
their Subsidiaries, as determined in good faith by the Board of Directors of
Publishing, Parent or any such Subsidiary or the senior management thereof, and
(ii) transactions exclusively between or among Parent and any of its
Wholly-Owned Subsidiaries that are Guarantors as of the Issue Date or
exclusively between or among such Wholly-Owned Subsidiaries that are Guarantors
as of the Issue Date, provided such transactions are not otherwise prohibited by
this Indenture.
SECTION 4.13. Limitation on Incurrences of Additional Indebtedness.
(a) Except as set forth in this Section 4.13, Parent and Publishing
shall not, and shall not permit any of their respective Subsidiaries, after the
original issuance of the Senior Notes, directly or indirectly, to incur, assume,
guarantee, become liable, contingently or otherwise, with respect to, or
otherwise become responsible for the payment of (collectively, "incur") any
Indebtedness. For purposes of this Indenture, Indebtedness incurred by any
Person that is not a Subsidiary of Parent or Publishing, which Indebtedness is
outstanding at the time such Person becomes, or is merged into or consolidated
with, such Subsidiary, Parent or Publishing, shall be deemed to have been
incurred or issued, as the case may be, at the time such Person becomes, or is
merged into or consolidated with, such Subsidiary, Parent or Publishing.
(b) Notwithstanding Section 4.13(a), Publishing, Parent or any of
their Subsidiaries may incur Indebtedness pursuant to the New Credit Facility in
an aggregate principal amount at any time outstanding not to exceed (i) $45
million, or (ii) for each Fiscal Quarter immediately following a Fiscal Quarter
in which the New Credit Facility Increase Test is met, $60 million, subject in
each case to permanent reduction as provided in Section 4.18. [The New Credit
Facility Increase Test shall be met when ________________ [test provisions to be
added].]
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(c) Notwithstanding Section 4.13(a), Publishing, Parent and their
Subsidiaries may incur Indebtedness evidenced by the Senior Notes.
(d) Notwithstanding Section 4.13(a), Parent or Publishing may incur
Indebtedness to any Guarantor, to the extent permitted by Section 4.12.
(e) [Additional Indebtedness to be discussed.]
SECTION 4.14. Limitation on Payment Restrictions Affecting Subsidiaries.
Publishing and Parent shall not, and shall not permit any of their
Subsidiaries to, directly or indirectly, create or suffer to exist, or allow to
become effective any consensual Payment Restriction with respect to any of its
Subsidiaries, except for (i) any such restrictions contained in (a) the New
Credit Facility and related documents as in effect on the Issue Date as any such
payment restriction may apply to any present or future Subsidiary, (b) this
Indenture, (c) secured Indebtedness otherwise permitted to be incurred pursuant
to Sections 4.13 and 4.15 hereof and that limits the right of the debtor to
dispose of the assets securing such Indebtedness; (ii) customary provisions
restricting subletting, transfer or assignment of any lease or agreement entered
into by a Subsidiary of Parent or the assets (other than cash) subject thereto;
(iii) customary pre-closing restrictions with respect to a Subsidiary of Parent
pursuant to an agreement that has been entered into for the sale or disposition
of all or a portion of the Capital Stock or assets of such Subsidiary; and (iv)
restrictions contained in Indebtedness incurred to refinance, refund, extend or
renew Indebtedness referred to in clause (i) above or amendments to the
Indebtedness referred to in clause (i) above; provided that the Payment
Restrictions contained therein are not any more restrictive than those provided
for in such Indebtedness being refinanced, refunded, extended or renewed.
SECTION 4.15. Limitation on Liens.
Publishing and Parent shall not and shall not permit any Subsidiary
to create, incur, assume or suffer to exist any Liens upon any of their
respective assets except for, to the extent permitted by the Security Agreement,
Permitted Liens.
SECTION 4.16. Restrictions on Sale and Ownership of Subsidiaries.
Publishing and Parent will not permit any of its Subsidiaries to
issue any Capital Stock or Partnership Interest (other than to Publishing or
Parent or to a Wholly-Owned Subsidiary that is a Guarantor as of the Issue Date)
or permit any Person (other than Publishing or Parent or a Wholly-Owned
Subsidiary that is a Guarantor as of the Issue Date) to own any Capital Stock or
Partnership Interest of any Subsidiary (other than in the case of a sale of 100%
of the Capital Stock of a Subsidiary which is not otherwise prohibited by this
Indenture).
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SECTION 4.17. Limitation on Change of Control.
Upon the occurrence of a Change of Control, Publishing will be
required to make an offer (the "Change of Control Offer") to repurchase all or
any part (equal to $1,000 principal amount or an integral multiple thereof) of a
holder's Senior Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment"). Within 20 days following any
Change of Control, Publishing shall mail by first class mail a notice to each
Holder with a copy to the Trustee, which notice shall govern the terms of the
Change of Control Offer, stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.17 and that all Senior Notes tendered will be accepted for
payment;
(2) the purchase price and the purchase date, which shall be no
earlier than 30 days nor later than 40 days from the date such
notice is mailed (the "Change of Control Payment Date");
(3) that any Senior Note not tendered will continue to accrue
interest;
(4) that, unless Publishing defaults in the payment of the Change of
Control Payment, all Senior Notes accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date;
(5) that holders electing to have any Senior Notes purchased
pursuant to a Change of Control Offer will be required to surrender
the Senior Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Senior Notes completed, to the
Paying Agent at the address specified in the notice prior to the
close of business on the third Business Day preceding the Change of
Control Payment Date;
(6) that holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the holder, the principal amount of Senior Notes delivered
for purchase, and a statement that such holder is withdrawing his
election to have such Senior Notes purchased; and
(7) that holders whose Senior Notes are being purchased only in part
will be issued new Senior Notes equal in principal amount to the
unpurchased portion of the Senior Notes surrendered, which
unpurchased portion must be equal to $1,000 principal amount or an
integral multiple thereof.
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On the Change of Control Payment Date, Publishing will (i) accept
for payment Senior Notes or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Senior Notes or portions thereof so
tendered and (iii) deliver or cause to be delivered to the Trustee the Senior
Notes so accepted together with an Officers' Certificate stating the Senior
Notes or portions thereof being tendered to Publishing. The Paying Agent shall
promptly mail to each Holder of Senior Notes so accepted payment in an amount
equal to the purchase price for such Senior Notes, and the Trustee shall
promptly authenticate and mail to each holder a new Senior Note equal in
principal amount to any unpurchased portion of the Senior Notes surrendered, if
any; provided, that each new Senior Note shall be in a principal amount of
$1,000 or an integral multiple thereof. Publishing will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date. For purposes of this Section 4.17, the Trustee
shall act as the Paying Agent.
SECTION 4.18. Limitation on Asset Sales.
(a) Parent will not, and will not permit any of its Subsidiaries to,
consummate any Asset Sale unless (i) Parent or the applicable Subsidiary
receives consideration at the time of such Asset Sale (the "Asset Sale Closing
Date") at least equal to the fair market value of the assets sold or otherwise
disposed of (as determined in good faith by the Board of Directors of Parent or,
with respect to assets having a fair market value in excess of $2 million, an
Independent Financial Advisor) and at least 90% of the fair market value (as so
determined) of the consideration so received by Parent or such Subsidiary is in
the form of cash; provided, however, that the amount of (A) any liabilities of
Parent or its Subsidiaries that are assumed by the transferee in any such
transaction (as shown on Parent's or such Subsidiary's most recent balance
sheet) and (B) any Cash Equivalents received by Parent or any Subsidiary from
such transferee that are immediately converted by Parent or such Subsidiary into
cash shall both be deemed to be cash, solely to the extent of the cash received
in the case of (B), for purposes of this Section 4.18; and (ii) the Net Cash
Proceeds received by Parent or such Subsidiary from such Asset Sale are applied,
(1) in the case of Collateral other than Second Lien Collateral, by delivery to
the Trustee on the Asset Sale Closing Date of all Net Cash Proceeds to be held
by the Trustee for the redemption of Senior Notes pursuant to a Net Proceeds
Redemption as set forth below, and (2) in the case of Second Lien Collateral, at
Parent's election, (A) by delivery to the Lender on the Asset Sale Closing Date
of the Net Cash Proceeds to repay Indebtedness of Publishing under the New
Credit Facility; provided, however, that any such repayment shall result in a
permanent reduction of the Lender's commitment thereunder and a corresponding
permanent reduction in the maximum amount of Indebtedness permitted under
Section 4.13(b)(i) or 4.13(b)(ii), or (B) by delivery to the Trustee on the
Asset Sale Closing Date of the Net Cash Proceeds to be held by the Trustee for
the redemption of Senior Notes pursuant to a Net Proceeds Redemption as set
forth below; provided, however, that if at any time any non-cash consideration
received by Parent or any Subsidiary in connection with any Asset Sale is
converted into or sold or otherwise disposed of for cash, or if cash dividends
or interest or other cash payments are received with respect thereto, then such
cash shall constitute Net Cash Proceeds for purposes of
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this covenant and shall be applied in accordance with clause (ii) above as if
received in an Asset Sale occurring on the date any such cash is received. To
the extent that any such Net Cash Proceeds are not actually applied in
accordance with clauses (ii)(2)(A) above or after such application there remains
a portion of the Net Cash Proceeds, Publishing shall redeem Senior Notes as
described in Section 4.18(b) (a "Net Proceeds Redemption") at a price equal to
the percentage specified in Section 3.07 of the aggregate principal amount
thereof, plus accrued interest to the date of purchase, which shall in the
aggregate equal the amount of Net Cash Proceeds required by this Section 4.18 to
be made available to purchase Senior Notes in a Net Proceeds Redemption.
(b) Notice of a Net Proceeds Redemption pursuant to this Section
4.18 shall be mailed, by first class mail, by Publishing not more than 30 days
after the relevant Asset Sale Closing Date to all Holders at their last
registered addresses, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Senior
Notes pursuant to the Net Proceeds Redemption and shall state the terms required
to be stated in a notice of redemption under Section 3.03.
On or before the Asset Sale Closing Date, Publishing shall deposit
with the Paying Agent U.S. Legal Tender equal to the Net Cash Proceeds of the
Asset Sale. Following the Redemption Date, the Paying Agent shall promptly mail
to the Holders of Senior Notes so accepted payment in an amount equal to the
purchase price. Publishing will publicly announce the results of the Net
Proceeds Redemption on or as soon as practicable after the Redemption Date. For
purposes of this Section 4.18, the Trustee shall act as the Paying Agent.
Notwithstanding the foregoing, the Trustee need not initiate a
redemption under this Section 4.18 if the amount on deposit with the Trustee on
any Asset Sale Closing Date is less than $1,000,000, but shall instead hold such
lesser amount in trust in an interest bearing account until the earlier of the
next Redemption Date under Sections 3.08 or 3.09 or the date upon which the
Senior Notes become due and payable. Publishing, however, may not credit any
such amounts held by the Trustee against any other provision of this Indenture.
SECTION 4.19. Guarantees of Certain Indebtedness.
Publishing and Parent will not permit any of its Subsidiaries (other
than the Guarantors), directly or indirectly, to (i) incur, guarantee or secure
through the granting of Liens the payment of any Indebtedness under the New
Credit Facility or refinancings thereof, (ii) pledge any intercompany notes
representing obligations of any of its Subsidiaries to secure the payment of any
Indebtedness under the New Credit Facility or refinancings thereof or (iii)
acquire property or assets from Publishing or any Guarantor, in each case unless
such Subsidiary and the Trustee execute and deliver (A) a supplemental indenture
evidencing such Subsidiary's Guarantee and (B) the Collateral Agreements.
Neither Publishing nor any Guarantor shall be required to make a notation on the
Senior Notes to reflect any such
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subsequent Guarantee. Nothing in this Section 4.19 shall be construed to permit
any Subsidiary of Publishing or Parent to incur Indebtedness otherwise
prohibited by Section 4.13.
SECTION 4.20. Limitation on License Agreements and Distribution Agreements.
Publishing and Parent shall not, and shall not permit any of their
respective Subsidiaries to, enter into any license agreement, distribution
agreement, option agreement or similar agreement with respect to any Collateral
other than license agreements and distribution agreements with respect to
intellectual property assets ("License and Distribution Agreements") entered
into prior to the Issue Date and License and Distribution Agreements entered
into in the ordinary course of business on terms which the Board of Directors of
Parent, pursuant to a Board Resolution, reasonably and in good faith determine
are fair to Parent, Publishing or such Subsidiary, as the case may be, and do
not adversely impact the Holders, the Collateral or the value of the Collateral.
All License and Distribution Agreements (and each series of related License and
Distribution Agreements which are similar or part of a common plan) involving
aggregate payments or other property with a fair market value in excess of
$1,000,000 shall be approved by a majority of the disinterested members of the
Board of Directors of Parent, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. In addition, neither
Publishing, Parent nor any of their Subsidiaries shall enter into a License and
Distribution Agreement or series of related License and Distribution Agreements
involving or having a value of more than $3 million to Publishing, Parent or any
Subsidiary unless Publishing, Parent or such Subsidiary has received an opinion
from an Independent Financial Advisor to the effect that the financial terms of
such License and Distribution Agreement are fair to Publishing, Parent or such
Subsidiary.
SECTION 4.21. Subsidiaries.
Publishing and Parent shall not, and shall cause their respective
Subsidiaries not to, own, acquire or permit to exist any Subsidiary which is not
a Wholly-Owned Subsidiary and a Guarantor. Publishing and Parent shall not, and
shall not permit any of their respective Subsidiaries to, cause or permit the
formation, acquisition, or ownership of any Subsidiary (or any interest in any
Person) not listed on Schedule 4.21 hereto.
SECTION 4.22. After Acquired Collateral.
Publishing and Parent shall, and shall cause their respective
Subsidiaries to, notify the Trustee of any intellectual property assets related
to the Collateral developed or otherwise acquired by Publishing, Parent or any
of their respective Subsidiaries within 15 days of the acquisition of same, and
shall deliver to the Trustee appropriate documentation to perfect in favor of
the Trustee first priority Liens on such intellectual property in the United
States and any material foreign jurisdiction, which shall include Canada and the
United Kingdom. On the first business day of each February, May, August, and
November, beginning in August 1999,
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Publishing and Parent shall deliver to the Trustee an Opinion of Counsel to the
effect that the Trustee has a perfected first priority (or second priority, as
the case may be) security interest in all such intellectual property.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Limitation on Merger, Etc.
(a) Each of Parent, Publishing, the Guarantors and their
Subsidiaries shall not in a single transaction or through a series of related
transactions, (i) consolidate with or merge with or into any other Person, or
transfer (by lease, assignment, sale or otherwise) all or substantially all of
its properties and assets as an entirety or substantially as an entirety to
another Person or group of affiliated Persons (including, without limitation,
the transfer by Parent of Publishing) or (ii) adopt a Plan of Liquidation.
(b) Notwithstanding Section 5.01(a), Parent may consolidate with or
merge with or into any other Person provided that:
(A) Parent shall be the continuing Person, or the Person (if
other than Parent) formed by such consolidation or into which Parent
is merged or to which all or substantially all of the properties and
assets of Parent as an entirety or substantially as an entirety are
transferred (or, in the case of a Plan of Liquidation, any Person to
which assets are transferred) (Parent or such other Person being
hereinafter referred to as the "Surviving Person") shall be a
corporation organized and validly existing under the laws of the
United States, any State thereof or the District of Columbia, and
shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of Parent under the Senior Notes and
this Indenture;
(B) immediately after and giving effect to such transaction
and the assumption contemplated by clause (A) above and the
incurrence or anticipated incurrence of any Indebtedness to be
incurred in connection therewith, (1) Parent shall have Net Worth
equal to or greater than the Net Worth of Parent immediately
preceding the transaction, (2) [financial test to be discussed], (3)
immediately before and immediately after and giving effect to such
transaction and the assumption of the obligations as set forth in
clause (A) above and the incurrence or anticipated incurrence of any
Indebtedness to be incurred in connection therewith, no Default or
Event of Default shall have occurred and be continuing and (4) the
priority and perfection of the Trustee's Liens under this Indenture
and the Collateral Agreements are not in any way impaired (including
36
by means of structural subordination), and all guarantees of the
Guarantors remain in full force and effect;
(C) Parent shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, transfer or adoption and such supplemental
indenture comply with this Article Five, that the Surviving Person
agrees to be bound hereby, and that all conditions precedent herein
provided relating to such transaction have been satisfied;
(D) Parent shall have delivered to the Trustee a certificate
from its independent certified public accountants stating that
Parent has made the calculations required by clauses (B) (1) and (2)
above in accordance with the terms of this Indenture; and
(E) none of Parent, Publishing, any Guarantor or any of their
Subsidiaries or the Surviving Person would thereupon become
obligated with respect to any Indebtedness (including acquired
indebtedness) nor would any of its assets or properties become
subject to a Lien, unless such Person could incur such Indebtedness
(including acquired indebtedness) or create such Lien under this
Indenture (after giving effect to such Person being bound by all the
terms of this Indenture).
(c) Notwithstanding Section 5.01 (a), a Wholly-Owned Subsidiary of
Publishing may merge into Publishing or another Wholly-Owned Subsidiary of
Publishing that is a Guarantor, and a Wholly-Owned Subsidiary of Parent may
merge into Parent or, except in the case of Publishing, another Wholly-Owned
Subsidiary of Parent that is a Guarantor.
(d) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Capital Stock of which constitutes all or substantially
all of the properties and assets of a Person, shall be deemed to be the transfer
of all or substantially all of the properties and assets of a Person.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any transfer of assets
(including pursuant to a Plan of Liquidation) in accordance with Section 5.01,
the successor Person formed by such consolidation or into which Parent,
Publishing or any Guarantor or Subsidiary is merged or to which such transfer is
made shall succeed to, and be substituted for, and may exercise every right and
power of, Parent, Publishing or Guarantor, as the case may be, under this
Indenture (and shall execute a supplemental indenture to that effect in
accordance with Section 11.11) with the same effect as if such successor Person
had been named as Parent, Publishing or Guarantor, as
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the case may be, herein; provided, however that Parent, Publishing and
Guarantors shall not be released from the obligations and covenants under this
Indenture and the Senior Notes.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs under this Indenture if:
(1) Publishing defaults in the payment of interest on any
Senior Notes when the same becomes due and payable, and the Default
continues for a period of 30 days;
(2) Publishing defaults in the payment of the principal of any
Senior Note when the same becomes due and payable, at maturity, upon
acceleration, redemption or otherwise (including the failure to
purchase Senior Notes tendered pursuant to the requirements of
Sections 4.04, 4.17 or 4.18);
(3) Publishing or any Guarantor fails to comply with any other
agreement or covenant contained in the Senior Notes, this Indenture,
any Collateral Agreements or the Registration Rights Agreement, and
the Default continues for the period after the notice specified
below;
(4) there shall be a default under any bond, debenture, or
other evidence of Indebtedness of Publishing or any Guarantor, or
under any mortgage, security agreement, indenture or other
instrument under which there may be issued or by which there may be
secured or evidenced any such Indebtedness, whether such
Indebtedness now exists or shall hereafter be created, if such
default either (A) results from the failure to pay principal or
interest on any Indebtedness or (B) relates to an obligation other
than the obligation to pay principal or interest or any Indebtedness
and results in the holder or holders of such Indebtedness causing
such Indebtedness to become due prior to its stated maturity;
(5) any Guarantee required to be in full force and effect by
the terms of this Indenture ceases to be in full force and effect or
is declared null and void or otherwise not enforceable against any
Guarantor in accordance with its terms, or any of the Guarantors
repudiates its obligations under its Guarantee or denies that it has
any further liability under the Guarantee or gives notice to such
effect (other than by reason of the termination of this Indenture or
the release of any such Guarantee in accordance with this
Indenture); or any Guarantor repudiates its
38
obligations under its Guarantee of the Senior Notes or if a final
judicial determination is made that such;
(6) Publishing or any Guarantor pursuant to or within the
meaning of any Bankruptcy Law:
(a) admits in writing its inability to pay its debts
generally as they become due;
(b) commences a voluntary case or proceeding;
(c) consents to the entry of a judgment, decree or order
for relief against it in an involuntary case or proceeding;
(d) consents to the appointment of a Custodian of it
or for all or substantially all of its property;
(e) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it;
(f) makes a general assignment for the benefit of its
creditors; or
(g) takes any corporate action to authorize or effect
any of the foregoing;
(7) a court of competent jurisdiction enters a judgment,
decree or order under any Bankruptcy Law that is for relief
against Publishing or any Guarantor, in an involuntary case or
proceeding which shall (A) approve a petition seeking
reorganization, arrangement, adjustment or composition in
respect of Publishing or any Guarantor, (B) appoint a
Custodian of Publishing or any Guarantor, or for substantially
all of its property, or (C) order the winding-up or
liquidation of its affairs, and in each case the judgment,
order or decree remains unstayed and in effect for 60 days; or
(8) any warrant of attachment is issued against any
property of Publishing or any Guarantor having a value of at
least $1 million, which warrant is not released, stayed or
bonded against within 60 days after service of process with
respect thereto, or final judgments not covered by insurance
for the payment of money which in the aggregate at any one
time exceeds $1 million shall be rendered against Publishing
or any Guarantor by a court of competent jurisdiction and
shall remain undischarged for 60 days after judgment becomes
final and nonappealable;
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(9) any final judgments or orders are rendered against
Parent, Publishing or any of their Guarantors or Subsidiaries
which require the payment in money, either individually or in
an aggregate amount, that is more than $5 million, which
remain unstayed, undischarged or unbonded for a period of 60
days thereafter; or
(10) there shall be any failure to procure and maintain
property and liability insurance in accordance with the
provisions of Section 4.07 continuing, in the case of failure
to maintain such insurance, until the earlier of (x) 30 days
after notice to Parent, Publishing or their Subsidiaries or
the Trustee of the lapse or cancellation of such insurance,
and (y) the date such lapse or cancellation is effective as to
the Trustee; or
(11) except as provided in this Indenture, the Trustee
does not have at all times a first priority perfected security
interest in the First Lien Collateral and a second priority
perfected security interest in the Second Lien Collateral,
subject only to Permitted Liens, or Publishing or any
Guarantor asserts in writing that the security arrangements
under the Indenture or any Collateral Agreement are not in
full force and effect.
A Default under clause (3) above (other than any Default under
Sections 4.03, 4.04, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21,
4.22 and 5.01, which Defaults shall be Events of Default with the notice
specified in this paragraph but without the passage of time specified in this
paragraph) is not an Event of Default until the Trustee notifies Publishing, or
the Holders of at least 25% in principal amount of the outstanding Senior Notes
notify Publishing and the Trustee, of the Default, and Publishing does not cure
the Default within 30 days after receipt of the notice. The notice must specify
the Default, demand that it be remedied and state that the notice is a "Notice
of Default." Such notice shall be given by the Trustee if so requested by the
Holders of at least 25% in principal amount of the Senior Notes then
outstanding. When a Default is cured, it ceases.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
Section 6.01(6) or (7) with respect to Publishing) occurs and is continuing, the
Trustee may, by notice to Publishing, or the Holders of at least 25% in
principal amount of the Senior Notes then outstanding may, by written notice to
Publishing and the Trustee, and the Trustee shall, upon the request of such
Holders, declare the aggregate principal amount of the Senior Notes outstanding,
together with accrued interest thereon to the date of payment, to be due and
payable and, upon any such declaration, the same shall become and be due and
payable. If an Event of Default specified in Section 6.01(6) or (7) occurs with
respect to Publishing, all unpaid principal and accrued interest on the Senior
Notes then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or
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any Holder. Upon payment of such principal amount, interest, and premium, if
any, all of Publishing's obligations under the Senior Notes and this Indenture,
other than obligations under Section 7.07, shall terminate. The Holders of a
majority in principal amount of the Senior Notes then outstanding by notice to
the Trustee may rescind an acceleration and its consequences if (i) all existing
Events of Default, other than the non-payment of the principal of the Senior
Notes which has become due solely by such declaration of acceleration, have been
cured or waived, (ii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
and (iii) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Senior Notes or to enforce the
performance of any provision of the Senior Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Senior Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the outstanding Senior Notes by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of or interest on any Senior Note as
specified in clauses (1) and (2) of Section 6.01. When a Default or Event of
Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding
Senior Notes may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. Subject to Section 7.01, however, the Trustee may refuse to
follow any direction that conflicts with any law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that may involve the Trustee in personal liability; provided
that the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
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SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Senior Notes unless:
(1) the Holder gives to the Trustee notice of a continuing Event
of Default;
(2) the Holder or Holders of at least 25% in principal amount of the
outstanding Senior Notes make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense
to be incurred in compliance with such request;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holder or Holders of a majority in
principal amount of the outstanding Senior Notes do not give the
Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Senior Note, on
or after the respective due dates expressed in such Senior Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against
Publishing or any other obligor on the Senior Notes for the whole amount of
principal and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per annum
borne by the Senior Notes and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
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SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relating to Publishing or
any other obligor upon the Senior Notes, any of their respective creditors or
any of their respective property and shall be entitled and empowered to collect
and receive any monies or other property payable or deliverable on any such
claims and to distribute the same, and any Custodian in any such judicial
proceedings is hereby authorized by each Securityholder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Securityholders, to pay to the Trustee any amount
due to it for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agent and counsel, and any other amounts due the Trustee
under Section 7.07. Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Senior Notes or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Securityholder
in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article Six, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against
Publishing or any Guarantor directly without the Trustee, to Holders
for their collection costs;
Third: to Holders for amounts due and unpaid on the Senior
Notes for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Senior Notes for principal and interest, respectively; and
Fourth: to Publishing or relevant Guarantor.
The Trustee, upon prior notice to Publishing, may fix a record date and payment
date for any payment to Securityholders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its
43
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit
by a Holder or Holders of more than 10% in principal amount of the outstanding
Senior Notes.
SECTION 6.12. Event of Default from Willful Action.
In the case of any Event of Default occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of Publishing
with the intention of avoiding payment of the premium that Publishing would have
had to pay if Publishing then had elected to redeem the Senior Notes pursuant to
Section 3.07 hereof, an equivalent premium shall also become and be immediately
due and payable to the extent permitted by law.
SECTION 6.13. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or wrongfully taken Senior Notes in
Section 2.07, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy arising upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
Six or by law to the Trustee or to the Holders may be exercised from time to
time, and as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.
ARTICLE SEVEN
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
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SECTION 7.01. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent Person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(i) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture that are adverse to
the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b)
of this Section 7.01.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) Assets held in trust by the Trustee need not be segregated from
other assets except to the extent required by law.
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SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document;
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 13.04 and 13.05. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion;
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care;
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers;
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit;
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby; and
(g) Any permissive right or power available to the Trustee under
this Indenture shall not be construed to be a mandatory duty or obligation.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior Notes and may otherwise deal with Publishing or any
Guarantor, or their respective Affiliates with the same rights it would have if
it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
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SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Senior Notes, it shall not be accountable for
Publishing's use of the proceeds from the Senior Notes, and it shall not be
responsible for any statement in the Senior Notes other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Senior Note, including the failure
to make payment of a Deficiency Repurchase Amount pursuant to a Deficiency
Offer, the failure to make payment on the Change of Control Payment Date
pursuant to a Change of Control Offer, and the failure to make payment upon a
mandatory redemption, the Trustee may withhold the notice if and so long as its
board of directors, the executive committee of its board of directors or a
committee of its directors and/or Trust Officers in good faith determines that
withholding the notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15, 2000
following the date of this Indenture, the Trustee shall, to the extent that any
of the events described in TIA Section 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Securityholder a brief report
dated as of such May 15 that complies with TIA Section 313(a).
The Trustee also shall comply with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to Publishing and filed with the SEC and each stock exchange, if
any, on which the Senior Notes are listed. Publishing shall notify the Trustee
if the Senior Notes become listed on any stock exchange.
SECTION 7.07. Compensation and Indemnity.
Publishing shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. Publishing shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
Publishing shall indemnify the Trustee for, and hold it harmless against, any
loss or liability incurred by it except for such actions to the extent caused by
any negligence or bad faith on its part, arising out of or in connection with
the administration of this trust and its rights or duties
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hereunder. The Trustee shall notify Publishing promptly of any claim asserted
against the Trustee for which it may seek indemnity. Publishing shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and Publishing shall pay the reasonable fees and expenses of
such counsel; provided that Publishing will not be required to pay such fees and
expenses if it assumes the Trustee's defense and there is no conflict of
interest between Publishing and the Trustee in connection with such defense as
reasonably determined by the Trustee. Publishing need not pay for any settlement
made without its written consent. Publishing need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure Publishing's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Senior Notes on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal of or interest on particular Senior Notes.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(6), (7) or (8) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The obligations of Publishing under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying Publishing. The Holders of a
majority in principal amount of the outstanding Senior Notes may remove the
Trustee by so notifying Publishing and the Trustee and may appoint a successor
trustee with Publishing's consent.
Publishing may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, Publishing shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Senior Notes may appoint a successor Trustee to replace the successor
Trustee appointed by Publishing.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to Publishing. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, Publishing or the
Holders of at least 10% in principal amount of the outstanding Senior Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, Publishing's obligations under Section 7.07 shall continue for the benefit
of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a). The Trustee shall have a combined capital
and surplus of at least $100 million (or be a member or subsidiary of a bank
holding system with aggregate combined capital and surplus of at least $100
million) as set forth in its most recent published annual report of condition.
The Trustee shall comply with TIA Section 310(b).
SECTION 7.11. Preferential Collection of Claims Against Publishing.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
49
ARTICLE EIGHT
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
Publishing may, at the option of its and Parent's Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Senior Notes upon compliance with the conditions set forth below in this Article
Eight.
SECTION 8.02. Legal Defeasance and Discharge.
Upon Publishing's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, Publishing shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Senior Notes on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that Publishing shall be
deemed to have paid and discharged the entire indebtedness represented by the
outstanding Senior Notes, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 and the other Sections of this Indenture
referred to in (i) through (iv) below, and to have satisfied all its other
obligations under such Senior Notes and this Indenture (and the Trustee, on
demand of and at the expense of Publishing, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (i) the rights of holders of
such outstanding Senior Notes to receive, solely from the trust fund described
in Section 8.05, payments in respect of the principal of, premium, if any, and
interest on such Senior Notes when such payments are due, (ii) Publishing's
obligations with respect to the Senior Notes under Article Two and Section 4.02
hereof, (iii) the rights, powers, trust, duties and immunities of the Trustee,
and Publishing's obligations in connection therewith and (iv) this Article
Eight. Subject to compliance with this Article Eight, Publishing may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
SECTION 8.03. Covenant Defeasance.
Upon Publishing's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, Publishing shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.03, 4.04, 4.12, 4.13,
4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 4.22 and Article Five hereof
with respect to the outstanding Senior Notes on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"),
and the Senior Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
50
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Senior Notes shall not be deemed outstanding for accounting
purposes). For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Senior Notes, Publishing may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Senior Notes shall be unaffected thereby. In addition, upon
Publishing's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, Sections 6.01(4), 6.01(8), 6.01(9) and 6.01(10) shall not
constitute Events of Default.
SECTION 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Senior Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) Publishing must irrevocably deposit with the Trustee or
Paying Agent, in trust, for the benefit of the Holders, U.S. Legal
Tender, U.S. Government Obligations, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on the Senior Notes on
the stated date for payment thereof or on the applicable redemption
date, as the case may be, of such principal or installment of
principal of, premium, if any, or interest on the Senior Notes;
(b) in the case of an election under Section 8.02 hereof,
Publishing shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming
that (A) Publishing has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the
Senior Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
Legal Defeasance had not occurred;
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(c) in the case of an election under Section 8.03 hereof,
Publishing shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming
that the Holders of the Senior Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or
Event of Default resulting from the incurrence of Indebtedness all
or a portion of the proceeds of which will be used to defease the
Senior Notes pursuant to this Article Eight concurrently with such
incurrence) or insofar as Sections 6.01(6) and 6.01(7) hereof are
concerned, at any time in the period ending on the 91st day after
the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a Default under,
this Indenture or a default under, the New Credit Facility or any
other material agreement or instrument to which Publishing or any of
its Subsidiaries is a party or by which Publishing or any of its
Subsidiaries is bound;
(f) Publishing shall have delivered to the Trustee an opinion
of Counsel to the effect that after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) Publishing shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by
Publishing with the intent of preferring the Holders over any other
creditors of Publishing or with the intent of defeating, hindering,
delaying or defrauding any other creditors of Publishing; and
(h) Publishing shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
SECTION 8.05. Deposited U.S. Legal Tender and U.S. Government Obligations to
be Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all U.S. Legal Tender and U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04
52
hereof in respect of the outstanding Senior Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Senior Notes
and this Indenture, to the payment, either directly or through any Paying Agent,
as the Trustee may determine, to the Holders of such Senior Notes of all sums
due and to become due thereon in respect of principal, premium, if any, and
interest, but such U.S. Legal Tender and U.S. Government Obligations need not be
segregated from other funds except to the extent required by law.
Publishing shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Senior Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to Publishing from time to time upon Publishing's
request any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. Repayment to Publishing.
Any U.S. Legal Tender or U.S. Government Obligations deposited with
the Trustee or any Paying Agent, in trust for the payment of the principal of,
premium, if any, or interest on any Senior Note and remaining unclaimed for two
years after such principal, and premium, if any, or interest has become due and
payable shall be paid to Publishing on its request or shall be discharged from
such trust; and the Holder of such Senior Note shall thereafter, as an unsecured
general creditor, look only to Publishing for payment thereof, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and all
liability of Publishing as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of Publishing cause to be published once,
in The New York Times and The Wall Street Journal (national edition), notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to Publishing.
SECTION 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then Publishing's obligations under this Indenture and the
53
Senior Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such U.S. Legal Tender and U.S. Government
Obligations in accordance with Section 8.02 or 8.03 hereof, as the case may be;
provided, however, that, if Publishing makes any payment of principal of,
premium, if any, or interest on any Senior Note following the reinstatement of
its obligations, Publishing shall be subrogated to the rights of the Holders of
such Senior Notes to receive such payment from the U.S. Legal Tender and U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVER
SECTION 9.01. Without Consent of Holders.
Publishing and the Guarantors, when authorized by Board Resolutions
of Parent and Publishing, and the Trustee, together, may amend or supplement
this Indenture or the Senior Notes without notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; provided
that such amendment or supplement does not adversely affect the
legal rights of any Holder;
(2) to comply with Article Five and Section 11.06;
(3) to provide for uncertificated Senior Notes in addition to
or in place of certificated Senior Notes;
(4) to make any other change that would provide any additional
rights or benefits to the Holders of the Senior Notes or that does
not adversely affect the legal rights under this Indenture of any
such Holder;
(5) to comply with any requirements of the SEC in order to
effect or maintain the qualification of this Indenture and the
Collateral Agreements under the TIA;
(6) to provide for additional Guarantors pursuant to Section
4.19 or otherwise;
(7) to provide for the appointment of a successor Trustee, as
provided in Section 7.08 hereof.
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provided that Publishing has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.01.
After an amendment or supplement under this Section becomes
effective, Publishing shall mail to the Holders affected thereby a notice
briefly describing the amendment or supplement. Any failure of Publishing to
mail such notice, or a defect in such notice, shall not, however, in any way
impair or affect the validity of any such amendment or supplement.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, Publishing and each Guarantor, when
authorized by Board Resolutions of Parent and Publishing, and the Trustee,
together, with the written consent of the Holder or Holders of at least a
majority in aggregate principal amount of the outstanding Senior Notes may amend
or supplement this Indenture or the Senior Notes, without notice to any other
Securityholders. Subject to Section 6.07, the Holder or Holders of a majority in
aggregate principal amount of the outstanding Senior Notes may waive compliance
by Publishing with any provision of this Indenture or the Senior Notes without
notice to any other Holder. Without the consent of each Holder affected,
however, no amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may (with respect to any Senior Notes held by a non-consenting
Holder of Senior Notes):
(1) reduce the principal amount of Senior Notes whose holders
must consent to an amendment, supplement or waiver of any provision
of this Indenture or the Senior Notes;
(2) reduce the principal of or change the fixed maturity of
any Senior Note or alter the provisions with respect to the
redemption of Senior Notes pursuant to Article Three of this
Indenture or alter the provisions, including the purchase price
payable, with respect to repurchases or redemptions of the Senior
Notes pursuant to Section 4.04, 4.17 or 4.18 hereof,
(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Senior Note;
(4) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Senior Notes or
that resulted from a failure to comply with Section 4.04, 4.17 or
4.18 hereof (except a rescission of acceleration of the Senior Notes
by the holders of at least a majority in aggregate principal amount
of the Senior Notes and a waiver of the payment default that
resulted from such acceleration);
55
(5) make the principal of, or the interest on, any Senior Note
payable in any manner other than that stated in this Indenture and
the Senior Notes on the Issue Date;
(6) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of
Senior Notes to receive payments of principal of or interest on the
Senior Notes;
(7) waive a redemption payment with respect to any Senior
Note;
(8) alter the ranking of the Senior Notes relative to other
Indebtedness of Publishing or the Guarantors;
(9) make any change in the foregoing amendment and waiver
provisions;
(10) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Senior Notes on or after
the due dates therefor or to institute suit for the enforcement of
any payment on or with respect to such Holder's Senior Notes;
(11) release any Collateral from the Lien of the Collateral
Agreements except in accordance with terms thereof, or the terms of
this Indenture, or amend the terms thereof or the terms of the
Indenture relating to such release; or
(12) release any Guarantor from its Guarantee, except as
provided herein.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, Publishing shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of
Publishing to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Senior Notes shall comply with the TIA.
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SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Senior Note or portion of a Senior Note that evidences
the same debt as the consenting Holder's Senior Note, even if notation of the
consent is not made on any Senior Note. However, any such Holder or subsequent
Holder may revoke the consent as to his Senior Note or portion of his Senior
Note by notice to the Trustee or Publishing received before the date on which
the Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Senior Notes have consented (and not theretofore
revoked such consent) to the amendment, supplement or waiver.
Publishing may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (12) of Section 9.02, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Senior Note who has consented to it and
every subsequent Holder of a Senior Note or portion of a Senior Note that
evidences the same debt as the consenting Holder's Senior Note; provided that
any such waiver shall not impair or affect the right of any Holder to receive
payment of principal of and interest on a Senior Note, on or after the
respective due dates expressed in such Senior Note, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.
SECTION 9.05. Notation on or Exchange of Senior Notes.
If an amendment, supplement or waiver changes the terms of a Senior
Note, the Trustee may require the Holder of the Senior Note to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Senior Note about
the changed terms and return it to the Holder. Alternatively, if Publishing or
the Trustee so determines, Publishing in exchange for the Senior Note shall
issue and the Trustee shall authenticate a new Senior Note that reflects the
changed terms. Any such notation or exchange shall be made at the sole cost and
expense of Publishing.
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SECTION 9.06. Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture.
ARTICLE TEN
MEETINGS OF SECURITYHOLDERS
SECTION 10.01. Purposes for Which Meetings May Be Called.
A meeting of Securityholders may be called at any time and from time
to time pursuant to the provisions of this Article Ten for any of the following
purposes:
(a) to give any notice to Publishing or to the Trustee, or to
give any directions to the Trustee, or to waive or to consent to the
waiving of any Default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by
Securityholders pursuant to any of the provisions of Article Six;
(b) to remove the Trustee or appoint a successor Trustee
pursuant to the provisions of Article Seven;
(c) to consent to an amendment, supplement or waiver pursuant
to the provisions of Section 9.02; or
(d) to take any other action (i) authorized to be taken by or
on behalf of the Holders of any specified aggregate principal amount
of the Senior Notes under any other provision of this Indenture, or
authorized or permitted by law or (ii) which the Trustee deems
necessary or appropriate in connection with the administration of
this Indenture.
SECTION 10.02. Manner of Calling Meetings.
The Trustee may at any time call a meeting of Securityholders to
take any action specified in Section 10.01, to be held at such time and at such
place in The City of New York, New York or elsewhere as the Trustee shall
determine. Notice of every meeting of
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Securityholders, setting forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be mailed by the
Trustee, first-class postage prepaid, to Publishing and to the Holders at their
last addresses as they shall appear on the registration books of the Registrar
not less than 10 nor more than 60 days prior to the date fixed for a meeting.
Any meeting of Securityholders shall be valid without notice if the
Holders of all Senior Notes then outstanding are present in Person or by proxy,
or if notice is waived before or after the meeting by the Holders of all Senior
Notes outstanding, and if Publishing, the Guarantors and the Trustee are either
present by duly authorized representatives or have, before or after the meeting,
waived notice.
SECTION 10.03. Call of Meetings by Publishing or Holders.
In case at any time Publishing, pursuant to a Board Resolution or
the Holders of not less than 10% in aggregate principal amount of the Senior
Notes then outstanding shall have requested the Trustee to call a meeting of
Securityholders to take any action specified in Section 10.01, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed the notice of such meeting
within 20 days after receipt of such request, then Publishing or the Holders of
Senior Notes in the amount above specified may determine the time and place in
The City of New York, New York or elsewhere for such meeting and may call such
meeting for the purpose of taking such action, by mailing or causing to be
mailed notice thereof as provided in Section 10.02.
SECTION 10.04. Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Securityholders, a Person
shall (a) be a registered Holder of one or more Senior Notes, or (b) be a Person
appointed by an instrument in writing as proxy for the registered Holder or
Holders of Senior Notes. The only Persons who shall be entitled to be present or
to speak at any meeting of Securityholders shall be the Persons entitled to vote
at such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of Publishing, the Guarantors and their
respective counsel.
SECTION 10.05. Regulations May Be Made by Trustee; Conduct of the Meeting;
Voting Rights; Adjournment.
Notwithstanding any other provision of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any action by
or any meeting of Securityholders, in regard to proof of the holding of Senior
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, and submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think appropriate. Such
regulations may fix a record date and time for determining the Holders of record
of Senior Notes entitled to
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vote at such meeting, in which case those and only those Persons who are Holders
of Senior Notes at the record date and time so fixed, or their proxies, shall be
entitled to vote at such meeting whether or not they shall be such Holders at
the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by Publishing
or by Securityholders as provided in Section 10.03, in which case Publishing or
the Securityholders calling the meeting, as the case may be, shall in like
manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Holders of a majority
in principal amount of the Senior Notes represented at the meeting and entitled
to vote.
At any meeting each Securityholder or proxy shall be entitled to one
vote for each $ 1,000 principal amount of Senior Notes held or represented by
him; provided, however, that no vote shall be cast or counted at any meeting in
respect of any Senior Notes challenged as not outstanding and ruled by the
chairman of the meeting to be not outstanding. The chairman may adjourn any such
meeting if he is unable to determine whether any Holder or proxy shall be
entitled to vote at such meeting. The chairman of the meeting shall have no
right to vote other than by virtue of Senior Notes held by him or instruments in
writing as aforesaid duly designating him as the proxy to vote on behalf of
other Securityholders. Any meeting of Securityholders duly called pursuant to
the provisions of Section 10.02 or Section 10.03 may be adjourned from time to
time by vote of the Holders of a majority in aggregate principal amount of the
Senior Notes represented at the meeting and entitled to vote, and the meeting
may be held as so adjourned without further notice.
SECTION 10.06. Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of
Securityholders shall be by written ballots on which shall be subscribed the
signatures of the Holders of Senior Notes or of their representatives by proxy
and the principal amount of the Senior Notes voted by the ballot. The permanent
chairman of the meeting shall appoint two inspectors of votes, who cast proxies
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of the Securityholders shall be prepared by the secretary of the meeting
and there shall be attached to such record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more Persons having knowledge of the facts, setting forth a copy of the notice
of the meeting and showing that such notice was mailed as provided in Section
10.02 or published as provided in Section 10.03. The record shall be signed and
verified by the affidavits of the permanent chairman and the secretary of the
meeting and one of the duplicates shall be delivered to Publishing and the other
to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
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Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
SECTION 10.07. Exercise of Rights of Trustee or Securityholders May Not Be
Hindered or Delayed by Call of Meeting.
Nothing contained in this Article Ten shall be deemed or construed
to authorize or permit, by reason of any call of a meeting of Securityholders or
any rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Securityholders under any of the provisions of
this Indenture or of the Senior Notes.
ARTICLE ELEVEN
GUARANTEE OF SENIOR NOTES
SECTION 11.01. Unconditional Guarantee.
(a) Each Guarantor hereby unconditionally, jointly and severally,
guarantees as a primary obligor and not as a surety (such guarantee to be
referred to herein as the "Guarantee") to each Holder of a Senior Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, the Senior Notes and the obligations of Publishing hereunder or
thereunder, that: (i) the principal of and interest on the Senior Notes will be
promptly paid in full when due, subject to any applicable grace period, whether
at maturity, by acceleration or otherwise and interest on the overdue principal,
if any, and interest on any interest to the extent lawful, of the Senior Notes
and all other obligations of Publishing to the Holders or the Trustee hereunder
or thereunder will be promptly paid in full or performed all in accordance with
the terms hereof and thereof; and (ii) in case of any extension of time of
payment or renewal of any Senior Notes or of any such other obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration or otherwise, subject, however, to
the limitations set forth in Section 11.05. Each Guarantor hereby agrees that
its obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Senior Notes or this Indenture, the absence
of any action to enforce the same, any waiver or consent by any Holder of the
Senior Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against Publishing, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of Publishing, any right to require a proceeding first against
Publishing, protest, notice and all demands whatsoever and covenants that this
Guarantee will not be discharged except by complete performance of the
obligations contained in the Senior Notes, this Indenture and in this
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Guarantee. If any Securityholder or the Trustee is required by any court or
otherwise to return to Publishing or any Guarantor or any custodian, trustee,
liquidator or other similar official acting in relation to Publishing or any
Guarantor, any amount paid by Publishing or any Guarantor to the Trustee or such
Securityholder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of this Guarantee.
(b) Each Guarantor further agrees that its Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Securityholder or the Trustee to any Senior Notes held for payment of
the Guarantees.
(c) Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any
Securityholder in enforcing any rights under this Article 11.
(d) Each Guarantor also agrees that the Guarantees will be secured
as provided in Article 12.
(e) Each Guarantor agrees to become a party to the Collateral
Agreements whereby the Guarantees will be secured in the manner set forth in
such Collateral Agreements.
SECTION 11.02. Seniority of Guarantee.
The obligations of each Guarantor to the Holders of Senior Notes and
to the Trustee pursuant to the Guarantee and this Indenture are expressly senior
secured obligations of such Guarantor.
SECTION 11.03. Severability.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
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SECTION 11.04. Release of a Guarantor.
If no Default or Event of Default exists or would exist under this
Indenture or any Collateral Agreement upon the sale or disposition (or the sale
or disposition of substantially all of the assets) of a Guarantor other than
Parent to an entity which is not a Subsidiary of Parent, which is otherwise in
compliance with the terms of this Indenture, including, without limitation,
Section 4.18, and the Collateral Agreements, such Guarantor shall be deemed
released from all its obligations under this Article Eleven and its Guarantee
without any further action required on the part of the Trustee or any Holder.
The Trustee shall deliver an appropriate instrument evidencing such release upon
receipt of a request by Publishing accompanied by an Opinion of Counsel and an
Officers' Certificate certifying as to the compliance with this Section 11.04.
Any Guarantor not so released remains liable for the full amount of principal of
and interest on the Senior Notes and other obligations as provided in this
Article Eleven.
SECTION 11.05. Limitation of Guarantor's Liability.
Each Guarantor (other than Parent, which shall be liable hereunder
to the full extent of the Guarantee) and by its acceptance hereof each Holder
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar federal or state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 11.07, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
SECTION 11.06. Guarantors May Consolidate, etc., on Certain Terms.
(a) Nothing contained in this Indenture or in any of the Senior
Notes shall prevent any consolidation or merger of a Guarantor with or into
Publishing or another Person that is a Guarantor as of the Issue Date or shall
prevent any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety, to Publishing or another Person that is a
Guarantor as of the Issue Date.
(b) Except as set forth in Articles Four and Five hereof, nothing
contained in this Indenture or in any of the Senior Notes shall prevent any
consolidation or merger of a Guarantor with or into a corporation or
corporations other than Publishing or another Person that is a Guarantor as of
the Issue Date (whether or not affiliated with such Guarantor), or successive
consolidations or mergers in which a Guarantor or its successor or successors
shall be a party or parties, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or
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substantially as an entirety, to a corporation other than Publishing or another
Person that is a Guarantor as of the Issue Date (whether or not affiliated with
such Guarantor); provided, however, that, subject to Sections 11.04 and
11.06(a), (i) such transaction does not violate any covenants set forth in
Articles Four and Five hereof, (ii) immediately after such transaction, and
giving effect thereto, no Default or Event of Default shall have occurred as a
result of such transaction and be continuing, and (iii) each Guarantor hereby
covenants and agrees that, upon any such consolidation, merger, sale or
conveyance, the Guarantee set forth in this Article Eleven, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by such Guarantor, shall be expressly assumed (in
the event that the Guarantor is not the surviving corporation in the merger), by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by the corporation formed by such consolidation, or
into which the Guarantor shall have merged, or by the corporation that shall
have acquired such property. In the case of any such consolidation, merger, sale
or conveyance and upon the assumption by the successor corporation, by
supplemental indenture executed and delivered to the Trustee and satisfactory in
form to the Trustee of the due and punctual performance of all of the covenants
and conditions of this Indenture to be performed by the Guarantor, such
successor corporation shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor.
SECTION 11.07. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging Publishing's
obligations with respect to the Senior Notes or any other Guarantor's
obligations with respect to the Guarantee.
SECTION 11.08. Waiver of Subrogation.
Each Guarantor hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against Publishing that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under the Guarantee and this Indenture, including, without limitation, any right
of subrogation, reimbursement, exoneration, indemnification, and any right to
participate in any claim or remedy of any Holder of Senior Notes against
Publishing, whether or not such claim, remedy or right arises in equity, or
under contract, statute or common law, including, without limitation, the right
to take or receive from Publishing, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to any Guarantor in
violation of the preceding sentence and the Senior Notes shall not have been
paid in full, such amount shall have been deemed to have been paid to such
Guarantor for the benefit of, and held in trust for the benefit of, the Holders
of the Senior Notes, and shall forthwith be paid to
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the Trustee for the benefit of such Holders to be credited and applied upon the
Senior Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 11.08 is knowingly made in contemplation of
such benefits.
SECTION 11.09. Execution of Guarantee.
To evidence their guarantee to the Securityholder specified in
Section 11.01, the Guarantors hereby agree to execute the Guarantee in
substantially the form of Exhibit A recited to be endorsed on each Senior Note
ordered to be authenticated and delivered by the Trustee. Each Guarantor hereby
agrees that its Guarantee set forth in Section 11.01 shall remain in full force
and effect notwithstanding any failure to endorse on each Senior Note a notation
of such Guarantee. Each such Guarantee shall be signed on behalf of each
Guarantor by two Officers, or an Officer and an Assistant Secretary or one
Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to such Guarantee prior to the authentication of the
Senior Note on which it is endorsed, and the delivery of such Senior Note on
which it is endorsed, and the delivery of such Senior Note by the Trustee, after
the authentication thereof hereunder, shall constitute due delivery of such
Guarantee on behalf of such Guarantor. Such signatures upon the Guarantee may be
by manual or facsimile signature of such officers and may be imprinted or
otherwise reproduced on the Guarantee, and in case any such officer who shall
have signed the Guarantee shall cease to be such officer before the Senior Note
on which such Guarantee is endorsed shall have been authenticated and delivered
by the Trustee or disposed of by Publishing, such Senior Note nevertheless may
be authenticated and delivered or disposed of as though the Person who signed
the Guarantee had not ceased to be such officer of the Guarantor.
SECTION 11.10. Guarantee Unconditional, Etc.
Upon failure of payment when due of any obligations covered by the
Guarantee for whatever reason, each Guarantor will be obligated to pay the same
immediately. Each Guarantor hereby agrees that its obligations hereunder shall
be continuing, absolute and unconditional, irrespective of: the recovery of any
judgment against Publishing or any Guarantor; any extension, renewal,
settlement, compromise, waiver or release in respect of any obligation of
Publishing under this Indenture or any Senior Note, by operation of law or
otherwise; any modification or amendment of or supplement to this Indenture or
any Senior Note; any change in the corporate existence, structure or ownership
of Publishing or any Guarantor, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting Publishing or any Guarantor or any of their
assets or any resulting release or discharge of any obligation of Publishing or
any Guarantor contained in this Indenture or any Senior Note; the existence of
any claim, set-off or other rights which any Guarantor may have at any time
against Publishing, any Guarantor, the Trustee, any Securityholder or any other
Person, whether in connection herewith or any unrelated transactions, provided,
that nothing herein shall prevent the
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assertion of any such claim by separate suit or compulsory counterclaim; any
invalidity or unenforceability relating to or against Publishing for any reason
of this Indenture or any Senior Note, or any provision of applicable law or
regulation purporting to prohibit the payment by Publishing of the principal,
premium, if any, or interest or any Senior Note or any other Guarantee; or any
other act or omission to act or delay of any kind by Publishing or any
Guarantor, the Trustee, any Securityholder or any other Person or any other
circumstance whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the Guarantors' obligations
hereunder. Each Guarantor's obligations hereunder shall remain in full force and
effect until this Indenture shall have terminated and the principal of and
interest on the Senior Notes and all other Guarantees shall have been paid in
full. If at any time any payment of the principal of or interest on any Senior
Notes or any other payment in respect of any Guarantees is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of Publishing or otherwise, each Guarantor's obligations hereunder with respect
to such payment shall be reinstated as though such payment had been due but not
made at such time, and this Article 11, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor irrevocably waives
any and all rights to which it may be entitled, by operation of law or
otherwise, upon making any payment hereunder to be subrogated to the rights of
the payee against Publishing with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by Publishing in respect thereof.
SECTION 11.11. Additional Guarantors.
Any Person that was not a Guarantor on the date of this Indenture
may become a Guarantor by executing and delivering to the Trustee (a) a
supplemental indenture in form and substance satisfactory to the Trustee, which
subjects such Person to the provisions of this Indenture as a Guarantor and (b)
an Opinion of Counsel to the effect that such supplemental indenture has been
duly authorized and executed by such Person and constitutes the legal, valid,
binding and enforceable obligation of such Person (subject to such customary
exceptions concerning creditors' rights and equitable principles as may be
acceptable to the Trustee in its discretion). The Guarantee of each Person
described in this Section 11.11 shall apply to all Senior Notes theretofore or
thereafter executed and delivered, notwithstanding any failure of such Senior
Notes to contain a notation of such Guarantee thereon.
SECTION 11.12. Waiver of Stay, Extension or Usury Laws.
Each Guarantor covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive each such Guarantor from
performing its Guarantee as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) each Guarantor
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not
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hinder, delay or impede the execution of any power herein granted to the Trustee
but will suffer and permit the execution of every such power as though no such
law had been enacted.
ARTICLE TWELVE
COLLATERAL AND SECURITY
SECTION 12.01. Collateral Agreements.
The due and punctual payment of the principal of and interest on the
Senior Notes when and as the same shall be due and payable, whether on an
Interest Payment Date, at maturity, by acceleration, repurchase, redemption or
otherwise, and interest on the overdue principal of and interest (to the extent
permitted by law), if any, on the Senior Notes and performance of all other
obligations of Publishing and the Guarantors to the Holders of Senior Notes or
the Trustee under this Indenture and the Senior Notes and the Guarantee,
according to the terms hereunder or thereunder, shall be secured as provided in
the Collateral Agreement which Publishing and the Trustee have entered into
simultaneously with the execution of this Indenture. Each Holder of Senior
Notes, by its acceptance thereof, consents and agrees to the terms of the
Collateral Agreements as the same may be in effect or may be amended from time
to time in accordance with its terms and authorizes and directs the Collateral
Agent to enter into the Collateral Agreement and to perform its obligations and
exercise its rights thereunder in accordance therewith. Publishing shall deliver
to the Trustee copies of all documents delivered to the Collateral Agent
pursuant to the Collateral Agreement, and shall do or cause to be done all such
acts and things as may be necessary or proper, or as may be required by the
provisions of the Collateral Agreements, to assure and confirm to the Trustee
and the Collateral Agent the security interest in the Collateral, by the
Collateral Agreements or any part thereof, as from time to time constituted, so
as to render the same available for the security and benefit of this Indenture
and of the Senior Notes secured hereby, according to the intent and purposes
herein expressed. Publishing and Parent shall take, or shall cause its
Subsidiaries to take, upon request of the Trustee, any and all actions
reasonably required to cause the Collateral Agreements to create and maintain,
as security for the Obligations of Publishing hereunder, a valid and enforceable
perfected first priority Lien in and on all the First Lien Collateral, in favor
of the Collateral Agent for the benefit of the Holders of Senior Notes, superior
to and prior to the rights of all third Persons and subject to no other Liens
other than, to the extent permitted by the Security Agreement, Permitted Liens
and a valid and enforceable perfected second priority Lien in and on all the
Second Lien Collateral, in favor of the Collateral Agent for the benefit of the
Holders of Senior Notes, subject to no other Liens than the Permitted Liens.
SECTION 12.02. Recording and Opinions.
(a) Publishing shall furnish to the Trustee simultaneously with the
execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such
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counsel all action has been taken with respect to the recording, registering,
filing and perfection of this Indenture, financing statements, copyright
registrations, trademark registrations or other instruments necessary to make
effective the Liens intended to be created by the Collateral Agreements, or (ii)
stating that, in the opinion of such counsel, no such action is necessary to
make such Liens effective.
(b) Publishing shall furnish to the Collateral Agent and the Trustee
on [September 30] in each year beginning with 1999, an Opinion of Counsel, dated
as of such date, either (i) (A) stating that, in the opinion of such counsel,
action has been taken with respect to the recording, registering, filing,
perfecting, re-recording, re-registering and refiling of all supplemental
indentures, financing statements, copyright registrations, trademark
registrations, continuation statements or other instruments of further assurance
as is necessary to maintain the Liens of the Collateral Agreements, and (B)
stating that, based on relevant laws as in effect on the date of such Opinion of
Counsel, all financing statements, copyright registrations, trademark
registrations and continuation statements have been executed and filed that are
necessary as of such date and during the succeeding 12 months fully to preserve
and protect, to the extent such protection and preservation are possible by
filing, the rights of the Holders of Senior Notes and the Collateral Agent and
the Trustee hereunder and under the Collateral Agreements with respect to the
security interests in the Collateral, or (ii) stating that, in the opinion of
such counsel, no such action is necessary to maintain such Lien and assignment.
(c) The Guarantors shall otherwise comply with the provisions of TIA
Section 314(b).
SECTION 12.03. Release of Collateral.
(a) Subject to Section 4.18 and subsections (b) and (c) of this
Section 12.03, Collateral may be released from the Lien and security interest
created by the Security Agreements on the terms set forth in such Security
Agreement.
(b) At any time when a Default or Event of Default shall have
occurred and be continuing and the maturity of the Senior Notes shall have been
accelerated (whether by declaration or otherwise) and the Trustee shall have
delivered a notice of acceleration to the Collateral Agent, no release of
Collateral pursuant to the provisions of the Collateral Agreement shall be
effective as against the Holders of Senior Notes.
(c) The release of any Collateral from the terms of this Indenture
and the Collateral Agreements shall not be deemed to impair the security under
this Indenture in contravention of the provisions hereof if and to the extent
the Collateral is released pursuant to the terms of such Collateral Agreement.
To the extent applicable, Publishing shall cause TIA Section 314(d) relating to
the release of property or securities from the Liens and security interest of
the Collateral Agreements and relating to the substitution therefor of any
property or securities to be subjected to the Liens and security interest of the
Collateral Agreement to be complied
68
with. Any certificate or opinion required by TIA Section 314(d) may be made by
an Officer of Publishing except in cases where TIA Section 314(d) requires that
such certificate or opinion be made by an independent Person, which Person shall
be an independent engineer, appraiser or other expert selected or approved by
the Trustee and the Collateral Agent in the exercise of reasonable care.
SECTION 12.04. Certificates of Publishing.
Publishing shall furnish to the Trustee and the Collateral Agent,
prior to each proposed release of Collateral pursuant to the Collateral
Agreements, (i) all documents required by TIA Section 314(d) and (ii) an Opinion
of Counsel, which may be rendered by internal counsel to Publishing, to the
effect that such accompanying documents constitute all documents required by TIA
Section 314(d). The Trustee may, to the extent permitted by Sections 7.01 and
7.02 hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and such
Opinion of Counsel.
SECTION 12.05. Certificates of the Trustee.
In the event that Publishing wishes to release Collateral in
accordance with the Collateral Agreements and has delivered the certificates and
documents required by such Collateral Agreements and Sections 12.03 and 12.04
hereof, the Trustee shall determine whether it has received all documentation
required by TIA Section 314(d) in connection with such release and, based on
such determination and the Opinion of Counsel delivered pursuant to Section
12.04(ii), shall deliver a certificate to the Collateral Agent setting forth
such determination.
SECTION 12.06. Authorization of Actions to be Taken by the Trustee Under the
Collateral Agreement.
Subject to the provisions of Section 7.01 and 7.02 hereof, the
Trustee may, in its sole discretion and without the consent of the Holders of
Senior Notes, direct, on behalf of the Holders of Senior Notes, the Collateral
Agent to take all actions it deems necessary or appropriate in order to (a)
enforce any of the terms of the Collateral Agreements and (b) collect and
receive any and all amounts payable in respect of the Obligations of Publishing
hereunder. The Trustee shall have power to institute and maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts that may be unlawful or in violation of the Collateral Agreements or
this Indenture, and such suits and proceedings as the Trustee may deem expedient
to preserve or protect its interests and the interests of the Holders of Senior
Notes in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders of Senior Notes or of the Trustee).
69
SECTION 12.07. Authorization of Receipt of Funds by the Trustee Under the
Collateral Agreement.
The Trustee is authorized to receive any funds for the benefit of
the Holders of Senior Notes distributed under the Collateral Agreements, and to
make further distributions of such funds to the Holders of Senior Notes
according to the provisions of this Indenture.
SECTION 12.08. Termination of Security Interest.
Upon the payment in full of all Obligations of Publishing under this
Indenture and the Senior Notes, or upon Legal Defeasance in accordance with
Section 8.02, the Trustee shall, at the request of Publishing, deliver a
certificate to the Collateral Agent stating that such Obligations have been paid
in full, and instruct the Collateral Agent to release the Liens pursuant to this
Indenture and the Collateral Agreements.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of Section 318(c) of the TIA, the imposed
duties shall control.
SECTION 13.02. Notices.
Except as otherwise expressly provided herein, all notices, requests
and demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy or telex), and shall be deemed to have been duly
given or made when delivered by hand, or five days after being deposited in the
United States mail, postage prepaid, or, in the case of telex notice, when sent,
answer-back received, or in the case of telecopy notice, when sent, or in the
case of a nationally recognized overnight courier service, one business day
after deposit with such nationally recognized overnight courier service, to the
address set forth below or to such other address as may be designated by any
party in a written notice to the other party hereto:
70
IF TO PUBLISHING OR GUARANTORS:
Golden Books Publishing Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO TRUSTEE:
[Marine Midland Bank
Corporate Trust Services
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Corporate Trust Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000]
WITH A COPY TO:
[Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000]
SECTION 13.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Senior Notes. Publishing,
71
the Guarantors, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by Publishing to the Trustee to take
any action under this Indenture, Publishing shall furnish to the Trustee:
(1) an Officer's Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with;
and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.08, shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an Opinion
of Counsel may rely on an Officers' Certificate or certificates of
public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
72
SECTION 13.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York, Los Angeles, California or at such place of payment are not required to be
open. If a payment date is a Legal Holiday at such place, payment may be made at
such place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 13.08. Governing Law.
THIS INDENTURE AND THE SENIOR NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. Each of
the parties hereto agrees to submit to the jurisdiction of the courts of the
State of New York in any action or proceeding arising out of or relating to this
Indenture.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of Publishing, Parent or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 13.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such,
of Publishing, or any Guarantor shall not have any liability for any obligations
of Publishing or any Guarantor under the Senior Notes or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creations. Each Securityholder by accepting a Senior Note waives and releases
all such liability. Such waiver and release are part of the consideration for
the issuance of the Senior Notes.
SECTION 13.11. Successors.
All agreements of Publishing and each Guarantor in this Indenture
and the Senior Notes shall bind their respective successors. All agreements of
the Trustee in this Indenture shall bind its successor.
SECTION 13.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
73
SECTION 13.13. Severability.
In case any one or more of the provisions in this Indenture or in
the Senior Notes shall be held invalid, illegal or unenforceable, in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
SECTION 13.14. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
74
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have cause this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the date first written above.
Dated: , 1999
----------------
GOLDEN BOOKS PUBLISHING COMPANY,
INC.
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
HSBC BANK USA,
as Trustee
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
GOLDEN BOOKS FAMILY ENTERTAINMENT,
INC.
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
75
GOLDEN BOOKS HOME VIDEO, INC.
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
GOLDEN BOOKS PUBLISHING (CANADA)
INC.
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
XXXXX XXXXX ENTERPRISES, INC.
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
SLE PRODUCTIONS
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
76
XXXXXXXXX-XXXXX, INC.
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
XXXXXXXXX-XXXXX MUSIC, LLC
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
XXXXXXXXX MUSIC, LLC
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
LRM ACQUISITION CORP.
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
XXXXXXXX XXXX MUSIC, LLC
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
77
SUMMERDAWN MUSIC, LLC
By:
---------------------------------------
Name:
Title:
Attest:
----------------------------
CHUNKY MONKEY MUSIC, LLC
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
XXXXXXXXX-XXXXX PUBLISHING, INC.
By:
--------------------------------------
Name:
Title:
Attest:
----------------------------
78
Exhibit A
[FORM OF SENIOR NOTE]
GOLDEN BOOKS PUBLISHING COMPANY, INC.
10% Senior Secured Note Due 2004
No. $
GOLDEN BOOKS PUBLISHING COMPANY, INC., a Delaware corporation ("Publishing,"
which term includes any successor corporation), for value received promises to
pay to ____________________ or registered assigns, the principal sum of
______________ Dollars, on ___________, 2004 and to pay interest thereon in cash
semiannually in arrears at the rate of 10% per annum on ______ and _________ of
each year until the principal hereof is paid or made available for payment;
provided, however, that, at the option of Publishing, semiannual interest
payments due on or prior to __________, 2002 may be paid in the form of
additional securities at a rate of 13.5% per annum, and otherwise identical in
form to this Senior Note, in lieu of cash. Payment of principal, premium, if
any, and interest shall be made in the manner and subject to the terms set forth
in provisions appearing on the reverse hereof, which provisions, in their
entirety, shall for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, Publishing has caused this Senior Note to be
signed manually or by facsimile by its duly authorized officers.
Dated:
---------------------
Attest: GOLDEN BOOKS PUBLISHING COMPANY,
INC.
By:
----------------------------- --------------------------
Name: Name:
Title: Title:
A-1
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Senior Notes described in the within-mentioned Indenture.
HSBC BANK USA
By:
-------------------------------------
Authorized Signatory
A-2
GOLDEN BOOKS PUBLISHING COMPANY, INC.
10% Senior Secured Note Due 2004
1. Interest.
GOLDEN BOOKS PUBLISHING COMPANY, INC., a Delaware corporation
("Publishing"), promises to pay interest on the principal amount of this Senior
Note at the rate per annum shown above, provided, however, that at the option of
Publishing, interest payments due on or prior to ___________, 2002 may be paid
in the form of additional securities at a rate of 13.5% per annum, and otherwise
identical in form to this security, in lieu of cash. Publishing will pay
interest, whether in cash or in-kind, semi-annually on __________________ and
________________ of each year (the "Interest Payment Date"), commencing
_________________, 1999. Interest on the Senior Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance of the Senior Notes. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
Publishing shall pay interest on overdue principal and interest on
overdue installments of interest, to the extent lawful, at a rate equal to the
rate of interest otherwise payable on the Senior Notes.
2. Method of Payment.
Publishing shall pay interest on the Senior Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Senior Notes are canceled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Senior Notes to a Paying
Agent to collect principal payments. Publishing shall pay principal and
interest, except as otherwise provided by the terms of this Note, in money of
the United States that at the time of payment is legal tender for payment of
public and private debts ("U.S. Legal Tender"). However, Publishing may pay
principal and interest by wire transfer of Federal funds, or interest by its
check payable in such U.S. Legal Tender. Publishing may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address. Publishing shall notify the Trustee in writing of its election to pay
interest on this Senior Note through the issuance of additional Notes and the
aggregate amount of additional Notes to be issued not less than 10 nor more than
45 days prior to the Record Date for the Interest Payment Date on which
additional Notes will be issued. On each such Interest Payment Date, the Trustee
shall authenticate additional Notes for original issuance to each Holder on the
relevant Record Date in the aggregate principal amount required to pay such
interest. Additional Notes are an additional obligation of Publishing and shall
be governed by, and entitled to the benefits of the Indenture (as such term is
defined below) and shall be subject to the terms of the Indenture (including the
guarantee provisions) and shall rank pari passu with and be subject to the same
terms (including
A-3
the rate of interest from time to time payable thereon) as this Senior Note
(except, as the case may be, with respect to the issuance date and aggregate
principal amount).
3. Paying Agent and Registrar.
Initially, [Marine Midland Bank] (the "Trustee") will act as Paying
Agent and Registrar. Publishing may change any Paying Agent, Registrar or
co-Registrar without notice to the Holders. Publishing, Parent or any of their
respective Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or co-Registrar.
4. Indenture and Guarantees.
Publishing issued the Senior Notes under an Indenture, dated as of
___________, 1999 (the "Indenture"), among Publishing, the Guarantors and the
Trustee. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Senior Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Senior Notes are subject to all such terms, and Holders of Senior
Notes are referred to the Indenture and the TIA for a statement of them. The
Senior Notes are senior secured obligations of Publishing limited in aggregate
principal amount to $87,000,000 (except as otherwise provided in Section 2 of
this Senior Note relating to Payment of Additional Senior Notes). Payment on
each Senior Note is guaranteed on a senior secured basis, jointly and severally,
by the Guarantors pursuant to Article Eleven of the Indenture. The Senior Notes
are secured by a first priority lien on First Lien Collateral (as defined in the
Security Agreement referred to in the Indenture), and a second priority lien on
Second Lien Collateral (as defined in the Security Agreement referred to in the
Indenture).
5. Optional Redemption.
The Senior Notes may be redeemed in whole, at any time, or from time
to time in part, at the option of Publishing, at a redemption price equal to the
applicable percentage of the principal amount thereof set forth below, together
with accrued interest to the Redemption Date, if redeemed during the 12-month
period commencing on _________________ in the years set forth below:
Year Percentage
---- ----------
1999.......................... 105.00%
2000.......................... 103.33%
2001.......................... 101.25%
2002 and thereafter........... 100.00%
A-4
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Senior Notes to be
redeemed at such Holder's registered address. Senior Notes in denominations
larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Senior Notes called for redemption
shall have been deposited with the Paying Agent for redemption on such
Redemption Date, then, unless Publishing defaults in the payment of such
Redemption Price, the Senior Notes called for redemption will cease to bear
interest and the only right of the Holders of such Senior Notes will be to
receive payment of the Redemption Price.
7. Redemption or Repurchase at Option of Holders.
(a) Deficiency Offer. If at the end of each of any two consecutive
fiscal quarters Parent's Net Worth is equal to or less than $_________ million
(the "Minimum Net Worth"), then Publishing will make a Deficiency Offer to
purchase, on a pro rata basis on the Deficiency Repurchase Date, $8.7 million
aggregate principal amount of Senior Notes, or if a lesser amount of Senior
Notes is outstanding at the Deficiency Date, all of the Senior Notes then
outstanding (the "Deficiency Repurchase Amount") at a purchase price equal to
the Redemption Price specified in paragraph 5 hereof of the principal amount
thereof plus accrued interest to the Deficiency Repurchase Date. Publishing may
credit against the principal amount of Senior Notes to be acquired in any
Deficiency Offer 100% of the principal amount of Senior Notes acquired by
Publishing's through purchase, optional redemption, exchange or otherwise during
the 180-day period ending on the Deficiency Date and surrendered for
cancellation. Publishing, however, may not credit Senior Notes against the
Deficiency Repurchase Amount if such Senior Notes were previously used as a
credit against any other required payment pursuant to the Indenture. To the
extent Holders properly tender Senior Notes in an amount exceeding the
Deficiency Repurchase Amount, Senior Notes of tendering Holders will be
repurchased on a pro rata basis (based on amounts tendered) in integral
multiples of $1,000 principal amount. In no event shall the failure of
Publishing's Net Worth to equal or exceed the Minimum Net Worth at the end of
any fiscal quarter be counted toward the making of more than one Deficiency
Offer.
(b) Change of Control Offer. Upon the occurrence of a Change of
Control, Publishing will be required to make an offer (the "Change of Control
Offer") to repurchase all or any part (equal to $1,000 principal amount or an
integral multiple thereof) of a Holder's Senior Notes at a purchase price equal
to 101% of the principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase.
A-5
8. Mandatory Redemption.
(a) Amortization Payment. The Senior Notes shall be mandatorily
redeemable by Publishing in part in an amount equal to $8,333,333 principal
amount of Senior Notes, on each of ___________, 2002, ___________, 2003, and
____________, 2003 (each, a Redemption Date) at a Redemption Price equal to 100%
of the principal amount plus accrued interest thereon to the applicable
Redemption Date.
(b) Asset Sale. Publishing is required to apply the Net Proceeds
from Asset Sales of Collateral (other than Second Lien Collateral) to the
mandatory redemption of Senior Notes (and in the case of Second Lien Collateral,
either to permanently repay the New Credit Facility or to the mandatory
redemption of Senior Notes), at the Redemption Price specified in Paragraph 5
hereof.
9. Denominations; Transfer; Exchange.
The Senior Notes are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Senior Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Senior Notes or portions thereof selected for redemption.
10. Persons Deemed Owners.
The registered Holder of a Senior Note shall be treated as the owner
of it for all purposes.
11. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agents will pay the money back to
Publishing at its request. After that, all liability of the Trustee and such
Paying Agents with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
If Publishing at any time deposits with the Trustee U.S. Legal
Tender or U.S. Government Obligations sufficient to pay the principal of and
interest on the Senior Notes to redemption or maturity and complies with the
other provisions of the Indenture relating thereto, Publishing will be
discharged from certain provisions of the Indenture and the Senior Notes
(including the financial covenants, but excluding its obligation to pay the
principal of and interest on the Senior Notes).
A-6
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Senior Notes may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Senior Notes then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Senior Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Senior Notes in
addition to or in place of certificated Senior Notes, provide for additional
Guarantors pursuant to Section 4.19 of the Indenture or otherwise, comply with
Article Five or Section 11.06 of the Indenture, or comply with any requirements
of the Commission in connection with the qualification of the Indenture under
the TIA, provide for the appointment of a successor Trustee pursuant to Section
7.08 or make any other change that does not adversely affect the legal rights of
any Holder of a Senior Note.
14. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of Parent
and its Subsidiaries to, among other things, pay dividends to stockholders of
Parent or make certain other restricted payments, incur additional Indebtedness
or Liens, enter into transactions with Affiliates, make payments in respect of
its Capital Stock and merge or consolidate with any other Person and sell,
lease, transfer or otherwise dispose of substantially all of its properties or
assets. The limitations are subject to a number of important qualifications and
exceptions. Publishing must annually report to the Trustee regarding compliance
with such limitations.
15. Successors.
When a successor assumes all the obligations of its predecessor
under the Senior Notes and the Indenture, the predecessor will not be released
from those obligations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Senior Notes then
outstanding may declare all the Senior Notes to be due and payable immediately
in the manner and with the effect provided in the Indenture. Holders of Senior
Notes may not enforce the Indenture or the Senior Notes except as provided in
the Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Senior Notes. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Senior Notes then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Senior Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest, including a payment of the Deficiency Repurchase Amount pursuant to a
Deficiency Offer, a payment on the Change of Control Payment Date pursuant to a
Change of Control Offer,
A-7
and a payment upon a mandatory redemption) if it determines that withholding
notice is in their interest.
17. Trustee Dealings with Publishing.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Senior Notes and may otherwise deal
with Publishing, the Guarantors, or their respective Affiliates as if it were
not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of Publishing or any Guarantor shall have any liability for any
obligations of Publishing or any Guarantor under the Senior Notes or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Senior Note by accepting a
Senior Note waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Senior Notes.
19. Authentication.
This Senior Note shall not be valid until the Trustee or
authenticating agent manually signs the certificate of authentication on this
Senior Note.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Senior Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to
Minors Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, Publishing will cause CUSIP numbers to be
printed on the Senior Notes as a convenience to the Holders of the Senior Notes.
No representation is made as to the accuracy of such numbers as printed on the
Senior Notes and reliance may be placed only on the other identification numbers
printed hereon.
Publishing will furnish to any Holder of a Senior Note upon written
request and without charge a copy of the Indenture. Requests may be made to:
Golden Books Publishing Company, Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000.
A-8
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
SENIOR SECURED GUARANTEE
The Guarantors (as defined in the Indenture (the "Indenture")
referred to in the Senior Note upon which this notation is endorsed and each
hereinafter referred to as a "Guarantor," which term includes any successor
Person under the Indenture) have, jointly and severally, unconditionally
guaranteed on a senior secured basis, (such guarantee by each Guarantor being
referred to herein as the "Guarantee") (i) the due and punctual payment of the
principal of and interest on the Senior Notes, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Senior Notes, to the extent
lawful, and the due and punctual performance of all other obligations of
Publishing to the Holders or the Trustee all in accordance with the terms set
forth in Article Eleven of the Indenture and (ii) in case of any extension of
time of payment or renewal of any Senior Notes or any of such other obligations,
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
The obligations of each Guarantor to the Holders of Senior Notes and
to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth, and are senior secured obligations of each such Guarantor to the extent
and in the manner provided, in Article Eleven of the Indenture, and may be
released under certain circumstances. Reference is hereby made to such Indenture
for the precise terms of the Guarantee therein made.
No stockholder, officer, director or incorporator, as such, past,
present or future, of any Guarantor shall have any liability under the Guarantee
by reason of his or its status as such stockholder, officer, director or
incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Senior Notes upon which the Guarantee
is noted shall have been executed by the Trustee under the Indenture by the
manual signature of one of its authorized officers.
[Remainder of Page Intentionally Left Blank]
A-9
GUARANTORS:
Golden Books Family Entertainment, Inc.
Golden Books Home Video, Inc.
Golden Books Publishing, (Canada) Inc.
Xxxxx Xxxxx Enterprises, Inc.
SLE Productions, Inc.
XxXxxxxxx-Xxxxx, Inc.
XxXxxxxxx-Xxxxx, Music, LLC
XxXxxxxxx Music, LLC
LRM Acquisition Corp.
Summerdawn Music, LLC
Chunky Monkey Music, LLC
XxXxxxxxx-Xxxxx Publishing, LLC
Xxxxxxxx Xxxx Music, LLC
By:
-----------------------------------------
Name:
(for each of the above-listed Guarantors)
By:
-----------------------------------------
Name:
(for each of the above-listed Guarantors)
A-10
[FORM OF ASSIGNMENT]
To assign this Senior Note, fill in the form below: I or we assign and transfer
this Senior Note to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
--------------------------------------------------------------------------------
and irrevocably appoint ____________ agent to transfer this Senior Note on the
books of Publishing. The agent may substitute another to act for him.
Dated:
-------------------------------
Signed:
-------------------------------
--------------------------------------------------------------------------------
(Sign exactly as your name appears on the
front of this Senior Note)
Signature Guarantee:
Signature must be guaranteed by an eligible guarantor institution within
the meaning of Securities and Exchange Commission Rule 17Ad-15 (including
banks, stock brokers, savings and loan associations, national securities
exchanges, registered securities associations, clearing agencies and
credit unions) with membership or participation in an approved signature
guarantee medallion program if this Senior Note is delivered other than to
and in the name of the registered holder.
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Note purchased by
Publishing pursuant to Section 4.04 or Section 4.17 of the Indenture, check the
appropriate box: Section 4.04 [ ] Section 4.17 [ ].
If you want to elect to have only part of this Senior Note purchased
by Publishing pursuant to Section 4.04 or Section 4.17 of the Indenture, state
the amount:
Date: Signature:
-------------------- --------------------------------------
(Sign exactly as your name appears
on the front of this Senior Note)
Signature Guarantee:
Signature must be guaranteed by an eligible guarantor institution within
the meaning of Securities and Exchange Commission Rule 17Ad-15 (including
banks, stock brokers, savings and loan associations, national securities
exchanges, registered securities associations, clearing agencies and
credit unions) with membership or participation in an approved signature
guarantee medallion program if this Senior Note is delivered other than to
and in the name of the registered holder.
A-12
