<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 5)
Golden Books Family Entertainment, Inc.
----------------------------------------
(Name of Issuer)
Common Stock, par value
------------------------
(Title of Class of Securities)
380804104
----------
(CUSIP Number)
Stephen Distler
E.M. Warburg Pincus & Co., LLC
466 Lexington Avenue
New York, New York 10017
(212) 878-0600
---------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
- with a copy to -
Laurence D. Weltman, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
September 8, 1998
----------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See ss. 240.13d-7(b),
for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- ------------------------------------------------------------------------------
CUSIP No. 380804104 Page 2 of 8 Pages
---------- -------- -----
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus Ventures, L.P. I.D. # 13-3784037
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
|_|
(b)
|X|
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
--------------------------------------------------------------
8 SHARED VOTING POWER
11,721,271
--------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,131,000
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
14,971,271
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
|_|
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.6%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- -----------------------------------------------------------------------------
CUSIP No 380804104 Page 3 of 8 Pages
--------- -------- ------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Warburg, Pincus & Co. I.D. # 13-6358475
- -----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
|_|
(b)
|x]
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- -----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
|_|
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- -----------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- -----------------------------------------------------------------------------
8 SHARED VOTING POWER
11,721,271
- -----------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- -----------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,131,000
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
14,971,271
- -----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
|_|
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.6%
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ---------------------------- ------------------------------------------
CUSIP No 380804104 Page 4 of 8 Pages
--------- -------- -----
- ---------------------------- ------------------------------------------
- -----------------------------------------------------------------------------
1 NAME OF REPORTING PER
SON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Golden Press Holding, L.L.C.
- -----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
|_|
(b)
|x|
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- -----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- -----------------------------------------------------------------------------
8 SHARED VOTING POWER
11,721,271
- -----------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- -----------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,131,000
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
14,971,271
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
|_|
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.6%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ------------------------- --------------------------------------------
CUSIP No. 380804104 Page 5 of 8 Pages
--------- -------- -------
- ------------------------- --------------------------------------------
- -----------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
E.M. Warburg, Pincus & Co., LLC I.D. # 13-3536050
- -----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
|_|
(b)
|x|
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- -----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- -----------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- -----------------------------------------------------------------------------
8 SHARED VOTING POWER
11,721,271
- -----------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
- -----------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,131,000
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
14,971,271
- -----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
|_|
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.6%
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Introductory Note.
-----------------
This Amendment No. 5 amends the Schedule 13D filed by the Reporting
Entities on February 13, 1996, as amended by Amendment No. 1 filed by the
Reporting Entities on May 16, 1996, Amendment No. 2 filed by the Reporting
Entities on March 7, 1997, Amendement No. 3 filed by the Reporting Entities
March 10, 1998, and Amendment No. 4 filed by the Reporting Entities July 8, 1998
(together, the "Schedule 13D"), relating to the Common Stock, par value $0.01
per share (the "Common Stock"), of Golden Books Family Entertainment, Inc., a
Delaware corporation (the "Company"), and is being filed pursuant to Rule 13d-2
of the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Unless otherwise indicated, all capitalized
terms used but not defined herein shall have the same meaning as set forth in
the Schedule 13D.
The Reporting Entities are filing this Amendment to report an agreement
among Golden Press Holding, L.L.C. ("GP Holding"), the Company, and the
Company's wholly-owned subsidiaries Golden Books Publishing Company, Inc.
("Publishing") and Golden Books Home Video, Inc. ("Home Video") entered into on
September 8, 1998 and described below under Item 6.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
-------------------------------------------------------------
Item 6 of the Schedule 13D is hereby amended by deleting the final
paragraph thereof, as reflected in Amendment No. 4 to Schedule 13D, dated July
8, 1998, and by adding the following paragraph at the end thereof:
On September 8, 1998 the Company and GP Holding, together with
Publishing and Home Video, entered into a Note Purchase Agreement
(the "Note Purchase Agreement") providing for the sale by Home
Video and purchase by GP Holding of up to $25 million of Senior
Secured Notes of Home Video, of which $10 million were sold upon
that same date. All of the proceeds of the sale of such Senior
Secured Notes were lent by Home Video to Publishing in exchange
for Senior Notes of Publishing in the same aggregate principal
amount. Interest on each of the Senior Secured Notes and Senior
Notes is at an initial rate of 5% per annum, increasing to 7% in
February 1999. The payment of interest may be deferred at the
Company's option until maturity. The Company fully and
unconditionally guaranteed the performance by Home Video of its
Senior Secured Notes and the performance by Publishing of its
Senior Notes. All obligations under the Note Purchase Agreement,
the Senior Notes and the Senior Secured Notes are secured by a
pledge of all of the Company's stock in each of Publishing and
Home Video, a pledge of the Senior Notes issued by Publishing and
by a senior security interest in all other of Home Video's
property. The Note Purchase Agreement provides that the Company
may borrow up to an additional $15 million at any time over the
next year. All obligations under the Note Purchase Agreement are
due on September 9, 1999, or earlier under certain conditions,
including if certain assets of the Company are sold.
<PAGE>
Item 7. Material to be filed as Exhibits
--------------------------------
Item 7 of the Schedule 13D is hereby amended by deleting the existing
Exhibit 6 added thereto by Amendment No. 4 to Schedule 13D, dated July 8, 1998,
amd by adding thereto the following Exhibits 6 through 10:
Exhibit 6 Note Purchase Agreement, between GPH, the Company, Publishing
and Home Video, incorporated by reference to the same
document included as Exhibit 10-1 to Form 8-K filed by the
Company on September 16, 1998, under SEC File No. 0-14399
(the "Company Form 8-K").
Exhibit7 Pledge and Security Agreement, between GPH,, the Company,
Publishing and Home Video, incorporated by reference to the
same document included as Exhibit 10.2 to the Company Form 8-K.
Exhibit 8 Senior Secured Note issued by Home Video.
Exhibit 9 Senior Note issued by Publishing.
Exhibit 10 Press release issued by the Company on September 14, 1998,
incorporated by reference to the same document included as
Exhibit 99.1 to the Company Form 8-K.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 18, 1998
GOLDEN PRESS HOLDING, L.L.C.
By: Warburg, Pincus Ventures, L.P.,
Member
By: Warburg, Pincus & Co.,
General Partner
By: /s/ Stephen M. Distler
-------------------------
Name: Stephen M. Distler
Title: Partner
WARBURG, PINCUS VENTURES, L.P.
By: Warburg, Pincus & Co.,
General Partner
By: /s/ Stephen M. Distler
---------------------------
Name: Stephen M. Distler
Title: Partner
WARBURG, PINCUS & CO.
By: /s/ Stephen M. Distler
---------------------------
Name: Stephen M. Distler
Title: Partner
E.M. WARBURG, PINCUS & CO., LLC
By: /s/ Stephen M. Distler
--------------------------
Name: Stephen M. Distler
Title: Managing Director
<PAGE>
SCHEDULE I
-----------
Set forth below is the name, position and present principal occupation of
each of the general partners of Warburg, Pincus & Co. ("WP") and each of
the members of E.M. Warburg, Pincus & Co., LLC ("EMW"). The sole general
partner of Warburg, Pincus Ventures, L.P. ("Ventures") is WP. WP, EMW and
Ventures are hereinafter collectively referred to as the "Reporting
Entities." Except as otherwise indicated, the business address of each of
such persons is 466 Lexington Avenue, New York, New York 10017, and each of
such persons is a citizen of the United States.
General Partners of WP
----------------------
Present Principal Occupation in
Addition to Position with WP, and
Positions with the Reporting
Entities
----------------------------------
Name
- ----
Joel Ackerman Managing Director and Member, EMW
Susan Black Managing Director and Member, EMW
Christopher W. Brody Managing Director and Member, EMW
Harold Brown Senior Managing Director and Member,
EMW
Errol M. Cook Managing Director and Member, EMW
W. Bowman Cutter Managing Director and Member, EMW
Elizabeth B. Dater Managing Director and Member, EMW
Stephen Distler Managing Director, Member and
Treasurer, EMW
Harold W. Ehrlich Managing Director and Member, EMW
Managing Director and Member, EMW
John L. Furth Vice Chairman of the Board and
Member, EMW
<PAGE>
Stewart K.P. Gross Managing Director and Member, EMW
Patrick T. Hackett Managing Director and Member, EMW
Jeffrey A. Harris Managing Director and Member, EMW
Managing Director and Member, EMW
William H. Janeway Managing Director and Member, EMW
Douglas M. Karp Managing Director and Member, EMW
Charles R. Kaye Managing Director and Member, EMW
Henry Kressel Managing Director and Member, EMW
Joseph P. Landy Managing Director and Member, EMW
Sidney Lapidus Managing Director and Member, EMW
Kewsong Lee Managing Director and Member, EMW
Reuben S. Leibowitz Managing Director and Member, EMW
S. Joshua Lewis Managing Director and Member, EMW
David E. Libowitz Managing Director and Member, EMW
Brady T. Lipp Managing Director and Member, EMW
Stephen J. Lurito Managing Director and Member, EMW
<PAGE>
Spencer S. Marsh III Managing Director and Member, EMW
Lynn S. Martin Managing Director and Member, EMW
Edward J. McKinley Managing Director and Member, EMW
Rodman W. Moorhead III Senior Managing Director and Member,
EMW
Maryanne Mullarkey Managing Director and Member, EMW
Howard H. Newman Managing Director and Member, EMW
Gary D. Nusbaum Managing Director and Member, EMW
Sharon B. Parente Managing Director and Member, EMW
Dalip Pathak Managing Director and Member, EMW
Daphne D. Philipson Managing Director and Member, EMW
Lionel I. Pincus Chairman of the Board, CEO, and
Managing Member, EMW;
and Managing Partner, Pincus & Co.
Eugene L. Podsiadlo Managing Director and Member, EMW
Ernest H. Pomerantz Managing Director and Member, EMW
Brian S. Posner Managing Director and Member, EMW
Arnold M. Reichman Managing Director and Member, EMW
Roger Reinlieb Managing Director and Member, EMW
John D. Santoleri Managing Director and Member, EMW
<PAGE>
Steven G. Schneider Managing Director and Member, EMW
Sheila N. Scott Managing Director and Member, EMW
Harold Sharon Managing Director and Member, EMW
Eugene J. Siembieda Managing Director and Member, EMW
James E. Thomas Managing Director and Member, EMW
John L. Vogelstein Vice Chairman of the Board and
Member, EMW
Elizabeth H. Weatherman Managing Director and Member, EMW
John A. Zaro III Managing Director and Member, EMW
Pincus & Co.*
NL & Co.**
<PAGE>
* New York limited partnership; its primary activity is
ownership in WP and EMW.
** New York limited partnership; its primary activity is
ownership in WP.
<PAGE>
Members of EMW
----------------
Present Principal Occupation in
Addition to Position with EMW,
and Positions with the Reporting
Name Entities
- ---- --------------------------------
Joel Ackerman Partner, WP
Susan Black Partner, WP
Christopher W. Brody Partner, WP
Harold Brown Partner, WP
Dale C. Christensen(1)
Errol M. Cook Partner, WP
W. Bowman Cutter Partner, WP
Elizabeth B. Dater Partner, WP
Stephen Distler Partner, WP
P. Nicholas Edwards(2) Partner, WP
Harold W. Ehrlich Partner, WP
John L. Furth Partner, WP
Stewart K.P. Gross Partner, WP
Patrick T. Hackett Partner, WP
Jeffrey A. Harris Partner, WP
William H. Janeway Partner, WP
Douglas M. Karp Partner, WP
Charles R. Kaye Partner, WP
Richard H. King(2)
Henry Kressel Partner, WP
Joseph P. Landy Partner, WP
Sidney Lapidus Partner, WP
<PAGE>
Kewsong Lee Partner, WP
Reuben S. Leibowitz Partner, WP
S. Joshua Lewis Partner, WP
David E. Libowitz Partner, WP
Brady T. Lipp Partner, WP
Stephen J. Lurito Partner, WP
Spencer S. Marsh III Partner, WP
John W. MacIntosh(1) Partner, WP
Lynn S. Martin Partner, WP
Edward J. McKinley Partner, WP
Rodman W. Moorhead III Partner, WP
Maryanne Mullarkey Partner, WP
Howard H. Newman Partner, WP
Gary D. Nusbaum Partner, WP
Sharon B. Parente Partner, WP
Dalip Pathak Partner, WP
Daphne D. Philipson Partner, WP
Lionel I. Pincus Managing Partner, WP; Chairman of the
Board and CEO, EMW; Managing Partner,
Pincus & Co.
Eugene L. Podsiadlo Partner, WP
Ernest H. Pomerantz Partner, WP
Brian S. Posner Partner, WP
Arnold M. Reichman Partner, WP
Roger Reinlieb Partner, WP
John D. Santoleri Partner, WP
Steven G. Schneider Partner, WP
<PAGE>
Sheila N. Scott Partner, WP
Harold Sharon Partner, WP
Dominic H. Shorthouse(2)
Eugene J. Siembieda Partner, WP
Chang Q. Sun(3)
James E. Thomas Partner, WP
John L. Vogelstein Partner, WP
Elizabeth H. Weatherman Partner, WP
John A. Zaro III Partner, WP
Pincus & Co.*
(1) Citizen of Canada
(2) Citizen of United Kingdom
(3) Citizen of People's Republic of China
* New York limited partnership; its primary activity is ownership in WP.
<PAGE>
Exhibit Index
Exhibit No. Description
- ---------- ------------
Exhibit 6 Note Purchase Agreement, incorporated by
reference to the same document included
as Exhibit 10-1 to Form 8-K filed by the
Company on September 16, 1998, under SEC
File No. 0-14399 ("Company Form 8-K").
Exhibit 7 Pledge and Security Agreement,
incorporated by reference to the same
document included as Exhibit 10.2 to the
Company Form 8-K.
Exhibit 8 Senior Secured Note issued by Home Video.
Exhibit 9 Senior Note by issued Publishing.
Exhibit 10 Press release issued by the Company on
September 14, 1998, incorporated by
reference to the same document included
as Exhibit 99.1 to the Company Form 8-K.
<PAGE>
Exhibit 8
---------
Copy of Senior Secured Note
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES WILL BE INVALID UNLESS
A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR IN
THE OPINION OF COUNSEL FOR THE COMPANY REGISTRATION UNDER THE ACT IS UNNECESSARY
IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT.
GOLDEN BOOKS HOME VIDEO, INC.
SENIOR SECURED NOTE
$10,000,000 September 8, 1998
FOR VALUE RECEIVED, subject to the terms and conditions set forth
below, GOLDEN BOOKS HOME VIDEO, INC., a Delaware corporation (the "Company"),
whose address is 888 Seventh Avenue, New York, New York 10106, hereby promises
to pay to the order of Golden Press Holding, L.L.C. (the "Payee"), the principal
sum of TEN MILLION DOLLARS ($10,000,000), together with interest on the
outstanding principal balance remaining unpaid from time to time from and after
the date hereof until paid in full at the rate of (i) until March 8, 1999, five
percent (5%) per annum, (ii) thereafter, at the rate of seven percent (7%) per
annum and (iii) on any overdue payment of principal and any overdue payment of
interest, payable on demand, at the rate of eleven percent (11%) per annum;
provided, however, that the rate of interest payable hereunder shall not exceed
the maximum rate, if any, allocable under applicable law, payable monthly in
arrears on the last day of each month, and on the maturity date hereof, computed
on the basis of a 360 day year of twelve 30 day months. The outstanding
principal balance, together with all accrued and unpaid interest, shall be due
and payable September 9, 1999.
In lieu of cash payment of interest hereon, on each day on which
interest shall be payable as aforesaid (except on the maturity date hereof), the
principal amount of this Senior Secured Note (the "Note") shall be increased by
an amount equal to the amount of interest payable on such interest payment date,
provided that, at the Company's option, such amount may be paid in cash.
All payments on account of principal and interest shall be made in
lawful money of the United States of America to the address of the Payee set
forth in the Purchase Agreement (as defined herein), or at such other place as
the holder hereof may from time to time designate in writing to the Company.
This Note is issued pursuant to that certain Note Purchase Agreement
dated as of September 8, 1998 (the "Purchase Agreement"), and is being delivered
to the Holder together with the Notation of Guarantee provided for in the
Purchase Agreement. All of the proceeds from the sale of this Note shall be
loaned to Golden Books Publishing Company, Inc. ("Publishing") in exchange
<PAGE>
for a senior promissory note of Publishing substantially in the Form of
Exhibit A-2 to the Purchase Agreement (the "Publishing Note"), which Publishing
Note shall be granted to the Holder as secured party under the Purchase
Agreement together with the other Collateral described in the Security
Agreement.
The Payee and each subsequent holder or holders hereof (any such person
being referred to herein as the "Holder" and all holders being referred to
herein as "Holders") by acceptance of the Note each agree to the following terms
and conditions:
1. Principal Payments.
------------------
1.1. Pro Rata Payments. Any and all payments under this Note,
whether at the election of the Company, upon maturity or following an Event of
Default, shall be made by the Company pro rata to all Holders of Notes under the
Purchase Agreement.
1.2. Optional Prepayments. This Note may be prepaid in whole or in
part without prepayment penalty at any time and from time to time upon 20 days
prior written notice to the Holders, together with all accrued and unpaid
interest with respect to the principal amount prepaid.
1.3. No Setoff, Counterclaim or Withholding; Gross-Up. Except as
otherwise required by law, each payment by the Company with respect to the Notes
shall be made without setoff or counterclaim and without withholding for or on
account of any present or future taxes imposed by or within the jurisdiction of
incorporation of, or the jurisdiction from or through which payment is made by,
the Company or, in each case, any political subdivision or taxing authority
thereof or therein. If any such withholding is so required, the Company shall
make the withholding, pay the amount withheld to the appropriate governmental
authority before penalties attach thereto or interest accrues thereon and
forthwith pay such additional amount as may be necessary to ensure that the net
amount actually received by the holder or holders of the Notes free and clear of
such taxes (including such taxes on such additional amount) is equal to the
amount which such holder or holders would have received had such withholding not
been made. If any holder or holders shall pay any amount in respect of any such
taxes, penalties or interest, the Company shall reimburse said holder or holders
in United States Dollars for that payment on demand, which reimbursement shall
be subject to the preceding provisions of this Section 1.3.
1.4. Manner of Payment. All payments of principal and interest on
this Note shall be made by wire transfer of immediately available funds to an
account designated by Payee in writing. If any payment of principal or interest
on this Note is due on a day which is not a Business Day, such payment shall be
due on the next succeeding Business Day, and such extension of time shall be
taken into account in calculating the amount of
2
<PAGE>
interest payable under this Note. "Business Day" means any day othern than a
Saturday, Sunday or legal holiday in the State of New York.
2. Replacement.
-----------
Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Note (provided that an affidavit
of the Holder will be satisfactory for such purpose), and upon surrender and
cancellation of this Note, if mutilated, the Company will make and deliver a new
Note of like tenor in a principal amount equal to the outstanding principal
balance of this Note. No Holder shall be required to pay any service charge,
post any bond, provide any insurance or make any similar payment in connection
therewith. Any Note so issued shall be dated as of the last date at which
principal or interest has been paid upon this Note.
3. Cancellation.
------------
Upon payment in full of all principal and interest payable
hereunder, this Note shall be surrendered to the Company for cancellation.
4. Amendment and Waiver.
--------------------
Any provision of the Note may be amended or waived by a written
instrument signed by the Company and by Holders of at least 66-2/3% of the then
outstanding aggregate principal amount of Notes, such amendment or waiver to be
effective with respect to all of the Notes but only in the specific instance and
for the specific purpose for which the amendment or waiver is made or given;
provided, however, that no such amendment or waiver shall, without the prior
written consent of the Holders of all of the then outstanding aggregate
principal amount of Notes, modify the principal amount, rate of interest, form
and place of payment, or maturity of the Note, or the percentage required to
effect amendment of the Note.
5. Attorneys' Fees.
---------------
The Company agrees, subject only to any limitation imposed by
applicable law, to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the Holder in endeavoring to collect any amounts
payable hereunder which are not paid when due, whether by acceleration or
otherwise, or to enforce any rights of such Holder under the Purchase Agreement
or this Note.
6. Waiver and Governing Law.
------------------------
No delay on the part of the Holder in exercising any right hereunder
shall operate as a waiver of such right under this Note. This Note shall be
construed in accordance with the
3
<PAGE>
laws of the State of New York applicable to contracts executed and to be
performed wholly within such state.
7. Presentment.
-----------
Presentment, demand, protest, notice of protest, notice of dishonor,
notice of nonpayment and all other like requirements are waived by the Company
with respect to any amounts due hereunder, and any rights to direct the Company
hereunder, and any right to require proceedings against others or to require
exhaustion of security, are waived.
8. Severability.
------------
If any provision in this Note is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Note will
remain in full force and effect. Any provision of this Note held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
9. Parties in Interest.
-------------------
This Note shall bind the Company and its successors and assigns.
This Note may be assigned or transferred by Payee without the consent of the
Company.
10. Section Headings, Construction.
------------------------------
The headings of Sections in this Note are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Note unless otherwise specified.
All words used in this Note will be construed to be of such gender
or number as the circumstances require. Unless otherwise expressly provided, the
words "hereof" and "hereunder" and similar references refer to this Note in its
entirety and not to any specific section or subsection hereof.
11. Notice.
------
Notices and other communications required or permitted to be given
hereunder shall be in writing and shall be conclusively deemed effectively given
upon personal delivery or confirmed facsimile transmission, or five days after
deposit in United States Mail, by registered or certified mail, postage prepaid,
or one day after forwarding through a nationally recognized air courier service,
addressed (i) if to the Company, at 888 Seventh Avenue, New York, New York
10106, Facsimile No.: (212) 547-6771, and (ii) if to Payee at Payee's address as
set forth in the Purchase Agreement, or at such other address as the
4
<PAGE>
Company or Payee may designate by ten (10) days' advance written notice to
the other party given in the manner herein provided.
GOLDEN BOOKS HOME VIDEO, INC.
By: /s/ Richard E. Synder
---------------------
Richard E. Synder
Chairman and Chief
Executive Officer
<PAGE>
NOTATION OF GUARANTEE
OF
GOLDEN BOOKS HOME VIDEO, INC. SENIOR SECURED NOTE
The Guarantor (as defined in the Note Purchase Agreement (the
"Note Purchase Agreement") referred to in the Senior Secured Note ("Note") upon
which this notation is affixed has unconditionally guaranteed (such guarantee
being referred to herein as the "Guarantee") (i) the due and punctual payment of
the principal of and the interest on the 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 Notes, to the extent lawful, and
the due and punctual performance of all other obligations of the Company to the
holders of the Notes, all in accordance with the terms set forth in the Note
Purchase Agreement, and (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that 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.
No past, present or future stockholder, director, officer,
employee or incorporator, as such, of the Guarantor shall have any liability for
any obligation of the Guarantor under the Guarantee or the Note Purchase
Agreement or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Guarantee.
GUARANTOR:
GOLDEN BOOKS FAMILY ENTERTAINMENT, INC.
By: /s/ Richard E. Snyder
Richard E. Snyder,
Chief Executive Officer
<PAGE>
Exhibit 9
----------
Copy of Senior Note
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES WILL BE INVALID UNLESS
A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR IN
THE OPINION OF COUNSEL FOR THE COMPANY REGISTRATION UNDER THE ACT IS UNNECESSARY
IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT.
GOLDEN BOOKS PUBLISHING COMPANY, INC.
SENIOR NOTE
10,000,000 September 8, 1998
FOR VALUE RECEIVED, subject to the terms and conditions set forth below,
GOLDEN BOOKS PUBLISHING COMPANY, INC., a Delaware corporation (the "Company"),
whose address is 888 Seventh Avenue, New York, New York 10106, hereby promises
to pay to the order of Golden Press Holding, L.L.C., as pledgee (the "Payee"),
the principal sum of TEN MILLION DOLLARS ($10,000,000), together with interest
on the outstanding principal balance remaining unpaid from time to time from and
after the date hereof until paid in full at the rate of (i) until March 8, 1999,
five percent (5%) per annum, (ii) thereafter, at the rate of seven percent (7%)
per annum and (iii) on any overdue payment of principal and any overdue payment
of interest, payable on demand, at the rate of eleven percent (11%) per annum;
provided, however, that the rate of interest payable hereunder shall not exceed
the maximum rate, if any, allocable under applicable law, payable monthly in
arrears on the last day of each month, and on the maturity date hereof, computed
on the basis of a 360 day year of twelve 30 day months. The outstanding
principal balance, together with all accrued and unpaid interest, shall be due
and payable September 9, 1999.
In lieu of cash payment of interest hereon, on each day on which interest
shall be payable as aforesaid (except on the maturity date hereof), the
principal amount of this Senior Note (the "Note") shall be increased by an
amount equal to the amount of interest payable on such interest payment date,
provided that, at the Company's option, such amount may be paid in cash.
All payments on account of principal and interest shall be made in lawful
money of the United States of America to the address of the Payee set forth in
the Purchase Agreement (as defined herein), or at such other place as the holder
hereof may from time to time designate in writing to the Company.
This Note is issued pursuant to that certain Note Purchase Agreement dated
as of September 8, 1998 (the "Purchase Agreement"), and is being delivered to
the Holder together with the Notation of Guarantee provided for in the Purchase
Agreement.
<PAGE>
The Payee and each subsequent holder or holders hereof (any such person
being referred to herein as the "Holder" and all holders being referred to
herein as "Holders") by acceptance of the Note each agree to the following terms
and conditions:
1. Principal Payments.
------------------
1.1. Pro Rata Payments. Any and all payments under this Note,
whether at the election of the Company, upon maturity or following an Event of
Default, shall be made by the Company pro rata to all Holders of Notes under the
Purchase Agreement.
1.2. Optional Prepayments. This Note may be prepaid in whole or in
part without prepayment penalty at any time and from time to time upon 20 days
prior written notice to the Holders, together with all accrued and unpaid
interest with respect to the principal amount prepaid.
1.3. No Setoff, Counterclaim or Withholding; Gross-Up. Except as
otherwise required by law, each payment by the Company with respect to the Notes
shall be made without setoff or counterclaim and without withholding for or on
account of any present or future taxes imposed by or within the jurisdiction of
incorporation of, or the jurisdiction from or through which payment is made by,
the Company or, in each case, any political subdivision or taxing authority
thereof or therein. If any such withholding is so required, the Company shall
make the withholding, pay the amount withheld to the appropriate governmental
authority before penalties attach thereto or interest accrues thereon and
forthwith pay such additional amount as may be necessary to ensure that the net
amount actually received by the holder or holders of the Notes free and clear of
such taxes (including such taxes on such additional amount) is equal to the
amount which such holder or holders would have received had such withholding not
been made. If any holder or holders shall pay any amount in respect of any such
taxes, penalties or interest, the Company shall reimburse said holder or holders
in United States Dollars for that payment on demand, which reimbursement shall
be subject to the preceding provisions of this Section 1.3.
1.4. Manner of Payment. All payments of principal and interest on
this Note shall be made by wire transfer of immediately available funds to an
account designated by Payee in writing. If any payment of principal or interest
on this Note is due on a day which is not a Business Day, such payment shall be
due on the next succeeding Business Day, and such extension of time shall be
taken into account in calculating the amount of interest payable under this
Note. "Business Day" means any day other than a Saturday, Sunday or legal
holiday in the State of New York.
2
<PAGE>
2. Replacement.
-----------
Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Note (provided that an affidavit
of the Holder will be satisfactory for such purpose), and upon surrender and
cancellation of this Note, if mutilated, the Company will make and deliver a new
Note of like tenor in a principal amount equal to the outstanding principal
balance of this Note. No Holder shall be required to pay any service charge,
post any bond, provide any insurance or make any similar payment in connection
therewith. Any Note so issued shall be dated as of the last date at which
principal or interest has been paid upon this Note.
3. Cancellation.
------------
Upon payment in full of all principal and interest payable
hereunder, this Note shall be surrendered to the Company for cancellation.
4. Amendment and Waiver.
--------------------
Any provision of the Note may be amended or waived by a written
instrument signed by the Company and by Holders of at least 66-2/3% of the then
outstanding aggregate principal amount of Notes, such amendment or waiver to be
effective with respect to all of the Notes but only in the specific instance and
for the specific purpose for which the amendment or waiver is made or given;
provided, however, that no such amendment or waiver shall, without the prior
written consent of the Holders of all of the then outstanding aggregate
principal amount of Notes, modify the principal amount, rate of interest, form
and place of payment, or maturity of the Note, or the percentage required to
effect amendment of the Note.
5. Attorneys' Fees.
---------------
The Company agrees, subject only to any limitation imposed by
applicable law, to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the Holder in endeavoring to collect any amounts
payable hereunder which are not paid when due, whether by acceleration or
otherwise, or to enforce any rights of such Holder under the Purchase Agreement
or this Note.
6. Waiver and Governing Law.
------------------------
No delay on the part of the Holder in exercising any right
hereunder shall operate as a waiver of such right under this Note. This Note
shall be construed in accordance with the laws of the State of New York
applicable to contracts executed and to be performed wholly within such state.
3
<PAGE>
7. Presentment.
-----------
Presentment, demand, protest, notice of protest, notice of
dishonor, notice of nonpayment and all other like requirements are waived by the
Company with respect to any amounts due hereunder, and any rights to direct the
Company hereunder, and any right to require proceedings against others or to
require exhaustion of security, are waived.
8. Severability.
------------
If any provision in this Note is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Note will
remain in full force and effect. Any provision of this Note held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
9. Parties in Interest.
-------------------
This Note shall bind the Company and its successors and assigns.
This Note may be assigned or transferred by Payee without the consent of the
Company.
10. Section Headings, Construction.
------------------------------
The headings of Sections in this Note are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Note unless otherwise specified.
All words used in this Note will be construed to be of such gender
or number as the circumstances require. Unless otherwise expressly provided, the
words "hereof" and "hereunder" and similar references refer to this Note in its
entirety and not to any specific section or subsection hereof.
11. Notice.
------
Notices and other communications required or permitted to be given
hereunder shall be in writing and shall be conclusively deemed effectively given
upon personal delivery or confirmed facsimile transmission, or five days after
deposit in United States Mail, by registered or certified mail, postage prepaid,
or one day after forwarding through a nationally recognized air courier service,
addressed (i) if to the Company, at 888 Seventh Avenue, New York, New York
10106, Facsimile No.: (212) 547-6771, and (ii) if to Payee at Payee's address as
set forth in the Purchase Agreement, or at such other address as the Company or
Payee may designate by ten (10) days' advance written notice to the other party
given in the manner herein provided.
4
<PAGE>
GOLDEN BOOKS PUBLISHING COMPANY, INC.
By: /s/ Richard E. Synder
---------------------
Richard E. Synder
Chairman and Chief
Executive Officer
<PAGE>
NOTATION OF GUARANTEE
OF
GOLDEN BOOKS PUBLISHING COMPANY, INC. SENIOR NOTE
The Guarantor (as defined in the Note Purchase Agreement (the
"Note Purchase Agreement") referred to in the Senior Note ("Note") upon which
this notation is affixed has unconditionally guaranteed (such guarantee being
referred to herein as the "Guarantee") (i) the due and punctual payment of the
principal of and the interest on the 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 Notes, to the extent lawful, and the due and
punctual performance of all other obligations of the Company to the holders of
the Notes, all in accordance with the terms set forth in the Note Purchase
Agreement, and (ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that 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.
No past, present or future stockholder, director, officer,
employee or incorporator, as such, of the Guarantor shall have any liability for
any obligation of the Guarantor under the Guarantee or the Note Purchase
Agreement or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Guarantee.
GUARANTOR:
GOLDEN BOOKS FAMILY ENTERTAINMENT, INC.
By: /s/ Richard E. Snyder
Richard E. Snyder,
Chairman and Chief
Executive Officer
