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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
GARDEN STATE NEWSPAPERS, INC.
(Exact name of Registrant as specified in its Charter)
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<S> <C> <C>
Delaware 2711 22-675173
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(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identifiation No.)
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1560 Broadway, Suite 1450
Denver, Colorado 80202
(303) 837-0886
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Copy to:
Joseph J. Lodovic, IV Howell E. Begle, Jr.
Garden State Newspapers, Inc. Verner, Liipfert, Bernhard, McPherson & Hand
1560 Broadway, Suite 1450 901 15th Street, N.W., Suite 700
Denver, Colorado 80202 Washington, D.C. 20005
(303) 837-0886 (202) 371-6000
(Name, address including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale of the securities
to the public: ________________________________.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box ________.
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Amount to be Proposed Maximum Proposed Maximum
Securities to be Registered Registered Offering Price(1) Aggregate Offering Price(1)
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<S> <C> <C> <C>
8.75% Series B Senior
Subordinated Notes Due 2009 $250,000,000 99.415% $248,537,500
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457
under the Securities Act.
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THE REGISTRANT HEREBY AMENDS THE REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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GARDEN STATE NEWSPAPERS, INC.
CROSS REFERENCE SHEET PURSUANT TO ITEM 501(B) OF REGULATION S-K
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ITEM OF FORM S-4 LOCATION IN PROSPECTUS
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A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus.................... Cover of Registration Statement; Outside Front Cover
Page of Prospectus; Cross Reference Sheet
2. Inside Front and Outside Back Cover Pages
of Prospectus............................................. Available Information; Certain Information Incorporated
by Reference
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information............................. Summary; Risk Factors; Summary Financial Data
4. Terms of the Transaction.................................. Summary; Risk Factors; The Exchange Offer; Description
of the Notes; Certain Federal Income Tax Considerations
5. Pro Forma Financial Information........................... Summary; Certain Information Incorporated by Reference
6. Material Contacts with the Company
Being Acquired............................................ Not Applicable
7. Additional Information Required for Re-
offering by Persons and Parties Deemed
to be Underwriters........................................ Not Applicable
8. Interests of Named Experts and Counsel.................... Not Applicable
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities............ Not Applicable
B. INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to S-3 Registrants................ Not Applicable
11. Incorporation of Certain Information by Reference.......... Not Applicable
12. Information with Respect to S-2 or S-3 Registrants......... Available Informtion; Documents Incorporated by
Reference
13. Incorporation of Certain Information by Reference.......... Certain Information Incorporated by Reference
14. Information with Respect to Registrants Other
than S-3 or S-2 Registrants................................ Not Applicable
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ITEM OF FORM S-4 LOCATION IN PROSPECTUS
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<S> <C> <C>
C. INFORMATION ABOUT THE COMPANY
BEING ACQUIRED
15. Information with Respect to
S-3 Companies.............................................. Not Applicable
16. Information with respect to
S-2 or S-3 Companies....................................... Not Applicable
17. Information with Respect to Companies
Other Than S-3 or S-2 Companies............................ Not Applicable
D. VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Consents or
Authorizations are to be Solicited......................... Not Applicable
19. Information if Proxies, Consents or
Authorizations are not to be
Solicited or in an Exchange Offer.......................... The Exchange Offer; Certain Information Incorporated
by Reference
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOME
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
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PROSPECTUS
SUBJECT TO COMPLETION, DATED , 1997
OFFER FOR ALL OUTSTANDING SERIES A 8.75% SENIOR SUBORDINATED NOTES DUE 2009
IN EXCHANGE FOR UP TO $250,000,000 PRINCIPAL AMOUNT OF
SERIES B 8.75% SENIOR SUBORDINATED NOTES DUE 2009
OF
GARDEN STATE NEWSPAPERS, INC.
THE EXCHANGE OFFER
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON , 1997
UNLESS EXTENDED
Garden State Newspapers, Inc. ("Garden State" or the "Company"), a
wholly owned subsidiary of Affiliated Newspapers Investments, Inc. ("ANI"),
hereby offers, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying Letter of Transmittal (which together constitute
the "Exchange Offer"), to exchange an aggregate of up to $250,000,000 principal
amount of 8 3/4% Senior Subordinated Notes due 2009 (the "Exchange Notes") of
Garden State for an identical face amount of the issued and outstanding 8 3/4%
Senior Subordinated Notes due 2009 (the "Original Notes" and together with the
Exchange Notes, the "Notes") of Garden State from the Holders (as defined
herein) thereof. As of the date of the Prospectus, there is $250,000,000
aggregate principal amount of the Original Notes outstanding. The terms of the
Exchange Notes are identical in all material respects to the Original Notes,
except that the Exchange Notes have been registered under the Securities Act of
1933, as amended (the "Securities Act"), and therefore will not bear legends
restricting their transfer and will not contain certain provisions providing for
liquidated damages in respect of the Original Notes under certain circumstances
described in the Registration Rights Agreement (as defined herein), which
provisions will terminate as to all of the Notes upon consummation of the
Exchange Offer.
The Exchange Notes will mature on October 1, 2009. Interest on the
Exchange Notes is payable semi-annually on April 1 and October 1 of each year,
commencing April 1, 1998. Garden State will not be required to make any
mandatory redemption or sinking fund payment with respect to the Exchange Notes
prior to maturity. The Exchange Notes will be redeemable at the option of Garden
State, in whole or in part, at any time on or after October 1, 2002, at the
redemption prices set forth herein plus accrued and unpaid interest, if any, to
the date of redemption. In the event of a Change of Control (as defined herein),
Garden State will be required to make an offer to repurchase the Exchange Notes,
at a price equal to 101% of the aggregate principal amount thereof, plus accrued
and unpaid interest, if any, to the date of repurchase. There can be no
assurance that Garden State will have, or will have access to, sufficient funds
to repurchase the Exchange Notes upon a Change of Control. See "The Exchange
Notes--Certain Covenants--Change of Control."
The Notes will be general unsecured obligations of Garden State, will
be senior in right of payment to any future indebtedness of Garden State which
is made expressly junior thereto and will be subordinated in right of payment to
all existing and future Senior Debt of Garden State. The Notes will rank PARI
PASSU in right of payment to Garden State's existing Senior Subordinated Secured
Notes; however, Garden State's Senior Subordinated Secured Notes are secured by
a second priority lien only on the capital stock of Garden State Investments,
Inc. ("GSI"), a wholly owned subsidiary of the Company which owns certain of the
business operations of Garden State. All existing and future liabilities of GSI
and its subsidiaries (including the trade payables) will be effectively senior
to the Notes. After giving effect to the sale of the Original Notes, no
indebtedness of Garden State that would be subordinate to the Notes would be
outstanding. As of June 30, 1997, and after giving effect to the sale of the
Original Notes and the Lowell Acquisition (as defined), Senior Debt of the
Company would have been approximately $63.3 million, secured PARI PASSU debt
would have been $100.0 million and the other outstanding liabilities of
subsidiaries reflected on Garden State's consolidated balance sheet, including
trade payables and accrued expenses, but not including guarantees of
indebtedness of Garden State, would have been approximately $42.7 million.
SEE "RISK FACTORS," WHICH BEGINS AT PAGE __, FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is _________, 1997.
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The Original Notes were sold on October 1, 1997, in a transaction
not registered under the Securities Act in reliance upon an exemption from
the registration requirements thereof. In general, the Original Notes may not
be offered or sold unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act. The Exchange Notes are being offered hereby in order to
satisfy certain obligations of Garden State contained in the Registration
Rights Agreement. Based on interpretations of comments by the staff of the
Securities and Exchange Commission (the "Commission") set forth in no-action
letters issued to third parties, Garden State believes that the Exchange
Notes issued pursuant to the Exchange Offer in exchange for Original Notes
may be offered for resale, resold or otherwise transferred by any holder
thereof (other than any such holder that is an "affiliate" of Garden State
within the meaning of Rule 405 promulgated under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, PROVIDED that such Exchange Notes are acquired in the
ordinary course of such holder's business, such holder has no arrangement
with any person to participate in the distribution of such Exchange Notes and
neither such holder nor any such other person is engaging in or intends to
engage in a distribution of such Exchange Notes. However, Garden State has
not sought, and does not intend to seek, its own no-action letter, and there
can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer. Notwithstanding the
foregoing, each broker-dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Notes. The Letter
of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with any resale of Exchange Notes received in
exchange for such Original Notes where such Original Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities (other than Original Notes acquired directly from Garden State).
Garden State has agreed that, for a period not to exceed 180 days after
consummation of the Exchange Offer (subject to extension in certain events),
it will make this Prospectus available to any broker-dealer for use in
connection with any such resale. See "Plan of Distribution."
Except as described herein, the Exchange Notes initially will be in
the form of one or more registered global book-entry notes without interest
coupons (collectively, the "Global Exchange Notes") and will be deposited
with the Trustee as custodian for The Depository Trust Company, New York, New
York ("DTC"), and registered in the name of DTC or its nominee. See "The
Exchange Notes--Book-Entry, Delivery and Form."
The Original Notes are eligible for trading in the Private
Offering, Resales and Trading through Automated Linkages ("PORTAL") market.
Garden State does not intend to list the Exchange Notes on any securities
exchange or to seek approval for quotation through any automated quotation
system. There has not previously been any public market for the Exchange
Notes and there can be no assurance that an active market for the Exchange
Notes will develop. Moreover, to the extent that Original Notes are tendered
and accepted in the Exchange Offer, the trading market, if any, for
untendered Original Notes could be adversely affected.
The Exchange Offer is not conditioned upon any minimum aggregate
principal amount of Original Notes being tendered for exchange. The date of
acceptance and exchange of the Original Notes (the "Exchange Date") will be
the fourth business day following the Expiration Date (as defined herein).
Original Notes tendered pursuant to the Exchange Offer may be withdrawn at
any time prior to the Expiration Date. Garden State will not receive any
proceeds from the Exchange Offer. Garden State will pay all of the expenses
incident to the Exchange Offer.
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO PURCHASE, THE SECURITIES BEING OFFERED BY THIS
PROSPECTUS, IN ANY JURISDICTION, TO OR FROM ANY PERSON TO WHOM OR FROM WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION OF AN OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF
SECURITIES PURSUANT TO THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH
HEREIN SINCE THE DATE OF THIS PROSPECTUS.
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AVAILABLE INFORMATION
Garden State is subject to the informational requirements of the
Exchange Act and accordingly files reports and other information with the
Commission. Such reports and other information filed with the Commission are
available for inspection and copying at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and at 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such documents may also be obtained from the Public
Reference Room of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Garden State files its reports
and other information with the Commission electronically, and the Commission
maintains a web site located at http://www.sec.gov containing such
information.
Garden State has filed a Registration Statement on Form S-4,
together with all amendments and exhibits thereto, with the Commission under
the Securities Act with respect to this Exchange Offer. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. The Registration Statement, including any
amendments, schedules and exhibits thereto, is available for inspection and
copying as set forth above. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein include all
material terms of such contracts or other documents but are not necessarily
complete, and in each instance reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each
such statement being qualified in all respects by such reference.
The Company is subject to the periodic reporting and other
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). In the event that the Company ceases to be subject to
the informational requirements of the Exchange Act, the Company has agreed
that, so long as any Notes remain outstanding, it will file with the
Commission and distribute to holders of the Original Notes or the Exchange
Notes, as applicable, copies of the financial information that would have
been contained in such annual reports and quarterly reports, including
management's discussion and analysis of financial condition and results of
operations, that would have been required to be filed with the Commission,
pursuant to the Exchange Act. See "Description of the Notes--Certain
Covenants--Reports to Securities and Exchange Commission."
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CERTAIN INFORMATION INCORPORATED BY REFERENCE
THE FOLLOWING DOCUMENTS FILED WITH THE COMMISSION PURSUANT TO THE EXCHANGE
ACT ARE INCORPORATED BY REFERENCE INTO AND DELIVERED WITH THIS PROSPECTUS:
1. Annual report on Form 10-K for the year ended June 30, 1997.
2. Current reports on Form 8-K dated July 31, 1997 and October 1, 1997.
3. Current report on Form 8-K/A Amendment No. 1 dated July 31, 1997.
All documents filed by Garden State pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the effective time of the Exchange Offer shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from
the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in
any other subsequently filed document that is or is deemed to be incorporated
by reference herein) modifies or supersedes such previous statement. Any
statement so modified or superseded shall not be deemed to constitute a part
hereof except as so modified or superseded.
DISCLOSURE REGARDING FORWARD-LOOKING AND PRO FORMA STATEMENTS
THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE
ACT. ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACTS INCLUDED IN
THIS PROSPECTUS, INCLUDING WITHOUT LIMITATION, CERTAIN STATEMENTS UNDER THE
"PRO FORMA FINANCIAL DATA," "THE COMPANY," AND STATEMENTS LOCATED ELSEWHERE
HEREIN REGARDING THE COMPANY'S FINANCIAL POSITION AND OPERATING STRATEGY, MAY
CONSTITUTE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT THE
EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT
CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT.
IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THE COMPANY'S EXPECTATIONS ("CAUTIONARY STATEMENTS") ARE DISCLOSED IN THIS
PROSPECTUS, INCLUDING UNDER "RISK FACTORS" AND ALSO INCLUDE THE FOLLOWING:
(1) COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF BUSINESSES ACQUIRED
BY THE COMPANY (INCLUDING CLUSTERING) MAY BE GREATER THAN EXPECTED; (2)
UNANTICIPATED INCREASES MAY OCCUR IN FINANCING AND OTHER COSTS, SUCH AS
NEWSPRINT OR LABOR COSTS; (3) GENERAL ECONOMIC OR BUSINESS CONDITIONS, EITHER
NATIONALLY OR IN THE REGIONS IN WHICH THE COMPANY CONDUCTS BUSINESS, MAY BE
LESS FAVORABLE THAN EXPECTED; AND (4) COMPETITION, INCLUDING FROM OTHER
NEWSPAPERS, OTHER TRADITIONAL FORMS OF ADVERTISING AND NEWER FORMS MADE
POSSIBLE BY THE INTERNET AND OTHERWISE. ALL SUBSEQUENT WRITTEN AND ORAL
FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY OR PERSONS ACTING ON
ITS BEHALF ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY
STATEMENTS.
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SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE
DETAILED INFORMATION (INCLUDING DEFINED TERMS), FINANCIAL STATEMENTS AND
NOTES THERETO APPEARING ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS. ALL REFERENCES IN THIS PROSPECTUS TO "GARDEN STATE" MEAN GARDEN
STATE NEWSPAPERS, INC. AND ALL REFERENCES TO THE "COMPANY" MEAN GARDEN STATE
AND ITS DIRECT AND INDIRECT SUBSIDIARIES (THE "SUBSIDIARIES"), UNLESS THE
CONTEXT OTHERWISE REQUIRES.
THE COMPANY
Garden State, a wholly owned subsidiary of Affiliated Newspapers
Investments, Inc. ("ANI"), is one of the largest privately held suburban
newspaper publishing companies in the United States. Garden State, founded in
March 1985, by William Dean Singleton and Richard B. Scudder, owns and
operates 26 market dominant daily and 69 weekly newspapers in eight states
(including suburban markets in close proximity to the San Francisco Bay area,
Los Angeles, New York City, Philadelphia and Boston). The Company's principal
sources of revenue are advertising and circulation sales. Other sources of
revenue include commercial printing and electronic media operations. The
Company's newspapers had a combined daily and Sunday paid circulation of
approximately 821,000 and 774,000, respectively, as of March 31, 1997,
including the July 31, 1997, acquisition discussed below. From fiscal 1994 to
fiscal 1997, the Company increased revenues and EBITDA, principally from
acquisitions and, to a lesser extent, internal growth, from $186.6 million
and $37.3 million to $302.9 million and $68.6 million, respectively, while
reducing its Leverage Ratio from approximately 6.0x to 4.5x.
In fiscal 1997, the Company acquired eight daily newspapers and
disposed of one (collectively, the "1997 Acquisitions and Disposition") and,
on July 31, 1997, acquired THE SUN in Lowell, Massachusetts (the "Lowell
Acquisition"). Pro forma for the 1997 Acquisitions and Disposition, as well
as the Lowell Acquisition, for fiscal 1997 the Company had revenues of $357.7
million and EBITDA of $84.2 million and a Leverage Ratio at fiscal year end
of 4.9x. See "Unaudited Pro Forma Financial Data."
Garden State's newspapers are geographically diverse and generally
positioned in markets with limited direct competition for local newspaper
advertising. Management believes the Company's markets, taken as a whole,
have above average population and sales growth potential. The Company's
newspapers are established franchises with strong local identities and often
serve as the primary source of local news and information in the communities
they serve. The Company's newspapers address the specific needs of the
community, providing a unique combination of social and economic services in
a way in which only they can provide, making them an attractive purchase for
both the reader and the advertiser.
Garden State has grown significantly by making strategic
acquisitions in markets which management believes have above average growth
potential and through internal growth. The Company's main acquisition focus
is on newspaper markets contiguous to its own, allowing it to realize certain
operating synergies. The Company refers to this acquisition strategy as
clustering. A majority of the Company's newspapers are located in regional
clusters, allowing them to achieve higher operating margins through efficient
use of labor and equipment and by providing opportunities to cross-sell
advertising. Management occasionally divests newspaper properties which no
longer fit a cluster strategy and at such time, in management's opinion, the
value of such newspaper property has been maximized. This strategy has
enabled the Company to reinvest sale proceeds in newspaper properties which
can be clustered, allowing the Company to achieve greater revenue and EBITDA
growth while reducing its Leverage Ratio.
Management believes that one of the keys to the Company's improved
financial position and future growth prospects is the successful
implementation of its clustering and acquisition strategy. This strategy may
include selective dispositions or asset exchanges from time to time. Since
May 31, 1994, the Company has acquired 18 daily and 23 weekly newspapers for
aggregate consideration (including the assumption of debt) of $322.9 million.
During the same period, the Company disposed of four daily and nine weekly
newspapers for a combined $122.1 million, resulting in realized pre-tax gains
of $49.6 million. These acquisitions and dispositions would have resulted in
a net increase in debt of $200.8 million if such transactions had occurred on
June 30, 1997 and pro forma net EBITDA of $46.4 million for the year then
ended, representing a debt to EBITDA ratio of 4.3x. Management believes that
its cluster acquisitions and its selective dispositions of newspapers (those
which had limited growth prospects and no longer fit a cluster strategy) have
positioned the Company to achieve greater internal growth in the future than
it would have otherwise been able to achieve.
In connection with the sale of the Original Notes, the Garden State
Credit Facility was amended to, among other things, decrease the interest
rate margin and to provide the Company with greater financial flexibility and
liquidity. See "Description of Other Indebtedness."
OPERATING STRATEGY
The Company's strategy is to increase revenues and cash flows
through geographic clustering; targeted marketing programs; local news
leadership; high quality editorial content and presentation; circulation
growth; cost control; and strategic technological investments, as described
below:
- GEOGRAPHIC CLUSTERING. The Company has acquired and assembled
newspapers, and may continue to acquire newspapers, in contiguous
markets ("clusters"). Clustering enables the Company to realize
operating efficiencies and economic synergies, such as the sharing of
management, accounting and production functions. In addition, the
Company seeks to increase operating cash flows at acquired newspapers
through cost reductions, including labor and web width reductions, as
well as overall improved cost management. Clustering also enables
management to maximize revenues through the cross-selling of
advertising among contiguous newspaper markets. As a result of
clustering,
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management believes that the Company's newspapers are able to obtain
higher operating margins than they would otherwise be able to achieve
on a stand alone basis.
- TARGETED MARKETING PROGRAMS. Through a strong local presence and
active community relations, the Company is able to develop programs to
maximize its advertising revenues. The Company utilizes research,
demographic studies and zoning (marketing directed to a particular
sub-segment of a local area) to develop marketing programs and meet
the unique needs of specific advertisers.
- LOCAL NEWS LEADERSHIP. The Company's newspapers generally have the
largest local news gathering resources in their markets. As a result
of emphasizing local news, the Company's newspapers generally are able
to generate reader loyalty and create franchise value. Because the
Company's provision of local news is a unique product in its markets,
its newspapers satisfy the demands of both its readers and
advertisers.
- HIGH QUALITY EDITORIAL CONTENT AND PRESENTATION. The Company's
newspapers are committed to editorial excellence, providing the proper
mix of local and national news to effectively serve the needs of their
local markets. The Company's newspapers often receive awards for
excellence in various areas in their respective regions and
categories. In addition, the Company's newspapers are generally
produced on modern offset presses and are designed to attract readers
through attractive layouts and color enhancements.
- CIRCULATION GROWTH. The Company believes that circulation growth is
essential to the creation of long-term franchise value at its
newspapers. Accordingly, the Company has and will continue to invest
in telemarketing and promotional campaigns to increase circulation and
readership. The Company has also established management incentive
programs which reward its publishers for circulation growth at each of
its daily newspapers. As a result of management's commitment to
circulation growth, the Company is one of the few newspaper groups
which, over the past several years, has been able to grow aggregate
circulation (excluding the effects of acquisitions).
- COST CONTROL. Each of the Company's newspapers emphasizes cost control
with a particular focus on managing staffing requirements. At
newspapers with collective bargaining units, management strives to
enter into long-term agreements with minimal annual increases. In
addition, the Company further controls labor costs through investments
in state-of-the-art production equipment that improves production
efficiencies. Management is equally focused on newsprint cost control.
Each of the Company's newspapers benefits from discounted newsprint
costs through its relationship with MediaNews Group, Inc. and MNG's
buying power, as the 13th largest newspaper group in the United States
in terms of circulation as of September 30, 1996. The Company's
newspapers buy newsprint from several suppliers, under arrangements
covering MNG affiliates, resulting in what management believes are
some of the most favorable newsprint prices in the industry. Through
MNG, the Company has available to it fixed price newsprint contracts
with certain suppliers, expiring over the next two and one-half to
three years, as well as newsprint purchasing arrangements with certain
of its other suppliers which delay the adverse effect of newsprint
price increases. Based on expected newsprint utilization at Garden
State, approximately two-thirds of the Company's annual newsprint
consumption for fiscal 1998 will be covered by fixed price contracts,
at prices which are currently well below market.
In order to further control newsprint costs while improving customer
satisfaction, beginning in October 1995, the Company began converting
all its newspapers to a 50-inch web width. Prior to such conversions,
the Company's newspapers had either 54 or 55-inch web widths. These
conversions have permanently reduced the Company's newsprint
consumption in excess of 8%. At June 30, 1997, all the Company's
newspapers, except certain recent acquisitions (all but one of which
are expected to be converted by December 1997), were printed using a
50-inch web width.
- STRATEGIC TECHNOLOGICAL INVESTMENTS. In the past, MNG has tested the
electronic delivery of news and advertising to consumers through
websites at Alameda Newspaper Group and Denver Newspapers, Inc., an
affiliate of Garden State and owner of THE DENVER POST ("Denver
Newspapers"). Based on the success of its initial online projects and
the rate at which electronic advertising as a whole is beginning to
grow, MNG established MediaNews Technologies ("MNT") to develop and
maintain websites for each of the Company's daily newspapers. MNT is
currently developing websites to provide an online editorial presence
and full online classified services for each of the Company's daily
newspapers. The Company expects that it will have all its daily
newspapers online by March 31, 1998. Although the Company believes
that providing an online product service is important to broadening
the presence of the newspapers in the communities served and
ultimately to increasing the Company's revenues through such value
added services, the Company believes almost all of its customers
prefer the newspaper in a printed form. By being the leading, and in
certain instances the sole, provider of local news in most of its
markets, management believes that its newspapers are poised to respond
and to benefit from any changes in the manner in which news and
information are delivered in the future.
As a result of the implementation of the operating strategy
described above, management believes the Company is positioned to continue to
achieve internal growth. The Company may, from time to time, seek strategic
or targeted newspaper acquisitions and dispositions such as the recently
completed Lowell Acquisition. The Company continually reviews newspaper
acquisition candidates that it believes are underperforming in terms of
operating cash flows but have an established history of strong readership and
advertiser loyalty
<PAGE>
and are available at attractive prices. Such acquisitions will only be made
in circumstances in which management believes that such acquisitions would
contribute to the Company's overall growth strategy, whether through revenue
growth and/or cost reduction opportunities, and represent attractive values
based on price.
Garden State is managed by MNG, an affiliate of the Company, which
is wholly owned by Messrs. Singleton and Scudder. MNG provides management and
related services to Garden State and Denver Newspapers, Inc. as well as other
newspapers owned by Messrs. Singleton and Scudder and their families. Messrs.
Singleton and Scudder currently plan to use Garden State and its subsidiaries
as the primary vehicle to acquire additional daily and weekly newspapers in
the future, to the extent permitted by existing debt covenants and such
acquisition candidate meets the Company's investment criteria. MNG provides
the Company with cost-effective corporate resources and newsprint buying
power generally only available to larger corporations. Messrs. Singleton and
Scudder have spent their entire careers in the newspaper publishing industry,
and their family members and family trusts own all of the capital stock of
ANI and thus, indirectly, all of the capital stock of Garden State
(respectively, the "Singleton Shareholder Group" and the "Scudder Shareholder
Group"), other than the Class B Common Stock, which represents 7.5% of the
outstanding capital stock of ANI. The executive officers of MNG are also
executive officers of Garden State and ANI.
Garden State is a Delaware corporation with its principal office
located at 1560 Broadway, Suite 1450, Denver, Colorado 80202. Garden State's
telephone number is (303) 837-0886.
<PAGE>
THE EXCHANGE OFFER
The Exchange Offer The Company is offering to exchange, pursuant to
the Exchange Offer, up to $250,000,000 aggregate
principal amount of Original Notes that are
properly tendered and accepted. The Company will
issue Exchange Notes on or promptly after the
Expiration Date. There is $250,000,000 aggregate
principal amount of Original Notes outstanding.
See "The Exchange Offer."
Registration Rights
Agreement The Original Notes were sold by the Company on
October 1, 1997, to BT Alex. Brown, Goldman,
Sachs & Co. and BNY Capital Markets, Inc. (the
"Initial Purchasers") pursuant to a Purchase
Agreement dated as of September 26, 1997, by and
among the Company and the Initial Purchasers (the
"Purchase Agreement"). Pursuant to the Purchase
Agreement, the Company and the Initial Purchasers
entered into a Registration Rights Agreement
dated as of October 1, 1997 (the "Registration
Rights Agreement"), which grants the holders of
the Original Notes certain exchange and
registration rights. See "The Exchange Offer--
Termination of Certain Rights." This Exchange
Offer is intended to satisfy such rights, which
terminate upon the consummation of the Exchange
Offer. The holders of the Exchange Notes are not
entitled to any exchange or registration rights
with respect to the Exchange Notes.
Expiration Date The Expiration Offer will expire at 5:00 p.m., New
York City time, on _______, 1997, unless the
Exchange Offer is extended by the Company, in its
sole discretion, in which case the term
"Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended.
Accrued Interest on the
Exchange Notes and
Original Notes The Exchange Notes will bear interest from and
including the Issue Date (i.e., October 1, 1997).
Holders whose Original Notes are accepted for
exchange will be deemed to have waived the right
to receive any interest accrued on the Original
Notes.
Conditions to the Exchange
Offer The Exchange Offer is subject to certain
customary conditions which may be waived by the
Company. See "The Exchange Offer--Certain
Conditions to the Exchange Offer." The Exchange
Offer is not conditioned upon any minimum
aggregate principal amount of Original Notes
being tendered for exchange.
Procedures for Tendering
Notes Each holder of Original Notes wishing to accept
the Exchange Offer must complete, sign and date
the Letter of Transmittal, or a facsimile
thereof, in accordance with the instructions
contained herein and therein, and mail or
otherwise deliver such Letter of Transmittal, or
such facsimile, together with such Original Notes
and any other required documentation to The Bank
of New York, as Exchange Agent, at the address
set forth therein. By executing the Letter of
Transmittal, each holder will represent to the
Company that, among other things, (i) the
Exchange Notes to be acquired by the holder of
the Original Notes in connection with the
Exchange Offer are being acquired by the holder in
the ordinary course of business of the holder,
(ii) the holder has no arrangement or
understanding with any person to participate in
the distribution of Exchange Notes, (iii) the
holder is not an "affiliate," as defined in Rule
405 under the Securities Act, of the Company;
(iv) if the holder is not a broker-dealer, that
it is not engaged in and does not intend to engage
in, the distribution of Exchange Notes, (v) if
such holder is a broker-dealer (a "Participating
Broker-Dealer") that will receive Exchange Notes
for its own account in exchange for Notes that
were acquired as a result of market-making or
other trading activities, that it will deliver a
prospectus in connection with any resale of such
Exchange Notes, (provided that by so acknowledging
and delivering a Prospectus, the Participating
Broker-Dealer will not be deemed to admit it is
an "underwriter" within the meaning of the
Securities Act), and (vi) that the holder is not
acting on behalf of any persons or entities who
could not truthfully make the foregoing
representations. See "The Exchange Offer--
Procedures for Tendering."
Special Procedures for
Beneficial Owners Any beneficial owner whose Original Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and who wishes to tender such Original Notes in
the Exchange Offer should contact such registered
holder promptly and instruct such registered
holder to tender on such beneficial owner's
behalf. See "The Exchange Offer--Procedures for
Tendering." If such beneficial owner wishes to
tender on such owner's behalf, such owner must,
prior to completing and executing the Letter of
transmittal and delivering such owner's Original
Notes, either make appropriate arrangements to
register ownership of the Original Notes in such
owner's name or obtain a properly completed bond
power from the registered holder. The transfer of
registered ownership may take considerable time
and may not be able to be completed prior to the
Expiration Date.
<PAGE>
Guaranteed Delivery
Procedures Holders of Original Notes who wish to tender
their Original Notes and whose Original Notes are
not immediately available or who cannot deliver
their Original Notes, the Letter of Transmittal
or any other document required by the Letter of
Transmittal to The Bank of New York, as Exchange
Agent, prior to the Expiration Date, must tender
their Original Notes according to the guaranteed
delivery procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures."
Acceptance of the Original
Notes and Delivery of the
Exchange Notes Subject to the satisfaction or waiver of the
conditions to the Exchange Offer, the Company
will accept for exchange any and all Original
Notes that are properly tendered in the Exchange
Offer prior to the Expiration Date. The Exchange
Notes issued pursuant to the Exchange Offer will
be delivered on the earliest practicable date
following the Expiration Date. See "The Exchange
Offer--Terms of the Exchange Offer."
Withdrawal Rights Tenders of Original Notes may be withdrawn at any
time prior to the Expiration Date. See "The
Exchange Offer--Withdrawal of Tenders."
Certain Federal Income
Tax Considerations For a discussion of certain federal income tax
considerations relating to the exchange of the
Original Notes for the Exchange Notes, see
"Certain U.S. Federal Income Tax Considerations."
Exchange Agent The Bank of New York is serving as the exchange
agent (the "Exchange Agent") in connection with
the Exchange Offer. The Bank of New York also
serves as Trustee under the Indenture.
Consequences of Failure
to Exchange The Original Notes that are not exchanged
pursuant to the Exchange Offer will remain
restricted securities. Accordingly, such Notes
may be resold only (i) to the Company, (ii)
pursuant to Rule 144A or Rule 144 under the
Securities Act or pursuant to some other
exemption under the Securities Act, (iii) outside
the United States to a foreign person pursuant to
the requirements of Rule 904 under the Securities
Act, or (iv) pursuant to an effective
registration statement under the Securities Act.
See "The Exchange Offer--Consequences of Failure
to Exchange."
<PAGE>
THE NOTES
<TABLE>
<S> <C>
The Exchange Notes................................. The Exchange Offer applies to $250,000,000 million aggregate
principal amount of the Original Notes. The form and terms of the
Exchange Notes are the same as the form and terms of the Original
Notes except that (i) the Exchange will have been registered under
the Securities Act and, therefore, the Exchange Notes will not
bear legends restricting their transfer pursuant to the Securities
Act, and (ii) holders of the Exchange Notes will not be entitled
to certain rights of holders of the Original Notes under the
Registration Rights Agreement, which rights will terminate upon
consummation of the Exchange Offer. The Exchange Notes will
evidence the same debt as the Original Notes (which they replace)
and will be issued under, and be entitled to the benefits of, the
Indenture. See "Description of Notes" for further information and
for definitions of certain capitalized terms used below.
Maturity Date...................................... October 1, 2009.
Interest Rates and
Payment Dates...................................... The Notes will bear interest at a rate of 8 3/4% per annum,
payable semi-annually on April 1 and October 1 of each year,
commencing April 1, 1998.
Optional Redemption................................ The Notes are redeemable at the option of Garden State, in whole
or in part, on and after October 1, 2002, at the redemption prices
set forth herein, plus accrued and unpaid interest, if any, to the
date of redemption. In addition, at any time, or from time to
time, on or prior to October 1, 2000, Garden State may, at its
option, use the net cash proceeds of one or more Equity Offerings
to redeem up to 35% of the principal amount of Notes originally
issued at a redemption price equal to 108.75% of the principal
amount thereof plus accrued and unpaid interest thereon, if any,
to the date of such redemption, PROVIDED that at least $162.5
million aggregate principal amount of Notes originally issued
remains outstanding immediately after any such redemption.
Change of Control.................................. Upon the occurrence of a Change of Control, Garden State will be
required to offer to repurchase the Notes at a purchase price of
101% of their principal amount, plus accrued and unpaid interest,
if any, to the date of repurchase.
Ranking and Structure.............................. The Notes will be general unsecured obligations of Garden State,
will be senior in right of payment to any future indebtedness of
Garden State which is made expressly junior thereto, and will be
subordinated in right of payment to all existing and future Senior
Debt of Garden State (including all indebtedness under the Garden
State Credit Facility). The Notes will rank PARI PASSU in right of
payment with the existing Senior Subordinated Secured Notes;
however, Garden State's Senior Subordinated Secured Notes are
secured by a second priority lien only on the capital stock of
GSI, which owns certain of the business operations of Garden
State. All existing and future liabilities of GSI and its
subsidiaries (including trade payables) will be effectively senior
to the Notes. After giving effect to the Offering and the Lowell
Acquisition, no indebtedness of Garden State which would be
subordinate to the Notes would be outstanding. As of June 30,
1997, and after giving effect to the Offering and the Lowell
Acquisition, Senior Debt of Garden State would have been
approximately $63.3 million, secured PARI PASSU debt would have
been $100.0 million, and the other outstanding liabilities of the
Subsidiaries reflected on Garden State's consolidated balance
sheet, including trade payables and accrued expenses, but not
including guarantees of indebtedness of Garden State, would have
been approximately $42.7 million. Secured PARI PASSU debt will, to
the extent such security is then available, have a claim prior to
the holders of the Notes with respect to the value of the GSI
Stock.
Certain Covenants.................................. The Indenture pursuant to which the Notes will be issued (the
"Indenture") imposes certain restrictions on the ability of Garden
State and its Restricted Subsidiaries to, among other things,
consummate certain asset sales, incur liens, incur indebtedness,
pay dividends or make certain other Restricted Payments, enter
into transactions with Affiliates, and on the ability of a
Restricted Subsidiary to impose restrictions on its ability to pay
dividends or make certain payments to Garden State. In addition,
the Indenture limits the ability of Garden State to merge or
consolidate with any person or sell all or substantially all of
its assets. Such restrictions are subject to certain
qualifications and exceptions. See "Description of the Notes--Certain
Covenants" and "Risk Factors--Restrictions on the Ability to Pay
Dividends to ANI" as to possible dividends or other payments to ANI,
the Company's parent.
</TABLE>
For additional information regarding the Notes, see "Description of Notes."
RISK FACTORS
See "Risk Factors" for a discussion of certain factors that should be
considered in evaluating an investment in the Exchange Notes.
<PAGE>
SUMMARY FINANCIAL DATA
The summary financial data for fiscal 1993 through 1997 has been derived
from the Consolidated Financial Statements of Garden State and should be read
in conjunction with such financial statements and the related notes included
elsewhere herein. Pro forma financial data for fiscal 1997 also gives effect
to the sale of the Original Notes and the 1997 Acquisitions and Disposition
and the Lowell Acquisition as if they had occurred as of July 1, 1996, for
purposes of income statement data and other financial data and on June 30,
1997, for the purposes of balance sheet data. Certain detail pro forma
financial data has been incorporated by reference herein. The summary
financial data of Garden State is qualified by reference to, and should be
read together with, the Consolidated Financial Statements of Garden State and
related notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" incorporated herein by reference.
<TABLE>
Fiscal Year Ended June 30, Pro Forma(a)
1993 1994 1995 1996 1997 1997
--------- -------- -------- -------- -------- ------------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues
Advertising $ 148,237 $159,653 $179,268 $197,954 $242,914 $280,828
Circulation 25,642 25,198 30,517 39,930 48,451 63,233
Other 1,931 1,792 3,260 7,546 11,537 13,660
--------- -------- -------- -------- -------- --------
Total Revenues 175,810 186,643 213,045 245,430 302,902 357,721
Cost of Sales 63,930 68,531 79,098 98,469 106,476 123,413
Selling, General and Administrative 76,864 79,217 88,847 100,230 125,632 147,884
Management Fees 1,402 1,552 1,666 2,008 2,205 2,205
Depreciation and Amortization 21,094 19,900 18,710 21,841 24,689 32,075
Interest Expense 24,064 24,623 25,806 27,414 31,903 42,610(b)
Gain on Sale of Newspaper Property -- 6,536 4,153 8,291 30,575 30,575
Income (Loss) Before Income Taxes
and Extraordinary Loss (13,794) (15,253) 684 (752) 34,577 26,019
Net Income(c) (10,992) 18,716 1,048 1,260 24,739 16,759(d)
OTHER FINANCIAL DATA:
EBITDA(e) $ 33,614 $ 37,343 $ 43,434 $ 44,723 $ 68,589 $ 84,219
EBITDA Margin(f) 19.1% 20.0% 20.4% 18.2% 22.6% 23.5%
Capital Expenditures $ 6,564 $ 3,380 $ 4,284 $ 8,079 $ 8,836 $ 8,836
Leverage Ratio(g) 6.9x 6.0x 5.1x 4.6x 4.5x 4.9x
Ratio of EBITDA to Interest Expense 1.4x 1.5x 1.7x 1.6x 2.1x 2.0x
Ratio of Earnings to
Fixed Charges(h) -- -- 1.0x -- 1.9x 1.6x
BALANCE SHEET DATA(i):
Intangible Assets (net) $ 143,299 $143,190 $134,409 $118,396 $230,938 $282,926
Total Assets 263,073 252,561 250,500 240,759 414,431 474,500
Long-Term Debt and Capital Leases 231,341 235,147 223,847 210,589 350,822 414,845
Other Long-Term Liabilities and Obligations 14,051 3,852 5,042 8,101 5,488 6,446
Total Shareholders' Equity (Deficit) (114,847) (23,100) (22,052) (20,792) 3,947 (2,698)
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
<PAGE>
(FOOTNOTES FOR PRECEDING PAGE)
___________
(a) The pro forma data gives effect to the 1997 Acquisitions and
Disposition, Lowell Acquisition and the sale of the Original Notes as if
these transactions occurred on July 1, 1996. Detail of the pro forma
financial information has been incorporated by reference herein.
(b) The pro forma effect on interest expense of the sale of the Original
Notes as if the Original Notes were issued on July 1, 1996, is described
below:
Add:
Interest on the Notes........................................ $21,996
Less:
Interest on Garden State Credit Facility repaid.............. 15,847
Senior secured notes previously prepaid...................... 2,791
Interest on NJNI credit facility repaid...................... 926
-------
Pro Forma interest adjustment................................ $ 2,432
-------
-------
The pro forma adjustment for interest on debt repaid, is based on the
actual interest incurred during the fiscal year ended June 30, 1997, and
the pro forma interest related to acquisitions. Interest expense on the
Notes is 8.75%.
Further pro forma adjustments to interest expense are reflected to give
effect to acquisitions and dispositions as described in (a) above.
(c) Fiscal years 1996 and 1997 also include $1.1 million and $13.9 million,
respectively, of expense associated with the write-off of bank fees and
make-whole premiums associated with the prepayment of previously
outstanding senior notes and related expenses. Such fees and expenses
were incurred in connection with acquisitions.
(d) Gives effect to approximately $6.1 million of estimated offering fees
and expenses associated with the sale of the Original Notes which will
be expensed when incurred.
(e) EBITDA represents total revenues less cost of sales, selling, general
and administrative expense and management fees charged by MNG. Although
EBITDA is not a measure of performance calculated in accordance with
GAAP, the Company believes that EBITDA is an indicator and measurement
of its leverage capacity and debt service ability. EBITDA should not be
considered as a measure of profitability or liquidity or as an
alternative to net income, cash flows generated by operating, investing
or financing activities or other financial statement data presented in
the Company's financial statements or any other GAAP measure as an
indicator of the Company's performance.
(f) EBITDA Margin represents EBITDA divided by total revenues. Management
believes EBITDA Margin is a useful indicator of the percentage of each
sales dollar that is left after deducting cost of sales, selling,
general and administrative expense and management fees charged by MNG.
(g) Calculated as defined. See "Description of the Notes."
(h) For purposes of calculating the ratio of earnings to fixed charges,
earnings means pre-tax income from continuing operations for such period
plus fixed charges for such period except any interest capitalized for
such period. Fixed charges means the sum of (i) interest, whether
expensed or capitalized, (ii) amortization of debt expense and discount
or premium and (iii) that portion of rental expense that is
representative of interest. In fiscal years 1993, 1994 and 1996,
earnings were not sufficient to cover fixed charges by $13.8 million,
$15.3 million and $0.8 million, respectively.
(i) The pro forma Balance Sheet Data reflects the sale of the Original Notes
and the Lowell Acquisition as if these transactions occurred on June 30,
1997.
<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, BEFORE TENDERING
THE ORIGINAL NOTES OF THE EXCHANGE NOTES OFFERED HEREBY, HOLDERS OF THE ORIGINAL
NOTES SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS, WHICH (OTHER THAN
"CONSEQUENCES OF FAILURE TO EXCHANGE") ARE GENERALLY APPLICABLE TO THE ORIGINAL
NOTES AS WELL AS THE EXCHANGE NOTES.
NOTES SUBORDINATED TO CREDITORS OF SUBSIDIARIES
Garden State conducts certain of its business operations directly; however,
a majority of its operations are conducted by subsidiaries of GSI, which is a
wholly owned subsidiary of Garden State. Garden State's ability to meet its
obligations, including with respect to the Notes, will be at least partially
reliant upon dividends and other payments from its Subsidiaries, which will be
dependent upon the availability of cash flow from operations, proceeds from the
sale of assets and/or borrowings. On a pro forma basis, during fiscal 1997,
approximately 31.5% of Garden States' EBITDA came from its own business
operations with the remaining 68.5% coming from its Subsidiaries. See
"Summary--Structure and Ownership."
RESTRICTIONS ON THE ABILITY TO PAY DIVIDENDS TO ANI
ANI, the parent of Garden State and Denver Newspapers, Inc., has no
material operations of its own. ANI is the sole obligor with respect to the
ANI Senior Discount Debentures. The ANI Senior Discount Debentures do not pay
interest in cash until January 1, 2000. The ANI Senior Discount Debentures
are not callable by ANI until July 1, 1999, at which time they will have an
accreted value of $173,576,000. See "Description of Other Indebtedness--ANI
Senior Discount Debentures." It is expected that ANI will be principally
dependent upon dividends and other payments from its subsidiaries, including
Garden State, to meet its debt service and other requirements. As a result of
the leverage of ANI, ANI may be required to cause Garden State to take
certain actions that Garden State would not otherwise take. The Indenture
under which the Notes will be issued will restrict the ability of Garden
State to pay dividends and restrict Garden State and its Restricted
Subsidiaries from making other Restricted Payments or otherwise engaging in
transactions with their Affiliates. The Indenture will, however, permit
Garden State to purchase the ANI Senior Discount Debentures or to make
dividend payments to ANI in an amount sufficient for ANI to redeem,
repurchase or retire the ANI Senior Discount Debentures so long as no Default
or Event of Default shall have occurred or be continuing or shall occur as a
consequence thereof and Garden State could incur at least $1.00 of additional
Debt under the first paragraph under "Description of Notes--Certain
Covenants--Limitation on Restricted Payments."
LEVERAGE
The degree to which the Company is leveraged could have important
consequences to holders of the Notes, including impairment of the ability of the
Company to obtain additional financing in the future for working capital,
capital expenditures, or general corporate or other purposes. A failure to make
any required payment under the Garden State Credit Facility or to comply with
any of the financial or operating covenants included in the Garden State Credit
Facility (including the occurrence of a Change of Control) would generally
result in an event of default thereunder, permitting the creditors thereunder to
accelerate the maturity of the indebtedness thereunder and to foreclose upon the
collateral securing such indebtedness. Any such acceleration could also result
in the acceleration of the Notes. Under any of such circumstances, there can be
no assurance that the Company would have sufficient assets to satisfy all of
such obligations or to repay the Notes.
EFFECTS OF CHANGE OF CONTROL
A Change of Control could cause a default under certain indebtedness of
Garden State and its Subsidiaries. The exercise by the holders of the Notes of
their right to require Garden State to repurchase the Notes upon a Change of
Control could also cause a default under indebtedness of Garden State and its
Subsidiaries due to the effect of such repurchase on the financial condition of
the Company, even if the Change of Control itself does not cause such a default.
In addition, Garden State's ability to pay cash to the holders of the Notes upon
their repurchase will be limited by Garden State's financial resources and the
instruments governing indebtedness of Garden State.
SUBORDINATION
The Notes are general obligations of Garden State, senior in right of
payment to any future indebtedness which is made expressly junior thereto and
subordinated in right of payment to all Senior Debt of Garden State, including
all indebtedness under the Garden State Credit Facility. The Notes will rank
PARI PASSU in right of payment to Garden State's Senior Subordinated Secured
Notes; however, Garden State's Senior Subordinated Secured Notes are secured
by a second priority lien only on the capital stock of GSI. See "Description
of the Notes--Subordination." The obligations under the Garden State Credit
Facility are secured by substantially all of the assets of Garden State and
are guaranteed by the Subsidiaries of Garden State. See "Description of Other
Indebtedness--Garden State Credit Facility." The Notes are effectively
subordinated to all obligations (including the trade payables and other
liabilities) of subsidiaries of Garden State. As of June 30, 1997, and after
giving effect to the sale of the Original Notes and the Lowell Acquisition,
Senior Debt of Garden State would have been approximately $63.3 million,
secured PARI PASSU debt would have been $100.0 million, and the other
outstanding liabilities of the Subsidiaries reflected on Garden State's
consolidated balance sheet, including trade payables and accrued expenses, but
not including guarantees of indebtedness of Garden State, would have been
approximately $42.7 million, and no indebtedness of Garden State which would
be subordinate to the Notes is outstanding. In the event of a bankruptcy,
liquidation or reorganization of Garden State or in the event that any default
in payment of, or the acceleration of, any debt occurs, holders of such debt
will be entitled to payment in full from the proceeds of all assets of the
Company prior to any payment of such proceeds to holders of the Notes.
Consequently, there can be no assurance that Garden State will have sufficient
funds remaining after such payments to make payments to the holders of the
Notes. By reason of the subordination provisions contained in the Notes, in
the event of insolvency, other creditors of Garden State may recover more
ratably than the holders of the Notes, and, as a result of the second priority
lien in favor of Garden State's Senior Subordinated Secured Notes, holders of
the Notes may recover less than the holders of Senior Subordinated Secured
Notes. Secured PARI PASSU debt will, to the extent such security is then
available, have a claim prior to the holders of the Notes with respect to the
value of the GSI Stock. See "Description of Other Indebtedness."
In addition, under certain circumstances, no payments may be made with
respect to the principal of or interest on the Notes for a specified period of
time if a nonpayment default exists with respect to Senior Debt. See
"Description of the Notes--Subordination."
<PAGE>
CYCLICALITY
Advertising revenues of the Company, as well as those of the newspaper
industry in general, are cyclical and dependent upon general economic
conditions. Historically, advertising revenues have increased with the beginning
of an economic recovery, principally with increases in classified advertising
for employment, housing and automobiles. Decreases in advertising revenues have
historically corresponded with general economic downturns and recessionary
regional and local conditions. The Company believes, however, that the diversity
of its geographical operations mitigates, to some degree, the effects of an
economic downturn to the extent such downturn is regional.
NEWSPRINT COSTS
Newsprint represents the single largest raw material expense of the
Company's newspapers and is one of its most significant operating costs. In
fiscal 1997, newsprint costs represented 13.6% of total revenues of the Company.
Newsprint costs are cyclical and can vary widely period to period. Newsprint
cost increased approximately 40% per metric ton in calendar 1995 on an
industry-wide basis, and the average cost per metric ton of newsprint was
substantially higher in the first half of calendar 1996 than in the first half
of calendar 1995. Newsprint costs decreased significantly in the second half of
calendar 1996 and the first quarter of calendar 1997; however, prices began to
rise slowly in the second quarter of calendar 1997, and a further price increase
has been announced for October 1, 1997. Although the Company has implemented
measures in an attempt to offset the rise in newsprint prices, such as reducing
page width, price increases have had, and may in the future have, an adverse
effect on the Company's results of operations. However, the impact of future
increases, if any, will be mitigated as a result of fixed price newsprint made
available to the Company by MNG. The Company expects to purchase approximately
two-thirds of its fiscal 1998 newsprint requirements under fixed price supply
contracts entered into by MNG. MNG expects to allocate 60,000 metric tons to the
Company annually over the next two and one-half to three years, the remaining
terms of such contracts. While there can be no assurance that the above
allocations will be met, based on current circumstances, management does not
believe that final allocations will be materially different than the expected
allocations discussed above.
COMPETITION
Revenue generation in the newspaper industry is dependent primarily upon
the sale of advertising and paid circulation. Competition for advertising and
circulation comes from local and regional newspapers, radio and television
broadcast, cable television, direct mail, electronic media (including the
"Internet"), and other communications and advertising media that operate in the
Company's markets. Certain of the Company's competitors are larger and have
greater financial resources than the Company. The extent and nature of such
competition is, in large part, determined by the location and demographics of
the market and the number of media alternatives in those markets.
Currently, the Company's newspapers do not compete directly with other
daily newspapers covering local news in the core of any of the Company's
markets. Although there can be no assurance that a competitor will not enter one
or more of the Company's markets and become successful, the Company believes
that entry by a direct competitor in its daily newspaper markets is unlikely for
the foreseeable future.
FULL IMPLEMENTATION OF OPERATING STRATEGY
Among other things, the Company's operating strategy includes the
acquisition of newspaper assets in markets contiguous to existing newspaper
markets or in markets where management believes opportunities for clustering
exist. The clustering strategy includes the implementation of certain operating
improvements and the adoption of new advertising strategies to capitalize on
perceived synergies. There can be no assurance that the Company will be able to
fully implement its strategy with respect to any recent or future acquisitions
or that the anticipated results of the implementation of its clustering
strategy, including the reduction of certain operating expenses, will be
realized.
CONTROL OF THE COMPANY
The Singleton Shareholder Group and the Scudder Shareholder Group, as sole
holders of the ANI Common Stock (other than Class B Common Stock, representing
7.5% of the Capital Stock of ANI), are each in effect entitled to elect one-half
of all of the members of the Board of Directors of ANI and Garden State, and to
otherwise control both ANI and Garden State, including as to mergers,
liquidations and asset acquisitions and dispositions. There are no outside
directors on the Boards of Directors of either ANI or Garden State and neither
ANI nor Garden State is under any obligation, and does not plan, to name one or
more independent directors at this time.
ABSENCE OF PUBLIC MARKET
The Exchange Notes are being offered to holders of the Original Notes. The
Original Notes were sold by the Company to a limited number of institutional
investors and are eligible for trading in the PORTAL Market. To the extent that
Original Notes are tendered and accepted in the Exchange Offer, the trading
market for the remaining untendered Original Notes could be adversely affected.
The Original Notes have not been registered under the Securities Act and will be
subject to restrictions on transferability to the extent that they are not
exchanged for Exchange Notes by holders who are entitled to participate in the
Exchange Offer.
The Exchange Notes will constitute a new issue of securities with no
established trading market. The Company does not intend to list the Exchange
Notes on any national securities exchange or to seek approval for quotation
through any automated quotation system. Accordingly, no assurance can be given
that an active public or other market will develop for the Exchange Notes or as
to the liquidity of the trading market for the Exchange Notes. If a trading
market does not develop or is not maintained, holders of the Exchange Notes may
experience difficulty in reselling the exchange Notes or may be unable to sell
them at all. If a market for the Exchange Notes develops, any such market may be
discontinued at any time.
If a public trading market develops for the Exchange Notes, future trading
prices of such securities will depend on many factors, including, among other
things, prevailing interest rates, the Company's results of operations and the
market for similar securities. Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of the Company, the
<PAGE>
Exchange Notes may trade at a discount from their principal amount.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Original Notes who do not exchange their Original Notes for
Exchange Notes pursuant to the Exchange Offer will continue to be subject to the
restrictions on transfer of such Original Notes as set forth in the legend
thereon and in the Offering Memorandum dated September 26, 1997, because the
Original Notes were issued pursuant to exemptions from, or in transactions not
subject to, the registration requirements of the Securities Act and applicable
state securities laws. In general, the Original Notes may not be offered or sold
unless registered under the Securities Act and applicable state securities laws,
or pursuant to an exemption therefrom, or in a transaction not subject to the
Securities Act and applicable state securities laws. The Company does not intend
to register the Original Notes under the Securities Act and, after consummation
of the Exchange Offer, will not be obligated to do so except under limited
circumstances. See "The Exchange Offer--Purpose of the Exchange Offer." Based on
an interpretation by the staff of the Commission set forth in no-action letters
issued to third parties, the Company believes that the Exchange Notes issued
pursuant to the Exchange Offer in exchange for Original Notes may be offered for
resale, resold or otherwise transferred by holders thereof (other than any such
holder which is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such holder's business,
such holders have no arrangement with any person to participate in the
distribution of such Exchange Notes and neither such holders nor any such other
person is engaging in or intends to engage in a distribution of such Exchange
Notes. However, the Commission has not considered the Exchange Offer in the
context of a no-action letter and there can be no assurance that the staff of
the Commission would make a similar determination with respect to the Exchange
Offer. Any holder of Original Notes who tenders in the Exchange Offer for the
purpose of participating in a distribution of the Exchange Notes may be deemed
to have received restricted securities and, if so, will be required to comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale transaction. Each broker-dealer that received
Exchange Notes for its own account in exchange for Original Notes, where such
Original Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. See "Plan of
Distribution." To the extent the Original Notes are tendered and accepted in
the Exchange Offer, the trading market for untendered and tendered but
unaccepted Original Notes could be adversely affected. See "The Exchange Offer."
EXCHANGE OFFER PROCEDURES
The Exchange Notes will be issued in exchange for Original Notes only after
timely receipt by the Exchange Agent of such Original Notes, a properly
completed and duly executed Letter of Transmittal and all other required
documents. Therefore, holders of Original Notes desiring to tender such Original
Notes in exchange for Exchange Notes should allow sufficient time to ensure
timely delivery. Neither the Exchange Agent nor the Company is under any duty to
give notification of defects or irregularities with respect to tenders of
Original Notes for exchange. Original Notes that are not tendered or are
tendered but not accepted will, following consummation of the Exchange Offer,
continue to be subject to the existing restrictions upon transfer thereof. In
addition, any holder of Original Notes who tenders in the Exchange Offer for the
purpose of participating in a distribution of the Exchange Notes will be
required to comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. Each broker-dealer
that receives Exchange Notes for its own account in exchange for Original Notes,
where such Original Notes were acquired by such broker-dealer as a result of
market-making activities or any other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution." To the extent that Original Notes are
tendered and accepted in the Exchange Offer, the trading market for untendered
and tendered but unaccepted Original Notes could be adversely affected. See "The
Exchange Offer."
<PAGE>
USE OF PROCEEDS
There will be no proceeds to Garden State from the exchange of the Original
Notes pursuant to the Exchange Offer. Garden State used the proceeds from the
offering of the Original Notes to reduce borrowings (but not commitments) under
the Garden State Credit Facility by approximately $225.5 million, general
corporate purposes and the pending prepayment of the credit facility at NJNI (a
subsidiary of Garden State) which is estimated to be approximately $17.0
million. After giving effect to the sale of the Original Notes, there is
approximately $249.0 million available for borrowings under the Garden State
Credit Facility, of which $151.0 million is available only for acquisitions.
Pending repayment of the NJNI bank credit facility, which is required to occur
within 90 days from the Issue Date, such portion of the net proceeds related
thereto will be invested in Cash Equivalents. See "Description of Other
Indebtedness."
<PAGE>
EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The Original Notes were sold by the Company on the Issue Date to the
Initial Purchasers pursuant to the Purchase Agreement. As a condition to the
sale of the Original Notes, the Company and the Initial Purchasers entered into
the Registration Rights Agreement on the Issue Date. Pursuant to the
Registration Rights Agreement, the Company agreed that, unless the Exchange
Offer is not permitted by applicable law or Commission policy, it would (i) file
with the Commission a Registration Statement under the Securities Act with
respect to the Exchange Notes within 60 days after the Issue Date, (ii) use its
best efforts to cause such Registration Statement to become effective under the
Securities Act within 120 days after the Issue Date and (iii) upon effectiveness
of the Registration Statement, commence the Exchange Offer, use its best efforts
to maintain the effectiveness of the Registration Statement for at least 30 days
(or a longer period if required by law) and consummate the Exchange Offer on or
prior to the 165th day following the Issue Date. Under existing Commission
interpretations, the Exchange Notes would in general be freely transferable
after the Exchange Offer without further registration under the Securities Act;
provided, that in the case of broker-dealers, a prospectus meeting the
requirements of the Securities Act must be delivered as required. The Company
has agreed to make available a prospectus meeting the requirements of the
Securities Act to any broker-dealer for use in connection with any resale of any
such Exchange Notes for a period of up to 180 days after the consummation of
the Exchange Offer (subject to extension under certain circumstances). A
broker-dealer that delivers such a prospectus to purchasers in connection
with such resales will be subject to certain of the civil liability
provisions under the Securities Act, and will be bound by the Registration
Rights Agreement (including certain indemnification rights and obligations).
A copy of the Registration Rights Agreement has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part. The
Registration Statement of which this Prospectus is a part is intended to
satisfy certain of the Company's obligations under the Registration Rights
Agreement and the Purchase Agreement.
RESALE OF THE EXCHANGE NOTES
With respect to the Exchange Notes, based upon an interpretation by the
staff of the Commission set forth in certain no-action letters issued to third
parties, the Company believes that a holder (other than (i) a broker-dealer who
purchases such Exchange Notes directly from the Company to resell pursuant to
Rule 144A or any other available exemption under the Securities Act, or (ii) any
such holder which is an "affiliate" of the Company within the meaning of Rule
405 under the Securities Act) who exchanges the Original Notes for the Exchange
Notes in the ordinary course of business and who is not participating, does not
intend to participate, and has no arrangement with any person to participate, in
the distribution of the Exchange Notes, will be allowed to resell the Exchange
Notes to the public without further registration under the Securities Act and
without delivering to the purchasers of the Exchange Notes a prospectus that
satisfies the requirements of Section 10 of the Securities Act. However, if any
holder acquires the Exchange Notes in the Exchange Offer for the purposes of
distributing or participating in the distribution of the Exchange Notes or is a
broker-dealer, such holder cannot rely on the position of the staff of the
Commission enumerated in certain no-action letters issued to third parties and
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, unless an exemption
from registration is otherwise available. Further, the Commission has not
considered the Exchange Offer in the context of a no-action letter and there can
be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer. Each broker-dealer that
receives Exchange Notes for its own account in exchange for Original Notes,
where such Original Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Notes received in exchange for Original
Notes where such Original Notes were acquired by such broker-dealer as a result
of market-making or other trading activities. Pursuant to the Registration
Rights Agreement, the Company has agreed to make this Prospectus, as it may be
amended or supplemented from time to time, available to all persons subject to
the prospectus delivery requirements of the Securities Act for use in connection
with any resale for a period of up to 180 days after the Expiration Date. See
"Plan of Distribution."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Original
Notes validly tendered and not withdrawn prior to the Expiration Date. The
Company will issue $1,000 principal amount of Exchange Notes in exchange for
each $1,000 principal amount of outstanding Original Notes surrendered pursuant
to the Exchange Offer. Notes may be tendered only in integral multiples of
$1,000.
The form and terms of the Exchange Notes are the same as the form and terms
of the Original Notes except that (i) the exchange will be registered under the
Securities Act and hence the Exchange Notes will not bear legends restricting
their transfer and (ii) holders of the Exchange Notes will not be entitled to
the certain rights of holders of Original Notes under the Registration Rights
Agreement, which rights will terminate upon the consummation of the Exchange
Offer. The Exchange Notes will evidence the same debt as the Original Notes
(which they replace) and will be issued under, and be entitled to the benefits
of, the Indenture, which also authorized the issuance of the Original Notes,
such that all outstanding Notes will be treated as a single class of debt
securities under the Indenture.
Holders of the Original Notes do not have any appraisal or dissenter's
rights under the Indenture in connection with the Exchange Offer. The Company
intends to conduct the Exchange Offer in accordance with the provisions of the
Registration Rights Agreement and the applicable requirements of the Securities
Act, the Exchange Act and the rules and regulations of the Commission
thereunder.
The Company shall be deemed to have accepted validly tendered Original
Notes when, as and if the Company has given oral or written notice thereof to
the Exchange Agent. The Exchange Agent will act as agent for the tendering
holders of Original Notes for the purposes of receiving the Exchange Notes from
the Company.
Holders who tender Original Notes in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than certain applicable taxes described below, in connection with the
Exchange Offer. See "Fees and Expenses."
<PAGE>
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
_________, 1997, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
If the Company elects to extend the Exchange Offer, the Company (i) will
notify the Exchange Agent of any extension by oral or written notice, (ii) will
mail to the registered holders of Original Notes an announcement thereof, and
(iii) will issue a press release or other public announcement which shall
include disclosure of the approximate number of Original Notes deposited to
date, each prior to 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date. Without limiting the manner in
which the Company may choose to make a public announcement of any delay,
extension, amendment or termination of the Exchange Offer, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement, other than by making a timely release to an appropriate
news agency.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Original Notes, (ii) to extend the Exchange Offer, or (iii) if any
conditions set forth below under "Certain Conditions to the Exchange Offer"
shall not have been satisfied to terminate the Exchange Offer by giving oral or
written notice of such delay, extension or termination to the Exchange Agent.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
registered holders. If the Exchange Offer is amended in a manner determined by
the Company to constitute a material change, the Company will promptly disclose
such amendment by means of a prospectus supplement that will be distributed to
the registered holders of Original Notes, and the Company will extend the
Exchange Offer for a period of five to ten business days, depending upon the
significance of the amendment and the manner of disclosure to such registered
holders, if the Exchange Offer would otherwise expire during such five to ten
business day period.
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes bear interest at a rate equal to 8.75% per annum.
Interest on the Exchange Notes is payable semiannually on each April 1 and
October 1, commencing on the first such date following their date of issuance.
Holders of Exchange Notes will receive interest on April 1, 1998, from the date
of initial issuance of the Original Notes. Holders of Original Notes that are
accepted for exchange will be deemed to have waived the right to receive any
interest accrued on the Original Notes.
PROCEDURES FOR TENDERING
Only a registered holder of Original Notes may tender such Original Notes
in the Exchange Offer. To tender in the Exchange Offer, a holder must complete,
sign and date the Letter of Transmittal or facsimile thereof, have the
signatures thereon guaranteed if required by the Letter of Transmittal, and mail
or otherwise deliver such Letter of Transmittal or such facsimile to the
Exchange Agent at the address set forth below under "Exchange Agent" for receipt
prior to the Expiration Date. In addition, either (i) certificates for such
Notes must be received by the Exchange Agent along with the Letter of
Transmittal, or (ii) a timely confirmation of a book-entry transfer (a "Book-
Entry Confirmation") of such Notes, if such procedure is available, into the
Exchange Agent's account at DTC pursuant to the procedures for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date, or (iii) the holder must comply with the guaranteed delivery
procedures described below.
The tender by a holder which is not withdrawn prior to the Expiration Date
will constitute an agreement between such holder and the Company in accordance
with the terms and subject to the conditions set forth herein and in the Letter
of Transmittal.
THE METHOD OF DELIVERY OF NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE
HOLDER INSTEAD OF DELIVERY BY MAIL. IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR NOTES SHOULD BE SENT TO THE
COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH
HOLDERS.
Any beneficial owner(s) of the Original Notes whose Original Notes are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender should contact the registered holder
promptly and instruct such registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to tender on such owner's
behalf, such owner must, prior to completing and executing the Letter of
Transmittal and delivering such owner's Original Notes, either make appropriate
arrangements to register ownership of the Original Notes in such owner's name
(to the extent permitted by the Indenture) or obtain a properly completed bond
power from the registered holder. The transfer of registered ownership may take
considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal described
below (see "Withdrawal of Tenders"), as the case may be, must be guaranteed by
an Eligible Institution (as defined below) unless the Original Notes tendered
pursuant thereto are tendered (i) by a registered holder who has not completed
the section entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. In the event that signatures on a Letter of Transmittal or
a notice of withdrawal, as the case may be, are required to be guaranteed, such
guarantee must be made by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States, or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act which is a member of one of the recognized
signature guarantee programs (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Original Notes listed therein, such Original Notes must
be endorsed or accompanied by a properly completed bond power, signed by such
registered holder as such registered holder's name appears on such Original
Notes.
<PAGE>
If the Letter of Transmittal or any Original Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by the
Company, evidence satisfactory to the Company of their authority to so act must
be submitted with the Letter of Transmittal.
The Exchange Agent and DTC have confirmed that any financial institution
that is a participant in the Depositary's system may utilize the Depositary's
Automated Tender Offer Program to tender Original Notes.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Original Notes will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Original Notes not properly tendered or any Original Notes the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Notes. The Company's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in the Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Original Notes must be cured within such time as the Company shall determine.
Although the Company intends to notify holders of defects or irregularities with
respect to tenders of Original Notes, neither the Company, the Exchange Agent
nor any other person shall incur any liability for failure to give such
notification. Tenders of Original Notes will not be deemed to have been made
until such defects or irregularities have been cured or waived.
While the Company has no present plan to acquire any Original Notes which
are not tendered in the Exchange Offer or to file a registration statement to
permit resales of any Original Notes which are not tendered pursuant to the
Exchange Offer, the Company reserves the right in its sole discretion to
purchase or make offers for any Original Notes that remain outstanding
subsequent to the Expiration Date or, as set forth below under "Certain
Conditions to the Exchange Offer," to terminate the Exchange Offer and, to the
extent permitted by applicable law, purchase Original Notes in the open market,
in privately negotiated transactions or otherwise. The terms of any such
purchases or offers could differ from the terms of the Exchange Offer.
By tendering, each holder will represent to the Company that, among other
things, (i) the Exchange Notes to be acquired by the holder of the Original
Notes in connection with the Exchange Offer are being acquired by the holder in
the ordinary course of business of the holder, (ii) the holder has no
arrangement or understanding with any person to participate in the distribution
of Exchange Notes, (iii) the holder is not an "affiliate," as defined in Rule
405 of the Securities Act, of the Company; (iv) if the holder is not a broker-
dealer, that it is not engaged in and does not intend to engage in, the
distribution of Exchange Notes, (v) if such holder is a broker-dealer (a
"Participating Broker-Dealer") that will receive Exchange Notes for its own
account in exchange for Notes that were acquired as a result of market-making or
other trading activities, that it will deliver a prospectus in connection with
any resale of such Exchange Notes (provided that by so acknowledging and by
delivering a prospectus, the Participating Broker-Dealer will not be deemed
to admint that it is an "underwriter" within the meaning of the Securities
Act), and (vi) that the holder is not acting on behalf of any persons or
entities who could not truthfully make the foregoing representations.
RETURN OF NOTES
If any tendered Original Notes are not accepted for any reason set forth
in the terms and conditions of the Exchange Offer or if Original Notes are
withdrawn or are submitted for a greater principal amount than the holders
desire to exchange, such unaccepted, withdrawn or non-exchanged Original Notes
will be returned without expense to the tendering holder thereof (or, in the
case of Original Notes tendered by book-entry transfer into the Exchange Agent's
account at DTC pursuant to the book-entry transfer procedures described below,
such Original Notes will be credited to an account maintained with the
Depositary) as promptly as practicable.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Original Notes at DTC for purposes of the Exchange Offer within two
business days after the date of this Prospectus, and any financial institution
that is a participant in the Depositary's systems may make book-entry delivery
of Original Notes by causing the Depositary to transfer such Original Notes into
the Exchange Agent's account at the Depositary in accordance with the
Depositary's procedures for transfer. However, although delivery of Original
Notes may be effected through book-entry transfer at DTC, the Letter of
Transmittal or facsimile thereof, with any required signature guarantees and any
other required documents, must, in any case, be transmitted to and received by
the Exchange Agent at the address set forth below under "Exchange Agent" on or
prior to the Expiration Date pursuant to the guaranteed delivery procedures
described below.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Original Notes and (i) whose Original
Notes are not immediately available or (ii) who cannot deliver their Original
Notes, the Letter of Transmittal or any other required documents to the Exchange
Agent prior to the Expiration Date, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Company (by
facsimile transmission, mail or hand delivery) setting forth the name and
address of the holder, the certificate number(s) of such Original Notes and
the principal amount of Original Notes tendered, stating that the tender is
being made thereby and guaranteeing that, within three New York Stock
Exchange trading days after the Expiration Date, the Letter of Transmittal
(or a facsimile thereof) together with the certificate(s) representing the
Original Notes in proper form for transfer or a Book-Entry Confirmation, as
the case may be, and any other documents required by the Letter of
Transmittal will be deposited by the Eligible Institution with the Exchange
Agent; and
<PAGE>
(c) Such properly executed Letter of Transmittal (or facsimile
thereof), as well as the certificate(s) representing all tendered Original
Notes in proper form for transfer and all other documents required by the
Letter of Transmittal are received by the Exchange Agent within three New
York Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Original Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Original Notes may be
withdrawn at any time prior to the Expiration Date.
To withdraw a tender of Original Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to the Expiration Date. Any such
notice of withdrawal must (i) specify the name of the person having deposited
the Original Notes to be withdrawn (the "Depositor"), (ii) identify the Original
Notes to be withdrawn (including the certificate number or numbers and principal
amount of such Original Notes), and (iii) be signed by the holder in the same
manner as the original signature on the Letter of Transmittal by which such
Original Notes were tendered (including any required signature guarantees). All
questions as to the validity, form and eligibility (including time of receipt)
of such notices will be determined by the Company in its sole discretion, whose
determination shall be final and binding on all parties. Any Original Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto unless
the Original Notes so withdrawn are validly retendered. Properly withdrawn Notes
may be retendered by following one of the procedures described above under
"Procedures for Tendering" at any time prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or exchange the Exchange Notes for, any
Original Notes not theretofore accepted for exchange, and may terminate or amend
the Exchange Offer as provided herein before the acceptance of such Original
Notes, if any of the following conditions exist: (a) the Exchange Offer violates
applicable law or any applicable interpretation of the staff of the SEC, (b) an
action or proceeding shall have been instituted or threatened in any court or by
any governmental agency which might materially impair the ability of the Company
to proceed with the Exchange Offer and any material adverse development shall
have occurred in any existing action or proceeding with respect to the Company,
and (c) all governmental approvals have not been obtained, which approvals the
Company deems necessary for the consummation of the Exchange Offer.
If the Company determines in its sole discretion that any of these
conditions are not satisfied, the Company may (i) refuse to accept any Original
Notes and return all tendered Original Notes to the tendering holders, (ii)
extend the Exchange Offer and retain all Original Notes tendered prior to the
expiration of the Exchange Offer, subject, however, to the rights of holders to
withdraw such Original Notes (see "Withdrawal of Tenders"), or (iii) waive such
unsatisfied conditions with respect to the Exchange Offer and accept all
properly tendered Original Notes which have not been withdrawn. If such waiver
constitutes a material change to the Exchange Offer, the Company will promptly
disclose such waiver by means of a prospectus supplement that will be
distributed to the registered holders of the Original Notes, and the Company
will extend the Exchange Offer for a period of five to ten business days,
depending upon the significance of the waiver and the manner of disclosure to
the registered holders, if the Exchange Offer would otherwise expire during such
five to ten business day period.
Holders may have certain rights and remedies against the Company under the
Registration Rights Agreement should the Company fail to consummate the Exchange
Offer, notwithstanding a failure of the conditions stated above. Such conditions
are not intended to modify those rights or remedies in any respect.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to such
condition or may be waived by the Company in whole or in part at any time and
from time to time in the Company's sole discretion. The failure by the Company
at any time to exercise the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
TERMINATION OF CERTAIN RIGHTS
All rights under the Registration Rights Agreement (including registration
rights) of holders of the Original Notes eligible to participate in this
Exchange Offer will terminate upon consummation of the Exchange Offer except
with respect to the Company's continuing obligations (i) to indemnify the
holders (including any broker-dealers) and certain parties related to the
holders against certain liabilities (including liabilities under the Securities
Act), (ii) to provide, upon the request of any holder of a transfer-restricted
Original Note, the information required by Rule 144A(d)(4) under the Securities
Act in order to permit resales of such Original Notes pursuant to Rule 144A,
(iii) to use its best efforts to keep the Registration Statement effective to
the extent necessary to ensure that it is available for resales of transfer-
restricted Notes by broker-dealers for a period of 90 days from the date on
which the Registration Statement is declared effective, and (iv) to provide
copies of the latest version of the Prospectus to all persons subject to the
prospectus delivery requirements of the Securities Act upon their request for a
period of 90 days from the date on which the Registration Statement is declared
effective.
LIQUIDATED DAMAGES
The following description of the Registration Rights Agreement is qualified
in its entirety by the provisions of the Registration Rights Agreement, which
has been filed as an exhibit to the Registration Statement of which the
Prospectus is a part. In the event of a failure to file, or to become effective,
one or more registration statements as provided by the Registration Rights
Agreement, the Company has agreed to pay, as liquidated damages, additional
interest on Original Notes ("Additional Interest") under the circumstances and
to the extent set forth below (each of which is given independent effect):
(i) if (A) neither the Registration Statement of which this Prospectus
is a part (the "Exchange Offer Registration Statement") nor Shelf
Registration Statement, as defined in the Registration Rights Agreement, is
filed with the Commission
<PAGE>
on or prior to the Filing Date or (B) notwithstanding that the Company
has consummated or will consummate an Exchange Offer, the Company is
required to file a Shelf Registration Statement and such Shelf
Registration Statement is not filed on or prior to the date required by
the Registration Rights Agreement, then commencing on the day after
either such required filing date, Additional Interest shall accrue on the
principal amount of the Notes at a rate of 0.25% per annum for the first
90 days immediately following each such filing date, such Additional
Interest rate increasing by an additional 0.25% per annum at the
beginning of each subsequent 90-day period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is declared effective by the Commission on or
prior to 120 days after the applicable filing date or (B) notwithstanding
that the Company has consummated or will consummate an Exchange Offer, the
Company is required to file a Shelf Registration Statement and such Shelf
Registration Statement is not declared effective by the Commission on or
prior to the 150th day following the date such Shelf Registration Statement
was filed, then, commencing on the day after the 150th day following the
applicable filing date, Additional Interest shall accrue on the principal
amount of the Notes at a rate of 0.25% per annum for the first 90 days
immediately following such date, such Additional Interest rate increasing
by an additional 0.25% per annum at the beginning of each subsequent 90-day
period; or
(iii) if (A) the Company has not exchanged Exchange Notes for all
Original Notes validly tendered in accordance with the terms of the
Exchange Offer on or prior to the 45th day after the date on which the
Exchange Offer Registration Statement was declared effective or (B) if
applicable, the Shelf Registration Statement has been declared effective
and such Shelf Registration Statement ceases to be effective at any time
prior to the second anniversary of its effective date (other than after
such time as all Original Notes have been disposed of thereunder), then
Additional Interest shall accrue on the principal amount of the Notes at a
rate of 0.25% per annum for the first 90 days commencing on (x) the 46th
day after such effective date, in the case of (A) above, or (y) the day
such Shelf Registration statement ceases to be effective in the case of (B)
above, such Additional Interest rate increasing by an additional 0.25% per
annum at the beginning of each subsequent 90-day period; PROVIDED, HOWEVER,
that the Additional Interest rate on the Notes may not exceed in the
aggregate 1.0% per annum; provided, further, however, that (1) upon the
filing of the Exchange Offer Registration Statement or a Shelf Registration
Statement (in the case of clause (i) above), (2) upon the effectiveness of
the Exchange Offer Registration Statement or a Shelf Registration Statement
(in the case of clause (ii) above), or (3) upon the exchange of Exchange
Notes for all Notes tendered (in the case of clause (iii)(A) above), or
upon the effectiveness of the Shelf Registration Statement which had ceased
to remain effective (in the case of clause (iii)(B) above), Additional
Interest on the Notes as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue.
Any amounts of Additional Interest due pursuant to clause (i), (ii) or
(iii) above will be payable in accordance with the terms of the Registration
Rights Agreement.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent of the Exchange
Offer. Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal and requests for Notice of
Guaranteed Delivery should be directed to the Exchange Agent addressed as
follows:
BY REGISTERED OR CERTIFIED MAIL BY HAND OR OVERNIGHT DELIVERY
-------------------------------------------------------------------
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Window-Ground Level
Attn: Reorganization Section New York, New York 10286
By Facsimile: (212) 571-3080
(Eligible Institutions Only)
FEES AND EXPENSES
All fees and expenses incident to compliance with the Registration Rights
Agreement regarding this Exchange Offer shall be borne by the Company whether or
not the Exchange Offer or a Shelf Registration becomes effective.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company and are estimated in the aggregate to be approximately
$125,000. Such expenses include registration fees, fees and expenses of the
Exchange Agent and Trustee, accounting and legal fees and printing costs, among
others.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Notes pursuant to the Exchange Offer. If, however, a transfer tax is imposed
for any reason other than the exchange of the Notes pursuant to the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the Original
Notes are urged to consult their financial and tax advisors in making their own
decisions on what action to take.
<PAGE>
The Original Notes which are not exchanged for the Exchange Notes pursuant
to the Exchange Offer will remain restricted securities. Accordingly, such Notes
may be resold only (i) to a person whom the seller reasonably believes is a
qualified institutional buyer (as defined in Rule 144A under the Securities Act)
in a transaction meeting the requirements of Rule 144A, (ii) in a transaction
meeting the requirements of Rule 144 under the Securities Act, (iii) outside the
United States to a foreign person in a transaction meeting the requirements of
Rule 904 under the Securities Act, (iv) in accordance with another exemption
from the registration requirements of the Securities Act (and based upon an
opinion of counsel if the Company so requests), (v) to the Company, or (vi)
pursuant to an effective registration statement and, in each case, in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction.
ACCOUNTING TREATMENT
For accounting purposes, the Company will recognize no gain or loss as a
result of the Exchange Offer. The expenses of the Exchange Offer will be
expensed in the Company's second fiscal quarter.
The Original Notes were issued, and the Exchange Notes are issuable, under
the Indenture, a copy of the form of which has been filed as an exhibit to the
Registration Statement. The form and terms of the Exchange Notes will be
identical in all material respects to the form and terms of the Original Notes,
except that the Exchange Notes will have been registered under the Securities
Act and, therefore, will not bear legends restricting transfer thereof. The
Exchange Notes and the Original Notes are deemed the same class of notes under
the Indenture and are both entitled to the benefits thereof. The following
summary of certain provisions of the Indenture is subject to, and is qualified
in its entirety by reference to, all the provisions of the Indenture, including
the definitions of certain terms therein and those terms made a part thereof by
the Trust Indenture Act of 1939, as amended. Whenever particular Sections or
defined terms of the Indenture not otherwise defined herein are referred to,
such Sections or defined terms are incorporated herein by reference.
<PAGE>
DESCRIPTION OF THE NOTES
The Original Notes have been, and the Exchange Notes will be, issued under
an Indenture dated as of October 1, 1997 (the "Indenture"), between Garden State
and The Bank of New York, as trustee (the "Trustee"). The following is a summary
of certain provisions of the Indenture and is subject to all of the provisions
of the Indenture, including the definitions of certain terms therein and those
terms made a part of the Indenture by the Trust Indenture Act of 1939, as
amended. Wherever particular sections or defined terms of the Indenture are
referred to, such sections or defined terms are incorporated herein by
reference. The definitions of certain capitalized terms used in the following
summary are set forth under "Definitions."
GENERAL
The Notes will mature on October 1, 2009, will be limited to $300.0 million
aggregate principal amount, of which $250.0 million is outstanding and is a
general unsecured obligations of Garden State. Additional amounts may be issued
in one or more series from time to time, subject to the limitations set forth
under "Certain Covenants--Limitations on Additional Debt."
The Notes will be payable both as to principal and interest at the office
or agency of Garden State maintained for such purpose within the City and State
of New York, or, at the option of Garden State, payment of interest may be made
by check mailed to the holders of the Notes at their respective addresses set
forth in the Note holder register. Unless otherwise designated by Garden State,
Garden State's office or agency in New York will be the office of the Trustee,
maintained for such purpose. Interest on the Notes will be computed on the basis
of a 360-day year of twelve 30-day months. Notes will be transferable and
exchangeable at the offices of the Trustee. The Notes will be issued in fully
registered form, without coupons, in principal amounts of $1,000 and any
integral multiple thereof.
Interest on the Notes will accrue at the rate per annum stated on the front
cover page, and will be payable semi-annually in arrears on April 1 and
October 1 of each year, commencing April 1, 1998, to the persons who are
registered holders thereof at the close of business on March 15 or September 15
preceding the applicable interest payment date. Interest on the Notes will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the date of original issuance.
SUBORDINATION
The payment of principal of, premium, if any, and interest on the Notes
will be subordinated in right of payment, to the extent set forth in the
Indenture, to the prior payment in full in cash of all existing and future
Senior Debt of Garden State, including the Garden State Credit Facility. The
Notes will be general unsecured obligations of the Company ranking PARI PASSU in
right of payment with the existing Senior Subordinated Secured Notes and all
other future senior subordinated indebtedness of the Company and senior in right
of payment to all existing and future subordinated indebtedness of the Company
which is made expressly junior thereto; however, the Company's Senior
Subordinated Secured Notes are secured by a second priority lien only on all of
the capital stock of GSI. Secured PARI PASSU debt will, to the extent such
security is then available, have a claim prior to the holders of the Notes with
respect to the value of the GSI Stock.
Upon any payment or distribution of assets to creditors of Garden State
upon any dissolution or winding up or total or partial liquidation or
reorganization of Garden State, whether voluntary or involuntary, or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to Garden State or its property, in an assignment for the benefit of
creditors or any marshalling of Garden State's assets and liabilities, the
holders of Senior Debt of Garden State will first be entitled to receive payment
in full in cash of all Obligations due in respect of such Senior Debt (including
interest accruing after or which would accrue but for the occurrence of the
commencement of any such proceeding, at the rate specified in the applicable
Senior Debt whether or not such interest is an allowable claim in any such
proceeding) before any payment or distribution is made on account of any
Obligations on the Notes, or for the acquisition of any of the Notes for cash or
property or otherwise and, until all Obligations with respect to Senior Debt of
Garden State have been paid in full in cash, any distribution to which the
holders of the Notes otherwise would be entitled shall be made to the holders of
Senior Debt (except that holders of the Notes may receive securities that are
subordinated at least to the same extent as the Notes to Senior Debt and to any
securities issued in exchange for Senior Debt). In addition and as a result of
the second priority lien in favor of the Company's Senior Subordinated Secured
Notes, holders of the Notes may recover less than the holders of Senior
Subordinated Secured Notes. See "Risk Factors--Notes Subordinated to Creditors
of Subsidiaries," "Use of Proceeds" and "Description of Other Indebtedness."
Garden State also may not make any payment upon or distribution in respect
of the Notes or acquire any of the Notes for cash or property or otherwise
(except in or for such subordinated securities) if (i) a default in the payment
of the principal of, premium, if any, or interest on Senior Debt occurs and is
continuing beyond any applicable period of grace (whether upon maturity, at a
date fixed for prepayment, as a result of acceleration or otherwise) (a "payment
default") or (ii) any other default occurs and is continuing (or if such an
event of default would occur upon any payment with respect to the Notes) with
respect to any Designated Senior Debt as to which the holders of such Designated
Senior Debt would have the right to accelerate its maturity, as a result of such
default, and the Trustee receives a notice of such default (a "Payment Blockage
Notice") from the holders, or from the trustee, agent or other representative of
the holders, of any such Designated Senior Debt (a "nonpayment default").
Payment on the Notes may and shall be resumed (i) in the case of a payment
default, upon the date on which such default is cured or waived and (ii) in case
of a nonpayment default, upon the earlier of the date on which such nonpayment
default is cured or waived or 179 days after the date on which the applicable
Payment Blockage Notice is received, unless the maturity of any Designated
Senior Debt has been accelerated. No new period of payment blockage in respect
of any nonpayment default may be commenced within 360 days after receipt by the
Trustee of any prior Payment Blockage Notice. No nonpayment default that existed
or was continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be made the basis for a subsequent Payment Blockage Notice unless
such default shall have been cured or waived for a period of not less than 180
days. The Indenture will further require that Garden State promptly notify
holders of Senior Debt if payment of the Notes is accelerated because of an
Event of Default.
MANDATORY REDEMPTION
Except as set forth under "Certain Covenants--Change of Control," Garden
State will not be required to make mandatory redemption or sinking fund payments
with respect to the Notes.
<PAGE>
OPTIONAL REDEMPTION
The Notes will not be redeemable at Garden State's option prior to
October 1, 2002. On and after such date, the Notes will be subject to redemption
at Garden State's option, in whole or in part, in amounts of $1,000 or integral
multiples thereof, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest, if any, to the applicable redemption
date, if redeemed during the twelve month period commencing on October 1 of the
years indicated below:
YEAR PERCENTAGE
---- ----------
2002 104.375%
2003 102.917%
2004 101.458%
2005 and thereafter 100.000%
In addition, at any time, or from time to time, on or prior to October 1,
2000, Garden State may, at its option, use the net cash proceeds of one or more
Equity Offerings (as defined below) to redeem up to 35% of the principal amount
of Notes originally issued at a redemption price equal to 108.75% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of such redemption, PROVIDED that at least $162.5 million aggregate
principal amount of Notes originally issued remains outstanding immediately
after any such redemption. In order to effect the foregoing redemption with the
proceeds of any Equity Offering, Garden State shall make such redemption not
more than 120 days after the consummation of any such Equity Offering.
As used herein, "Equity Offering" means the issuance and sale of Qualified
Capital Stock of the Company.
CERTAIN COVENANTS
The Indenture will contain, among others, the following covenants:
LIMITATION ON ADDITIONAL DEBT. The Indenture will provide that Garden
State and its Restricted Subsidiaries may not, directly or indirectly, Issue
(including through any merger or consolidation to which Garden State or such
Restricted Subsidiary is a party) any Debt, except that Garden State and/or its
Restricted Subsidiaries may Issue Debt if (i) no Default or Event of Default
shall have occurred and be continuing at such time or shall occur as a result of
such issuance and (ii) at the time such Debt is so Issued and after giving
effect thereto and to the application of the net proceeds therefrom, the
Leverage Ratio of Garden State shall not be greater than 6.75 to 1, if such Debt
is Issued on or prior to December 31, 1999, 6.25 to 1, if such Debt is Issued
after December 31, 1999, but on or prior to December 31, 2001, and 6.0 to 1 if
such Debt is Issued thereafter.
The limitations set forth in the immediately preceding paragraph will not
apply to: (i) the Notes; (ii) Existing Debt; (iii) Debt under the Garden State
Credit Facility, PROVIDED that the aggregate amount of such Debt does not, at
any time, exceed $350.0 million, less any prepayments or scheduled payments
actually made thereunder (to the extent, in the case of prepayments on revolving
credit indebtedness, that the corresponding commitments have been permanently
reduced); (iv) Debt owing from or to Garden State and its Restricted
Subsidiaries, PROVIDED that any Debt owing from Garden State to its Restricted
Subsidiaries is subordinated to the Notes; (v) other Debt issued hereafter not
to exceed in the aggregate $40.0 million at any one time outstanding; (vi) Debt
in respect of Capitalized Lease Obligations not to exceed in the aggregate $25.0
million at any one time outstanding (including those outstanding on the Issue
Date); (vii) Acquired Debt; and (viii) any extension, renewal or replacement of
the Debt described in clauses (i) and (ii) above, PROVIDED that (a) the
aggregate principal amount of Debt so issued (or, if such Debt is issued at a
price less than the principal amount thereof, the original issue price) shall
not exceed the aggregate principal amount of the Debt being extended, renewed or
replaced, (b) any Debt so issued shall not mature prior to the stated maturity
of the Debt being extended, renewed or replaced, and (c) the Debt so issued
shall not have an Average Life less than the remaining Average Life of the Debt
to be extended, renewed or replaced.
LIMITATION ON SENIOR SUBORDINATED DEBT. The Indenture will provide that
Garden State will not, directly or indirectly, become liable, contingently or
otherwise, with respect to any Debt that is subordinated or junior in right of
payment to any Senior Debt of Garden State and senior in right of payment to the
Notes.
LIMITATION ON LIENS SECURING CERTAIN DEBTS. The Indenture will provide
that Garden State will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens to secure
any Debt of Garden State which is PARI PASSU with or subordinate in right of
payment to the Notes, other than Liens existing on the date of the Indenture
with respect to the Senior Subordinated Secured Notes, unless the Notes are
secured equally and ratably with such Debt (but on a senior basis if such other
Debt is subordinate to the Notes) as long as such Debt is so secured.
LIMITATION ON RESTRICTED PAYMENTS. The Indenture will provide that Garden
State will not, and will not permit any of its Restricted Subsidiaries to, make,
directly or indirectly, any Restricted Payment; PROVIDED, however, that Garden
State and its Restricted Subsidiaries may make Restricted Payments so long as at
the time of the making of such Restricted Payment and after giving effect
thereto:
(a) no Default or Event of Default shall have occurred or be continuing as
a consequence thereof;
(b) immediately after giving effect to such Restricted Payment, Garden
State would have been permitted to incur $1.00 of additional Debt pursuant
to the terms of the first paragraph under the "Limitation on Additional
Debt" covenant; and
(c) the aggregate amount expended by Garden State and its Restricted
Subsidiaries in connection with all Restricted Payments made subsequent to
the Issue Date shall not exceed the sum of (i) Garden State's Cumulative
Credit (or, in the event such aggregate Cumulative Credit shall be a
deficit, minus 100% of such deficit) for the period (taken as one
accounting period) from the Issue Date; (ii) 100% of the Net Cash Proceeds
received by Garden State from any Person (other than a Subsidiary of Garden
State) from the issuance and sale subsequent to the Issue Date of Qualified
Capital Stock of Garden State (excluding (A) Qualified Capital Stock made
as a distribution on any Capital Stock or as interest on any Debt and (B)
any such Net Cash
<PAGE>
Proceeds from issuances and sales of Qualified Capital Stock, where the
purchase is financed directly or indirectly using funds borrowed from
Garden State or any Subsidiary of Garden State); (iii) 100% of the Net
Cash Proceeds received by Garden State from the exercise of options or
warrants on Qualified Capital Stock of Garden State since the Issue Date
(other than from a Subsidiary of Garden State); (iv) 100% of the Net Cash
Proceeds received by Garden State from the conversion into Qualified
Capital Stock of convertible Debt or convertible Preferred Stock issued
and sold since the Issue Date (other than from a Subsidiary of Garden
State); (v) 100% of the aggregate net proceeds of any (a) sale or other
disposition of Restricted Investments (which Investment was made after
the Issue Date) made by the Company or a Restricted Subsidiary of the
Company, (b) dividends, whether liquidating or otherwise, from, or the
sale of capital stock of, an Unrestricted Subsidiary, or (c) dividends,
whether liquidating or otherwise, from Restricted Investments; and (vi)
$40.0 million.
Notwithstanding the foregoing, this restriction will not prevent (A) the
payment of any dividend within 60 days after the date of declaration if the
dividend would have been permitted on the date of declaration; (B) so long as no
Default or Event of Default shall have occurred or be continuing or shall occur
as a consequence thereof, the acquisition of Capital Stock of Garden State which
is funded either by the exchange of shares of Qualified Capital Stock of Garden
State or from the Net Cash Proceeds of the substantially concurrent sale for
cash of shares of Qualified Capital Stock of Garden State (other than to a
Subsidiary of Garden State) which amount shall not then be included in
(c)(ii) of the immediately preceding paragraph; (C) so long as no Default or
Event of Default shall have occurred or be continuing or shall occur as a
consequence thereof, the purchase for value of shares of Capital Stock or
warrants, options or other rights to acquire Capital Stock held by directors,
officers of employees of Garden State upon death, disability, retirement or
termination of employment in an aggregate amount not to exceed $3.0 million in
any twelve-month period; and (D) so long as no Default or Event of Default shall
have occurred or be continuing or shall occur as a consequence thereof, and
immediately after giving effect to such Restricted Payment, Garden State would
have been permitted to incur at least $1.00 of additional Debt pursuant to the
terms of the first paragraph under "Limitations on Additional Debt" covenant,
the redemption, purchase or retirement by Garden State of the ANI Senior
Discount Debentures or the payment of dividends to ANI in an amount sufficient
to allow ANI to redeem, repurchase, or retire the ANI Senior Discount
Debentures, PROVIDED, in each such case, the proceeds are forthwith so used.
LIMITATION ON SALES OF ASSETS. The Indenture will provide that Garden
State and its Restricted Subsidiaries may not, directly or indirectly,
consummate any Asset Sale unless: (a) at least 85% of the consideration therefor
received by Garden State or such Restricted Subsidiary shall be in the form of
cash or Cash Equivalents, PROVIDED, that the amount of (i) any liabilities (as
shown on Garden State's or such Restricted Subsidiary's most recent balance
sheet or in the notes thereto) of Garden State or any Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Notes or any
guarantee thereof) that are assumed by the transferee of any such assets shall
be excluded from such calculation and (ii) any notes or other obligations
received by Garden State or any such Restricted Subsidiary from such transferee
that are immediately converted by Garden State or such Restricted Subsidiary
into cash (to the extent of the cash received) shall be deemed, to the extent of
cash so received, to be cash for purposes of this provision; (b) Garden State or
such Restricted Subsidiary shall have received consideration in such Asset Sale
at least equal to the fair market value of the assets sold in such Asset Sale
(as determined in good faith by the Board of Directors of Garden State); and (c)
such Asset Sale is approved in writing by the Board of Directors of Garden
State; PROVIDED, however, that clause (a) shall not apply to the extent an Asset
Sale consists of the exchange of one or more newspapers for another newspaper.
Garden State will, and will cause each such Restricted Subsidiary to,
commit to apply the Net Cash Proceeds from any such Asset Sale within 270 days
of receipt thereof, and will, and will cause such Restricted Subsidiary to,
apply such Net Cash Proceeds within 360 days of receipt thereof to
(i) reinvestment by Garden State or such Restricted Subsidiary in property or
assets to be employed in a Permitted Business, (ii) the permanent repayment of
Debt (including premium) of Garden State or its Restricted Subsidiaries that is
held by a person other than a Restricted Subsidiary or Affiliate of Garden
State, or (iii) the repurchase of Notes tendered as described in the immediately
succeeding paragraph. Any Net Cash Proceeds from Asset Sales that are not
applied as provided in clause (i) or (ii) of the preceding sentence shall
constitute "Excess Proceeds."
In the event Garden State or any Restricted Subsidiary shall have received
any Excess Proceeds, Garden State will make an offer to all holders of the Notes
to purchase the maximum principal amount of Notes that may be purchased out of
such Excess Proceeds, at an offer price, in cash in an amount equal to 100% of
the outstanding principal amount thereof, plus the accrued and unpaid interest
thereon, if any, to the date fixed for the closing of such offer, in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
principal amount of Notes tendered pursuant to an offer to purchase is less than
the Excess Proceeds, Garden State may use such excess for general corporate
purposes. If the aggregate principal amount of Notes surrendered by holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes to be purchased on a pro rata basis. Notwithstanding the foregoing, if
after applying any Net Cash Proceeds received from Assets Sales in accordance
with clause (ii) of the immediately preceding paragraph, Excess Proceeds are
less than $10.0 million, the application of such Excess Proceeds to repurchase
the Notes may be deferred until such time as such Excess Proceeds are at least
equal to $10.0 million, at which time Garden State or such Restricted Subsidiary
shall apply all such Excess Proceeds to repurchase the Notes.
In the event the repurchase of the Notes with Excess Proceeds constitutes a
"tender offer" for purposes of Rule 14e-1 under the Exchange Act at the time it
is required, Garden State will be required to comply with Rule 14e-1 as then in
effect with respect to such repurchase.
LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Indenture will provide
that Garden State will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (or series of related transactions) (each a "Transaction") with any
Affiliate of Garden State or any Unrestricted Subsidiary of Garden State,
including, without limitation, any sale, purchase, lease or loan or any other
direct or indirect payment, transfer or other disposition of assets, property or
services, unless (a) such Transaction is on terms no less favorable to Garden
State or such Restricted Subsidiary, as the case may be, than those that could
be obtained in a comparable arm's-length transaction with an independent third
party (the "Fairness Condition") and (b) prior to effecting such Transaction,
Garden State shall deliver to the Trustee (i) with respect to any Transaction
involving aggregate consideration in excess of $1.0 million, an officers'
certificate certifying that a majority of the disinterested members of the Board
of Directors of Garden State has approved such Transaction and has determined
that the terms of such Transaction satisfy the Fairness Condition and (ii) in
addition, with respect to any Transaction involving (x) aggregate consideration
in excess of $1.0 million in which there are no disinterested directors or (y)
aggregate consideration in excess of $10.0 million, a written opinion from a
nationally recognized investment banking firm stating that the terms of such
Transaction satisfy the Fairness Condition or are fair to Garden State or such
Restricted Subsidiary from a financial point of view. Clause (b)(ii)(y) shall
not apply to purchases of newsprint in the ordinary course of business by Garden
State and its
<PAGE>
Restricted Subsidiaries from Affiliates of Garden State or of its Restricted
Subsidiaries. Notwithstanding the foregoing, this provision will not apply to
(A) any Transaction between Garden State and a Restricted Subsidiary of Garden
State, or between Restricted Subsidiaries of Garden State (provided that in
the case of any Restricted Subsidiary that is not a Wholly Owned Subsidiary,
no affiliate of Garden State is a direct or indirect investor in such
Subsidiary other than through Garden State), and any transaction, in the
ordinary course of business, between Garden State and its Restricted
Subsidiaries, on the one hand, and Denver Newspapers or its wholly owned
subsidiaries (as long as Denver Newspapers is a Subsidiary of ANI), on the
other hand, (B) the making of Permitted Investments, (C) the making of
Restricted Payments in accordance with the "Limitation on Restricted Payments"
covenant, and (D) the making of Permitted Intercompany Payments. In connection
with this covenant, any determination regarding whether a director is
"disinterested" will be made on the basis of whether such director has, among
other things, a personal stake in the business or transactions requiring any
such determination to be made.
LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES. The Indenture will provide that Garden State will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly, create
or otherwise cause or permit to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary of Garden State to
(i) pay dividends or make any other distributions on its Capital Stock or pay
any Debt owed to Garden State or a Restricted Subsidiary of Garden State,
(ii) make loans or advances to Garden State or a Restricted Subsidiary of Garden
State or (iii) transfer any of its properties or assets to Garden State, except
for encumbrances or restrictions existing under or by reason of (A) applicable
law or provisions in effect on the Issue Date, (B) the Indenture, (C) agreements
existing on the Issue Date, (D) the Garden State Credit Facility, the Senior
Subordinated Secured Notes or the Notes, (E) customary non-assignment provisions
of any lease governing a leasehold interest of Garden State or a Restricted
Subsidiary of Garden State or (F) any instrument governing or evidencing
Acquired Debt of a Person at the time of such acquisition, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person so acquired, PROVIDED that such Debt, and such
encumbrance or restriction, is not incurred in connection with, or in
contemplation of, such acquisition or (G) any encumbrances or restrictions
contained in any Debt governing any refinancings of the Debt described in clause
(C), PROVIDED that the encumbrances and restrictions contained in any such
refinancing agreement or amendment, supplement or other modification are not
materially less favorable to the Noteholders than encumbrances and restrictions
contained in such agreements.
INVESTMENT COMPANY ACT. The Indenture will provide that Garden State will
not take any action that would require it or any of its Restricted Subsidiaries
to register as an investment company under the Investment Company Act of 1940.
REPORTS TO THE SECURITIES AND EXCHANGE COMMISSION. The Indenture will
provide that Garden State shall file with the Trustee and mail to each holder of
Notes, within 15 days after filing with the Commission, copies of the annual,
quarterly and current reports (or copies of such portions of any of the
foregoing as the Commission may by rules and regulations prescribe) which it is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. Notwithstanding that Garden State is not required by law to remain
subject to the periodic reporting requirements of the Exchange Act, it will
nonetheless continue to file with the Commission and deliver to the Trustee, and
to each holder of Notes such annual, quarterly and current reports which are
specified in Section 13 or 15(d) of the Exchange Act. In addition, Garden State
shall, at its cost, deliver to each holder of the Notes quarterly and annual
reports substantially equivalent to those which would be required under the
Exchange Act.
LIMITATION ON BUSINESS. The Indenture will provide that Garden State will
not, and will not permit any of its Restricted Subsidiaries to, engage in any
business other than the Permitted Business.
LIMITATION ON RESTRICTED AND UNRESTRICTED SUBSIDIARIES. The Indenture
will provide that the Board of Directors of the Company may, if no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, designate any Restricted Subsidiary to be an Unrestricted
Subsidiary if such designation is at that time permitted under "--Limitation
on Restricted Payments" above. The Indenture will also provide that the Board
of Directors of the Company may, if no Default or Event of Default shall have
occurred and be continuing or would result therefrom, designate an
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that
(i) any such redesignation shall be deemed to be an incurrence as of the date
of such redesignation by the Company and the Restricted Subsidiaries of Debt,
if any, of such redesignated Subsidiary for purposes of "--Limitation of
Additional Debt" above; and (ii) unless such redesignated Restricted
Subsidiary shall not have any Debt outstanding (other than Debt which would be
permitted under "--Limitation of Additional Debt" above), no such designation
shall be permitted if immediately after giving effect to such redesignation
and the Incurrence of any such Debt, the Company could not incur $1.00 of
additional Debt pursuant to the first paragraph described under "-- Limitation
on Additional Debt" above. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by the filing with the Trustee
of a certified copy of the Board Resolution of the Company's Board of
Directors giving effect to such designation or redesignation and an Officers'
Certificate certifying that such designation or redesignation complied with
the foregoing conditions and setting forth in reasonable detail the underlying
calculations.
The Indenture will provide that Subsidiaries that are not designated by the
Board of Directors as Restricted or Unrestricted Subsidiaries will be deemed to
be Restricted Subsidiaries. The designation of a Restricted Subsidiary as an
Unrestricted Subsidiary shall be deemed to include a designation of all of the
subsidiaries of such Unrestricted Subsidiary as Unrestricted Subsidiaries. As of
the date of the Indenture, there are no Unrestricted Subsidiaries.
CHANGE OF CONTROL. The Indenture will provide that upon the occurrence of
a Change of Control, each holder will have the right to require Garden State to
repurchase all or a portion of such holder's Notes pursuant to the offer
described below (the "Change of Control Offer"), at a purchase price equal to
101% of the principal amount thereof plus accrued and unpaid interest thereon,
if any, to the date of repurchase.
Within ten (10) Business Days following the date upon which the Change of
Control occurred, Garden State will send, by first class mail, a notice to each
holder of the Notes, with a copy to the Trustee, which notice shall govern the
terms of the Change of Control Offer. Such notice shall state, among other
things, the purchase date, which must be no earlier than 30 days nor later than
45 days from the date such notice is mailed, other than as may be required by
law (the "Change of Control Payment Date"). Holders electing to have a Note
purchased pursuant to a Change of Control Offer will be required to surrender
the Note with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the business day immediately prior
to the Change of Control Payment Date.
None of the provisions relating to a repurchase upon a Change of Control
are waivable by the Board of Directors of Garden State. Garden State could, in
the future, enter into certain transactions, including certain recapitalizations
of Garden State, that would not
<PAGE>
constitute a Change of Control with respect to the Change of Control
repurchase feature of the Indenture, but would increase the amount of Debt
outstanding at such time. If a Change of Control were to occur, there can be
no assurance that Garden State would have sufficient funds to purchase all of
the Notes that it is required to repurchase. In the event that Garden State
were required to purchase outstanding Notes pursuant to a Change of Control
Offer, Garden State expects that it would need to seek third party financing
to the extent it does not have available funds to meet its purchase
obligations. However, there can be no assurance that Garden State would be
able to obtain such financing. Accordingly, the obligation of Garden State to
offer to repurchase the Notes may be of limited value if Garden State cannot
obtain sufficient funding to repay all Debt then becoming due. A Change of
Control may constitute an Event of Default under the Garden State Credit
Facility, and permit the holders of the Debt thereunder to declare all amounts
outstanding thereunder to be immediately due and payable.
Restrictions in the Indenture described herein on the ability of Garden
State and its Restricted Subsidiaries to incur additional Debt, to grant Liens
on its property, to make Restricted Payments and to make Asset Sales may also
make more difficult or discourage a takeover of Garden State, whether favored or
opposed by current management of Garden State. Such restrictions and the
restrictions on transactions with Affiliates may, in certain circumstances, make
more difficult or discourage a leveraged buyout of Garden State. While such
restrictions cover a wide variety of arrangements which have traditionally been
used to effect highly leveraged transactions, the Indenture may not afford the
holders protection in all circumstances from the adverse aspect of a highly
leveraged transaction, reorganization, restructuring, merger or similar
transaction. For example, the Company could in the future enter into certain
transactions including acquisitions, refinancings or other recapitalizations
that would not constitute a Change of Control under the Indenture, but that
could increase the amount of indebtedness outstanding at such time or otherwise
affect the Company's capital structure or credit ratings.
Garden State will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer.
MERGER OR CONSOLIDATION
The Indenture will provide that Garden State will not, in a single
transaction or a series of related transactions, consolidate with or merge with
or into another Person or adopt any plan of liquidation or sell all or
substantially all of its assets, unless (i) either (x) Garden State shall be the
surviving corporation or (y) the surviving Person (the "Survivor"), if other
than Garden State, shall be a corporation, partnership or trust, organized and
existing under the laws of the United States of America, one of the states
thereof or the District of Columbia, (ii) the Survivor assumes by supplemental
indenture all of the obligations of Garden State under the Indenture and the
Notes, (iii) immediately after giving effect to such transaction (including any
Debt incurred or anticipated to be incurred in connection with such
transaction), (x) no Default or Event of Default shall have occurred and be
continuing, (y) the Consolidated Net Worth of the Survivor is equal to or
greater than that of Garden State immediately prior to the transaction, and (z)
on a pro forma basis as if such transaction and the incurrence of any such Debt
had occurred at the beginning of the four-quarter period immediately preceding
such transaction, the Survivor or Garden State, as the case may be, would have
been permitted to incur $1.00 of additional Debt under the first paragraph of
the "Limitation on Additional Debt" covenant and (iv) Garden State shall have
delivered to the Trustee certain officers' certificates and opinions of counsel
demonstrating compliance with each of the foregoing.
EVENTS OF DEFAULT
An Event of Default will be defined in the Indenture to mean, among other
things, (i) the failure by Garden State to pay interest on any Note when the
same becomes due and payable and the continuance of any such failure for 30
days; (ii) the failure by Garden State to pay the principal of, or premium, if
any, on any Note when and as the same shall become due and payable, at maturity,
upon acceleration, redemption or otherwise, including as a result of a Change of
Control Offer or an Asset Sale; (iii) the failure by Garden State to comply with
any of its agreements or covenants described under the heading "Merger or
Consolidation" above; (iv) the failure by Garden State to comply (A) with any of
its agreements or covenants described under the "Limitation on Restricted
Payments" covenant, the "Limitation on Additional Debt" covenant, the
"Limitation on Senior Subordinated Debt" covenant, the "Limitation on Liens
Securing Certain Debt" covenant or the "Limitation on Sales of Assets" covenant
described above, and the continuance of such failure for 30 days after written
notice is given to Garden State by the Trustee or to Garden State and the
Trustee by the holders of 25% in aggregate principal amount of the Notes then
outstanding or (B) with any other agreements or covenants in the Notes or the
Indenture and the continuance of such failure for 45 days after written notice
is given to Garden State by the Trustee or to Garden State and the Trustee by
the holders of 25% in aggregate principal amount of the Notes then outstanding;
(v) failure to pay at final maturity (after any stated grace period) the
principal of and interest on one or more classes of Debt of Garden State or any
of its Restricted Subsidiaries, whether such Debt is outstanding on the Issue
Date or thereafter incurred having, individually or in the aggregate, an
outstanding principal amount exceeding $10.0 million or more or any Debt having,
individually or in the aggregate, an outstanding principal amount exceeding
$10.0 million is declared due and payable prior to the stated maturity;
(vi) certain final judgments, orders or decrees for the payment of money in
excess of $10.0 million are entered against ANI or any of its Significant
Subsidiaries and such judgments remain undischarged or unstayed for a period of
60 days after such judgment or judgments become final and nonappealable and
after the notice specified below; and (vii) certain events of bankruptcy,
insolvency, foreclosure or reorganization of Garden State or any Significant
Subsidiary. The Indenture will provide that the Trustee must, within 90 days
after the occurrence of a Default, give to the holders of the Notes notice of
all uncured Events of Default known to it; provided that, except in the case of
a Default relating to the payment of principal or interest in respect of such
Notes, the Trustee will be protected in withholding such notice if a committee
of its Trust Officers in good faith determines that the withholding of such
notice is in the interest of the holders of the Notes. The Indenture will
provide that Garden State is required to furnish annually to the Trustee a
certificate as to its compliance with the terms of the Indenture.
RIGHTS UPON DEFAULT
Upon the happening of any Event of Default specified in the Indenture, the
Trustee may, and the Trustee upon the request of 25% in principal amount of the
then outstanding Notes shall or the holders of at least 25% in aggregate
principal amount of the then outstanding Notes may declare the principal of and
accrued but unpaid interest, if any, on all the Notes to be due and payable by
notice in writing to Garden State and the Trustee specifying the respective
Event of Default and that it is a "notice of acceleration", and the same
(i) shall become immediately due and payable (other than an Event of Default
resulting from the bankruptcy, insolvency or reorganization
<PAGE>
of Garden State, which shall result in automatic acceleration without the
giving of any such notice) or (ii) if there are any amounts outstanding under
the Garden State Credit Facility will become due and payable upon the first to
occur of either (x) an acceleration, or a failure to pay at final maturity,
under the Garden State Credit Facility, or (y) five Business Days after the
notice of acceleration has been sent to Garden State and each of the
representatives under the Garden State Credit Facility (if it is then
outstanding) unless no Events of Default shall be then continuing.
The holders of not less than a majority in aggregate principal amount of
Notes outstanding are authorized to rescind any Declaration if all Events of
Default then continuing (other than any Events of Default with respect to the
nonpayment of principal of, or interest on, any Note which has become due solely
as a result of such Declaration) have been cured, and to waive any default other
than a default with respect to a covenant or provision that cannot be modified
or amended without the consent of the holder of each outstanding Note affected.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request, order or direction of any of the
holders of the Notes issued thereunder, unless the holders of such Notes have
offered to the Trustee indemnity satisfactory to it. Subject to all provisions
of the Indenture and applicable law, the holders of a majority in aggregate
principal amount of the Notes then outstanding have the right to 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 the Trustee.
TRANSFER AND EXCHANGE
Upon any transfer of a Note, the Registrar may require a holder, among
other things, to furnish appropriate endorsements and transfer documents, and to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar is not required to transfer or exchange any Notes selected for
redemption nor is the Registrar required to transfer or exchange any Notes for a
period of 15 days before a selection of Notes to be redeemed. The registered
holder of a Note will be treated as the owner of it for all purposes.
THE TRUSTEE
The Bank of New York is the Trustee under the Indenture and has been
appointed by the Company as Registrar and Paying Agent with respect to the
Notes.
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest (as defined in
the Trust Indenture Act), it must eliminate such conflict or resign.
The Indenture provides that in case an Event of Default shall occur (which
shall not be cured), the Trustee will be required, in the exercise of its power,
to use the degree of care of a prudent man in the conduct of his own affairs.
Subject to such provisions, the Trustee will be under no obligation to exercise
any of its rights or powers under the Indenture at the request of any of the
holders of the Notes issued thereunder, unless they shall have offered to the
Trustee security and indemnity satisfactory to it.
MODIFICATIONS AND AMENDMENTS
Modifications and amendments of the Indenture may be made by Garden State
and the Trustee with the consent of the holders of a majority of the aggregate
principal amount of the outstanding Notes, PROVIDED that no such modification,
amendment or instruction may, without the consent of the holder of each
outstanding Note affected thereby: (i) change the stated maturity of the
principal of, or any installment of interest on, any Note or reduce the
principal amount thereof, the rate of interest thereon or any premium payable
upon the redemption thereof, or change the coin or currency in which any Note or
any premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment after the stated maturity thereof
(or, in the case of redemption, on or after the redemption date); (ii) reduce
the percentage in principal amount of the outstanding Notes, the consent of the
holders of which is required for any such supplemental indenture or the consent
of such holders is required for any waiver of compliance with certain provisions
of the Indenture or certain Defaults thereunder and their consequences provided
for in the Indenture; (iii) modify any of the provisions relating to
supplemental indentures requiring the consent of holders or relating to the
waiver of past defaults or relating to the waiver of certain covenants, except
to increase any such percentage of outstanding Notes required for such actions
or to provide that certain other provisions of the Indenture cannot be modified
or waived without the consent of the holder of each Note affected thereby; or
(iv) amend, modify or change the obligation of Garden State to make or
consummate a Change of Control Offer or to offer to purchase Notes using Excess
Proceeds or waive any default in the performance thereof or modify any of the
provisions or definitions in respect thereof.
The holders of a majority of the aggregate principal amount of the Notes
outstanding may waive compliance with certain restrictive covenants and
provisions of the Indenture.
DEFEASANCE AND DISCHARGE OF THE INDENTURE AND THE NOTES
The Indenture will provide that Garden State at any time may terminate all
of its obligations under the Notes and the Indenture ("legal defeasance"),
except for certain obligations, including those with respect to the transfer or
exchange of the Notes, to replace mutilated, destroyed, lost or stolen Notes and
to maintain a registrar and paying agent in respect of the Notes. If Garden
State exercises its legal defeasance option, payment of the Notes may not be
accelerated despite an Event of Default with respect thereto. Subject to the
conditions described below, Garden State at any time may terminate its
obligations under the covenants described under "Certain Covenants," "Change of
Control" and "Limitation on Sales of Assets" ("covenant defeasance") above.
Garden State may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
In order to exercise either defeasance option (i) Garden State must have
irrevocably deposited in trust (the "defeasance trust") with the Trustee, money,
U.S. Government Obligations, or any combination thereof, sufficient to pay the
principal of, premium, if any, and interest on the Notes to maturity or
redemption, as the case may be; (ii) Garden State shall have delivered to the
Trustee a certificate from a nationally recognized firm of independent
accountants expressing the opinion that the payment of principal and interest
when due and without reinvestment on the deposited U.S. Government Obligations
plus any deposited money without reinvestment will provide cash at
<PAGE>
such times and in such amounts as will be sufficient to pay principal and
interest when due on all the Notes to maturity or redemption, as the case may
be; (iii) Garden State shall have delivered to the Trustee an opinion of
counsel to the effect that the trust funds will not be subject to any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; (iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or insofar as Events
of Default from bankruptcy or insolvency events are concerned, at any time in
the period ending on the 91st day after the date of deposit; (v) such
defeasance or covenant defeasance shall not result in a breach or violation
of or constitute a default under the Indenture, or any other agreement or
instrument to which Garden State is a party or by which Garden State is
bound; (vi) Garden State shall have delivered to the Trustee an opinion of
counsel to the effect that the trust resulting from the deposit is not
required to register as an investment company under the Investment Company
Act of 1940, as amended; (vii) Garden State shall have delivered to the
Trustee an opinion of counsel to the effect that the holder of Notes shall
have a perfected security interest under applicable law in the U.S.
Government Obligations so deposited; (viii) in the case of legal defeasance,
Garden State shall have delivered to the Trustee an opinion of counsel
reasonably acceptable to the Trustee confirming that (a) Garden State has
received from, or there has been published by, the Internal Revenue Service a
ruling or (b) since the date of the 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 holder of the
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; (ix) in the
case of covenant defeasance, Garden State shall have delivered to the Trustee
an opinion of counsel reasonably acceptable to the Trustee confirming that
the holders of the 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; and (x) Garden State shall have delivered to the Trustee an
officers' certificate and an opinion of counsel, each stating that all
conditions precedent provided for relating to either the legal defeasance or
the covenant defeasance, as the case may be, have been complied with.
GOVERNING LAW
The Indenture and the Notes will be governed by, and construed in
accordance with, the laws of the State of New York.
DEFINITIONS
"ACQUIRED DEBT" with respect to any Person, means (i) Debt of an entity,
which entity is acquired by Garden State or any of its Subsidiaries after the
date of the Indenture, (ii) Debt assumed which is secured by assets acquired
by Garden State or any of its Subsidiaries, PROVIDED that the Debt in clauses
(i) and (ii) is outstanding at the time of the acquisition of such entity or
such assets, is not created in contemplation of such acquisition and, in the
case of the acquisition of an entity, is not, directly or indirectly,
recourse (including by way of set-off) to Garden State or its Restricted
Subsidiaries or any of their respective assets, other than to the entity and
its Subsidiaries so acquired and the assets of the entity and its
Subsidiaries so acquired, or (iii) Refinancings of Debt described in clauses
(i) and (ii), PROVIDED that in the case of Debt described in clause (i), the
recourse with respect to such Refinancing Debt is limited to the same extent
as the Debt so Refinanced.
"ADJUSTED CONSOLIDATED OPERATING CASH FLOW" of a Person means the
Consolidated Operating Cash Flow of such Person as determined on a
consolidated basis in accordance with GAAP, consistently applied, after
giving effect to the following: (i) if, during the period in which
Consolidated Operating Cash Flow is being calculated, such Person or any of
its Subsidiaries completed an Asset Sale, Consolidated Operating Cash Flow
for such period shall be reduced by an amount equal to the pro forma
Consolidated Operating Cash Flow (if positive) directly attributable to the
assets which are the subject of such Asset Sale for the period or increased
by an amount equal to the pro forma Consolidated Operating Cash Flow (if
negative) directly attributable thereto for such period; and (ii) if, during
the period in which Consolidated Operating Cash Flow is being calculated,
such Person or any of its Subsidiaries completes an acquisition of any Person
or business which immediately after such acquisition is a Subsidiary of such
Person or whose assets are held directly by such Person or a Subsidiary of
such Person, pro forma Consolidated Operating Cash Flow shall be computed so
as to give pro forma effect to the acquisition of such Person or business.
Any such pro forma calculation may include (a) any adjustments that would, in
the reasonable determination of the Company, set forth in an Officers'
Certificate, satisfy the requirements of Rule 11-02(a) of Regulation S-X as
if included in a registration statement filed with the Commission, and (b)
any other operating expense reductions reasonably expected to result from any
acquisition of assets, if such expected reductions are (i) set forth in
reasonable detail in an operating plan, and (ii) limited to operating
expenses specified in such plan (and, if any such reductions are set forth as
a range, the lowest amount of such range) that would otherwise have resulted
in the payment of cash within twelve months after the date of consummation of
such transaction, net of any operating expenses (other than extraordinary
items, non-recurring or temporary charges and other similar one-time
expenses) reasonably expected to be incurred to implement such plan or to
obtain goods or services (including without limitation personnel, occupancy
and newsprint expenses) in replacement of goods and services that are being
curtailed or eliminated to result in such expected reductions, and that are
to be paid in cash during such twelve-month period, and such Officers'
Certificate so states.
"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 "controlling" and "controlled" having meanings correlative to the
foregoing. A lender to such Person or any of its Subsidiaries shall not, as a
result of such loan and any credit or similar agreement entered into in
connection therewith, be deemed an Affiliate of such Person.
"ANI" means Affiliated Newspapers Investments, Inc., a Delaware
corporation, and its successors.
"ANI SENIOR DISCOUNT DEBENTURES" means ANI's 13 1/4% Senior Discount
Debentures due 2006.
"ASSET SALE" means the sale, transfer, lease, assignment, conveyance or
other disposition (other than sales of inventory in the ordinary course of
business consistent with past practice) by Garden State or its Restricted
Subsidiaries of any assets of Garden State other than capital stock of an
Unrestricted Subsidiary or of its Restricted Subsidiaries other than capital
stock of an Unrestricted Subsidiary, whether owned or outstanding on the date
of the Indenture or acquired thereafter, in one or more related transactions,
in each case having an aggregate fair market value in excess of $5.0 million.
Asset Sale shall include the disposition of (i) any capital stock of any
Restricted Subsidiary of Garden State or (ii) all or substantially all of the
properties or assets relating to any newspaper or groups of newspapers
<PAGE>
owned by Garden State or any of its Restricted Subsidiaries, in either case
having an aggregate fair market value in excess of $5.0 million.
"AVERAGE LIFE" means, as of the date of any determination, with respect
to any Debt, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from the date of the transaction or event giving rise
to the need to calculate the Average Life of such Debt to the date, or dates,
of each successive scheduled principal payment of such Debt multiplied by (b)
the amount of each such principal payment by (ii) the sum of all such
principal payments.
"CAPITALIZED LEASE OBLIGATION" means any rental obligation that, in
accordance with GAAP, is required to be classified and accounted for as a
capitalized lease and the amount of Debt represented by such obligation shall
be the capitalized amount of such obligation determined in accordance with
GAAP; and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due in respect of such obligation.
"CAPITAL STOCK" of any Person means any and all shares, interests
(including partnership interests), warrants, rights, options or other
interests, participations or other equivalents of or interests in (however
designated) the equity of such Person, including common stock or preferred
stock, whether now outstanding or issued after the date of the Indenture, but
excluding any debt securities convertible into or exchangeable for such
equity.
"CASH EQUIVALENTS" means (i) readily marketable obligations of or
obligations guaranteed by the United States of America or issued by any
agency thereof and backed by the full faith and credit of the United States
of America, (ii) readily marketable direct obligations issued by any state of
the United States of America or any political subdivision having a rating in
one of the two highest rating categories obtainable from either Moody's
Investors Service, Inc. or Standard & Poor's Corporation, (iii) commercial
paper having a rating in one of the two highest rating categories of Moody's
Investors Service, Inc., or Standard & Poor's Corporation, (iv) certificates
of deposit issued by, bankers' acceptances and deposit accounts of, and time
deposits with, commercial banks of recognized standing chartered in the
United States of America with capital, surplus and undivided profits
aggregating in excess of $500.0 million, (v) agreements to sell or repurchase
securities of the kind described in clauses (i) and (ii) above, and (vi)
shares of money market funds that invest solely in Permitted Investments of
the kind described in clauses (i) through (v) above.
"CHANGE OF CONTROL" means the earlier to occur of (i) the Permitted
Holders' failure, individually or as a group, to be the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, in the aggregate, of a majority of the outstanding shares of
Common Stock or Voting Stock of Garden State, on a fully diluted basis, and
(ii) William Dean Singleton ceasing to be the chief executive officer of
Garden State and not being replaced within 90 days by a media executive of
comparable experience.
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after
the execution of the Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"COMMON STOCK" of any Person means any and all shares, interests,
participations, or other equivalents (however designated) of such Person's
common stock whether now outstanding or issued after the date of the
Indenture.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the aggregate of all cash and non-cash interest expense
(including any original issue discount attributable to the issuance of any
debt security as part of or with any other security) with respect to all
outstanding Debt of such Person and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, the interest
component of Capitalized Lease Obligations, all capitalized interest, and the
interest portion of any deferred payment obligations for such period.
"CONSOLIDATED NET WORTH" of any Person means, at any date, all amounts
that would, in conformity with GAAP, be included under shareholders' equity
on a consolidated balance sheet of such Person as at such date less any
amounts attributable to Disqualified Stock.
"CONSOLIDATED OPERATING CASH FLOW" with respect to Garden State for any
period means (A) revenues less (B) the sum of (i) cost of sales, (ii)
management fees and (iii) selling, general and administrative expenses, in
each case, of Garden State and its Restricted Subsidiaries, for such period,
determined on a consolidated basis and in accordance with GAAP, PROVIDED
that, (x) if any such Restricted Subsidiary is not a Wholly Owned Subsidiary
of Garden State, on a fully diluted basis, revenues, cost of sales,
management fees and selling, general and administrative expenses of such
Restricted Subsidiary and its Restricted Subsidiaries shall be included only
to the extent of Garden State's common equity ownership on a fully diluted
basis therein and (y) Operating Cash Flow of any Subsidiary shall be excluded
if and to the extent that, the declaration of dividends or distribution by
that Subsidiary of such Operating Cash Flow is not, at the time, permitted
directly or indirectly, by the terms of its charter, or any agreement,
instrument, judgment, decree, order, statute, rule or government regulation
applicable to that Subsidiary.
"CUMULATIVE CREDIT" means (x) Consolidated Operating Cash Flow of Garden
State and its Restricted Subsidiaries from and after the first day of the
first full fiscal quarter after the Issue Date to the end of the fiscal
quarter immediately preceding the date of the proposed Restricted Payment,
or, if such Consolidated Operating Cash Flow for such period is negative,
minus the amount by which such Consolidated Operating Cash Flow is negative
less (y) 150% of the cumulative Consolidated Interest Expense of Garden State
for such period.
"DEBT" of any Person means, without duplication, (i) the principal in
respect of (A) indebtedness of such Person for money borrowed (whether or not
the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof) and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable (other than those payable to government
agencies to defer the payment of workers' compensation liabilities, taxes,
assessments or other obligations, and provided in the ordinary course of
business of such Person); (ii) all Capitalized Lease Obligations of such
Person; (iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations of such
Person and all obligations of such Person under any title retention agreement
(but excluding trade accounts payable and other accrued current liabilities
arising in the ordinary course of business and consistent with past
practice); (iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction, other than letters of credit entered into in the ordinary course
of business that either are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed no
<PAGE>
later than the third Business Day following receipt by such Person of a
demand for reimbursement following payment on the letter of credit); (v) the
amount of all Disqualified Stock of such Person (but excluding any accrued
dividends thereon); (vi) all obligations of the type referred to in clauses
(i) through (v) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including
guarantees of such obligations and dividends; and (vii) all obligations of
the type referred to in clauses (i) through (vi) of other Persons secured by
any Lien on any property, asset or Capital Stock of such Person (whether or
not such obligation is assumed by such Person), the amount of such obligation
being deemed to be the lesser of the value of such property or assets or the
amount of the obligation so secured.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"DESIGNATED SENIOR DEBT" means all obligations of Garden State under the
Garden State Credit Facility and any other Senior Debt permitted under the
Indenture the principal amount of which is $25.0 million or more that has
been designated by Garden State as Designated Senior Debt.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, (ii) is subject to a mandatory offer to purchase,
(iii) is convertible or exchangeable for Debt or Disqualified Stock or (iv)
is redeemable at the option of the holder thereof, in whole or in part; in
each case on or prior to the first anniversary of the stated maturity of the
Notes.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"EXISTING DEBT" means Debt of Garden State and its Restricted
Subsidiaries (other than the Garden State Credit Facility) outstanding on the
date of the Indenture.
"GARDEN STATE CREDIT FACILITY" means the Credit Agreement among Garden
State, the financial institutions named therein and The Bank of New York, as
agent thereunder, as amended, substituted, refinanced (including successive
refinancings), extended or renewed without restriction as to the new terms
contained therein, except as to the total amount outstanding provided under
"Limitation on Additional Debt" and as provided in "Limitation on Liens".
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means generally
accepted accounting principles set forth in the opinions and pronouncements
of the Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board as they are in effect on the date of the
Indenture.
"GUARANTEE" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt or other
obligation, contingent or otherwise, of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Debt or other obligation of
such other Person (whether arising by virtue of participation arrangements,
by agreement to keep well, to purchase assets, goods, securities or services,
to take-or-pay, or to maintain financial statement conditions or otherwise)
or (ii) entered into for the purpose of assuring the obligee of such Debt or
other obligation in any other manner of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part), provided
that the term "guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Notes.
"INVESTMENT" means any direct or indirect advance, loan (other than
advances or loans to customers in the ordinary course of business, which are
recorded at the time made as accounts receivable on the balance sheet of the
Person making such advance or loan), guarantee or other extension of credit
or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Capital Stock, bonds,
notes, debentures or other securities issued by, any other Person.
"ISSUE" means issue, assume, Guarantee, incur or otherwise become liable
for; PROVIDED, HOWEVER, that any Debt or Capital Stock of a Person existing
at the time such Person becomes a Subsidiary of another Person (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be issued
by such Subsidiary at the time it becomes a Subsidiary of such other Person.
"ISSUE DATE" means the date on which any Note is originally issued and
with respect to any Note issued in transfer, exchange or replacement, means
the date of issue of the Note to which such transfer, exchange or replacement
Note relates.
"LEVERAGE RATIO" means, as of any date, the ratio of (A) total Debt of
Garden State and its Restricted Subsidiaries on a consolidated basis as of
such date to (B) Trailing Adjusted Consolidated Operating Cash Flow of Garden
State as of such date; PROVIDED, however, that the Debt of any Restricted
Subsidiary (and its Restricted Subsidiaries) that is not a Wholly Owned
Subsidiary, on a fully diluted basis, of Garden State shall be included
pro-rata only to the extent of Garden State's common equity ownership
interest therein, on a fully diluted basis.
"LIEN" means any lien, mortgage, charge, pledge, security interest, or
other encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof), whether or not
filed, recorded or otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statute) of any jurisdiction.)
"MANAGEMENT AGREEMENT" means the Management Agreement, dated July 1,
1988, between ANI and MediaNews, as the same may be amended, modified or
supplemented in accordance with its terms.
"MEDIANEWS" or "MNG" means MediaNews Group, Inc., a Delaware corporation
and its successors.
<PAGE>
"MEDIANEWS TECHNOLOGIES" means MediaNews Technologies or MNT, a division
of MNG which operates and manages ANI's and its Affiliates' electronic media
business.
"NET CASH PROCEEDS" from an Asset Sale or issuance of Capital Stock
means cash payments received by way of conversion into cash or Cash
Equivalents of any note or other obligation received in connection with such
Asset Sale or issuance or by way of deferred payment of principal pursuant
to, or liquidation of, any note or installment receivable or otherwise (but
only as and when received therefrom), in each case net of all legal, title
and recording tax expenses, commissions and other fees and expenses incurred,
and all income taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Sale or issuance of Capital Stock.
"OBLIGATIONS" means all obligations for principal, premium, interest
(including post-petition interest), penalties, fees, indemnification,
reimbursements, damages and other liabilities payable under the documentation
governing any Debt.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a certificate
signed by the Chief Executive Officer, the President or any Vice President
and the Chief Financial Officer or any Treasurer of such Person that shall
comply with applicable provisions of the Indenture.
"PERMITTED BUSINESS" means the (i) ownership and operation of regional,
local and other newspapers, and (ii) other businesses directly related to the
Company's newspaper operations, including broadcast, electronic media, and
other businesses deriving a majority of its revenue from advertising.
"PERMITTED HOLDERS" means each of William Dean Singleton and Richard B.
Scudder, members of their families and trusts for the benefit of such
Persons.
"PERMITTED INTERCOMPANY PAYMENTS" means (i) payments by the Company to
MNG in respect of management fees for services actually rendered to Garden
State and determined in a manner consistent with that described in this
Offering Memorandum not to exceed $3.5 million for fiscal 1998, and
increasing 10% per annum in each fiscal year thereafter and (ii) payment by
the Company to MNT in respect of its allocated share of electronic media
related expenses.
"PERMITTED INVESTMENTS" means (i) Investments by a Restricted Subsidiary
of Garden State in Garden State or a Restricted Subsidiary of Garden State or
Investments by Garden State in a Restricted Subsidiary of Garden State, (ii)
Investments in cash or Cash Equivalents, (iii) Investments by Garden State or
by any of its Restricted Subsidiaries in a Permitted Business, including, but
not limited to, joint ventures or other business alliances in the ordinary
course of business, provided that the other investors in such joint venture
or business alliance are not Affiliates of ANI, (iv) Investments of Garden
State and its Restricted Subsidiaries arising as a result of any Asset Sale
otherwise complying with the terms of the Indenture, and (v) Other
Investments (other than Investments specified in clauses (i) through (iv)
above) in an aggregate amount, as valued at the time each such Investment is
made, not exceeding $25.0 million.
"PERSON" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"PREFERRED STOCK," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation. Preferred Stock of any Person shall include Disqualified Stock
of such Person.
"QUALIFIED CAPITAL STOCK" shall mean any Capital Stock which is not
Disqualified Stock.
"REFINANCE" means, in respect of any Debt, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue Debt in
exchange or replacement for, such Debt. "Refinanced" and "Refinancing" shall
have correlative meanings.
"RESTRICTED INVESTMENT" means any Investment other than a Permitted
Investment.
"RESTRICTED PAYMENT" means (i) any dividend or distribution on or in
respect of any shares of Capital Stock of Garden State or any of its
Restricted Subsidiaries or to the direct or indirect holders (in their
capacities as such) of Capital Stock of Garden State or any of its Restricted
Subsidiaries; (ii) the redemption, repurchase, retirement or other
acquisition for value of any Capital Stock of Garden State or any of its
Restricted Subsidiaries; (iii) any designation of a Restricted Subsidiary as
an Unrestricted Subsidiary on the basis of the Investment by the Company
therein, (iv) any Restricted Investment by Garden State or any Restricted
Subsidiary of Garden State, PROVIDED that Restricted Payments shall not
include (a) any dividend or distribution declared or paid by any Restricted
Subsidiary of Garden State to Garden State or any of its Restricted
Subsidiaries, or (b) the redemption, purchase, retirement or other
acquisition for value by Garden State or any of its Restricted Subsidiaries
of any Capital Stock of Garden State or any of its Restricted Subsidiaries
held by Garden State or its Restricted Subsidiaries. For purposes of
determining the amount expended for Restricted Payments, cash distributed or
invested shall be valued at the face amount thereof and property other than
cash shall be valued at its fair market value.
"RESTRICTED SUBSIDIARY" means a Subsidiary of the Company other than an
Unrestricted Subsidiary and includes all of the Subsidiaries of the Company
existing as of the Issue Date. The Board of Directors of the Company may
designate any Unrestricted Subsidiary or any Person that is to become a
Subsidiary as a Restricted Subsidiary if immediately after giving effect to
such action (and treating any Acquired Debt as having been incurred at the
time of such action), the Company could have incurred at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to the
"Limitation on Additional Indebtedness" covenant.
"SENIOR DEBT" means all Obligations of Garden State with respect to any
Debt, whether outstanding on the date of the Indenture or thereafter created,
incurred or assumed, unless, in the case of any particular Debt, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Debt shall not be senior in right of
payment to the Notes. Notwithstanding the foregoing, Senior Debt shall not
include: (i) any Debt of Garden State to any Subsidiary of Garden State; (ii)
any Debt to, or guaranteed on behalf of, any Affiliate, director, officer or
employee of Garden State or any Restricted Subsidiary (including, without
limitation, amounts owed for compensation); (iii) Debt and other amounts
incurred in connection with obtaining goods, materials
<PAGE>
or services owing to trade creditors; (iv) Disqualified Stock; (v) any
liability for federal, state, local or other taxes owed or owing by Garden
State; (vi) Debt incurred in violation of the Indenture provisions set forth
under "Limitation on Additional Debt"; and (vii) Debt which is, by its
express terms, junior in right of payment to the Notes.
"SENIOR SUBORDINATED SECURED NOTES" means the Company's $100,000,000 12%
Senior Subordinated Secured Notes due 2004.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary of Garden State
which at the time of determination either (A) had assets which, as of the
date of Garden State's most recent quarterly consolidated balance sheet,
constituted at least 5% of Garden State's total assets on a consolidated
basis as of such date, in each case determined in accordance with GAAP, or
(B) had revenues for the twelve-month period ending on the date of Garden
State's most recent quarterly consolidated statement of income which
constituted at least 5% of Garden State's total revenues on a consolidated
basis for such period.
"STATED MATURITY," when used with respect to any Note or any installment
of interest thereon, means the date specified in such Note as the fixed date
on which the principal of such Note or such installment of interest is due
and payable, and, when used with respect to any other Debt, means the date
specified in the instrument governing such Debt as the fixed date on which
the principal of such Debt or any installment of interest is due and payable.
"SUBSIDIARY" means, with respect to any Person, (i) a corporation the
majority of whose Voting Stock, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by such Person, by
one or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof or (ii) any other Person (other than a corporation) in
which such Person, one or more Subsidiaries thereof or such Person and one or
more Subsidiaries thereof, directly or indirectly, at the date of
determination thereof has at least a majority ownership interest and the
power to direct the policies, management and affairs thereof. For purposes of
this definition, any director's qualifying shares or investments by foreign
nationals mandated by applicable law shall be disregarded in determining the
ownership of a Subsidiary.
"TRAILING" means, at or in respect of any date, the twelve-month period
ending on the last day of the month immediately preceding such date for which
financial statements are available.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary (including its
subsidiaries) so designated by a Board Resolution adopted by the Board of
Directors of the Company in accordance with "--Certain Covenants--Limitation on
Restricted and Unrestricted Subsidiaries" above. Notwithstanding the
foregoing, an Unrestricted Subsidiary shall be deemed to be redesignated a
Restricted Subsidiary at any time if (a) the Company or any Restricted
Subsidiary (i) provides credit support for, or a guarantee of, any Debt of
such Unrestricted Subsidiary or any of its Subsidiaries (including any
undertaking, agreement or instrument evidencing such Debt) or (ii) is
directly or indirectly liable for any Debt of such Unrestricted Subsidiary or
any of its Subsidiaries, (b) a default with respect to any Debt of such
Unrestricted Subsidiary or any of its Subsidiaries (including any right which
the holders thereof may have to take enforcement action against any of them)
would permit (upon notice, lapse of time or both) any holder of any other
Debt of the Company or any Restricted Subsidiary to declare a default on such
other Debt or cause the payment thereof to be accelerated or payable prior to
its final scheduled maturity or (c) such Unrestricted Subsidiary or any of
its subsidiaries incurs Debt pursuant to which the lender has recourse to any
of the assets of Garden State or any of its Restricted Subsidiaries.
"U.S. GOVERNMENT OBLIGATIONS" means money or direct non-callable
obligations of, and obligations guaranteed by, the United States of America
for the payment of which the full faith and credit of the United States is
pledged.
"VOTING STOCK" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the
election of directors.
"WHOLLY OWNED SUBSIDIARY" means any Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by
the applicable corporation or another Wholly Owned Subsidiary of the
applicable corporation.
<PAGE>
BOOK-ENTRY; DELIVERY AND FORM
Except as described in the next paragraph, the Exchange Notes initially
will be represented by one or more permanent global certificates in
definitive, fully registered form (the "Global Notes"). The Global Notes will
be deposited on the Issue Date with, or on behalf of, DTC, New York, New
York, and registered in the name of a nominee of DTC.
THE GLOBAL NOTES. The Company expects that pursuant to procedures
established by DTC (i) upon the issuance of the Global Notes, DTC or its
custodian will credit, on its internal system, the principal amount of the
individual beneficial interests represented by such Global Notes to the
respective accounts of persons who have accounts with such depositary and
(ii) ownership of beneficial interests in the Global Notes will be shown on,
and the transfer of such ownership will be effected only through, records
maintained by DTC or its nominee (with respect to interests of participants)
and the records of participants (with respect to interests of persons other
than participants). Such accounts initially will be designated by or on
behalf of the Initial Purchasers and ownership of beneficial interests in the
Global Notes will be limited to persons who have accounts with DTC
("participants") or persons who hold interests through participants. QIBs may
hold their interests in the Global Note directly through DTC if they are
participants in such system, or indirectly through organizations which are
participants in such system.
So long as DTC, or its nominee, is the registered owner or holder of the
Notes, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the Notes represented by such Global Notes for all
purposes under the Indenture. No beneficial owner of an interest in any of
the Global Notes will be able to transfer that interest except in accordance
with DTC's procedures, in addition to those provided for under the Indenture
with respect to the Notes. Interests in the Global Notes will also be subject
to certain restrictions on transfers as set forth under the heading "Transfer
Restrictions."
Payments of the principal of, premium (if any) and interest (including
Additional Interest) on the Global Notes will be made to DTC or its nominee,
as the case may be, as the registered owner thereof. None of the Company, the
Trustee or any Paying Agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Notes or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interest.
The Company expects that DTC or its nominee, upon receipt of any payment
of principal, premium, if any, or interest (including Additional Interest) in
respect of the Global Notes, will credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of the Global Notes as shown on the records of DTC or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in the Global Notes held through such participants will
be governed by standing instructions and customary practice, as is now the
case with securities held for the accounts of customers registered in the
names of nominees for such customers. Such payments will be the
responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary
way through DTC's same-day funds system in accordance with DTC rules and will
be settled in same day funds. If a holder requires physical delivery of a
Certificated Note ("Certificated Note") for any reason, including to sell
Notes to persons in states which require physical delivery of the Notes, or
to pledge such securities, such holder must transfer its interest in a Global
Note, in accordance with the normal procedures of DTC and with the procedures
set forth in the Indenture.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Notes (including the presentation of Notes for exchange)
only at the direction of one or more participants to whose account the DTC
interests in the Global Notes are credited and only in respect of such
portion of the aggregate principal amount of Notes as to which such
participant or participants has or have given such direction. However, if
there is an Event of Default under the Indenture, DTC will exchange the
Global Notes for Certificated Notes, which it will distribute to its
participants.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants and facilitate the clearance and settlement
of securities transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers
and dealers, banks, trust companies and clearing corporations and certain
other organizations. Indirect access to the DTC system is available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly ("indirect participants").
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Notes among participants of
DTC, it is under no obligation to perform such procedures, and such
procedures may be discontinued at any time. Neither the Company nor the
Trustee will have any responsibility for the performance by DTC or its
participants or indirect participants of their respective obligations under
the rules and procedures governing their operations.
CERTIFICATED NOTES. If DTC is at any time unwilling or unable to
continue as a depositary for the Global Notes and a successor depositary is
not appointed by the Company within 90 days, Certificated Notes will be
issued in exchange for the Global Notes.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The exchange of Original Notes for Exchange Notes should not constitute
a recognition event for federal income tax purposes. Consequently, no gain or
loss should be recognized by Holders upon receipt of the Exchange Notes. For
purposes of determining gain or loss upon the subsequent sale or exchange of
Exchange Notes, a Holder's basis in Exchange Notes should be the same as such
Holder's basis in the Original Notes exchanged therefor. Holders should be
considered to have held the Exchange Notes from the time of their original
acquisition of the Original Notes.
IN ANY EVENT, PERSONS CONSIDERING THE EXCHANGE OF ORIGINAL NOTES FOR
EXCHANGE NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES IN LIGHT OF THEIR PARTICULAR
SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER
TAXING JURISDICTIONS.
<PAGE>
DESCRIPTION OF OTHER INDEBTEDNESS
The following outlines certain terms of the indebtedness and other
obligations of ANI and the Subsidiaries of Garden State after giving effect
to the sale of the Original Notes. For further information on indebtedness
and other obligations of the Company, see the Consolidated Financial
Statements of Garden State and the notes thereto incorporated by reference
herein. See "Certain Documents Incorporated by Reference."
GARDEN STATE CREDIT FACILITY
The Garden State Credit Facility, as amended (the "Garden State Credit
Facility"), provides for up to $285.0 million of borrowings under four
tranches: (i) the first tranche ("RCA") is a $167.0 million senior secured
revolving credit facility with a maturity date of June 30, 2003 available
only for acquisitions; (ii) the second tranche ("RCB") is a $27.0 million
senior secured revolving credit facility, including sublimits of $7.0 million
available for standby letters of credit, with a maturity of March 31, 2004;
(iii) the third tranche ("RCC") is a $76.0 million senior secured revolving
credit facility available for acquisitions and other corporate purposes with
a maturity date of March 31, 2004; and (iv) the fourth tranche is a $15.0
million term loan ("Term A Loan") with a maturity of March 31, 2004.
All borrowings under the Garden State Credit Facility bear interest at
rates based upon, at Garden State's option, Eurodollar or prime, plus a
spread based on leverage. Pursuant to a requirement in the Garden State
Credit Facility, Garden State entered into an interest rate swap maturing in
April, 1999, with a notional amount of $50.0 million and a fixed annual
interest rate of 6.445% plus the applicable spread. As of the date hereof and
giving effect to an amendment to be effective on the Issue Date, Garden
State's Eurodollar spread is 1.50%.
The Garden State Credit Facility contains restrictive covenants which
relate to, among other things, the incurrence of additional debt, the
incurrence of additional liens, capital expenditures and distributions.
Additionally, certain financial ratios based on leverage, debt service,
interest coverage and fixed charges must be maintained. The tranches under
the Garden State Credit Facility are secured by different collateral pools.
RCA borrowings are secured only by the assets which were acquired with RCA
borrowings. The Term A Loan is secured by substantially all the assets of New
England Newspapers, Inc., a subsidiary of Garden State. The remaining
tranches are secured by substantially all of Garden State's remaining
tangible and intangible assets and the stock of Garden State and its
Restricted Subsidiaries.
After giving effect to the sale of the Original Notes and use of
proceeds, approximately $151.0 million will be available under RCA for future
acquisitions, approximately $22.0 million will be available under RCB,
approximately $76.0 million will be available under RCC for future
acquisitions and other corporate purposes, and the Term A Loan will be fully
outstanding.
The following table sets forth the annual commitment reductions for RCA,
RCB and RCC, as well as annual payments under the Term A Loan, giving effect
to the amended Garden State Credit Facility.
Term A
RCA RCB RCC Loan
-------- ------- ------- -------
(In thousands)
1998 $ 10,000 $ -- $ 4,000 $ --
1999 31,000 -- 7,500 --
2000 31,000 -- 7,500 --
2001 31,000 -- 12,000 --
2002 31,000 -- 12,000 3,750
Thereafter 33,000 27,000 33,000 11,250
-------- ------- ------- -------
$167,000 $27,000 $76,000 $15,000
-------- ------- ------- -------
-------- ------- ------- -------
SENIOR SUBORDINATED SECURED NOTES
In May, 1994, Garden State issued $100.0 million of Senior Subordinated
Secured Notes pursuant to an indenture between Garden State, as issuer, and
The Bank of New York, as trustee (the "Garden State Indenture"). The Notes
were issued at par and bear interest at 12% payable semi-annually, in
arrears, on January 1 and July 1. The Notes are redeemable at the option of
Garden State, in whole or in part, on and after July 1, 1999, at redemption
prices set forth in the Garden State Indenture. The Garden State Indenture
requires that, upon the occurrence of a Change in Control (as defined in the
Garden State Indenture), Garden State offer to repurchase the Notes at a
purchase price of 101% of the principal amount thereof plus accrued and
unpaid interest thereon.
The Garden State Indenture contains customary covenants with respect to,
among other things, limitation on the incurrence of additional liens and
indebtedness by Garden State and its Subsidiaries, and restrictions on Garden
State's ability to pay dividends or make certain other restricted payments.
In addition, the Garden State Indenture contains customary events of default.
The Senior Subordinated Secured Notes are secured only by a second lien on
the stock of GSI.
CAPITAL LEASE OBLIGATIONS
As of June 30, 1997, $7.5 million was outstanding under Garden State's
capital lease agreements, principally related to a production facility.
OTHER OBLIGATIONS
In connection with various acquisitions, Garden State and its
Subsidiaries have issued notes payable to prior owners and assumed certain
debt obligations, with an aggregate discounted value as of June 30, 1997, of
$13.3 million. The notes payable and other debt obligations bear interest at
rates ranging from 0% to 6%. Notes bearing interest at below market rates
were discounted at rates ranging from 9% to 12.0%. These notes and other debt
obligations are not secured and contain no restrictions on payment of
dividends.
<PAGE>
ANI SENIOR DISCOUNT DEBENTURES
In May, 1994, ANI issued approximately $173,586,000 principal amount of
13 1/4% Senior Discount Debentures due 2006 pursuant to an indenture between
ANI, as issuer, and The Bank of New York, as trustee (the "ANI Indenture").
The ANI Senior Discount Debentures were issued at a discount of approximately
48% from their principal amount at maturity. Interest on the ANI Senior
Discount Debentures is payable semi-annually on July 1 and January 1 of each
year, commencing January 1, 2000, at the rate of 13 1/4% per annum. Prior to
such date, no periodic payment of interest is due.
The ANI Senior Discount Debentures are redeemable at the option of ANI,
in whole or in part, on and after July 1, 1999, at redemption prices set
forth in the ANI Indenture. The ANI Indenture requires that, upon the
occurrence of a Change of Control (as defined in the ANI Indenture), ANI
offer to repurchase the ANI Senior Discount Debentures at a purchase price of
101% of their Accreted Value (as defined in the ANI Indenture), prior to July
1, 1999, and from and after such date at 101% of the principal amount, plus
accrued interest thereon to the date of repurchase.
The ANI Indenture contains customary covenants with respect to, among
other things, limitation on the incurrence of additional liens and
indebtedness by ANI and its subsidiaries, including Garden State, and
restrictions on ANI's ability to pay dividends or make certain other
restricted payments. In addition, the ANI Indenture contains customary events
of default.
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it acquired the Original
Notes for its own account as a result of market-making activities or other
trading activities and it will deliver a prospectus in connection with any
resale of such Exchange Notes. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Original Notes where
such Original Notes were acquired as a result of market-making activities or
other trading activities. The Company has agreed that for a period of up to
180 days after the consummation of the Exchange Offer (subject to extension in
certain events), it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sales of the Exchange
Notes by broker-dealers. Exchange Notes received by broker-dealers for their
own account pursuant to the Exchange Offer may be sold from time to time in
one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods at resale, at market prices prevailing at the
time of resale, at prices related to such prevailing market prices or
negotiated prices. Any such resale may be made directly to the purchaser or
to or through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers
of any such Exchange Notes. Any broker-dealer that resells the Exchange Notes
that were received by it for its own account pursuant to the Exchange Offer
and any broker or dealer that participates in a distribution of such Exchange
Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of Exchange Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of up to 180 days after the consummation of the Exchange
Offer, the Company will promptly send additional copies of this Prospectus
and any amendment or supplement to this Prospectus to any person subject to
the prospectus delivery requirements of the Securities Act that requests such
documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer, other than commissions and
concessions of any brokers or dealers, and will indemnify the holders of the
Original Notes (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.
<PAGE>
EXPERTS
The consolidated financial statements of Garden State Newspapers, Inc.
and Garden State Investments, Inc., incorporated by reference in the Garden
State Newspapers, Inc. Annual Report (Form 10-K) for the year ended June 30,
1997, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.
LEGAL MATTERS
The legality of the issuance and sale of the Notes will be passed upon for
Garden State by Verner, Liipfert, Bernhard, McPherson and Hand, Chartered,
Washington, D.C. Howell E. Begle, Jr., an officer of and Counsel to ANI, GSN and
the Subsidiaries of GSN, a director of GSN and the Subsidiaries of GSN, and
trustee with respect to various trusts holding ANI common stock, is Of Counsel
to such firm.
<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, THE NOTES TO ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE SUCH DATE.
--------------------
TABLE OF CONTENTS
Page
----
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Information Incorporated by Reference. . . . . . . . . . . . . . . .
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unaudited Pro Forma Financial Data . . . . . . . . . . . . . . . . . . . . .
Selected Historical Financial Data . . . . . . . . . . . . . . . . . . . . .
Description of Other Indebtedness. . . . . . . . . . . . . . . . . . . . . .
The Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Book-Entry; Delivery and Form. . . . . . . . . . . . . . . . . . . . . . . .
Certain Federal Income Tax Considerations. . . . . . . . . . . . . . . . . .
Description of Other Indebtedness. . . . . . . . . . . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . .
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$250,000,000
--------------------
PROSPECTUS
--------------------
GARDEN STATE NEWSPAPERS, INC.
OFFER TO EXCHANGE ITS
SERIES A 8-3/4% SENIOR SUBORDINATED NOTES
DUE 2009
FOR ANY AND ALL OF ITS SERIES B 8-3/4%
SENIOR SUBORDINATED NOTES
DUE 2009
OCTOBER _____, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS/INFORMATION STATEMENT
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") provides that
a corporation formed under the laws of the State of Delaware may indemnify any
director, officer, employee or agent of the corporation who was or is a party or
is threatened to be made a party to (i) any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) or
(ii) any threatened, pending or completed action suit in, by or in the right of
the corporation to procure a judgment in its favor by reason of the fact that he
is or was such director, officer, employee or agent of the corporation, or is or
was serving as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or enterprise at the request of the
corporation. Indemnification in the case of actions, suits and proceedings under
(i) above, shall be against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceedings and in the case of actions and
suits listed under (ii) above, shall be against expenses (including attorney's
fees) actually and reasonably incurred by the person in connection with the
defense or settlement of such action or suits, if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Any indemnification
provided under S 145 of the DGCL is permitted to be made by the corporation only
as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in S 145. Such
determination shall be made by (i) the board of directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or if such a quorum is not obtainable, or, even if obtainable (ii) a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (iii) by the stockholders. Article VII of the Registrant's
Certificate of Incorporation provides for indemnification of the aforementioned
parties to the fullest extent permitted under the DGCL.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corportion or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for
any transaction from which the director derived an improper personal benefit. As
permitted by Section 102(b)(7) of the DGCL, Article VII of the Registrant's
Certificate of Incorporation, as amended and restated, includes a provision that
limits a director's personal liability to such Issuer or its stockholders for
monetary damages for breaches of his or her fiduciary duty as a director in
accordance with the provisions of Section 102(b)(7).
The Registrant maintains insurance policies under which its directors and
officers are insured, within the limits and subject to the limitations of the
policies, against expenses in connection with the defense of actions, suits or
proceedings, and certain liabilities that might be imposed as a result of such
actions, suits or proceedings, to which they are parties by reason of being or
having been directors or officers of the Registrant.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
See Index to Exhibits.
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(2) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other Items of the applicable form.
(3) That every prospectus (i) that is filed pursuant to paragraph (2), or
(ii) purports to meet the requirements of Section 10(a)(3) of the Act and is
used in connection with an offering of securities subject to Rule 415, will be
filed as a part of an amendment to the registration statement and will not be
used until such amendment is effective, and that, for purposes of determining
any liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
(4) Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions described under Item 20 above, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(5) The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the Prospectus pursuant
to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(6) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Denver, State of
Colorado, on October 20, 1997.
GARDEN STATE NEWSPAPERS, INC.
By: /s/ Joseph J. Lodovic, IV
----------------------------------
Joseph J. Lodovic, IV
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons on
behalf of the registrant in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ William Dean Singleton Vice Chairman, President, October 20, 1997
- ---------------------------- Chief Executive Officer and
(William Dean Singleton) Director (Chief Executive
Officer)
/s/ Joseph J. Lodovic, IV Executive Vice President October 20, 1997
- ---------------------------- and Chief Financial Officer
(Joseph J. Lodovic, IV) (Chief Financial Officer)
/s/ Richard B. Scudder Director October 20, 1997
- ----------------------------
(Richard B. Scudder)
/s/ Peter M. Miller Director October 20, 1997
- ----------------------------
(Peter M. Miller)
/s/ Howell E. Begle, Jr. Director, Counsel and October 20, 1997
- ---------------------------- Assistant Secretary
(Howell E. Begle, Jr.)
/s/ Ronald A. Mayo Vice President Finance and October 20, 1997
- ---------------------------- Controller (Principal
(Ronald A. Mayo) Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- -----------
3.1* -Second Amended and Restated Certificate of Incorporation.
3.2* -Form of Fourth Amended and Restated Certificate of Incorporation.
3.5* -Form of Certificate of Incorporation of Garden State Investments,
Inc.
4.1* -Form of Indenture.
4.2* -Form of Second Pledge Agreement between Garden State Investments,
Inc., Bank of New York, Wilmington Trust Company and William J.
Wade.
4.3 -Registration Rights Agreement dated as of October 1, 1997, among
Garden State Newspapers, Inc. as Issuer and B.T. Alex Brown
Incorporated; Goldman, Sachs & Co.; BNY Capital Markets, Inc. as
Initial Purchasers.
4.4 -Indenture dated as of October 31, 1997, between Garden State
Newspapers, Inc. as Issuer and The Bank of New York as Trustee.
4.5 -Form of Garden State Newspapers, Inc.'s 8-3/4% Senior Subordinated
Notes due 2009, Series A (Exhibit A to the Indenture filed as
Exhibit 4.4).
4.6 -Form of Garden State Newspapers, Inc.'s 8-3/4% Senior Subordinated
Notes due 2009, Series B (Exhibit B to the Indenture filed as
Exhibit 4.4).
5.0 -Opinon of Verner, Liipfert, Bernhard, McPherson & Hand.
10.1* -Form of Senior Note Agreement between Garden State Newspapers, Inc.
and certain of its subsidiaries, as obligors, and John Hancock
Mutual Life Insurance Company, Lender.
10.2* -Form of Garden State Credit Facility Agreement.
10.3* -Form of NJNI Credit Facility Agreement.
10.4* -Management Agreement dated July 1, 1988 between MediaNews Group, Inc.
and the Registrant.
10.5* -Employment Agreement dated April 26, 1985 between Garden State
Newspapers, Inc. and William Dean Singleton, with April 30, 1986,
October 1, 1988, and February 10, 1993 Amendments.
10.6* -Amended and Restated Partnership Agreement of North Jersey Newspapers
Company dated December 31, 1991 between North Jersey Newspapers,
Inc., and Affiliated Newspapers Investment Company.
10.7* -Joint Operating Agreement dated January 13, 1989 among York Daily
Record, Inc., York Newspapers, Inc., and The York Newspapers
Company.
10.8* -Form of Tax Sharing Agreement by and between Garden State Newspapers,
Inc. and Affiliated Newspapers Investments, Inc.
10.9* -Form of Used Equipment Trade Agreement between Alameda Newspaper
Group and Man Roland, Inc.
10.10* -Form of Used Equipment Trade Agreement between North Jersey
Newspapers Company and Man Roland, Inc.
10.11* -Form of Agreement between Garden State Newspapers, Inc. and North
Jersey Newspapers Company for an option to purchase three Colormatic
Presses.
10.12* -Consulting Agreement dated November 16, 1993 between J. Allan Meath
and Garden State Newspapers, Inc.
10.13* -Letter Agreement between Media General, Garden State Newspapers, Inc.
and Affiliated Newspapers Investment Company, dated as of March 16,
1994.
10.14* -Purchase Agreement dated March 25, 1994, between Thomson Newspapers
and Affiliated Newspapers Investments, Inc.
10.15* -Amendment dated May 3, 1994, to Letter Agreement between Media
General, Garden State Newspapers, Inc. and Affiliated Newspapers
Investment Company dated as of March 16, 1994.
<PAGE>
INDEX TO EXHIBITS (CONTINUED)
EXHIBIT
NO. DESCRIPTION
- ------- -----------
10.16* -Form of Amendment and Restatement of Trust Agreement among Garden
State Newspapers, Inc., Alameda Newspapers, Inc., Graham Newspapers,
Inc., The Johnstown Tribune Publishing Company, Mid-States
Newspapers, Inc., and York Newspapers, Inc.; John Hancock Mutual
Life Insurance Company, John Hancock Variable Life Insurance Company
and Mellon Bank N.A., as Trustee of AT&T Master Pension Trust;
Bankers Trust Company, a New York banking corporation; Wilmington
Trust Company, a Delaware banking corporation; and William J. Wade.
10.17* -Form of Amended and Restated Pledge Agreement among Garden State
Newspapers, Inc., its subsidiaries, John Hancock Mutual Life
Insurance Company, John Hancock Variable Life Insurance Company and
Mellon Bank, N.A., as Trustee of AT&T Master Pension Trust, Bankers
Trust Company, a New York banking corporation, Wilmington Trust
Company, a Delaware banking corporation, and William J. Wade.
10.18** -Form of Asset Purchase Agreement dated July 15, 1994, among Mid-State
Newspapers, Inc., as Seller; Garden State Newspapers, Inc., as
guarantor; Bristol Acquisition Corp., as Purchaser.
10.19** -Asset purchase agreement and assumed debt agreements related to THE
GLOUCESTER COUNTY TIMES and TODAY'S SUNBEAM asset acquisition.
10.20** -Asset Purchase Agreement dated July 31, 1995, by and among EPC
Holding, Inc., The Eagle Publishing Company, Reformer Publishing
Corporation, Middletown Press Publishing Corporation, and Eagle
Street Realty Trust, as Sellers, and Nw England Newspapers, Inc.,
Brattleboro Publishing Company, Connecticut Newspapers, Inc. and
Pittsfield Publications, Inc., as Purchasers.
10.21** -Asset Purchase Agreement dated July 31, 1995, by and among Banner
Publishing Corporation and Eagle Street Realty Trust, as Sellers,
and New England Newspapers, Inc. and North Eastern Publishing
Company, as Purchasers.
10.22** -Asset Purchase Agreement dated August 24, 1995, by and among
Connecticut Newspapers, Inc., as Seller, and Middletown Acquisition
Corp., as Purchaser.
10.23** -$42.0 million Credit Agreement dated August 31, 1995, among Garden
State Newspapers, Inc., The Bank of New York and Bankers Trust
Company, as Agents.
10.24** -Agreement dated April 29, 1996, by and among American Publishing
(1991) Inc., Berkshire Newspapers, Inc., Evening News Company,
Sidney Publication Company, Sterling Publishing Company and Garden
State Investments, Inc.
10.25** -Agreement dated April 30, 1996, by and among Garden State
Investments, Inc. and The Denver Post Corporation for the
sale/purchase of the capital stock of Eastern Colorado Publishing
Company.
10.26** -Asset Purchase Agreement by and among Thomson Newspapers, Inc.,
Seller, and Garden State Newspapers, Inc., Purchaser, relating to
the PASADENA STAR-NEWS, WHITTIER DAILY NEWS, SAN GABRIEL VALLEY
TRIBUNE and Various Related Publications Collectively Referred to
by Seller as The Thomson L.A. News Group Published in Pasadena,
Whittier and West Covina, California; The TIMES-STANDARD and Various
Related Publications Published in Eureka, California; and THE
EVENING SUN and Various Related Publications Published in Hanover,
Pennsylvania, dated October 30, 1996.
10.27** -$240,000,000 Credit Agreement Dated as of August 31, 1995, as Amended
and Restated as of October 31, 1996, among Garden State Newspapers,
Inc., the Banks listed in the signature pages hereof (including
Bankers Trust Company, as Documentation Agent) and The Bank of New
York (including in its capacity as Administrative and Syndication
Agent), as Agent.
10.28** -Asset Purchase Agreement dated as of February 13, 1997, by and among
Mid-States Newspapers, Inc., as Seller, and Newspaper Holdings,
Inc., as Buyer.
10.29** -Asset Purchase Agreement by and among Thomson Newspapers, Inc.,
Seller, and Garden State Newspapers, Inc., Purchaser, relating to
the SENTINEL & ENTEPRISE and various related publications published
in Fitchburg, Massachusetts; THE DAILY NEWS and various related
publications published in Lebanon, Pennsylvania; and THE DAILY
NONPAREIL and various related publications published in Council
Bluffs, Iowa, dated February 27, 1997.
<PAGE>
INDEX TO EXHIBITS (CONTINUED)
EXHIBIT
NO. DESCRIPTION
- ------- -----------
12.1 -Computation of Ratio of Earnings to Fixed Charges.
21.1 -Subsidiaries of Registrant.
23.1 -Consent of Independent Auditors.
23.2 -Consent of Verner, Liipfert, Bernhard, McPherson & Hand (contained
in their opinion filed as Exhibit 5).
25 -Form T-1 Statement of Eligibility Under the Trust Indenture Act of
1939 of The Bank of New York.
99.1 -Form of Letter of Transmittal.
- -----------------
*Previously Filed as exhibits to registration statement on Form S-1 (No.
33-75156) and amendments thereto.
**Previously Filed.
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of October 1, 1997
among
GARDEN STATE NEWSPAPERS, INC.
as Issuer
and
BT ALEX. BROWN INCORPORATED
GOLDMAN, SACHS & CO.
BNY CAPITAL MARKETS, INC.
as Initial Purchasers
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
$250,000,000
8 3/4% SENIOR SUBORDINATED NOTES DUE 2009
<PAGE>
TABLE OF CONTENTS
Page
----
1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
3. Shelf Registration . . . . . . . . . . . . . . . . . . . . . . . . . . .9
4. Additional Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 10
5. Registration Procedures. . . . . . . . . . . . . . . . . . . . . . . . 12
6. Registration Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 22
7. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8. Rule 144 and 144A. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9. Underwritten Registrations . . . . . . . . . . . . . . . . . . . . . . 28
10. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(a) No Inconsistent Agreements. . . . . . . . . . . . . . . . . . . . 28
(b) Adjustments Affecting Registrable Notes . . . . . . . . . . . . . 28
(c) Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . 29
(d) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(e) Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . 30
(f) Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(g) Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(h) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(i) Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(j) Securities Held by the Company or Its Affiliates. . . . . . . . . 31
(k) Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . 31
(l) Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 32
-i-
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT"), dated as of
October 1, 1997 by and among Garden State Newspapers, Inc., a Delaware
corporation (the "COMPANY"), and BT Alex. Brown Incorporated, Goldman, Sachs
& Co. and BNY Capital Markets, Inc. (collectively, the "INITIAL PURCHASERS").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of September 26, 1997, by and among the Company and the
Initial Purchasers (the "PURCHASE AGREEMENT"), which provides for the sale by
the Company to the Initial Purchasers of $250,000,000 aggregate principal
amount of the Company's 8 3/4% Senior Subordinated Notes due 2009 (the
"NOTES"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement for the benefit of the Initial Purchasers and
their direct and indirect transferees and assigns. The execution and
delivery of this Agreement is a condition to the Initial Purchasers'
obligation to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
ADDITIONAL INTEREST: See Section 4(a) hereof.
ADVICE: See the last paragraph of Section 5 hereof.
AGREEMENT: See the first introductory paragraph hereto.
APPLICABLE PERIOD: See Section 2(b) hereof.
CLOSING DATE: The Closing Date as defined in the Purchase
Agreement.
COMPANY: See the first introductory paragraph hereto.
EFFECTIVENESS DATE: The date that is 120 days after the Issue Date.
<PAGE>
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EFFECTIVENESS PERIOD: See Section 3(a) hereof.
EVENT DATE: See Section 4(b) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
EXCHANGE NOTES: See Section 2(a) hereof.
EXCHANGE OFFER: See Section 2(a) hereof.
EXCHANGE OFFER REGISTRATION STATEMENT: See Section 2(a) hereof.
FILING DATE: Within 60 days after the Issue Date.
HOLDER: Any holder of a Registrable Note or Registrable Notes.
INDEMNIFIED PERSON: See Section 7(c) hereof.
INDEMNIFYING PERSON: See Section 7(c) hereof.
INDENTURE: The Indenture, dated as of October 1, 1997 between the
Company and The Bank of New York, as trustee, pursuant to which the Notes are
being issued, as amended or supplemented from time to time in accordance with
the terms thereof.
INITIAL PURCHASERS: See the first introductory paragraph hereto.
INSPECTORS: See Section 5(o) hereof.
ISSUE DATE: The date on which the original Notes were sold to the
Initial Purchasers pursuant to the Purchase Agreement.
NASD: See Section 5(t) hereof.
NOTES: See the second introductory paragraph hereto.
PARTICIPANT: See Section 7(a) hereof.
PARTICIPATING BROKER-DEALER: See Section 2(b) hereof.
<PAGE>
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PERSON: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
PRIVATE EXCHANGE: See Section 2(b) hereof.
PRIVATE EXCHANGE NOTES: See Section 2(b) hereof.
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule
430A promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, with respect to the terms of the offering of any portion of the
Registrable Notes covered by such Registration Statement including
post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.
RECORDS: See Section 5(o) hereof.
REGISTRABLE NOTES: Each Note upon original issuance of the Notes
and at all times subsequent thereto, each Exchange Note as to which Section
2(c)(v) hereof is applicable upon original issuance and at all times
subsequent thereto and each Private Exchange Note upon original issuance
thereof and at all times subsequent thereto, until in the case of any such
Note, Exchange Note or Private Exchange Note, as the case may be, the
earliest to occur of the following: (i) a Registration Statement (other than,
with respect to any Exchange Note as to which Section 2(c)(v) hereof is
applicable, the Exchange Offer Registration Statement) covering such Note,
Exchange Note or Private Exchange Note, as the case may be, has been declared
effective by the SEC and such Note, Exchange Note or Private Exchange Note,
as the case may be, has been disposed of in accordance with such effective
Registration Statement, (ii) such Note, Exchange Note or Private Exchange
Note, as the case may be, is sold in compliance with Rule 144, (iii) such
Note has been exchanged for an Exchange Note or Exchange Notes pursuant to an
Exchange Offer and is entitled to be resold without complying with the
prospectus delivery requirements of the Securities Act, or (iv) such Note,
Exchange Note or Private Exchange Note, as the case may be, ceases to be
outstanding for purposes of the Indenture.
<PAGE>
-4-
REGISTRATION STATEMENT: Any registration statement of the Company,
including, but not limited to, the Exchange Offer Registration Statement and
any registration statement filed in connection with a Shelf Registration,
filed with the SEC pursuant to the provisions of this Agreement, including
the Prospectus, amendments and supplements to such registration statement,
including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
RULE 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and
sales of securities made in compliance therewith resulting in offers and
sales by subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus delivery
requirements of the Securities Act.
RULE 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
RULE 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
SHELF NOTICE: See Section 2(c) hereof.
SHELF REGISTRATION: See Section 3(a) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
TRUSTEE: The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Notes and Private Exchange
Notes (if any).
PURCHASE AGREEMENT: See the second introductory paragraph hereto.
<PAGE>
-5-
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration
in which securities of the Company are sold to an underwriter for reoffering
to the public.
2. EXCHANGE OFFER
(a) The Company shall file with the SEC no later than the Filing
Date a registration statement relating to an offer to exchange (the "EXCHANGE
OFFER") any and all of the Registrable Notes (other than the Private Exchange
Notes, if any) for a like aggregate principal amount of debt securities of
the Company that are identical in all material respects to the Notes (the
"EXCHANGE NOTES") (and that are entitled to the benefits of the Indenture or
a trust indenture that is identical in all material respects to the Indenture
(other than such changes to the Indenture or any such identical trust
indenture as are necessary to comply with any requirements of the SEC) and
that, in either case, has been qualified under the TIA), except that the
Exchange Notes (other than Private Exchange Notes, if any) shall have been
registered pursuant to an effective Registration Statement under the
Securities Act and shall contain no restrictive legend thereon. The Exchange
Offer shall be registered under the Securities Act on the appropriate form
(the "EXCHANGE OFFER REGISTRATION STATEMENT") and shall comply with all
applicable tender offer rules and regulations under the Exchange Act. The
Company agrees to use its reasonable best efforts to (x) cause the Exchange
Offer Registration Statement to be declared effective under the Securities
Act on or before the Effectiveness Date; (y) keep the Exchange Offer open for
at least 30 business days (or longer if required by applicable law) after the
date that notice of the Exchange Offer is mailed to Holders; and (z)
consummate the Exchange Offer on or prior to the 165th day following the
Issue Date. If after such Exchange Offer Registration Statement is declared
effective by the SEC, the Exchange Offer or the issuance of the Exchange
Notes thereunder is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court,
such Exchange Offer Registration Statement shall be deemed not to have become
effective for purposes of this Agreement. Each Holder who participates in
the Exchange Offer will be required to represent (i) that any Exchange Notes
received by it will be acquired in the ordinary course of its business, (ii)
that such Holder has and will have no arrangement or understanding with any
Person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes in violation of the Securities Act,
(iii) that such Holder is not an "affiliate" (as defined in Rule 405
promulgated under the Securities Act) of the Com-
<PAGE>
-6-
pany, (iv) if such Holder is not a broker-dealer, that it is not engaged in,
and does not intend to engage in, the distribution of Exchange Notes, (v) if
such Holder is a broker-dealer (a "Participating Broker-Dealer") that will
receive Exchange Notes for its own account in exchange for Notes that were
acquired as a result of market-making or other trading activities, that it
will deliver a prospectus in connection with any resale of such Exchange
Notes, and (vi) that the Holder is not acting on behalf of any persons or
entities who could not truthfully make the foregoing representations. Upon
consummation of the Exchange Offer in accordance with this Section 2, the
provisions of this Agreement shall continue to apply, MUTATIS MUTANDIS,
solely with respect to Registrable Notes that are Private Exchange Notes and
Exchange Notes held by Participating Broker-Dealers (as defined below), and
the Company shall have no further obligation to register Registrable Notes
(other than Private Exchange Notes and other than in respect of any Exchange
Notes as to which clause 2(c)(v) hereof applies) pursuant to Section 3
hereof. No securities other than the Exchange Notes shall be included in the
Exchange Offer Registration Statement.
(b) The Company shall include within the Prospectus contained in
the Exchange Offer Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchasers, that shall
contain a summary statement of the positions taken or policies made by the
Staff of the SEC with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of Exchange Notes received by such broker-dealer in the
Exchange Offer (a "PARTICIPATING BROKER-DEALER"), whether such positions or
policies have been publicly disseminated by the Staff of the SEC or such
positions or policies, in the judgment of the Initial Purchasers, represent
the prevailing views of the Staff of the SEC. Such "Plan of Distribution"
section shall also expressly permit the use of the Prospectus by all Persons
subject to the prospectus delivery requirements of the Securities Act,
including all Participating Broker-Dealers, and include a statement
describing the means by which Participating Broker-Dealers may resell the
Exchange Notes.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the Prospectus
contained therein, in order to permit such Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery requirements of
the Securities Act for such period of time as is necessary to comply with
<PAGE>
-7-
applicable law in connection with any resale of the Exchange Notes; PROVIDED,
HOWEVER, that such period shall not exceed 180 days after the consummation of
the Exchange Offer (or such longer period if extended pursuant to the last
paragraph of Section 5 hereof) (the "APPLICABLE PERIOD").
If, prior to consummation of the Exchange Offer, any Initial
Purchaser holds any Notes acquired by it and having, or that are reasonably
likely to be determined to have, the status of an unsold allotment in the
initial distribution, the Company, upon the request of such Initial Purchaser
simultaneously with the delivery of the Exchange Notes in the Exchange Offer,
shall issue and deliver to the Initial Purchaser in exchange (the "PRIVATE
EXCHANGE") for such Notes held by the Initial Purchaser a like principal
amount of debt securities of the Company that are identical in all material
respects to the Exchange Notes (the "PRIVATE EXCHANGE NOTES") (and that are
issued pursuant to the same indenture as the Exchange Notes), except for the
placement of a restrictive legend on such Private Exchange Notes. The
Private Exchange Notes shall bear the same CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue (A) from the later of (i) the last interest payment date on which
interest was paid on the Note surrendered in exchange therefor or (ii) if the
Note is surrendered for exchange on a date in a period which includes the
record date for an interest payment date to occur on or after the date of
such exchange and as to which interest will be paid, the date of such
interest payment date or (B) if no interest has been paid on such Note, from
the Issue Date.
In connection with the Exchange Offer, the Company shall:
(1) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(2) utilize the services of a depository for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(3) permit Holders to withdraw tendered Notes tendered for exchange in
the Exchange Offer at any time prior to the close of business, New York
time, on the last busi-
<PAGE>
-8-
ness day on which the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Company shall:
(1) accept for exchange all Notes properly tendered and not validly
withdrawn pursuant to the Exchange Offer or the Private Exchange;
(2) deliver to the Trustee for cancellation all Notes so accepted for
exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes or Private Exchange Notes, as the case may
be, equal in outstanding principal amount to the Notes of such Holder so
accepted for exchange.
The Exchange Notes and the Private Exchange Notes may be issued
under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture, which in either event shall provide that (1) the
Exchange Notes shall not be subject to the transfer restrictions set forth in
the Indenture and (2) the Private Exchange Notes shall be subject to the
transfer restrictions set forth in the Indenture. The Indenture or such
indenture shall provide that the Exchange Notes, the Private Exchange Notes
and the Notes shall vote and consent together on all matters as one class and
that neither the Exchange Notes, the Private Exchange Notes or the Notes will
have the right to vote or consent as a separate class on any matter.
(c) If, (i) because of any change in law or in currently
prevailing interpretations of the Staff of the SEC, the Company is not
permitted to effect an Exchange Offer, (ii) the Exchange Offer is not
consummated within 165 days of the Issue Date, (iii) any holder of Private
Exchange Notes so requests at any time after the consummation of the Private
Exchange, (iv) in the case of any Holder that participates in the Exchange
Offer, such Holder does not receive Exchange Notes on the date of the
exchange that may be sold without restriction under state and federal
securities laws (other than due solely to the status of such Holder as an
affiliate of the Company within the meaning of the Securities Act), then in
each case
<PAGE>
-9-
the Company shall promptly deliver written notice thereof (the "SHELF
NOTICE") to the Trustee and in the case of clauses (i), (ii) and (iv), all
Holders, in the case of clause (iii), the Holders of the Private Exchange
Notes and in the case of clause (v), the affected Holder, and shall file a
Shelf Registration pursuant to Section 3 hereof.
3. SHELF REGISTRATION
If a Shelf Notice is delivered as contemplated by Section 2(c) hereof,
then:
(a) SHELF REGISTRATION. The Company shall as promptly as practicable
file with the SEC a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Registrable Notes (the
"SHELF REGISTRATION"). If the Company shall not have yet filed an Exchange
Offer Registration Statement, the Company shall use its best efforts to file
with the SEC the Shelf Registration on or prior to the Filing Date. The Shelf
Registration shall be on Form S-1 or another appropriate form permitting
registration of such Registrable Notes for resale by Holders in the manner or
manners designated by them (including, without limitation, one or more
underwritten offerings). The Company shall not permit any securities other than
the Registrable Notes to be included in the Shelf Registration.
The Company shall use its reasonable best efforts to cause the Shelf
Registration to be declared effective under the Securities Act on or prior to
the Effectiveness Date and to keep the Shelf Registration continuously effective
under the Securities Act until the date that is two years from the Issue Date,
subject to extension pursuant to the last paragraph of Section 5 hereof (the
"EFFECTIVENESS PERIOD"), or such shorter period ending when all Registrable
Notes covered by the Shelf Registration have been sold in the manner set forth
and as contemplated in the Shelf Registration.
(b) WITHDRAWAL OF STOP ORDERS. If the Shelf Registration ceases to
be effective for any reason at any time during the Effectiveness Period (other
than because of the sale of all of the securities registered thereunder), the
Company shall use its best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof.
(c) SUPPLEMENTS AND AMENDMENTS. The Company shall promptly
supplement and amend the Shelf Registration if required by the SEC, the rules,
regulations or instructions ap-
<PAGE>
-10-
plicable to the registration form used for such Shelf Registration or the
Securities Act, or if reasonably requested by the Holders of a majority in
aggregate principal amount of the Registrable Notes covered by such
Registration Statement or by any underwriter of such Registrable Notes.
4. ADDITIONAL INTEREST
(a) The Company and the Initial Purchasers agree that the Holders of
Registrable Notes will suffer damages if the Company fails to fulfill its
obligation under Section 2 or Section 3 hereof and that it would not be feasible
to ascertain the extent of such damages with precision. Accordingly, the
Company agrees to pay, as liquidated damages, additional interest on the Notes
("ADDITIONAL INTEREST") under the circumstances and to the extent set forth
below (without duplication):
(i) if (A) neither the Exchange Offer Registration Statement nor the
Shelf Registration Statement is filed with the SEC on or prior to the
applicable filing date or (B) notwithstanding that the Company has
consummated or will consummate an Exchange Offer, the Company is required
to file a Shelf Registration Statement and such Shelf Registration
Statement is not filed on or prior to the date required by this Agreement,
then commencing on the day after either such required filing date,
Additional Interest shall accrue on the principal amount of the Notes at
a rate of 0.25% per annum for the first 90 days immediately following each
such filing date, such Additional Interest rate increasing by an additional
0.25% per annum at the beginning of each subsequent 90-day period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is declared effective by the SEC on or prior
to 120 days after the applicable filing date or (B) notwithstanding that
the Company has consummated or will consummate an Exchange Offer, the
Company is required to file a Shelf Registration Statement and such Shelf
Registration Statement is not declared effective by the SEC on or prior to
the 150th day following the date such Shelf Registration Statement was
filed, then, commencing on the day after the 150th day following the
applicable filing date, Additional Interest shall accrue on the principal
amount of the Notes at a rate of 0.25% per annum for the first 90 days
immediately following such date, such Additional Interest rate in-
<PAGE>
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creasing by an additional 0.25% per annum at the beginning of each
subsequent 90-day period; or
(iii) if (A) the Company has not exchanged Exchange Notes for all
Notes validly tendered in accordance with the terms of the Exchange Offer
on or prior to the 45th day after the date on which the Exchange Offer
Registration Statement was first declared effective or (B) if applicable,
the Shelf Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the
second anniversary of the Issue Date (other than after such time as all
Notes have been disposed of thereunder), then Additional Interest shall
accrue on the principal amount of the Notes at a rate of 0.25% per annum
for the first 90 days commencing on (x) the 46th day after such effective
date, in the case of (A) above, or (y) the day such Shelf Registration
Statement ceases to be effective, in the case of (B) above, such Additional
Interest rate increasing by an additional 0.25% per annum at the beginning
of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Notes may not exceed
in the aggregate 1.0% per annum; and provided, further, that (1) upon the filing
of the Exchange Offer Registration Statement or a Shelf Registration Statement
(in the case of clause (i) above), (2) upon the effectiveness of the Exchange
Offer Registration Statement or the Shelf Registration Statement (in the case of
clause (ii) above), (3) upon the exchange of Exchange Notes for all Notes
tendered (in the case of clause (iii)(A) above), or (4) upon the effectiveness
of the Shelf Registration Statement which had ceased to remain effective (in the
case of clause (iii)(B) above), Additional Interest on the Notes as a result of
such clause (or the related subclause thereof), as the case may be, shall cease
to accrue.
(b) The Company shall notify the Trustee within one business day
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "EVENT DATE"). Any amounts of
Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this
Section 4 will be payable in cash semi-annually on each April 1 and October 1
(to the holders of record at the close of business on March 15 or September
15 immediately preceding such dates), commencing with the first such date
occurring after any such Additional Interest commences to accrue. The amount
of Additional Interest will be determined by multiplying the applicable
Additional In-
<PAGE>
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terest rate by the principal amount of the Registrable Notes, multiplied by a
fraction, the numerator of which is the number of days such Additional Interest
rate was applicable during such period (determined on the basis of a 360-day
year comprised of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed) and the denominator of which is 360.
5. REGISTRATION PROCEDURES
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Company shall effect such registration(s) to
permit the sale of the securities covered thereby in accordance with the
intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by the Company, hereunder the
Company shall:
(a) Prepare and file with the SEC prior to the applicable filing date
a Registration Statement or Registration Statements as prescribed by Sections 2
or 3 hereof, and use its best efforts to cause each such Registration Statement
to become effective and remain effective as provided herein; PROVIDED, HOWEVER,
that, if (1) such filing is pursuant to Section 3 hereof or (2) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Company shall furnish to and afford the
Holders of the Registrable Notes covered by such Registration Statement or each
such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, a reasonable opportunity to review copies of all
such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed (in each case
at least five business days prior to such filing). The Company shall not file
any Registration Statement or Prospectus or any amendments or supplements
thereto if the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement, or any such
Participating Broker-Dealer, as the case may be, or their counsel, or the
managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Offer Registration Statement,
as the case may be, as may
<PAGE>
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be necessary to keep such Registration Statement continuously effective for
the Effectiveness Period or the Applicable Period, as the case may be; cause
the related Prospectus to be supplemented by any prospectus supplement
required by applicable law, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act;
and comply with the provisions of the Securities Act and the Exchange Act
applicable to it with respect to the disposition of all securities covered by
such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities
being sold by a Participating Broker-Dealer covered by any such Prospectus;
the Company shall be deemed not to have used its best efforts to keep a
Registration Statement effective during the Applicable Period if it
voluntarily takes any action that would cause selling Holders of the
Registrable Notes covered thereby or Participating Broker-Dealers seeking to
sell Exchange Notes not to be able to sell such Registrable Notes or such
Exchange Notes during that period unless such action is required by
applicable law or unless the Company complies with this Agreement, including
without limitation, the provisions of paragraphs 5(k) and 5(u) hereof.
(c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, notify the selling Holders of Registrable Notes, or each
such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, promptly (but in any event within two business
days) and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole expense
of the Company, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Registrable Notes or
<PAGE>
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resales of Exchange Notes by Participating Broker-Dealers the representations
and warranties of the Company contained in any agreement (including any
underwriting agreement), contemplated by Section 5(n) hereof cease to be true
and correct, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable Notes or
the Exchange Notes to be sold by any Participating Broker-Dealer for offer or
sale in any jurisdiction, or the initiation or written threat of any
proceeding for such purpose, (v) of the happening of any event, the existence
of any condition or any information becoming known that makes any statement
made in such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respects or that requires the making of any changes in or amendments
or supplements to such Registration Statement, Prospectus or documents so
that, in the case of the Registration Statement, it will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading and
(vi) of the Company's determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) Use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable
Notes or the Exchange Notes for sale in any jurisdiction and, if any such
order is issued, use its best efforts to obtain the withdrawal of any such
order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter or underwriters (if any) or the Holders
of a majority in aggregate principal amount of the Registrable Notes being
sold in connection with an underwritten offering, (i) promptly incorporate in
a prospectus supplement or post-effective amendment such information as the
managing underwriter or underwriters (if any), such Holders, or counsel for
any of them determine is reasonably necessary to be included therein, (ii)
make all required filings of such prospectus supplement or such
post-effective
<PAGE>
-15-
amendment as soon as practicable after the Company has received notification
of the matters to be incorporated in such prospectus supplement or
post-effective amendment and (iii) supplement or make amendments to such
Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, furnish to each selling Holder
of Registrable Notes and to each such Participating Broker-Dealer who so
requests and to counsel and each managing underwriter, if any, at the sole
expense of the Company, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto, including
financial statements and schedules and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all
exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, deliver to each selling Holder
of Registrable Notes, or each such Participating Broker-Dealer, as the case
may be, their respective counsel and the underwriters, if any, at the sole
expense of the Company, as many copies of the Prospectus or Prospectuses
(including each form of preliminary prospectus) and each amendment or
supplement thereto and any documents incorporated by reference therein as
such Persons may reasonably request; and, subject to the last paragraph of
this Section 5, the Company hereby consents to the use of such Prospectus and
each amendment or supplement thereto (provided the manner of such use
complies with all applicable federal securities laws, the rules and
regulations of the SEC and applicable state securities "Blue Sky" laws) by
each of the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if any,
and dealers (if any), in connection with the offering and sale of the
Registrable Notes covered by, or the sale by Participating Broker-Dealers of
the Exchange Notes pursuant to, such Prospectus and any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Notes or Exchange
Notes or any delivery of a Prospectus contained in the Exchange Offer
Registration Statement by any Par-
<PAGE>
-16-
ticipating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its best efforts to register or qualify such
Registrable Notes (and to cooperate with the selling Holders of Registrable
Notes or each such Participating Broker-Dealer, as the case may be, the
managing underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Notes) for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer or the managing
underwriter or underwriters reasonably request in writing; PROVIDED, HOWEVER,
that where Exchange Notes held by Participating Broker-Dealers or Registrable
Notes are offered other than through an underwritten offering, the Company
agrees to cause the Company's counsel to perform Blue Sky investigations and
file registrations and qualifications required to be filed pursuant to this
Section 5(h); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Notes held by Participating Broker-Dealers or
the Registrable Notes covered by the applicable Registration Statement;
PROVIDED, HOWEVER, that the Company shall not be required to (A) qualify
generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or (C)
subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and registered in such names as
is in accordance with the Indenture and as the managing underwriter or
underwriters, if any, or Holders may reasonably request.
(j) Use its best efforts to cause the Registrable Notes covered by
the Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
Holders thereof
<PAGE>
-17-
or the underwriter or underwriters, if any, to consummate the disposition of
such Registrable Notes, except as may be required solely as a consequence of
the nature of such selling Holder's business, in which case the Company will
cooperate in all reasonable respects with the filing of such Registration
Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3
hereof or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as
practicable prepare and (subject to Section 5(a) hereof) file with the SEC,
at the Company's sole expense, a supplement or post-effective amendment to
the Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, or
file with the SEC any other required document so that, as thereafter
delivered to the purchasers of the Registrable Notes being sold thereunder or
to the purchasers of the Exchange Notes to whom such Prospectus will be
delivered by a Participating Broker-Dealer, any such Prospectus will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(l) Use its best efforts to cause the Registrable Notes covered by
a Registration Statement or the Exchange Notes, as the case may be, to be
rated with the appropriate rating agencies, if so requested by the Holders of
a majority in aggregate principal amount of Registrable Notes covered by such
Registration Statement or the Exchange Notes, as the case may be, or the
managing underwriter or underwriters, if any.
(m) Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, (i) provide the Trustee with
certificates for the Registrable Notes or Exchange Notes, as the case may be,
in a form eligible for deposit with The Depository Trust Company and (ii)
provide a CUSIP number for the Registrable Notes or Exchange Notes, as the
case may be.
(n) In connection with any underwritten offering of Registrable
Notes pursuant to a Shelf Registration, enter into an underwriting agreement
as is customary in underwritten of-
<PAGE>
-18-
ferings of debt securities similar to the Notes and take all such other
actions as are reasonably requested by the managing underwriter or
underwriters in order to expedite or facilitate the registration or the
disposition of such Registrable Notes and, in such connection, (i) make such
representations and warranties to, and covenants with, the underwriters with
respect to the business of the Company and its subsidiaries (including any
acquired business, properties or entity, if applicable) and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily made by
issuers to underwriters in underwritten offerings of debt securities similar
to the Notes, and confirm the same in writing if and when requested; (ii)
obtain the written opinion of counsel to the Company and written updates
thereof in form, scope and substance reasonably satisfactory to the managing
underwriter or underwriters, addressed to the underwriters covering the
matters customarily covered in opinions requested in underwritten offerings
of debt similar to the Notes and such other matters as may be reasonably
requested by the managing underwriter or underwriters; (iii) obtain "cold
comfort" letters and updates thereof in form, scope and substance reasonably
satisfactory to the managing underwriter or underwriters from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or
of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included or incorporated by
reference in the Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings of debt securities similar to the Notes and such other
matters as reasonably requested by the managing underwriter or underwriters;
and (iv) if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set
forth in Section 7 hereof (or such other provisions and procedures acceptable
to Holders of a majority in aggregate principal amount of Registrable Notes
covered by such Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section and no more onerous to the indemnifying parties than
those set forth in Section 7. The above shall be done at each closing under
such underwriting agreement, or as and to the extent required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to Section 3 hereof
or (2) a Prospectus contained in an Exchange
<PAGE>
-19-
Offer Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, make available
for inspection by any selling Holder of such Registrable Notes being sold, or
each such Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Notes, if any, and any
attorney, accountant or other agent retained by any such selling Holder or
each such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "INSPECTORS"), at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent
corporate documents and instruments of the Company and its subsidiaries
(collectively, the "RECORDS") as shall be reasonably necessary to enable them
to exercise any applicable due diligence responsibilities, and cause the
officers, directors and employees of the Company and its subsidiaries to
supply all information reasonably requested by any such Inspector in
connection with such Registration Statement. Records that the Company
determines, in good faith, to be confidential and any Records that it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records (or the portion thereof,
if only a portion is appropriate to disclose (to the extent partial
disclosure gives an accurate picture)) is necessary to avoid or correct a
misstatement or omission in such Registration Statement, (ii) the release of
such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, (iii) disclosure of such information is, in the
opinion of counsel for any Inspector, necessary or advisable in connection
with any action, claim, suit or proceeding, directly or indirectly, involving
or potentially involving such Inspector and arising out of, based upon,
relating to or involving this Agreement, or any transactions contemplated
hereby or arising hereunder or (iv) the information in such Records has been
made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company unless and
until such information is generally available to the public. Each selling
Holder of such Registrable Notes and each such Participating Broker-Dealer
will be required to further agree that it will, upon learning that disclosure
of such Records is sought in a court of competent jurisdiction, give notice
to the Company and allow the Company to undertake appropriate action
<PAGE>
-20-
to prevent disclosure of the Records deemed confidential at the Company's
sole expense.
(p) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the Exchange
Offer or the first Registration Statement relating to the Registrable Notes;
and in connection therewith, cooperate with the trustee under any such
indenture and the Holders of the Registrable Notes, to effect such changes to
such indenture as may be required for such indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use its best efforts
to cause such trustee to execute, all documents as may be required to effect
such changes and all other forms and documents required to be filed with the
SEC to enable such indenture to be so qualified in a timely manner.
(q) Comply with all applicable rules and regulations of the SEC
and make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no
later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) (i) commencing at
the end of any fiscal quarter in which Registrable Notes are sold to
underwriters in a firm commitment or best efforts underwritten offering and
(ii) if not sold to underwriters in such an offering, commencing on the first
day of the first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month periods.
(r) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company, in a form customary for
underwritten transactions, addressed to the Trustee for the benefit of all
Holders of Registrable Notes participating in the Exchange Offer or the
Private Exchange, as the case may be, that the Exchange Notes or Private
Exchange Notes, as the case may be, and the related indenture constitute
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, subject to customary
exceptions and qualifications.
(s) If an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by Holders to the Company (or to such
other Person as directed by the
<PAGE>
-21-
Company) in exchange for the Exchange Notes or the Private Exchange Notes, as
the case may be, the Company shall mark, or cause to be marked, on such
Registrable Notes that such Registrable Notes are being canceled in exchange
for the Exchange Notes or the Private Exchange Notes, as the case may be; in
no event shall such Registrable Notes be marked as paid or otherwise
satisfied.
(t) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in
connection with any filings required to be made with the National Association
of Securities Dealers, Inc. (the "NASD").
(u) Use its best efforts to take all other steps necessary or
advisable to effect the registration of the Registrable Notes covered by a
Registration Statement contemplated hereby.
The Company may require each seller of Registrable Notes as to which any
registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such Registrable Notes as the
Company may, from time to time, reasonably request. The Company may exclude
from such registration the Registrable Notes of any seller who unreasonably
fails to furnish such information within a reasonable time after receiving
such request and in such event shall have no further obligation under this
Agreement with respect to such seller or any subsequent holder of such
Registrable Notes. Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the Company all information required
to be disclosed in order to make the information previously furnished to the
Company by such seller not materially misleading.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by acquisition of such Registrable Notes or Exchange Notes to be sold
by such Participating Broker-Dealer, as the case may be, that, upon actual
receipt of any notice from the Company of the happening of any event of the
kind described in Sections 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof,
such Holder will forthwith discontinue disposition of such Registrable Notes
covered by such Registration Statement or Prospectus or Exchange Notes to be
sold by such Holder or Participating Broker-Dealer, as the case may be, until
such Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contem-
<PAGE>
-22-
plated by Section 5(k) hereof, or until it is advised in writing (the
"ADVICE") by the Company that the use of the applicable Prospectus may be
resumed, and has received copies of any amendments or supplements thereto.
In the event that the Company shall give any such notice, each of the
Effectiveness Period and the Applicable Period shall be extended by the
number of days during such periods from and including the date of the giving
of such notice to and including the date when each seller of Registrable
Notes covered by such Registration Statement or Exchange Notes to be sold by
such Participating Broker-Dealer, as the case may be, shall have received (x)
the copies of the supplemented or amended Prospectus contemplated by Section
5(k) hereof or (y) the Advice.
6. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not the Exchange Offer or a Shelf Registration is filed or becomes
effective, including, without limitation, (i) all registration and filing
fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten offering
and (B) fees and expenses of compliance with state securities or Blue Sky
laws (including, without limitation, reasonable fees and disbursements of
counsel in connection with Blue Sky qualifications of the Registrable Notes
or Exchange Notes and determination of the eligibility of the Registrable
Notes or Exchange Notes for investment under the laws of such jurisdictions
(x) where the holders of Registrable Notes are located, in the case of the
Exchange Notes, or (y) as provided in Section 5(h) hereof, in the case of
Registrable Notes or Exchange Notes to be sold by a Participating
Broker-Dealer during the Applicable Period)), (ii) printing expenses,
including, without limitation, expenses of printing certificates for
Registrable Notes or Exchange Notes in a form eligible for deposit with The
Depository Trust Company and of printing prospectuses if the printing of
prospectuses is requested by the managing underwriter or underwriters, if
any, by the Holders of a majority in aggregate principal amount of the
Registrable Notes included in any Registration Statement or sold by any
Participating Broker-Dealer, as the case may be, (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company
and fees and disbursements of special counsel for the sellers of Registrable
Notes (subject to the provisions of Section 6(b) hereof), (v) fees and
disbursements of all independent certified public accountants referred to in
Section 5(n)(iii) hereof (including, with-
<PAGE>
-23-
without limitation, the expenses of any special audit and "cold comfort"
letters required by or incident to such performance), (vi) rating agency
fees, if any, and any fees associated with making the Registrable Notes or
Exchange Notes eligible for trading through The Depository Trust Company,
(vii) Securities Act liability insurance, if the Company desires such
insurance, (viii) fees and expenses of all other Persons retained by the
Company, (ix) internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees of the
Company performing legal or accounting duties), (x) the expense of any annual
audit, (xi) the fees and expenses incurred in connection with the listing of
the securities to be registered on any securities exchange, if applicable,
and (xii) the expenses relating to printing, word processing and distributing
all Registration Statements, underwriting agreements, securities sales
agreements, indentures and any other documents necessary to comply with this
Agreement.
(b) The Company shall (i) reimburse the Holders of the Registrable
Notes being registered in a Shelf Registration for the reasonable fees and
disbursements of not more than one counsel (in addition to appropriate local
counsel) chosen by the Holders of a majority in aggregate principal amount of
the Registrable Notes to be included in such Registration Statement and (ii)
reimburse out-of-pocket expenses (other than legal expenses and other than
sales commissions or similar costs) of Holders of Registrable Notes incurred
in connection with the registration and sale of the Registrable Notes
pursuant to a Shelf Registration or in connection with the exchange of
Registrable Notes pursuant to the Exchange Offer. In addition, the Company
shall reimburse the Initial Purchasers for the reasonable fees and expenses
of one counsel in connection with the Exchange Offer, which shall be Cahill
Gordon & Reindel, and shall not be required to pay any other legal expenses
in connection therewith.
7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder
of Registrable Notes offered pursuant to a Shelf Registration Statement and
each Participating Broker-Dealer selling Exchange Notes during the Applicable
Period, the directors, officers, agents, and employees of each such Person or
its affiliates, and each other Person, if any, who controls any such Person
or its affiliates within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act (each, a "PARTICIPANT"), from and
against any and all losses, claims, damages and liabilities (including,
without
<PAGE>
-24-
limitation, the reasonable legal fees and other expenses actually incurred in
connection with any suit, action or proceeding or any claim asserted) caused
by, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement pursuant
to which the offering of such Registrable Notes or Exchange Notes, as the
case may be, is registered (or any amendment thereto) or related Prospectus
(or any amendments or supplements thereto) or any related preliminary
prospectus, or caused by, arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that the Company will not be required to indemnify a Participant if (i) such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Participant furnished to the
Company in writing by or on behalf of such Participant expressly for use
therein or (ii) such Participant sold to the person asserting the claim the
Registrable Notes or Exchange Notes that are the subject of such claim and
such untrue statement or omission or alleged untrue statement or omission was
contained or made in any preliminary prospectus and corrected in the
Prospectus or any amendment or supplement thereto and the Prospectus does not
contain any other untrue statement or omission or alleged untrue statement or
omission of a material fact that was the subject matter of the related
proceeding and it is established by the Company in the related proceeding
that such Participant failed to deliver or provide a copy of the Prospectus
(as amended or supplemented) to such Person with or prior to the confirmation
of the sale of such Registrable Notes or Exchange Notes sold to such Person
if required by applicable law, unless such failure to deliver or provide a
copy of the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and officers and each
Person who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to each Participant, but only (i) with
reference to information relating to such Participant furnished to the
Company in writing by or on behalf of such Participant expressly for use in
any Registration Statement or Prospectus, any amendment or supplement thereto
or any preliminary prospectus or (ii) with respect to any untrue statement or
<PAGE>
-25-
representation made by such Participant in writing to the Company. The
liability of any Participant under this paragraph shall in no event exceed
the proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any Person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such Person (the "INDEMNIFIED
PERSON") shall promptly notify the Person against whom such indemnity may be
sought (the "INDEMNIFYING PERSON") in writing, and the Indemnifying Person,
upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person
and any others the Indemnifying Person may reasonably designate in such
proceeding and shall pay the reasonable fees and expenses actually incurred
by such counsel related to such proceeding; PROVIDED, HOWEVER, that the
failure to so notify the Indemnifying Person shall not relieve the
Indemnifying Person of any obligation or liability that it may have hereunder
or otherwise (unless and only to the extent that such failure directly
results in the loss or compromise of any material rights or defenses by the
Indemnifying Person and the Indemnifying Person was not otherwise aware of
such action or claim). In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed in
writing to the contrary, (ii) the Indemnifying Person shall have failed
within a reasonable period of time to retain counsel reasonably satisfactory
to the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and
the Indemnified Person and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that, unless there exists a conflict among
Indemnified Persons, the Indemnifying Person shall not, in connection with
any one such proceeding or separate but substantially similar related
proceeding in the same jurisdiction arising out of the same general
allegations, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Indemnified Persons, and that
all such fees and expenses shall be reimbursed promptly as they are incurred.
Any such separate firm for the Participants and such control Persons of
Participants shall be designated in writing by Participants who
<PAGE>
-26-
sold a majority in interest of Registrable Notes and Exchange Notes sold by
all such Participants and any such separate firm for the Company, its
directors, its officers and such control Persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its prior
written consent (which consent shall not be unreasonably withheld), but if
settled with such consent or if there be a final non-appealable judgment for
the plaintiff for which the Indemnified Person is entitled to indemnification
pursuant to this Agreement, the Indemnifying Person agrees to indemnify and
hold harmless each Indemnified Person from and against any loss or liability
by reason of such settlement or judgment. No Indemnifying Person shall,
without the prior written consent of the Indemnified Person, effect any
settlement or compromise of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party, and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement (A) includes an unconditional written release of such Indemnified
Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of any Indemnified
Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or
insufficient to hold harmless, an Indemnified Person in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraphs, in lieu of indemnifying such
Indemnified Person thereunder and in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities
in such proportion as is appropriate to reflect (i) the relative benefits
received by the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other from the offering of the Notes or
(ii) if the allocation provided by the foregoing clause (i) is not permitted
by applicable law, not only such relative benefits but also the relative
fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements
or omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue
<PAGE>
-27-
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand
or such Participant or such other Indemnified Person, as the case may be, on
the other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result
of the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any reasonable legal or other expenses actually incurred by
such Indemnified Person in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 7, in no
event shall a Participant be required to contribute any amount in excess of
the amount by which proceeds received by such Participant from sales of
Registrable Notes or Exchange Notes, as the case may be, exceeds the amount
of any damages that such Participant has otherwise been required to pay or
has paid by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. RULE 144 AND 144A
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner in accordance
with the requirements of the Securities Act and the Exchange Act and, if at
any time the Company is not required to file such reports, it will, upon the
request of any Holder of Registrable Notes, make pub-
<PAGE>
-28-
licly available annual reports and such information, documents and other
reports of the type specified in Sections 13 and 15(d) of the Exchange Act.
The Company further covenants for so long as any Registrable Notes remain
outstanding, to make available to any Holder or beneficial owner of
Registrable Notes in connection with any sale thereof and any prospective
purchaser of such Registrable Notes from such Holder or beneficial owner the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Registrable Notes pursuant to Rule 144A.
9. UNDERWRITTEN REGISTRATIONS
If any of the Registrable Notes covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banker or
investment bankers and manager or managers that will manage the offering will
be selected by the Holders of a majority in aggregate principal amount of
such Registrable Notes included in such offering and reasonably acceptable to
the Company.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements.
10. MISCELLANEOUS
(a) NO INCONSISTENT AGREEMENTS. The Company has not, as of the
date hereof, and shall not, after the date of this Agreement, enter into any
agreement with respect to any of the Company's securities that is
inconsistent with the rights granted to the Holders of Registrable Notes in
this Agreement or otherwise conflicts with the provisions hereof. The
Company has not entered and will not enter into any agreement with respect to
any of its securities that will grant to any Person piggy-back registration
rights with respect to a Registration Statement.
(b) ADJUSTMENTS AFFECTING REGISTRABLE NOTES. The Company shall
not, directly or indirectly, take any action with respect to the Registrable
Notes as a class that would adversely affect the ability of the Holders of
Registrable Notes
<PAGE>
-29-
to include such Registrable Notes in a registration undertaken pursuant to
this Agreement.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, otherwise than with
the prior written consent of the Holders of not less than a majority in
aggregate principal amount of the then outstanding Registrable Notes.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of
Registrable Notes may be given by Holders of at least a majority in aggregate
principal amount of the Registrable Notes being sold by such Holders pursuant
to such Registration Statement; PROVIDED, HOWEVER, that the provisions of
this sentence may not be amended, modified or supplemented except in
accordance with the provisions of the immediately preceding sentence.
(d) NOTICES. All notices and other communications (including
without limitation any notices or other communications to the Trustee)
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or facsimile:
1. if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture, with a copy in like manner to the Initial
Purchasers as follows:
BT ALEX. BROWN INCORPORATED
GOLDMAN, SACHS & CO.
BNY CAPITAL MARKETS, INC.
c/o BT Alex. Brown Incorporated
Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Facsimile No.: (212) 250-7200
Attention: Corporate Finance Department
with a copy to:
<PAGE>
-30-
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No.: (212) 269-5420
Attention: Michael Becker, Esq.
2. if to the Initial Purchasers, at the addresses specified in
Section 10(d)(1);
3. if to the Company, at the address as follows:
Garden State Newspapers, Inc.
1560 Broadway, Suite 1450
Denver, CO 80202
Facsimile No.: (303) 894-9327
Attention: Joseph J. Lodovic IV,
Executive Vice President and
Chief Financial Officer
with copies to:
Verner, Liipfert, Bernhard,
McPherson and Hand, Chartered
901 15th Street, N.W.
Washington, D.C. 20005
Facsimile No.: (202) 371-6279
Attention: Roy G. Bowman, Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one
business day after being timely delivered to a next-day air courier; and when
receipt is acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties hereto; PROVIDED, HOWEVER, that this Agreement shall not inure to the
benefit of or be binding upon a successor or assign of a Holder unless and to
the extent such successor or assign holds Registrable Notes.
<PAGE>
-31-
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WHOLLY 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 AGREEMENT.
(i) SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(j) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Notes is required hereunder, Registrable Notes held by the Company or its
affiliates (as such term is defined in Rule 405 under the Securities Act)
shall not be counted in determining whether such consent or approval was
given by the Holders of such required percentage.
(k) THIRD PARTY BENEFICIARIES. Holders of Registrable Notes and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
<PAGE>
-32-
(l) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement and the Indenture, is intended by the parties as a final and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein and any and all
prior oral or written agreements, representations, or warranties, contracts,
understandings, correspondence, conversations and memoranda between the
Initial Purchasers on the one hand and the Company on the other, or between
or among any agents, representatives, parents, subsidiaries, affiliates,
predecessors in interest or successors in interest with respect to the
subject matter hereof and thereof are merged herein and replaced hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
GARDEN STATE NEWSPAPERS, INC.
By:
---------------------------------
Name:
Title:
BT ALEX. BROWN INCORPORATED
By:
---------------------------------
Name:
Title:
GOLDMAN, SACHS & CO.
By:
---------------------------------
Name:
Title:
BNY CAPITAL MARKETS, INC.
By:
---------------------------------
Name:
Title:
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
GARDEN STATE NEWSPAPERS, INC.,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
---------------------
INDENTURE
Dated as of October 1, 1997
---------------------
up to $300,000,000
8 3/4% Senior Subordinated Notes due 2009, Series A
8 3/4% Senior Subordinated Notes due 2009, Series B
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ---------
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07; 4.08;
11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.02;
10.03;
10.04; 10.05
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 11.02
(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
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10; 9.04
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
- -------------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Incorporation by Reference of TIA. . . . . . . . . 19
SECTION 1.03. Rules of Construction. . . . . . . . . . . . . . . 20
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating. . . . . . . . . . . . . . . . . . 20
SECTION 2.02. Execution and Authentication.. . . . . . . . . . . 21
SECTION 2.03. Registrar and Paying Agent.. . . . . . . . . . . . 22
SECTION 2.04. Paying Agent To Hold Assets in Trust.. . . . . . . 23
SECTION 2.05. Noteholder Lists.. . . . . . . . . . . . . . . . . 23
SECTION 2.06. Transfer and Exchange. . . . . . . . . . . . . . . 24
SECTION 2.07. Replacement Notes. . . . . . . . . . . . . . . . . 24
SECTION 2.08. Outstanding Notes. . . . . . . . . . . . . . . . . 25
SECTION 2.09. Treasury Notes.. . . . . . . . . . . . . . . . . . 25
SECTION 2.10. Temporary Notes. . . . . . . . . . . . . . . . . . 26
SECTION 2.11. Cancellation.. . . . . . . . . . . . . . . . . . . 26
SECTION 2.12. Defaulted Interest.. . . . . . . . . . . . . . . . 26
SECTION 2.13. CUSIP Number.. . . . . . . . . . . . . . . . . . . 27
SECTION 2.14. Deposit of Moneys. . . . . . . . . . . . . . . . . 27
SECTION 2.15. Book-Entry Provisions for Global Notes.. . . . . . 27
SECTION 2.16. Special Transfer Provisions. . . . . . . . . . . . 29
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.. . . . . . . . . . . . . . . . 32
SECTION 3.02. Selection of Notes To Be Redeemed. . . . . . . . . 33
SECTION 3.03. Notice of Redemption.. . . . . . . . . . . . . . . 33
SECTION 3.04. Effect of Notice of Redemption.. . . . . . . . . . 34
SECTION 3.05. Deposit of Redemption Price. . . . . . . . . . . . 34
SECTION 3.06. Notes Redeemed in Part.. . . . . . . . . . . . . . 34
-i-
<PAGE>
Page
----
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.. . . . . . . . . . . . . . . . . 35
SECTION 4.02. Maintenance of Office or Agency. . . . . . . . . . 35
SECTION 4.03. Corporate Existence. . . . . . . . . . . . . . . . 35
SECTION 4.04. Payment of Taxes and Other Claims. . . . . . . . . 36
SECTION 4.05. Maintenance of Properties and Insurance. . . . . . 36
SECTION 4.06. Compliance Certificate; Notice of Default. . . . . 37
SECTION 4.07. Compliance with Laws.. . . . . . . . . . . . . . . 38
SECTION 4.08. Commission Reports.. . . . . . . . . . . . . . . . 38
SECTION 4.09. Waiver of Stay, Extension or Usury Laws. . . . . . 39
SECTION 4.10. Limitation on Restricted Payments. . . . . . . . . 39
SECTION 4.11. Limitation on Transactions with Affiliates.. . . . 41
SECTION 4.12. Limitation on Additional Debt. . . . . . . . . . . 42
SECTION 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . 43
SECTION 4.14. Limitation on Restricted and Unrestricted
Subsidiaries . . . . . . . . . . . . . . . . . . 44
SECTION 4.15. Limitation on Senior Subordinated Debt.. . . . . . 45
SECTION 4.16. Change of Control. . . . . . . . . . . . . . . . . 45
SECTION 4.17. Limitation on Sales of Assets. . . . . . . . . . . 47
SECTION 4.18. Limitation on Liens Securing Certain Debt. . . . . 48
SECTION 4.19. Limitation on Business.. . . . . . . . . . . . . . 49
SECTION 4.20. Investment Company Act.. . . . . . . . . . . . . . 49
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. . . . . . . . . . . . 49
SECTION 5.02. Successor Corporation Substituted. . . . . . . . . 50
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . . 51
SECTION 6.02. Acceleration.. . . . . . . . . . . . . . . . . . . 52
SECTION 6.03. Other Remedies.. . . . . . . . . . . . . . . . . . 54
SECTION 6.04. Waiver of Past Defaults. . . . . . . . . . . . . . 54
-ii-
<PAGE>
Page
----
SECTION 6.05. Control by Majority. . . . . . . . . . . . . . . . 54
SECTION 6.06. Limitation on Suits. . . . . . . . . . . . . . . . 55
SECTION 6.07. Rights of Holders To Receive Payment.. . . . . . . 55
SECTION 6.08. Collection Suit by Trustee.. . . . . . . . . . . . 55
SECTION 6.09. Trustee May File Proofs of Claim.. . . . . . . . . 56
SECTION 6.10. Priorities.. . . . . . . . . . . . . . . . . . . . 56
SECTION 6.11. Undertaking for Costs. . . . . . . . . . . . . . . 57
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee. . . . . . . . . . . . . . . . . 57
SECTION 7.02. Rights of Trustee. . . . . . . . . . . . . . . . . 59
SECTION 7.03. Individual Rights of Trustee.. . . . . . . . . . . 60
SECTION 7.04. Trustee's Disclaimer.. . . . . . . . . . . . . . . 60
SECTION 7.05. Notice of Default. . . . . . . . . . . . . . . . . 60
SECTION 7.06. Reports by Trustee to Holders. . . . . . . . . . . 61
SECTION 7.07. Compensation and Indemnity.. . . . . . . . . . . . 61
SECTION 7.08. Replacement of Trustee.. . . . . . . . . . . . . . 62
SECTION 7.09. Successor Trustee by Merger, Etc.. . . . . . . . . 63
SECTION 7.10. Eligibility; Disqualification. . . . . . . . . . . 63
SECTION 7.11. Preferential Collection of Claims Against Company. 64
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations.. . . . . . . 64
SECTION 8.02. Acknowledgment of Discharge by Trustee.. . . . . . 68
SECTION 8.03. Application of Trust Money.. . . . . . . . . . . . 68
SECTION 8.04. Repayment to the Company.. . . . . . . . . . . . . 68
SECTION 8.05. Reinstatement. . . . . . . . . . . . . . . . . . . 69
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.. . . . . . . . . . . . 69
SECTION 9.02. With Consent of Holders. . . . . . . . . . . . . . 70
SECTION 9.03. Compliance with TIA. . . . . . . . . . . . . . . . 71
SECTION 9.04. Revocation and Effect of Consents. . . . . . . . . 71
SECTION 9.05. Notation on or Exchange of Notes.. . . . . . . . . 72
SECTION 9.06. Trustee To Sign Amendments, Etc. . . . . . . . . . 72
-iii-
<PAGE>
Page
----
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Debt.. . . . . . . . 73
SECTION 10.02. Liquidation; Dissolution; Bankruptcy. . . . . . . 73
SECTION 10.03. Default on Senior Debt. . . . . . . . . . . . . . 74
SECTION 10.04. No Suspension of Remedies.. . . . . . . . . . . . 75
SECTION 10.05. When Distributions Must Be Paid Over. . . . . . . 76
SECTION 10.06. Notice by Company.. . . . . . . . . . . . . . . . 77
SECTION 10.07. Subrogation.. . . . . . . . . . . . . . . . . . . 77
SECTION 10.08. Relative Rights.. . . . . . . . . . . . . . . . . 77
SECTION 10.09. Subordination May Not Be Impaired by Company. . . 78
SECTION 10.10. Distribution or Notice to Representative. . . . . 78
SECTION 10.11. Rights of Trustee and Paying Agent. . . . . . . . 78
SECTION 10.12. Authorization to Effect Subordination.. . . . . . 79
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls. . . . . . . . . . . . . . . . . . . 80
SECTION 11.02. Notices.. . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.03. Communications by Holders with Other Holders. . . 81
SECTION 11.04. Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . 81
SECTION 11.05. Statements Required in Certificate or Opinion . . 81
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar . . . . 82
SECTION 11.07. Legal Holidays. . . . . . . . . . . . . . . . . . 82
SECTION 11.08. Governing Law . . . . . . . . . . . . . . . . . . 82
SECTION 11.09. No Adverse Interpretation of Other Agreements . . 83
SECTION 11.10. No Recourse Against Others. . . . . . . . . . . . 83
SECTION 11.11. Successors. . . . . . . . . . . . . . . . . . . . 83
SECTION 11.12. Duplicate Originals . . . . . . . . . . . . . . . 83
SECTION 11.13. Severability. . . . . . . . . . . . . . . . . . . 83
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
-iv-
<PAGE>
Page
----
Exhibit A - Form of Series A Note. . . . . . . . . . . . . . . A-1
Exhibit B - Form of Series B Note. . . . . . . . . . . . . . .
Exhibit C - Form of Legend for Global Notes. . . . . . . . . .
Exhibit D - Form of Certificate To Be Delivered
in Connection with Transfers to
Non-QIB Accredited Investors . . . . . . . . . .
Exhibit E - Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S . . . . . . . . . . . .
Note: This Table of Contents shall not, for any purpose,
be deemed to be part of this Indenture.
-v-
<PAGE>
INDENTURE, dated as of October 1, 1997, between Garden State
Newspapers, Inc., a Delaware corporation (the "COMPANY"), and The Bank of New
York, a New York banking corporation, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 8 3/4%
Senior Subordinated Notes due 2009, Series A, and 8 3/4% Senior Subordinated
Notes due 2009, Series B, to be issued in exchange for the 8 3/4% Senior
Subordinated Notes due 2009, Series A, pursuant to a registration rights
agreement and, to provide therefor, the Company has duly authorized the
execution and delivery of this Indenture. All things necessary to make the
Notes, when duly issued and executed by the Company and authenticated and
delivered hereunder, the valid and binding obligations of the Company and to
make this Indenture a valid and binding agreement of the Company, have been
done.
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's
8 3/4% Senior Subordinated Notes due 2009, Series A and Series B:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" with respect to any Person, means (i) Debt of an
entity, which entity is acquired by Garden State or any of its Subsidiaries
after the date of this Indenture, (ii) Debt assumed which is secured by
assets acquired by the Company or any of its Subsidiaries, PROVIDED that the
Debt in clauses (i) and (ii) is outstanding at the time of the acquisition of
such entity or such assets, is not created in contemplation of such
acquisition and, in the case of the acquisition of an entity, is not,
directly or indirectly, recourse (including by way of set-off) to Garden
State or its Restricted Subsidiaries or any of their respective assets, other
than to the entity and its Subsidiaries so acquired and the assets of the
entity and its Subsidiaries so acquired, or (iii) Refinancings of Debt
described in clauses (i) and (ii), PROVIDED that in the case of Debt
described in clause (i), the recourse with respect to such Refinancing Debt
is limited to the same extent as the Debt so Refinanced.
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"Adjusted Consolidated Operating Cash Flow" of a Person means the
Consolidated Operating Cash Flow of such Person as determined on a
consolidated basis in accordance with GAAP, consistently applied, after
giving effect to the following: (i) if, during the period in which
Consolidated Operating Cash Flow is being calculated, such Person or any of
its Subsidiaries completed an Asset Sale, Consolidated Operating Cash Flow
for such period shall be reduced by an amount equal to the pro forma
Consolidated Operating Cash Flow (if positive) directly attributable to the
assets which are the subject of such Asset Sale for the period or increased
by an amount equal to the pro forma Consolidated Operating Cash Flow (if
negative) directly attributable thereto for such period; and (ii) if, during
the period in which Consolidated Operating Cash Flow is being calculated,
such Person or any of its Subsidiaries completes an acquisition of any Person
or business which immediately after such acquisition is a Subsidiary of such
Person or whose assets are held directly by such Person or a Subsidiary of
such Person, pro forma Consolidated Operating Cash Flow shall be computed so
as to give pro forma effect to the acquisition of such Person or business.
Any such pro forma calculation may include (a) any adjustments that would, in
the reasonable determination of the Company, set forth in an Officers'
Certificate, satisfy the requirements of Rule 11-02(a) of Regulation S-X as
if included in a registration statement filed with the SEC, and (b) any other
operating expense reductions reasonably expected to result from any
acquisition of assets, if such expected reductions are (i) set forth in
reasonable detail in an operating plan, and (ii) limited to operating
expenses specified in such plan (and, if any such reductions are set forth as
a range, the lowest amount of such range) that would otherwise have resulted
in the payment of cash within twelve months after the date of consummation of
such transaction, net of any operating expenses (other than extraordinary
items, non-recurring or temporary charges and other similar one-time
expenses) reasonably expected to be incurred to implement such plan or to
obtain goods or services (including without limitation personnel, occupancy
and newsprint expenses) in replacement of goods and services that are being
curtailed or eliminated to result in such expected reductions, and that are
to be paid in cash during such twelve-month period, and such Officers'
Certificate so states.
"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,
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whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" having meanings correlative to
the foregoing. A lender to such Person or any of its Subsidiaries shall not,
as a result of such loan and any credit or similar agreement entered into in
connection therewith, be deemed an Affiliate of such Person.
"Agent" means any Registrar, Paying Agent or Co-Registrar.
"ANI" means Affiliated Newspapers Investments, Inc., a Delaware
corporation, and its successors.
"ANI Senior Discount Debentures" means ANI's 13 1/4% Senior
Discount Debentures due 2006.
"Asset Sale" means the sale, transfer, lease, assignment,
conveyance or other disposition (other than sales of inventory in the
ordinary course of business consistent with past practice) by Garden State or
its Restricted Subsidiaries of any assets of Garden State other than capital
stock of an Unrestricted Subsidiary or of its Restricted Subsidiaries other
than capital stock of an Unrestricted Subsidiary, whether owned or
outstanding on the date of this Indenture or acquired thereafter, in one or
more related transactions, in each case having an aggregate fair market value
in excess of $5.0 million. Asset Sale shall include the disposition of (i)
any capital stock of any Restricted Subsidiary of Garden State or (ii) all or
substantially all of the properties or assets relating to any newspaper or
groups of newspapers owned by Garden State or any of its Restricted
Subsidiaries, in either case having an aggregate fair market value in excess
of $5.0 million.
"Average Life" means, as of the date of any determination, with
respect to any Debt, the quotient obtained by dividing (i) the sum of the
products of (a) the number of years from the date of the transaction or event
giving rise to the need to calculate the Average Life of such Debt to the
date, or dates, of each successive scheduled principal payment of such Debt
multiplied by (b) the amount of each such principal payment by (ii) the sum
of all such principal payments.
"Bankruptcy Law" means Title 11 of the 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
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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 or other equivalent governing
body of such Person.
"Business Day" means a day that is not a Legal Holiday.
"Capitalized Lease Obligation" means any rental obligation that, in
accordance with GAAP, is required to be classified and accounted for as a
capitalized lease and the amount of Debt represented by such obligation shall
be the capitalized amount of such obligation determined in accordance with
GAAP; and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due in respect of such obligation.
"Capital Stock" of any Person means any and all shares, interests
(including partnership interests), warrants, rights, options or other
interests, participations or other equivalents of or interests in (however
designated) the equity of such Person, including common stock or preferred
stock, whether now outstanding or issued after the date of this Indenture,
but excluding any debt securities convertible into or exchangeable for such
equity.
"Cash Equivalents" means (i) readily marketable obligations of or
obligations guaranteed by the United States of America or issued by any
agency thereof and backed by the full faith and credit of the United States
of America, (ii) readily marketable direct obligations issued by any state of
the United States of America or any political subdivision having a rating in
one of the two highest rating categories obtainable from either Moody's
Investors Service, Inc. or Standard & Poor's Corporation, (iii) commercial
paper having a rating in one of the two highest rating categories of Moody's
Investors Service, Inc., or Standard & Poor's Corporation, (iv) certificates
of deposit issued by, bankers' acceptances and deposit accounts of, and time
deposits with, commercial banks of recognized standing chartered in the
United States of America with capital, surplus and undivided profits
aggregating in excess of $500.0 million, (v) agreements to sell or repurchase
securities of the kind described in clauses (i) and (ii) above, and (vi)
shares of money market funds that invest solely in Permit-
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ted Investments of the kind described in clauses (i) through (v) above.
"Change of Control" means the earlier to occur of (i) the Permitted
Holders' failure, individually or as a group, to be the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, in the aggregate, of a majority of the outstanding shares of
Common Stock or Voting Stock of Garden State, on a fully diluted basis, and
(ii) William Dean Singleton ceasing to be the chief executive officer of
Garden State and not being replaced within 90 days by a media executive of
comparable experience.
"Change of Control Date" has the meaning provided in Section 4.15.
"Change of Control Offer" has the meaning provided in Section 4.16.
"Change of Control Payment Date" has the meaning provided in
Section 4.16.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture the Commission is not existing and
performing the duties now assigned to it under the TIA, then the body
performing such duties at such time.
"Common Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
common stock, whether now outstanding or issued after the date of this
Indenture.
"Company" or "Garden State" means the party named as such in this
Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the aggregate of all cash and non-cash interest expense
(including any original issue discount attributable to the issuance of any
debt security as part of or with any other security) with respect to all
outstanding Debt of such Person and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, the interest
component of Capitalized Lease Obligations, all capitalized interest, and the
interest portion of any deferred payment obligations for such period.
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"Consolidated Net Worth" of any Person means, at any date, all
amounts that would, in conformity with GAAP, be included under shareholders'
equity on the consolidated balance sheet of such Person as at such date less
any amounts attributable to Disqualified Stock.
"Consolidated Operating Cash Flow" with respect to Garden State for
any period means (A) revenues less (B) the sum of (i) cost of sales, (ii)
management fees and (iii) selling, general and administrative expenses, in
each case, of Garden State and its Restricted Subsidiaries, for such period,
determined on a consolidated basis and in accordance with GAAP, PROVIDED
that, (x) if any such Restricted Subsidiary is not a Wholly Owned Subsidiary
of Garden State, on a fully diluted basis, revenues, cost of sales,
management fees and selling, general and administrative expenses of such
Restricted Subsidiary and its Restricted Subsidiaries shall be included only
to the extent of Garden State's common equity ownership on a fully diluted
basis therein and (y) Operating Cash Flow of any Subsidiary shall be excluded
if and to the extent that, the declaration of dividends or distribution by
that Subsidiary of such Operating Cash Flow is not, at the time, permitted
directly or indirectly, by the terms of its charter, or any agreement,
instrument, judgment, decree, order, statute, rule or government regulation
applicable to that Subsidiary.
"Cumulative Credit" means (x) Consolidated Operating Cash Flow of
Garden State and its Restricted Subsidiaries from and after the first day of
the first full fiscal quarter after the Issue Date to the end of the fiscal
quarter immediately preceding the date of the proposed Restricted Payment,
or, if such Consolidated Operating Cash Flow for such period is negative,
minus the amount by which such Consolidated Operating Cash Flow is negative
less (y) 150% of the cumulative Consolidated Interest Expense of Garden State
for such period.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Debt" of any Person means, without duplication, (i) the principal
in respect of (A) indebtedness of such Person for money borrowed (whether or
not the recourse of the lender is to the whole of the assets of such Person
or only to a portion thereof) and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable (other than those payable to government
agencies to defer the payment of workers'
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compensation liabilities, taxes, assessments or other obligations, and
provided in the ordinary course of business of such Person); (ii) all
Capitalized Lease Obligations of such Person; (iii) all obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such Person and all obligations of such
Person under any title retention agreement (but excluding trade accounts
payable and other accrued current liabilities arising in the ordinary course
of business and consistent with past practice); (iv) all obligations of such
Person for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, other than letters of credit
entered into in the ordinary course of business that either are not drawn
upon or, if and to the extent drawn upon, such drawing is reimbursed no later
than the third Business Day following receipt by such Person of a demand for
reimbursement following payment on the letter of credit); (v) the amount of
all Disqualified Stock of such Person (but excluding any accrued dividends
thereon); (vi) all obligations of the type referred to in clauses (i) through
(v) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including guarantees of such
obligations and dividends; and (vii) all obligations of the type referred to
in clauses (i) through (vi) of other Persons secured by any Lien on any
property, asset or Capital Stock of such Person (whether or not such
obligation is assumed by such Person), the amount of such obligation being
deemed to be the lesser of the value of such property or assets or the amount
of the obligation so secured.
"Declaration" has the meaning provided in Section 6.02.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Default Amount" has the meaning provided in Section 6.02.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part as Global Securities, The Depository Trust Company, New
York, New York, or any successor thereto registered as a clearing agency
under the Exchange Act or other applicable statute or regulation.
"Designated Senior Debt" means all obligations of the Company under
the Garden State Credit Facility, and any other
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Senior Debt permitted hereunder the principal amount of which is $25.0
million or more that has been designated by the Company as Designated Senior
Debt.
"Discharged" has the meaning provided in Section 8.01.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, (ii) is subject to a mandatory offer to purchase,
(iii) is convertible or exchangeable for Debt or Disqualified Stock or (iv)
is redeemable at the option of the holder thereof, in whole or in part, in
each case on or prior to the first anniversary of the stated maturity of the
Notes.
"Equity Offering" has the meaning provided in paragraph 6 of the
Notes.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.17.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Exchange Notes" means the 8 3/4% Senior Subordinated Notes due
2009, Series B, to be issued in exchange for the Initial Notes pursuant to
the Registration Rights Agreement.
"Exchange Offer" has the meaning provided in the Registration
Rights Agreement.
"Exchange Offer Registration Statement" has the meaning provided in
the Registration Rights Agreement.
"Existing Debt" means Debt of Garden State and its Restricted
Subsidiaries (other than the Garden State Credit Facility) outstanding on the
date of this Indenture.
"Fair Market Value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing
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seller and a willing and able buyer, neither of whom is under undue pressure
or compulsion to complete the transaction. Fair market value shall be
determined by the Board of Directors of the Company acting reasonably and in
good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Trustee.
"Fairness Condition" has the meaning provided in Section 4.11.
"Garden State" or the "Company" means the party named as such in
this Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.
"Garden State Credit Facility" means the Credit Agreement among
Garden State, the financial institutions named therein and The Bank of New
York, as agent thereunder, as amended, substituted, refinanced (including
successive refinancings), extended or renewed without restriction as to the
new terms contained therein, except as to the total amount outstanding
provided under Section 4.12 and as provided in Section 4.17.
"Generally Accepted Accounting Principles" or "GAAP" means
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board as they are in effect on the date of
this Indenture.
"Global Note" when used with respect to any Notes issued hereunder,
means a Note which is executed by Garden State and authenticated and
delivered by the Trustee to the Depository or pursuant to the Depository's
instructions in accordance with the provisions set forth herein, and pursuant
to the request of Garden State, which shall be registered in the name of the
Depository or its nominee and which shall represent, and shall be denominated
in an amount equal to the aggregate principal amount of, all of the
outstanding Notes or any portion thereof, in either case having the same
terms.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation, contingent or otherwise, of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or
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advance or supply funds for the purchase or payment of) such Debt or other
obligation of such other Person (whether arising by virtue of participation
arrangements, by agreement to keep well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring the
obligee of such Debt or other obligation in any other manner of the payment
thereof or to protect such obligee against loss in respect thereof (in whole
or in part), provided that the term "guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"IAI Global Note" means a permanent Global Note in registered form
representing the aggregate principal amount of Notes sold to Institutional
Accredited Investors.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Initial Notes" means the 8 3/4% Senior Subordinated Notes due 2009,
Series A, of the Company.
"Initial Purchasers means BT Alex. Brown Incorporated, Goldman,
Sachs & Co. and BNY Capital Markets, Inc.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Notes.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"Investment" means any direct or indirect advance, loan (other than
advances or loans to customers in the ordinary course of business, which are
recorded at the time made as accounts receivable on the balance sheet of the
Person making such advance or loan), guarantee or other extension of credit
or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Capital Stock, bonds,
notes, debentures or other securities issued by, any other Person.
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"Issue" means to issue, assume, Guarantee, incur or otherwise
become liable for; PROVIDED, HOWEVER, that any Debt or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary of another
Person (whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be issued by such Subsidiary at the time it becomes a Subsidiary of
such other Person.
"Issue Date" means the date on which any Note is originally issued
and with respect to any Note issued in transfer, exchange or replacement,
means the date of the original issue of the Note to which such transfer,
exchange or replacement Note relates.
"Legal Holiday" has the meaning provided in Section 11.07.
"Leverage Ratio" means, as of any date, the ratio of (A) total Debt
of Garden State and its Restricted Subsidiaries on a consolidated basis as of
such date to (B) Trailing Adjusted Consolidated Operating Cash Flow of Garden
State as of such date; PROVIDED, HOWEVER, that the Debt of any Restricted
Subsidiary (and its Restricted Subsidiaries) that is not a Wholly Owned
Subsidiary, on a fully diluted basis, of Garden State shall be included
pro-rata only to the extent of Garden State's common equity ownership
interest therein, on a fully diluted basis.
"Lien" means any lien, mortgage, charge, pledge, security interest,
or other encumbrance of any kind (including any conditional sale or other
title retention agreement and any lease in the nature thereof), whether or
not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statute) of any
jurisdiction.)
"Management Agreement" means the Management Agreement, dated July
1, 1988, between ANI and MediaNews, as the same may be amended, modified or
supplemented in accordance with its terms.
"Maturity Date" means October 1, 2009.
"MediaNews" or "MNG", means MediaNews Group, Inc. a Delaware
corporation, and its successors.
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"MediaNews Technologies" means MediaNews Technologies or MNT, a
division of MNG which operates and manages ANI's and its Affiliates'
electronic media business.
"Net Cash Proceeds" from an Asset Sale or issuance of Capital Stock
means cash payments received by way of conversion into cash or Cash
Equivalents of any note or other obligation received in connection with such
Asset Sale or issuance or by way of deferred payment of principal pursuant
to, or liquidation of, any note or installment receivable or otherwise (but
only as and when received therefrom), in each case net of all legal, title
and recording tax expenses, commissions and other fees and expenses incurred,
and all income taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Sale or issuance of Capital Stock.
"Non-U.S. Person" has the meaning assigned to such term in
Regulation S.
"Notes" means, collectively, the Initial Notes, the Private
Exchange Notes, if any, treated as a single class of securities under this
Indenture.
"Obligations" means all obligations for principal, premium,
interest (including post-petition interest), penalties, fees,
indemnification, reimbursements, damages and other liabilities payable under
the documentation governing any Debt.
"Offering Memorandum" means the Offering Memorandum dated October
1, 1997 regarding the Notes and any supplement thereto.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer, the Treasurer, the Controller, or the Secretary of
such Person.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the President or any Vice
President and the Chief Financial Officer or any Treasurer of such Person
that shall comply with applicable provisions of this Indenture.
"144A Global Note" means a permanent Global Note in registered form
representing the aggregate principal amount of Notes sold in reliance on Rule
144A under the Securities Act.
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"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee complying with the requirements of Sections
11.04 and 11.05, as they relate to the giving of an Opinion of Counsel.
Unless otherwise required by the TIA, the legal counsel may be an employee of
or counsel to Garden State or the Trustee.
"Participant" has the meaning provided in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03, except
that, for the purposes of Articles Three and Eight and Sections 4.16 and
4.17, the Paying Agent shall not be Garden State or a Subsidiary of Garden
State.
"Permitted Business" means the (i) ownership and operation of
regional, local and other newspapers, and (ii) other businesses directly
related to the Company's newspaper operations, including broadcast,
electronic media, and other businesses deriving a majority of its revenue
from advertising.
"Permitted Holders" means each of William Dean Singleton and
Richard B. Scudder, members of their families and trusts for the benefit of
such Persons.
"Permitted Intercompany Payments" means (i) payments by the Company
to MNG in respect of management fees for services actually rendered to Garden
State and determined in a manner consistent with that described in the
Offering Memorandum not to exceed $3.5 million for fiscal 1998, and
increasing 10% per annum in each fiscal year thereafter and (ii) payment by
the Company to MNT in respect of its allocated share of electronic media
related expenses.
"Permitted Investments" means (i) Investments by a Restricted
Subsidiary of Garden State in Garden State or a Restricted Subsidiary of
Garden State or Investments by Garden State in a Restricted Subsidiary of
Garden State, (ii) Investments in cash or Cash Equivalents, (iii) Investments
by Garden State or by any of its Restricted Subsidiaries in a Permitted
Business, including, but not limited to, joint ventures or other business
alliances in the ordinary course of business, provided that the other
investors in such joint venture or business alliance are not Affiliates of
ANI, (iv) Investments of Garden State and its Restricted Subsidiaries arising
as a result of any Asset Sale otherwise complying with the terms of this
Indenture, and (v) Other Investments (other than Investments specified in
clauses (i) through
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(iv) above) in an aggregate amount, as valued at the time each such
Investment is made, not exceeding $25.0 million.
"Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint-stock company,
trust, unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Physical Notes" shall have the meaning provided in Section 2.01.
"Post-Petition Interest" means any interest accruing subsequent to
the filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law.
"Preferred Stock," as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution
of assets upon any voluntary or involuntary liquidation or dissolution of
such corporation, over shares of Capital Stock of any other class of such
corporation. Preferred Stock of any Person shall include Disqualified Stock
of such Person.
"principal" of any Debt (including the Notes) means the principal
amount of such Debt plus the premium, if any, on such Debt.
"Private Exchange Notes" shall have the meaning provided in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth on
the Initial Notes in the form set forth on EXHIBIT A.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in
accordance with Article 11 of Regulation S-X under the Securities Act as
interpreted by the Company in consultation with its independent certified
public accountants.
"Qualified Capital Stock" shall mean any Capital Stock which is not
Disqualified Stock.
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"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Redemption Date" when used with respect to any Note to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Notes.
"Redemption Price" when used with respect to any Note to be
redeemed, means the price fixed for such redemption pursuant to this
Indenture and the Notes.
"Refinance" means, in respect of any Debt, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue Debt in
exchange or replacement for, such Debt. "Refinanced" and "Refinancing" shall
have correlative meanings.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the exchange and registration
rights agreement dated October 1, 1997 between Garden State and the Initial
Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" means a permanent Global Note in
registered form representing the aggregate principal amount of Notes sold in
reliance on Regulation S under the Securities Act.
"Representative" means the indenture trustee or other trustee,
agent or representative in respect of any Designated Senior Debt; PROVIDED
that if, and for so long as, any Designated Senior Debt lacks such a
representative, then the Representative for such Designated Senior Debt shall
at all times constitute the holders of a majority in outstanding principal
amount of such Designated Senior Debt in respect of any Designated Senior
Debt.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Note" means a Note that constitutes a "Restricted
Security" within the meaning of Rule 144(a)(3) under the Securities Act;
PROVIDED, HOWEVER, that the Trustee shall be entitled to request and
conclusively rely on an Opin-
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ion of Counsel with respect to whether any Note constitutes a Restricted Note.
"Restricted Payment" means (i) any dividend or distribution on or
in respect of any shares of Capital Stock of Garden State or any of its
Restricted Subsidiaries or to the direct or indirect holders (in their
capacities as such) of Capital Stock of Garden State or any of its Restricted
Subsidiaries; (ii) the redemption, repurchase, retirement or other
acquisition for value of any Capital Stock of Garden State or any of its
Restricted Subsidiaries; (iii) any designation of a Restricted Subsidiary as
an Unrestricted Subsidiary on the basis of the Investment by the Company
therein, (iv) any Restricted Investment by Garden State or any Restricted
Subsidiary of Garden State, PROVIDED that Restricted Payments shall not
include (a) any dividend or distribution declared or paid by any Restricted
Subsidiary of Garden State to Garden State or any of its Restricted
Subsidiaries, or (b) the redemption, purchase, retirement or other
acquisition for value by Garden State or any of its Restricted Subsidiaries
of any Capital Stock of Garden State or any of its Restricted Subsidiaries
held by Garden State or its Restricted Subsidiaries. For purposes of
determining the amount expended for Restricted Payments, cash distributed or
invested shall be valued at the face amount thereof and property other than
cash shall be valued at its fair market value.
"Restricted Subsidiary" means a Subsidiary of the Company other
than an Unrestricted Subsidiary and includes all of the Subsidiaries of the
Company existing as of the Issue Date.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Senior Debt" means all Obligations of Garden State with respect to
any Debt, whether outstanding on the date of this Indenture or thereafter
created, incurred or assumed, unless, in the case of any particular Debt, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Debt shall not be senior in right of
payment to the Notes. Notwithstanding the foregoing, Senior Debt shall not
include: (i) any Debt of Garden State to any Subsidiary of Garden State; (ii)
any Debt to, or guaranteed on behalf of, any Affiliate, director, officer or
employee of Garden State or any Restricted Subsidiary (including, without
limitation, amounts owed for compensation);
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(iii) Debt and other amounts incurred in connection with obtaining goods,
materials or services owing to trade creditors; (iv) Disqualified Stock; (v)
any liability for federal, state, local or other taxes owed or owing by
Garden State; (vi) Debt incurred in violation of the Indenture provisions set
forth under Section 4.12; and (vii) Debt which is, by its express terms,
junior in right of payment to the Notes.
"Senior Subordinated Secured Notes" means the Company's
$100,000,000 12% Senior Subordinated Secured Notes due 2004.
"Significant Subsidiary" means any Restricted Subsidiary of Garden
State which at the time of determination either (A) had assets which, as of
the date of Garden State's most recent quarterly consolidated balance sheet,
constituted at least 5% of Garden State's total assets on a consolidated
basis as of such date, in each case determined in accordance with GAAP, or
(B) had revenues for the twelve-month period ending on the date of Garden
State's most recent quarterly consolidated statement of income which
constituted at least 5% of Garden State's total revenues on a consolidated
basis for such period.
"Stated Maturity," when used with respect to any Note or any
installment of interest thereon, means the date specified in such Note as the
fixed date on which the principal of such Note or such installment of
interest is due and payable, and, when used with respect to any other Debt,
means the date specified in the instrument governing such Debt as the fixed
date on which the principal of such Debt or any installment of interest is
due and payable.
"Subsidiary" means, with respect to any Person, (i) a corporation
the majority of whose Voting Stock, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by such Person, by
one or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof or (ii) any other Person (other than a corporation) in
which such Person, one or more Subsidiaries thereof or such Person and one or
more Subsidiaries thereof, directly or indirectly, at the date of
determination thereof has at least a majority ownership interest and the
power to direct the policies, management and affairs thereof. For purposes of
this definition, any director's qualifying shares or investments by foreign
nationals mandated by applicable law shall be disregarded in determining the
ownership of a Subsidiary.
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"Survivor" has the meaning provided in Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date on which this Indenture
is qualified under the TIA, except as otherwise provided in Section 9.03.
"Trailing" means, at or in respect of any date, the twelve-month
period ending on the last day of the month immediately preceding such date
for which financial statements are available.
"Transaction" has the meaning provided in Section 4.11.
"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.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"Unrestricted Notes" means one or more Notes that do not and are
not required to bear the Private Placement Legend in the form set forth in
EXHIBIT A, including, without limitation, the Exchange Notes.
"Unrestricted Subsidiary" means any Subsidiary (including its
Subsidiaries) so designated by a Board Resolution adopted by the Board of
Directors of the Company in accordance with Section 4.14. Notwithstanding
the foregoing, an Unrestricted Subsidiary shall be deemed to be redesignated
a Restricted Subsidiary at any time if (a) the Company or any Restricted
Subsidiary (i) provides credit support for, or a guarantee of, any Debt of
such Unrestricted Subsidiary or any of its Subsidiaries (including any
undertaking, agreement or instrument evidencing such Debt) or (ii) is
directly or indirectly liable for any Debt of such Unrestricted Subsidiary or
any of its Subsidiaries, (b) a default with respect to any Debt of such
Unrestricted Subsidiary or any of its Subsidiaries (including any right which
the holders thereof may have to take enforcement action against any of them)
would permit (upon notice, lapse of time or both) any holder of any other
Debt of the Company or any Restricted Subsidiary to declare a default on such
other Debt or cause the payment thereof to be accelerated or payable prior to
its final scheduled maturity or
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(c) such Unrestricted Subsidiary or any of its Subsidiaries incurs Debt
pursuant to which the lender has recourse to any of the assets of Garden
State or any of its Restricted Subsidiaries.
"U.S. Government Obligations" means money or direct non-callable
obligations of, and obligations guaranteed by, the United States of America
for the payment of which the full faith and credit of the United States 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.
"Voting Stock" of a corporation means all classes of Capital Stock
of such corporation then outstanding and normally entitled to vote in the
election of directors.
"Wholly Owned Subsidiary" means any Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by
the applicable corporation or another Wholly Owned Subsidiary of the
applicable corporation.
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 Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
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.
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SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP as in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular; and
(5) "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.
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING.
The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of EXHIBIT A hereto. The Private Exchange
Notes and the Trustee's certificate of authentication relating thereto shall
be substantially in the form of EXHIBIT B hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company and the Trustee shall approve the form of the Notes and
any notation, legend or endorsement on them. Each Note shall be dated the
date of its authentication.
The terms and provisions contained in the Notes annexed hereto as
EXHIBITS A AND B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company, and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A, Notes offered and
sold to institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) and Notes offered and sold in
reliance on Regula-
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tion S shall be issued initially in the form of one or more Global Notes,
substantially in the form set forth in EXHIBIT A deposited with the Trustee,
as custodian for the Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in EXHIBIT C. The aggregate principal amount of the Global
Notes may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Notes issued in exchange for interests in a Global Note pursuant to
Section 2.16 may be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in EXHIBIT A (the
"PHYSICAL NOTES").
All Notes offered and sold in reliance on Regulation S shall remain
in the form of a Global Note until the consummation of the Exchange Offer
pursuant to the Registration Rights Agreement; PROVIDED, HOWEVER, that all of
the time periods specified in the Registration Rights Agreement to be
complied with by the Company have been so complied with.
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 Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note was an Officer at the
time of such execution but no longer holds that office at the time the
Trustee authenticates the Note, the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue
in an aggregate principal amount not to exceed $250,000,000, (ii) Private
Exchange Notes from time to time only in exchange for a like principal amount
of Initial Notes, (iii) Unrestricted Notes from time to time only in exchange
for (A) a like principal amount of Initial Notes or (B) a like principal
amount of Private Exchange Notes, and (iv) any addi-
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tional amounts of Notes in an aggregate principal amount not to exceed
$50,000,000, in each case upon a written order of the Company in the form of
an Officers' Certificate of the Company. Each such written order shall
specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated, whether the Notes are to be Initial Notes,
Private Exchange Notes or Unrestricted Notes and whether (subject to Section
2.01) the Notes are to be issued as Physical Notes or Global Notes and such
other information as the Trustee may reasonably request. The aggregate
principal amount of Notes outstanding at any time may not exceed
$300,000,000, except as provided in Sections 2.07 and 2.08.
Notwithstanding the foregoing, all Notes issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Notes may vote or consent) as one class and no series of Notes will have
the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise
provided in the appointment, an authenticating agent may authenticate 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 the Company
and Affiliates of the Company.
The 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.
The Company shall maintain an office or agency, where (a) Notes may
be presented or surrendered for registration of transfer or for exchange
("Registrar"), (b) Notes may be presented or surrendered for payment ("Paying
Agent") and (c) notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company may also from time to
time designate one or more other offices or agencies where the 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 the Company of its obligation to
maintain an office or agency, for such purposes. The Company may act as its
own Registrar or Paying Agent except that for the purposes of Articles Three
and Eight and Sections
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4.15 and 4.16 neither the Company, any Subsidiary of the Company nor any of
their Affiliates shall act as Paying Agent. The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company, upon
notice to the Trustee, may have one or more co-Registrars and one or more
additional paying agents reasonably acceptable to the Trustee. The term
"Paying Agent" includes any additional paying agent. The Company initially
appoints the Trustee as Registrar and Paying Agent until such time as the
Trustee has resigned or a successor has been appointed.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee, in advance, of the name and address of any such Agent.
If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such.
SECTION 2.04. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company 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 the Holders or the Trustee all assets held by the Paying Agent for
the payment of principal of, or interest on, the Notes (whether such assets
have been distributed to it by the Company or any other obligor on the
Securities), and shall notify the Trustee of any Default by the Company (or
any other obligor on the Securities) in making any such payment. If the
Company or a Subsidiary of the Company acts as Paying Agent, it shall
segregate such assets and hold them as a separate trust fund. The Company 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 the Company to
the Paying Agent, the Paying Agent shall have no further liability for such
assets.
SECTION 2.05. NOTEHOLDER 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 the Holders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee before
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each Record Date and at such other times as the Trustee may request in
writing a list as of such date and in such form as the Trustee may reasonably
require of the names and addresses of the Holders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar or a co-Registrar with a
request to register the transfer of such Notes or to exchange such Notes for
an equal principal amount of Notes of other authorized denominations, the
Registrar or co-Registrar shall register the transfer or make the exchange as
requested if its requirements for such transaction are met; PROVIDED,
HOWEVER, that the Notes surrendered for transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Company 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, the Company shall execute and the
Trustee shall authenticate Notes at the Registrar's or co-Registrar's
request. No service charge shall be made for any registration of transfer or
exchange, but the Company 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,
3.06, 4.16, 4.17 or 9.05). The Registrar or co-Registrar shall not be
required to register the transfer of or exchange of any Note (i) during a
period beginning at the opening of business 15 days before the mailing of a
notice of redemption of Notes and ending at the close of business on the day
of such mailing and (ii) selected for redemption in whole or in part pursuant
to Article Three, except the unredeemed portion of any Note being redeemed in
part.
SECTION 2.07. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder
of a Note claims that the Note has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Company, such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of both the Company and the Trustee, to protect
the Company, the Trustee or any Agent from any loss which any of them may
suffer if a Note is replaced. The Company may charge such Holder for its
reasonable, out-of-
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pocket expenses in replacing a Note, including reasonable fees and expenses
of counsel. Every replacement Note shall constitute an additional obligation
of the Company.
SECTION 2.08. OUTSTANDING NOTES.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to
it for cancellation and those described in this Section as not outstanding.
A Note does not cease to be outstanding because the Company or any of its
Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note
is held by a BONA FIDE purchaser. A mutilated Note ceases to be outstanding
upon surrender of such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent
(other than the Company or a Subsidiary of the Company) holds U.S. Legal
Tender or U.S. Government Obligations sufficient to pay all of the principal
and interest due on the Notes payable on that date, then on and after that
date such Notes cease to be outstanding and interest on them ceases to
accrue; PROVIDED, HOWEVER, that to the extent the Trustee is enjoined from
making payments to the Holders, interest will continue to accrue until such
time as the Trustee is not so enjoined.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver, consent or notice, Notes
owned by the Company or an Affiliate (other than (i) any Affiliate who is an
Affiliate solely on account of his or its ownership of securities of the
Company, membership on the Board of Directors of the Company or employment by
the Company or any Affiliate of the Company, and (ii) any other Affiliate who
is an Affiliate solely on account of his or its relationship with any Person
described in clause (i) above, except in any case to the extent such Person
is an affiliate as defined in Section 316(a) of the TIA) shall be considered
as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent,
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only Notes which the Trustee actually knows are so owned shall be so
considered.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon receipt of a
written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be
authenticated. Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate upon receipt of a
written order of the Company pursuant to Section 2.02 definitive Notes in
exchange for temporary Notes.
2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any 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 the Company or a Subsidiary of the Company), and no one
else, shall cancel and, at the written direction of the Company, shall return
all Notes surrendered for transfer, exchange, payment or cancellation to the
Company. Subject to Section 2.07, the Company may not issue new Notes to
replace Notes that it has paid or delivered to the Trustee for cancellation.
If the Company shall acquire any of the Notes, such acquisition shall not
operate as a redemption or satisfaction of the Debt represented by such 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 the Company defaults in a payment of interest on the 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 the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is
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not a Business Day. At least 15 days before the subsequent special record
date, the Company 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.
The Company in issuing the Notes may use a "CUSIP" number, and if
so, 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 Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes.
SECTION 2.14. DEPOSIT OF MONEYS.
Prior to 11:00 a.m. New York City time on each Interest Payment
Date, Maturity Date, Redemption Date, or Change of Control Date the Company
shall have deposited with the Paying Agent in immediately available funds
money sufficient to make cash payments, if any, due on such Interest Payment
Date, Maturity Date, Redemption Date, or Change of Control Date as the case
may be, in a timely manner that permits the Paying Agent to remit payment to
the Holders on such Interest Payment Date, Maturity Date, Redemption Date, or
Change of Control Date as the case may be.
SECTION 2.15. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) The Global Notes initially shall (i) be registered in the name
of the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth
in EXHIBIT C.
Members of, or participants in, the Depository ("Participants")
shall have no rights under this Indenture with respect to any Global Note
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Note, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
the Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee
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from giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and
Participants, the operation of customary practices governing the exercise of
the rights of a Holder of any Note.
(b) Transfers of Global Notes shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Notes may be
transferred or exchanged for Physical Notes in accordance with the rules and
procedures of the Depository and the provisions of Section 2.16. In
addition, Physical Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Notes if (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for any Global Note and a successor Depository is not appointed by the
Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of
the beneficial interest in a Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Note in an amount equal to the principal
amount of the beneficial interest in the Global Note to be transferred, and
the Company shall execute and the Trustee shall authenticate and deliver, one
or more Physical Notes of authorized denominations in an aggregate principal
amount equal to the principal amount of the beneficial interest in the Global
Note so transferred.
(d) In connection with the transfer of a Global Note as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
such Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute and the Trustee shall upon
written instructions from the Company authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in such Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Note delivered in
exchange for an interest in a Global Note pursuant to paragraph (b) or (c) of
this Section 2.15 shall, except as
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otherwise provided by Section 2.16, bear the Private Placement Legend.
(f) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
SECTION 2.16. SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS AND
NON-U.S. PERSONS. The following additional provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Note to
any Institutional Accredited Investor which is not a QIB or to any Non-U.S.
Person:
(i) the Registrar shall register the transfer of any Restricted
Note, whether or not such Note bears the Private Placement Legend, if (x)
the requested transfer is after the second anniversary of the Issue Date;
PROVIDED, HOWEVER, that neither the Company nor any Affiliate of the
Company has held any beneficial interest in such note, or portion thereof,
at any time on or prior to the second anniversary of the Issue Date or
(y) (1) in the case of a transfer to an Institutional Accredited Investor
which is not a QIB (excluding Non-U.S. Persons), the proposed transferee
has delivered to the Registrar a certificate substantially in the form of
EXHIBIT D hereto and any legal opinions and certifications required
thereby and (2) in the case of a transfer to a Non-U.S. Person, the
proposed transferor has delivered to the Registrar a certificate
substantially in the form of EXHIBIT E hereto;
(ii) if the proposed transferee is a Participant and the Notes to be
transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the IAI Global Note or Regulation S Global
Note, as the case may be, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the Registrar's
procedures and (y) the appropriate certificate, if any, required by clause
(y) of paragraph (i) above, the Registrar shall register the transfer and
reflect on its books and records the date and an increase in the principal
amount of the IAI Global Note or Regulation S Global Note, as the case may
be, in an amount equal to the principal amount of Physical Notes to be
transferred,
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and the Trustee shall cancel the Physical Notes so transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in a Global Note, upon receipt by the Registrar of
(x) written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, the Registrar shall
register the transfer and reflect on its books and records the date and
(A) a decrease in the principal amount of the Global Note from which such
interests are to be transferred in an amount equal to the principal amount
of the Notes to be transferred and (B) an increase in the principal amount
of the IAI Global Note or the Regulation S Global Note, as the case may
be, in an amount equal to the principal amount of the Notes to be
transferred.
(b) TRANSFERS TO QIBS. The following provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Note to
a QIB:
(i) the Registrar shall register the transfer of any Restricted
Note, whether or not such Note bears the Private Placement Legend, if (x)
the requested transfer is after the second anniversary of the Issue Date;
PROVIDED, HOWEVER, that neither the Company nor any Affiliate of the
Company has held any beneficial interest in such Note, or portion thereof,
at any time on or prior to the second anniversary of the Issue Date or
(y) such transfer is being made by a proposed transferor who has checked
the box provided for on the form of Note stating, or has otherwise advised
the Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration under the Securities Act provided by Rule 144A;
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(ii) if the proposed transferee is a Participant and the Notes to be
transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the 144A Global Note, upon receipt by the
Registrar of written instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall register
the transfer and reflect on its books and records the date and an
increase in the principal amount of the 144A Global Note in an amount
equal to the principal amount of Physical Notes to be transferred, and
the Trustee shall cancel the Physical Note so transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in the IAI Global Note or the Regulation S Global
Note, upon receipt by the Registrar of written instructions given in
accordance with the Depository's and the Registrar's procedures, the
Registrar shall register the transfer and reflect on its books and records
the date and (A) a decrease in the principal amount of the IAI Global Note
or the Regulation S Global Note, as the case may be, in an amount equal to
the principal amount of the Notes to be transferred and (B) an increase in
the principal amount of the 144A Global Note in an amount equal to the
principal amount of the Notes to be transferred.
(c) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provisions of this Indenture, a Global Note may not
be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(d) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
or co-Registrar shall deliver Notes that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar or co-Registrar shall deliver only
Notes that bear the Private Placement Legend unless (i) there is delivered to
the Trustee an Opinion of Counsel reasonably satisfactory to the Company and
the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with
the provisions of the Securities Act or (ii) such Note has been sold pursuant
to an effective registration statement under the Securities Act.
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(e) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Note only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under
this Indenture or under applicable law with respect to any transfer of any
interest in any Note (including any transfers between or among Depositary
Participants or beneficial owners of interests in any Global Note) other than
to require delivery of such certificates and other documentation or evidence
as are expressly required by the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
ARTICLE THREE
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Paragraph 5 of
the Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed and
whether it wants the Trustee to give notice of redemption to the Holders (at
the Company's expense) at least 45 days (unless a shorter notice shall be
satisfactory to the Trustee) but not more than 60 days before the Redemption
Date. Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
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SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If fewer than all of the Notes are to be redeemed, the Trustee
shall select the Notes to be redeemed in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes being
redeemed are listed, or, if the Notes are not listed on a national securities
exchange, by lot or on a PRO RATA basis or by such other method as the
Trustee shall deem appropriate.
The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
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 Notes that have denominations larger than
$1,000. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail or cause to be mailed a notice of redemption by
first class mail to each Holder whose Notes are to be redeemed, with a copy
to the Trustee. At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense. Each
notice for redemption shall identify the Notes to be redeemed (including
CUSIP number) and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(5) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the
Holders of such Notes is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Notes redeemed;
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(6) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or Notes
in the aggregate principal amount equal to the unredeemed portion
thereof will be issued; and
(7) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be
outstanding after such partial redemption.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03, 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 Notes called for redemption shall be paid at the Redemption Price.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before 11:00 a.m. (New York City time) on the Redemption
Date, the Company shall deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the Redemption Price of all Notes to be redeemed on that
date (other than Notes or portions thereof called for redemption on that date
which have been delivered by the Company to the Trustee for cancellation).
The Paying Agent shall promptly return to the Company any U.S. Legal Tender
so deposited which is not required for that purpose, except with respect to
monies owed as obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such Redemption Price, interest on the
Notes to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Notes are presented for payment.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is to be redeemed in part, the
Trustee shall authenticate for the Holder a new Note or Notes equal in
principal amount to the unredeemed portion of the Note surrendered.
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ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes. An installment of
principal of or interest on the Notes shall be considered paid on the date it
is due if the Trustee or Paying Agent (other than the Company or a Subsidiary
of the Company) holds on that date U.S. Legal Tender designated for and
sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate set forth in the second paragraph of
Paragraph 1 of the Notes.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law,
deduct or withhold income or other similar taxes imposed by the United States
of America from principal or interest payments hereunder.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain the office or agency required under
Section 2.03. The Company 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 the Company 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 11.02.
SECTION 4.03. CORPORATE EXISTENCE.
Except as otherwise permitted by Article Five, Garden State shall
do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate or other existence and the corporate or other
existence of each of its Subsidiaries in accordance with the respective
organizational documents of each such Subsidiary and the material rights
(charter and statutory) and franchises of Garden State and each such
Subsidiary; PROVIDED, HOWEVER, that Garden State shall not be required to
preserve, with respect to itself, any material
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right or franchise and, with respect to any of its Subsidiaries, any such
existence, material right or franchise, if the Board of Directors or other
equivalent governing body of Garden State or such Subsidiary, as the case may
be, shall determine that the preservation thereof is no longer desirable in
the conduct of the business of Garden State or any such Subsidiary.
SECTION 4.04. PAYMENT OF TAXES AND OTHER CLAIMS.
Garden State shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon it or any
of its Subsidiaries or properties of it or any of its Subsidiaries and (ii)
all lawful claims for labor, materials and supplies that, if unpaid, might by
law become a Lien upon the property of it or any of its Subsidiaries;
PROVIDED, HOWEVER, that Garden State 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 generally accepted
accounting principles then in effect 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 Garden State and its Subsidiaries, taken as a whole.
SECTION 4.05. MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) Garden State shall, and shall cause each of its Subsidiaries
to, maintain its properties in good working order and condition (subject to
ordinary wear and tear) and make all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto and actively
conduct and carry on its business; PROVIDED, HOWEVER, that nothing in this
Section shall prevent Garden State or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its properties, if such
discontinuance is, in the judgment of Garden State or the Subsidiary, as the
case may be, desirable in the conduct of their respective businesses and is
not disadvantageous in any material respect to the Holders.
(b) Garden State 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 the
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Company are adequate and appropriate for the conduct of the business of
Garden State and such 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 customary, in the reasonable, good faith opinion of
the Company, for companies similarly situated in the industry, unless the
failure to provide such insurance (together with all other such failures)
would not have a material adverse effect on the financial condition or
results of operations of Garden State and its Subsidiaries, taken as a whole.
SECTION 4.06. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) Garden State shall deliver to the Trustee, within 120 days
after the end of the Company's fiscal year, an Officers' Certificate stating
that a review of its activities and the activities of its Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether it 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
the Company during such preceding fiscal year has kept, observed, performed
and fulfilled each and every such covenant and no Default or Event of Default
occurred during such year and at the date of such certificate there is no
Default or Event of Default that has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate shall
describe the Default or Event of Default and its status with particularity.
The Officers' Certificate shall also notify the Trustee should the Company
elect to change the manner in which it fixes its fiscal year end. For
purposes of this Section 4.06(a), one of the Officers signing such Officers'
Certificate shall be the Chief Financial Officer, the Chief Executive Officer
or the President of the Company.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied by a
written report of the Company's independent public accountants (who shall be
a firm of established national reputation reasonably satisfactory to the
Trustee) that in conducting their audit of such financial statements (which
is directed primarily to the expression of their opinion on such financial
statements taken as a whole and not toward obtaining knowledge of
non-compliance with credit
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agreements) nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article Four, Five or
Six of this Indenture or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) (i) If any Default or Event of Default has occurred and is
continuing, (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed default under this Indenture or the Notes or (iii) if
the trustee for or the holder of any other evidence of Debt of the Company or
any Subsidiary seeks to exercise any remedy with respect to a claimed
default, the Company shall deliver to the Trustee by registered or certified
mail or by facsimile transmission followed by hard copy by registered or
certified mail an Officers' Certificate specifying such event, notice or
other action and what action the Company has taken or proposes to take with
respect thereto within five Business Days of its occurrence.
SECTION 4.07. COMPLIANCE WITH LAWS.
Garden State shall comply, and shall cause each of its 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 could not in
the aggregate be reasonably expected to have a material adverse effect on the
financial condition or results of operations of Garden State and its
Subsidiaries taken as a whole.
SECTION 4.08. COMMISSION REPORTS.
(a) The Company shall file with the Trustee and mail to each
holder of Notes, within 15 days after filing with the Commission, copies of
the annual, quarterly and current reports (or copies of such portions of any
of the foregoing as the Commission may by rules and regulations prescribe)
which it is required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act.
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(b) Notwithstanding that the Company is not required by law to
remain subject to the periodic reporting requirements of the Exchange Act, it
will nonetheless continue to file with the Commission and deliver to the
Trustee, and to each holder of Notes such annual, quarterly and current
reports which are specified in Section 13 or 15(d) of the Exchange Act.
(c) In addition, the Company shall, at its cost, deliver to each
holder of the Notes quarterly and annual reports substantially equivalent to
those which would be required under the Exchange Act.
(d) Delivery of such reports, information and documents to the
Trustee pursuant to this Section 4.08 is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).
SECTION 4.09. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company 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 the Company from paying
all or any portion of the principal of or interest on the Notes 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) the Company 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 4.10. LIMITATION ON RESTRICTED PAYMENTS.
Garden State will not, and will not permit any of its Restricted
Subsidiaries to, make, directly or indirectly, any Restricted Payment;
PROVIDED, HOWEVER, that Garden State and its Restricted Subsidiaries may make
Restricted Payments so long as at the time of the making of such Restricted
Payment and after giving effect thereto:
(a) no Default or Event of Default shall have occurred or be
continuing as a consequence thereof;
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(b) immediately after giving effect to such Restricted Payment,
Garden State would have been permitted to incur $1.00 of additional Debt
pursuant to the terms of the first paragraph under Section 4.12 hereof; and
(c) the aggregate amount expended by Garden State and its Restricted
Subsidiaries in connection with all Restricted Payments made subsequent to
the Issue Date shall not exceed the sum of (i) Garden State's Cumulative
Credit (or, in the event such aggregate Cumulative Credit shall be a
deficit, minus 100% of such deficit) for the period (taken as one
accounting period) from the Issue Date; (ii) 100% of the Net Cash Proceeds
received by Garden State from any Person (other than a Subsidiary of Garden
State) from the issuance and sale subsequent to the Issue Date of Qualified
Capital Stock of Garden State (excluding (A) Qualified Capital Stock made
as a distribution on any Capital Stock or as interest on any Debt and (B)
any such Net Cash Proceeds from issuances and sales of Qualified Capital
Stock, where the purchase is financed directly or indirectly using funds
borrowed from Garden State or any Subsidiary of Garden State); (iii) 100%
of the Net Cash Proceeds received by Garden State from the exercise of
options or warrants on Qualified Capital Stock of Garden State since the
Issue Date (other than from a Subsidiary of Garden State); (iv) 100% of the
Net Cash Proceeds received by Garden State from the conversion into
Qualified Capital Stock of convertible Debt or convertible Preferred Stock
issued and sold since the Issue Date (other than from a Subsidiary of
Garden State); (v) 100% of the aggregate net proceeds of any (a) sale or
other disposition of Restricted Investments (which Investment was made
after the Issue Date) made by the Company or a Restricted Subsidiary of the
Company, (b) dividends, whether liquidating or otherwise, from, or the sale
of capital stock of, an Unrestricted Subsidiary, or (c) dividends, whether
liquidating or otherwise, from Restricted Investments; and (vi) $40.0
million.
Notwithstanding the foregoing, this restriction will not prevent
(A) the payment of any dividend within 60 days after the date of declaration if
the dividend would have been permitted on the date of declaration; (B) so long
as no Default or Event of Default shall have occurred or be continuing or shall
occur as a consequence thereof, the acquisition of Capital Stock of Garden State
which is funded either by the exchange of shares of Qualified Capital Stock of
Garden State or from the Net Cash Proceeds of the substantially concurrent sale
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for cash of shares of Qualified Capital Stock of Garden State (other than to a
Subsidiary of Garden State) which amount shall not then be included in
(c)(ii) of the immediately preceding paragraph; (C) so long as no Default or
Event of Default shall have occurred or be continuing or shall occur as a
consequence thereof, the purchase for value of shares of Capital Stock or
warrants, options or other rights to acquire Capital Stock held by directors,
officers of employees of Garden State upon death, disability, retirement or
termination of employment in an aggregate amount not to exceed $3.0 million in
any twelve-month period; and (D) so long as no Default or Event of Default shall
have occurred or be continuing or shall occur as a consequence thereof, and
immediately after giving effect to such Restricted Payment, Garden State would
have been permitted to incur at least $1.00 of additional Debt pursuant to the
terms of the first paragraph under Section 4.12, the redemption, purchase or
retirement by Garden State of the ANI Senior Discount Debentures or the payment
of dividends to ANI in an amount sufficient to allow ANI to redeem, repurchase,
or retire the ANI Senior Discount Debentures, PROVIDED, in each such case, the
proceeds are forthwith so used.
SECTION 4.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
Garden State will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (or series of related transactions) (each a "Transaction") with any
Affiliate of Garden State or any Unrestricted Subsidiary of Garden State,
including, without limitation, any sale, purchase, lease or loan or any other
direct or indirect payment, transfer or other disposition of assets, property or
services, unless (a) such Transaction is on terms no less favorable to Garden
State or such Restricted Subsidiary, as the case may be, than those that could
be obtained in a comparable arm's-length transaction with an independent third
party (the "Fairness Condition") and (b) prior to effecting such Transaction,
Garden State shall deliver to the Trustee (i) with respect to any Transaction
involving aggregate consideration in excess of $1.0 million, an officers'
certificate certifying that a majority of the disinterested members of the Board
of Directors of Garden State has approved such Transaction and has determined
that the terms of such Transaction satisfy the Fairness Condition and (ii) in
addition, with respect to any Transaction involving (x) aggregate consideration
in excess of $1.0 million in which there are no disinterested directors or (y)
aggregate consideration in excess of $10.0 million, a written opinion from a
nationally recognized investment banking firm stating that the terms of such
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Transaction satisfy the Fairness Condition or are fair to Garden State or such
Restricted Subsidiary from a financial point of view. Clause (b)(ii)(y) shall
not apply to purchases of newsprint in the ordinary course of business by Garden
State and its Restricted Subsidiaries from Affiliates of Garden State or of its
Restricted Subsidiaries. Notwithstanding the foregoing, this provision will not
apply to (A) any Transaction between Garden State and a Restricted Subsidiary of
Garden State, or between Restricted Subsidiaries of Garden State (provided that
in the case of any Restricted Subsidiary that is not a Wholly Owned Subsidiary,
no affiliate of Garden State is a direct or indirect investor in such Subsidiary
other than through Garden State), and any transaction, in the ordinary course of
business, between Garden State and its Restricted Subsidiaries, on the one hand,
and Denver Newspapers or its wholly owned Subsidiaries (as long as Denver
Newspapers is a Subsidiary of ANI), on the other hand, (B) the making of
Permitted Investments, (C) the making of Restricted Payments in accordance with
Section 4.10, and (D) the making of Permitted Intercompany Payments. In
connection with this covenant, any determination regarding whether a director is
"disinterested" will be made on the basis of whether such director has, among
other things, a personal stake in the business or transactions requiring any
such determination to be made.
SECTION 4.12. LIMITATION ON ADDITIONAL DEBT.
Garden State and its Restricted Subsidiaries may not, directly or
indirectly, Issue (including through any merger or consolidation to which Garden
State or such Restricted Subsidiary is a party) any Debt, except that Garden
State and/or its Restricted Subsidiaries may Issue Debt if (i) no Default or
Event of Default shall have occurred and be continuing at such time or shall
occur as a result of such issuance and (ii) at the time such Debt is so Issued
and after giving effect thereto and to the application of the net proceeds
therefrom, the Leverage Ratio of Garden State shall not be greater than 6.75 to
1, if such Debt is Issued on or prior to December 31, 1999, 6.25 to 1, if such
Debt is Issued after December 31, 1999, but on or prior to December 31, 2001,
and 6.0 to 1 if such Debt is Issued thereafter.
The limitations set forth in the immediately preceding paragraph will
not apply to: (i) the Notes; (ii) Existing Debt; (iii) Debt under the Garden
State Credit Facility, PROVIDED that the aggregate amount of such Debt does not,
at any time, exceed $350.0 million, less any prepayments or scheduled payments
actually made thereunder (to the extent, in the case
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of prepayments on revolving credit indebtedness, that the corresponding
commitments have been permanently reduced); (iv) Debt owing from or to Garden
State and its Restricted Subsidiaries, PROVIDED that any Debt owing from
Garden State to its Restricted Subsidiaries is subordinated to the Notes; (v)
other Debt issued hereafter not to exceed in the aggregate $40 million at any
one time outstanding; (vi) Debt in respect of Capitalized Lease Obligations
not to exceed in the aggregate $25.0 million at any one time outstanding
(including those outstanding on the Issue Date); (vii) Acquired Debt; and
(viii) any extension, renewal or replacement of the Debt described in clauses
(i) and (ii) above, PROVIDED that (a) the aggregate principal amount of Debt
so issued (or, if such Debt is issued at a price less than the principal
amount thereof, the original issue price) shall not exceed the aggregate
principal amount of the Debt being extended, renewed or replaced, (b) any
Debt so issued shall not mature prior to the stated maturity of the Debt
being extended, renewed or replaced, and (c) the Debt so issued shall not
have an Average Life less than the remaining Average Life of the Debt to be
extended, renewed or replaced.
SECTION 4.13. LIMITATION ON DIVIDEND AND OTHER
PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
Garden State will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of Garden State to (i) pay dividends or make any other
distributions on its Capital Stock or pay any Debt owed to Garden State or a
Restricted Subsidiary of Garden State, (ii) make loans or advances to Garden
State or a Restricted Subsidiary of Garden State or (iii) transfer any of its
properties or assets to Garden State, except for encumbrances or restrictions
existing under or by reason of (A) applicable law or provisions in effect on the
Issue Date, (B) the Indenture, (C) agreements existing on the Issue Date,
(D) the Garden State Credit Facility, the Senior Subordinated Secured Notes or
the Notes, (E) customary non-assignment provisions of any lease governing a
leasehold interest of Garden State or a Restricted Subsidiary of Garden State or
(F) any instrument governing or evidencing Acquired Debt of a Person at the time
of such acquisition, which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person so
acquired, PROVIDED that such Debt, and such encumbrance or restriction, is not
incurred in connection with, or
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in contemplation of, such acquisition or (G) any encumbrances or restrictions
contained in any Debt governing any refinancings of the Debt described in
clause (C), PROVIDED that the encumbrances and restrictions contained in any
such refinancing agreement or amendment, supplement or other modification are
not materially less favorable to the Noteholders than encumbrances and
restrictions contained in such agreements.
SECTION 4.14. LIMITATION ON RESTRICTED AND
UNRESTRICTED SUBSIDIARIES.
The Board of Directors of the Company may, if no Default or Event of
Default shall have occurred and be continuing or would result therefrom,
designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such
designation is at that time permitted under Section 4.10. The Board of
Directors of the Company may, if no Default or Event of Default shall have
occurred and be continuing or would result therefrom, designate an Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that (i) any such
redesignation shall be deemed to be an incurrence as of the date of such
redesignation by the Company and the Restricted Subsidiaries of Debt, if any, of
such redesignated Subsidiary for purposes of Section 4.12 above; and (ii) unless
such redesignated Restricted Subsidiary shall not have any Debt outstanding
(other than Debt which would be permitted under Section 4.12), no such
designation shall be permitted if immediately after giving effect to such
redesignation and the Incurrence of any such Debt, the Company could not incur
$1.00 of additional Debt pursuant to the first paragraph of Section 4.12. Any
such designation by the Board of Directors of the Company shall be evidenced to
the Trustee by the filing with the Trustee of a certified copy of the Board
Resolution of the Company's Board of Directors giving effect to such designation
or redesignation and an Officers' Certificate certifying that such designation
or redesignation complied with the foregoing conditions and setting forth in
reasonable detail the underlying calculations.
Subsidiaries that are not designated by the Board of Directors as
Restricted or Unrestricted Subsidiaries will be deemed to be Restricted
Subsidiaries. The designation of a Restricted Subsidiary as an Unrestricted
Subsidiary shall be deemed to include a designation of all of the Subsidiaries
of such Unrestricted Subsidiary as Unrestricted Subsidiaries. As of the date of
this Indenture, there are no Unrestricted Subsidiaries.
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SECTION 4.15. LIMITATION ON SENIOR SUBORDINATED DEBT.
The Company will not, directly or indirectly, become liable,
contingently or otherwise, with respect to any Debt that is subordinated or
junior in right of payment to any Senior Debt of the Company and senior in right
of payment to the Notes.
SECTION 4.16. CHANGE OF CONTROL.
(a) In the event of a Change of Control, Garden State shall be
obligated to make an offer to repurchase all or a portion of the outstanding
Notes pursuant to the offer described in paragraph (b) below (the "Change of
Control Offer") at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
repurchase.
(b) Prior to the repurchase of the Notes, Garden State shall
(i) repay in full all Senior Debt the terms of which require repayment upon a
Change of Control or offer to repay in full all such Debt and to repay the Debt
owed to each holder of such Debt which has accepted such offer, or (ii) obtain
the requisite consents under such Senior Debt to permit the repurchase of the
Notes as provided below. Garden State shall first comply with the covenant in
the preceding sentence before it shall be required to repurchase Notes pursuant
to the provisions described in this Section 4.16. Within 10 Business Days after
the date upon which the Change of Control occurs (the "Change of Control Date")
requiring Garden State to make a Change of Control Offer pursuant to this
Section 4.16 and the conditions set forth in the preceding sentence are
satisfied, Garden State shall so notify the Trustee.
(c) The notice to the Holders shall contain all instructions and
materials necessary to enable such Holders to tender (or cause to be transferred
by book-entry) Notes pursuant to the Change of Control Offer. Within 30
Business Days following any Change of Control Date, Garden State shall send, by
first class mail, a notice to each Holder of Notes as of the Change of Control
Date, with a copy to the Trustee, which notice shall govern the terms of the
Change of Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.16 and that all Notes tendered will be accepted for payment;
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(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor later than 45
days from the date such notice is mailed, other than as may be required by
law) (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Note 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 a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day immediately prior to the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Change of Control Payment Date, a facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Notes the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased;
(7) that Holders whose Notes are purchased only in part will be
issued (by book-entry) new Notes in a principal amount equal to the
unpurchased portion of the Notes surrendered; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Notes or portions thereof tendered pursuant to the Change
of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price of all Notes so tendered and (iii) deliver
to the Trustee (or, in the case of a book-entry transfer, evidence satisfactory
to the Trustee of such Notes) Notes so accepted together with an Officers'
Certificate stating the Notes or
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portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to the Holders of Notes so accepted payment in an amount equal
to the purchase price, and the Trustee shall promptly authenticate and mail
to such Holders (or cause to be transferred by book-entry) new Notes equal in
principal amount to any unpurchased portion of the Notes surrendered. Any
Notes not so accepted shall be promptly mailed by the Company to the Holder
thereof. For purposes of this Section 4.16, the Trustee shall act as the
Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Change
of Control Offer shall be returned by the Trustee to the Company.
SECTION 4.17. LIMITATION ON SALES OF ASSETS.
Garden State and its Restricted Subsidiaries may not, directly or
indirectly, consummate any Asset Sale unless: (a) at least 85% of the
consideration therefor received by Garden State or such Restricted Subsidiary
shall be in the form of cash or Cash Equivalents, PROVIDED, that the amount of
(i) any liabilities (as shown on Garden State's or such Restricted Subsidiary's
most recent balance sheet or in the notes thereto) of Garden State or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Notes or any guarantee thereof) that are assumed by the
transferee of any such assets shall be excluded from such calculation and
(ii) any notes or other obligations received by Garden State or any such
Restricted Subsidiary from such transferee that are immediately converted by
Garden State or such Restricted Subsidiary into cash (to the extent of the cash
received) shall be deemed, to the extent of cash so received, to be cash for
purposes of this provision; (b) Garden State or such Restricted Subsidiary shall
have received consideration in such Asset Sale at least equal to the fair market
value of the assets sold in such Asset Sale (as determined in good faith by the
Board of Directors of Garden State); and (c) such Asset Sale is approved in
writing by the Board of Directors of Garden State; PROVIDED, however, that
clause (a) shall not apply to the extent an Asset Sale consists of the exchange
of one or more newspapers for another newspaper.
Garden State will, and will cause each such Restricted Subsidiary to,
commit to apply the Net Cash Proceeds from any such Asset Sale within 270 days
of receipt thereof, and will, and will cause such Restricted Subsidiary to,
apply such Net Cash Proceeds within 360 days of receipt thereof to
(i) reinvestment by Garden State or such Restricted Subsidiary
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in property or assets to be employed in a Permitted Business, (ii) the
permanent repayment of Debt (including premium) of Garden State or its
Restricted Subsidiaries that is held by a person other than a Restricted
Subsidiary or Affiliate of Garden State, or (iii) the repurchase of Notes
tendered as described in the immediately succeeding paragraph. Any Net Cash
Proceeds from Asset Sales that are not applied as provided in clause (i) or
(ii) of the preceding sentence shall constitute "Excess Proceeds."
In the event Garden State or any Restricted Subsidiary shall have
received any Excess Proceeds, Garden State will make an offer to all holders of
the Notes to purchase the maximum principal amount of Notes that may be
purchased out of such Excess Proceeds, at an offer price, in cash in an amount
equal to 100% of the outstanding principal amount thereof, plus the accrued and
unpaid interest thereon, if any, to the date fixed for the closing of such
offer, in accordance with the procedures set forth in this Indenture. To the
extent that the aggregate principal amount of Notes tendered pursuant to an
offer to purchase is less than the Excess Proceeds, Garden State may use such
excess for general corporate purposes. If the aggregate principal amount of
Notes surrendered by holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis.
Notwithstanding the foregoing, if after applying any Net Cash Proceeds received
from Assets Sales in accordance with clause (ii) of the immediately preceding
paragraph, Excess Proceeds are less than $10.0 million, the application of such
Excess Proceeds to repurchase the Notes may be deferred until such time as such
Excess Proceeds are at least equal to $10.0 million, at which time Garden State
or such Restricted Subsidiary shall apply all such Excess Proceeds to repurchase
the Notes.
In the event the repurchase of the Notes with Excess Proceeds
constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act
at the time it is required, Garden State will be required to comply with
Rule 14e-1 as then in effect with respect to such repurchase.
SECTION 4.18. LIMITATION ON LIENS SECURING CERTAIN DEBT.
Garden State will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens to secure
any Debt of Garden State which is PARI PASSU with or subordinate in right of
payment to the Notes, other than Liens existing on the date hereof with respect
to the Senior Subordinated Secured Notes, unless the
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Notes are secured equally and ratably with such Debt (but on a senior basis
if such other Debt is subordinate to the Notes) as long as such Debt is so
secured.
SECTION 4.19. LIMITATION ON BUSINESS.
Garden State will not and will not permit any of its Restricted
Subsidiaries to, engage in any business other than in the Permitted Business.
SECTION 4.20. INVESTMENT COMPANY ACT.
Garden State will not take any action that would require it or any of
its Restricted Subsidiaries to register as an investment company under the
Investment Company Act of 1940.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC.
(a) Garden State shall not, in a single transaction or through a
series of related transactions, consolidate with or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its assets to, another Person or adopt any plan of liquidation, unless:
(1) either Garden State shall be the survivor of such merger or
consolidation or the surviving Person (the "Survivor") is a corporation,
partnership or trust organized and existing under the laws of the United
States, any State thereof or the District of Columbia.
(2) such Survivor shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee on or prior to
the consummation of such transaction, in a form satisfactory to the
Trustee, all the obligations of Garden State under the Notes and this
Indenture;
(3) immediately after giving effect to such transaction (including
any Debt incurred or anticipated to be incurred in connection with such
transaction) on a pro forma basis as if such transaction and the incurrence
of any such Debt had occurred at the beginning of the
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four-quarter period immediately preceding such transaction, the Survivor
or Garden State, as the case may be, would have been permitted to incur
$1.00 of additional Debt in compliance with Section 4.12;
(4) immediately after giving effect to such transaction (including
any Debt incurred or anticipated to be incurred in connection with such
transaction) no Default or Event of Default shall have occurred and be
continuing;
(5) the Survivor will have Consolidated Net Worth immediately after
giving effect to the transaction (including any Debt incurred or
anticipated to be incurred in connection with such transaction), equal to
or greater than the Consolidated Net Worth of Garden State immediately
prior to the transaction; and
(6) Garden State has 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 Survivor (if other than the
Company) agrees to be bound hereby, and that all conditions precedent
herein provided relating to such transaction have been satisfied.
(b) 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 of Garden State, the Capital Stock of which constitutes all or
substantially all of the properties and assets of Garden State, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
Garden State.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any transfer of assets in
accordance with Section 5.01, the successor Person formed by such consolidation
or into which Garden State is merged or to which such transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
Garden State under this Indenture with the same effect as if such successor
Person had been named as Garden State herein. When a successor corporation
assumes all of the obligations of Garden State hereunder and under the Notes and
agrees to be bound hereby and thereby, the predecessor shall be released from
such obligations.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(1) Garden State defaults in the payment of interest on any Notes
when the same becomes due and payable and such Default continues for a
period of 30 days (whether or not such payment shall be prohibited by
Article Ten);
(2) Garden State defaults in the payment of the stated principal
amount of, or premium on, if any, any Notes when the same becomes due and
payable at maturity, upon acceleration, redemption or otherwise, or
pursuant to a Change of Control Offer or an Asset Sale (whether or not such
payment shall be prohibited by Article Ten);
(3) Garden State fails to observe or perform (a) any covenant or
agreement contained in Section 4.10, 4.12, 4.14, 4.15, 4.17, 4.18 or 5.01
of this Indenture, or (b) any other covenant or agreement contained in the
Notes or this Indenture, and, in each case, the Default continues for the
period and after the notice specified below;
(4) failure to pay at final maturity (after any stated grace period)
the principal of and interest on one or more classes of Debt of Garden
State or any of its Restricted Subsidiaries, whether such Debt is
outstanding on the Issue Date or thereafter incurred having, individually
or in the aggregate, an outstanding principal amount exceeding $10.0
million or more or any Debt having, individually or in the aggregate, an
outstanding principal amount exceeding $10.0 million is declared due and
payable prior to the stated maturity;
(5) one or more judgments in an aggregate amount in excess of $10.0
million shall have been rendered against ANI or any of its Significant
Subsidiaries and such judgments remain discharged or unstayed for a period
of 60 days after such judgment or judgments become final and nonappealable
and after notice specified below;
(6) Garden State or any Significant Subsidiary (A) admits in writing
its inability to pay its debts gen-
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erally as they become due, (B) commences a voluntary case or proceeding
under any Bankruptcy Law with respect to itself, (C) consents to the entry
of a judgment, decree or order for relief against it in an involuntary case
or proceeding under any Bankruptcy Law, (D) consents to the appointment of
a Custodian of it or for 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; and
(7) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of Garden State or any Significant Subsidiary
in an involuntary case or proceeding under any Bankruptcy Law, which shall
(A) approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of Garden State or any
Significant Subsidiary, (B) appoint a Custodian of Garden State or any
Significant Subsidiary or for substantially all of its property or (C)
order the winding-up or liquidation of its affairs; and such judgment,
decree or order shall remain unstayed and in effect for a period of 60
consecutive days.
A Default under clause (3) above (other than in the case of any
Default under Section 5.01, which Default shall be an Event 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 Garden
State, or the Holders of at least 25% in principal amount of the outstanding
Notes notify Garden State and the Trustee of the Default, and Garden State does
not cure the Default within (i) in the case of clause 3(a) above (except in the
case of Section 5.01 hereof), 30 days, and (ii) in the case of clause 3(b)
above, 45 days, in each case 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 Notes then
outstanding. A Default under clause (5) above shall be an Event of Default with
the notice specified in this paragraph but without the passage of time referred
to in this paragraph.
SECTION 6.02. ACCELERATION.
(a) If an Event of Default (other than an Event of Default specified
in Section 6.01(6) or (7) with respect to the
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Company) occurs and is continuing and has not been waived pursuant to Section
6.04, the Trustee may, by notice to Garden State, or the Holders of at least
25% in principal amount of the Notes then outstanding, by written notice to
Garden State and the Trustee, and the Trustee shall, upon the request of such
Holders, declare (a "Declaration") the aggregate principal amount of the
Notes outstanding, together with accrued but unpaid interest thereon to the
date of payment, to be due and payable (the "Default Amount") and, upon any
such declaration, the same shall become and be due and payable; PROVIDED,
HOWEVER, that in the event there shall be any amounts outstanding under the
Garden State Credit Facility, the Default Amount shall not become due and
payable until the earlier to occur of either (x) an acceleration, or a
failure to pay at final maturity, under the Garden State Credit Facility, or
(y) five Business Days after the notice has been sent to Garden State and
each of the Representatives under the Garden State Credit Facility (if it is
then outstanding) unless no Events of Default shall be then continuing; and
PROVIDED, FURTHER, HOWEVER, that the Trustee shall be under no obligation to
follow any request of any of the Holders unless such Holders shall have
offered to the Trustee, after request by the Trustee, reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
by it in compliance with such request, order or direction.
(b) If an Event of Default specified in Section 6.01(6) or (7) occurs
with respect to Garden State, the Default Amount shall IPSO FACTO become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Noteholder.
(c) Upon payment of the Default Amount all of Garden State's
obligations under the Notes and this Indenture, other than obligations under
Section 7.07, shall terminate. The Holders of a majority in principal amount of
the Notes then outstanding by notice to the Trustee may rescind a Declaration
and its consequences if (i) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction, (ii) all existing Events of
Default, other than the non-payment of the principal and interest on the Notes
which have become due solely by such declaration of acceleration, have been
cured or waived, (iii) 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,
(iv) Garden State has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and ad-
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vances and (v) in the event of the cure or waiver of a Default or Event of
Default of the type described in Section 6.01(4), the Trustee shall have
received an Officers' Certificate and an opinion of Counsel that such Default
has been cured or waived. No such rescission shall affect any subsequent
default or impair any right consequent thereto.
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 Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder 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 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 Note as specified in clauses (1)
and (2) of Section 6.01.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the outstanding 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
including, without limitation, any remedies provided for in Section 6.03.
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 Noteholder, 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 Noteholder may not pursue any remedy with respect to this Indenture
or the Notes unless:
(1) the Holder gives to the Trustee notice of a continuing Event of
Default;
(2) Holders of at least 25% in principal amount of the outstanding
Notes make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee reasonable indemnity against
any loss, liability or expense to be incurred in compliance with such
request;
(4) the Trustee does not comply with the request within 45 days after
receipt of the request and the offer of satisfactory indemnity; and
(5) during such 45-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the Trustee a direction which,
in the opinion of the Trustee, is inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over such other
Noteholder.
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 Note, on or
after the respective due dates expressed in such 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 such 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
Garden State 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
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annum borne by the 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.
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, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders, allowed in any judicial proceedings relating to the Company or
any other obligor upon the 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 Noteholder 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 Noteholders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, taxes, disbursements and
advances of the Trustee, its agents 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 Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Noteholder 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 the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due
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and payable on the Notes for principal and interest, respectively; and
Fourth: to Garden State or as a court of competent jurisdiction may
direct.
The Trustee, upon prior notice to Garden State, may fix a record date and
payment date for any payment to Noteholders 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 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 and expenses, 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 Notes.
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.
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:
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(1) 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.
(2) 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,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(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:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) 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.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.02 or 6.05.
(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) whether or not therein expressly so provided, 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.
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(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon 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 of its selection (provided such counsel is reasonably
acceptable to the Company) and may require an Officers' Certificate or an
opinion of Counsel, which shall conform to Sections 12.04 and 12.05. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on the advice of such counsel or 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, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this
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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 by it in compliance with such
request, order or direction.
(g) Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company request or Company order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(h) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the notes and this Indenture.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or its 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.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement in the 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 Noteholder 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 Note, the Trustee may withhold
the notice if and so long as its board of directors, the executive committee
of its board of directors
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or a committee of its directors and/or Trust Officers in good faith determines
that withholding the notice is in the interest of the Noteholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each October 1 beginning with the October 1
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 Noteholder a brief report dated
as of such October 1 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 Noteholders shall be
mailed to the Company and filed with the Commission and each stock exchange,
if any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become listed
on any stock exchange and of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such compensation
as shall be agreed in writing between the Company and the Trustee for its
services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all tax obligations imposed on the Trustee
related to this Indenture and all reasonable out-of-pocket expenses incurred
or made by it. Such expenses shall include the reasonable fees and expenses of
the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor
Trustee and their respective agents, employees, stockholders and directors
for, and hold them harmless against, any and all loss, liability, damage,
claim or expense, including taxes (other than taxes based on the income of the
Trustee) incurred by them except for such actions to the extent caused by any
negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of this trust including the reasonable costs
and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their rights, powers or
duties hereunder. The Trustee shall notify the Company
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promptly of any claim asserted against the Trustee for which it may seek
indemnity. The Company shall defend the claim and the Trustee shall cooperate
in the defense. The Trustee may have separate counsel and the Company shall
pay the reasonable fees and expenses of such counsel, provided that counsel
selected by the Company shall be the sole counsel of record in any judicial or
arbitral proceeding. The Company need not pay for any settlement made without
its written consent, which shall not be unreasonably withheld. The Company
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 the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee
by so notifying the Company and the Trustee and may appoint a successor
trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or 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, the Company shall notify each Holder of such event
and shall promptly ap-
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point a successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the Notes may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. 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 Noteholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the expense
of the Company), the Company or the Holders of at least 10% in principal
amount of the outstanding 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 Noteholder 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,
the Company'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 requirement
of TIA Sections 310(a)(1) and 310(a)(5). The Trustee (or in the case of a
corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least
$100,000,000 as
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set forth in its most recent published annual report of condition. In
addition, if the Trustee is a corporation included in a bank holding company
system, the Trustee, independently of such bank holding company, shall meet
the capital requirements of TIA Section 310(a)(2). The Trustee shall comply
with TIA Section 310(b); PROVIDED, HOWEVER, that there shall be excluded
from the operation of TIA Section 310(b)(1) any indenture or indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
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 therein.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except that
Garden State's obligations under Sections 7.07, 8.04 and 8.05 shall survive
the effect of this Article Eight) when all outstanding Notes theretofore
authenticated and issued have been delivered to the Trustee for cancellation.
In addition, at Garden State's option, either (a) Garden State
shall be deemed to have been Discharged (as defined below) from its
obligations with respect to the Notes ("legal defeasance"), except for
certain obligations, including those with respect to the transfer or exchange
of the Notes, to replace mutilated, destroyed, lost or stolen Notes and to
maintain a registrar and paying agent in respect of the Notes, at any time
after the applicable conditions set forth below have been satisfied or (b)
Garden State shall cease to be under any obligation to comply with any term,
provision or condition set forth in Sections 4.08, 4.10 through 4.20 and 5.01
("covenant defeasance") at any time after the applicable conditions set forth
below have been satisfied:
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(1) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Notes (i) money in an amount, or (ii) U.S. Legal Tender or U.S. Government
Obligations (as defined below) which through the payment of interest and
principal in respect thereof in accordance with their terms will provide,
not later than one business day before the due date of any payment, money
in an amount, or (iii) a combination of (i) and (ii), sufficient, in the
opinion (with respect to (i) and (ii)) of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge each installment of
principal of and interest on the outstanding Notes on the dates such
installments of interest or principal are due; PROVIDED that no deposits
made pursuant to this Section 8.01(1) shall cause the Trustee to have a
conflicting interest as defined in and for purposes of the TIA; PROVIDED,
further, that no such deposit shall result in the Company, the Trustee or
the trust becoming or being deemed to be an "investment company" under the
Investment Company Act of 1940.
(2) No Event of Default or Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit or, insofar as
Events of Default from bankruptcy or insolvency events are concerned, at
any time in the period ending on the 91st day after the date of deposit;
(3) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the Holders of the Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of the
Company's exercise of its option under this Section 8.01 and in the same
manner and at the same times as would have been the case if such option had
not been exercised, and, accompanied by a ruling to that effect received
from or published by the Internal Revenue Service, (ii) all conditions
precedent to the Discharge pursuant to this Section 8.01 have been complied
with, together with an Officers' Certificate to such effect and (iii) the
trust funds deposited pursuant to clause (1) above will not be subject to
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
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(4) The Company shall have paid or duly provided for payment of all
amounts then due to the Trustee pursuant to Section 7.07 hereof; and
(5) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel to the effect that such legal defeasance or covenant
defeasance shall not result in a breach or violation of or constitute a
Default under this Indenture, or any other material agreement or instrument
to which the Company is a party or by which the Company is bound;
(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit is not required to be
registered as an investment company under the Investment Company Act of
1940, as amended;
(7) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the Noteholder has a perfected security interest under
applicable law in the U.S. Government Obligations so deposited;
(8) in the case of legal defeasance, the Company delivers to the
Trustee an Opinion of Counsel confirming that (a) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
or (b) since the date of the 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 Noteholder
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;
(9) in the case of covenant defeasance, the Company delivers to the
Trustee an Opinion of Counsel confirming that the Noteholder 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; and
(10) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that
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all conditions precedent provided for relating to either the legal
defeasance or the covenant defeasance, as the case may be, have been
complied with.
Notwithstanding the foregoing provisions of this Section, the
conditions set forth in the foregoing paragraphs (1)(iii), (2), (3), (5), (6)
and (7) need not be satisfied so long as, at the time Garden State makes the
deposit described in paragraph (1), (i) no default under Section 6.01(1),
6.01(2), 6.01(3), 6.01(6) or 6.01(7) has occurred and is continuing on the
date of such deposit and after giving effect thereto and (ii) either (x) a
notice of redemption has been mailed pursuant to Section 3.03 proving for
redemption of all the Notes 30 days after such mailing and the provisions of
Article Three with respect to such redemption shall have been complied with
or (y) the Stated Maturity of all of the Notes will occur within 30 days. If
the conditions of the preceding sentence are satisfied, Garden State shall be
deemed to have exercised its covenant defeasance option.
Before or after a deposit, Garden State may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article Three.
"Discharged" means that Garden State shall be deemed to have paid
and discharged the entire indebtedness represented by, and obligations under,
the Notes and to have satisfied all the obligations under this Indenture
relating to the Notes (and the Trustee, at the expense of Garden State, shall
execute proper instruments acknowledging the same), except (i) the rights of
the Holders of Notes to receive, from the trust fund described in clause (1)
above, payment of the principal of and the interest on such Notes when such
payments are due, (ii) Garden State's obligations with respect to the Notes
under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07 and 7.08 and (iii) the
rights, powers, trusts, duties and immunities of the Trustee hereunder.
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SECTION 8.02. ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE.
Subject to Section 8.05, after (i) the conditions of Section 8.01
have been satisfied, (ii) Garden State has paid or caused to be paid all
other sums payable hereunder by Garden State and (iii) Garden State has
delivered to the Trustee an Opinion of Counsel, stating that all conditions
precedent referred to in clause (i) above relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon written
request shall acknowledge in writing the discharge of Garden State's
obligations under this Indenture except for those surviving obligations
specified in this Article Eight.
SECTION 8.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust, money, U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to Section 8.01. It shall
apply the deposited money and the money from U.S. Legal Tender and U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal and accrued and unpaid interest on the
Notes.
The Company 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 8.01 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
outstanding Notes.
SECTION 8.04. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall promptly pay to Garden State
any money held by them for the payment of principal or interest that remains
unclaimed for one year; PROVIDED, HOWEVER, that the Trustee or such Paying
Agent may, at the expense of Garden State, cause to be published once in a
newspaper of general circulation in The City of New York or mailed to each
Holder, 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
publication or mailing, any unclaimed balance of such money then remaining
will be repaid to Garden State. After payment to Garden State, Holders
entitled to the money must look to Garden State for payment as general
creditors unless an applicable abandoned property law
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designates another Person and all liability of the Trustee and Paying Agent
with respect to such money shall cease.
SECTION 8.05. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money, U.S.
Legal Tender or U.S. Government Obligations in accordance with Section 8.01
by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, Garden State's obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.01 until such time as the Trustee or Paying
Agent is permitted to apply all such money, U.S. Legal Tender or U.S.
Government Obligations in accordance with Section 8.01; PROVIDED, HOWEVER,
that if Garden State has made any payment of interest on or principal of any
Notes because of the reinstatement of its obligations, Garden State shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money, U.S. Legal Tender or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company, when authorized by a Board Resolution, and the
Trustee, together, may amend or supplement this Indenture or the Notes
without notice to or consent of any Noteholder:
(1) to cure any ambiguity, defect or inconsistency; PROVIDED that
such amendment or supplement does not, in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes; or
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(4) to make any other change that does not adversely affect in any
material respect the rights of any Noteholders hereunder;
PROVIDED that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07, Garden State, when authorized by a Board
Resolution, 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 Notes, may amend or supplement this Indenture or the Notes,
without notice to any other Holders. Subject to Section 6.07, the Holder or
Holders of a majority in aggregate principal amount of the outstanding Notes
may waive compliance by Garden State with any provision of this Indenture or
the Notes without notice to any other Noteholder. No amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, shall, without the
consent of each Holder of each Note affected thereby:
(1) change the stated maturity of the principal of, or any
installment of interest on, any Note or reduce the principal amount
thereof, the rate of interest thereon or any premium payable upon the
redemption thereof, or change the coin or currency in which any Note or any
premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment after the stated
maturity thereof (or, in the case of redemption, on or after the redemption
date);
(2) reduce the percentage in principal amount of the outstanding
Notes, the consent of the Holders of which is required for any supplemental
indenture or the consent of such Holders is required for any waiver of
compliance with provisions of this Indenture or Defaults hereunder and
their consequences provided for in this Indenture;
(3) modify any of the provisions relating to supplemental indentures
requiring the consent of Holders or relating to the waiver of past defaults
or relating to the waiver of covenants, except to increase any such
percentage of outstanding Notes required for such actions or to provide
that certain other provisions of this Indenture
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cannot be modified or waived without the consent of each Noteholder
affected thereby;
(4) waive a default in the payment of the principal of or interest on
any Note or modify or waive the Company's obligation to repurchase Notes
under Section 4.16 or 4.17;
(5) except as otherwise permitted by the covenants contained in
Article Five, consent to the assignment or transfer by the Company of any
of its rights and obligations under this Indenture;
(6) make any change in this Section 9.02 or Section 6.04 or 6.07; or
(7) change the time at which any Note must be redeemed or repaid in
accordance with the terms of this Indenture and the Notes.
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 9.02
becomes effective, Garden State shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure
of Garden State 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
Notes shall comply with the TIA as then in effect.
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 Note or portion of a Note that evidences the same debt
as the consenting Holder's Note, even if notation of the consent is not made
on any Note. Subject to the following paragraph, any such Holder or
subsequent Holder may revoke the consent as to his Note or portion of his
Note by notice to the Trustee or the Company received
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before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Notes have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company 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 Noteholder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's 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 Note, on or after the respective due dates expressed in such 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 NOTES.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.
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
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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 and an Officers' Certificate each stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Nine
is authorized or permitted by this Indenture. Such Opinion of Counsel shall
not be an expense of the Trustee.
ARTICLE TEN
SUBORDINATION
SECTION 10.01. NOTES SUBORDINATED TO SENIOR DEBT.
The Company covenants and agrees and the Trustee and each Holder of
the Notes, by its acceptance thereof, likewise covenants and agrees, that all
Notes shall be issued subject to the provisions of this Article Ten; and the
Trustee and each Person holding any Note, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that the payment of
all Obligations on the Notes by the Company shall, to the extent and in the
manner herein set forth, be subordinated and junior in right of payment to the
prior payment in full in cash or Cash Equivalents of all Obligations in respect
of the Senior Debt; that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Senior Debt, and that each holder of
Senior Debt whether now outstanding or hereafter created, incurred, assumed or
guaranteed shall be deemed to have acquired Senior Debt in reliance upon the
covenants and provisions contained in this Indenture and the Notes.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution of assets to creditors of Garden
State upon any dissolution or winding up or total or partial liquidation or
reorganization of Garden State whether voluntary or involuntary or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to Garden State or its property, in an assignment for the benefit of
creditors or any marshalling of Garden State's assets and liabilities:
(a) the holders of Senior Debt of Garden State will first be entitled
to receive payment in full in cash of all Ob-
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ligations due in respect of such Senior Debt (including interest accruing
after or which would accrue but for the occurrence of the commencement of any
such proceeding, at the rate specified in the applicable Senior Debt whether
or not such interest is an allowable claim in any such proceeding) before any
payment or distribution is made on account of any Obligations on the Notes,
or for the acquisition of any of the Notes for cash or property or otherwise;
and
(b) until all obligations with respect to Senior Debt of Garden State
(as provided in clause (a) above) are paid in full in cash, any distribution to
which the Holders of the Notes otherwise would be entitled but for this Article
Ten shall be made to the holders of Senior Debt, except that Holders of the
Notes may receive securities that are subordinated at least to the same extent
as the Notes to (a) Senior Debt and (b) any securities issued in exchange for
Senior Debt ("subordinated securities").
For purposes of this Article Ten, a distribution may consist of cash,
Cash Equivalents, securities or other property, by set-off or otherwise.
The consolidation of Garden State with, or the merger of Garden State
into, another corporation or the liquidation or dissolution of Garden State
following the conveyance or transfer of its properties and assets substantially
as an entirety to another Person upon the terms and conditions set forth in
Article Five hereof shall not be deemed a dissolution, winding up, liquidation
or reorganization for the purposes of this Section 10.02 if the Survivor
complies with the conditions set forth in Article Five hereof.
SECTION 10.03. DEFAULT ON SENIOR DEBT.
(a) Upon the final maturity of any Senior Debt by lapse of time,
acceleration or otherwise, all Senior Debt shall first be paid in full in cash
or Cash Equivalents, or such payment duly provided for in cash or Cash
Equivalents or in a manner satisfactory to the holders of such Senior Debt,
before any payment is made by Garden State or any person acting on behalf of
Garden State of the principal, premium, if any, or interest on the Notes.
(b) Garden State may not make any payment upon or distribution in
respect of the Notes or acquire any of the Notes for cash or property or
otherwise (except in or for such subordinated securities) if (i) a default in
the payment of the
<PAGE>
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principal, premium, if any, or interest on Senior Debt occurs and is
continuing beyond any applicable period of grace (whether upon maturity, at a
date fixed for prepayment, as a result of acceleration or otherwise) (a
"payment default") or (ii) any other default occurs and is continuing (or if
such an event of default would occur upon any payment with respect to the
Notes or would arise upon the passage of time as a result of such payment)
with respect to any Designated Senior Debt that permits holders of the
Designated Senior Debt as to which such default relates to accelerate its
maturity (a "nonpayment default") and, in either case, the Trustee receives a
notice of such non-payment default (a "payment blockage notice") from the
holders, or from the trustee, agent or other representative of the holders,
of any such Designated Senior Debt.
(c) Payments on the Notes may and shall be resumed (i) in the case of
a payment default, upon the date on which such default is cured or waived, and
(ii) in the case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date on which the
applicable payment blockage notice is received, unless the maturity of any
Designated Senior Debt has been accelerated (with respect to a non-payment
default such period of time shall be hereinafter referred to as a "payment
blockage period"). No payment blockage period may be commenced within 360 days
after receipt by the Trustee of any prior payment blockage notice. No
nonpayment default that existed or was continuing on the date of delivery of any
payment blockage period to the Trustee shall be made the basis for a subsequent
payment blockage notice unless such default shall have been cured or waived for
a period of not less than 180 days and all scheduled payments of principal,
premium, if any, and interest then due and payable on the Notes shall have been
made.
SECTION 10.04. NO SUSPENSION OF REMEDIES.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 hereof or to pursue any other rights or
remedies hereunder or under applicable law; PROVIDED, HOWEVER, that all Senior
Debt of the Company then due and payable, or which thereafter is declared to be,
or shall otherwise become, due and payable, pursuant to its terms (whether by
acceleration or otherwise) shall first be paid in full in cash or Cash
Equivalents before the Holders or the Trustee are entitled to receive any
payment from Garden State of principal, premium, if any, or interest on the
Notes. If payment of the Notes is accelerated because of
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an Event of Default, Garden State shall promptly notify holders of Senior Debt
of the acceleration.
SECTION 10.05. WHEN DISTRIBUTIONS MUST BE PAID OVER.
In the event that the Trustee or any Noteholder receives any payment
of any Obligations with respect to the Notes at a time when a Trustee or such
Noteholder has actual knowledge such payment is prohibited by Section 10.02 or
10.03 hereof, such payment shall be held by the Trustee or such Noteholder in
trust for the benefit of, and shall be paid forthwith over and delivered, upon
written request, to, the holders of Senior Debt as their interests may appear or
their agent or representative or the trustee under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
If a distribution is made to the Trustee or any Noteholder that
because of this Article Ten should not have been made to it, the Trustee or such
Noteholder who receives the distribution, upon notice that such distribution
should not have been made, shall hold it in trust for the benefit of, and, upon
written request, pay it over to, the holders of Senior Debt as their interests
may appear, or their agent or representative or the trustee under the indenture
or other agreement (if any) pursuant to which Senior Debt may have been issued,
as their respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article Ten, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Noteholders or the
Company or any other person money or assets to which any holders of Senior
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Debt shall be entitled by virtue of this Article Ten, except if such payment
is made as a result of the willful misconduct or negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article Ten, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt
provided in this Article Ten.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in
full, Noteholders shall be subrogated (equally and ratably with all other Debt
PARI PASSU with the Notes) to the rights of holders of Senior Debt to receive
distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the Noteholders have been applied to the payment of Senior
Debt. A distribution made under this Article to holders of Senior Debt which
otherwise would have been made to Noteholders is not, as between the Company and
Noteholders, a payment by the Company on the Senior Debt.
SECTION 10.08. RELATIVE RIGHTS.
This Article Ten defines the relative rights of Noteholders and
holders of Senior Debt. Nothing in the Indenture shall:
(a) impair, as between the Company and Noteholders, the obligation of
the Company, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms;
(b) affect the relative rights of Noteholders and creditors of the
Company other than their rights in relation to holders of Senior Debt; or
(c) prevent the Trustee or any Noteholder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Noteholders.
<PAGE>
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If the Company fails because of this Article to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the indebtedness evidenced by the Notes shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article Ten, the Trustee and the Noteholders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other person making any distribution to the Trustee or to the Noteholders for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other Debt of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Ten.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article Ten or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment or
distribution by the Trustee, or the taking of any action by the Trustee, and the
Trustee or Paying Agent may continue to make payments on the Notes unless a
Trust Officer of the Trustee shall have received at least five Business Days
prior to the date of such payment written notice of facts that would cause the
payment of any Obligations with respect to the Notes to violate this Article
Ten. Only the Company, a Representative or a holder of an issue of Senior Debt
that has no Representative may give the notice. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any person as a holder of Senior Debt to participate in any payment or
distribution pursuant to this Article, the Trustee
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may request such person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Debt held by such person, the extent
to which such person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such person under
this Article, and if such evidence is not furnished, the Trustee may defer
any payment which it may be required to make for the benefit of such person
pursuant to the term of this Indenture pending judicial determination as to
the rights of such person to receive such payment. Nothing in this Article
Ten shall apply to amounts due to, or impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Noteholder by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article Ten, and appoints the
Trustee his attorney-in-fact for any and all such purposes.
SECTION 10.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 7.01, and the
Holders of the Notes shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the Trustee in bankruptcy,
liquidating trustee, Custodian, receiver, assignee for the benefit of creditors,
agent or other person making such payment, or distribution, delivered to the
Trustee or to the Holders of Notes, for the purpose of ascertaining the persons
entitled to participate in such payment or distribution, the holders of Senior
Debt and other indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article.
<PAGE>
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ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
SECTION 11.02. NOTICES.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company:
Garden State Newspapers, Inc.
1560 Broadway, Suite 1450
Denver, Colorado 80202
Attention: Chief Financial Officer
with a copy to:
Verner, Liipfert, Bernhard,
McPherson and Hand
901 North West 15th Street, Suite 700
Washington, D.C. 20005-2301
Attention: Roy G. Bowman, Esq.
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21W
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Each of the Company and the Trustee by written notice to each other
such Person may designate additional or different addresses for notices to such
Person. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when receipt is acknowledged, if faxed; and five (5) cal-
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endar days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address shall not be deemed to
have been given until actually received by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given whether or not the addressee receives it.
SECTION 11.03. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, 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 11.05. 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 4.06, shall include:
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(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 reasonably 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.
SECTION 11.06. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Noteholders. The Paying
Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. 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 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 11.08. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES 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
CONFLICT OF LAWS. 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.
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SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of Garden State or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or incorporator, as such,
of the Company shall not have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creations. Each Noteholder by accepting a
Note waives and releases all such liability. Such waiver and release are part
of the consideration for the issuance of the Notes.
SECTION 11.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.12. 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.
SECTION 11.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the
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.
<PAGE>
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
GARDEN STATE NEWSPAPERS, INC.
By:
--------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
[FORM OF SERIES A NOTE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OF OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a) (1),
(2), (3) OR (7) PROMULGATED UNDER THE SECURITIES ACT) (AN "ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S PROMULGATED UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE ISSUER THEREOF OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
PROMULGATED UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHED (OR
HAS FURNIHSED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATIONS S PROMULGATED UNDER
THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144A PROMULATED UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECUIRTY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, WRITTEN LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQURIEMENTS OF THE SECURIITES
ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
A-1
<PAGE>
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
A-2
<PAGE>
CUSIP No.
GARDEN STATE NEWSPAPERS, INC.
8 3/4% Senior Subordinated Note due 2009, Series A
No. $
GARDEN STATE NEWSPAPERS, INC., a Delaware corporation (the "Company"),
for value received, promises to pay to CEDE & CO. or registered assigns, the
principal sum of Dollars, on October 1, 2009.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
GARDEN STATE NEWSPAPERS, INC.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 8 3/4% Senior Subordinated Notes due 2009, Series
A, referred to in the within-mentioned Indenture.
Dated: October 1, 1997
THE BANK OF NEW YORK, as Trustee
By:
--------------------------------------
Authorized Signatory
A-4
<PAGE>
(REVERSE OF NOTE)
8 3/4% Senior Subordinated Note due 2009, Series A
1. INTEREST. GARDEN STATE NEWSPAPERS, INC., a Delaware
corporation (the "Company"), promises to pay interest on the principal amount
of this Note at the rate per annum shown above. Interest on the Note will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the date of this Note. The Company will pay
interest semi-annually in arrears on each April 1 and October 1 (each, an
"Interest Payment Date") and at stated maturity, commencing on April 1, 1998.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any
applicable grace periods).
2. METHOD OF PAYMENT. The Company shall pay interest on the
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 Notes are cancelled on registration of
transfer or registration of exchange after such Record Date. Holders must
surrender Notes to a Paying Agent to collect principal payments. The Company
shall pay principal, premium and interest 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, the Company may pay principal, premium
and interest by its check payable in such U.S. Legal Tender. The Company may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder's registered address.
3. PAYING AGENT AND REGISTRAR. THE BANK OF NEW YORK (the
"Trustee") will act as Paying Agent and Registrar. The Company may change
any Paying Agent, Registrar or co-Registrar without notice to the Holders.
The Company or any of its Subsidiaries may, subject to certain exceptions,
act as Registrar or co-Registrar.
4. INDENTURE. The Company issued the Notes under an Indenture,
dated as of October 1, 1997 (the "Indenture"), between the Company and the
Trustee. This Note is one of a duly authorized issue of Notes of the Company
designated as its 8 3/4% Senior Subordinated Notes due 2009, Series A (the
"Initial Notes"), limited (except as otherwise provided in the Indenture) in
aggregate principal amount to $300,000,000, which may
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<PAGE>
be issued under the Indenture. The Notes include the Initial Notes, the
Private Exchange Notes (as defined in the Indenture) and the Unrestricted
Notes, as defined below, issued in exchange for the Initial Notes pursuant to
the Registration Rights Agreement. The Initial Notes and the Unrestricted
Notes are treated as a single class of securities under the Indenture.
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture unless otherwise defined herein. The terms of the 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.C. Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and the TIA
for a statement of them. The Notes are general unsecured obligations of the
Company.
5. SUBORDINATION. The Notes are subordinated in right of
payment, in the manner and to the extent set forth in the Indenture, to the
prior payment in full in cash or Cash Equivalents of all Senior Debt of the
Company, whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed. Each Holder by his acceptance
hereof agrees to be bound by such provisions and authorizes and expressly
directs the Trustee, on his behalf, to take such action as may be necessary
or appropriate to effectuate the subordination provided for in the Indenture
and appoints the Trustee his attorney-in-fact for such purposes.
6. (a) OPTIONAL REDEMPTION. The Notes will be redeemable at the
Company's option, in whole at any time or in part from time to time, on and
after October 1, 2002 at the following redemption prices (expressed as a
percentage of principal amount), if redeemed during the twelve-month period
commencing on October 1 of each year set forth below, plus, in each case,
accrued interest thereon to the date of redemption:
Year Percentage
---- ----------
2002 . . . . . . . . . . . 104.375%
2003 . . . . . . . . . . . 102.917%
2004 . . . . . . . . . . . 101.458%
2005 and thereafter. . . . 100.000%
(b) OPTIONAL REDEMPTION UPON PUBLIC EQUITY OFFERINGS. At any
time, or from time to time, on or prior to October 1, 2000, the Company may,
at its option, use the net cash proceeds of one or more Equity Offerings (as
defined below) to redeem (the "Equity Proceeds Offer") up to 35% of the
aggregate principal amount of Notes issued under the Indenture as original
issue Notes at a redemption price of 108.75% of the aggre-
A-6
<PAGE>
gate principal amount of Notes to be redeemed, plus accrued and unpaid
interest, to such redemption date; PROVIDED that at least $162.500 million in
aggregate principal amount of Notes remains outstanding immediately after any
such redemption.
As used in the preceding paragraph, "Equity Offering" means the
issuance and sale of Qualified Capital Stock of the Company.
7. 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 Notes to be redeemed at such Holder's registered address. 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 Notes called for redemption shall
have been deposited with the Paying Agent for redemption on such Redemption
Date, then, unless the Company defaults in the payment of such Redemption
Price, the Notes called for redemption will cease to bear interest and only
right of the Holders of such Notes will be to receive the payment of the
Redemption Price.
8. CHANGE OF CONTROL OFFER. In the event of a Change of Control,
upon the satisfaction of the conditions set forth in the Indenture, the
Company shall be required to offer to purchase all of the then outstanding
Notes pursuant to a Change of Control Offer at a purchase price equal to 101%
of the principal amount thereof plus accrued interest, if any, to the date of
purchase. Holders of Notes which are the subject of such an offer to
repurchase shall receive an offer to repurchase and may elect to have such
Notes repurchased in accordance with the provisions of the Indenture pursuant
to and in accordance with the terms of the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. A Holder shall register the transfer or exchange of
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 or exchange of any Notes during a period
beginning 15 days before the mailing of a redemption notice for any Notes or
portions thereof selected for redemption.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall
be treated as the owner of it for all purposes.
A-7
<PAGE>
11. UNCLAIMED MONEY. If money for the payment of principal or
interest or premium, if any, remains unclaimed for one year, the Trustee and
the Paying Agent will pay the money back to the Company. After that, all
liability of the Trustee and such Paying Agent with respect to such money
shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at
any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of, premium and interest on the
Notes to redemption or maturity and complies with the other provisions of the
Indenture relating thereto, the Company will be discharged from certain
provisions of the Indenture and the Notes (including certain covenants, but
excluding its obligation to pay the principal of, premium and interest on the
Notes).
13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount
of the then outstanding Notes, and any existing Default or Event of Default
or noncompliance with any provision may be waived with the written consent of
the Holders of a majority in aggregate principal amount of the then
outstanding Notes. Without consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Notes in
addition to or in place of certificated Notes, or comply with Article Five of
the Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, incur additional Indebtedness, pay dividends or make
certain other restricted payments, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Restricted
Subsidiaries and merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of
its assets or adopt a plan of liquidation. Such limitations are subject to a
number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such limitations.
15. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
A-8
<PAGE>
16. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable in
the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture or the Notes unless it has been offered indemnity or security
reasonably satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Notes then outstanding to direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of Notes notice of
any continuing Default or Event of Default (except a Default in payment of
principal or interest) if it determines in good faith that withholding notice
is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company, its Restricted and
Unrestricted Subsidiaries 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 the Company shall have any
liability for any obligation of the Company under the 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 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 Notes.
19. AUTHENTICATION. This Note shall not be valid until the
Trustee or authenticating agent manually signs the certificate of
authentication on this Note.
20. GOVERNING LAW. This Note shall be governed by, and construed
in accordance with, the laws of the State of New York but without giving
effect to applicable principles of conflicts of law to the extent that the
application of the law of another jurisdiction would be required thereby.
21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may
be used in the name of a Holder of a 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).
A-9
<PAGE>
22. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes as a convenience to the
Holders of the Notes. No representation is made as to the accuracy of such
numbers as printed on the Notes and reliance may be placed only on the other
identification numbers printed hereon.
23. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement, the Company will be obligated upon the occurrence of certain
events to consummate an exchange offer pursuant to which the Holder of this
Note shall have the right to exchange this Series A Note for a 8 3/4% Senior
Subordinated Note due 2009, Series B, of the Company (an "Unrestricted Note")
which has been registered under the Securities Act, in like principal amount
and having terms identical in all material respects as the Series A Notes.
The Holder shall be entitled to receive certain additional interest payments
in the event such exchange offer is not consummated and upon certain other
conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement.
24. INDENTURE. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time. Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture. Requests may be made to:
GARDEN STATE NEWSPAPERS, INC., 1560 Broadway Suite 1450, Denver, Colorado
80202, Attention: Chief Financial Officer.
A-10
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
- --------------------------------
- ------------------------------------------------------------------------------
(please print or type name and address)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
- ------------------------------------------------------------------------------
attorney to transfer the Note on the books of the Company with full power of
substitution in the premises.
Dated:
--------------------- ------------------------------------------------
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed by the endorser's
bank or broker.
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the
Securities Act of 1933, as amended (the "Securities Act") covering resales of
this Note (which effectiveness shall not have been suspended or terminated at
the date of the transfer) and (ii) October [ ], 1999 the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer:
[CHECK ONE]
(1) ____ to the Company or a Subsidiary thereof; or
A-11
<PAGE>
(2) ___ pursuant to and in compliance with Rule 144A under the Securities Act;
or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act, that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) ___ outside the United States to a "foreign purchaser" in compliance
with Rule 904 of Regulation S under the Securities Act; or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(6) ___ pursuant to an effective registration statement under the Securities
Act; or
(7) ___ pursuant to another available exemption from the registration
statement requirements of the Securities Act;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act (an "Affiliate"):
/ / The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any person other
than the registered Holder thereof; PROVIDED, HOWEVER, that if item (3), (4),
(5) or (7) is checked, the Company or the Trustee may require, prior to
registering any such transfer of the Note, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3) or (4) and other information as the Trustee or the Company
have reasonably requested to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
If none of the foregoing items is checked, the Trustee or Registrar shall
not be obligated to register this Note in the name of any person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
A-12
<PAGE>
Dated: _________________ Signed:_________________________
(Sign exactly as name
appears on the other side
of this Note)
Signature Guarantee:__________________________________________
Participants in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated: ______________________ _____________________________
NOTICE: To be executed by an
executive officer
Signature Guarantee:___________________________________________
A-13
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.16 or Section 4.17 of the Indenture, check the appropriate box:
Section 4.16 [ ] Section 4.17 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state the
amount: $_____________
Dated: _________________ Your Signature:_________________________
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee:__________________________________________
Participants in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
A-14
<PAGE>
EXHIBIT B
CUSIP NO.
GARDEN STATE NEWSPAPERS, INC.
8 3/4% Senior Subordinated Note due 2009, Series B
No. $
GARDEN STATE NEWSPAPERS, INC., a Delaware corporation (the "Company"),
for value received, promises to pay to ______________________________ or
registered assigns, the principal sum of ______________ Dollars, on October 1,
2009.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at
this place.
B-1
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
GARDEN STATE NEWSPAPERS, INC.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 8 3/4% Senior Subordinated Notes due 2009, Series B
referred to in the within-mentioned Indenture.
Dated: October 1, 1997
THE BANK OF NEW YORK, as Trustee
By:
------------------------------
Authorized Signatory
B-2
<PAGE>
(REVERSE OF NOTE)
8 3/4% Senior Subordinated Note due 2009, Series B
1. INTEREST. GARDEN STATE NEWSPAPERS, INC., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate per annum shown above. Interest on the Notes will accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from the date of original issuance of this Note. The Company will pay
interest semi-annually in arrears on each April 1 and October 1 (each, an
"Interest Payment Date") and at stated maturity, commencing on April 1, 1998.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods).
2. METHOD OF PAYMENT. The Company shall pay interest on the 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 Notes are canceled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal, premium
and interest 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,
the Company may pay principal, premium and interest by its check payable in such
U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, THE BANK OF NEW YORK (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders. The
Company or any of its Subsidiaries may, subject to certain exceptions, act as
Registrar or co-Registrar.
4. INDENTURE. The Company issued the Notes under an Indenture,
dated as of October 1, 1997 (the "Indenture"),
B-3
<PAGE>
between the Company and the Trustee. This Note is one of a duly authorized
issue of Notes of the Company designated as its 8 3/4% Senior Subordinated
Notes due 2009, Series B (the "Unrestricted Notes"), limited (except as
otherwise provided in the Indenture) in aggregate principal amount to
$300,000,000, which may be issued under the Indenture. The Notes include the
8 3/4% Senior Subordinated Notes due 2009, Series A (the "Initial Notes"), the
Private Exchange Notes (as defined in the Indenture) and the Unrestricted
Notes. The Initial Notes, the Private Exchange Notes and the Unrestricted
Notes are treated as a single class of securities under the Indenture.
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture unless otherwise defined herein. The terms of the 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.C. Sections 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding
anything to the contrary herein, the Notes are subject to all such terms, and
Holders of Notes are referred to the Indenture and the TIA for a statement of
them. The Notes are general unsecured obligations of the Company.
5. SUBORDINATION. The Notes are subordinated in right of payment,
in the manner and to the extent set forth in the Indenture, to the prior payment
in full in cash or Cash Equivalents of all Senior Debt of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. Each Holder by his acceptance hereof agrees to be bound
by such provisions and authorizes and expressly directs the Trustee, on his
behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
6. (a) OPTIONAL REDEMPTION. The Notes will be redeemable at the
Company's option, in whole at any time or in part from time to time, on and
after October 1, 2002 at the following redemption prices (expressed as a
percentage of principal amount), if redeemed during the twelve-month period
commencing on October 1 of each year set forth below, plus, in each case,
accrued interest thereon to the date of redemption:
Year Percentage
---- ----------
2002 . . . . . . . . . . . . . 109.375%
2003 . . . . . . . . . . . . . 102.917%
2004 . . . . . . . . . . . . . 101.458%
B-4
<PAGE>
2005 and thereafter. . . . . . 100.000%
(b) OPTIONAL REDEMPTION UPON PUBLIC EQUITY OFFERINGS. At any time,
or from time to time, on or prior to October 1, 2000, the Company may, at its
option, use the net cash proceeds of one or more Equity Offerings (as defined
below) to redeem (the "Equity Proceeds Offer") up to 35% of the aggregate
principal amount of Notes issued under the Indenture as original issue Notes at
a redemption price of 108.75% of the aggregate principal amount of Notes to be
redeemed, plus accrued and unpaid interest, to such redemption date; PROVIDED
that at least $162,500 million in aggregate principal amount of Notes remains
outstanding immediately after any such redemption.
As used in the preceding paragraph, "Equity Offering" means the
issuance and sale of Qualified Capital Stock of the Company.
7. 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 Notes to be redeemed at such Holder's registered address. 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 Notes called for redemption shall have
been deposited with the Paying Agent for redemption on such Redemption Date,
then, unless the Company defaults in the payment of such Redemption Price, the
Notes called for redemption will cease to bear interest and the only right of
the Holders of such Notes will be to receive payment of the Redemption Price.
8. CHANGE OF CONTROL OFFER. In the event of a Change of Control,
upon the satisfaction of the conditions set forth in the Indenture, the Company
shall be required to offer to purchase all of the then outstanding Notes
pursuant to a Change of Control Offer at a purchase price equal to 101% of the
principal amount thereof plus accrued interest, if any, to the date of purchase.
Holders of Notes which are the subject of such an offer to repurchase shall
receive an offer to repurchase and may elect to have such Notes repurchased in
accordance with the provisions of the Indenture pursuant to and in accordance
with the terms of the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall regis-
B-5
<PAGE>
ter the transfer of or exchange 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 Notes during a period beginning 15 days before the mailing of a redemption
notice for any Notes or portions thereof selected for redemption.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or interest
or premium, if any, remains unclaimed for one year, the Trustee and the Paying
Agent will pay the money back to the Company. After that, all liability of
the Trustee and such Paying Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of, premium and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of, premium and interest on the Notes).
13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Notes. Without consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes in addition
to or in place of certificated Notes, or comply with Article Five of the
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebted-
B-6
<PAGE>
ness, pay dividends or make certain other restricted payments, enter into
transactions with Affiliates, create dividend or other payment restrictions
affecting Restricted Subsidiaries and merge or consolidate with any other
Person, sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets or adopt a plan of liquidation. Such
limitations are subject to a number of important qualifications and
exceptions. The Company must annually report to the Trustee on compliance
with such limitations.
15. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will 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 principal amount of
the then outstanding Notes may declare all the Notes to be due and payable in
the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture or the Notes unless it has been offered indemnity or Security
reasonably satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Notes then outstanding to direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of Notes notice of
any continuing Default or Event of Default (except a Default in payment of
principal or interest) if it determines in good faith that withholding notice
is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under this
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company, its Restricted and
Unrestricted Subsidiaries 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 the Company shall have any
liability for any obligation of the Company under the Notes or this Indenture
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 Notes.
B-7
<PAGE>
19. AUTHENTICATION. This Note shall not be valid until the
Trustee or authenticating agent manually signs the certificate of
authentication on this Note.
20. GOVERNING LAW. This note shall be governed by, and construed
in accordance with, the laws of the State of New York but without giving
effect to applicable principles of conflicts of law to the extent that the
application of the law of another jurisdiction would be required thereby.
21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may
be used in the name of a Holder of a 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).
22. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes as a convenience to the
Holders of the Notes. No representation is made as to the accuracy of such
numbers as printed on the Notes and reliance may be placed only on the other
identification numbers printed hereon.
23. INDENTURE. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time. Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture. Requests may be made to:
GARDEN STATE NEWSPAPERS, INC., 1560 Broadway, Suite 1450, Denver, Colorado
80202, Attention: Chief Financial Officer.
B-8
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
- --------------------------------
- -------------------------------------------------------------------------------
(please print or type name and address)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
- -------------------------------------------------------------------------------
attorney to transfer the Note on the books of the Company with full power of
substitution in the premises.
Dated:
--------------- ------------------------------------------------------
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the face
of the within Note in every particular without
alteration or enlargement or any change whatsoever and
be guaranteed by the endorser's bank or broker.
Signature Guarantee:
----------------------------------------------------------
Participants in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
B-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.16 [ ] Section 4.17 [ ]
If you want to elect to have only part of this Note purchased by
the Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state
the amount: $
-------------
Date: Your Signature:
----------------- -----------------------------
(Sign exactly as your
name appears on the other
side of this Note)
Signature Guarantee:
----------------------------------------------------------
Participants in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
B-10
<PAGE>
EXHIBIT C
FORM OF LEGEND FOR GLOBAL NOTE
Any Global Note authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case
of a Restricted Note) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER
OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
C-1
<PAGE>
EXHIBIT D
Form of Certificate To Be
Delivered in Connection with
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
[ ], [ ]
THE BANK OF NEW YORK
101 Barclay Street, Floor 21W
New York, NY 10286
Ladies and Gentlemen:
In connection with our proposed purchase of 8 3/4% Senior
Subordinated Notes due 2009 (the "Notes") of GARDEN STATE NEWSPAPERS, INC.
(the "Company"), we confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum"), dated October 26, 1997, relating to the Notes and
such other information as we deem necessary in order to make our investment
decision. We acknowledge that we have read and agreed to the matters stated
on pages (i)-(ii) of the Offering Memorandum and in the section entitled
"Transfer Restrictions" of the Offering Memorandum, including the
restrictions on duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Notes (as described in the Offering Memorandum) and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes may not be
offered or sold except as permitted in the following sentence. We agree, on
our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell any Notes prior to the date that
is two years after the original issuance of the Notes, we will do so only (i)
to the Company or any of its Subsidiaries, (ii) inside the United States in
accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act),
(iii) inside the United
D-1
<PAGE>
States to an institutional "accredited investor" (as defined below) that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to the Trustee (as defined in the Indenture relating to the
Notes), a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Notes (the form of which
letter can be obtained from the Trustee), (iv) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (v)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (vi) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing any of the Notes from us a notice advising such purchaser
that resales of the Notes are restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will
not transfer the Notes to, any pension or welfare plan (as defined in Section
3 of the Employee Retirement Income Security Act of 1974), except as
permitted in the section entitled "Transfer Restrictions" of the Offering
Memorandum.
5. We understand that, on any proposed resale of any Notes, we
will be required to furnish to the Trustee and the Company such
certification, legal opinions and other information as the Trustee and the
Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
D-2
<PAGE>
You, the Company, the Trustee and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
-----------------------------------
Name:
Title:
D-3
<PAGE>
EXHIBIT E
Form of Certificate To Be Delivered
in Connection with Transfers
PURSUANT TO REGULATION S
[ ], [ ]
THE BANK OF NEW YORK
101 Barclay Street, Floor 21W
New York, NY 10286
Re: GARDEN STATE NEWSPAPERS, INC. (the
"Company") 8 3/4% Senior Subordinated
Notes due 2009 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $250,000,000 aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act
of 1933, as amended (the "Securities Act"), and, accordingly, we represent
that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
E-1
<PAGE>
You, the Company and counsel for the Company are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-----------------------------------
Authorized Signature
E-2
<PAGE>
[Verner, Liipfert, Bernhard, McPherson and Hand Letterhead]
October __, 1997
Garden State Newspapers, Inc.
1560 Broadway
Suite 1485
Denver, Colorado 80202
Re: REGISTRATION STATEMENT ON FORM S-4
Ladies and Gentlemen:
We have acted as counsel to Garden State Newspapers, Inc., a Delaware
corporation (the "Company"), in the preparation of a Registration Statement
on Form S-4 (the "Registration Statement") filed by the Company with the
Securities and Exchange Commission with respect to up to $250,000,000
aggregate principal amount of the Company's 8 3/4% Senior Subordinated Notes
due 2009, Series B (the "Exchange Notes"). The Exchange Notes will be
offered in exchange for the Company's issued and outstanding 8 3/4% Senior
Subordinated Notes due 2009, Series A (the "Original Notes"), as described in
the Registration Statement.
The Exchange Notes are to be issued in exchange for Original Notes
pursuant to an indenture (the "Indenture") dated as of October 1, 1997
between the Company, and The Bank of New York, as Trustee (the "Trustee") and
the related Registration Rights Agreement among the Company, BT Alex Brown
Incorporated, Goldman, Sachs & Co., and BNY Capital Markets, Inc. (the
"Registration Rights Agreement").
In so acting, we have examined and relied upon such records, documents
and other instruments as in our judgement are necessary or appropriate in
order to express the opinion hereinafter set forth and have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, and the conformity to original documents of all documents
submitted to us as certified or photostatic copies.
Based upon and subject to the foregoing, we are of the opinion that the
Exchange Notes, when duly executed by the Company and authenticated by the
Trustee in accordance with the provisions of the Indenture, and delivered in
exchange for Original Notes in accordance with the terms of the Indenture,
will have been validly issued and will be legally binding obligations of the
Company, subject to (a) bankruptcy, insolvency, reorganization, fraudulent
conveyance, arrangement, moratorium, fraudulent transfer and other similar
laws relating to or affecting the rights of creditors and (b) general
principles of equity (including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability
of specific performance, injunctive relief or other equitable remedies) and
the discretion of the court before
<PAGE>
which any proceedings therefore may be brought, regardless of whether
considered in a proceeding at law or in equity.
We express no opinion herein other than as to the law of the State of New
York, the federal law of the United States and the Delaware General
Corporation law.
We hereby consent to the reference to our law firm in the prospectus
contained in the Registration Statement under the caption "Legal Matters" and
to the use of this opinion as an exhibit to the Registration Statement.
Sincerely,
Verner, Liipfert, Bernhard,
McPherson and Hand
<PAGE>
Ratio of Earnings To Fixed Charges
Garden State Newspapers, Inc.
1994 1995 1996 1997
------------------------------------
Pretax Income (15,253) 684 (752) 34,577
Fixed Charges
- ------------------------------
Interest 21,607 24,539 25,950 30,902
Debt Issuance Cost 11,665 - 1,092 4,508
Capital lease interest 922 1,120 1,015 1,001
------------------------------------
34,194 25,659 28,057 36,411
------------------------------------
------------------------------------
Ratio of Earnings to Fixed Charges (15,253) 1.0 (752) 1.9
------------------------------------
------------------------------------
<PAGE>
Exhibit 21.1
SUBSIDIARIES OF GARDEN STATE NEWSPAPERS, INC.
<TABLE>
- ---------------------------------------------------------------------------------------------------
Subsidiaries State of Incorporation Names Under Which It Conducts Business
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Garden State Investments, Inc. Delaware Alameda Newspapers, Inc.
Brattleboro Publishing Company
Easton Publishing Company
Graham Newspapers, Inc.
Mid-States Newspapers, Inc.
New England Newspapers, Inc.
NJN Investments, Inc.
North Adams Publishing Company
North Eastern Publishing Company
North Jersey Newspaper Company
Pittsfield Publications, Inc.
South Jersey Newspaper Company
The York Newspaper Company
York Newspapers, Inc.
Alameda Newspapers, Inc. Delaware The Oakland Tribune
The Tri-Valley Herald
The Argus
The Daily Review
Alameda Times Star
San Mateo County Times
Alameda Accent
Times Weekend
San Bruno Herald
Coastside Chronicle
Daly City Record
Brisbane Bee
Millbrae Recorder-Progress
Brattleboro Publishing Company Delaware The Brattleboro Reformer
Easton Publishing Company Delaware The Express Times
Two Rivers Shopping Times
The Bethlehem Star
Hunterdon Marketplace
Graham Newspapers, Inc. Delaware The Graham Leader
The Lake Country Sun
The Jacksboro Gazette
The Jack County Herald
Lake Country Shopper
The Olney Enterprise
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
Subsidiaries State of Incorporation Names Under Which It Conducts Business
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mid-States Newspapers, Inc. Delaware Las Cruces Sun-News
The Daily Nonpareil
Sentinel & Enterprise
Lebanon Daily News
The Shopper Bulletin
Southwest Iowa Shopper Guide
North Country Leader
The Independent
The Palm Advertiser
The Shopping Times
Vos del Valle
North Adams Publishing Company Delaware North Adams Transcript
The Transcript Spotlight
North Eastern Publishing Company Delaware Bennington Banner
The Manchester Journal
The Bennington Shopper
North Jersey Newspaper Company Delaware Herald-News
Community Life
Community Forum
The Ridgewood News
Shopper News
South Bergenite
Suburban News
Paramas Town News
The Dateline Journal
Suburban Life
Suburban Trends
Today
Summit Independent Press
Berkeley Heights and News
Phillipsburg Free Press
Star Gazette
Blairstown Press
Belvidere News
Star Journal
The News Leader
The News
The Hills Bedminster Press
Somerset Messenger Gazette
Highland Park Herald
The Review
The Chronicle
The Piscataway Review
The Reporter
Cranford Chronicle
The Westfield Record-Press
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------
Subsidiaries State of Incorporation Names Under Which It Conducts Business
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Pittsfield Publications, Inc. Delaware The Berkshire Eagle
The Shopper
South Jersey Newspaper Company Delaware The Gloucester County Times
Today's Sunbeam
Bridgeton Evening News
The Millville Shopper News
The Record
The Advertiser
York Newspapers, Inc. Delaware The York Newspaper Company
York Newspaper Company Pennsylvania The York Dispatch
General Partnership The York Sunday News
Weekly Record
- -------------------------------------------------------------------------------
</TABLE>
GARDEN STATE NEWSPAPERS, INC. OPERATING NAMES
---------------------------------------------
San Gabriel Valley Times
Whittier Daily News
Pasadena Star-News
Cheers
Whittier Review Shopper
The Star
Highlander Newspapers
Eureka Times Standard
The Buyers' Guide
On the Market
The Sun
The Sunday Sun
The Evening Sun
The Community Sun
- -------------------------------------------------------------------------------
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-4) and related Prospectus of Garden State
Newspapers, Inc. for the registration of $250,000,000 of 8-3/4% Senior
Subordinated Notes Due 2009 and to the incorporation by reference therein of
our report dated August 22, 1997, with respect to the consolidated financial
statements of Garden State Newspapers, Inc. and Garden State Investments, Inc.
included in the Garden State Newspapers, Inc. Annual Report (Form 10-K) for
the year ended June 30, 1997, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Denver, Colorado
October 13, 1997
<PAGE>
EXHIBIT 25
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
--------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
--------------------------
Garden State Newspapers, Inc.
(Exact name of obligor as specified in its charter)
Delaware 22-675173
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1560 Broadway, Suite 1450
Denver, Colorado 80202
(Address of principal executive offices) (Zip code)
--------------------------
8.75% Senior Subordinated Notes Due 2009
(Title of the indenture securities)
==============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York, N.Y.
New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of October, 1997.
THE BANK OF NEW YORK
By: /S/ MARY JANE MORRISSEY
-------------------------------------
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business June 30, 1997, published in accordance with
a call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........... $ 7,769,502
Interest-bearing balances .................................... 1,472,524
Securities:
Held-to-maturity securities .................................. 1,080,234
Available-for-sale securities ................................ 3,046,199
Federal funds sold and Securities purchased under agreements
to resell..................................................... 3,193,800
Loans and lease financing receivables:
Loans and leases, net of unearned income ......... 35,352,045
LESS: Allowance for loan and lease losses ........ 625,042
LESS: Allocated transfer risk reserve............. 429
Loans and leases, net of unearned income, allowance, and
reserve................................................... 34,726,574
Assets held in trading accounts ................................ 1,611,096
Premises and fixed assets (including capitalized leases) ....... 676,729
Other real estate owned ........................................ 22,460
Investments in unconsolidated subsidiaries and associated
companies .................................................... 209,959
Customers' liability to this bank on acceptances outstanding ... 1,357,731
Intangible assets .............................................. 720,883
Other assets ................................................... 1,627,267
-----------
Total assets ................................................... $57,514,958
-----------
-----------
LIABILITIES
Deposits:
In domestic offices .......................................... $26,875,596
Noninterest-bearing .............................. 11,213,657
Interest-bearing ................................. 15,661,939
In foreign offices, Edge and Agreement subsidiaries, and IBFs. 16,334,270
Noninterest-bearing .............................. 596,369
Interest-bearing ................................. 15,737,901
Federal funds purchased and Securities sold under agreements
to repurchase................................................. 1,583,157
Demand notes issued to the U.S. Treasury ....................... 303,000
Trading liabilities ............................................ 1,308,173
Other borrowed money:
With remaining maturity of one year or less .................. 2,383,570
With remaining maturity of more than one year through
three years................................................. 0
With remaining maturity of more than three years ............. 20,679
Bank's liability on acceptances executed and outstanding ....... 1,377,244
Subordinated notes and debentures .............................. 1,018,940
Other liabilities .............................................. 1,732,792
-----------
Total liabilities .............................................. 52,937,421
-----------
-----------
EQUITY CAPITAL
Common stock ................................................... 1,135,284
Surplus ........................................................ 731,319
Undivided profits and capital reserves ......................... 2,721,258
Net unrealized holding gains (losses) on available-for-sale
securities ................................................... 1,948
Cumulative foreign currency translation adjustments ............ (12,272)
Total equity capital ........................................... 4,577,537
-----------
Total liabilities and equity capital ........................... $57,514,958
-----------
-----------
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
Alan R. Griffith )
J. Carter Bacot ) Directors
Thomas A. Renyi )
<PAGE>
Exhibit 99
LETTER OF TRANSMITTAL
GARDEN STATE NEWSPAPERS, INC.
OFFER FOR ALL OUTSTANDING SERIES A 8 3/4%
SENIOR SUBORDINATED NOTES DUE 2009
IN EXCHANGE FOR
SERIES B 8 3/4% SENIOR SUBORDINATED NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED
PURSUANT TO THE PROSPECTUS
DATED , 1997
-------------------------
- ------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON , 1997, UNLESS THE OFFER IS EXTENDED BY THE ISSUERS IN THEIR
SOLE DISCRETION.
- ------------------------------------------------------------------------------
-------------------------
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
BY MAIL: BY OVERNIGHT DELIVERY OR HAND:
-------- ------------------------------
The Bank Of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, NY 10286 Corporate Trust Services Window
Attention: Reorganization Section Ground Level
Attention: Reorganization Section
To Confirm by Telephone or for Information:
(212) 815-6333
Facsimile Transmissions:
(212) 571-3080
<PAGE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Original Notes
(as defined below) either if Original Notes are to be forwarded herewith or if
tenders of Original Notes are to be made by book-entry transfer to an account
maintained by The Bank of New York, (the "Exchange Agent") at The Depository
Trust Company ("DTC")pursuant to the procedures set forth in "The Exchange Offer
- -- Procedures for Tendering" in the Prospectus.
Holders of Original Notes whose certificates (the "Certificates") for such
Original Notes are not immediately available or who cannot deliver their
Certificates and all other required documents to the Exchange Agent on or prior
to the Expiration Date (as defined in the Prospectus) or who cannot complete the
procedures for book-entry transfer on a timely basis, must tender their Original
Notes according to the guaranteed delivery procedures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures" in the Prospectus. SEE INSTRUCTION 1.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
-2-
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
- ------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL NOTES 1 2 3
- ------------------------------------------------------------------------------
Aggregate Principal
Principal Amount of
Amount of Original
Certificate Original Notes
Name(s) and Address(es) of Number(s)* Notes Tendered**
Registered Holders: -----------------------------------------
(Please fill in blank)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
* Need not be completed if Original Notes are being tendered by book
entry-holders.
** Original Notes may be tendered in whole or in part in denominations
of $1,000 and integral multiples thereof. See instruction 4. Unless
otherwise indicated in the column, a holder will be deemed to have
tendered all Original Notes represented by the Original Notes indicated
in Column 2. See Instruction 4.
- ------------------------------------------------------------------------------
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[_] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
---------------------------------------------
DTC Account Number
--------------------------------------------------------
Transaction Code Number
---------------------------------------------------
[_] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name of Registered Holders(s)
---------------------------------------------
Window Ticket Number (if any)
---------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
------------------------
Name of Institution which Guaranteed Delivery
-----------------------------
If Guaranteed Delivery is to be made By Book-Entry Transfer:
--------------
Name of Tendering Institution
-------------------------------------------
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<PAGE>
DTC Account Number
------------------------------------------------------
Transaction Code Number
-------------------------------------------------
[_] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED ORIGINAL
NOTES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH
ABOVE.
[_] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE ORIGINAL NOTES FOR
ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES
(A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES
OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
---------------------------------------------------------------------
Address:
------------------------------------------------------------------
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<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Garden State Newspapers, Inc., a Delaware
corporation (the "Company" or the "Issuer"), the above described aggregate
principal amount of Series A 8 3/4% Senior Subordinated Notes due 2009 (the
"Original Notes") in exchange for a like aggregate principal amount of Series B
8 3/4% Senior Subordinated Notes due 2009 (the "Exchange Notes") which have been
registered under the Securities Act of 1933 (the "Securities Act"), upon the
terms and subject to the conditions set forth in the Prospectus dated _________,
1997 (as the same may be amended or supplemented from time to time, the
"Prospectus"), receipt of which is acknowledged, and in this Letter of
Transmittal (which, together with the Prospectus, constitute the "Exchange
Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Original Notes tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of the
Issuer all right, title and interest in and to such Original Notes as are being
tendered herewith. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent as its agent and attorney-in-fact (with full knowledge that
the Exchange Agent is also acting as agent of the Issuer in connection with the
Exchange Offer) with respect to the tendered Original Notes, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), subject only to the right of withdrawal described in
the Prospectus, to (i) deliver Certificates for Original Notes to the Issuer
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Issuer, upon receipt by the Exchange Agent, as the
undersigned's agent, of the Exchange Notes to be issued in exchange for such
Original Notes, (ii) present Certificates for such Original Notes for transfer,
and to transfer the Original Notes on the books of the Issuer, and (iii) receive
for the account of the Issuer all benefits and otherwise exercise all rights of
beneficial ownership of such Original Notes, all in accordance with the terms
and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
ORIGINAL NOTES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE ISSUER WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE ORIGINAL NOTES TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE
CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY
ADDITIONAL DOCUMENTS DEEMED BY THE ISSUER OR THE EXCHANGE AGENT TO BE NECESSARY
OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE ORIGINAL
NOTES TENDERED HEREBY, AND THE UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS
UNDER THE REGISTRATION RIGHTS AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO
ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered Holder(s) of the Original
Notes tendered hereby should be printed above, if they are not already set forth
above, as they appear on the Certificates representing such Original Notes. The
Certificate number(s) and the Original Notes that the undersigned wishes to
tender should be indicated in the appropriate boxes above.
-5-
<PAGE>
If any tendered Original Notes are not exchanged pursuant to the Exchange
Offer for any reason, or if Certificates are submitted for more Original Notes
than are tendered or accepted for exchange, Certificates for such nonexchanged
or nontendered Original Notes will be returned (or, in the case of Original
Notes tendered by book-entry transfer, such Original Notes will be credited to
an account maintained at DTC), without expense to the tendering Holder, promptly
following the expiration or termination of the Exchange Offer.
The undersigned understands that tenders of Original Notes pursuant to any
one of the procedures described in "The Exchange Offer -- Procedures for
Tendering" in the Prospectus and in the instructions hereto will, upon the
Issuer' acceptance for exchange of such tendered Original Notes, constitute a
binding agreement between the undersigned and the Issuer upon the terms and
subject to the conditions of the Exchange Offer. The undersigned recognizes
that, under certain circumstances set forth in the Prospectus, the Issuer may
not be required to accept for exchange any of the Original Notes tendered
hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Notes be
issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of Original Notes, that such Exchange Notes be credited to the account
indicated above maintained at DTC. If applicable, substitute Certificates
representing Original Notes not exchanged or not accepted for exchange will be
issued to the undersigned or, in the case of a book-entry transfer of Original
Notes, will be credited to the account indicated above maintained at DTC.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please deliver Exchange Notes to the undersigned at the address shown below the
undersigned's signature.
BY TENDERING ORIGINAL NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF THE ISSUER; (II) ANY EXCHANGE NOTES TO BE RECEIVED BY THE
UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS; (III) THE
UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE
IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF EXCHANGE NOTES
TO BE RECEIVED IN THE EXCHANGE OFFER; (IV) IF THE UNDERSIGNED IS NOT A
BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE
IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH EXCHANGE
NOTES; (V) A HOLDER OF ORIGINAL NOTES WHICH IS A BROKER-DEALER REPRESENTS AND
AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE
DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO
THIRD PARTIES, THAT (A) SUCH ORIGINAL NOTES HELD BY THE BROKER-DEALER ARE HELD
ONLY AS A NOMINEE, OR (B) SUCH ORIGINAL NOTES WERE ACQUIRED BY SUCH
BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR
OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR
SUPPLEMENTED FROM TIME TO TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT
IN CONNECTION WITH ANY RESALE OF SUCH EXCHANGE NOTES (PROVIDED THAT, BY SO
ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE
DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES
ACT); AND (VI) THE UNDERSIGNED IS NOT ACTING ON BEHALF OF PERSONS OR ENTITIES
WHO WOULD NOT TRUTHFULLY MAKE THE FOREGOING REPRESENTATIONS.
THE ISSUER HAS AGREED THAT, SUBJECT TO THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM
TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) IN
CONNECTION WITH RESALES OF EXCHANGE NOTES RECEIVED IN
-6-
<PAGE>
EXCHANGE FOR ORIGINAL NOTES, WHERE SUCH ORIGINAL NOTES WERE ACQUIRED BY SUCH
PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING
ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR THE LESSER OF (I) A PERIOD ENDING
180 DAYS FROM THE DATE ON WHICH THE REGISTRATION STATEMENT OF WHICH THE
PROSPECTUS IS A PART IS DECLARED EFFECTIVE OR (II) SUCH PERIOD OF TIME AS
SUCH BROKER-DEALER MUST COMPLY WITH THE PROSPECTUS DELIVERY REQUIREMENTS OF
THE SECURITIES ACT IN ORDER TO RESELL THE EXCHANGE NOTES RECEIVED IN EXCHANGE
FOR ORIGINAL NOTES WHICH WERE ACQUIRED BY IT AS A RESULT OF MARKET-MAKING OR
OTHER TRADING ACTIVITIES. IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED
ORIGINAL NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH
ORIGINAL NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON
RECEIPT OF NOTICE FROM THE ISSUER OF THE OCCURRENCE OF ANY EVENT OR THE
DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY
REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES
THE PROSPECTUS TO OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE
THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF
THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING OR OF THE
OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE REGISTRATION RIGHTS
AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND THE SALE OF EXCHANGE
NOTES PURSUANT TO THE PROSPECTUS UNTIL THE ISSUER HAS AMENDED OR SUPPLEMENTED
THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS FURNISHED
COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING
BROKER-DEALER OR THE ISSUER HAS GIVEN NOTICE THAT THE SALE OF THE EXCHANGE
NOTES MAY BE RESUMED, AS THE CASE MAY BE. IF THE ISSUER GIVES SUCH NOTICE TO
SUSPEND THE SALE OF THE EXCHANGE NOTES, IT SHALL EXTEND THE 180-DAY PERIOD
REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO
USE THE PROSPECTUS IN CONNECTION WITH THE RESALE OF EXCHANGE NOTES BY THE
NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF
SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL
HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO
PERMIT RESALES OF THE EXCHANGE NOTES OR TO AND INCLUDING THE DATE ON WHICH
THE ISSUER HAS GIVEN NOTICE THAT THE SALE OF EXCHANGE NOTES MAY BE RESUMED,
AS THE CASE MAY BE.
A PARTICIPATING BROKER-DEALER WHO INTENDS TO USE THE PROSPECTUS IN
CONNECTION WITH THE RESALE OF THE EXCHANGE NOTES RECEIVED IN EXCHANGE FOR
ORIGINAL NOTES PURSUANT TO THE EXCHANGE OFFER MUST NOTIFY THE ISSUER, OR CAUSE
THE ISSUER TO BE NOTIFIED, ON OR PRIOR TO THE EXPIRATION DATE, THAT IT IS A
PARTICIPATING BROKER-DEALER. Such notice may be given in the space provided for
that purpose on page 2 of this Letter of Transmittal or may be delivered to the
Exchange Agent at the address set forth on page 1 of this Letter of Transmittal.
Each Exchange Note will bear interest from and including the Issue Date of
the Original Notes that are accepted for exchange. Holders whose Original Notes
are accepted for exchange will be deemed to have waived the right to receive any
interest on the Original Notes.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
-7-
<PAGE>
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered Holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Original Notes hereby tendered or on a security position
listing, or by any person(s) authorized to become the registered Holder(s) by
endorsements and documents transmitted herewith (including such opinions of
counsel, certifications and other information as may be required by the Issuer
or the Trustee for the Original Notes to comply with the restrictions on
transfer applicable to the Original Notes). If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary capacity or representative
capacity, please set forth the signer's full title. See Instruction 5.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Date _______________________, 1997
Name(s)______________________________________________________________________
(PLEASE PRINT)
Address_______________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number________________________________________________
______________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
Authorized Signature__________________________________________________________
Name__________________________________________________________________________
(PLEASE PRINT)
Date________________________, 1997
Capacity or Title_____________________________________________________________
Name of Firm__________________________________________________________________
Address_______________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number________________________________________________
-8-
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6) (SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the Exchange To be completed ONLY if the Exchange
Notes are to be issued in the name Notes are to be sent to someone other
of someone other than the registered than the registered Holder of the
Holder of the Original Notes whose Original Notes whose (name(s)
name(s) appear(s) above. appear(s) above, or to such registered
Holder(s) at an address other than
that shown above.
Issue Exchange Notes: Mail Exchange Notes to:
Name Name
----------------------------- -------------------------------
(PLEASE PRINT) (PLEASE PRINT)
Address Address
------------------------- ----------------------------
------------------------- ----------------------------
------------------------- ----------------------------
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
---------------------------------- ------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL (TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NO.) SECURITY NO.)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if
(a) Certificates are to be forwarded herewith or (b) tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in
"The Exchange Offer -- Procedures for Tendering" in the Prospectus.
Certificates, or timely confirmation of a book-entry transfer of such
Original Notes into the Exchange Agent's account at DTC, as well as this
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Exchange
Agent at one of its addresses set forth herein on or prior to the Expiration
Date. Original Notes may be tendered in whole or in part in the principal
amount of $1,000 and integral multiples of $1,000.
Holders who wish to tender their Original Notes and (i) whose Original
Notes are not immediately available or (ii) who cannot deliver their Original
Notes, this Letter of Transmittal and all other required documents to the
Exchange Agent on or prior to the Expiration Date or (iii) who cannot
complete the procedures for delivery by book-entry transfer on a timely
basis, may tender their Original Notes by properly completing and duly
executing a Notice
-9-
<PAGE>
of Guaranteed Delivery pursuant to the guaranteed delivery procedures set
forth in "The Exchange Offer -- Guaranteed Delivery Procedures" in the
Prospectus. Pursuant to such procedures: (i) such tender must be made by or
through an Eligible Institution (as defined below); (ii) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form
made available by the Issuer, must be received by the Exchange Agent on or
prior to the Expiration Date, and (iii) the Certificates (or a book-entry
confirmation (as defined in the Prospectus)) representing all tendered
Original Notes, in proper form for transfer, together with a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent within
three New York Stock Exchange trading days after the date of execution of
such Notice of Guaranteed Delivery, all as provided in "The Exchange Offer
- --Guaranteed Delivery Procedures" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form set forth in such Notice.
For Original Notes to be properly tendered pursuant to the guaranteed
delivery procedure, the Exchange Agent must receive a Notice of Guaranteed
Delivery on or prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein) (i) a bank; (ii) a broker,
dealer, municipal securities broker or dealer or government securities broker
or dealer, (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
association that is a participant in a Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE
TIMELY DELIVERY.
The Issuer will not accept any alternative, conditional or contingent
tenders. Each tendering Holder, by execution of a Letter of Transmittal (or
facsimile thereof), waives any right to receive any notice of the acceptance
of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered Holder
(which term, for purposes of this document, shall include any participant
in DTC whose name appears on a security position listing as the owner of
the Original Notes) of Original Notes tendered herewith, unless such
Holder(s) has completed either the box entitled "Special Issuance
Instructions" or the box entitled "Special Delivery Instructions" above,
or
(ii) such Original Notes are tendered for the account of a firm that
is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this letter of Transmittal. See Instruction 5.
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<PAGE>
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Original Notes" is inadequate, the Certificate number(s)
and/or the principal amount of Original Notes and any other required
information should be listed on a separate signed schedule which is attached
to this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Original Notes
will be accepted only in the principal amount of $1,000 and integral
multiples thereof. If less than all the Original Notes evidenced by any
Certificate submitted are to be tendered, fill in the principal amount of
Original Notes which are to be tendered in the box entitled "Principal Amount
of Original Notes Tendered (if less than all)." In such case, new
Certificate(s) for the remainder of the Original Notes that were evidenced by
your old Certificate(s) will only be sent to the Holder of the Original
Notes, promptly after the Expiration Date. All Original Notes represented by
Certificates delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Original Notes may be
withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth above or in
the Prospectus on or prior to the Expiration Date. Any such notice of
withdrawal must specify the name of the person who tendered the Original
Notes to be withdrawn, the aggregate principal amount of Original Notes to be
withdrawn, and (if Certificates for Original Notes have been tendered) the
name of the registered Holder of the Original Notes as set forth on the
Certificate for the Original Notes, if different from that of the person who
tendered such Original Notes. If Certificates for the Original Notes have
been delivered or otherwise identified to the Exchange Agent, then prior to
the physical release of such Certificates for the Original Notes, the
tendering Holder must submit the serial numbers shown on the particular
Certificates for the Original Notes to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution, except in
the case of Original Notes tendered for the account of an Eligible
Institution. If Original Notes have been tendered pursuant to the procedures
for book-entry transfer set forth in "The Exchange Offer -- Procedures for
Tendering" the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of Original Notes, in which
case a notice of withdrawal will be effective if delivered to the Exchange
Agent by written, telegraphic, telex or facsimile transmission. Withdrawals
of tenders of Original Notes may not be rescinded. Original Notes properly
withdrawn will not be deemed validly tendered for purposes of the Exchange
Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described in the
Prospectus under "The Exchange Offers -- Procedures for Tendering."
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Issuer, in
its sole discretion, whose determination shall be final and binding on all
parties. The Issuer, any affiliates or assigns of the Issuer, the Exchange
Agent or any other person shall not be under any duty to give any
notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Original Notes
which have been tendered but which are withdrawn will be returned to the
Holder thereof without cost to such Holder promptly after withdrawal.
-11-
<PAGE>
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered Holder(s) of the
Old Notes tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the Certificate(s) without alteration,
enlargement or any change whatsoever.
If any of the Original Notes tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Original Notes are registered in different name(s) on
several Certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and must submit proper
evidence satisfactory to the Issuer, in their sole discretion, of such
persons' authority to so act.
When this Letter of Transmittal is signed by the registered owner(s) of
the Original Notes listed and transmitted hereby, no endorsement(s) of
Certificate(s) or separate bond power(s) are required unless Exchange Notes
are to be issued in the name of a person other than the registered Holder(s).
Signature(s) on such Certificate(s) or bond power(s) must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Original Notes listed, the Certificates must be
endorsed or accompanied by appropriate bond powers, signed exactly as the
name or names of the registered owner(s) appear(s) on the Certificates, and
also must be accompanied by such opinions of counsel, certifications and
other information as the Issuer or the Trustee for the Original Notes may
require in accordance with the restrictions on transfer applicable to the
Original Notes. Signatures on such Certificates or bond powers must be
guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Exchange Notes are
to be issued in the name of a person other than the signer of this Letter of
Transmittal, or if Exchange Notes are to be sent to someone other than the
signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be
completed. Certificates for Original Notes not exchanged will be returned by
mail or, if tendered by book-entry transfer, by crediting the account
indicated above maintained at DTC. See Instruction 4.
7. IRREGULARITIES. The Issuer will determine, in their sole
discretion, all questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tender of
Original Notes, which determination shall be final and binding on all
parties. The Issuer reserve the absolute right to reject any and all tenders
determined by them not to be in proper form or the acceptance of which, or
exchange for, may, in the view of counsel to the Issuer, be unlawful. The
Issuer also reserve the absolute right, subject to applicable law, to waive
any of the conditions of the Exchange Offer set forth in the Prospectus under
"The Exchange Offer -- Conditions" or any conditions or irregularity in any
tender of Original Notes of any particular Holder whether or not similar
conditions or irregularities are waived in the case of other Holders.
-12-
<PAGE>
The Issuer interpretation of the terms and conditions of the Exchange
Offer (including this Letter of Transmittal and the instructions hereto) will
be final and binding. No tender of Original Notes will be deemed to have
been validly made until all irregularities with respect to such tender have
been cured or waived. Neither the Issuer, any affiliates or assigns of the
Issuer, the Exchange Agent, nor any other person shall be under any duty to
give notification of any irregularities in tenders or incur any liability for
failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES.
Questions and requests for assistance may be directed to the Exchange Agent
at its address and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed
Delivery and the Letter of Transmittal may be obtained from the Exchange
Agent or from your broker, dealer, commercial bank, trust company or other
nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal
income tax law, a Holder whose tendered Original Notes are accepted for
exchange is required to provide the Exchange Agent with such Holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the Holder or other payee to a $50 penalty.
In addition, payments to such Holders or other payees with respect to
Original Notes exchanged pursuant to the Exchange Offer may be subject to 31%
backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering Holder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 2 is
checked, the Holder or other payee must also complete the Certificate of
Awaiting Taxpayer Identification Number below in order to avoid backup
withholding. Notwithstanding that the box in Part 2 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Exchange Agent will withhold 31% of all payments made prior to the time a
properly certified TIN is provided to the Exchange Agent. The Exchange Agent
will retain such amounts withheld during the 60 day period following the date
of the Substitute Form W-9. If the Holder furnishes the Exchange Agent with
its TIN within 60 days after the date of the Substitute Form W-9, the amounts
retained during the 60 day period will be remitted to the Holder and no
further amounts shall be retained or withheld from payments made to the
Holder thereafter. If, however, the Holder has not provided the Exchange
Agent with its TIN within such 60 day period, amounts withheld will be
remitted to the IRS as backup withholding. In addition, 31% of all payments
made thereafter will be withheld and remitted to the IRS until a correct TIN
is provided.
The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Original Notes or of the last transferee appearing on the transfers
attached to, or endorsed on, the Original Notes. If the Original Notes are
registered in more than one name or are not in the name of the actual owner,
consult the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for additional guidance on which number to
report.
Certain Holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such Holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the
face thereof, to avoid possible erroneous backup withholding. A foreign
person
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<PAGE>
may qualify as an exempt recipient by submitting a properly completed IRS
Form W-8, signed under penalties of perjury, attesting to that Holder's
exempt status. Please consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which Holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax.
Rather, the U.S. Federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Original Notes have been lost, destroyed or stolen, the Holder
should promptly notify the Exchange Agent. The Holder will then be instructed
as to the steps that must be taken in order to replace the Certificate(s).
This Letter of Transmittal and related documents cannot be processed until
the procedures for replacing lost, destroyed or stolen Certificate(s) have
been followed.
11. SECURITY TRANSFER TAXES. Holders who tender their Original Notes
for exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, Exchange Notes are to be delivered to, or are to be
issued in the name of, any person other than the registered Holder of the
Original Notes tendered, or if a transfer tax is imposed for any reason other
than the exchange of Original Notes in connection with the Exchange Offer,
then the amount of any such transfer tax (whether imposed on the registered
Holder or any other persons) will be payable by the tendering Holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes
will be billed directly to such tendering Holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL
OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR
TO THE EXPIRATION DATE.
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<PAGE>
TO BE COMPLETED BY ALL
TENDERING SECURITYHOLDERS
(SEE INSTRUCTION 9)
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C>
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SUBSTITUTE Part 1 - PLEASE PROVIDE YOUR TIN _________________________
Form W-9 TIN IN THE BOX AT RIGHT AND Social Security Number or
CERTIFY BY SIGNING AND Employer Identification Number
DATING BELOW
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Department of the Treasury Part 2
Internal Revenue Service Awaiting TIN [_]
-----------------------------------
CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I
CERTIFY THAT (1) the number shown on this form is my correct
taxpayer identification number (or I am waiting for a number to be issued
to me), (2) 1 am not subject to backup withholding either because (i) I am
exempt from backup withholding, (ii) I have not been notified by the
Internal Revenue Service ("IRS") that I am subject to backup withholding as
a result of a failure to report all interest or dividends, or (iii) the IRS has
notified me that I am no longer subject to backup withholding, and (3) any
other information provided on this form is true and correct.
Payer's Request for Taxpayer SIGNATURE ________________________________________________________________
Identification Number (TIN)
and Certification DATE _____________________________________________________________________
You must cross out item (iii) in Part (2) above if you have been notified by
the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return and you have not
been notified by the IRS that you are no longer subject to backup
withholding.
________________________________________________________________________________________________________________
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT
TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
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CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and that either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments made to me on account of the Exchange
Notes shall be retained until I provide a taxpayer identification number to
the Exchange Agent and that, if I do not provide my taxpayer identification
number within 60 days, such retained amounts shall be remitted to the Internal
Revenue Service as backup withholding and 31% of all reportable payments made
to me thereafter will be withheld and remitted to the Internal Revenue Service
until I provide a taxpayer identification number.
Signature ___________________________________ Date _____________________
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