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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)
Delaware 2711 22-675173
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(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification
No.)
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
<TABLE>
<CAPTION>
Title of Each Class of Amount to be Proposed Maximum Proposed Maximum
Securities to be Registered Registered Offering Price(1) Aggregate Offering Price(1)
- --------------------------- ------------ ----------------- ---------------------------
<S> <C> <C> <C>
8.75% Series B Senior
Subordinated Notes Due 2009 $50,000,000 103.50% $51,750,000
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act.
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
ITEM OF FORM S-4 LOCATION IN PROSPECTUS
---------------- ----------------------
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; Selected
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 Information; Certain
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
<PAGE>
ITEM OF FORM S-4 LOCATION IN PROSPECTUS
---------------- ----------------------
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
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
DATED MAY __, 1998
OFFER FOR ALL OUTSTANDING SERIES A 8.75% SENIOR SUBORDINATED NOTES DUE 2009
IN EXCHANGE FOR UP TO $50,000,000 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 JUNE __, 1998
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
$50,000,000 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 of Garden
State from the Holders (as defined herein) thereof. As of the date of the
Prospectus, there is $50,000,000 aggregate principal amount of the Original
Notes outstanding. There are $250,000,000 of Exchange Notes previously
outstanding, that were issued on February 2, 1998, in exchange for
$250,000,000 of unregistered notes issued on October 1, 1997, pursuant to the
same Indenture (as herein defined) as the Original Notes, and the Exchange
Notes offered hereby (see Description of Notes). 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 Original Notes, together with the
Exchange Notes offered by this Prospectus and all previously outstanding
Exchange Notes, shall be referred to as the "Notes."
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 December 31, 1997, and after giving
effect to the sale of the Original Notes and the acquisition of the DAILY
NEWS on January 29, 1998, Senior Debt of the Company would have been
approximately $80.0 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 $52.2 million.
SEE "RISK FACTORS," WHICH BEGINS AT PAGE 13, 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.
-----------------------
The date of this Prospectus is May _____, 1998.
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The Original Notes were sold on February 12, 1998, 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."
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.
ii
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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.
4. Form 10-Q for quarter ended September 30, 1997.
5. Form 10-Q for quarter ended December 31, 1997.
6. Current report on Form 8-K dated January 29, 1998.
7. Current report on Form 8-K/A Amendment No. 1 dated January 29, 1998.
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, and as of March
31, 1998, owns and operates 27 market dominant daily and 55 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 1,060,989 and 1,063,188, respectively, as of September 30, 1997,
including the acquisition and dispositions 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.
On July 31, 1997, December 16, 1997, and January 29, 1998, the Company
acquired THE SUN in Lowell, Massachusetts, the PRESS-TELEGRAM in Long Beach,
California, and the DAILY NEWS in the San Fernando Valley of Los Angeles,
California, respectively. In addition, on December 5, 1997, the Company sold the
NORTH JERSEY HERALD & NEWS located in Passaic, New Jersey, and sixteen weekly
newspapers in surrounding counties.
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. From May 31, 1994 through
January 31, 1998, the Company has acquired 20 daily and 25 weekly newspapers for
aggregate consideration (including the assumption of debt) of $491.1 million.
During the same period, the Company disposed of five daily and 25 weekly
newspapers for a combined $165.1 million, resulting in realized pre-tax gains of
$81.4 million. These acquisitions and
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dispositions would have resulted in a net increase in debt of $326.2 million
if such transactions had occurred on June 30, 1997 and pro forma EBITDA
of $66.1 million for the year then ended, representing a debt to EBITDA ratio
of 4.9x. 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.
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, 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).
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- 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. ("MNG") and
MNG's buying power, as the 7th largest newspaper group in the United
States in terms of circulation as of September 30, 1997. 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 12 months to two 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 the
remainder of fiscal year 1998 and fiscal year 1999 will be covered by
fixed price contracts, at prices which are currently 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 March 31, 1998, all the Company's
newspapers, except Lebanon, Pennsylvania, 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 June 30, 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 the DAILY
NEWS 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 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.
3
<PAGE>
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.
4
<PAGE>
THE EXCHANGE OFFER
The Exchange Offer. . The Company is offering to exchange, pursuant to the
Exchange Offer, up to $50,000,000 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 $50,000,000
aggregate principal amount of Original Notes outstanding.
See "The Exchange Offer."
Registration Rights
Agreement. . . . . . The Original Notes were sold by the Company on February
12, 1998, to Goldman, Sachs & Co. (the "Initial
Purchaser") pursuant to a Purchase Agreement dated as of
February 6, 1998, by and among the Company and the
Initial Purchaser (the "Purchase Agreement"). Pursuant to
the Purchase Agreement, the Company and the Initial
Purchaser entered into a Registration Rights Agreement
dated as of February 6, 1998 (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 June _____, 1998, 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.
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.
5
<PAGE>
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."
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.
6
<PAGE>
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."
7
<PAGE>
THE NOTES
The Exchange Notes. . The Exchange Offer applies to $50,000,000 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. There are $250,000,000 of exchange notes
that were previously issued in an Exchange Offer
completed on February 2, 1998. 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.
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.
8
<PAGE>
Ranking and Structure. The Notes will be general unsecured obligations of
Garden State, will be senior in right to payment to
any future indebtedness of Garden State which is made
expressly junior thereto (such as the $47,600,000
subordinated promissory note issued on January 30,
1998 pursuant to the Garden State Newspapers, Inc.
and Greenco, Inc. Subordinated Note Purchase
Agreement), 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
DAILY NEWS Acquisition, no indebtedness of Garden
State which would be subordinate to the Notes would
be outstanding. As of December 31, 1997, and after
giving effect to the issuance of the Original Notes
and the acquisition of THE SUN and the DAILY NEWS,
Senior Debt of Garden State would have been
approximately $80.0 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 $52.2 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.
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.
9
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth certain selected financial data of Garden
State. The selected financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements of Garden State and Notes
thereto which have been incorporated by reference in this Prospectus. The
selected financial data as of and for the fiscal years ended June 30, 1995
through 1997 have been derived from the Garden State financial statements which
have been audited by independent certified public accountants, and which are
incorporated by reference in this Prospectus. The selected financial data for
the years ended June 30, 1993 and 1994 have been derived from audited financial
statements which are not included herein. The selected financial data for the
six months ended December 31, 1997 and 1996 have been derived from unaudited
financial statements which are incorporated by reference in this Prospectus. In
the opinion of management of the Company, the unaudited financial statements for
the six months ended December 31, 1997 and 1996 have been prepared on the same
basis as the audited financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position and the results of operations for these
periods. Operating results for the six months ended December 31, 1997, are not
necessarily indicative of the results that may be expected for the year ending
June 30, 1998. This data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the financial statements, and related notes thereto, incorporated by reference
in this Prospectus. (Dollars in thousands.)
<TABLE>
<CAPTION>
Six Months Ended
Fiscal Year Ended June 30 December 31
------------------------------------------------------- ---------------------
1993 1994 1995 1996 1997 1997 1997
--------- -------- -------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues
Advertising . . . . . . . . . . . . . . . . . $ 148,237 $159,653 $179,268 $ 197,954 $ 242,914 $ 113,525 $ 150,845
Circulation . . . . . . . . . . . . . . . . . 25,642 25,198 30,517 39,930 48,451 21,465 30,883
Other . . . . . . . . . . . . . . . . . . . . 1,931 1,792 3,260 7,546 11,537 4,975 7,262
--------- -------- -------- --------- ---------- --------- ----------
Total Revenues . . . . . . . . . . . . . . . . 175,810 186,643 213,045 245,430 302,902 139,965 188,990
Cost of Sales . . . . . . . . . . . . . . . . . 63,930 68,531 79,098 98,469 106,476 50,289 64,941
Selling, General & Administrative . . . . . . . 76,864 79,217 88,847 100,230 125,632 57,121 75,400
Management Fees . . . . . . . . . . . . . . . . 1,402 1,552 1,666 2,008 2,205 1,066 1,339
Depreciation and Amortization . . . . . . . . . 21,094 19,900 18,710 21,841 24,689 10,967 16,507
Interest Expense . . . . . . . . . . . . . . . 24,064 24,623 25,806 27,414 31,903 14,390 20,141
Gain on Sale of Newspaper Property . . . . . . -- 6,536 4,153 8,291 30,575 -- 31,829
Income (Loss) Before Income Taxes
and Extraordinary Loss . . . . . . . . . . . . (13,794) (15,253) 684 (752) 34,577 1,319 34,544
Net Income (Loss)(a) . . . . . . . . . . . . . (10,992) 18,716 1,048 1,260 24,739 (8,825) 27,615
OTHER FINANCIAL DATA:
EBITDA(b) . . . . . . . . . . . . . . . . . . . $ 33,614 $ 37,343 $ 43,434 $ 44,723 $ 68,589 $ 31,489 $ 47,310
EBITDA Margin(c) . . . . . . . . . . . . . . . 19.1% 20.0% 20.4% 18.2% 22.6% 22.5% 25.0%
Capital Expenditures . . . . . . . . . . . . . $ 6,564 $ 3,380 $ 4,284 $ 8,079 $ 8,836 $ 4,948 $ 3,794
Leverage Ratio(d) . . . . . . . . . . . . . . . 6.9x 6.0x 5.1x 4.6x 4.5x -- --
Ratio of EBITDA to Interest Expense . . . . . . 1.4x 1.5x 1.7x 1.6x 2.1x 2.2x 2.3x
Ratio of Earnings to Fixed Charges(e) . . . . . -- -- 1.0x -- 1.9x 1.1x 2.3x
BALANCE SHEET DATA:
Intangible Assets (net) . . . . . . . . . . . . $ 143,299 $143,190 $134,409 $ 118,396 $ 230,938 $ 213,388 $ 308,083
Total Assets . . . . . . . . . . . . . . . . . 263,073 252,561 250,500 240,759 414,431 376,645 526,563
Long-Term Debt and Capital Leases . . . . . . . 231,341 235,147 223,847 210,589 350,822 353,211 413,810
Other Long-Term Liabilities and Obligations . . 14,051 3,852 5,042 8,101 5,488 5,796 5,199
Total Shareholders' Equity (Deficit) . . . . . (114,847) (23,100) (22,052) (20,792) 3,947 (29,617) 31,562
</TABLE>
(FOOTNOTES ON PAGE 12)
10
<PAGE>
UNAUDITED PRO FORMA SELECTED FINANCIAL DATA
Unaudited pro forma income statement data for fiscal 1997 gives effect to
the acquisition of THE SUN and the DAILY NEWS and the sale of the Original Notes
as if the transactions had occurred on July 1, 1996. Unaudited pro forma income
statement data for the six months ended December 31, 1997, give effect to the
acquisition of the DAILY NEWS and the sale of the Original Notes as if they
occurred on July 1, 1997. For purposes of the balance sheet data, the unaudited
pro forma data include the acquisition of the DAILY NEWS and the sale of the
Original Notes as if these occurred on December 31, 1997. (Dollars in
thousands.)
<TABLE>
<CAPTION>
Unaudited Unaudited
Pro Forma Pro Forma
June 30, December 31,
1997(g) 1997(g)
------------- -------------
<S> <C> <C>
INCOME STATEMENT DATA:
Revenues
Advertising . . . . . . . . . . . . . . . $ 342,514 $ 193,661
Circulation . . . . . . . . . . . . . . . 73,627 39,674
Other . . . . . . . . . . . . . . . . . . 12,166 7,696
------------- --------------
Total Revenues . . . . . . . . . . . . . . 427,947 241,031
Cost of Sales . . . . . . . . . . . . . . . 160,023 83,888
Selling, General & Administrative . . . . . 178,338 100,031
Management Fees . . . . . . . . . . . . . . 2,205 1,339
Depreciation and Amortization . . . . . . . 35,366 19,596
Interest Expense . . . . . . . . . . . . . 47,319 25,437
Gain on Sale of Newspaper Property . . . . 30,575 31,829
Income Before Income Taxes and
Extraordinary Loss . . . . . . . . . . . 27,027 33,532
Net Income(a) . . . . . . . . . . . . . . . 18,255 26,603
OTHER FINANCIAL DATA:
EBITDA(b) . . . . . . . . . . . . . . . . . $ 87,381 $ 55,773
EBITDA Margin(c) . . . . . . . . . . . . . 20.4% 23.1%
Capital Expenditure . . . . . . . . . . . . $ 8,836 $ 3,794
Leverage Ratio(d) . . . . . . . . . . . . . 5.13x --
Ratio of EBITDA to Interest Expense . . . . 1.85x 2.19x
BALANCE SHEET DATA:
Intangible Assets (net) . . . . . . . . . . (f) $ 387,611
Total Assets . . . . . . . . . . . . . . . (f) 663,132
Long-Term Debt and Capital Leases . . . . . (f) 531,410
Other Long-Term Liabilities and Obligations (f) 7,599
Total Shareholders' Equity . . . . . . . . (f) 31,562
</TABLE>
(FOOTNOTES ON PAGE 12)
11
<PAGE>
(FOOTNOTES FOR PAGES 10 AND 11)
(a) The six months ended December 31, 1997, and the fiscal year 1997, include
approximately $7.0 million and $4.4 million, respectively, of expense
associated with the write-off of debt issuance cost and bank fees. Fiscal
year 1997 also includes $9.5 million of make-whole premiums associated with
the prepayment on October 31, 1996, of the previously outstanding senior
notes and related expenses.
(b) 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.
(c) 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.
(d) Calculated as defined. See "Description of the Notes."
(e) 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.
(f) Pro forma balance sheet data is presented for the six-month period ended
only, as previous transactions have already been reflected in the balance
sheet as of December 31, 1997.
(g) Details of the pro forma adjustments are included in Form 8-K/A dated
January 21, 1998, and has been incorporated by reference herein.
Note: No pro forma information for the acquisition of the Long Beach PRESS
TELEGRAM or the sale of the North Jersey HERALD & NEWS has been included as
these transactions were not material as defined by regulation SX.
12
<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, BEFORE TENDERING
THE ORIGINAL NOTES FOR 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, for fiscal 1997 as
presented, approximately 35.9% of Garden States' EBITDA came from its own
business operations with the remaining 64.1% coming from its Subsidiaries.
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.
13
<PAGE>
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 December 31, 1997, and after
giving effect to the sale of the Original Notes and the DAILY NEWS acquisition,
Senior Debt of Garden State would have been approximately $80.0 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 $52.2 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."
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.
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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 throughout calendar 1997 and into calendar 1998.
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 three quarters of its
fiscal 1998 newsprint requirements under fixed price supply contracts entered
into by MNG with a weighted average price of $535 per metric ton. MNG expects
to allocate 100,000 metric tons to the Company annually over the next 12
months to two 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.
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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. 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 constitute an 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 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 Note Purchase Agreement between the Company and the
Purchasers of the Notes dated February 6, 1998 (the "Purchase Agreement"),
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."
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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."
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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 $51.0 million and general
corporate purposes. After giving effect to the sale of the Original Notes, there
is approximately $228.2 million available for borrowings under the Garden State
Credit Facility, of which $151.0 million is available only for acquisitions.
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THE 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.
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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."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
June ____, 1998, 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.
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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 record on September 15, 1998, of the Exchange Notes will receive
interest on October 1, 1998, for the semiannual period ended October 1, 1998.
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.
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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.
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.
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
admit 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.
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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.
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
(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.
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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.
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<PAGE>
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 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 0.50% per annum
for the first 90 days immediately following each such filing date, such
Additional Interest rate increasing by an additional 0.50% 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 0.50% per annum for the first 90 days
immediately following such date, such Additional Interest rate increasing
by an additional 0.50% 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 0.50% 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 0.50% per
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<PAGE>
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
$50,000. 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.
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<PAGE>
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.
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 was previously filed with the SEC as an
exhibit to the Company's Registration Statement on Form S-4 dated October 24,
1997 (No. 333-38663). 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.
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<PAGE>
DESCRIPTION OF THE NOTES
The Original Notes have been, and the Exchange Notes offered by this
Prospectus 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"). On February 2, 1998, $250,000,000 of Exchange Notes were issued
pursuant to the Indenture in exchange for unregistered Notes issued pursuant to
the Indenture on October 1, 1997. 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 $300.0 million is outstanding
and are general unsecured obligations of Garden State.
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
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<PAGE>
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.
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:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2002 . . . . . . . . . . . . . . . . . . . . . . . . . 104.375%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . 102.917%
2004 . . . . . . . . . . . . . . . . . . . . . . . . . 101.458%
2005 and thereafter. . . . . . . . . . . . . . . . . . 100.000%
</TABLE>
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<PAGE>
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 contains, among others, the following covenants:
LIMITATION ON ADDITIONAL DEBT. The Indenture provides 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 do 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 provides 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 provides 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.
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<PAGE>
LIMITATION ON RESTRICTED PAYMENTS. The Indenture provides 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 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 provides 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
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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 provides 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
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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 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 provides 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 provides 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 provides
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 provides that Garden State will not,
and will not permit any of its Restricted Subsidiaries to, engage in any
business other than the Permitted Business.
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LIMITATION ON RESTRICTED AND UNRESTRICTED SUBSIDIARIES. The Indenture
provides 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 also provides 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 provides 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 this Prospectus, there are no Unrestricted Subsidiaries.
CHANGE OF CONTROL. The Indenture provides 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 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.
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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
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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 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.
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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.
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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 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.
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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 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 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.
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"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
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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 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.
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"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.
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"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.
"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.
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"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 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.
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"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.
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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.
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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.
47
<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 $284.0 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 $75.0 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.
As of December 31, 1997, after giving effect to the sale of the Original
Notes and use of proceeds and the acquisition of the DAILY NEWS on January 29,
1998, approximately $151.0 million will be available under RCA for future
acquisitions, approximately $22.2 million will be available under RCB,
approximately $55.0 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.
<TABLE>
<CAPTION>
RCA RCB RCC Term A Loan
--------- --------- --------- -----------
(In thousands)
<S> <C> <C> <C> <C>
1998 . . . . . $ 10,000 $ -- $ 3,000 $ --
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 $ 75,000 $ 15,000
--------- --------- --------- -----------
--------- --------- --------- -----------
</TABLE>
48
<PAGE>
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 December 31, 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 December 31, 1997, of $23.9 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.
SUBORDINATED PROMISSORY NOTE
On January 30, 1998, Garden State entered into a subordinated note
purchase agreement, pursuant to which Garden State issued a $47.6 million,
9.0% Subordinated Promissory Note (the "Promissory Note") due January 31,
2010. Interest accruing on the Promissory Note is payable quarterly beginning
on March 31, 1998, provided that on each interest payment date occurring on or
prior to December 31, 2002, the Company may elect to defer any or all accrued
and unpaid interest otherwise due and payable. However, in calendar years
2000, 2001 and 2002 the Company must pay the lesser of $3.0 million or all
accrued and unpaid interest due in such year. The Promissory Note is
subordinated and junior in right of payment to Garden State's Bank Credit
Agreement, Senior Subordinated Secured Notes and the Senior Subordinated
Notes. No scheduled principal payments are required until January 31, 2010,
at which time the outstanding principal amount is due and payable. ANI has
guaranteed the Promissory Note. Proceeds from the Promissory Note were used
to fund a portion of the DAILY NEWS acquisition.
ANI SENIOR DISCOUNT DEBENTURES
In May, 1994, ANI issued approximately $173,576,000 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.
49
<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.
50
<PAGE>
EXPERTS
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, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. In addition, the
Financial Statements of Tower Media, Inc., for the year ended December 28, 1997,
which were included in the Garden State Newspapers, Inc. Form 8-K/A dated
January 29, 1998, have also been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
therein by reference. All such financial statements referred to above 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.
51
<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
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . iii
Certain Information Incorporated by Reference. . . . . . . . . . . . . . iv
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . 10
The Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Description of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Book-Entry; Delivery and Form. . . . . . . . . . . . . . . . . . . . . . 46
Certain Federal Income Tax Considerations. . . . . . . . . . . . . . . . 47
Description of Other Indebtedness. . . . . . . . . . . . . . . . . . . . 48
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . 51
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
</TABLE>
$50,000,000
----------
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
MAY , 1998
52
<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. The indemnified person shall have
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 Section 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 Section 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 corporation 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.
53
<PAGE>
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.
(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.
54
<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 May 1, 1998.
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:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------- --------------------------- ---------------
<S> <C> <C>
/s/ William Dean Singleton Vice Chairman, President,
- --------------------------- Chief Executive Officer and May 1, 1998
(William Dean Singleton) Director (Chief Executive
Officer)
/s/ Joseph J. Lodovic, IV Executive Vice President
- --------------------------- and Chief Financial Officer May 1, 1998
(Joseph J. Lodovic, IV) (Chief Financial Officer)
/s/ Richard B. Scudder Director May 1, 1998
- ---------------------------
(Richard B. Scudder)
/s/ Peter M. Miller Director May 1, 1998
- ---------------------------
(Peter M. Miller)
/s/ Howell E. Begle, Jr. Director, Counsel and May 1, 1998
- --------------------------- Assistant Secretary
(Howell E. Begle, Jr.)
/s/ Ronald A. Mayo Vice President Finance and
- --------------------------- Controller (Principal May 1, 1998
(Ronald A. Mayo) Accounting Officer)
</TABLE>
55
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
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 1, 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
4.6*** -Form of Garden State Newspapers, Inc.'s 8-3/4% Senior
Subordinated Notes due 2009, Series B, contained in the Indenture
filed as Exhibit 4.4
4.7 -Registration Rights Agreement dated as of February 6, 1998,
among Garden State Newspapers, Inc. and the Purchasers listed on
the signature page.
5.0 -Opinion 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 New 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
</TABLE>
56
<PAGE>
INDEX TO EXHIBITS (CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
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 New 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 24, 1995, by and
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 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
</TABLE>
57
<PAGE>
INDEX TO EXHIBITS (CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.29** -Asset Purchase Agreement by and among Thomson Newspapers, Inc.,
Seller, and Garden State Newspapers, Inc., Purchaser, relating to
the SENTINEL & ENTERPRISE 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
10.30** -Asset Purchase Agreement by and among Lowell Sun Publishing
Company and Lowell Sun Realty Company (Sellers), Garden State
Newspapers, Inc. (Purchaser), and John H. Costello, Jr.,
Alexander S. Costello, Thomas F. Costello, Andrew G. Costello,
Charlotte E. LaPierre and Dana Biadi (Guarantors), Relating to
the Acquisition of THE SUN and THE SUNDAY SUN dated July 31, 1997
10.31** -Asset Purchase and Sale Agreement by and between Tower Media,
Inc., as Seller; Jack Kent Cooke Incorporated, as Guarantor; and
Garden State Newspapers, Inc., as Purchaser, dated as of
December 1, 1997
10.32** -Indenture dated as of October 1, 1997, between Garden State
Newspapers, Inc. and The Bank of New York, as Trustee, for the
issuance of up to $300,000,000 of Series A & B 8-3/4% Senior
Subordinated Notes due 2009
10.33** -Subordinated Note Purchase Agreement between Garden State
Newspapers, Inc. and Greenco, Inc. dated as of January 30, 1998
10.34 -Note Purchase Agreement dated February 6, 1998, by and among
Garden State Newspapers, Inc. and the Purchasers of $50,000,000
of 8-3/4% Notes due 2009
12.1** -Computation of Ratio 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
</TABLE>
_________________
* Previously filed as exhibits to registration statement on Form
S-1 (No. 33-75156) and amendments thereto.
** Previously filed.
*** Previously filed as exhibits to Registration Statement on Form
S-4 (No. 333-38663).
58
<PAGE>
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) AND AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) PROMULGATED UNDER THE
SECURITIES ACT) (AN "ACCREDITED INVESTOR"), (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) TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHED (OR
HAS FURNISHED 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 REGULATION S PROMULGATED UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144A PROMULGATED 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 TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY 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 REQUIREMENTS OF THE SECURITIES 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.
-1-
<PAGE>
CUSIP No. 365438AB6
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 ___________ 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.
-2-
<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: February __, 1998
THE BANK OF NEW YORK, as Trustee
By:
Authorized Signatory
-3-
<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 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. THE BANK OF NEW YORK (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or coRegistrar 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 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
-4-
<PAGE>
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:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2002 104.375%
2003 102.917%
2004 101.458%
2005 and thereafter 100.000%
</TABLE>
(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 $162,500,000 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
-5-
<PAGE>
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 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.
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
-6-
<PAGE>
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.
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.
-7-
<PAGE>
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. 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.
-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.
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) February ___, 2000 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
----
(2) pursuant to and in compliance with Rule 144A under the Securities
---- Act; or
-9-
<PAGE>
(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.
Dated: Signed:
------------------------ ------------------------------------
(Sign exactly as name appears on the other
side of this Note)
Signature Guarantee:
---------------------------------------------------------
-10-
<PAGE>
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:
---------------------------------------------------------
-11-
<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)
-12-
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of February 6, 1998
among
GARDEN STATE NEWSPAPERS, INC.
as Issuer
and
the Purchasers
listed on the signature page
attached hereto
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$50,000,000
8 3/4% SENIOR SUBORDINATED NOTES DUE 2009
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
3. Shelf-Registration . . . . . . . . . . . . . . . . . . . . . . . . . .7
4. Additional Interest. . . . . . . . . . . . . . . . . . . . . . . . . .8
5. Registration Procedures. . . . . . . . . . . . . . . . . . . . . . . 10
6. Registration Expenses. . . . . . . . . . . . . . . . . . . . . . . . 19
7. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8. Rule 144 and 144A. . . . . . . . . . . . . . . . . . . . . . . . . . 25
9. Underwritten Registrations . . . . . . . . . . . . . . . . . . . . . 25
10. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(a) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . 25
(b) Adjustments Affecting Registrable Notes. . . . . . . . . . . . 26
(c) Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 26
(d) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(e) Successors and Assigns . . . . . . . . . . . . . . . . . . . . 27
(f) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 28
(g) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(h) Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 28
(i) Severability . . . . . . . . . . . . . . . . . . . . . . . . . 28
(j) Securities Held by the Company or Its Affiliates . . . . . . . 28
(k) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT)", dated as of February
6, 1998, by and among Garden State Newspapers, Inc., a Delaware corporation (the
"COMPANY"), and the Purchasers listed on the signature page hereof
(collectively, the "PURCHASERS").
This Agreement is entered into in connection with the Note Purchase
Agreement, dated as of February 6, 1998, by and among the Company and the
Purchasers listed on the signature page hereof (the "PURCHASE AGREEMENT"), which
provides for the sale by the Company to the Purchasers of $50,000,000 aggregate
principal amount of the Company's 8 3/4% Senior Subordinated Notes due 2009 (the
"NOTES"). In order to induce the 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 Purchasers and their direct and
indirect transferees and assigns. The execution and delivery of this Agreement
by the Company is a condition to the 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.
EFFECTIVENESS PERIOD: See Section 3(a) hereof.
EVENT DATE: See Section 4(b) hereof.
<PAGE>
2
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.
INSPECTORS: See Section 5(o) hereof.
ISSUE DATE: The date on which the Notes were sold to the 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.
PERSON: An individual, trustee, corporation, partnership, limited liability
company, joint stock company, trust, unincorporated association, union, business
association, firm or other legal entity.
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
<PAGE>
3
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.
PURCHASERS: See the first introductory paragraph hereto.
RECORDS: See Section 5(o) hereof.
REGISTRABLE NOTES: Each Note upon original issuance of the Notes and at all
times subsequent thereto, until the earliest to occur of the following: (i) a
Registration Statement covering such Note has been declared effective by the SEC
and such Note has been disposed of in accordance with such effective
Registration Statement, (ii) such Note 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 ceases to be outstanding for purposes of the Indenture.
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.
<PAGE>
4
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.
PURCHASE AGREEMENT: See the second introductory paragraph hereto.
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 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 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
<PAGE>
5
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 Company, (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, and (v) 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 Exchange
Notes held by Participating Broker-Dealers (as defined below), and the Company
shall have no further obligation to register Registrable Notes 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 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 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
<PAGE>
6
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 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").
Interest on the 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 business 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 the
Company shall:
<PAGE>
7
(1) accept for exchange all Notes properly tendered and not validly
withdrawn pursuant to the Exchange Offer;
(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 equal in outstanding principal amount to the
Notes of such Holder so accepted for exchange.
The 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 the Exchange Notes shall not be subject to the transfer
restrictions set forth in the Indenture. The Indenture or such indenture shall
provide that the Exchange Notes and the Notes shall vote and consent together on
all matters as one class and that neither the Exchange Notes nor 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) 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 the Company
shall promptly deliver written notice thereof (the "SHELF NOTICE") to the
Trustee and all Holders, 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
<PAGE>
8
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 applicable 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 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)
<PAGE>
9
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 0.50% per annum for the first 90
days immediately following each such filing date, such Additional Interest
rate increasing by an additional 0.50% 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 O.50% per annum for the first 90 days
immediately following such date, such Additional Interest rate increasing
by an additional 0.50% 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 0.50% 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 0.50% per annum at the beginning
of each such subsequent 90-day period;
<PAGE>
10
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
Interest 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 registrations 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 such filing is pursuant to Section 3 hereof
<PAGE>
11
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, 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 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 maybe 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; 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 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 a Shelf Registration is filed pursuant to Section 3 hereof,
notify the selling Holders of Registrable Notes, 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
<PAGE>
12
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 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 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
<PAGE>
13
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 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 a Shelf Registration is filed pursuant to Section 3 hereof,
furnish to each selling Holder of Registrable Notes 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 a Shelf Registration is filed pursuant to Section 3 hereof,
deliver to each selling Holder of Registrable Notes, their 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 and the underwriters or agents, if
any, and dealers (if any), in connection with the offering and sale of the
Registrable Notes covered by such Prospectus and any amendment or supplement
thereto.
(h) Prior to any public offering of Registrable Notes, use its best
efforts to register or qualify such Registrable Notes (and to cooperate with the
selling Holders of Registrable Notes, 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 or the
managing underwriter or underwriters reasonably request in writing; PROVIDED,
HOWEVER,
<PAGE>
14
that where 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
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 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 a Shelf Registration is filed pursuant to Section 3 hereof,
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
<PAGE>
15
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.
(1) 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 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, 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.
(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 offering 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
<PAGE>
16
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 a Shelf Registration is filed pursuant to Section 3 hereof,
make available for inspection by any selling Holder of such Registrable Notes
being sold, 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 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,
<PAGE>
17
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 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 trust indenture provided for
in Section 2(a) hereof that is not the Indenture (which Indenture already has
been qualified pursuant to the TIA), 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 security holders 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
<PAGE>
18
Company after the effective date of a Registration Statement, which statements
shall cover said 12-month periods.
(r) Upon consummation of an Exchange Offer 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 that the Exchange Notes 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 is to be consummated, upon delivery of the
Registrable Notes by Holders to the Company (or to such other Person as directed
by the Company) in exchange for the Exchange Notes, 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; 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.
<PAGE>
19
Each Holder of Registrable Notes agrees by acquisition of such
Registrable Notes 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 until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated 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 and determination of the
eligibility of the Registrable Notes for investment under the laws of such
jurisdictions where the holders of Registrable Notes are located, (ii) printing
expenses, including, without limitation, expenses of printing certificates for
Registrable 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, (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
<PAGE>
20
referred to in Section 5(n)(iii) hereof (including, 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 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.
7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder of
Registrable Notes offered pursuant to a Shelf Registration Statement, 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 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
<PAGE>
21
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 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
<PAGE>
22
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 proceedings 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 purchased a
majority of the Registrable Notes 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
<PAGE>
23
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 Exchange
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 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
<PAGE>
24
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 Exchange Notes 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. RULES 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 publicly 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
<PAGE>
25
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 piggyback 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 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
<PAGE>
26
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, at the most current
address of such Holder set forth on the records of the registrar under the
Indenture,
[with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No.: (212) 269-5420
Attention: Michael Becker, Esq.]
2. 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: Harold I. Freilich, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally
<PAGE>
27
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.
(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
<PAGE>
28
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) ENTIRE AGREEMENT. This Agreement, together with the Note
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
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.
[Intentionally left blank]
[Signatures on following page]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
GARDEN STATE NEWSPAPERS, INC.
By:
-------------------------
Name:
Title:
Agreed to and accepted as
of the date first above written:
print or type name of Purchaser
By:
------------------------
Title
Address
<PAGE>
Schedule I
List Of Purchasers
<PAGE>
- --------------------------------------------------------------------------------
GARDEN STATE NEWSPAPERS, INC.
8 3/4% Senior Subordinated Notes
Due 2009
NOTE PURCHASE AGREEMENT
Dated as of February 6, 1998
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
ARTICLE 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2. PURCHASE AND SALE OF THE NOTES . . . . . . . . . . . . . . . . . . 6
Section 2.1. The Securities . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.2. Issue of the Notes . . . . . . . . . . . . . . . . . . . . 7
Section 2.3 Sale and Purchase of the Securities; the Closing . . . . . 8
Section 2.4 Failure to Deliver . . . . . . . . . . . . . . . . . . . . 8
Section 2.5. Further Action . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 3. CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.1. Conditions to Obligations of the
Purchasers . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.1.1. Opinions of Counsel. . . . . . . . . . . . . . . . . . . . 9
Section 3.1.2. Representations and Warranties True;
No Event of Default. . . . . . . . . . . . . . . . . . . . 9
Section 3.1.3. Compliance with Agreements . . . . . . . . . . . . . . . . 9
Section 3.1.4. Officers' Certificates . . . . . . . . . . . . . . . . . .10
Section 3.1.5. Completion of Other Transactions . . . . . . . . . . . . .10
Section 3.1.6. Consents; Permits. . . . . . . . . . . . . . . . . . . . .10
Section 3.1.7. Maintenance of Agreements. . . . . . . . . . . . . . . . .10
Section 3.1.8. Purchase Permitted by Applicable Laws;
Legal Investment . . . . . . . . . . . . . . . . . . . . .10
Section 3.1.9. Proceedings Satisfactory . . . . . . . . . . . . . . . . .11
Section 3.1.10.Full Subscription. . . . . . . . . . . . . . . . . . . . .11
Section 3.2. Conditions to Obligations of GSN . . . . . . . . . . . . .11
Section 3.2.1. Sale of Securities . . . . . . . . . . . . . . . . . . . .11
Section 3.2.2. Purchaser's Representations and Warranties True. . . . . .11
Section 3.2.3. Sale of Securities Not Enjoined. . . . . . . . . . . . . .11
ARTICLE 4. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . .12
Section 4.1. Representations and Warranties of GSN. . . . . . . . . . .12
Section 4.2. Representations and Warranties . . . . . . . . . . . . . .20
Section 4.2.1. Accredited Investor. . . . . . . . . . . . . . . . . . . .20
Section 4.2.2. Investment Intent. . . . . . . . . . . . . . . . . . . . .20
Section 4.2.3. Accuracy and Reliance. . . . . . . . . . . . . . . . . . .21
Section 4.2.4. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . .22
ARTICLE 5. COMPLIANCE WITH THE SECURITIES ACT . . . . . . . . . . . . . . . .23
Section 5.1. Compliance with the Securities Act . . . . . . . . . . . .23
Section 5.2. Certificates Evidencing the Securities . . . . . . . . . .24
Section 5.3. Information. . . . . . . . . . . . . . . . . . . . . . . .26
Section 5.4. Exceptions . . . . . . . . . . . . . . . . . . . . . . . .26
<PAGE>
ARTICLE 6. SUBSTITUTION OF PURCHASERS . . . . . . . . . . . . . . . . . . . .26
Section 6.1. Substitution of Purchasers . . . . . . . . . . . . . . . .26
ARTICLE 7. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . .26
Section 7.1. Access to Information. . . . . . . . . . . . . . . . . . .26
Section 7.2. Notices. . . . . . . . . . . . . . . . . . . . . . . . . .27
Section 7.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . .27
Section 7.4. Home Office Payment. . . . . . . . . . . . . . . . . . . .28
Section 7.5. Termination. . . . . . . . . . . . . . . . . . . . . . . .28
Section 7.6. Survival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . . .29
Section 7.7. Assignments. . . . . . . . . . . . . . . . . . . . . . . .29
Section 7.8. No Waiver; Modifications in Writing. . . . . . . . . . . .29
Section 7.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . .30
Section 7.10. Headings . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 7.11. Consent to Jurisdiction and Service of Process . . . . . .30
Section 7.12. Governing Law. . . . . . . . . . . . . . . . . . . . . . .31
Section 7.13. Entire Agreement . . . . . . . . . . . . . . . . . . . . .31
Section 7.14. Severability . . . . . . . . . . . . . . . . . . . . . . .31
Section 7.15. Delivery . . . . . . . . . . . . . . . . . . . . . . . . .31
Section 7.16. Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . .32
Section 7.17. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . .32
Section 7.18. Placements Agents as Beneficiaries of Agreement. . . . . .32
Section 7.19. Alternative Closing Procedure. . . . . . . . . . . . . . .32
</TABLE>
<PAGE>
GARDEN STATE NEWSPAPERS, INC.
$50,000,000
8 3/4% Senior Subordinated Notes due 2009
NOTE PURCHASE AGREEMENT
February 6, 1998
To: The Purchasers Specified on the
Attached List
Dear Ladies and Gentlemen:
Garden State Newspapers, Inc., a Delaware corporation (the "Company"
or "GSN"), hereby confirms its agreement with you (the "PURCHASERS"), as set
forth below.
ARTICLE 1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
indicated below:
"AFFILIATE" means, in respect to any Person, any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. 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.
"AGREEMENT" means this Note Purchase Agreement, as the same may be
supplemented, amended or modified in accordance with the terms hereof.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New
York, State of New York are authorized or obligated by law or executive
order to close.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however
designated) of such Person's capital stock, and any rights (other than debt
securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock.
<PAGE>
-2-
"CLOSING" shall have the meaning specified in Section 2.3 of this
Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, and any body or bodies hereafter performing any
of the duties performed by the Commission.
"CONTROL" means, with respect to any specified Person, 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" have meanings
correlative to the foregoing.
"DEFAULT" shall have the meaning specified in Section 1.01 of the
Indenture.
"DOCUMENTS" means this Agreement, the Securities, the Indenture and
the Registration Rights Agreement, collectively, together with any
exhibits, schedules or other attachments hereto or thereto, as they may be
amended or supplemented from time to time in accordance with the respective
terms thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 6.01 of
the Indenture.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER" means the registration by GSN, under the Securities
Act, of all the Series B Notes pursuant to a registration statement under
which GSN offers each Holder the opportunity to exchange all outstanding
Notes held by such Holder for Series B Notes in an aggregate principal
amount equal to the aggregate principal amount of the Notes held by such
Holder, all in accordance with the terms and conditions of the Registration
Rights Agreement.
<PAGE>
-3-
"FORMS 8-K" means the Company's Current Reports on Form 8-K, each as
amended, dated July 31, 1997, October 1, 1997 and January 29, 1998, as
filed with the Commission.
"FORM 10-K" means the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1997, as filed with the Commission.
"FORM 10-Q" means the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, as filed with the Commission.
"FORM S-4" means the Company's Form S-4 Registration Statement in
respect to the exchange offer by the Company for $250,000,000 in aggregate
principal amount of 8 3/4% Senior Subordinated Notes issued October 1,
1997, filed with the Commission on October 24, 1997.
"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 or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession of the United States of America, which are
applicable as of the date of determination.
"HOLDER" means any holder of a Note.
"INDENTURE" means the Indenture, dated as of October 1, 1997, by and
between Garden State Newspapers, Inc. as issuer 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, a copy
of which is attached hereto as Exhibit G.
"LIEN" means any mortgage, charge, pledge, lien (statutory or other),
privilege, security interest, hypothecation, cessation and transfer, lease
of real property, assignment for security, claim, deposit arrangement,
other encumbrance upon or with respect to property of any kind, real or
personal, movable or immovable, now owned or hereafter acquired. A Person
shall be deemed to own subject to a Lien any property such Person has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention
agreement.
<PAGE>
-4-
"MATERIAL ADVERSE EFFECT" means (a) a material adverse effect on the
business, condition (financial or otherwise), results of operations,
properties or prospects of GSN or its Subsidiaries, taken as a whole, (b)
an adverse effect on the ability of any of GSN or its Subsidiaries to
perform any of its material obligations under any of the Documents to which
it is a party or (c) an adverse effect on the legality, validity or
enforceability of any of the Documents.
"NOTES" shall have the meaning specified in Section 2.1 of this
Agreement.
"OFFERING" means the private offering of the Notes.
"PERSON" means an individual, partnership, corporation, trust or
unincorporated organization or a government or agency or political
subdivision thereof.
"PLACEMENT AGENTS" means Goldman, Sachs & Co. and BT Alex. Brown
Incorporated, in their role as placement agents for the Securities.
"PURCHASER" means each Person, accepted by the Company, (i) who agrees
to the terms hereof as indicated by such Person's signature on the
execution pages of this Agreement or a counterpart thereof, (ii) on whose
behalf another Person executes this Agreement and whose funds are used for
the purchase of any Securities hereunder and, with respect to whom, the
Person so executing this Agreement executes and delivers to GSN
simultaneously with or prior to the Time of Purchase a representation
letter in the form of Exhibit C hereto, and (iii) subject to Article 6 of
this Agreement, who becomes a Substitute Purchaser.
"PURCHASE PRICE" means, when used in respect to a specified Note,
103.5% of the stated principal amount of such Note, plus accrued interest
thereon from the immediately preceding interest payment date (i.e., October
1, 1997) to but excluding the date of Closing.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" means a qualified
institutional buyer as defined in rule 144A under the Securities Act.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the Time of Purchase, among GSN and the Purchasers,
substantially in the form of Exhibit
<PAGE>
-5-
E hereto, as amended and supplemented from time to time in accordance with
the terms thereof.
"REGULATION D" means Regulation D as promulgated by the Commission
under the Securities Act, and any successor rule or regulation thereto.
"RULES AND REGULATIONS" means the rules and regulations promulgated by
the Commission under the Securities Act and/or the Exchange Act, as in
effect from time to time.
"SECURITIES" means the Notes.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES FILINGS" means the Form S-4, the Form 10-K, the Form 10-Q
and the Forms 8-K.
"SERIES A NOTES" means the Company's 8 3/4% Senior Subordinated Notes
Due 2009, Series A, proposed to be issued and sold in accordance with this
Agreement.
"SERIES B NOTES" means the Company's 8 3/4% Senior Subordinated Notes
Due 2009, Series B, the terms of which are substantially identical to the
Notes, issued or to be issued in exchange for the Notes pursuant to the
Exchange Offer.
"SUBSIDIARY" means with respect to any specified Person, any other
Person of which a majority of the equity ownership or the voting securities
is, at the time owned, directly or indirectly, by such specified Person or
by one or more other Subsidiaries of such specified Person, or by such
specified Person and one or more other Subsidiaries of such Person. Unless
the context otherwise clearly requires, any reference to a "Subsidiary" is
a reference to a Subsidiary of GSN.
"SUBSTITUTE PURCHASER" shall have the meaning specified in Section 6.1
of this Agreement.
"TAX" or "TAXES" means all taxes, including all foreign and United
States federal, state, county or local income, excise, withholding, sales,
franchise, property, gains, transfer, employment or other taxes and all
interest and penalties related thereto.
<PAGE>
-6-
"TIME OF PURCHASE" shall have the meaning specified in Section 2.3 of
this Agreement.
"TRUSTEE" means The Bank of New York, as trustee under the Indenture
or any successor trustee.
ARTICLE 2. PURCHASE AND SALE OF THE NOTES
Section 2.1. THE SECURITIES. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Purchasers up to
$50,000,000 aggregate principal amount of its 8 3/4% Senior Subordinated Notes
due 2009 (the "NOTES"). The Notes are to be issued under the Indenture. The
Notes will be offered and sold to the Purchasers without being registered under
the Securities Act, in reliance on exemptions from registration thereunder.
GSN has also authorized the issuance of up to $50,000,000 aggregate
principal amount of its Series B Notes. The Series B Notes will be issued
pursuant to the Indenture solely in exchange for an equal principal amount of
outstanding Securities pursuant to an Exchange Offer as provided in Section 2 of
the Registration Rights Agreement. The terms of the Series B Notes will be
identical to the terms of the Series A Notes.
The Purchasers of the Notes will be entitled to the benefits of the
Registration Rights Agreement, pursuant to which the Company will agree, among
other things, to file a registration statement (the "Registration Statement")
with the Commission registering the Exchange Notes (as defined in the
Registration Rights Agreement) under the Act.
Section 2.2. ISSUE OF THE NOTES. Each Note will be issued in the
principal amount of $1,000 or any integral multiple of $1,000, shall be dated as
provided in Section 2.01 of the Indenture and shall otherwise be in the form of
the Notes set forth in Article Two of the Indenture.
Section 2.3 SALE AND PURCHASE OF THE SECURITIES; THE CLOSING. Each
Purchaser subscribes for and agrees to purchase at the Closing, in consideration
for the Purchase Price, an aggregate principal amount of the Notes as specified
below such Purchaser's signature on its counterpart of the signature page of
this Agreement. Each Purchaser agrees that GSN may accept or reject such
Purchaser's subscription in whole or in part.
In reliance upon the representations and warranties made herein and subject
to the satisfaction or waiver of the terms and
<PAGE>
-7-
conditions set forth herein, GSN hereby agrees to issue and sell to each
Purchaser, and each Purchaser hereby agrees, severally and not jointly, to
purchase from GSN at the Time of Purchase, for the Purchase Price, the principal
amount of Securities subscribed for by such Purchaser on its counterpart of the
signature pages hereof and accepted by GSN.
Each sale and purchase of the Securities to each Purchaser shall take place
at a closing (individually or collectively, as the context requires, the
"Closing") at the offices of Verner, Liipfert, Bernhard, McPherson and Hand,
Chartered, 901 15th Street, N.W., Washington, D.C. 20005, no earlier than 10:00
a.m. on Thursday, February 12, 1998, or at such other place and on such
alternative Business Day as may be selected by GSN upon notice to each Purchaser
at least one Business Day prior thereto (the "Time of Purchase"). The purchase
and sale of the Securities to each Purchaser is independent from the purchase
and sale of the Securities to any other Purchaser and no such purchase or sale
shall be subject to or conditioned upon the closing or consummation of any other
such purchase or sale. However, GSN is not obligated to close the Offering
unless all $50,000,000 aggregate principal amount of the Series A Notes is sold.
Payment of the Purchase Price of the Securities hereunder shall be made by
each Purchaser by 10:00 a.m. (New York City time) at or before the Time of
Purchase by federal funds check or by wire transfer of immediately available
funds to an account (the "Account") designated by the Company in a notice to
such Purchaser prior to the Closing. If the Closing occurs, interest will
accrue on the Securities beginning on the date the Purchase Price is delivered
(rather than the Time of Purchase) in accordance with the instructions of the
Company. If the Closing does not occur, GSN shall pay to each Purchaser an
amount of interest on the Purchase Price deposited into the Account by such
Purchaser equal to the interest such Purchaser would have received on the
Securities from the date of deposit to but not including the date such Purchase
Price is returned to such Purchaser.
At the Closing, GSN shall deliver to each Purchaser the Securities
purchased by such Purchaser in such permitted denomination or denominations and
registered in the name of such Purchaser or the name of such nominee or nominees
as such Purchaser may request, dated the Time of Purchase.
Section 2.4 FAILURE TO DELIVER. If at the Closing any of the conditions
to the Closing specified in this Agreement (other
<PAGE>
-8-
than the conditions specified in Section 3.2 hereof) shall not have been
satisfied to the reasonable satisfaction of a Purchaser or waived by such
Purchaser, such Purchaser shall, at its election and notwithstanding anything to
the contrary in this Agreement, be relieved of all further obligations under
this Agreement without thereby waiving any other rights such Purchaser may have
by reason of such nonfulfillment or failure. Nothing in this Section 2.4 shall
operate to relieve GSN from any of its obligations hereunder.
Section 2.5. FURTHER ACTION. During the period from the date hereof to
the Time of Purchase, (a) GSN shall use its reasonable best efforts and take all
action reasonably necessary or appropriate to cause its respective
representations and warranties contained in Section 4.1 to be true and correct
as of the Time of Purchase after giving effect to the transactions contemplated
by this Agreement and the other Documents, as if made at and as of such time and
(b) each Purchaser shall use its reasonable best efforts and take all action
reasonably necessary or appropriate to cause the representations and warranties
of such Purchaser contained in Section 4.2 hereof to be true and correct as of
the Time of Purchase as if made at and as of such time.
ARTICLE 3. CLOSING CONDITIONS
Section 3.1. CONDITIONS TO OBLIGATIONS OF THE PURCHASERS. The obligation
of each Purchaser to purchase and pay for the Securities to be purchased by it
hereunder shall be subject to the satisfaction or waiver by such Purchaser of
each of the following conditions at or before the Time of Purchase:
Section 3.1.1. OPINIONS OF COUNSEL. The Placement Agents and such
Purchaser shall have received a favorable opinion, dated the Time of Purchase
and addressed to it, from Verner, Liipfert, Bernhard, McPherson & Hand, counsel
for GSN, substantially in the form of Exhibit A hereto.
In rendering such opinions, such counsel may rely as to factual matters
upon certificates or other documents furnished by officers of GSN (copies of
which shall be delivered to you), and by government officials, and-upon such
other documents as such counsel shall deem appropriate as a basis for its
opinions, including the letter of the Placement Agents referred to in Section
3.2.3 of this Agreement. Such counsel may specify the jurisdictions in which it
is admitted to practice and that it is not admitted to practice in any other
jurisdiction and is not expert in the law of any other jurisdiction. To the
extent such
<PAGE>
-9-
opinion concerns the laws of any other such jurisdiction, such counsel may rely
upon the opinion of counsel admitted to practice in such jurisdiction. Any
opinion relied upon by such counsel as aforesaid shall be delivered to such
Purchaser and the Placement Agents together with the opinion of such counsel,
which opinion shall state that such counsel reasonably believes that the
reliance of such counsel and such Purchaser thereon is justified.
Section 3.1.2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF
DEFAULT. Each of the representations and warranties made by GSN contained in
Article 4.1 hereof shall have been true and correct in all material respects
when made and shall be true and correct in all material respects at and as of
the Time of Purchase, after giving effect to the transactions contemplated by
this Agreement and each of the other Documents, as if made at and as of such
time, except to the extent that any such representation or warranty was
expressly made as of any other date, in which case such representation or
warranty shall have been true and correct at and as of such date. There shall
exist at and as of the Time of Purchase, after giving effect to the transactions
contemplated by this Agreement and the other Documents, no Default or Event of
Default or any other event, act or condition that, with notice or lapse of time
or both, would constitute a default under or breach or violation by GSN or any
of its Subsidiaries of any of the Documents or any indebtedness of GSN or any of
its Subsidiaries.
Section 3.1.3. COMPLIANCE WITH AGREEMENTS. GSN shall have performed
and complied in all material respects with all agreements, covenants and
conditions contained herein which are required to be performed or complied with
by GSN at or before the Time of Purchase.
Section 3.1.4. OFFICERS' CERTIFICATES. Such Purchaser shall have
received a certificate, dated the Time of Purchase and signed by the President
or any Vice President and attested by the Secretary or any Assistant Secretary
of GSN, certifying (a) that the conditions set forth in Sections 3.1.2, 3.1.3,
3.1.5 and 3.1.6 of this Agreement are satisfied at and as of such date and (b)
as to such other matters as you may reasonably request.
Section 3.1.5. COMPLETION OF OTHER TRANSACTIONS.
(a) Each of the Documents shall have been duly authorized, executed
and delivered by the respective parties thereto (other than any Purchaser),
shall not have been terminated and shall be in full force and effect. The
Placement Agents shall have received on behalf of such Purchaser a
<PAGE>
-10-
conformed copy of the Indenture and an original copy of this Agreement and the
Registration Rights Agreement.
(b) The Securities to be issued or sold to such Purchaser hereunder
shall have been executed by GSN and delivered to the Trustee pursuant to the
Indenture and the Trustee shall have authenticated such Securities in accordance
with the Indenture.
Section 3.1.6. CONSENTS; PERMITS. All consents, permits,
agreements, approvals and other authorizations that may be required from, and
all such filings and declarations that may be required with, any Person pursuant
to any law, statute, regulation, or rule (federal, provincial, state, local and
foreign) or pursuant to any order, decree or other agreements to which GSN or
any Subsidiary is a party or by which any of them are bound, in connection with
this Agreement, each of the other Documents and the transactions contemplated
hereby and thereby shall have been obtained or made, as the case may be.
Section 3.1.7. MAINTENANCE OF AGREEMENTS. From the date hereof until
the Closing, this Agreement, the Securities and the Registration Rights
Agreement shall not be amended without the consent of Purchasers of a majority
in aggregate principal amount of the Securities (which consent shall not be
unreasonably withheld).
Section 3.1.8. PURCHASE PERMITTED BY APPLICABLE LAWS; LEGAL
INVESTMENT. The purchase of and payment for the Securities to be purchased by
such Purchaser hereunder, and the consummation of the transactions contemplated
by any of the Documents (a) shall not be prohibited by any applicable law, court
order or injunction (temporary or permanent), or governmental regulation,
release, interpretation or opinion (including, without limitation, Regulations
G, T, U and X of the Board of Governors of the Federal Reserve System) whether
domestic or foreign and (b) shall not subject such Purchaser to any penalty,
tax, liability or other material adverse effect other than income taxes payable
on the interest paid on the Securities. GSN shall have delivered to such
Purchaser factual certificates or other evidence as such Purchaser shall
reasonably request, to enable such Purchaser to establish compliance with this
condition.
Section 3.1.9. PROCEEDINGS SATISFACTORY. All proceedings taken in
connection with the sale of the Securities and the transactions contemplated by
this Agreement and the other Documents, shall be reasonably satisfactory to such
Purchaser. Such Purchaser shall have received copies of such agreements,
<PAGE>
-11-
documents and instruments as such Purchaser may reasonably request in connection
therewith, or as a basis for the Closing opinions referred to in Section 3.1.1,
all in form and substance reasonably satisfactory to such Purchaser.
Section 3.1.10. FULL SUBSCRIPTION. Each Purchaser shall have
accepted delivery of and made payment for Securities to be purchased by it
hereunder at the Time of Purchase pursuant to this Agreement.
Section 3.2. CONDITIONS TO OBLIGATIONS OF GSN. The obligation of GSN to
issue and sell the Securities to any Purchaser pursuant to this Agreement shall
be subject to the satisfaction or waiver by GSN of each of the following
conditions on or before the Time of Purchase:
Section 3.2.1. SALE OF SECURITIES. Such Purchaser shall have
delivered payment of the Purchase Price to GSN in respect of its purchase of the
Securities pursuant to this Agreement.
Section 3.2.2. PURCHASER'S REPRESENTATIONS AND WARRANTIES TRUE. Each
of the representations and warranties made by such Purchaser contained in
Section 4.2 hereof shall have been true and correct in all material respects
when made and shall be true and correct in all material respects at and as of
the Time of Purchase, after giving effect to the transactions contemplated by
the Documents, as if made at and as of such time.
Section 3.2.3. SALE OF SECURITIES NOT ENJOINED. The sale of the
Securities to such Purchaser by GSN hereunder and the consummation of the
transactions involving such Purchaser contemplated by the Documents shall not
have been enjoined (temporarily or permanently) at the time of the Closing or be
prohibited by any applicable law or governmental regulation, release,
interpretation or opinion (including Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System), whether domestic or foreign.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
Section 4.1. REPRESENTATIONS AND WARRANTIES OF GSN.
Section 4.1.1. Each of the Company and its subsidiaries has been duly
incorporated and is validly existing in good standing as a corporation under the
laws of its jurisdiction of incorporation, with all requisite corporate power
and authority to own its properties and conduct its businesses as
<PAGE>
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now conducted as described in the Securities Filings, and is duly qualified to
do business as a foreign corporation in good standing in all other jurisdictions
where the ownership or leasing of its properties or the conduct of its
businesses requires such qualification, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect.
Section 4.1.2. The Company has the authorized, issued and outstanding
capitalization set forth in the Securities Filings, the outstanding shares of
capital stock of the Company and each of its subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights; and except as
specifically set forth in Schedule I hereto, all of the outstanding shares of
capital stock of the Company and each of its Subsidiaries are free and clear of
all liens, encumbrances, equities and claims or restrictions on transferability
(other than those imposed by the Securities Act and the securities or "Blue Sky"
laws of certain jurisdictions) or voting. Except for the stock of the
Subsidiaries and as specifically set forth in the Securities Filings, the
Company does not own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities or have any equity interest in any firm,
partnership, joint venture or other entity. No holders of securities of the
Company or any of its Subsidiaries or Affiliates are entitled to have such
securities registered under the Registration Statement as defined in and
pursuant to the Registration Rights Agreement or, to the extent so entitled,
written waivers have been obtained.
Section 4.1.3. The Notes and the Exchange Notes (as defined in the
Registration Rights Agreement) have each been duly authorized by the Company
and, when (i) the pertinent provisions of state securities and "Blue Sky" laws
have been complied with; (ii) the Notes have been executed by the Company and
authenticated by the Trustee in accordance with the provisions of the Indenture,
(iii) the Notes have been issued, sold, paid for and delivered in accordance
with the terms of this Agreement, will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture, and will
be enforceable in accordance with their terms, except enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity and the discretion of the court before
which any proceeding therefor may be brought.
<PAGE>
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Section 4.1.4. The Company (and to the extent necessary, its
Subsidiaries and Affiliates) has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
Indenture and to consummate the transactions contemplated hereby; this Agreement
and the Indenture have each been duly authorized by the Company and Indenture
has been qualified under the Trust Indenture Act of 1939, as amended (the
"TIA"). The Indenture constitutes, and this Agreement when executed and
delivered by the Company (assuming the due authorization, execution and delivery
by the other parties hereto) will constitute, a valid and legally binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought.
Section 4.1.5. The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and validly
authorized by the Company and, when executed and delivered by the Company, will
constitute a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought.
Section 4.1.6. No consent, approval, authorization or order of any
court or governmental agency or body, or third party is required for the
issuance and sale of the Notes or the consummation by the Company of the
transactions contemplated hereby, except such as have been obtained and such as
may be required under state securities or "Blue Sky" laws and applicable federal
securities laws in connection with the registration of the Exchange Notes with
the Commission. Both before and after giving effect to the Offering and the
transactions contemplated hereby, neither the Company nor any of its
Subsidiaries or Affiliates is (i) in violation of its certificate of
incorporation or bylaws, (ii) in violation of any statute, judgment, decree,
order, rule or regulation applicable to the Company or any of its Subsidiaries
or Affiliates, which violation could reasonably be expected to have, singly or
in the aggregate,
<PAGE>
-14-
a Material Adverse Effect, or (iii) in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate, contract or other agreement or instrument to
which it is a party or to which it is subject, which default could reasonably be
expected to have, singly or in the aggregate, a Material Adverse Effect.
Section 4.1.7. The execution, delivery and performance by the Company
of this Agreement, the Indenture, the Registration Rights Agreement and the
consummation by the Company and its Subsidiaries and Affiliates of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance and sale of the Notes to the Purchasers), will not conflict with or
constitute or result in a breach or violation by the Company or any of its
Subsidiaries or Affiliates, as the case may be, of any of (i) the terms or
provisions of, or constitute a default by the Company or any of its Subsidiaries
or Affiliates under, any indenture, mortgage, deed of trust, loan agreement,
note, lease, license, franchise agreement, or other agreement or instrument to
which it is a party or to which any of them or their respective properties is
subject, which conflict, breach, violation or default could have, singly or in
the aggregate, a Material Adverse Effect, (ii) its certificate of incorporation
or bylaws, or (iii) (assuming compliance with all applicable state securities
and "Blue Sky" laws and applicable federal securities laws in connection with
the registration of the Exchange Notes with the Commission) any statute,
judgment, decree, order, rule or regulation of any court or governmental agency
or other body applicable to it or any of their properties, which conflict,
breach, violation or default could reasonably be expected to have a Material
Adverse Effect.
Section 4.1.8. Except as otherwise specifically stated therein, the
audited consolidated financial statements and schedules of the Company and its
consolidated subsidiaries included in the Securities Filings present fairly the
consolidated financial position, results of operations and cash flows of the
Company and its consolidated subsidiaries at the dates and for the periods to
which they relate and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis. The unaudited consolidated
financial statements and the related notes included in the Securities Filings
present fairly the consolidated financial position, results of operations and
cash flows of the Company and its consolidated subsidiaries at the dates and for
the periods to which they relate, subject to year-end audit
<PAGE>
-15-
adjustments, and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, except in respect to
customary year-end adjustments consistent with past practice, or as otherwise
stated therein . Ernst & Young LLP, which has examined such audited
consolidated financial statements included in the Securities Filings is an
independent public accounting firm as defined by the Act and the rules and
regulations under the Act.
Section 4.1.9. The pro forma consolidated financial statements and
other pro forma financial information (including the notes thereto) included in
the Securities Filings (A) present fairly in all material respects the
information shown therein as of the date thereof, except as specifically stated
therein, (B) have been prepared in accordance with applicable requirements of
Regulation S-X promulgated under the Exchange Act (the "Exchange Act"), and (C)
except as specifically stated therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements. The assumptions used in the preparation of the pro forma financial
statements and other pro forma consolidated financial information included in
the Securities Filings are set forth in all material respects in the notes to
such pro forma statements and information and such assumptions are reasonable,
and the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
Section 4.1.10. Except as specifically described in the Securities
Filings, there is not pending or, to the best of the knowledge of the Company,
threatened, any action, suit, proceeding, inquiry or investigation to which the
Company or any of its Subsidiaries or Affiliates is a party, or to which the
property of the Company or any of its Subsidiaries or Affiliates is subject,
before or brought by any court or governmental agency or body, which could be
reasonably likely to have, singly or in the aggregate, a Material Adverse
Effect.
Section 4.1.11. Both before and after giving effect to the Offering,
the Company and each of its Subsidiaries own or possess adequate licenses or
other rights to use all patents, trademarks, service marks, trade names,
copyrights and know-how necessary to conduct the business now or proposed to be
operated by them as described in the Securities Filings, and neither the Company
nor any of its subsidiaries has received any notice of infringement of or
conflict with (or knows of any such infringement of or conflict with) asserted
rights of others with respect to any patents, trademarks, service marks, trade
names, copyrights or know-how which, if such assertion of infringement
<PAGE>
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or conflict were sustained, could reasonably be expected to have, singly or in
the aggregate, a Material Adverse Effect.
Section 4.1.12. Both before and after giving effect to the Offering,
the Company and each of its Subsidiaries have obtained all licenses, permits,
franchises and other governmental authorizations necessary to conduct the
business now or proposed to be operated by them as described in the Securities
Filings, the lack of which could reasonably be expected to have, singly or in
the aggregate, a Material Adverse Effect.
Section 4.1.13. Subsequent to the respective dates as of which
information is given in the Securities Filings and except as specifically
described or referred to herein, (i) neither the Company nor any of its
subsidiaries has incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, not in the ordinary
course of business and (ii) the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or distribution
of any kind on its capital stock.
Section 4.1.14. Neither the Company nor any Subsidiary is in
violation of any federal, state or local law relating to occupational safety and
health or to the storage, handling or transportation of hazardous or toxic
materials and the Company and its subsidiaries have obtained all permits,
licenses or other approvals required under applicable federal and state
occupational safety and health and environmental laws and regulations to conduct
their businesses as described in the Securities Filings and the Company and its
Subsidiaries are in compliance with all terms and conditions of any such
required permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other approvals or
failure to comply with the terms of such permits, licenses or approvals which
could not reasonably be expected to have, singly or in the aggregate, a Material
Adverse Effect.
Section 4.1.15. There are no actual or threatened legal or
governmental proceedings required to be described in a prospectus pursuant to
the Act or the Rules and Regulations that are not described in the Securities
Filings, nor any contracts or other documents required to be described in a
prospectus pursuant to the Act or the Rules and Regulations that are not
described in the Securities Filings. Except as specifically set forth in the
Securities Filings, both before and after giving effect to the Offering, neither
the Company nor any of its Subsidiaries is in default under any contracts or
other agreement or instrument to
<PAGE>
-17-
which any of them is a party or to which any of them or their respective
properties or assets is subject (the "CONTRACTS"), has received a notice or
claim of any such default or has knowledge of any breach of any of the
Contracts, except such defaults or breaches as could not reasonably be expected
to have, singly or in the aggregate, a Material Adverse Effect.
Section 4.1.16. The Company and each of its Subsidiaries and
Affiliates have filed all necessary federal and state income and franchise tax
returns, and have paid all taxes shown as due thereon; and other than tax
deficiencies which the Company or its Subsidiaries or Affiliates are contesting
in good faith and for which the Company reasonably believes that adequate
reserves have been provided, there is no tax deficiency that has been asserted
against the Company or any of its Subsidiaries or Affiliates that could
reasonably be expected to have, singly or in the aggregate, a Material Adverse
Effect.
Section 4.1.17. Both before and after giving effect to the Offering
and the transactions contemplated thereby, there are no consensual encumbrances
or restrictions on the ability of any Subsidiary (i) to pay dividends or make
any other distributions on such Subsidiary's capital stock or to pay any
indebtedness owed to the Company or any Subsidiary of the Company, (ii) to make
any loans or advances to, or investments in, the Company or any Subsidiary or
(iii) to transfer any of its property or assets to the Company or any
Subsidiary.
Section 4.1.18. Neither the Company nor any agent acting on its
behalf has taken or will take any action that might cause this Agreement or the
sale of the Notes to violate Regulation G, T, U or X of the Board of Governors
of the Federal Reserve System.
Section 4.1.19. The Company and each Subsidiary has good and
marketable title to all real property and good title to all personal and real
property described in the Securities Filings as being owned by it or reflected
on the Company's consolidated balance sheet, and good and marketable title to
all leasehold estates in the real property and good title to personal property
described in the Securities Filings as being leased by it (except for those
leases of real and personal property in which the Company has good title and
that in the case of real property would be marketable but for the requirement
that the landlord consent to an assignment or sublease of the lease), free and
clear of all liens, charges, encumbrances or restrictions, except, in each case,
as specifically described in the Securities Filings. Both before and after
giving effect to the Offering and the transactions contemplated thereby, all
leases, contracts and agreements, to which the Company or any Subsidiary is a
party or
<PAGE>
-18-
by which any of them is bound, are valid and enforceable against the Company or
any Subsidiary, are, to the best knowledge of the Company, valid and enforceable
against the other party or parties thereto and are in full force and effect with
only such exceptions as could not be reasonably expected to have, singly or in
the aggregate, a Material Adverse Effect.
Section 4.1.20. Both before and after giving effect to the Offering
and the transactions contemplated thereby, neither the Company nor any
Subsidiary has violated any federal, state or local law relating to
discrimination in the hiring, promotion or pay of employees nor any applicable
wage or hour laws, nor any provisions of ERISA or the rules and regulations
promulgated thereunder, nor has the Company or any Subsidiary engaged in any
unfair labor practice, which in each case could reasonably be expected to
result, singly or in the aggregate, in a Material Adverse Effect. Both before
and after giving effect to the Offering and the transactions contemplated
thereby, there is (i) no unfair labor practice complaint pending against the
Company or any Subsidiary or, to the best knowledge of the Company, threatened
against any of them, before the National Labor Relations Board or any state or
local labor relations board, and no grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is
pending against the Company or any Subsidiary or, to the best knowledge of the
Company, threatened against any of them, (ii) no strike, labor dispute, slowdown
or stoppage pending against the Company or any Subsidiary or, to the best
knowledge of the Company, threatened against the Company or any Subsidiary and
(iii) to the best knowledge of the Company, no union representation question
existing with respect to the employees of the Company or any Subsidiary such as
could reasonably be expected to have, singly or in the aggregate, a Material
Adverse Effect. The execution and delivery of this Agreement and the purchase of
the Securities hereunder will not involve any transaction that is subject to the
prohibitions of Section 406(a) of ERISA, or in connection with which a tax could
be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The
representation and warranty under the preceding sentence of this paragraph is
made in reliance upon the accuracy of the representation of each of the
Purchasers under Section 4.2.4 hereof.
Section 4.1.21. Both before and after giving effect to the Offering
and the transactions contemplated thereby, the Company and each Subsidiary has
maintained and will maintain insurance, including without limitations,
defamation insurance, covering their properties, operations, personnel and
businesses. Such insurance insures against such losses and risks as are
adequate in accordance with customary industry practice to protect the Company
and its Subsidiaries and their businesses.
<PAGE>
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Neither the Company nor any Subsidiary has received notice from any insurer or
agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance. All such
insurance is outstanding and duly in force.
Section 4.1.22. Both before and after giving effect to the Offering
and the transactions contemplated thereby, the Company was not and is not an
"investment company" or an affiliated person of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.
Section 4.1.23. Both before and after giving effect to the Offering
and the transactions contemplated thereby, the fair value and present fair
saleable value of the assets of the Company, on a consolidated basis, will
exceed the sum of its stated liabilities and identified contingent liabilities;
and (ii) none of the Company nor any of its Subsidiaries is, nor will any of
them or the Company be, both before and after giving effect to the Offering
(a) left with unreasonably small capital with which to carry on their business
as it is proposed to be conducted, (b) unable to pay their debts (contingent or
otherwise) as they mature or (c) insolvent.
Section 4.1.24. Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or indirectly, any action
designed, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company.
Section 4.2. REPRESENTATIONS AND WARRANTIES. Each Purchaser severally
represents and warrants to GSN as follows:
Section 4.2.1. ACCREDITED INVESTOR. Such Purchaser is, and will be
at the Time of Purchase, a QIB, and an "accredited investor" within the meaning
of Rule 501(a) of Regulation D.
Section 4.2.2. INVESTMENT INTENT. Each Purchaser understands that the
Securities to be sold to such Purchaser hereunder are being offered and sold
without registration under the Securities Act, in reliance upon exemptions from
registration thereof, including such exemption provided under Section 4(2) of
the Securities Act. Each Purchaser further understands that such exemption
depends, in part upon, the representations and warranties set forth in this
Section 4.2. Such Purchaser is (i) purchasing at least $150,000 in aggregate
principal amount of the
<PAGE>
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Securities and (ii) purchasing the Securities to be purchased by it solely for
its own account or as trustee for a commingled pension trust and with no
intention of distributing or reselling such Securities or any part thereof, or
interest therein, in any transaction which would be in violation of the
securities laws of the United States of America or any state thereof, without
prejudice, however, to the right of such Purchaser at all times to sell or
otherwise dispose of all or any part of such Securities under an effective
registration statement under the Securities Act or pursuant to an exemption from
registration available under the Securities Act and any other applicable state
securities laws and in compliance with Section 5 hereof; provided, however, that
it is understood that the disposition of the property of each Purchaser shall at
all times be within its control.
Section 4.2.3. ACCURACY AND RELIANCE. (a) All of the information
concerning such Purchaser supplied by such Purchaser in any materials furnished
to GSN or the Placement Agents is accurate and complete.
(b) Such Purchaser hereby acknowledges that (i) it has made, and
is solely responsible for making, its own independent evaluation of the
economic, credit and other risks involved in its investment in the Securities
and its own independent decision to make such investment; (ii) such Purchaser
has been given the opportunity to ask questions of, and receive answers from
representatives of GSN with respect to the business to be conducted by GSN and
its Subsidiaries, the financial condition and capital of GSN and its
Subsidiaries and the terms and conditions of the offering of the Securities; and
(iii) such Purchaser has been given the opportunity to obtain such additional
information necessary to verify the accuracy of the information provided to such
Purchaser to evaluate the merits and risks of an investment in the Securities to
the extent that GSN and its Subsidiaries possess such information or can acquire
it without unreasonable effort or expense. Such Purchaser understands that an
investment in the Notes involves certain risks, including the risk of loss of
all or substantially all of its investment under certain circumstances.
(c) Such Purchaser hereby acknowledges that it has been
furnished with a copy of the Indenture, the Registration Rights Agreement to
which it is a party, the other documents, exhibits and schedules referred to
herein and any other documents that it has deemed necessary and requested in
connection with its evaluation of the offering of the Securities, and has relied
solely on its own independent evaluation of the economic, credit and other risks
involved in its investment in the Securities in making its investment decision.
<PAGE>
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(d) Such Purchaser hereby acknowledges that it has such
knowledge and experience in business and financial matters as to be capable of
evaluating the merits and risks of an investment in the Notes, and is able to
bear the economic risks of such Purchaser's investment.
(e) Such Purchaser hereby acknowledges that the Notes will bear
the legend referred to in Section 5.2(a).
(f) In connection with the purchase of the Notes and the
entering into, and the confirming of the execution of, this Agreement and any
other documentation relating to this Agreement to which such Purchaser is a
party or that such Purchaser is required by this Agreement to deliver: (i)
neither the Company nor the Placement Agents are acting as a fiduciary or
financial or investment adviser for such Purchaser; (ii) such Purchaser is not
relying (for the purposes of making any investment decision or otherwise) upon
any advice, counsel or representations (whether written or oral) of the Company
or the Placement Agents other than the representations of the Company expressly
set forth in this Agreement; (iii) such Purchaser has consulted with its own
legal, regulatory, tax, business, investment, financial, and accounting advisers
to the extent it has deemed necessary, and it has made its own investment
decisions (including decisions regarding the suitability of any transaction
pursuant to the documentation for the Notes) based upon its own judgment and
upon any advice from such advisers as it has deemed necessary and not upon any
view expressed by the Company or the Placement Agents; (iv) such Purchaser has
determined that the rates, prices or amounts and other terms of the purchase and
sale of the Notes reflect those in relevant market for similar transactions, and
all trading decisions have been the result of arms' length negotiations between
the Purchaser and the Company; (v) such Purchaser is entering into this
Agreement and any other documentation relating to this Agreement with a full
understanding of all of the terms, conditions and risks hereof and thereof
(economic and otherwise), and it is capable of assuming and willing to assume
(financially and otherwise) those risks; and (vi) such Purchaser is a
sophisticated investor familiar with transactions similar to its investment in
the Notes.
Section 4.2.4. ERISA. Each Purchaser severally represents that at
least one of the following statements concerning each source of funds to be used
to purchase the Securities (respectively, the "Source") is accurate:
(a) the Source is not an "employee benefit plan" as defined in
Section 3(3) of ERISA (an "employee benefit plan")
<PAGE>
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that is subject to Title I of ERISA or a "plan" as defined in Section 4975(e) of
the Code;
(b) the Source is an "insurance company general account" (as such
term is defined under Section V of Prohibited Transaction Class Exemption
95-60), there is no employee benefit plan, treating as a single plan all plans
maintained by the same employer or employee organization, with respect to which
the amount of the general account reserves and liabilities for all contracts
held by or on behalf of such plan exceed 10% of the total reserves and
liabilities of such general account (exclusive of separate account liabilities)
plus surplus, as set forth in the NAIC Annual Statement filed with the state of
domicile of the insurer, and the conditions of Section IV(b) of Prohibited
Transaction Class Exemption 95-60 are satisfied;
(c) the Source is an insurance company pooled separate account, and
either (i) no employee benefit plan or group of plans maintained by the same
employer or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account, and such Purchaser agrees to satisfy
the conditions of Section III(b) and (c) of Prohibited Transaction Class
Exemption 90-1, or (ii) such separate account is maintained solely in connection
with the fixed contractual obligations of such Purchaser under which the amounts
payable or credited to the employee benefit plan and to any participant or
beneficiary (including any annuitant) of the employee benefit plan are not
affected in any manner by the investment performance of the separate account;
(d) the Source is a bank collective investment fund, within the
meaning of the Prohibited Transaction Class Exemption 91-38, no employee benefit
plan or group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such collective
investment fund, and such Purchaser agrees to satisfy the conditions of Section
III(b) and (c) of Prohibited Transaction Class Exemption 91-38;
(e) the Source is an "investment fund" managed by a "qualified
professional asset manager" or "QPAM" (as defined in part V of Prohibited
Transaction Class Exemption 84-14 (the "QPAM Exemption")), no employee benefit
plan's assets that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM
Exemption) of such employer or by the same employee organization and managed by
such QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM exemption are satisfied, neither the
QPAM nor a person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest
in either of the Companies,
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and (i) the identity of such QPAM and (ii) the names of all employee benefit
plans whose assets are included in such investment fund have been disclosed to
the Companies in writing;
(f) the purchase is made on behalf of an employee benefit plan by an
in-house asset manager and the conditions of Prohibited Transaction Class
Exemption 96-23 are satisfied; or
(g) the Source is a governmental plan (as defined in Section 3(32) of
ERISA).
ARTICLE 5. COMPLIANCE WITH THE SECURITIES ACT
Section 5.1. COMPLIANCE WITH THE SECURITIES ACT. (a) None of the
Securities may be sold, transferred or otherwise disposed of (any such sale,
transfer or other disposition, a "sale"), except in compliance with this Section
5.
(b) A Purchaser may effect a sale of its Securities only if:
(i) such sale is made pursuant to exemption from the
registration requirements of the Securities Act; provided, however, that
the Purchaser furnishes to GSN and the Trustee such certificates, written
legal opinions or other information as either of them may reasonably
require to confirm that such proposed sale may be effected without
registration under the Securities Act and under applicable state securities
or "Blue Sky" laws, and
(ii) the transferee of such Securities agrees to be bound by the
provisions of this Section 5 with respect to any sale of any of such
Securities.
(c) Each Purchaser acknowledges that the transfer agent for the
Securities will not register the transfer of such Securities unless such
transfer agent has received notification from GSN to the effect that the
conditions in Section 5.1(b)(i) have been met.
(d) GSN will provide to any proposed transferee of a Purchaser who
has furnished the representations and warranties in Section 4.2 hereof to GSN in
a manner acceptable to GSN, the opportunity to ask questions of, and receive
answers from representatives of GSN with respect to the business to be conducted
by GSN and its Subsidiaries, the financial condition and capital of GSN and its
Subsidiaries and the terms and conditions of the offering of the Securities and
such proposed transferee of a Purchaser has been given the opportunity to obtain
such additional information necessary to verify the
<PAGE>
-24-
accuracy of the information provided to such proposed transferee of a Purchaser
to evaluate the merits and risks of an investment in the Securities to the
extent that GSN and its Subsidiaries possess such information or can acquire it
without unreasonable effort or expense. Such proposed transferee of a Purchaser
understands that an investment in the Notes involves certain risks, including
the risk of loss of all or substantially all of its investment under certain
circumstances.
Section 5.2. CERTIFICATES EVIDENCING THE SECURITIES. (a) Upon original
issuance thereof, and until such time as the same is no longer required under
the applicable requirements of the Securities Act or applicable state securities
or "Blue Sky" laws, the Securities (and all Securities or other securities
issued in exchange therefor or substitution thereof) shall bear the following
legend:
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) AND AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) PROMULGATED UNDER THE
SECURITIES ACT) (AN "ACCREDITED INVESTOR"), (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) TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHED (OR
HAS FURNISHED 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 PROMULGATED 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 TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY 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 REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE
<PAGE>
-25-
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
(b) The instrument representing such Securities, and each instrument
issued in transfer thereof, shall also bear any legend required under any
applicable state securities or "Blue Sky" laws.
(c) Each Purchaser consents to GSN's making a notation on its records
or giving instructions to any transfer agent of the Securities in order to
implement the restrictions on transfer mentioned in this Section 5.
Section 5.3. INFORMATION. Upon the request of the holder of a Security,
GSN will inform such holder if such Security (or any predecessor Security) was
held during the two year period preceding such request by GSN, or, to the best
knowledge of GSN, a Person who was an Affiliate of GSN at the time of the sale
of the Security by such person.
Section 5.4. EXCEPTIONS. The provisions of Sections 5.1 and 5.3 of this
Agreement shall not apply to any sale of a Security in a transaction that is
registered under the Securities Act pursuant to the terms of the Registration
Rights Agreement.
ARTICLE 6. SUBSTITUTION OF PURCHASERS
Section 6.1. SUBSTITUTION OF PURCHASERS. If (i) one or more of the
Purchasers does not purchase all or part of the Securities (a "Non-Purchaser")
which such Non-Purchaser(s) has agreed to purchase hereunder, and (ii) one or
more other Purchasers or one or more other Persons (a "Substitute Purchaser") is
willing to assume the obligations of the Non-Purchaser(s) under this Agreement
and is accepted by GSN, then the obligations of the Non-Purchaser(s) to purchase
Securities pursuant to this Agreement may be assumed by the Substitute
Purchaser(s), and such Substitute Purchaser(s) shall be substituted for the
Non-Purchaser(s) under this Agreement, by such Substitute Purchaser(s) executing
and delivering a copy of this Agreement and thereby becoming a party hereto.
The inclusion of this Section 6.1 in this Agreement, and the assumption by a
Substitute Purchaser of the obligations of a Non-Purchaser pursuant to this
Section 6.1, shall not constitute a waiver of any rights GSN may have against
such Non-Purchaser if such Non-Purchaser has defaulted in its obligations under
this Agreement.
<PAGE>
-26-
ARTICLE 7. MISCELLANEOUS
Section 7.1. ACCESS TO INFORMATION. (a) GSN shall, from time to time,
prior to the Time of Purchase, provide to you upon request during normal
business hours such other information with respect to the offering of the
Securities, the operations, business, assets, properties or financial condition
of GSN and its Subsidiaries as you may reasonably request.
(b) GSN shall provide to the holder of a Security all of the information
required to be furnished by GSN pursuant to Section 4.08 of the Indenture.
Section 7.2. NOTICES. Prior to the Closing, and thereafter with respect
to matters pertaining to this Agreement only, all notices and other
communications provided for or permitted hereunder shall be made by hand
delivery, first-class mail (registered or certified, return receipt requested),
telex, telecopier or commercial courier guaranteeing next day delivery:
(a) if to a Purchaser, at the address of such Purchaser set forth on the
counterpart signature pages attached hereto, or at such other address as such
Purchaser may have furnished in writing to GSN, with a copy to Cahill Gordon &
Reindel, 80 Pine Street, New York, New York 10005, Attention: Michael A. Becker,
Esq.
(b) if to GSN, at the address set forth on the first page of this
Agreement, Attention: Joseph J. Lodovic, IV, or at such other address as GSN may
have furnished in writing to you, with a copy to Verner, Liipfert, Bernhard,
McPherson & Hand, Suite 700, 901 15th Street, N.W., Washington, D.C. 20005,
Attention: Harold I. Freilich, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and the
next business day after timely delivery to the courier, if sent to a commercial
courier guaranteeing next day delivery.
Section 7.3. EXPENSES. Whether or not the Securities are sold hereunder,
GSN agrees to pay all expenses relating to the negotiation, preparation,
printing, typing, reproduction, execution, delivery and administration of this
Agreement and the other Documents, including without limitation:
<PAGE>
-27-
(a) the cost of printing and reproducing the Securities, the other
Documents, and any other documents contemplated hereby or thereby;
(b) the cost of delivering to the home office of each Purchaser or the
office of the designee of each Purchaser insured to the satisfaction of each
Purchaser, the Securities purchased by each such Purchaser at the Closing;
(c) all reasonable out-of-pocket expenses of the Purchasers relating to
any amendment, or modification of, or any waiver, or consent or preservation of
rights under, the Securities, the Documents, or any other documents or
instruments regardless of whether such amendment, modification, waiver, consent
or preservation of rights becomes effective;
(d) the reasonable fees and expenses of Cahill Gordon & Reindel and its
agents;
(e) all taxes in connection with the issuance, sale and delivery of the
Securities to you and the execution and delivery of the Documents and any other
agreements and instruments contemplated thereby and any modification of any of
such Securities, Documents, or such other agreements and instruments; and
(f) all other reasonable expenses, including reasonable fees and expenses
of counsel and accountants, incurred by GSN in connection with the transactions
contemplated by the Documents.
The obligations of GSN under this Section 7.3 shall survive termination of
this Agreement and the payment of all amounts due and payable under the
Securities.
In addition, GSN agrees to pay any and all stamp, transfer and other
similar taxes payable or as determined to be payable in connection with the
execution and delivery at the Time of Purchase of this Agreement or the original
issuance of the Securities, and to save and hold each of the Purchasers harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying, or omitting to pay, such taxes.
Section 7.4. HOME OFFICE PAYMENT. Payment of all or any portion of the
principal, premium, if any, and interest on any Security shall be made by check
to the Holder thereof in accordance with the Indenture.
GSN agrees that it shall initiate deposit with the Trustee by 10:00 a.m.
(New York City time) on the date of payment any
<PAGE>
-28-
payments of principal, premium, if any, and interest due on the Securities.
Section 7.5. TERMINATION. This Agreement may be terminated (solely in
respect to the party electing to so terminate it and not as to any other party)
at any time prior to the Time of Purchase as follows:
(a) by GSN, if any of the conditions specified in Section 3.2 hereof have
not been satisfied or waived by GSN pursuant to the terms of this Agreement by
12:00 midnight, New York City time, on February 15, 1998 or at such earlier date
that it becomes apparent that any such condition can no longer be satisfied;
(b) by any Purchaser, if any of the conditions specified in Section 3.1
hereof have not been satisfied or waived pursuant to the terms of this Agreement
by 12:00 midnight, New York City time, on February 15, 1998 or at such earlier
date that it becomes apparent that any such condition can no longer be
satisfied.
Section 7.6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in writing by any party
in connection herewith will survive the execution and delivery of this
Agreement, regardless of (a) any investigation made by any other party, (b)
acceptance of any of the Securities and any payment therefor, (c) payment or
prepayment of the Securities upon redemption or otherwise or (d) any termination
of this Agreement.
Section 7.7. ASSIGNMENTS. The rights of any Purchaser under this
Agreement shall not be assigned, and the duties of any Purchaser under this
Agreement shall not be delegated, without the written consent of GSN (which
consent shall not be unreasonably withheld) except to a wholly-owned Subsidiary
of such Purchaser, provided, however, that such Purchaser shall remain obligated
to pay the Purchase Price in accordance with Section 2.3 hereof.
Notwithstanding the foregoing, the rights and interests of the Purchasers
hereunder may be assigned to and shall inure to the benefit of a transferee of
the Securities pursuant to Section 5 hereof until the date which is the earlier
of (i) the consummation of the Exchange Offer or (ii) the filing of a
Registration Statement (as defined in the Registration Rights Agreement) with
respect to the Securities.
This Agreement shall be binding upon GSN and each of the Purchasers and
each of their respective successors and permitted assigns.
<PAGE>
-29-
Section 7.8. NO WAIVER; MODIFICATIONS IN WRITING. No failure or delay on
the part of GSN or any Purchaser in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to GSN or any Purchaser at law or in equity or
otherwise. No waiver of or consent to any departure by GSN or any Purchaser
from any provision of this Agreement shall be effective unless signed in writing
by the party(ies) entitled to the benefit thereof; provided that notice of any
such waiver shall be given to each party hereto as set forth below. Except as
otherwise provided herein, no amendment, modification or termination of any
provision of this Agreement shall be effective unless signed in writing by or on
behalf of each of GSN and each Purchaser. Any amendment, supplement or
modification of or to any provision of this Agreement, any waiver of any
provision of this Agreement, and any consent to any departure by GSN or any
Purchaser from the terms of any provision of this Agreement, shall be effective
only in the specific instance and for the specific purpose for which made or
given. Except where notice is specifically required by this Agreement, no
notice to or demand on GSN in any case shall entitle GSN to any other or further
notice or demand in similar or other circumstances.
Section 7.9. 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.
Section 7.10. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 7.11. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. GSN hereby
agrees that any legal suit, action or proceeding brought by any of the other
parties to enforce any rights under or with respect to the Securities, this
Agreement or the transactions contemplated hereby may be instituted in any state
or federal court in The City of New York, State of New York, waives to the
fullest extent permitted by law any objection which it may now or hereafter have
to the laying of venue of any such suit, action or proceeding and irrevocably
submits to the non-exclusive jurisdiction of any such court in any such suit,
action or proceeding. GSN has appointed CT Corporation System ("CT") as its
authorized agent to receive and forward on its behalf service of any and all
process which may be served in any
<PAGE>
-30-
such suit, action or proceeding in any such court and agrees that service of
process upon CT (or such successor) at its office at 1633 Broadway, New York,
New York 10019(or such other address in New York, as GSN may designate by
written notice to the other parties hereto) and written notice of said service
to GSN, as the case may be, mailed or delivered to CT, 1633 Broadway, New York,
New York 10019, shall be deemed in every respect effective service of process
upon GSN, as the case may be, in any such suit, action or proceeding and shall
be taken and held to be valid personal service upon GSN. Nothing in this
Section 7.11 shall affect the right of any party hereto to serve process in any
manner permitted by law or limit the right of any party hereto to bring
proceedings against GSN in the courts of any jurisdiction or jurisdictions. GSN
further agrees to take any and all action, including the execution and filing of
any and all such documents and instruments, as may be necessary to continue such
designation and appointment of DTC in full force and effect so long as this
Agreement shall be in full force and effect and so long as any of the Securities
shall be outstanding.
Section 7.12. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York (without giving
effect to the conflicts of law principles thereof).
Section 7.13. ENTIRE AGREEMENT. This Agreement, together with the other
Documents, is intended by the parties hereto to constitute the final expression
of their agreement and to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises, warranties
or undertakings other than those set forth or referred to herein and therein.
This Agreement, together with the other Documents, supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
Section 7.14. SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held to be invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and unenforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected.
Section 7.15. DELIVERY. Except as provided pursuant to Section 7.19, each
Purchaser hereby appoints the Placement Agents to accept delivery of the
Securities to be purchased by such Purchaser at the Closing and execute a
receipt for such Securities on its behalf.
<PAGE>
-31-
Section 7.16. ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement or any other document or instrument
contemplated hereby, or where any provision hereof is validly asserted as a
defense, the successful party shall be entitled to recover attorneys' fees in
addition to any other available remedy.
Section 7.17. WAIVER OF JURY TRIAL. GSN hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement, the other Documents or the transactions
contemplated hereby or thereby.
Section 7.18. PLACEMENTS AGENTS AS BENEFICIARIES OF AGREEMENT. The
Placement Agents shall be deemed to be third- party beneficiaries of all of the
provisions contained in this Agreement and opinions delivered hereunder.
Section 7.19. ALTERNATIVE CLOSING PROCEDURE. If a Purchaser notifies GSN
in writing at least two business days prior to the Closing that such Purchaser
elects to close in the manner prescribed in this Section 7.19, then,
contemporaneously with receipt of the Securities by Purchaser's third party
custodian reasonably acceptable to GSN at a location in New York City specified
in writing by the Purchaser, Purchaser shall pay the Purchase Price for the
Securities in the manner provided in Section 2.3 hereof.
[Intentionally left blank]
[Signatures on following page]
<PAGE>
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If this Note Purchase Agreement is satisfactory to you, please so indicate
by signing five counterparts of this Agreement in the space provided below,
providing the information indicated thereon, and delivering such counterparts to
GSN, whereupon this Agreement shall become binding upon execution by GSN in
accordance with its terms.
Agreed and accepted as of
the date first above written:
_______________________________
Print or Type Name of Purchaser
By: ___________________________
Title:
Address:
Principal Amount of Securities Subscribed
to be Purchased: $___________
Notices: _________________________
_________________________
_________________________
Attn: ___________________
Facsimile: ______________
*************************************************************
[To be completed by GSN]
Principal Amount of Securities Subscribed for
by Purchaser and Accepted by the Company: $_______________
Purchase Price of Securities: $_______________
(Purchase Price is equal to the sum of (a) ___% of the principal amount of
the Notes, or $____________, plus (b) accrued interest on the principal
amount from the immediately preceding interest payment date (i.e., October
1, 1997) to but excluding the day of Closing, equal to $___________)
GARDEN STATE NEWSPAPERS, INC.
By: _________________________
Name:
Title:
<PAGE>
Exhibit 21.1
SUBSIDIARIES OF GARDEN STATE NEWSPAPERS, INC.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
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.
V&P Publishing, 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
Hanover Publishing Company Delaware The Evening Sun
The Community Sun
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Subsidiaries State of Incorporation Names Under Which It Conducts Business
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Janson Publishing Company Delaware The Home Town News
Nazareth US
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
Denison Review
Denison Bulletin
Ad-Visor
Meat Empire Savings Guide
Valley News Today
Essex Independent
Valley News Life
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 Community Forum
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
El Economico
Press Telegram
Pittsfield Publications, Inc. Delaware The Berkshire Eagle
The Shopper
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Subsidiaries State of Incorporation Names Under Which It Conducts Business
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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 Tribune
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
Daily News of Los Angeles
Vecinos Del Valle
The Real Estate Weekly Newspaper
Tri-City Weekly
<PAGE>
EXHIBIT 23.1
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 $50,000,000 of 8-3/4% Series B 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, and our report dated March 27, 1998, with respect to
the Financial Statements of Tower Media, Inc. for the year ended December 28,
1997, included in Garden State Newspapers, Inc.'s Form 8-K/A dated January 29,
1998, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Denver, Colorado
May 7, 1998
<PAGE>
EXHIBIT 23.2 - PAGE 1 OF 2
(ORIGINALLY FILED AS EXHIBIT 5)
[VERNER, LIIPFERT, BERNHARD, MCPHERSON & HAND LETTERHEAD]
May 8, 1998
Garden State Newspapers, Inc.
1560 Broadway, Suite 1450
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 $50,000,000 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 dated as of February 6, 1998, among the Company
and the Purchasers (as defined therein).
In so acting, we have examined and relied upon such records, documents and
other instruments as in our judgment 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 which any proceedings therefore may be brought, regardless of whether
considered in a proceeding at law or in equity.
<PAGE>
EXHIBIT 23.2 - PAGE 2 OF 2
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>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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% Series B 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.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 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
</TABLE>
(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 6th day of May, 1998.
THE BANK OF NEW YORK
By: /s/JAMES W.P. HALL
----------------------------------
Name: JAMES W.P. HALL
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 December 31, 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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.......... $ 5,742,986
Interest-bearing balances................................... 1,342,769
Securities:
Held-to-maturity securities................................. 1,099,736
Available-for-sale securities............................... 3,882,686
-----------
Federal funds sold and Securities purchased under
agreements to resell......................................... 2,568,530
Loans and lease financing receivables:
Loans and leases, net of unearned income.................... 35,019,608
LESS: Allowance for loan and lease losses................... 627,350
LESS: Allocated transfer risk reserve....................... 0
Loans and leases, net of unearned income, allowance,
and reserve................................................ 34,392,258
-----------
Assets held in trading accounts............................... 2,521,451
Premises and fixed assets (including capitalized leases)...... 659,209
Other real estate owned....................................... 11,992
Investments in unconsolidated subsidiaries and associated
companies................................................... 226,263
Customers' liability to this bank on acceptances outstanding.. 1,187,449
Intangible assets............................................. 781,684
Other assets.................................................. 1,736,574
-----------
Total assets.................................................. $56,153,587
-----------
-----------
LIABILITIES
Deposits:
In domestic offices......................................... $27,031,362
Noninterest-bearing......................................... 11,899,507
Interest-bearing............................................ 15,131,855
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................... 13,794,449
Noninterest-bearing......................................... 590,999
Interest-bearing............................................ 13,203,450
Federal funds purchased and Securities sold under
agreements to repurchase..................................... 2,338,881
Demand notes issued to the U.S. Treasury...................... 173,851
Trading liabilities........................................... 1,695,216
Other borrowed money:
With remaining maturity of one year or less................. 1,905,330
With remaining maturity of more than one year through
three years................................................ 0
With remaining maturity of more than three years............ 25,664
Bank's liability on acceptances executed and outstanding...... 1,195,923
Subordinated notes and debentures............................. 1,012,940
Other liabilities............................................. 2,018,960
-----------
Total liabilities............................................. 51,192,576
-----------
EQUITY CAPITAL
Common stock.................................................. 1,135,284
Surplus....................................................... 731,319
Undivided profits and capital reserves........................ 3,093,726
Net unrealized holding gains (losses) on available-for-sale
securities................................................... 36,866
Cumulative foreign currency translation adjustments........... (36,184)
-----------
Total equity capital.......................................... 4,961,011
-----------
Total liabilities and equity capital.......................... $56,153,587
-----------
-----------
</TABLE>
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.
Thomas A. Renyi }
Alan R. Griffith } Directors
J. Carter Bacot }
<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 , 1998
-------------------------
- ------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON , 1998, 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
-------------------------------------------
-3-
<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:
------------------------------------------------------------------
------------------------------------------------------------------
-4-
<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 _________,
1998 (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.
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<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.
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<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>
- ----------------------------------------------------------------------------------------------------------------
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
- ----------------------------------------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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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