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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 (Primary Standard (IRS Employer
of incorporation or Industrial Classification Identification
organization) Code Number)
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: ______, 1999.
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 Amount of
Securities to be Registered Registered Offering Price(1) Aggregate Offering Price(1) Registration Fee
- ----------------------------- ------------ ----------------- --------------------------- ----------------
<S> <C> <C> <C> <C>
8.625% Series B Senior
Subordinated Notes Due 2011 $200,000,000 99.047% $198,094,000 $55,070
</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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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to by these
securities in any state where the offer of sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 28, 1999
PROSPECTUS
DATED _______, 1999
OFFER TO EXCHANGE
ALL OUTSTANDING
Series A 8.625% Senior Subordinated Notes Due 2011
FOR
Series B 8.625% Senior Subordinated Notes Due 2011
OF
GARDEN STATE NEWSPAPERS, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON JULY ____,
1999, UNLESS EXTENDED
Garden State Newspapers, Inc., a wholly owned subsidiary of Affiliated
Newspapers Investments, Inc., hereby offers to exchange its unregistered
8.625% Senior Subordinated Notes due 2011, of which $200,000,000 aggregate
principal amount was issued on March 16, 1999, for an equal face amount of
registered 8.625% Senior Subordinated Notes due 2011. The terms of the
registered notes, also referred to as exchange notes, are identical in all
material respects to the unregistered notes, except that the exchange notes
have been registered under the Securities Act of 1933, as amended, and
therefore will not bear legends restricting their transfer. The unregistered
notes and the exchange notes offered by this prospectus are sometimes
collectively referred to as the notes.
THE EXCHANGE NOTES
- The exchange notes will mature on July 1, 2011.
- Interest on the exchange notes is payable semi-annually on January 1
and July 1 of each year, commencing July 1, 1999.
- We 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 our option, in whole or in
part, at any time on or after July 1, 2004.
- We may, on or before July 1, 2002, use the net proceeds from one or
more equity offerings to redeem up to 35% of the aggregate principal amount
of the exchange notes.
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- We may be required to make an offer to repurchase the exchange notes
from you if we undergo a change of control.
- The exchange notes will be unsecured, will be senior in right of
payment to any future indebtedness which is made expressly junior thereto and
will be subordinated in right of payment to all existing and future senior
debt.
- The exchange notes will be equal in right of payment to our existing
senior subordinated secured notes of which $300.0 million is outstanding. In
addition, we have a $52.0 million subordinated promissory note, which
includes deferred interest, that will rank junior to the exchange notes.
Also, on May 11, 1999, we entered into a new credit facility for up to $190.0
million (of which $175.0 million is outstanding) which will be senior to the
exchange notes. The New Credit Agreement may be expanded to $250.0 million.
WE REFER YOU TO "RISK FACTORS," WHICH BEGINS AT PAGE 20, FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE
OFFER
____________________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
____________________
The date of this Prospectus is _____________, 1999.
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1
You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. We are offering to exchange unregistered
notes for exchange notes only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as
of the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of exchange notes.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with
the Commission. You can inspect and copy these reports and other information
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. Please call the Commission at 1-800-SEC-0330 for further
information on the public reference rooms. We file our reports and other
information with the Commission electronically, and the Commission maintains
a web site located at http://www.sec.gov containing this information.
We have filed a registration statement on Form S-4, which includes all
amendments and exhibits to the S-4, with the Commission with respect to this
exchange offer. This prospectus does not contain all of the information
included in the registration statement. Certain parts of the registration
statement are omitted in accordance with the rules and regulations of the
Commission. The registration statement, including any amendments, schedules
and exhibits are 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 in the prospectus include all material terms of
the contracts or other documents but are not necessarily complete, and in
each instance reference is made to the copy of the applicable contract or
other document filed as an exhibit to the registration statement, each
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. 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 notes 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. We refer you to "Description of the Notes--Certain
Covenants--Reports to Securities and Exchange Commission."
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, 1998.
2. Current reports on Form 8-K dated March 31, 1999.
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2
3. Form 10-Q for quarter ended September 30, 1998.
4. Form 10-Q for quarter ended December 31, 1998.
5. Form 10-Q for the quarter ended March 31, 1999.
All documents filed by us 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 will 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 in this prospectus will be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus, 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
will not be deemed to constitute a part of this prospectus except as so
modified or superseded.
We will provide without charge copies of all documents incorporated by
reference in this prospectus, other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference into such
documents), to each person to whom a copy of this prospectus has been
delivered upon the written or oral request of such person.
DISCLOSURE REGARDING FORWARD-LOOKING 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
COMPANY," AND STATEMENTS LOCATED ELSEWHERE HEREIN REGARDING THE COMPANY'S
FINANCIAL POSITION AND OPERATING STRATEGY, MAY CONSTITUTE FORWARD-LOOKING
STATEMENTS. IN ADDITION, WHEN USED IN THIS PROSPECTUS, INCLUDING THE
DOCUMENTS INCORPORATED BY REFERENCE, THE WORDS "BELIEVES," "ANTICIPATES,"
"EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN
SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE 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:
- COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF BUSINESSES
ACQUIRED BY THE COMPANY (INCLUDING CLUSTERING) MAY BE GREATER THAN EXPECTED;
- UNANTICIPATED INCREASES MAY OCCUR IN FINANCING AND OTHER COSTS, SUCH
AS NEWSPRINT OR LABOR COSTS;
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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
- 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. WE DO NOT UNDERTAKE ANY
RESPONSIBILITY TO RELEASE PUBLICLY ANY REVISIONS TO THESE FORWARD-LOOKING
STATEMENTS TO TAKE INTO ACCOUNT EVENTS OR CIRCUMSTANCES THAT OCCUR AFTER THE
DATE OF THIS PROSPECTUS.
NOTICE TO INVESTORS
The unregistered notes were sold on March 16, 1999, in a transaction not
registered under the Securities Act in reliance upon an exemption from the
registration requirements thereof. In general, the unregistered 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 obligations of Garden State contained in a registration rights
agreement, a copy of which has been filed as an exhibit to the registration
statement. Based on interpretations by the staff of 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 the
unregistered 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 they 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 the unregistered notes where unregistered notes were
acquired by such broker-dealer as a result of market-making activities or
other trading activities, other than unregistered 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), we will make this prospectus available to any broker-dealer
for use in connection with any such resale. We refer you to "Plan of
Distribution."
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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, referred to in this prospectus collectively as 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. We refer you to "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 the unregistered
notes are tendered and accepted in the exchange offer, the trading market, if
any, for untendered unregistered notes could be adversely affected.
The exchange offer is not conditioned upon any minimum aggregate
principal amount of unregistered notes being tendered for exchange. The date
of acceptance and exchange of the unregistered notes, referred to as the
"exchange date," will be the fourth business day following the expiration
date, as defined herein. The unregistered 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.
SUMMARY
THE FOLLOWING SUMMARY CONTAINS BASIC INFORMATION ABOUT GARDEN STATE
NEWSPAPERS, INC. AND ITS SUBSIDIARIES AND OTHER INFORMATION CONTAINED
ELSEWHERE IN THIS PROSPECTUS. IT MAY NOT CONTAIN ALL THE INFORMATION THAT
MAY BE IMPORTANT TO YOU. YOU SHOULD READ THIS ENTIRE PROSPECTUS, INCLUDING
THE "RISK FACTORS" AND THE FINANCIAL DATA AND RELATED NOTES, THE INCORPORATED
DOCUMENTS AND THE OTHER DOCUMENTS TO WHICH WE HAVE REFERRED YOU BEFORE MAKING
AN INVESTMENT DECISION. ALL REFERENCES IN THIS PROSPECTUS TO "WE," "OUR,"
"US," "COMPANY" AND "GARDEN STATE" MEAN GARDEN STATE NEWSPAPERS, INC. AND ITS
DIRECT AND INDIRECT SUBSIDIARIES, INCLUDING THE CALIFORNIA NEWSPAPERS
PARTNERSHIP (THE "SUBSIDIARIES"), UNLESS THE CONTEXT OTHERWISE REQUIRES.
THE COMPANY
GENERAL
Garden State, a wholly owned subsidiary of Affiliated Newspapers, is one
of the largest privately held newspaper publishing companies in the United
States. Garden State was founded in March 1985 by William Dean Singleton and
Richard B. Scudder. Including the California Newspapers Partnership, we
currently own and operate 41 market dominant daily and 90 non-daily
newspapers in nine states (including suburban markets in close proximity to
the San Francisco Bay area, Los Angeles, Philadelphia, Omaha and Boston). Our
principal sources of revenue are print advertising and circulation sales.
Other sources of revenue include commercial printing and electronic
advertising. Our newspapers had a combined daily and Sunday average paid
circulation of approximately 1,410,000 and 1,422,000, respectively, as of
September 30, 1998, including the newspapers added in California Newspapers
Partnership.
From fiscal 1994 to fiscal 1998, we increased revenues and EBITDA,
through acquisitions and internal growth, from $196.7 million and $37.3
million to $435.4 million and $98.1 million, respectively, while reducing our
leverage ratio from approximately 6.0x to 4.7x. We had revenues and EBITDA
of $398.9 million and $88.8 million, respectively, for the nine months ended
March 31, 1999, compared to $309.3 million and
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$69.3 million, respectively, for the nine months ended March 31, 1998.
Fiscal year 1999 results included the August 21, 1998 and October 31, 1998
acquisition of the Charleston, West Virginia DAILY NEWS and Farmington, New
Mexico DAILY TIMES, respectively since the date of acquisition. In addition,
we contributed certain of our California newspapers to the California
Newspapers Partnership, as discussed in more detail below, effective April 1,
1999.
We have grown significantly by making strategic acquisitions in markets,
which we believe, have above average growth potential and to a lesser extent
through internal growth. Our main acquisition focus is on newspaper markets
contiguous to our own, allowing us to realize certain operating synergies. We
refer to this acquisition strategy as clustering. A majority of our
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 sell advertising into other Garden State
newspapers located nearby. We occasionally divest newspaper properties that
no longer fit our cluster strategy and when we believe the value to us of
such newspaper properties has been maximized. This strategy has enabled us to
reinvest sale proceeds in newspaper properties that can be clustered,
allowing us to achieve greater revenue and EBITDA growth in the future than
we otherwise would have. This strategy has proven successful over the past
four years as our EBITDA has grown at a compounded annual growth rate of
27.3%, while our leverage ratio has decreased, as described above.
Our newspapers are geographically diverse and generally positioned in
markets with limited direct competition for local newspaper advertising. We
believe our newspaper markets, taken as a whole, have above average
population and sales growth potential. Most suburban and small city daily
newspapers, such as the newspapers we own, have leading or sole distribution
in the market areas served by the newspaper. Only a few cities in the United
States contain more than one primary daily newspaper, the majority of which
are in major metropolitan markets. Additionally, start-ups of new daily
newspapers in suburban markets with pre-existing local newspapers are rare.
Suburban newspapers address the specific needs of the community by publishing
a broad spectrum of local news as well as advertiser-specific editions, which
television, because of its broader geographic coverage, is unwilling or
unable to provide. Thus, in many communities the local newspaper provides a
unique combination of social and economic services, making it attractive for
both readers and advertisers.
Sizable weekly newspapers are generally found in and around metropolitan
areas in addition to smaller towns and cities. Suburban weeklies, such as
the weekly newspapers operated by our divisions, NJN Publishing, Alameda
Newspaper Group and Los Angeles Newspaper Group, have several advantages over
metropolitan dailies, including (1) a lower cost structure, (2) the ability
to publish only on their most profitable days, such as one midweek and one
weekend day, and (3) the ability to more effectively exploit zoned
advertising and avoid expensive investments in wire services and syndicated
feature material. Zoned advertising permits small merchants, individual
classified, and other advertisers to advertise solely in their own local
areas at a cost lower than that of a full-run metropolitan daily newspaper.
Thus, the typical suburban weekly newspaper has a broader advertiser base and
does not rely to the same degree as a metropolitan daily on major retailers
for advertising revenues.
On March 31, 1999, we formed a partnership, referred to in this
prospectus as the "California Newspapers Partnership," with Donrey Newspapers
LLC and Gannett Company Inc., to which we contributed our Alameda Newspaper
Group, comprised of six daily newspapers we publish in the San Francisco Bay
area; San Gabriel Valley Newspaper Group, which includes three daily
newspapers we publish in the Los
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Angeles area; the TIMES-STANDARD, a daily newspaper we publish in Eureka,
California; and all the weekly publications published by these daily
newspapers. Donrey contributed ten daily newspapers and two non-daily
newspapers, located in California, most of which are located in close
proximity to certain Garden State newspaper publications. Gannett
contributed the San Bernardino County Sun, in southern California. The
California Newspapers Partnership publishes twenty-one daily newspapers with
average paid daily circulation of about 607,000 and Sunday circulation of
about 573,000 at September 30, 1998. We have a 58.8% partnership interest in
the California Newspapers Partnership and appoint a majority of its
management committee. Media News Group, Inc., referred to in this prospectus
as "MNG," (we refer you to "Business--MediaNews Group, Inc.'s Management of
Newspaper Operations") entered into a management agreement with the
California Newspapers Partnership, providing MNG a management fee of 1.25% of
revenues and thereby reducing the MNG management fee charged to us by about
$1.0 million annually on a net basis. In addition, we entered into certain
other agreements in connection with the California Newspapers Partnership,
such as rights of first offer, put rights and other rights.
We entered into a new $190.0 million senior credit facility, referred to
in this prospectus as the "new credit facility," on May 12, 1999. We used the
proceeds of the unregistered notes and $175.0 million borrowed under the new
credit facility to, among other things, (1) complete the repurchase of our
Senior Subordinated Secured Notes due 2004, (2) repay our existing bank
credit facility and (3) pay a dividend to Affiliated Newspapers which then
repurchased its Senior Discount Debentures due 2006.
RECENT DEVELOPMENTS
NEW CREDIT AGREEMENT. On May 12, 1999, Garden State entered into a new
credit agreement with The Bank of New York, as administrative agent, certain
lenders party thereto, Affiliated Newspapers and the subsidiaries of Garden
State. The obligations of Garden State under the credit agreement are
guaranteed by Affiliated Newspapers and the subsidiaries of Garden State and
are secured by a pledge of shares of capital stock of Garden State and its
subsidiaries. The new credit facility permits Garden State, upon compliance
with the terms of the credit agreement, to borrow up to $190.0 million. As
of May 12, 1999, we have borrowed $175.0 million under the new credit
facility which was used to refinance and serve as a substitute for our
existing credit facility. The new credit facility matures on June 30, 2006.
REDEMPTION OF GARDEN STATE 12% NOTES. On May 12, 1999, we redeemed all
of the $57.7 million principal amount outstanding under our existing 12%
Senior Subordinated Secured Notes due 2004. The cost of redeeming these
notes was $62.4 million, including prepayment premium and accrued interest to
the redemption date. Garden State will recognize a pre-tax extraordinary
loss of approximately $2.3 million in its fourth fiscal quarter ending June
30, 1999 for this redemption.
REDEMPTION OF AFFILIATED NEWSPAPERS NOTES. On May 12, 1999, we paid a
dividend of $150.0 million to Affiliated Newspapers which was used to
redeemed all of the $141.6 million principal amount then outstanding under
Affiliated Newspapers existing Senior Discount Debentures due 2006.
ACQUISITION OF ADDITIONAL 20% OF DENVER NEWSPAPERS STOCK BY AFFILIATED
NEWSPAPERS. Affiliated Newspapers has agreed in principle to acquire an
additional 20% of the outstanding common stock of Denver Newspapers, Inc.
bringing its total ownership interest in Denver Newspapers to 80%. In
addition, Denver Newspapers will redeem its outstanding preferred stock which
was scheduled to be redeemed July 1, 1999. Garden State will fund the
acquisition of Denver Newspapers common stock and redemption of Denver
Newspapers preferred stock for a total of
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approximately $92.0 million. Garden State has received commitments to
increase its new credit agreement, previously discussed, to $350.0 million in
order to fund the purchase. Upon completion of the above transaction Denver
Newspapers will become a consolidated subsidiary of Garden State and it is
anticipated that Garden State, Affiliated Newspapers and MNG may undergo a
corporate restructuring intended to combine their operations. This possible
restructuring is not expected to have a material adverse effect on Garden
State's ability to perform its obligations under the Exchange Notes.
OPERATING STRATEGY
Our strategy is to increase revenues and cash flows through geographic
clustering and internal growth. The key components of our internal growth
strategy are, targeted marketing programs, local news leadership, high
quality editorial content and presentation, circulation growth, cost control,
and strategic technological investments. These strategies are more fully
described below.
GEOGRAPHIC CLUSTERING. We have acquired and assembled newspapers, and may
continue to acquire newspapers, in contiguous markets. We refer to this
strategy as "clustering." Clustering enables us to realize operating
efficiencies and economic synergies, such as the sharing of management,
accounting and production functions. In addition, we seek to increase
operating cash flows at acquired newspapers by reducing labor costs and the
width of the newspaper, as well as overall improved cost management.
Clustering also enables management to maximize revenues by selling
advertising into newspapers owned by us in contiguous markets. As a result of
clustering, we believe that our newspapers are able to obtain higher
operating margins than they would otherwise be able to achieve on a
stand-alone basis. The formation of the California Newspapers Partnership is
an extension of this strategy.
TARGETED MARKETING PROGRAMS. Through a strong local presence and active
community relations, we are able to develop programs to maximize our
advertising revenues. We utilize research, demographic studies and zoning
(marketing directed to a particular sub-segment of a local area) to develop
marketing programs that meet the unique needs of specific advertisers.
LOCAL NEWS LEADERSHIP. Our newspapers generally have the largest local
news gathering resources in their markets. As a result of emphasizing local
news, our newspapers generally are able to generate reader loyalty and create
franchise value. Because our provision of local news is a unique product in
our markets, our newspapers satisfy the demands of both our readers and
advertisers.
HIGH QUALITY EDITORIAL CONTENT AND PRESENTATION. Our newspapers are
committed to editorial excellence, by providing the proper mix of local and
national news to effectively serve the needs of the local markets. Our
newspapers often receive awards for excellence in various editorial
categories in their respective regions and circulation categories. In
addition, our newspapers are generally produced on modern offset presses and
are designed to attract readers through attractive layouts and color
enhancements.
CIRCULATION GROWTH. We believe that circulation growth is essential to
the creation of long-term franchise value at our newspapers. Accordingly, we
have and will continue to invest heavily in telemarketing and promotional
campaigns to increase circulation and readership. We have also established
management incentive programs, which reward our publishers for circulation
growth at each of their daily newspapers. As a result of our commitment to
circulation growth, we are one of the few newspaper groups which has
consistently grown circulation over the last several years, excluding the
effects of acquisitions.
COST CONTROL. We emphasize 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, we further control labor costs through
investments in state-of-the-art
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production equipment that improves production, quality and increases
efficiency. We are equally focused on newsprint cost control. Each of our
newspapers benefits from discounted newsprint costs through its relationship
with MNG as the seventh largest newspaper group in the United States in terms
of circulation as of September 30, 1997. We purchase newsprint from several
suppliers under arrangements covering MNG affiliates, resulting in what we
believe are some of the most favorable long- term newsprint prices in the
industry. Through MNG and Affiliated Newspapers, we have available fixed
price newsprint contracts and newsprint swaps expiring over the next twelve
months to ten years, as well as newsprint purchasing arrangements with
certain of our other suppliers which delay the adverse effect of newsprint
price increases. Based on expected newsprint utilization at Garden State,
including the two daily newspapers we acquired in fiscal 1999 and the
California Newspapers Partnership, 50% of our annual newsprint consumption
for fiscal 2000 will be covered by fixed price contracts, and/or newsprint
contracts.
To further control newsprint costs while improving customer satisfaction,
beginning in October of 1995, we began converting all of our newspapers to a
50-inch web width, which reduced the width of a single newspaper page to 12.5
inches, from either 13.5 inch or 13.75 inch page widths. These conversions
have permanently reduced our newsprint consumption in excess of 8% over
levels prior to conversion. At March 31, 1999, all of our newspapers,
excluding the Gannett and Donrey newspapers contributed to the California
Newspapers Partnership, were printed using a 50-inch web width.
STRATEGIC TECHNOLOGICAL INVESTMENTS. To take advantage of the increasing
use of the world wide web and its advertising growth opportunities, MNG
established MediaNews Technologies, referred to in this prospectus as "MNT,"
to develop and maintain websites for each of our daily newspapers. MNT has
developed websites to provide an online editorial presence and full online
classified services for each of our daily newspapers. Although we believe
that providing an online product is important to broaden the reach of our
newspapers and ultimately increase our revenues through value added services,
we believe that almost all of our 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 our markets, we believe that our newspapers are well
positioned to respond to and benefit from any changes in the way in which
news and information are delivered in the future. Our online newspapers can
be found at www.newschoice.com.
In January 1999, Garden State, the Hearst Corporation, E.W. Scripps,
Donrey Media Group and Advance Publications each acquired a 20.0% interest in
AdOne LLC, which was formed to acquire the assets of AdOne Classified
Network, Inc., or "AdOne," and its consumer website, classifiedwarehouse.com,
a fully searchable classified advertising database. After the acquisition of
AdOne and the addition of the newspapers owned by the Hearst Corporation,
E.W. Scripps, Donrey Media Group and Advance Publications, AdOne will have
classified listings from approximately 530 newspapers, which includes
newspapers in 38 of the top 50 markets in the United States. By June 30,
1999, AdOne's classifiedwarehouse.com is expected to average six million new
classified ads each month. AdOne's classifiedwarehouse.com is also the
classified content provider for the portal/web search site, Lycos. With its
new ownership, AdOne is solidly positioned to play a leading role in the
rapidly expanding online classified market place.
We may, from time to time, make strategic or targeted newspaper
acquisitions and dispositions. We continually review newspaper acquisition
candidates that we believe are underperforming in terms of operating cash
flows but have an established history of strong readership, advertiser
loyalty and are available at attractive prices. Acquisitions will only be
made in circumstances in which we believe that the acquisition will
contribute to our overall growth strategy.
<PAGE>
9
MANAGEMENT
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 have spent their entire careers in the
newspaper publishing industry. MNG provides Garden State with cost-effective
corporate resources and newsprint buying power generally only available to
larger corporations. The Singleton and Scudder family members and their
family trusts own all of the capital stock of ANI, other than the Class B
Common Stock, which represents 7.5% of the outstanding capital stock of ANI.
Because the Singleton and Scudder families control ANI, they also control the
common stock of Garden State. The executive officers of MNG are also
executive officers of Garden State and ANI.
__________________
We are a Delaware corporation with our principal management office at
1560 Broadway, Suite 1450, Denver, Colorado 80202. Our telephone number is
(303) 837-0886.
<PAGE>
10
THE EXCHANGE OFFER
<TABLE>
<S> <C>
The Exchange Offer............. We are offering to exchange $1,000 principal
amount of our registered Series B 8.625%
Senior Subordinated Notes due 2011 (the
"Exchange Notes") for each $1,000 principal
amount of our unregistered Series A 8.625%
Senior Subordinated Notes due 2011 (the
"Original Notes" and together with the
Exchange Notes, the "Notes") that are
properly tendered and accepted, referred to
in this prospectus as the "Exchange Offer."
Currently, $200,000,000 aggregate
principal amount of Original Notes is
outstanding. We will issue Exchange Notes
on or promptly after the Expiration Date,
as defined below. We refer you to "The
Exchange Offer."
Resale of the Exchange Notes... Based upon interpretations by the staff of
the Commission set forth in certain no-action
letters issued to third parties, we believe
that the Exchange Notes issued in the
Exchange Offer in exchange for Original Notes
may be offered for resale, resold and
otherwise transferred by a holder without
compliance with the registration and
prospectus delivery provisions of the
Securities Act; PROVIDED you (1) exchange the
Original Notes for the Exchange Notes in the
ordinary course of business and you do not
participate, intend to participate, and have
an arrangement with any other person to
participate, in the distribution of the
Exchange Notes (2) are not 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 (3) are not an
"affiliate" of the Company within the meaning
of Rule 405 under the Securities Act.
Each broker-dealer that receives Exchange
Notes for its own account in exchange for
Original Notes, where Original Notes were
acquired by that 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.
This Prospectus, as it may be amended or
supplemented from time to time, may be used
by a broker-dealer in connection with such
resales of Exchange Notes.
If, however, you acquire the Exchange Notes
in the Exchange Offer for the purposes of
distributing or participating in the
distribution of the Exchange Notes, you
cannot rely on the position of the staff of
the Commission enumerated above 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.
Registration Rights Agreement.. The Original Notes were sold by the Company
on March 16, 1999, to the initial purchasers
pursuant to a Purchase Agreement dated as of
March 10, 1999, by
<PAGE>
11
and among the Company and the initial
purchasers (the "Purchase Agreement").
Pursuant to the Purchase Agreement, the
Company and the Initial Purchasers entered
into a Registration Rights Agreement dated
as of March 10, 1999 (the "Registration
Rights Agreement"), which grants the
holders of the Original Notes certain
exchange and registration rights. We refer
you to "The Exchange Offer--Termination of
Certain Rights." This Exchange Offer is
intended to satisfy these 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 Exchange Offer will expire at 5:00 p.m.,
New York City time, on July _____, 1999,
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, in this case,
March 16, 1999. 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. We refer you to "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. We refer
you to "The Exchange Offer--Procedures for
Tendering." If such beneficial owner wishes
to tender on such owner's behalf, such
owner must, prior to completing and
executing the Letter of Transmittal and
delivering such owner's Original Notes,
either make appropriate arrangements to
register ownership of the Original Notes in
such owner's name or obtain a properly
completed bond power from the registered
holder. The transfer of registered
ownership may take considerable time and
may not be able to be completed prior to
the Expiration Date.
<PAGE>
12
Procedures for Tendering Notes.. If you wish to accept the Exchange Offer you
must complete, sign and date the Letter of
Transmittal, or a facsimile thereof, in
accordance with the instructions contained
in it and in this prospectus, and mail or
otherwise deliver such Letter of
Transmittal, or such facsimile, together
with such Original Notes you wish to
exchange and any other required
documentation to The Bank of New York, as
exchange agent (the "Exchange Agent"), at
the address set forth in the Letter of
Transmittal. By executing the Letter of
Transmittal, each holder will represent to
the Company that, among other things,
- the Exchange Notes to be acquired by you
in connection with the Exchange Offer
are being acquired by you in the
ordinary course of business,
- you have no arrangement or understanding
with any person to participate in the
distribution of Exchange Notes,
- you are not an "affiliate," as defined
in Rule 405 under the Securities Act, of
the Company,
- if you are not a broker-dealer, that you
are not engaged in and do not intend to
engage in, the distribution of Exchange
Notes,
- if you are 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 you 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
- that you are not acting on behalf of any
persons or entities who could not
truthfully make the foregoing
representations. We refer you to "The
Exchange Offer--Procedures for
Tendering."
Guaranteed Delivery ............ If you wish to tender your Original Notes and
your Original Notes are not immediately
available or you cannot deliver your
Original Notes, the Letter of Transmittal
or any other document required by the
Letter of Transmittal to the Exchange Agent
prior to the Expiration Date, then you must
tender your Original Notes according to the
guaranteed delivery procedures set forth in
"The Exchange Offer-Guaranteed Delivery
Procedures."
<PAGE>
13
Acceptance of the Original
Notes and Delivery of the
Exchange Notes.................. Subject to the satisfaction or waiver of the
conditions to the Exchange Offer, we 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. We refer you to "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,
we refer you to "Certain U.S. Federal Income
Tax Considerations."
Exchange Agent.................. The Bank of New York is serving as the
Exchange Agent in connection with the
Exchange Offer. The Bank of New York also
serves as Trustee under the Indenture
governing the Exchange Notes (the
"Indenture").
Consequences of Failure to
Exchange........................ The Original Notes that are not exchanged
pursuant to the Exchange Offer will remain
restricted securities. Accordingly, such
Notes may be resold only (1) to us, (2)
pursuant to Rule 144A or Rule 144 under the
Securities Act or pursuant to some other
exemption under the Securities Act, (3)
outside the United States to a non United
States person pursuant to the requirements
of Rule 904 under the Securities Act, or
(4) pursuant to an effective registration
statement under the Securities Act. We
refer you to "The Exchange
Offer--Consequences of Failure to
Exchange."
</TABLE>
<PAGE>
14
THE EXCHANGE NOTES
<TABLE>
<S> <C>
Issuer.......................... Garden State Newspapers, Inc.
Notes Offered................... $200.0 million aggregate principal amount of
8 5/8% Senior Subordinated Notes due July 1,
2011. We may, in the future, offer up to
$100.0 million of additional Notes under
the Indenture governing the Notes (the
"Indenture").
Maturity........................ July 1, 2011.
Offering Price.................. 99.047%.
Interest........................ Annual rate 8 5/8%.
Interest Payment Dates.......... Payment frequency: every six months on
January 1 and July 1, commencing July 1,
1999.
Sinking Fund.................... None.
Ranking......................... The Exchange Notes will rank junior to all of
our existing and future senior indebtedness
and will rank senior in right of payment to
all of our future indebtedness that is
expressly subordinated to the Notes. The
Notes will be equal in right of payment with
the existing Senior Subordinated Notes due
2009. As of May 11, 1999 we have
outstanding:
1. $175.0 million under our new credit
facility
2. $300.3 million of indebtedness that
ranks equal to the Exchange Notes; and
3. a $52.0 million subordinated
promissory note, including deferred
interest, that ranks junior to the
Exchange Notes.
Optional Redemption............. We may redeem some or all of the Exchange
Notes at our option at any time on or after
July 1, 2004 at the redemption prices listed
in "Description of Exchange Notes--Optional
Redemption."
In addition, on or before July 1, 2002, we
may, at our option, use the net proceeds from
one or more equity offerings to redeem up to
35% of the aggregate principal amount of the
Notes originally issued at the price listed
in "Description of Exchange Notes--Optional
Redemption."
Mandatory Offer to Repurchase... If we experience specific kinds of changes of
control or certain types of asset sales, we
must offer to repurchase the Exchange Notes
at the prices listed in "Description of
Exchange Notes--Certain Covenants--Change of
Control" and "Description of Exchange Notes--
Certain Covenants--Limitation on Sales of
Assets."
Basic Covenants of Indenture.... We will issue Exchange Notes under the
Indenture with The Bank of New York as
Trustee. The Indenture will limit our
ability and/or the ability of certain of
our subsidiaries to:
- incur more debt;
- pay dividends, redeem stock or make
other distributions;
- issue capital stock;
- make certain investments;
- use assets as security in other
transactions;
- enter into transactions with affiliates;
<PAGE>
15
- enter into sale and leaseback
transactions;
- merge or consolidate; and
- transfer or sell assets.
These covenants are subject to a number of
important qualifications and limitations. We
refer you to "Description of Exchange Notes-
Certain Covenants." Garden State's new credit
facility also contains restrictive covenants.
Risk Factors................... Investing in the Exchange Notes involves
substantial risks. We refer you to "Risk
Factors" on page 20 for a description of some
of the risks you should consider before
investing in the Exchange Notes.
</TABLE>
<PAGE>
16
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The selected historical consolidated financial data for fiscal 1994
through 1998 were derived from the Consolidated Financial Statements of
Garden State and should be read in conjunction with such financial statements
and the related notes included in this prospectus. The historical
consolidated financial data for the nine months ended March 31, 1998 and 1999
were derived from the unaudited consolidated financial statements of Garden
State and, in the opinion of management, include all adjustments (all of
which are of normal, recurring nature) necessary for a fair presentation of
such data. The results of operations for the nine months ended March 31,
1999 are not necessarily indicative of the results that may be expected for
any other interim period or for the entire fiscal year. The selected
historical consolidated financial data of Garden State is qualified by
reference to, and should be read together with, the Consolidated Financial
Statements of Garden State and related notes thereto included in this
prospectus and "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
<TABLE>
<CAPTION>
1998 1999
1994 1995 1996 1997 1998 ------------- -------------
---------------------------------------------------------------------- NINE MONTHS ENDED
FISCAL YEARS ENDED JUNE 30, MARCH 31,
--------------------------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA (a):
Revenues
Advertising................. $159,653 $179,268 $197,954 $243,023 $331,999 $234,333 $306,797
Circulation................. 35,259 42,589 53,513 64,890 89,039 64,308 80,629
Other....................... 1,792 3,260 7,546 11,428 14,383 10,632 11,479
-------- -------- -------- -------- -------- -------- --------
Total Revenues.................. 196,704 225,117 259,013 319,341 435,421 309,273 398,905
Cost of Sales................... 68,531 79,002 99,535 108,070 145,412 103,185 131,454
Selling, General and
Administrative................ 89,278 101,015 112,747 140,477 189,137 134,790 176,366
Management Fees................. 1,552 1,666 2,008 2,205 2,757 2,002 2,279
Depreciation and Amortization... 19,900 18,710 21,841 24,689 38,857 26,229 31,746
Interest Expense................ 24,623 25,806 27,414 31,903 45,311 32,203 40,463
Gain on Sale of Newspaper
Property...................... 6,536 4,153 8,291 30,575 31,829 31,829 --
Income (Loss) Before Income
Taxes and Extraordinary Loss.. (15,253) 684 (752) 34,577 34,392 33,537 8,666
Net Income...................... 18,716 1,048 1,260 24,739 29,600 28,007 2,982
OTHER FINANCIAL DATA:
EBITDA (b)...................... $37,343 $43,434 $44,723 $68,589 $98,115 $69,296 $88,806
Capital Expenditures............ 3,380 4,284 8,079 8,836 9,683 6,621 8,154
Cash Flow from:
Operating Activities........ 7,039 22,876 8,658 31,438 55,350 36,475 38,801
Investing Activities........ (9,840) 1,255 6,900 (148,657) (207,026) (184,398) (64,571)
Financing Activities........ 3,105 (15,742) (28,226) 121,748 143,731 142,402 104,858
Ratio of Earnings to Fixed
Changes (c)................... -- 1.0x -- 1.9x 1.6x 1.9x 1.2x
BALANCE SHEET DATA:
Intangible Assets (Net)......... $143,190 $134,409 $118,396 $230,938 $365,718 $381,665 $399,636
Total Assets.................... 252,561 250,500 240,759 414,431 639,643 644,445 773,094
Long-Term Debt and Capital
Leases........................ 235,147 223,847 210,589 350,822 517,330 513,173 657,573
Other Long-Term Liabilities and
Obligations................... 3,852 5,042 8,101 5,488 6,963 6,617 7,102
Total Shareholder's Equity
(Deficit)..................... (23,100) (22,052) (20,792) 3,947 33,547 31,954 23,943
</TABLE>
- --------------
(FOOTNOTES ON THE FOLLOWING PAGE)
<PAGE>
17
(FOOTNOTES FOR PRECEDING PAGE)
(a) Revenues and operating expenses are affected by the following acquisition
and disposition transactions. The revenue numbers provided below are from
the actual fiscal year results of operations of the respective newspapers
since the date of acquisition or prior to their disposition.
(1) On May 31, 1994, the Company purchased the assets of THE EXPRESS
TIMES, which contributed $1.5 million to fiscal 1994 revenues of the
Company.
(2) On June 27, 1994, the Company closed the YPSILANTI PRESS, a daily
newspaper published in Ypsilanti, Michigan, and sold its circulation
list for $9.0 million. The sale resulted in a pre-tax gain of
approximately $6.5 million. This newspaper contributed approximately
$4.3 million in fiscal 1993 and $4.1 million of revenues in fiscal
1994 prior to its disposition.
(3) On August 1, 1994, the Company sold substantially all the assets used
in the publication of the BRISTOL PRESS and three weekly newspapers
distributed in and around Bristol, Connecticut, for $14.5 million. The
sale resulted in a pre-tax gain of approximately $4.2 million. This
newspaper contributed approximately $6.2 million of revenue in fiscal
1994 and $0.5 million of revenue prior to its sale in fiscal 1995.
(4) On November 18, 1994, the Company acquired substantially all the
assets used in the publication of the GLOUCESTER COUNTY TIMES and
TODAY'S SUNBEAM, daily newspapers located in Woodbury and Salem, New
Jersey, respectively, for $10.9 million. These newspapers contributed
approximately $8.4 million of revenues to the Company in fiscal 1995.
(5) On August 31, 1995, the Company acquired substantially all the assets
used in the publication of THE BERKSHIRE EAGLE, BENNINGTON BANNER and
BRATTLEBORO REFORMER, daily newspapers published in Pittsfield,
Massachusetts; Bennington and Brattleboro, Vermont, respectively, for
approximately $34.6 million. These newspapers contributed
approximately $21.6 million of revenues in fiscal year 1996.
(6) On March 10, 1996, the Company acquired substantially all the assets
used in the publication of the SAN MATEO COUNTY TIMES, a daily
newspaper, and five weekly newspapers published in San Mateo County,
California, for approximately $15.0 million. These newspapers
contributed approximately $4.0 million of revenue to the Company in
fiscal 1996.
(7) On May 1, 1996, the Company sold the common stock of the Johnstown
Tribune Publishing Company, which publishes The Tribune-Democrat and
two weekly newspapers, distributed in and around Johnstown,
Pennsylvania, for $50.6 million. The sale resulted in a pre-tax gain
of approximately $8.3 million. These newspapers contributed
approximately $14.9 million of revenues in fiscal 1996 prior to its
sale and approximately $17.4 million in fiscal 1995. In connection
with the sale of the Johnstown Tribune Publishing Company described
above, the Company acquired the NORTH ADAMS TRANSCRIPT and the
BRIDGETON NEWS, daily newspapers published in North Adams,
Massachusetts, and Bridgeton, New Jersey,
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
<PAGE>
18
(FOOTNOTES CONTINUED FROM PRECEDING PAGE)
respectively. These newspapers contributed revenue of approximately
$1.2 million in fiscal 1996.
(8) On October 31, 1996, the Company acquired substantially all the assets
used in the publication of the PASADENA STAR-NEWS, SAN GABRIEL VALLEY
TRIBUNE, WHITTIER DAILY NEWS, TIMES-STANDARD and THE EVENING SUN,
daily newspapers distributed primarily in Pasadena, West Covina,
Whittier and Eureka, California, and Hanover, Pennsylvania,
respectively, and seven weekly newspapers distributed in and around
these same cities, for a total of approximately $130.0 million. These
newspapers contributed $45.9 million of revenue to the Company in
fiscal year 1997.
(9) On February 13, 1997, the Company sold substantially all the assets
used in the publication of the POTOMAC NEWS and two weekly
publications for $47.7 million in cash plus an adjustment for working
capital. The Company recognized a pre-tax gain on the sale of
approximately $30.6 million, net of selling expenses, in its third
fiscal quarter. These newspapers contributed approximately
$7.5 million of revenues in fiscal year 1997 prior to their sale and
approximately $12.0 million in fiscal year 1996.
(10) On February 28, 1997, the Company acquired substantially all the
assets used in the publication of the SENTINEL & ENTERPRISE, LEBANON
DAILY NEWS and THE DAILY NONPAREIL, daily newspapers located in
Fitchburg and Leominster, Massachusetts; Lebanon, Pennsylvania; and
Council Bluffs, Iowa, respectively, and five weekly newspapers
distributed in and around the same cities, for a total of
approximately $51.2 million in cash. These newspapers combined
contributed approximately $7.9 million of revenue to the Company in
fiscal year 1997.
(11) On July 31, 1997, the Company acquired substantially all the assets
used in the publication of THE SUN, an evening newspaper published in
Lowell, Massachusetts. The assets were purchased for approximately
$60.8 million. THE SUN contributed $22.3 million of revenue in fiscal
1998.
(12) On December 5, 1997, the Company sold substantially all the assets
used in the publication of the NORTH JERSEY HERALD & NEWS and sixteen
weekly publications for $43.0 million in cash plus an adjustment for
working capital. The Company recognized a pre-tax gain on the sale of
approximately $31.8 million, net of selling expenses. These
newspapers contributed $16.2 million of revenues prior to the sale and
$36.2 million in fiscal year 1997.
(13) On December 16, 1997, the Company acquired substantially all the
assets used in the publication of the PRESS-TELEGRAM, a daily
newspaper published in Long Beach, California, for approximately
$38.2 million in cash. Proceeds from the sale of the NORTH JERSEY
HERALD & NEWS were used to fund the acquisition. This newspaper
contributed approximately $22.7 million of revenue in fiscal year
1998.
(14) On January 29, 1998, the Company acquired substantially all the assets
used in the publication of the DAILY NEWS, a daily newspaper published
in the San Fernando Valley of Los Angeles, California, for
approximately $130.0 million. This newspaper contributed
approximately $36.9 million of revenue to the Company in fiscal year
1998.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
<PAGE>
19
(FOOTNOTES CONTINUED FROM PRECEDING PAGE)
(15) On May 1, 1998, the Company acquired substantially all the assets used
in the publication of the VALLEY NEWS TODAY, a morning newspaper
published five times a week in Shenandoah, Iowa, and seven weekly
publications distributed primarily in Shenandoah and Dennison, Iowa.
These assets were purchased for approximately $5.1 million in cash,
plus covenants not to compete with a discounted value of $0.6 million.
These newspapers contributed approximately $0.3 million of revenue to
the Company in fiscal year 1998.
(16) On May 11, 1998 the Company acquired substantially all the assets used
in the publication of THE TRI-CITY WEEKLY, a weekly newspaper
published in Eureka, California for approximately $2.6 million in
cash, plus a covenant not to compete with a discounted value of
$0.5 million. This newspaper contributed approximately $0.2 million
of revenue to the Company in fiscal year 1998.
(17) On August 22, 1998, the Company acquired, for approximately
$47.0 million, a 50% interest in Charleston Newspapers, a joint
venture, which publishes the CHARLESTON GAZETTE (morning) and
CHARLESTON DAILY MAIL (evening) six days a week and the SUNDAY
GAZETTE-MAIL, under the terms of a Joint Operating Agreement. This
newspaper contributed approximately $6.8 million of revenue to the
Company in the six-month period ended December 31, 1998.
(18) Effective October 1, 1998, the Company acquired substantially all the
assets used in the publication of THE DAILY TIMES, a morning newspaper
published in Farmington, New Mexico, for $5.0 million in cash and
discounted notes with the prior owners. This newspaper contributed
approximately $1.7 million of revenue to the Company in the six-month
period ended December 31, 1998.
<PAGE>
20
RISK FACTORS
BEFORE DECIDING TO SURRENDER YOUR ORIGINAL NOTES FOR THE EXCHANGE NOTES
PURSUANT TO THE EXCHANGE OFFER YOU SHOULD BE AWARE THAT OUR ABILITY TO MAKE
PAYMENTS OF INTEREST AND PRINCIPAL AND THE VALUE OF THE EXCHANGE NOTES IN THE
SECONDARY MARKET ARE SUBJECT TO VARIOUS RISKS, INCLUDING THOSE DESCRIBED
BELOW. YOU SHOULD CONSIDER CAREFULLY THESE RISK FACTORS TOGETHER WITH ALL OF
THE OTHER INFORMATION INCLUDED IN THIS PROSPECTUS BEFORE YOU DECIDE TO
EXCHANGE YOUR ORIGINAL NOTES FOR THE EXCHANGE NOTES PURSUANT TO THIS EXCHANGE
OFFER.
HOLDING COMPANY STRUCTURE-OUR ABILITY TO MAKE PAYMENTS ON THE EXCHANGE NOTES
DEPENDS ON OUR ABILITY TO RECEIVE DIVIDENDS OR OTHER DISTRIBUTIONS FROM OUR
SUBSIDIARIES, INCLUDING FROM OUR NEWLY-FORMED JOINT VENTURE/PARTNERSHIP.
Our ability to meet our obligations, including with respect to the
Exchange Notes, will be dependent upon dividends and other distributions
or payments from our subsidiaries, including the California Newspapers
Partnership. The ability of our subsidiaries to dividend or distribute
or make other payments to Garden State depends upon the availability of
cash flow from operations, proceeds from the sale of assets and/or
borrowings. In the event of bankruptcy proceedings affecting a
subsidiary, to the extent we are recognized as a creditor of that
subsidiary, our claim would still be subordinate to any security
interest in or other lien on any assets of that subsidiary and to any of
its debt and other obligations that are senior to the payment of the
Exchange Notes. On May 12, 1999, we repurchased all the remaining
outstanding Senior Subordinated Secured Notes due 2004.
Under its partnership agreement, the California Newspapers Partnership
is expected to distribute on a monthly basis its earnings or other funds
that are available for distribution, less amounts to be retained for
working capital and capital expenditures, to the partners. We cannot be
certain of the availability of distributions from the California
Newspapers Partnership and the lack of any such distributions may
adversely affect our ability to pay interest and principal on the
Exchange Notes or meet our other obligations.
SUBORDINATION-YOUR RIGHT TO RECEIVE PAYMENTS ON THE EXCHANGE NOTES IS JUNIOR
TO OUR BANK AND OTHER UNSUBORDINATED INDEBTEDNESS AND POSSIBLY ALL OF OUR
FUTURE BORROWINGS.
Payments on the Exchange Notes are subordinated to all of our existing and
future indebtedness including amounts under our new credit facility, other
than trade payables and future indebtedness that expressly provides that it
is equal to or subordinated in right of payment to the Exchange Notes. As
a result, upon any distribution to our creditors in a bankruptcy,
liquidation or reorganization or similar proceeding relating to us or our
property, the holders of our senior debt will be entitled to be paid in
full before any payment may be made with respect to the Exchange Notes.
In the event of a bankruptcy, liquidation or reorganization or similar
proceeding relating to us, holders of the Exchange Notes will participate
on a PARI PASSU (or equal) basis with trade creditors and all other holders
of our senior subordinated indebtedness. However, because the Indenture
requires that amounts otherwise payable to holders of the Exchange Notes in
a bankruptcy or
<PAGE>
21
similar proceeding be paid instead to holders of senior
debt until they are paid in full, holders of the Exchange Notes may receive
less, ratably, than holders of trade payables and other senior subordinated
debt in any such proceeding. In addition, any acceleration of the
indebtedness under our new credit facility will, and acceleration of our
other indebtedness may, constitute an event of default under the Indenture.
If an event of default exists under our new credit facility or certain
other senior indebtedness, the Indenture may restrict payments on the
Exchange Notes until holders of such other indebtedness are paid in full or
such default is cured or waived or has otherwise ceased to exist. In any
of these cases, we may not have sufficient funds to pay all of our
creditors and holders of the Exchange Notes may receive less, ratably, than
the holders of trade payables and other senior subordinated debt.
SUBSTANTIAL LEVERAGE-OUR SUBSTANTIAL INDEBTEDNESS COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR FINANCIAL HEALTH AND PREVENT US FROM FULFILLING OUR
OBLIGATIONS UNDER THE EXCHANGE NOTES.
We have, a significant amount of indebtedness. In addition, subject to the
restrictions contained in our indebtedness agreements, we expect to incur
additional indebtedness from time to time to finance acquisitions, for
capital expenditures, to fund working capital and for general business
purposes.
The following chart presents certain important credit information assuming
that the Company had borrowed $175.0 million under a new credit facility as
of March 31, 1999.
<TABLE>
<CAPTION>
AT MARCH 31,
1999
PRO FORMA
---------
(DOLLARS IN
MILLIONS)
<S> <C>
Total indebtedness...................................................
$762.5
</TABLE>
Our substantial indebtedness could have important consequences to you. For
example, it could:
- make it more difficult for us to satisfy or refinance our
obligations with respect to the Exchange Notes and our other
indebtedness;
- require us to dedicate a substantial portion of our cash flow
from operations to payments on our indebtedness, thereby
reducing the availability of our cash flow to fund working
capital, capital expenditures, acquisitions or other general
corporate purposes;
- impair our ability to obtain additional financing for, among
other things, working capital, capital expenditures, acquisitions
or other general corporate purposes, or prevent us from obtaining
financing to repurchase the Exchange Notes from you upon a change
of control;
- make us less attractive to prospective or existing customers or
less attractive to potential acquisition targets; and
<PAGE>
22
- limit our flexibility to adjust to changing business and market
conditions, and make us more vulnerable to a downturn in general
economic conditions as compared to our competitors that have less
debt.
In addition, our failure to comply with the financial and other restrictive
covenants contained in our indebtedness agreements could result in an event
of default under such indebtedness, which if not cured or waived, could
have a material adverse effect on us. If we cannot meet or refinance our
obligations when they are due, we may have to sell assets, reduce capital
expenditures or take other actions, which could have a material adverse
effect on us.
We cannot assure you that our businesses will generate sufficient cash flow
from operations or that future borrowings will be available to us under our
new credit facility or otherwise in an amount sufficient to enable us to
pay our indebtedness, including the Exchange Notes, or to fund our other
liquidity needs. In addition, we may need to refinance all or a portion of
our indebtedness, including the Exchange Notes, on or before maturity. We
cannot assure you that we will be able to refinance any of our
indebtedness, including our new credit facility and the Exchange Notes, on
commercially reasonable terms or at all.
CHANGE OF CONTROL OFFER-WE MAY NOT BE PERMITTED TO PURCHASE THE EXCHANGE NOTES
UPON A CHANGE OF CONTROL AS REQUIRED BY THE INDENTURE.
Upon the occurrence of certain specific change of control events, we will
be required to offer to purchase all outstanding Exchange Notes from you.
However, a change of control may also constitute an event of default under
our new credit facility that would permit the lenders to accelerate the
debt thereunder. In addition, our new credit facility restricts our
ability to purchase the Exchange Notes upon a change of control.
Therefore, prior to purchasing the Exchange Notes upon a change of control,
we must either repay the indebtedness under our new credit facility or
obtain the consent of the lenders thereunder. If we do not repay our new
credit facility or obtain such consent, we will be prohibited from offering
to purchase the Exchange Notes.
The source of funds for any purchase of the Exchange Notes would be our
available cash or cash generated from other sources, including borrowings,
sales of assets, sales of equity or funds provided by an existing or new
controlling person. We cannot assure you that any of these sources will be
available. Upon the occurrence of a change of control event, we may seek
to refinance the indebtedness outstanding under our new credit facility and
the Exchange Notes. However, it is possible that we will not be able to
complete such refinancing on commercially reasonable terms or at all. In
such event, we may not have the funds necessary to finance the required
change of control offer. We refer you to "Description of Exchange
Notes-Certain Covenants-Change of Control."
FRAUDULENT CONVEYANCE-THE APPLICATION OF FRAUDULENT CONVEYANCE LAWS COULD
AFFECT THE ENFORCEABILITY OF THE EXCHANGE NOTES OR RESULT IN THEIR
SUBORDINATION.
A portion of the proceeds from the sale of the Original Notes were used to
pay dividends to our sole shareholder, who in turn used such proceeds to
repurchase, the Affiliated Newspapers Senior Discount Debenture due 2006.
<PAGE>
23
If a court voided the dividend as a result of a fraudulent conveyance or
because the court deemed the dividend unlawful, the court could disallow
the obligations represented by the Exchange Notes or subordinate the
obligations represented by the Exchange Notes to the claims of other
creditors of Garden State.
Although laws differ among various jurisdictions, in general, the
obligations represented by the Exchange Notes could be found to be a
fraudulent conveyance if:
- the dividend was paid with actual intent to hinder, delay or defraud
creditors; or
- Garden State did not receive fair consideration or reasonably
equivalent value for the note offering (because the proceeds of the
note offering were used to pay a dividend) and Garden State was any of
the following:
1. insolvent or was rendered insolvent because of issuance of the
Exchange Notes and the dividend;
2. engaged in a business or transaction for which its remaining
assets constituted unreasonably small capital; or
3. intended to incur, or believed that it would incur, debts beyond
its ability to pay at maturity.
THE CALIFORNIA NEWSPAPERS PARTNERSHIP PUT OPTIONS-WE MAY BE REQUIRED TO
PURCHASE THE EQUITY INTEREST OF THE OTHER PARTNERS COMMENCING AFTER JANUARY 1,
2003.
Donrey and Gannett have the right to require Garden State to effect the
purchase of their interests in the California Newspapers Partnership, in
the case of Donrey at any time on or after January 1, 2005 and in the case
of Gannett at any time on or after January 1, 2003, at the then appraised
fair market value. We would be required to consummate the purchases of such
interests for cash within two years of the determination of such value. We
cannot be sure that we will have sufficient cash on hand to fund any such
purchase or that third party financing would be available or available on
acceptable terms. Even if we have sufficient cash on hand to fund the
purchase or can obtain acceptable financing, the actual funding of any such
purchase could have a material adverse effect on us.
CYCLICALITY-OUR REVENUES ARE CYCLICAL.
Our advertising revenues, 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. We believe, however, that the
diversity of our geographical operations mitigates, to some degree, the
effects of an economic downturn to the extent such downturn is regional.
We refer you to "Business-Industry Background."
<PAGE>
24
NEWSPRINT COSTS-FLUCTUATIONS IN NEWSPRINT COSTS MAY AFFECT OUR FINANCIAL
RESULTS.
The steady decline in newsprint prices continues as North American
newsprint supplies continue to exceed demand. The price declines began in
November of 1998, and since that time, the average price has dropped
approximately $60 per metric ton for 30 pound newsprint. While North
American newsprint is currently averaging $520 per metric ton, the Company
has been able to purchase newsprint from Europe and Asia at prices under
$500 per metric ton. Newsprint prices may continue to decline as newsprint
producer's inventories are expected to grow in the near term.
To minimize the influence of newsprint price fluctuations, Garden State,
through MediaNews Group and Affiliated Newspapers, has entered into fixed
price newsprint contracts and newsprint swap agreements, which expire over
the next twelve months to ten years. The weighted average price for
newsprint under both the fixed price newsprint contracts and the newsprint
swap, for fiscal 1999 is $552 per metric ton and for fiscal 2000 is $566
per metric ton. About 50% of Garden State's fiscal year 2000 consumption
is expected to be purchased under these price contracts. In addition,
Garden State has a contract that allows it to purchase 36,000 metric tons
per year at a price equal to the lowest price at which newsprint is sold to
large North America newsprint purchasers, subject to quarterly adjustment.
COMPETITION-COMPETITION COULD HAVE A MATERIAL ADVERSE EFFECT ON US.
Our revenue generation depends primarily upon the sale of advertising and
paid circulation. Our competitors for advertising and circulation include
local and regional newspapers, radio and television broadcast, cable
television, direct mail, electronic media, including the "Internet," and
other communications and advertising media which operate in our markets.
Some of our competitors are larger and have greater financial resources
than we do. The extent and nature of our competition in any particular
newspaper market is in large part determined by the location and
demographics of the market and the number of media alternatives in that
market.
Currently, our newspapers do not compete directly with other daily
newspapers covering local news in the core of any of our markets. Although
there can be no assurance that a competitor will not enter one or more of
our markets and become successful, we believe that entry by a direct
competitor in our daily newspaper markets is unlikely for the foreseeable
future.
FULL IMPLEMENTATION OF OPERATING STRATEGY; FUTURE ACQUISITIONS AND/OR JOINT
VENTURES-FAILURE TO IMPLEMENT OUR OPERATING STRATEGY COULD HAVE A MATERIAL
ADVERSE EFFECT ON US; FUTURE ACQUISITIONS AND/OR JOINT VENTURES MAY
MATERIALLY CHANGE OUR CORPORATE STRUCTURE AND ACCESS TO CASH FLOW FROM OUR
OPERATING UNITS.
Our operating strategy includes acquiring newspaper assets in markets
contiguous to existing newspaper markets or in markets where we believe
opportunities for clustering exist. The clustering strategy includes
implementing certain operating improvements and adopting new advertising
strategies to capitalize on perceived synergies. We may not be able to
fully implement our strategy with respect to any recent or future
acquisitions or to realize the anticipated results of our clustering
strategy, including the reduction of certain operating expenses.
<PAGE>
25
CONTROL OF GARDEN STATE-WE ARE EFFECTIVELY CONTROLLED BY TWO SHAREHOLDER
GROUPS.
The Singleton shareholder group and the Scudder shareholder group, as sole
holders of the Affiliated Newspapers Common Stock (other than Class B
Common Stock, representing 7.5% of the Capital Stock of Affiliated
Newspapers), are each in effect entitled to elect one-half of all of the
members of our board of directors and of our parent corporation, and to
otherwise control us and our parent corporation, including with respect to
mergers, liquidations and asset acquisitions and dispositions. There are no
independent directors on our board of directors or our parent corporation's
board of directors and neither we nor our parent corporation are under any
obligation, and do not plan, to name one or more independent directors at
this time.
YEAR 2000 RISK-YEAR 2000 ISSUES COULD HAVE A MATERIAL ADVERSE EFFECT ON US.
As has been widely reported, many computer systems process dates based on
two digits for the year of transaction and may be unable to process dates
in the year 2000 and beyond. There are many risks associated with the year
2000 compliance issue, including but not limited to the possible failure of
our systems and hardware with embedded applications. Any such failure could
result in (1) our inability to obtain raw materials; (2) the malfunctioning
of our printing, distribution or service processes, (3) our inability to
properly bill and collect payments from our customers and/or (4) errors or
omissions in accounting and financial data, any of which could have a
material adverse effect on our results of operations and financial
condition. In addition, there can be no guarantee that the systems of
other companies, including our vendors, utilities and customers, will be
converted in a timely manner, or that a failure to convert by another
company, or a conversion that is incompatible with our systems, would not
have a material adverse effect on us.
ABSENCE OF PUBLIC MARKET FOR THE EXCHANGE NOTES-AN ACTIVE TRADING MARKET MAY
NOT DEVELOP FOR THE EXCHANGE NOTES
The Exchange Notes constitute a new class of securities for which there is
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, we can not
assure you 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,
it would have a material adverse effect on the market price and liquidity
of the Exchange Notes and you may experience difficulty in reselling the
Exchange Notes or may be unable to sell them at all.
If a market for the Exchange Notes does develop, 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 these factors, the Exchange
Notes may trade at prices that may be higher or lower than their principal
amount. Declines in the liquidity and market price of the Exchange Notes
may also occur independently of our financial performance or prospects.
Any market for the Exchange Notes that does develop is subject volatility
or disruptions or may be discontinued at any time.
<PAGE>
26
CONSEQUENCES OF FAILURE TO EXCHANGE ORIGINAL NOTES
IF YOU WISH TO EXCHANGE YOUR ORIGINAL NOTES FOR EXCHANGE NOTES, YOU MUST
COMPLY WITH THE 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. If you do not exchange your
Original Notes for Exchange Notes pursuant to the Exchange Offer or your
tender for exchange is not accepted, you will continue to be subject to the
restrictions on transfer of your Original Notes as set forth in the legend
on the Original Notes. Because the Original Notes were issued pursuant to
exemptions from the registration requirements of the Securities Act and
applicable state securities laws, 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 thereto. We do 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. We refer you to
"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, we believe 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
your business, you do have no arrangement with any person to participate in
the distribution of such Exchange Notes and neither you or any 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. If you tender your Original Notes in the Exchange Offer for
the purpose of participating in a distribution of the Exchange Notes you
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. A 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 they will deliver a
prospectus in connection with any resale of such Exchange Notes. We refer
you to "Plan of Distribution."
THE AMOUNT OF THE ORIGINAL NOTES TENDERED AND ACCEPTED IN THE EXCHANGE
OFFER WILL AFFECT THE MARKET FOR THE ORIGINAL NOTES AND THE EXCHANGE NOTES.
To the extent that a significant amount of the Original Notes are tendered
and accepted in the Exchange Offer, the trading market
<PAGE>
27
for untendered and tendered but unaccepted Original Notes could be
adversely affected. For the same reason, to the extent that a large
amount of Original Notes is not tendered or is tendered and not accepted
in the Exchange Offer, the trading market for the Exchange Notes could
be adversely affected. We refer you to "The Exchange Offer."
USE OF PROCEEDS
There will be no proceeds to Garden State from the exchange of the
Original Notes pursuant to the Exchange Offer. We used the proceeds from the
offering of the Original Notes to repay all the borrowings under our then
existing credit facility, to repurchase our 12% Senior Subordinated Secured
Notes, to pay a dividend to Affiliated Newspapers, which then repurchased a
portion of its Senior Discount Debentures due 2006, and for our general
corporate purposes.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
We sold the Original Notes on March 16, 1999 to the initial purchasers
pursuant to the Purchase Agreement. The initial purchasers subsequently sold
the Original Notes to (a) qualified institutional buyers, as defined in
Rule 144A under the Securities Act, in reliance on Rule 144A, and to (b) persons
in offshore transactions in reliance on Regulation S under the Securities
Act. As a condition to the initial sale of the Original Notes, the Company
and the initial purchasers entered into the Registration Rights Agreement on
March 16, 1999. Pursuant to the Registration Rights Agreement, we agreed to
(1) file with the Commission within 75 days after the issue date of the
Original Notes a registration statement under the Securities Act with respect
to the Exchange Notes and (2) use our reasonable best efforts to cause such
Registration Statement to become effective under the Securities Act within
120 days after the issue date of the Original Notes. We agreed to issue and
exchange the Exchange Notes for all Original Notes validly tendered and not
withdrawn before the expiration of the Exchange Offer. 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 is intended to satisfy certain of our obligations under the
Registration Rights Agreement and the Purchase Agreement.
RESALE OF THE EXCHANGE NOTES
With respect to the Exchange Notes, based upon interpretations by the
staff of the Commission set forth in certain no-action letters issued to
third parties, we believe that if you, assuming you are not (1) 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 (2) you are not "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act, exchange the Original Notes for
the Exchange Notes in the ordinary course of business and you do not
participate, intend to participate, or have an arrangement with any other
person to participate, in the distribution of the Exchange Notes, you 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 you acquire the Exchange
Notes in the Exchange Offer for the purposes of distributing or participating
in the distribution of the Exchange Notes or are a broker-dealer, you cannot
rely on the position of the staff of the Commission enumerated in these
no-action letters issued to third parties and must comply
<PAGE>
28
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 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 if the
Original Notes were acquired by the broker-dealer as a result of
market-making or other trading activities.
Pursuant to the Registration Rights Agreement, we have agreed to make
this prospectus, as it may be amended or supplemented from time to time,
available to any broker-dealer 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. We refer you to "Plan
of Distribution."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions in this prospectus and in
the Letter of Transmittal, we will accept any and all Original Notes validly
tendered and not withdrawn prior to the Expiration Date. We 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. Original 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 (1) the exchange will be registered
under the Securities Act and hence the Exchange Notes will not bear legends
restricting their transfer and (2) as a holder of the Exchange Notes you 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.
As a holder of the Original Notes you do not have any appraisal or
dissenter's rights under the Indenture in connection with the Exchange Offer.
We intend 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.
We will be deemed to have accepted validly tendered Original Notes when,
as and if we give 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 us.
If you tender Original Notes in the Exchange Offer you 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
<PAGE>
29
the exchange of Exchange Notes for Original Notes pursuant to the Exchange
Offer. We will pay all charges and expenses, other than certain applicable
taxes described below, in connection with the Exchange Offer. We refer you to
"--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on July __,
1999, 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 we elect to extend the Exchange Offer, we (1) will notify the
Exchange Agent of any extension by oral or written notice, (2) mail to the
registered holders of Original Notes an announcement thereof, and (3) 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 we choose to
make a public announcement of any delay, extension, amendment or termination
of the Exchange Offer, we will 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.
We reserve the right, in our sole discretion, (1) to delay accepting any
Original Notes, (2) to extend the Exchange Offer, or (3) if any conditions
set forth below under "--Certain Conditions to the Exchange Offer" have not
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 us, which constitutes a material change, we will promptly disclose such
amendment by means of a prospectus supplement that will be distributed to the
registered holders of Original Notes, and we 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 8.625% per annum.
Interest on the Exchange Notes is payable semiannually on each January 1 and
July 1, commencing on the first such date following their date of issuance.
Record holders of the Exchange Notes on December 15, 1999 will receive
interest on January 1, 2000 for the semiannual period ended December 31,
1999. 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, you 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 (1)
certificates for such Original
<PAGE>
30
Notes must be received by the Exchange Agent along with the Letter of
Transmittal, or (2) a timely confirmation of a book-entry transfer, referred
to as a "Book-Entry Confirmation," of such Original 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 (3) the holder must comply
with the guaranteed delivery procedures described below.
If you do not withdraw your tender of the Original Notes prior to the
Expiration Date it will constitute an agreement between you and Garden State
in accordance with the terms and subject to the conditions set forth herein
and in the Letter of Transmittal.
THE METHOD OF DELIVERY OF ORIGINAL NOTES AND THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION
AND RISK. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT YOU 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 US. YOU MAY REQUEST YOUR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR YOU.
If you are a beneficial owner of the Original Notes and your Original
Notes are held through a broker, dealer, commercial bank, trust company or
other nominee and you wish to tender your Original Notes, you should contact
such intermediary promptly and instruct such intermediary to tender the
Original Notes on your behalf.
Signatures on a Letter of Transmittal or a notice of withdrawal, as
described below under "--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 (1) by a registered holder who
has not completed the section entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (2) 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, each an "Eligible
Institution".
If you sign the Letter of Transmittal even though you are not the
registered holder of any Original Notes listed in the Letter of Transmittal,
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 you sign the Letter of Transmittal or any Original Notes or bond
powers in your capacity as trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, you 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.
<PAGE>
31
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. We reserve the absolute right to reject any and all
Original Notes not properly tendered or any Original Notes our acceptance of
which would, in the opinion of our counsel, be unlawful. We also reserve the
right to waive any defects, irregularities or conditions of tender as to
particular Notes. Our 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 we 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 we have 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, we reserve the right in our 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 us that, among other things,
(1) the Exchange Notes you acquired in connection with the Exchange Offer are
being acquired by the you in the ordinary course of business; (2) you have no
arrangement or understanding with any person to participate in the
distribution of Exchange Notes; (3) you are not an "affiliate," as defined in
Rule 405 of the Securities Act, of the Company; (4) if you are not a
broker-dealer, that you are not engaged in and do not intend to engage in,
the distribution of Exchange Notes; (5) if you are a broker-dealer, referred
to as a "Participating Broker-Dealer," that will receive Exchange Notes for
its own account in exchange for Original Notes that were acquired as a result
of market-making or other trading activities, that you 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 (6) that you are not acting on behalf
of any persons or entities who could not truthfully make the foregoing
representations.
RETURN OF NOTES
If any tendered Original Notes are not accepted for any reason set forth
in the terms and conditions of the Exchange Offer or if Original Notes are
withdrawn or are submitted for a greater principal amount than you desire to
exchange, such unaccepted, withdrawn or non-exchanged Original Notes will be
returned to you without any expense to you as promptly as practicable. Under
these circumstances, 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.
<PAGE>
32
GUARANTEED DELIVERY PROCEDURES
If you wish to tender your Original Notes and (1) your Original Notes
are not immediately available or (2) you cannot deliver your Original Notes,
the Letter of Transmittal or any other required documents to the Exchange
Agent prior to the Expiration Date, you 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 you in order for you to tender your Original Notes according to
the guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Original Notes may be
withdrawn at any time prior to the Expiration Date.
To withdraw a tender of Original Notes in the Exchange Offer, a written
or facsimile transmission notice of withdrawal must be received by the
Exchange Agent at its address set forth herein prior to the Expiration Date.
Any such notice of withdrawal must (1) specify the name of the person having
deposited the Original Notes to be withdrawn, known as the "Depositor," (2)
identify the Original Notes to be withdrawn, including the certificate number
or numbers and principal amount of such Original Notes, and (3) 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 Original Notes may be
retendered by following one of the procedures described above under
"--Procedures for Tendering" at any time prior to the Expiration Date.
<PAGE>
33
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, we will 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 our ability 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 we deem necessary for the consummation of the
Exchange Offer.
If we determine in our sole discretion that any of these conditions are
not satisfied, we may (1) refuse to accept any Original Notes and return all
tendered Original Notes to the tendering holders, (2) 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 as provided above under "--Withdrawal of Tenders," or (3)
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, we will
promptly disclose such waiver by means of a prospectus supplement that will
be distributed to the registered holders of the Original Notes, and we 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.
You may have certain rights and remedies against us under the
Registration Rights Agreement should we 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 our benefit only and we may assert them
regardless of the circumstances giving rise to such condition or we may waive
them in whole or in part at any time and from time to time in at our sole
discretion. Our failure at any time to exercise the foregoing rights shall
not be deemed a waiver of any such right and each such right shall be deemed
an ongoing right, which may be asserted at any time and from time to time.
TERMINATION OF CERTAIN RIGHTS
All rights under the Registration Rights Agreement, including
registration rights, of holders of the Original Notes eligible to participate
in this Exchange Offer will terminate upon consummation of the Exchange Offer
except with respect to our continuing obligations (1) to indemnify you
(including any broker-dealers) and certain parties related to you against
certain liabilities, including liabilities under the Securities Act, (2) to
provide, upon your request, the information required by Rule 144A(d)(4) under
the Securities Act in order to permit resales of your Original Notes pursuant
to Rule 144A, (3) to use our 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 180 days from
the date on which the registration statement is declared effective, and (4)
to provide copies of the latest version of the prospectus to all persons
subject to
<PAGE>
34
the prospectus delivery requirements of the Securities Act upon their request
for a period of 180 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, we have 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):
(1) 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 we have consummated or will consummate an
Exchange Offer, we are required to file a Shelf Registration Statement
and such Shelf Registration Statement is not filed on or prior to the
date required by the Registration Rights Agreement, then commencing on
the day after either such required filing date, Additional Interest
shall accrue on the principal amount of the Notes at a rate of 0.25%
per annum for the first 90 days immediately following each such filing
date, such Additional Interest rate increasing by an additional 0.25%
per annum at the beginning of each subsequent 90-day period; or
(2) 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 we have consummated or will consummate an
Exchange Offer, we are required to file a Shelf Registration Statement
and such Shelf Registration Statement is not declared effective by the
Commission on or prior to the 150th day following the date such Shelf
Registration Statement was filed, then, commencing on the day after
the 150th day following the applicable filing date, Additional
Interest shall accrue on the principal amount of the Notes at a rate
of 0.25% per annum for the first 90 days immediately following such
date, such Additional Interest rate increasing by an additional 0.25%
per annum at the beginning of each subsequent 90-day period; or
(3) if (A) we have 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 issue date of the Original Notes (other
than after such time as all Original Notes have been disposed of
thereunder), then Additional Interest shall accrue on the principal
amount of the Notes at a rate of 0.25% per annum for the first 90 days
commencing on (x) the 46th day after such effective date, in the case
of (A) above, or (y) the day such Shelf Registration statement ceases
to be effective in the case of (B) above, such Additional
<PAGE>
35
Interest rate increasing by an additional 0.25% per annum at the
beginning of each subsequent 90-day period;
provided, however, that the Additional Interest rate on the Notes may
not exceed in the aggregate 1.0% per annum; provided, further,
however, that (x) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (1)
above), (y) upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (2)
above), or (z) upon the exchange of Exchange Notes for all Original
Notes tendered (in the case of clause (3)(A) above), or upon the
effectiveness of the Shelf Registration Statement which had ceased to
remain effective (in the case of clause (3)(B) above), Additional
Interest on the Original 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 (1), (2) or
(3) 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) 815-6330
(Eligible Institutions Only)
FEES AND EXPENSES
All fees and expenses incident to compliance with the Registration
Rights Agreement regarding this Exchange Offer shall be paid by us whether or
not the Exchange Offer or a Shelf Registration becomes effective.
We have 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. We will, however, 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 us and are estimated in the aggregate to be approximately
$125,000. Such expenses include registration fees, fees and expenses of the
Exchange Agent and Trustee, accounting and legal fees and printing costs,
among others.
<PAGE>
36
We 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 Original Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes, whether imposed
on the registered holder or any other persons, will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such tendering
holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. You are urged to
consult their financial and tax advisors in making your decision 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 (1) to a person whom the seller
reasonably believes is a qualified institutional buyer in a transaction
meeting the requirements of Rule 144A, (2) in a transaction meeting the
requirements of Rule 144 under the Securities Act, (3) outside the United
States to a non United States person in a transaction meeting the
requirements of Rule 904 under the Securities Act, (4) in accordance with
another exemption from the registration requirements of the Securities Act,
and subject to an opinion of counsel satisfactory to us if we so request, (5)
to the Company, or (6) 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, we will recognize no gain or loss as a result
of the Exchange Offer. The expenses of the Exchange Offer will be expensed in
our fourth fiscal quarter.
The Original Notes were issued, and the Exchange Notes are issuable,
under the Indenture dated as of March 16, 1999, a copy of the form of which
is filed with the SEC as an exhibit to our registration statement on Form
S-4. The form and terms of the Exchange Notes will be identical in all
material respects to the form and terms of the Original Notes, except that
the Exchange Notes will have been registered under the Securities Act and,
therefore, will not bear legends restricting transfer thereof. The Exchange
Notes and the Original Notes are deemed the same class of notes under the
Indenture and are both entitled to the benefits thereof. The following
summary of certain provisions of the Indenture is subject to, and is
qualified in its entirety by reference to, all the provisions of the
Indenture, including the definitions of certain terms therein and those terms
made a part thereof by the Trust Indenture Act of 1939, as amended. Whenever
particular Sections or defined terms of the Indenture not otherwise defined
herein are referred to, such Sections or defined terms are incorporated
herein by reference.
<PAGE>
37
DESCRIPTION OF EXCHANGE NOTES
The Original Notes have been, and the Exchange Notes offered by this
prospectus will be issued under an Indenture dated as of March 16, 1999 (the
"Indenture") between Garden State and The Bank of New York, as trustee (the
"Trustee"). The following is a summary of certain provisions of the Indenture
and is subject to all of the provisions of the Indenture, including the
definitions of certain terms therein and those terms made a part of the
Indenture by the Trust Indenture Act of 1939, as amended. Wherever particular
sections or defined terms of the Indenture are referred to, such sections or
defined terms are incorporated herein by reference. The definitions of
certain capitalized terms used in the following summary are set forth under
"--Definitions."
GENERAL
The Notes will mature on July 1, 2011, will be limited to $300.0 million
aggregate principal amount, of which $200.0 million are outstanding and are
general unsecured obligations of Garden State. Additional amounts may be
issued in one or more series from time to time, subject to the limitations
set forth under "--Certain Covenants-Limitation on Additional Debt."
The Exchange 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 Exchange 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 Exchange 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 Exchange Notes will accrue at the rate per annum stated
on the front cover page, and will be payable semiannually in arrears on July
1 and January 1 of each year, commencing July 1, 1999, to the persons who are
registered holders thereof at the close of business on June 15 or December 15
preceding the applicable interest payment date. Interest on the Exchange
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
Exchange 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 Exchange Notes will be general unsecured obligations of the
Company ranking PARI PASSU in right of payment with the existing Senior
Subordinated 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.
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
<PAGE>
38
property, in an assignment for the benefit of creditors or any marshaling of
Garden State's assets and liabilities, the holders of Senior Debt of Garden
State will first be entitled to receive payment in full in cash of all
Obligations due in respect of such Senior Debt (including interest accruing
after or which would accrue but for the occurrence of the commencement of any
such proceeding, at the rate specified in the applicable Senior Debt whether
or not such interest is an allowable claim in any such proceeding) before any
payment or distribution is made on account of any Obligations on the Notes,
or for the acquisition of any of the Notes for cash or property or otherwise
and, until all Obligations with respect to Senior Debt of Garden State have
been paid in full in cash, any distribution to which the holders of the Notes
otherwise would be entitled shall be made to the holders of Senior Debt
(except that holders of the Notes may receive securities that are
subordinated at least to the same extent as the Notes to Senior Debt and to
any securities issued in exchange for Senior Debt).
Garden State also may not make any payment upon or distribution in
respect of the Exchange Notes or acquire any of the Exchange 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 Exchange 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 (a "nonpayment default"), as a result of
such default, and, in either case, 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. Payment on the Exchange 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," and
"--Certain Covenants-Limitation on Sales of Assets," Garden State will not be
required to make mandatory redemption or sinking fund payments with respect
to the Exchange Notes.
OPTIONAL REDEMPTION
The Exchange Notes will not be redeemable at Garden State's option prior
to July 1, 2004. On and after such date, the Exchange 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
<PAGE>
39
unpaid interest, if any, to the applicable redemption date, if redeemed
during the twelve month period commencing on July 1 of the years indicated
below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004.............................................. 104.312%
2005.............................................. 102.875%
2006.............................................. 101.438%
2007 and thereafter............................... 100.000%
</TABLE>
In addition, at any time, or from time to time, on or prior to July 1,
2002, 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 Exchange Notes originally issued at a redemption price equal to
108.625% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of such redemption, PROVIDED that at least
$130.0 million aggregate principal amount of Exchange 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 after December 31, 2001.
The limitations set forth in the immediately preceding paragraph will
not apply to: (i) the Notes; (ii) Existing Debt; (iii) Debt under the Garden
State Credit Facility, PROVIDED that the aggregate amount of such Debt does
not, at any time, exceed $350.0 million, less any prepayments or scheduled
payments actually made thereunder (to the extent, in the case of prepayments
on revolving credit indebtedness, that the corresponding commitments have
been permanently reduced); (iv) Debt owing from or to Garden State and its
Restricted Subsidiaries, PROVIDED that any Debt owing from Garden State to
its Restricted Subsidiaries is subordinated to the Notes; (v) other Debt
issued hereafter not to exceed in the aggregate $50.0 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;
<PAGE>
40
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 Exchange Notes, other than Liens existing on the date of the Indenture
with respect to the Senior Subordinated Secured Notes, unless the Exchange
Notes are secured equally and ratably with such Debt (but on a senior basis
if such other Debt is subordinate to the Exchange Notes) as long as such Debt
is so secured.
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 October 1, 1997 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
October 1, 1997 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 October 1,
1997 (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 October 1, 1997 (other than from a
Subsidiary of Garden State);
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(v) 100% of the aggregate net proceeds of any (a) sale or other
disposition of Restricted Investments (which Investment was made
after October 1, 1997) 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 or 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 the
"--Limitation 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 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 or other Permitted Investments.
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
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42
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 ("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 Asset Sales in accordance with
clauses (i) and (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 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
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43
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
consensual 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, (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, (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 or (H) customary restrictions on such loans, advances or
transfers contained in agreements governing Permitted Investments.
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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44
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 on 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 the Indenture, there are no Unrestricted
Subsidiaries.
CHANGE OF CONTROL. The Indenture will provide that upon the occurrence of
a Change of Control, each holder will have the right to require Garden State
to repurchase all or a portion of such holder's Exchange 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 an Exchange Note purchased pursuant to a Change of Control Offer will
be required to surrender the Exchange Note with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Exchange 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
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45
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
Exchange Notes may be of limited value if Garden State cannot obtain
sufficient funding to repay all Debt then becoming due. A Change of Control
may constitute an Event of Default under the Garden State Credit Facility,
and permit the holders of the Debt thereunder to declare all amounts
outstanding thereunder to be immediately due and payable.
Restrictions in the Indenture described herein on the ability of Garden
State and its Restricted Subsidiaries to incur additional Debt, to grant
Liens on its property, to make Restricted Payments and to make Asset Sales
may also make more difficult or discourage a takeover of Garden State,
whether favored or opposed by current management of Garden State. Such
restrictions and the restrictions on transactions with Affiliates may, in
certain circumstances, make more difficult or discourage a leveraged buyout
of Garden State. While such restrictions cover a wide variety of arrangements
which have traditionally been used to effect highly leveraged transactions,
the Indenture may not afford the holders protection in all circumstances from
the adverse aspect of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction. For example, the Company could
in the future enter into certain transactions including acquisitions,
refinancings or other recapitalizations that would not constitute a Change of
Control under the Indenture, but that could increase the amount of
indebtedness outstanding at such time or otherwise affect the Company's
capital structure or credit ratings.
Garden State will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Exchange Notes pursuant to a Change of Control Offer.
MERGER OR CONSOLIDATION
The Indenture provides 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.
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46
EVENTS OF DEFAULT
An Event of Default is defined in the Indenture to mean, among other
things, (i) the failure by Garden State to pay interest on any Note when the
same becomes due and payable and the continuance of any such failure for 30
days; (ii) the failure by Garden State to pay the principal of, or premium,
if any, on any Note when and as the same shall become due and payable, at
maturity, upon acceleration, redemption or otherwise, including as a result
of a Change of Control Offer or an Asset Sale; (iii) the failure by Garden
State to comply with any of its agreements or covenants described under the
heading "--Merger or Consolidation" above; (iv) the failure by Garden State
to comply (A) with any of its agreements or covenants described under the
"--Limitation on Restricted Payments" covenant, the "--Limitation on
Additional Debt" covenant, the "--Limitation on Senior Subordinated Debt"
covenant, the "--Limitation on Liens Securing Certain Debt" covenant or the
"--Limitation on Sales of Assets" covenant described above, and the
continuance of such failure for 30 days after written notice is given to
Garden State by the Trustee or to Garden State and the Trustee by the holders
of 25% in aggregate principal amount of the Notes then outstanding or (B)
with any other agreements or covenants in the Notes or the Indenture and the
continuance of such failure for 45 days after written notice is given to
Garden State by the Trustee or to Garden State and the Trustee by the holders
of 25% in aggregate principal amount of the Notes then outstanding; (v)
failure to pay at final maturity (after any stated grace period) the
principal of and interest on one or more classes of Debt of Garden State or
any of its Restricted Subsidiaries, whether such Debt is outstanding on the
Issue Date or thereafter incurred having, individually or in the aggregate,
an outstanding principal amount exceeding $10.0 million or more or any Debt
having, individually or in the aggregate, an outstanding principal amount
exceeding $10.0 million is declared due and payable prior to the stated
maturity; (vi) certain final judgments, orders or decrees for the payment of
money in excess of $10.0 million are entered against ANI or any of its
Significant Subsidiaries and such judgments remain undischarged or unstayed
for a period of 60 days after such judgment or judgments become final and
nonappealable and after the notice specified below; and (vii) certain events
of bankruptcy, insolvency, foreclosure or reorganization of Garden State or
any Significant Subsidiary. The Indenture provides 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 provides 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
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47
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 an Exchange 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 Exchange
Notes selected for redemption nor is the Registrar required to transfer or
exchange any Exchange Notes for a period of 15 days before a selection of
Exchange Notes to be redeemed. The registered holder of an Exchange Note will
be treated as the owner of it for all purposes.
THE TRUSTEE
The Bank of New York is the Trustee under the Indenture and has been
appointed by the Company as Registrar and Paying Agent with respect to the
Exchange 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
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48
outstanding Note affected thereby: (i) change the stated maturity of the
principal of, or any installment of interest on, any Note or reduce the
principal amount thereof, the rate of interest thereon or any premium payable
upon the redemption thereof, or change the coin or currency in which any Note
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment after the stated
maturity thereof (or, in the case of redemption, on or after the redemption
date); (ii) reduce the percentage in principal amount of the outstanding
Notes, the consent of the holders of which is required for any such
supplemental indenture or the consent of such holders is required for any
waiver of compliance with certain provisions of the Indenture or certain
Defaults thereunder and their consequences provided for in the Indenture;
(iii) modify any of the provisions relating to supplemental indentures
requiring the consent of holders or relating to the waiver of past defaults
or relating to the waiver of certain covenants, except to increase any such
percentage of outstanding Notes required for such actions or to provide that
certain other provisions of the Indenture cannot be modified or waived
without the consent of the holder of each Note affected thereby; or (iv)
amend, modify or change the obligation of Garden State to make or consummate
a Change of Control Offer or to offer to purchase Notes using Excess Proceeds
or waive any default in the performance thereof or modify any of the
provisions or definitions in respect thereof.
The holders of a majority of the aggregate principal amount of the Notes
outstanding may waive compliance with certain restrictive covenants and
provisions of the Indenture.
DEFEASANCE AND DISCHARGE OF THE INDENTURE AND THE NOTES
The Indenture will provide that Garden State at any time may terminate
all of its obligations under the Notes and the Indenture ("legal
defeasance"), except for certain obligations, including those with respect to
the transfer or exchange of the Notes, to replace mutilated, destroyed, lost
or stolen Notes and to maintain a registrar and paying agent in respect of
the Notes. If Garden State exercises its legal defeasance option, payment of
the Notes may not be accelerated despite an Event of Default with respect
thereto. Subject to the conditions described below, Garden State at any time
may terminate its obligations under the covenants described under "--Certain
Covenants," "--Change of Control" and "--Limitation on Sales of Assets"
("covenant defeasance") above. Garden State may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
In order to exercise either defeasance option (i) Garden State must have
irrevocably deposited in trust (the "defeasance trust") with the Trustee,
money, U.S. Government Obligations, or any combination thereof, sufficient to
pay the principal of, premium, if any, and interest on the Notes to maturity
or redemption, as the case may be; (ii) Garden State shall have delivered to
the Trustee a certificate from a nationally recognized firm of independent
accountants expressing the opinion that the payment of principal and interest
when due and without reinvestment on the deposited U.S. Government
Obligations plus any deposited money without reinvestment will provide cash
at 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
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49
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 are governed by, and construed in accordance
with, the laws of the State of New York.
DEFINITIONS
"ACQUIRED DEBT" with respect to any Person, means (i) Debt of an entity,
which entity is acquired by Garden State or any of its Subsidiaries after the
date of the Indenture, (ii) Debt assumed which is secured by assets acquired
by Garden State or any of its Subsidiaries, PROVIDED that the Debt in clauses
(i) and (ii) is outstanding at the time of the acquisition of such entity or
such assets, is not created in contemplation of such acquisition and, in the
case of the acquisition of an entity, is not, directly or indirectly,
recourse (including by way of set-off) to Garden State or its Restricted
Subsidiaries or any of their respective assets, other than to the entity and
its Subsidiaries so acquired and the assets of the entity and its
Subsidiaries so acquired, or (iii) Refinancings of Debt described in clauses
(i) and (ii), PROVIDED that in the case of Debt described in clause (i), the
recourse with respect to such Refinancing Debt is limited to the same extent
as the Debt so Refinanced.
"ADJUSTED CONSOLIDATED OPERATING CASH FLOW" of a Person means the
Consolidated Operating Cash Flow of such Person as determined on a
consolidated basis in accordance with GAAP, consistently applied, after
giving effect to the following: (i) if, during the period in which
Consolidated Operating Cash Flow is being calculated, such Person or any of
its Subsidiaries completed an Asset Sale, Consolidated Operating Cash Flow
for such period shall be reduced by an amount equal to the pro forma
Consolidated Operating Cash Flow (if positive) directly attributable to the
assets which are the subject of such Asset Sale for the period or increased
by an amount equal to the pro forma Consolidated Operating Cash Flow (if
negative) directly attributable thereto for such period; and (ii) if, during
the period in which Consolidated Operating Cash Flow is
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50
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. These notes were repurchased on May 12, 1999.
"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, 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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51
"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;
PROVIDED that if any such Subsidiary is not a Wholly Owned Subsidiary of
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52
such Person, interest expense of such Subsidiary and its Subsidiaries shall
be included only to the extent of such Person's consolidated common equity
ownership on a fully diluted basis therein.
"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 PLUS (C) the
lesser of (i) dividends received from Investments in a Permitted Business not
qualifying as a Subsidiary hereunder for such period and (ii) Garden State's
and its Restricted Subsidiaries' percentage interest in the net income of
such Permitted Business; PROVIDED that, (x) if any such Restricted Subsidiary
is not a Wholly Owned Subsidiary of Garden State, 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,
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53
guarantor or otherwise, including guarantees of such obligations and
dividends; and (vii) all obligations of the type referred to in clauses (i)
through (vi) of other Persons secured by any Lien on any property, asset or
Capital Stock of such Person (whether or not such obligation is assumed by
such Person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets or the amount of the obligation so
secured.
"DEFAULT" means any event, which is, or after notice or passage of time
or both would be, an Event of Default.
"DESIGNATED SENIOR DEBT" means all obligations of Garden State under the
Garden State Credit Facility and any other Senior Debt permitted under the
Indenture the principal amount of which is $25.0 million or more that has
been designated by Garden State as Designated Senior Debt.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, (ii) is subject to a mandatory offer to purchase,
(iii) is convertible or exchangeable for Debt or Disqualified Stock or (iv)
is redeemable at the option of the holder thereof, in whole or in part; in
each case on or prior to the first anniversary of the stated maturity of the
Notes.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"EXISTING DEBT" means Debt of Garden State and its Restricted
Subsidiaries (other than the Garden State Credit Facility) outstanding on the
date of the Indenture.
"GARDEN STATE CREDIT FACILITY" means the Credit Agreement among Garden
State, the financial institutions named therein and The Bank of New York, as
agent thereunder, as amended, substituted, refinanced (including successive
refinancings), extended or renewed without restriction as to the new terms
contained therein, except as to the total amount outstanding provided under
"--Limitation on Additional Debt" and as provided in "--Limitation on Liens
Securing Certain Debts."
"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
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54
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Notes.
"INVESTMENT" means any direct or indirect advance, loan (other than
advances or loans to customers in the ordinary course of business, which are
recorded at the time made as accounts receivable on the balance sheet of the
Person making such advance or loan), guarantee or other extension of credit
or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Capital Stock, bonds,
notes, debentures or other securities issued by, any other Person.
"ISSUE" means issue, assume, Guarantee, incur or otherwise become liable
for; PROVIDED, HOWEVER, that any Debt or Capital Stock of a Person existing
at the time such Person becomes a Subsidiary of another Person (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be issued
by such Subsidiary at the time it becomes a Subsidiary of such other Person.
"ISSUE DATE" means the date on which any Note is originally issued and
with respect to any Note issued in transfer, exchange or replacement, means
the date of issue of the Note to which such transfer, exchange or replacement
Note relates.
"LEVERAGE RATIO" means, as of any date, the ratio of (A) total Debt of
Garden State and its Restricted Subsidiaries on a consolidated basis as of
such date to (B) Trailing Adjusted Consolidated Operating Cash Flow of Garden
State as of such date; PROVIDED, HOWEVER, that the Debt of any Restricted
Subsidiary (and its Restricted Subsidiaries) that is not a Wholly Owned
Subsidiary, on a fully diluted basis, of Garden State shall be included
pro-rata only to the extent of Garden State's common equity ownership
interest therein, on a fully diluted basis.
"LIEN" means any lien, mortgage, charge, pledge, security interest, or
other encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof), whether or not
filed, recorded or otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statute) of any jurisdiction.)
"MANAGEMENT AGREEMENT" means the Management Agreement, dated July 1,
1988, between ANI and MediaNews, as the same may be amended, modified or
supplemented in accordance with its terms.
"MEDIANEWS" or "MNG" means MediaNews Group, Inc., a Delaware corporation
and its successors.
"MEDIANEWS TECHNOLOGIES" or "MNT" means MediaNews Technologies, 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
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55
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 INTER-COMPANY 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 $4.0 million for fiscal 1999, and
increasing 10% per annum in each fiscal year thereafter and (ii) payment by
the Company to MNT in respect of its allocated share of electronic media
related expenses.
"PERMITTED INVESTMENTS" means (i) Investments by a Restricted Subsidiary
of Garden State in Garden State or a Restricted Subsidiary of Garden State or
Investments by Garden State in a Restricted Subsidiary of Garden State, (ii)
Investments in cash or Cash Equivalents, (iii) Investments by Garden State or
by any of its Restricted Subsidiaries in a Permitted Business, including, but
not limited to, joint ventures or other business alliances in the ordinary
course of business, PROVIDED that the other investors in such joint venture
or business alliance are not Affiliates of ANI, (iv) Investments of Garden
State and its Restricted Subsidiaries arising as a result of any Asset Sale
otherwise complying with the terms of the Indenture and (v) Other Investments
(other than Investments specified in clauses (i) through (iv) above) in an
aggregate amount, as valued at the time each such Investment is made, not
exceeding $25.0 million.
"PERSON" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"PREFERRED STOCK," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation. Preferred Stock of any Person shall include Disqualified Stock
of such Person.
"QUALIFIED CAPITAL STOCK" shall mean any Capital Stock which is not
Disqualified Stock.
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"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 to the direct or
indirect holders (in their capacities as such) of Capital Stock of Garden
State; (ii) the redemption, repurchase, retirement or other acquisition for
value of any Capital Stock of Garden State; (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 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 "--Certain
Covenants-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, which were repurchased in full on
May 12, 1999.
"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
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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 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, (ii) a partnership, joint venture or
limited liability company, with respect to which such Person under the
applicable partnership agreement, joint venture agreement or limited
liability company operating agreement owns a majority of the equity interests
therein and either has the power to appoint a majority of the board of
managers thereof, or otherwise has the power to direct the policies,
management and affairs thereof through a management agreement or otherwise or
(iii) any Person (other than a corporation, partnership, joint venture or
limited liability company) 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 re-designated 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.
<PAGE>
58
"VOTING STOCK" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the
election of directors.
"WHOLLY OWNED SUBSIDIARY" means any Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by
the applicable corporation or another Wholly Owned Subsidiary of the
applicable corporation.
<PAGE>
59
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. We expect 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 holders tendering Notes in the Exchange Offer 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.
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 in the Indenture.
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.
We expect 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. We also expect 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.
<PAGE>
60
DTC has advised us that it will take any action permitted to be taken by
a holder of Notes (including the presentation of Notes for exchange) only at
the direction of one or more participants to whose account the DTC interests
in the Global Notes are credited and only in respect of such portion of the
aggregate principal amount of Notes as to which such participant or
participants has or have given such direction. However, if there is an Event
of Default under the Indenture, DTC will exchange the Global Notes for
Certificated Notes, which it will distribute to its participants.
DTC has advised 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.
<PAGE>
61
DESCRIPTION OF OTHER INDEBTEDNESS
The following outlines certain terms of the indebtedness and other
obligations of Affiliated Newspapers and the subsidiaries of Garden State
after giving effect to the offerings. For further information on indebtedness
and other obligations of the Company, we refer you to the Consolidated
Financial Statements of Garden State and the notes thereto appearing
elsewhere herein.
NEW CREDIT AGREEMENT
We have available to us, for borrowings, a $190.0 million new credit
agreement, entered into on May 12, 1999, which was used to refinance and be a
substitute for our existing credit facility. The following summary is
qualified in its entirety by reference to the terms of our new credit
agreement. The terms reflected below are the terms which are contained in the
commitment letter for the $350.0 million credit facility. Subsequent to May
12, 1999 Garden State obtained commitments to increase this credit facility
to $350.0 million, in conjunction with the previously discussed acquisition
of a 20% interest in Denver Newspapers and redemption of Denver Newspapers
preferred stock.
The new credit facility matures on June 30, 2006. The commitment under
the new credit facility reduces quarterly beginning September 30, 2003.
Our obligations under the new credit facility are guaranteed by certain
of our direct and indirect subsidiaries and secured by a pledge of all of our
and our subsidiaries' capital stock.
The loans under the new credit facility bear interest, at our option, at
either (1) an "alternate base rate" equal to the greater of BNY's Prime Rate
or the sum of 0.5% plus the federal funds rate or (2) the "LIBOR rate," in
either case, plus an applicable margin. LIBOR margins ranging from 1.0% to
2.125% per annum, based on the Company's leverage.
The new credit facility contains a number of covenants that, among other
things, restrict our ability and our subsidiaries' ability to dispose of
assets, incur additional indebtedness, incur guaranty obligations, pay
dividends or make capital contributions, create liens on assets, make
investments, make acquisitions, engage in mergers or consolidations, engage
in certain transactions with subsidiaries and affiliates and otherwise
restrict corporate activities. In addition, the new credit facility requires
compliance with certain financial covenants, including requiring us and our
subsidiaries to maintain a maximum ratio of total debt to operating cash
flow, a maximum ratio of senior debt to operating cash flow, a minimum ratio
of operating cash flow to pro forma debt service and a minimum ratio of
operating cash flow to fixed charges.
The new credit facility contains customary events of default, including
the failure to pay principal when due, the failure of any representation or
warranty made by us to be correct in any material respect on or as of the
date made, a default in the performance of any negative covenants or a
default in the performance of certain other agreements, a default in certain
other indebtedness, certain insolvency events and certain change of control
events. In addition, a default under the Indenture will result in a default
under the new credit facility.
SENIOR SUBORDINATED NOTES DUE 2009
In October 1997 and February 1998, Garden State issued in the aggregate
$300.3 million of Senior Subordinated Notes pursuant to an indenture between
Garden State, as issuer, and The Bank of New York, as trustee. These notes
bear interest at 8 3/4% payable semi-annually, in arrears, on April 1 and
October 1.
<PAGE>
62
These notes are redeemable at the option of Garden State, in whole or in
part, on and after October 1, 2002, at declining redemption prices. Upon the
occurrence of a Change in Control, Garden State must offer to repurchase
these notes at a purchase price of 101% of the principal amount thereof plus
accrued and unpaid interest thereon.
The indenture governing these notes 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, and customary events of default.
SENIOR SUBORDINATED SECURED NOTES
In May 1994, Garden State issued $100.0 million of Senior Subordinated
Secured Notes due 2004 pursuant to an indenture between Garden State, as
issuer, and The Bank of New York, as trustee. These notes were issued at par
and bear interest at 12% payable semi-annually, in arrears, on January 1 and
July 1. These notes are redeemable at the option of Garden State, in whole or
in part, on and after July 1, 1999, at declining redemption prices. Upon the
occurrence of certain changes in control, Garden State must offer to
repurchase the Senior Subordinated Secured Notes due 2004 at a purchase price
of 101% of the principal amount thereof plus accrued and unpaid interest
thereon. As of December 31, 1998, $63.2 million of the Senior Subordinated
Secured Notes remain outstanding. As of the date of this prospectus, these
Senior Subordinated Secured Notes have been repaid in full.
SUBORDINATED PROMISSORY NOTE DUE 2010
The Company entered into a subordinated note purchase agreement pursuant
to which the Company 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, provided that on each interest payment
date occurring on or prior to December 31, 2002, the Company may elect to
defer payment of any or all accrued and unpaid interest. 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 the Company's senior
debt and senior subordinated debt, including the Exchange Notes issued in
this offering. No scheduled principal payments are required until January
31, 2010, at which time the outstanding principal amount is due and payable.
Affiliated Newspapers has guaranteed the Promissory Note. Within 90 days
after the Company has repaid its Senior Subordinated Secured Notes due 2004,
the Company is required to transfer the DAILY NEWS and related assets to a
newly-formed subsidiary, which shall also become a co-obligor on the
Promissory Note.
CAPITAL LEASE OBLIGATIONS
As of March 31, 1999, $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 March 31, 1999, of
$31.4 million. The notes payable and other debt obligations bear interest at
rates ranging
<PAGE>
63
from 0% to 6%. The 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.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The exchange of Original Notes for Exchange Notes should not constitute
a recognition event for United States federal income tax purposes.
Consequently, no gain or loss should be recognized by holders upon receipt of
the Exchange Notes. For purposes of determining gain or loss upon the
subsequent sale or exchange of Exchange Notes, a holder's basis in Exchange
Notes should be the same as such holder's basis in the Original Notes
exchanged therefor. Holders should be considered to have held the Exchange
Notes from the time of their original acquisition of the Original Notes.
IN ANY EVENT, PERSONS CONSIDERING THE EXCHANGE OF ORIGINAL NOTES FOR
EXCHANGE NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES IN LIGHT OF THEIR PARTICULAR
SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER
TAXING JURISDICTIONS.
<PAGE>
64
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it acquired the Original
Notes for its own account as a result of market-making activities or other
trading activities and it will deliver a prospectus in connection with any
resale of such Exchange Notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Original Notes where
such Original Notes were acquired as a result of market-making activities or
other trading activities. The Company has agreed that for a period of up to
180 days after the consummation of the Exchange Offer, subject to extension
in certain events, it will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sales of the Exchange
Notes by broker-dealers. Exchange Notes received by broker-dealers for their
own account pursuant to the Exchange Offer may be sold from time to time in
one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods at resale, at market prices prevailing at the
time of resale, at prices related to such prevailing market prices or
negotiated prices. Any such resale may be made directly to the purchaser or
to or through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers
of any such Exchange Notes. Any broker-dealer that resells the Exchange
Notes that were received by it for its own account pursuant to the Exchange
Offer and any broker or dealer that participates in a distribution of such
Exchange Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of Exchange Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of
Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an 'underwriter' within the meaning of the Securities Act.
For a period of up to 180 days after the consummation of the Exchange
Offer, the Company will promptly send additional copies of this prospectus
and any amendment or supplement to this prospectus to any person subject to
the prospectus delivery requirements of the Securities Act that requests such
documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer, other than commissions and
concessions of any brokers or dealers, and will indemnify the holders of the
Original Notes, including any broker-dealers, against certain liabilities,
including liabilities under the Securities Act.
<PAGE>
65
EXPERTS
The consolidated financial statements of Garden State Newspapers, Inc.
and Garden State Investments, Inc., appearing in the Garden State Newspapers,
Inc.'s Annual Report on Form 10-K for the year ended June 30, 1998, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such reports given on the authority of such firm as experts in
accounting and auditing.
LEGAL MATTERS
The legality of the issuance and sale of the Exchange 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 Afffiliated Newspapers, Garden State and the subsidiaries of
Garden State, a director of Garden State and the subsidiaries of Garden
State, and trustee with respect to various trusts holding Affiliated
Newspapers common stock, is Of Counsel to such firm.
<PAGE>
You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. We are offering to exchange unregistered
notes for exchange notes only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as
of the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of exchange notes.
Each broker-dealer who holds Original Notes acquired for its own account
as a result of market-making or other trading activities and who receives
Exchange Notes for its own account in the Exchange Offer must deliver a copy
of this prospectus in connection with any resale of such Exchange Notes.
- --------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More Information ......................... 1
Certain Information Incorporated by Reference ............... 1
Disclosure Regarding Forward-Looking Statements.............. 2
Notice to Investors ......................................... 3
Summary ..................................................... 4
Selected Historical Consolidated Financial Data ............. 16
Risk Factors ................................................ 20
Use of Proceeds ............................................. 27
The Exchange Offer .......................................... 27
Description of Exchange Notes ............................... 37
Book-Entry; Delivery and Form ............................... 59
Description of Other Indebtedness ........................... 61
Certain Federal Income Tax Considerations ................... 63
Plan Of Distribution ........................................ 64
Experts ..................................................... 65
Legal Matters ............................................... 65
</TABLE>
<PAGE>
$200,000,000
- ----------
PROSPECTUS
- ----------
GARDEN STATE NEWSPAPERS, INC.
OFFER TO EXCHANGE ALL OF ITS OUTSTANDING
SERIES A 8-5/8% SENIOR SUBORDINATED NOTES
DUE 2011
FOR ITS SERIES B 8-5/8%
SENIOR SUBORDINATED NOTES
DUE 2011
_____, 1999
<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 (1) 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 (2) 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 (1) 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 (2) 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 (A) 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 (B) a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (C) 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 (1) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) under Section 174
of the DGCL, or (4) 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
<PAGE>
2
Registrant.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
See Index to Exhibits.
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d)
of the Exchange Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(2) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other Items of
the applicable form.
(3) That every prospectus (i) that is filed pursuant to paragraph (2),
or (ii) purports to meet the requirements of section 10(a)(3) of the Act and
is used in connection with an offering of securities subject to Rule 415,
will be filed as a part of an amendment to the registration statement and
will not be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(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
<PAGE>
3
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the
date of responding to the request.
(6) The undersigned Registrant hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
<PAGE>
4
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 28, 1999.
GARDEN STATE NEWSPAPERS, INC.
By: /s/ Joseph J. Lodovic, IV
-------------------------------
Joseph J. Lodovic, IV
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Joseph J. Lodovic IV and Ronald A. Mayo
and each and either of them, his or her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including, without limitation, post-effective amendments)
to this Registration Statement, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
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, May 28, 1999
- ---------------------------- Chief Executive Officer and
(William Dean Singleton) Director (Chief Executive
Officer)
/s/ Joseph J. Lodovic, IV Executive Vice President and May 28, 1999
- ---------------------------- Chief Financial Officer
(Joseph J. Lodovic, IV) (Chief Financial Officer)
/s/ Richard B. Scudder Director May 28, 1999
- ----------------------------
(Richard B. Scudder)
/s/ Jean L. Scudder Director May 28, 1999
- ----------------------------
(Jean L. Scudder)
/s/ Howell E. Begle, Jr. Director, Counsel and May 28, 1999
- ----------------------------
<PAGE>
5
<CAPTION>
<S> <C> <C>
(Howell E. Begle, Jr.) Assistant Secretary
/s/ Ronald A. Mayo Vice President Finance and May 28, 1999
- ---------------------------- Controller (Principal
(Ronald A. Mayo) Accounting Officer)
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
3.1* -Fourth Restated and Amended Certificate of Incorporation
3.2* -Second restated bylaws of Garden State Newspapers, Inc.
4.1 -Form of Indenture dated as of March 16, 1999 (the "Indenture") between Garden State
Newspapers, Inc., as Issuer, and The Bank of New York, as Trustee
4.2 -Registration Rights Agreement dated as of March 16, 1999, among Garden State
Newspapers, Inc. as Issuer and Goldman, Sachs & Co., BNY Capital Markets, Inc.,
Nationsbanc Montgomery Securities LLC and First Union Capital Markets Corp., as Initial
Purchasers
4.3 -Form of Garden State Newspapers, Inc.'s 8-5/8% Senior Subordinated Notes due 2011,
Series A (contained in the Indenture filed as Exhibit 4.1)
4.4 -Form of Garden State Newspapers, Inc.'s 8-5/8% Senior Subordinated Notes due 2011,
Series B, the "Exchange Note" (contained in the Indenture filed as Exhibit 4.1)
5.0 -Opinion of Verner, Liipfert, Bernhard, McPherson & Hand Chartered
10.1 -$190.0 million credit agreement dated as of May 12, 1999 among Garden State Newspapers, Inc.,
the Banks listed therein, the Guarantors listed therein and the various agents listed therein
and which is herein referred to as the new credit agreement
10.2* -Management Agreement dated July 1, 1988, between MediaNews Group, Inc. and the
Registrant
10.3* -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, January 15, 1996, Amendments
10.4* -Joint Operating Agreement dated January 13, 1989, among York Daily Record, Inc., York
Newspapers, Inc., and The York Newspapers Company
10.5* -Form of Tax Sharing Agreement by and between Garden State Newspapers, Inc. and
Affiliated Newspapers Investments, Inc.
10.6* -Consulting Agreement dated November 16, 1993, between J. Allan Meath and Garden
State Newspapers, Inc.
10.7* -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
10.8* -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
10.9* -$240,000 Credit Agreement Dated as of August 31, 1995, as Amended and Restated as of
October 31, 1996, among Garden State Newspapers, Inc., and 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. This agreement was repaid in full and terminated on May 12, 1999
<PAGE>
2
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
10.10* -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
10.11* -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
10.12* -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
10.13* -Subordinated Note Purchase Agreement between Garden State Newspapers, Inc. and
Greenco, Inc. dated as of January 30, 1998
10.14* -Note Purchase Agreement dated February 6, 1998, by and among Garden State
Newspapers, Inc. and the Initial Purchasers of $50,000,000 of 8-3/4% Notes due 2009
10.15 -Purchase Agreement dated March 10, 1999, by and among Garden State Newspapers,
Inc. and the Initial Purchasers of $200,000,000 of 8-5/8% Notes due 2011
10.16* -Partnership Agreement for California Newspapers Partnership, a Delaware General
Partnership, by and among West Coast MediaNews LLC, Donrey Newspapers LLC, the
Sun Company of San Bernardino, California and MediaWest-SBC, Inc. dated March 31, 1999
10.17** -Contribution Agreement dated March 3, 1999 by and among Garden State Newspapers, Inc.,
Alameda Newspapers, Inc., V&P Publishing, Inc., Internet Media Publishing, Inc.,
DR Partners, MediaWest-SBC, Inc. and The Sun Company of San Bernardino, California.
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)
24 -Power of Attorney (included on signature page to this registration statement)
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
99.2 -Form of Notice of Guaranteed Delivery
99.3 -Form of Letter to Brokers, Dealers
99.4 -Form of Letter to Clients
</TABLE>
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* Previously filed as exhibits to registration statement on Form S-1
(No. 33-75156) and amendments thereto.
** Previously filed.
<PAGE>
GARDEN STATE NEWSPAPERS, INC.,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
INDENTURE
Dated as of March 16, 1999
up to $300,000,000
8-5/8% Senior Subordinated Notes due 2011, Series A
8-5/8% Senior Subordinated Notes due 2011, Series B
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- -------
310 (a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.08; 7.10
(b) 7.08; 7.10
(c) N.A.
311 (a) 7.11
(b) 7.11
(c) N.A.
312 (a) 2.05
(b) 11.03
(c) 11.03
313 (a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 7.06; 11.02
(d) 7.06
314 (a) 4.07; 4.08;
11.02
(b) N.A.
(c)(1) 11.04
(c)(2) 11.04
(c)(3) N.A.
(d) N.A.
(e) 11.05
(f) N.A.
315 (a) 7.01(b)
(b) 7.05; 11.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 6.10; 9.04
317 (a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318 (a) 11.01
(b) 11.01
(c) 11.01
- ----------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions. 1
SECTION 1.02. Incorporation by Reference of TIA. 19
SECTION 1.03. Rules of Construction. 20
ARTICLE TWO THE NOTES.
SECTION 2.01. Form and Dating. 20
SECTION 2.02. Execution and Authentication. 21
SECTION 2.03. Registrar and Paying Agent. 23
SECTION 2.04. Paying Agent To Hold Assets in Trust. 23
SECTION 2.05. Noteholder Lists. 24
SECTION 2.06. Transfer and Exchange. 24
SECTION 2.07. Replacement Notes. 25
SECTION 2.08. Outstanding Notes. 25
SECTION 2.09. Treasury Notes. 26
SECTION 2.10. Temporary Notes. 26
SECTION 2.11. Cancellation. 26
SECTION 2.12. Defaulted Interest. 27
SECTION 2.13. CUSIP Number. 27
SECTION 2.14. Deposit of Moneys 27
SECTION 2.15. Book-Entry Provisions for Global Notes. 28
SECTION 2.16. Special Transfer Provisions. 29
ARTICLE THREE REDEMPTION
SECTION 3.01. Notices to Trustee. 33
SECTION 3.02. Selection of Notes To Be Redeemed. 33
SECTION 3.03. Notice of Redemption. 33
SECTION 3.04. Effect of Notice of Redemption. 34
SECTION 3.05. Deposit of Redemption Price. 34
SECTION 3.06. Notes Redeemed in Part. 35
ARTICLE FOUR COVENANTS
SECTION 4.01. Payment of Notes. 35
SECTION 4.02. Maintenance of Office or Agency. 36
SECTION 4.03. Corporate Existence. 36
SECTION 4.04. Payment of Taxes and Other Claims. 36
SECTION 4.05. Maintenance of Properties and Insurance. 37
SECTION 4.06. Compliance Certificate; Notice of Default. 37
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SECTION 4.07. Compliance with Laws. 38
SECTION 4.08. Commission Reports. 39
SECTION 4.09. Waiver of Stay, Extension or Usury Laws. 39
SECTION 4.10. Limitation on Restricted Payments. 40
SECTION 4.11. Limitation on Transactions with Affiliates. 42
SECTION 4.12. Limitation on Additional Debt. 43
SECTION 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted
Subsidiaries. 44
SECTION 4.14. Limitation on Restricted and Unrestricted
Subsidiaries. 44
SECTION 4.15. Limitation on Senior Subordinated Debt. 45
SECTION 4.16. Change of Control. 45
SECTION 4.17. Limitation on Sales of Assets. 48
SECTION 4.18. Limitation on Liens Securing Certain Debts. 49
SECTION 4.19. Limitation on Business. 49
SECTION 4.20. Investment Company Act. 50
ARTICLE FIVE SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. 50
SECTION 5.02. Successor Corporation Substituted. 51
ARTICLE SIX DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. 52
SECTION 6.02. Acceleration. 54
SECTION 6.03. Other Remedies. 55
SECTION 6.04. Waiver of Past Defaults. 55
SECTION 6.05. Control by Majority. 55
SECTION 6.06. Limitation on Suits. 56
SECTION 6.07. Rights of Holders To Receive Payment. 56
SECTION 6.08. Collection Suit by Trustee. 56
SECTION 6.09. Trustee May File Proofs of Claim. 57
SECTION 6.10. Priorities. 57
SECTION 6.11. Undertaking for Costs. 58
ARTICLE SEVEN TRUSTEE
SECTION 7.01. Duties of Trustee. 58
SECTION 7.02. Rights of Trustee. 60
SECTION 7.03. Individual Rights of Trustee. 61
SECTION 7.04. Trustee's Disclaimer. 61
SECTION 7.05. Notice of Default. 61
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<PAGE>
Page
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SECTION 7.06. Reports by Trustee to Holders. 62
SECTION 7.07. Compensation and Indemnity. 62
SECTION 7.08. Replacement of Trustee. 63
SECTION 7.09. Successor Trustee by Merger, Etc. 64
SECTION 7.10. Eligibility; Disqualification. 64
SECTION 7.11. Preferential Collection of Claims Against Company. 65
ARTICLE EIGHT SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE
SECTION 8.01. Termination of Company's Obligations. 65
SECTION 8.02. Acknowledgment of Discharge by Trustee. 68
SECTION 8.03. Application of Trust Money. 69
SECTION 8.04. Repayment to the Company. 69
SECTION 8.05. Reinstatement. 69
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. 70
SECTION 9.02. With Consent of Holders. 70
SECTION 9.03. Compliance with TIA 72
SECTION 9.04. Revocation and Effect of Consents. 72
SECTION 9.05. Notation on or Exchange of Notes. 73
SECTION 9.06. Trustee To Sign Amendments, Etc. 73
ARTICLE TEN SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Debt. 74
SECTION 10.02. Liquidation; Dissolution; Bankruptcy. 74
SECTION 10.03. Default on Senior Debt. 75
SECTION 10.04. No Suspension of Remedies. 76
SECTION 10.05. When Distributions Must Be Paid Over. 76
SECTION 10.06. Notice by Company. 77
SECTION 10.07. Subrogation. 78
SECTION 10.08. Relative Rights. 78
SECTION 10.09. Subordination May Not Be Impaired by Company. 78
SECTION 10.10. Distribution or Notice to Representative. 79
SECTION 10.11. Rights of Trustee and Paying Agent. 79
SECTION 10.12. Authorization to Effect Subordination. 80
SECTION 10.13. Reliance on Judicial Order or Certificate of
Liquidating Agent. 80
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<PAGE>
Page
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ARTICLE ELEVEN
SECTION 11.01. TIA Controls. 80
SECTION 11.02. Notices. 81
SECTION 11.03. Communications by Holders with Other Holders. 82
SECTION 11.04. Certificate and Opinion as to Conditions
Precedent. 82
SECTION 11.05. Statements Required in Certificate or Opinion. 82
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar. 83
SECTION 11.07. Legal Holidays. 83
SECTION 11.08. Governing Law. 83
SECTION 11.09. No Adverse Interpretation of Other Agreements. 83
SECTION 11.10. No Recourse Against Others 83
SECTION 11.11. Successors. 84
SECTION 11.12. Duplicate Originals. 84
SECTION 11.13. Severability. 84
SIGNATURES. 85
Exhibit A - Form of Series A Note. A-1
Exhibit B - Form of Series B Note.
Exhibit C - Form of Legend for Global Notes.
Exhibit D - Form of Certificate To Be Delivered
in Connection with Transfers to
Non-QIB Accredited Investors
Exhibit E - Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S.
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
this Indenture.
-6-
<PAGE>
INDENTURE, dated as of March 16, 1999, between Garden State
Newspapers, Inc., a Delaware corporation (the "COMPANY"), and The Bank of New
York, a New York banking corporation, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 8-5/8%
Senior Subordinated Notes due 2011, Series A, and 8-5/8% Senior Subordinated
Notes due 2011, Series B, to be issued in exchange for the 8-5/8% Senior
Subordinated Notes due 2011, Series A, pursuant to a registration rights
agreement and, to provide therefor, the Company has duly authorized the
execution and delivery of this Indenture. All things necessary to make the
Notes, when duly issued and executed by the Company and authenticated and
delivered hereunder, the valid and binding obligations of the Company and to
make this Indenture a valid and binding agreement of the Company, have been
done.
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's
8-5/8% Senior Subordinated Notes due 2011, Series A and Series B:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Debt" with respect to any Person, means (i) Debt of an
entity, which entity is acquired by Garden State or any of its Subsidiaries
after the date of this Indenture, (ii) Debt assumed which is secured by assets
acquired by the Company or any of its Subsidiaries, PROVIDED that the Debt in
clauses (i) and (ii) is outstanding at the time of the acquisition of such
entity or such assets, is not created in contemplation of such acquisition and,
in the case of the acquisition of an entity, is not, directly or indirectly,
recourse (including by way of set-off) to Garden State or its Restricted
Subsidiaries or any of their respective assets, other than to the entity and its
Subsidiaries so acquired and the assets of the entity and its Subsidiaries so
acquired, or (iii) Refinancings of Debt described in clauses (i) and (ii),
PROVIDED that in the case of Debt described in clause (i), the recourse with
respect to such Refinancing Debt is limited to the same extent as the Debt so
Refinanced.
<PAGE>
-8-
"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
<PAGE>
-9-
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.
"Agent" means any Registrar, Paying Agent or Co-Registrar.
"ANI" means Affiliated Newspapers Investments, Inc., a Delaware
corporation, and its successors.
"ANI Senior Discount Debentures" means ANI's 13 1/4% Senior Discount
Debentures due 2006.
"Asset Sale" means the sale, transfer, lease, assignment, conveyance
or other disposition (other than sales of inventory in the ordinary course of
business consistent with past practice) by Garden State or its Restricted
Subsidiaries of any assets of Garden State other than capital stock of an
Unrestricted Subsidiary, whether owned or outstanding on the date of this
Indenture or acquired thereafter, in one or more related transactions, in each
case having an aggregate fair market value in excess of $5.0 million. Asset Sale
shall include the disposition of (i) any capital stock of any Restricted
Subsidiary of Garden State or (ii) all or substantially all of the properties or
assets relating to any newspaper or groups of newspapers owned by Garden State
or any of its Restricted Subsidiaries, in either case having an aggregate fair
market value in excess of $5.0 million.
"Average Life" means, as of the date of any determination, with
respect to any Debt, the quotient obtained by dividing (i) the sum of the
products of (a) the number of years from the date of the transaction or event
giving rise to the need to calculate the Average Life of such Debt to the date,
or dates, of each successive scheduled principal payment of such Debt multiplied
by (b) the amount of each such principal payment by (ii) the sum of all such
principal payments.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
<PAGE>
-10-
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors or other equivalent governing body of such
Person.
"Business Day" means a day that is not a Legal Holiday.
"Capitalized Lease Obligation" means any rental obligation that, in
accordance with GAAP, is required to be classified and accounted for as a
capitalized lease and the amount of Debt represented by such obligation shall be
the capitalized amount of such obligation determined in accordance with GAAP;
and the stated maturity thereof shall be the date of the last payment of rent or
any other amount due in respect of such obligation.
"Capital Stock" of any Person means any and all shares, interests
(including partnership interests), warrants, rights, options or other interests,
participations or other equivalents of or interests in (however designated) the
equity of such Person, including common stock or preferred stock, whether now
outstanding or issued after the date of this Indenture, but excluding any debt
securities convertible into or exchangeable for such equity.
"Cash Equivalents" means (i) readily marketable obligations of or
obligations guaranteed by the United States of America or issued by any agency
thereof and backed by the full faith and credit of the United States of America,
(ii) readily marketable direct obligations issued by any state of the United
States of America or any political subdivision having a rating in one of the two
highest rating categories obtainable from either Moody's Investors Service, Inc.
or Standard & Poor's Corporation, (iii) commercial paper having a rating in one
of the two highest rating categories of Moody's Investors Service, Inc., or
Standard & Poor's Corporation, (iv) certificates of deposit issued by, bankers'
acceptances and deposit accounts of, and time deposits with, commercial banks of
recognized standing chartered in the United States of America with capital,
surplus and undivided profits aggregating in excess of $500.0 million, (v)
agreements to sell or repurchase securities of the kind described in clauses (i)
and
<PAGE>
-11-
(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.
"Change of Control Date" has the meaning provided in Section 4.16.
"Change of Control Offer" has the meaning provided in Section 4.16.
"Change of Control Payment Date" has the meaning provided in Section
4.16.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.
"Common Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's common
stock, whether now outstanding or issued after the date of this Indenture.
"Company" or "Garden State" means the party named as such in this
Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the aggregate of all cash and non-cash interest expense
(including any original issue discount attributable to the issuance of any debt
security as part of or with any other security) with respect to all outstanding
Debt of such Person and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, the interest component of
Capitalized Lease Obligations, all capitalized interest, and the interest
portion of any
<PAGE>
-12-
deferred payment obligations for such period; PROVIDED that if any such
Subsidiary is not a Wholly Owned Subsidiary of such Person, interest expense of
such Subsidiary and its Subsidiaries shall be included only to the extent of
such Person's consolidated common equity ownership on a fully diluted basis
therein.
"Consolidated Net Worth" of any Person means, at any date, all
amounts that would, in conformity with GAAP, be included under shareholders'
equity on the consolidated balance sheet of such Person as at such date less any
amounts attributable to Disqualified Stock.
"Consolidated Operating Cash Flow" with respect to Garden State for
any period means (A) revenues less (B) the sum of (i) cost of sales, (ii)
management fees and (iii) selling, general and administrative expenses, in each
case, of Garden State and its Restricted Subsidiaries, for such period,
determined on a consolidated basis and in accordance with GAAP, PLUS (C) the
lesser of (i) dividends received from Investments in a Permitted Business not
qualifying as a Subsidiary hereunder for such period and (ii) Garden State's and
its Restricted Subsidiaries' percentage interest in the net income of such
Permitted Business, PROVIDED that, (x) if any such Restricted Subsidiary is not
a Wholly Owned Subsidiary of Garden State, 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.
<PAGE>
-13-
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Debt" of any Person means, without duplication, (i) the principal
in respect of (A) indebtedness of such Person for money borrowed (whether or not
the recourse of the lender is to the whole of the assets of such Person or only
to a portion thereof) and (B) indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment of which such Person is responsible
or liable (other than those payable to government agencies to defer the payment
of workers' compensation liabilities, taxes, assessments or other obligations,
and provided in the ordinary course of business of such Person); (ii) all
Capitalized Lease Obligations of such Person; (iii) all obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such Person and all obligations of such Person
under any title retention agreement (but excluding trade accounts payable and
other accrued current liabilities arising in the ordinary course of business and
consistent with past practice); (iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction, other than letters of credit entered into in the
ordinary course of business that either are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the third Business
Day following receipt by such Person of a demand for reimbursement following
payment on the letter of credit); (v) the amount of all Disqualified Stock of
such Person (but excluding any accrued dividends thereon); (vi) all obligations
of the type referred to in clauses (i) through (v) of other Persons and all
dividends of other Persons for the payment of which, in either case, such Person
is responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including guarantees of such obligations and dividends; and (vii) all
obligations of the type referred to in clauses (i) through (vi) of other Persons
secured by any Lien on any property, asset or Capital Stock of such Person
(whether or not such obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the value of such property or assets
or the amount of the obligation so secured.
"Declaration" has the meaning provided in Section 6.02.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
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"Default Amount" has the meaning provided in Section 6.02.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part as Global Securities, The Depository Trust Company, New York,
New York, or any successor thereto registered as a clearing agency under the
Exchange Act or other applicable statute or regulation.
"Designated Senior Debt" means all obligations of the Company under
the Garden State Credit Facility and any other Senior Debt permitted hereunder
the principal amount of which is $25.0 million or more that has been designated
by the Company as Designated Senior Debt.
"Discharged" has the meaning provided in Section 8.01.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise, (ii) is subject to a mandatory offer to purchase, (iii) is
convertible or exchangeable for Debt or Disqualified Stock or (iv) is redeemable
at the option of the holder thereof, in whole or in part, in each case on or
prior to the first anniversary of the stated maturity of the Notes.
"Equity Offering" has the meaning provided in paragraph 6 of the
Notes.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.17.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Exchange Notes" means the 8-5/8% Senior Subordinated Notes due
2011, Series B, to be issued in exchange for the Initial Notes pursuant to the
Registration Rights Agreement.
"Exchange Offer" has the meaning provided in the Registration Rights
Agreement.
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"Exchange Offer Registration Statement" has the meaning provided in
the Registration Rights Agreement.
"Existing Debt" means Debt of Garden State and its Restricted
Subsidiaries (other than the Garden State Credit Facility) outstanding on the
date of this Indenture.
"Fair Market Value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Trustee.
"Fairness Condition" has the meaning provided in Section 4.11.
"Garden State" or the "Company" means the party named as such in
this Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.
"Garden State Credit Facility" means the Credit Agreement among
Garden State, the financial institutions named therein and The Bank of New York,
as agent thereunder, as amended, substituted, refinanced (including successive
refinancings), extended or renewed without restriction as to the new terms
contained therein, except as to the total amount outstanding provided under
Section 4.12 and as provided in Section 4.18.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board as they are in effect on the date of this Indenture.
"Global Note" when used with respect to any Notes issued hereunder,
means a Note which is executed by Garden State and authenticated and delivered
by the Trustee to the Depository or pursuant to the Depository's instructions in
accordance with the provisions set forth herein, and pursuant to the request of
Garden State, which shall be registered in the name of the Depository or its
nominee and which shall
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represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the outstanding Notes or any portion thereof, in
either case having the same terms.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation, contingent or otherwise, of any other Person and, without limiting
the generality of the foregoing, any obligation, direct or indirect, contingent
or otherwise, of such Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation of such other
Person (whether arising by virtue of participation arrangements, by agreement to
keep well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring the obligee of such Debt or other obligation in any
other manner of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), PROVIDED that the term "guarantee" shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"IAI Global Note" means a permanent Global Note in registered form
representing the aggregate principal amount of Notes sold to Institutional
Accredited Investors.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Initial Notes" means the 8-5/8% Senior Subordinated Notes due 2011,
Series A, of the Company.
"Initial Purchasers means Goldman, Sachs & Co., BNY Capital Markets,
Inc., NationsBanc Montgomery Securities LLC and First Union Capital Markets
Corp.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Notes.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
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"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 to issue, assume, Guarantee, incur or otherwise become
liable for; PROVIDED, HOWEVER, that any Debt or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary of another Person (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be issued
by such Subsidiary at the time it becomes a Subsidiary of such other Person.
"Issue Date" means the date on which any Note is originally issued
and with respect to any Note issued in transfer, exchange or replacement, means
the date of the original issue of the Note to which such transfer, exchange or
replacement Note relates.
"Legal Holiday" has the meaning provided in Section 11.07.
"Leverage Ratio" means, as of any date, the ratio of (A) total Debt
of Garden State and its Restricted Subsidiaries on a consolidated basis as of
such date to (B) Trailing Adjusted Consolidated Operating Cash Flow of Garden
State as of such date; PROVIDED, HOWEVER, that the Debt of any Restricted
Subsidiary (and its Restricted Subsidiaries) that is not a Wholly Owned
Subsidiary, on a fully diluted basis, of Garden State shall be included pro-rata
only to the extent of Garden State's common equity ownership interest therein,
on a fully diluted basis.
"Lien" means any lien, mortgage, charge, pledge, security interest,
or other encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof), whether or not filed,
recorded or otherwise perfected under applicable law (including any conditional
sale or other title retention agreement, any lease in the nature thereof, any
option or other agreement to sell or give a security interest in and any filing
of or agreement to give any financing statement under the Uniform Commercial
Code
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(or equivalent statute) of any jurisdiction.)
"Management Agreement" means the Management Agreement, dated July 1,
1988, between ANI and MediaNews, as the same may be amended, modified or
supplemented in accordance with its terms.
"Maturity Date" means July 1, 2011.
"MediaNews" or "MNG", means MediaNews Group, Inc. a Delaware
corporation and its successors.
"MediaNews Technologies" or "MNT" means MediaNews Technologies, a
division of MNG which operates and manages ANI's and its Affiliates' electronic
media business.
"Net Cash Proceeds" from an Asset Sale or issuance of Capital Stock
means cash payments received by way of conversion into cash or Cash Equivalents
of any note or other obligation received in connection with such Asset Sale or
issuance or by way of deferred payment of principal pursuant to, or liquidation
of, any note or installment receivable or otherwise (but only as and when
received therefrom), in each case net of all legal, title and recording tax
expenses, commissions and other fees and expenses incurred, and all income taxes
required to be accrued as a liability under GAAP, as a consequence of such Asset
Sale or issuance of Capital Stock.
"Non-U.S. Person" has the meaning assigned to such term in
Regulation S.
"Notes" means, collectively, the Initial Notes, the Exchange Notes
and the Private Exchange Notes, if any, treated as a single class of securities
under this Indenture.
"Obligations" means all obligations for principal, premium, interest
(including post-petition interest), penalties, fees, indemnification,
reimbursements, damages and other liabilities payable under the documentation
governing any Debt.
"Offering Circular" means the Offering Circular dated March 10, 1999
regarding the Notes and any supplement thereto.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of such
Person.
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"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the President or any Vice
President and the Chief Financial Officer or any Treasurer of such Person that
shall comply with applicable provisions of this Indenture.
"144A Global Note" means a permanent Global Note in registered form
representing the aggregate principal amount of Notes sold in reliance on Rule
144A under the Securities Act.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee complying with the requirements of Sections 11.04
and 11.05, as they relate to the giving of an Opinion of Counsel. Unless
otherwise required by the TIA, the legal counsel may be an employee of or
counsel to Garden State or the Trustee.
"Participant" has the meaning provided in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03, except
that, for the purposes of Articles Three and Eight and Sections 4.16 and 4.17,
the Paying Agent shall not be Garden State or a Subsidiary of Garden State.
"Permitted Business" means the (i) ownership and operation of
regional, local and other newspapers and (ii) other businesses directly related
to the Company's newspaper operations, including broadcast, electronic media,
and other businesses deriving a majority of its revenue from advertising.
"Permitted Holders" means each of William Dean Singleton and Richard
B. Scudder, members of their families and trusts for the benefit of such
Persons.
"Permitted Intercompany Payments" means (i) payments by the Company
to MNG in respect of management fees for services actually rendered to Garden
State and determined in a manner consistent with that described in the Offering
Circular not to exceed $4.0 million for fiscal 1999, 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
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State in a Restricted Subsidiary of Garden State, (ii) Investments in cash or
Cash Equivalents, (iii) Investments by Garden State or by any of its Restricted
Subsidiaries in a Permitted Business, including, but not limited to, joint
ventures or other business alliances in the ordinary course of business,
PROVIDED that the other investors in such joint venture or business alliance are
not Affiliates of ANI, (iv) Investments of Garden State and its Restricted
Subsidiaries arising as a result of any Asset Sale otherwise complying with the
terms of this Indenture, and (v) other Investments (other than Investments
specified in clauses (i) through (iv) above) in an aggregate amount, as valued
at the time each such Investment is made, not exceeding $25.0 million.
"Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Physical Notes" shall have the meaning provided in Section 2.01.
"Post-Petition Interest" means any interest accruing subsequent to
the filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable law.
"Preferred Stock," as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation. Preferred Stock of any Person shall include Disqualified Stock of
such Person.
"principal" of any Debt (including the Notes) means the principal
amount of such Debt plus the premium, if any, on such Debt.
"Private Exchange Notes" shall have the meaning provided in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth on
the Initial Notes in the form set forth on EXHIBIT
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A, unless Garden State determines otherwise in accordance with applicable law.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act as interpreted by the
Company in consultation with its independent certified public accountants.
"Qualified Capital Stock" shall mean any Capital Stock which is not
Disqualified Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Redemption Date" when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price" when used with respect to any Note to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Notes.
"Refinance" means, in respect of any Debt, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue Debt in
exchange or replacement for, such Debt. "Refinanced" and "Refinancing" shall
have correlative meanings.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the exchange and registration
rights agreement dated March 16, 1999 between Garden State and the Initial
Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" means a permanent Global Note in
registered form representing the aggregate principal amount of Notes sold in
reliance on Regulation S under the Securities Act.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Debt; PROVIDED that if,
and for so long as, any Designated Senior Debt lacks such a representative, then
the
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Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Note" means a Note that constitutes a "Restricted
Security" within the meaning of Rule 144(a)(3) under the Securities Act;
PROVIDED, HOWEVER, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Note
constitutes a Restricted Note.
"Restricted Payment" means (i) any dividend or distribution on or in
respect of any shares of Capital Stock of Garden State to the direct or indirect
holders (in their capacities as such) of Capital Stock of Garden State; (ii) the
redemption, repurchase, retirement or other acquisition for value of any Capital
Stock of Garden State; (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 held
by Garden State or its Restricted Subsidiaries. For purposes of determining the
amount expended for Restricted Payments, cash distributed or invested shall be
valued at the face amount thereof and property other than cash shall be valued
at its fair market value.
"Restricted Subsidiary" means a Subsidiary of the Company other than
an Unrestricted Subsidiary and includes all of the Subsidiaries of the Company
existing as of the Issue Date.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Senior Debt" means all Obligations of Garden State with respect to
any Debt, whether outstanding on the date of
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this Indenture or thereafter created, incurred or assumed, unless, in the case
of any particular Debt, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such Debt
shall not be senior in right of payment to the Notes. Notwithstanding the
foregoing, Senior Debt shall not include: (i) any Debt of Garden State to any
Subsidiary of Garden State; (ii) any Debt to, or guaranteed on behalf of, any
Affiliate, director, officer or employee of Garden State or any Restricted
Subsidiary (including, without limitation, amounts owed for compensation); (iii)
Debt and other amounts incurred in connection with obtaining goods, materials or
services owing to trade creditors; (iv) Disqualified Stock; (v) any liability
for federal, state, local or other taxes owed or owing by Garden State; (vi)
Debt incurred in violation of the Indenture provisions set forth under Section
4.12; and (vii) Debt which is, by its express terms, junior in right of payment
to the Notes.
"Senior Subordinated Secured Notes" means the Company's $100,000,000
12% Senior Subordinated Secured Notes due 2004.
"Significant Subsidiary" means any Restricted Subsidiary of Garden
State which at the time of determination either (A) had assets which, as of the
date of Garden State's most recent quarterly consolidated balance sheet,
constituted at least 5% of Garden State's total assets on a consolidated basis
as of such date, in each case determined in accordance with GAAP, or (B) had
revenues for the twelve-month period ending on the date of Garden State's most
recent quarterly consolidated statement of income which constituted at least 5%
of Garden State's total revenues on a consolidated basis for such period.
"Stated Maturity," when used with respect to any Note or any
installment of interest thereon, means the date specified in such Note as the
fixed date on which the principal of such Note or such installment of interest
is due and payable, and, when used with respect to any other Debt, means the
date specified in the instrument governing such Debt as the fixed date on which
the principal of such Debt or any installment of interest is due and payable.
"Subsidiary" means, with respect to any Person, (i) a corporation
the majority of whose Voting Stock 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
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Subsidiaries thereof, (ii) a partnership, joint venture or limited liability
company, with respect to which such Person under the applicable partnership
agreement, joint venture agreement or limited liability company operating
agreement owns a majority of the equity interests therein and either has the
power to appoint a majority of the board of managers thereof, or otherwise has
the power to direct the policies, management and affairs thereof through a
management agreement or otherwise (iii) any Person (other than a corporation,
partnership, joint venture or limited liability company) 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.
"Survivor" has the meaning provided in Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date on which this Indenture is
qualified under the TIA, except as otherwise provided in Section 9.03.
"Trailing" means, at or in respect of any date, the twelve-month
period ending on the last day of the month immediately preceding such date for
which financial statements are available.
"Transaction" has the meaning provided in Section 4.11.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"Unrestricted Notes" means one or more Notes that do not and are not
required to bear the Private Placement Legend in the form set forth in EXHIBIT
A, including, without limitation, the Exchange Notes.
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"Unrestricted Subsidiary" means any Subsidiary (including its
Subsidiaries) so designated by a Board Resolution adopted by the Board of
Directors of the Company in accordance with Section 4.14. Notwithstanding the
foregoing, an Unrestricted Subsidiary shall be deemed to be redesignated a
Restricted Subsidiary at any time if (a) the Company or any Restricted
Subsidiary (i) provides credit support for, or a guarantee of, any Debt of such
Unrestricted Subsidiary or any of its Subsidiaries (including any undertaking,
agreement or instrument evidencing such Debt) or (ii) is directly or indirectly
liable for any Debt of such Unrestricted Subsidiary or any of its Subsidiaries,
(b) a default with respect to any Debt of such Unrestricted Subsidiary or any of
its Subsidiaries (including any right which the holders thereof may have to take
enforcement action against any of them) would permit (upon notice, lapse of time
or both) any holder of any other Debt of the Company or any Restricted
Subsidiary to declare a default on such other Debt or cause the payment thereof
to be accelerated or payable prior to its final scheduled maturity or (c) such
Unrestricted Subsidiary or any of its Subsidiaries incurs Debt pursuant to which
the lender has recourse to any of the assets of Garden State or any of its
Restricted Subsidiaries.
"U.S. Government Obligations" means money or direct non-callable
obligations of, and obligations guaranteed by, the United States of America for
the payment of which the full faith and credit of the United States is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Voting Stock" of a corporation means all classes of Capital Stock
of such corporation then outstanding and normally entitled to vote in the
election of directors.
"Wholly Owned Subsidiary" means any Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by the
applicable corporation or another Wholly Owned Subsidiary of the applicable
corporation.
SECTION 1.02. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a
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part of, this Indenture. The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
and not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP as in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular; and
(5) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING.
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The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of EXHIBIT A hereto. The Private Exchange
Notes and the Trustee's certificate of authentication relating thereto shall be
substantially in the form of EXHIBIT B hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company and the Trustee shall approve the form of the Notes and any notation,
legend or endorsement on them. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the Notes annexed hereto as
EXHIBITS A AND B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company, and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A, Notes offered and
sold to institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of one or more Global Notes,
substantially in the form set forth in EXHIBIT A deposited with the Trustee, as
custodian for the Depository, duly executed by the Company and authenticated by
the Trustee as hereinafter provided and shall bear the legend set forth in
EXHIBIT C. The aggregate principal amount of the Global Notes may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depository, as hereinafter provided.
Notes issued in exchange for interests in a Global Note pursuant to
Section 2.16 may be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in EXHIBIT A (the "PHYSICAL
NOTES").
All Notes offered and sold in reliance on Regulation S shall remain
in the form of a Global Note until the consummation of the Exchange Offer
pursuant to the Registration Rights Agreement; PROVIDED, HOWEVER, that all of
the time periods specified in the Registration Rights Agreement to be complied
with by the Company have been so complied with.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
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Two Officers, or an Officer and an Assistant Secretary, shall sign,
or one Officer shall sign and one officer or an Assistant Secretary (each of
whom shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Note, the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue
in an aggregate principal amount not to exceed $200,000,000, (ii) Private
Exchange Notes from time to time only in exchange for a like principal amount of
Initial Notes, (iii) Unrestricted Notes from time to time only in exchange for
(A) a like principal amount of Initial Notes or (B) a like principal amount of
Private Exchange Notes, and (iv) any additional amounts of Notes in an aggregate
principal amount not to exceed $100,000,000, in each case upon a written order
of the Company in the form of an Officers' Certificate of the Company. Each such
written order shall specify the amount of Notes to be authenticated and the date
on which the Notes are to be authenticated, whether the Notes are to be Initial
Notes, Private Exchange Notes or Unrestricted Notes and whether (subject to
Section 2.01) the Notes are to be issued as Physical Notes or Global Notes and
such other information as the Trustee may reasonably request. The aggregate
principal amount of Notes outstanding at any time may not exceed $300,000,000,
except as provided in Sections 2.07 and 2.08.
Notwithstanding the foregoing, all Notes issued under this Indenture
shall vote and consent together on all matters (as to which any of such Notes
may vote or consent) as one class and no series of Notes will have the right to
vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Notes whenever the
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Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Notes shall be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency, where (a) Notes may
be presented or surrendered for registration of transfer or for exchange
("Registrar"), (b) Notes may be presented or surrendered for payment ("Paying
Agent") and (c) notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company may also from time to time
designate one or more other offices or agencies where the Notes may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency, for such purposes. The Company may act as its own Registrar or Paying
Agent except that for the purposes of Articles Three and Eight and Sections 4.15
and 4.16 neither the Company, any Subsidiary of the Company nor any of their
Affiliates shall act as Paying Agent. The Registrar shall keep a register of the
Notes and of their transfer and exchange. The Company, upon notice to the
Trustee, may have one or more co-Registrars and one or more additional paying
agents reasonably acceptable to the Trustee. The term "Paying Agent" includes
any additional paying agent. The Company initially appoints the Trustee as
Registrar and Paying Agent until such time as the Trustee has resigned or a
successor has been appointed.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee, in advance, of the name and address of any such Agent. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such.
SECTION 2.04. PAYING AGENT TO HOLD ASSETS IN TRUST.
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The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of the Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Notes (whether such assets have
been distributed to it by the Company or any other obligor on the Securities),
and shall notify the Trustee of any Default by the Company (or any other obligor
on the Securities) in making any such payment. If the Company or a Subsidiary of
the Company acts as Paying Agent, it shall segregate such assets and hold them
as a separate trust fund. The Company at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default, upon written request to a Paying Agent, require such Paying Agent to
distribute all assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that shall have been
delivered by the Company to the Paying Agent, the Paying Agent shall have no
further liability for such assets.
SECTION 2.05. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee before each Record Date and at such other times as the Trustee may
request in writing a list as of such date and in such form as the Trustee may
reasonably require of the names and addresses of the Holders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar or a co-Registrar with a
request to register the transfer of such Notes or to exchange such Notes for an
equal principal amount of Notes of other authorized denominations, the Registrar
or co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; PROVIDED, HOWEVER, that the Notes
surrendered for transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Registrar or co-Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Notes at the
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Registrar's or co-Registrar's request. No service charge shall be made for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant to Sections
2.02, 2.07, 2.10, 3.06, 4.16, 4.17 or 9.05). The Registrar or co-Registrar shall
not be required to register the transfer of or exchange of any Note (i) during a
period beginning at the opening of business 15 days before the mailing of a
notice of redemption of Notes and ending at the close of business on the day of
such mailing and (ii) selected for redemption in whole or in part pursuant to
Article Three, except the unredeemed portion of any Note being redeemed in part.
SECTION 2.07. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder
of a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, such
Holder must provide an indemnity bond or other indemnity, sufficient in the
judgment of both the Company and the Trustee, to protect the Company, the
Trustee or any Agent from any loss which any of them may suffer if a Note is
replaced. The Company may charge such Holder for its reasonable, out-of-pocket
expenses in replacing a Note, including reasonable fees and expenses of counsel.
Every replacement Note shall constitute an additional obligation of the Company.
SECTION 2.08. OUTSTANDING NOTES.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. A Note
does not cease to be outstanding because the Company or any of its Affiliates
holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a BONA FIDE purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to
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Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or a Subsidiary of the Company) holds U.S. Legal Tender or U.S.
Government Obligations sufficient to pay all of the principal and interest due
on the Notes payable on that date, then on and after that date such Notes cease
to be outstanding and interest on them ceases to accrue; PROVIDED, HOWEVER, that
to the extent the Trustee is enjoined from making payments to the Holders,
interest will continue to accrue until such time as the Trustee is not so
enjoined.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver, consent or notice, Notes owned
by the Company or an Affiliate (other than (i) any Affiliate who is an Affiliate
solely on account of his or its ownership of securities of the Company,
membership on the Board of Directors of the Company or employment by the Company
or any Affiliate of the Company, and (ii) any other Affiliate who is an
Affiliate solely on account of his or its relationship with any Person described
in clause (i) above, except in any case to the extent such Person is an
affiliate as defined in Section 316(a) of the TIA) shall be considered as though
they are not outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes which the Trustee actually knows are so owned shall be so
considered.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon receipt of a
written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be authenticated.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate upon receipt of a written order of the Company pursuant to Section
2.02 definitive Notes in exchange for temporary Notes.
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SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee, or
at the direction of the Trustee, the Registrar or the Paying Agent (other than
the Company or a Subsidiary of the Company), and no one else, shall cancel and,
at the written direction of the Company, shall return all Notes surrendered for
transfer, exchange, payment or cancellation to the Company. Subject to Section
2.07, the Company may not issue new Notes to replace Notes that it has paid or
delivered to the Trustee for cancellation. If the Company shall acquire any of
the Notes, such acquisition shall not operate as a redemption or satisfaction of
the Debt represented by such Notes unless and until the same are surrendered to
the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall, unless the Trustee fixes another record date pursuant to Section 6.10,
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest to the Persons who are Holders on a subsequent special
record date, which date shall be the fifteenth day next preceding the date fixed
by the Company for the payment of defaulted interest or the next succeeding
Business Day if such date is not a Business Day. At least 15 days before the
subsequent special record date, the Company shall mail to each Holder, with a
copy to the Trustee, a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest, and interest payable on
such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number, and if
so, the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; PROVIDED that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes.
SECTION 2.14. DEPOSIT OF MONEYS.
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Prior to 11:00 a.m. New York City time on each Interest Payment
Date, Maturity Date, Redemption Date, or Change of Control Payment Date the
Company shall have deposited with the Paying Agent in immediately available
funds money sufficient to make cash payments, if any, due on such Interest
Payment Date, Maturity Date, Redemption Date, or Change of Control Payment Date
as the case may be, in a timely manner that permits the Paying Agent to remit
payment to the Holders on such Interest Payment Date, Maturity Date, Redemption
Date, or Change of Control Payment Date as the case may be.
SECTION 2.15. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) The Global Notes initially shall (i) be registered in the name
of the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
EXHIBIT C.
Members of, or participants in, the Depository ("Participants")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and
Participants, the operation of customary practices governing the exercise of the
rights of a Holder of any Note.
(b) Transfers of Global Notes shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Notes may be transferred
or exchanged for Physical Notes in accordance with the rules and procedures of
the Depository and the provisions of Section 2.16. In addition, Physical Notes
shall be transferred to all beneficial owners in exchange for their beneficial
interests in Global Notes if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for any Global Note and a
successor Depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a
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request from the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Note to beneficial owners pursuant to paragraph
(b), the Registrar shall (if one or more Physical Notes are to be issued)
reflect on its books and records the date and a decrease in the principal amount
of such Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and the Company shall execute and
the Trustee shall authenticate and deliver, one or more Physical Notes of
authorized denominations in an aggregate principal amount equal to the principal
amount of the beneficial interest in the Global Note so transferred.
(d) In connection with the transfer of a Global Note as an entirety
to beneficial owners pursuant to paragraph (b) of this Section 2.15, such Global
Note shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute and the Trustee shall upon written instructions from the
Company authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in such Global Note, an equal
aggregate principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Note delivered in
exchange for an interest in a Global Note pursuant to paragraph (b) or (c) of
this Section 2.15 shall, except as otherwise provided by Section 2.16, bear the
Private Placement Legend.
(f) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through Participants, to take any action which a Holder is entitled to take
under this Indenture or the Notes.
SECTION 2.16. SPECIAL TRANSFER PROVISIONS.
(A) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS AND
NON-U.S. PERSONS. The following additional provisions shall apply with respect
to the registration of any proposed transfer of a Restricted Note to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any
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Restricted Note, whether or not such Note bears the Private Placement
Legend, if (x) the requested transfer is after the second anniversary of
the Issue Date; PROVIDED, HOWEVER, that neither the Company nor any
Affiliate of the Company has held any beneficial interest in such note, or
portion thereof, at any time on or prior to the second anniversary of the
Issue Date or (y) (1) in the case of a transfer to an Institutional
Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the
proposed transferee has delivered to the Registrar a certificate
substantially in the form of EXHIBIT D hereto and any legal opinions and
certifications required thereby and (2) in the case of a transfer to a
Non-U.S. Person, the proposed transferor has delivered to the Registrar a
certificate substantially in the form of EXHIBIT E hereto;
(ii) if the proposed transferee is a Participant and the Notes to be
transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the IAI Global Note or Regulation S Global
Note, as the case may be, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the Registrar's
procedures and (y) the appropriate certificate, if any, required by clause
(y) of paragraph (i) above, the Registrar shall register the transfer and
reflect on its books and records the date and an increase in the principal
amount of the IAI Global Note or Regulation S Global Note, as the case may
be, in an amount equal to the principal amount of Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so
transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in a Global Note, upon receipt by the Registrar of
(x) written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, the Registrar shall
register the transfer and reflect on its books and records the date and
(A) a decrease in the principal amount of the Global Note from which such
interests are to be transferred in an amount equal to the principal amount
of the Notes to be transferred and (B) an increase in the principal amount
of the IAI Global Note or the Regulation S Global Note, as the case may
be, in an amount equal to the principal amount of the Notes to be
transferred.
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(b) TRANSFERS TO QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Note to a
QIB:
(i) the Registrar shall register the transfer of any Restricted
Note, whether or not such Note bears the Private Placement Legend, if (x)
the requested transfer is after the second anniversary of the Issue Date;
PROVIDED, HOWEVER, that neither the Company nor any Affiliate of the
Company has held any beneficial interest in such Note, or portion thereof,
at any time on or prior to the second anniversary of the Issue Date or (y)
such transfer is being made by a proposed transferor who has checked the
box provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration under
the Securities Act provided by Rule 144A;
(ii) if the proposed transferee is a Participant and the Notes to be
transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the 144A Global Note, upon receipt by the
Registrar of written instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall register
the transfer and reflect on its books and records the date and an increase
in the principal amount of the 144A Global Note in an amount equal to the
principal amount of Physical Notes to be transferred, and the Trustee
shall cancel the Physical Note so transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in the IAI Global Note or the Regulation S Global
Note, upon receipt by the
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Registrar of written instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall register
the transfer and reflect on its books and records the date and (A) a
decrease in the principal amount of the IAI Global Note or the Regulation
S Global Note, as the case may be, in an amount equal to the principal
amount of the Notes to be transferred and (B) an increase in the principal
amount of the 144A Global Note in an amount equal to the principal amount
of the Notes to be transferred.
(c) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(d) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar or co-Registrar shall deliver only Notes that
bear the Private Placement Legend unless (i) there is delivered to the Trustee
an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act or (ii) such Note has been sold pursuant to an effective registration
statement under the Securities Act.
(e) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
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The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Depositary Participants or
beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
ARTICLE THREE
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Paragraph 6 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed and whether
it wants the Trustee to give notice of redemption to the Holders (at the
Company's expense) at least 45 days (unless a shorter notice shall be
satisfactory to the Trustee) but not more than 60 days before the Redemption
Date. Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If fewer than all of the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes being
redeemed are listed, or, if the Notes are not listed on a national securities
exchange, by lot or on a PRO RATA basis or by such other method as the Trustee
shall deem appropriate.
The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be
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redeemed. Notes in denominations of $1,000 may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Notes that have denominations larger than
$1,000. Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail to each Holder whose Notes are to be redeemed, with a copy to the
Trustee. At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. Each notice for
redemption shall identify the Notes to be redeemed (including CUSIP number) and
shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(5) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of
such Notes is to receive payment of the Redemption Price upon surrender to
the Paying Agent of the Notes redeemed;
(6) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or Notes in
the aggregate principal amount equal to the unredeemed portion thereof
will be issued; and
(7) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such
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partial redemption.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price. Upon surrender to the Trustee or Paying Agent, such Notes
called for redemption shall be paid at the Redemption Price.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before 11:00 a.m. (New York City time) on the Redemption Date,
the Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to
pay the Redemption Price of all Notes to be redeemed on that date (other than
Notes or portions thereof called for redemption on that date which have been
delivered by the Company to the Trustee for cancellation). The Paying Agent
shall promptly return to the Company any U.S. Legal Tender so deposited which is
not required for that purpose, except with respect to monies owed as obligations
to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such Redemption Price, interest on the
Notes to be redeemed will cease to accrue on and after the applicable Redemption
Date, whether or not such Notes are presented for payment.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is to be redeemed in part, the Trustee
shall authenticate for the Holder a new Note or Notes equal in principal amount
to the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay the principal of and interest
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on the Notes on the dates and in the manner provided in the Notes. An
installment of principal of or interest on the Notes shall be considered paid on
the date it is due if the Trustee or Paying Agent (other than the Company or a
Subsidiary of the Company) holds on that date U.S. Legal Tender designated for
and sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate set forth in the second paragraph of
Paragraph 1 of the Notes.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain the office or agency required under
Section 2.03. The Company shall give prior notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02.
SECTION 4.03. CORPORATE EXISTENCE.
Except as otherwise permitted by Article Five, Garden State shall do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate or other existence and the corporate or other existence of
each of its Subsidiaries in accordance with the respective organizational
documents of each such Subsidiary and the material rights (charter and
statutory) and franchises of Garden State and each such Subsidiary; PROVIDED,
HOWEVER, that Garden State shall not be required to preserve, with respect to
itself, any material right or franchise and, with respect to any of its
Subsidiaries, any such existence, material right or franchise, if the Board of
Directors or other equivalent governing body of Garden State or such Subsidiary,
as the case may be, shall determine that the preservation thereof is no longer
desirable in the conduct of the business of Garden State or any such Subsidiary.
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SECTION 4.04. PAYMENT OF TAXES AND OTHER CLAIMS.
Garden State shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all taxes, assessments
and governmental charges (including withholding taxes and any penalties,
interest and additions to taxes) levied or imposed upon it or any of its
Subsidiaries or properties of it or any of its Subsidiaries and (ii) all lawful
claims for labor, materials and supplies that, if unpaid, might by law become a
Lien upon the property of it or any of its Subsidiaries; PROVIDED, HOWEVER, that
Garden State shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim if either (a) the amount,
applicability or validity thereof is being contested in good faith by
appropriate proceedings and an adequate reserve has been established therefor to
the extent required by generally accepted accounting principles then in effect
or (b) the failure to make such payment or effect such discharge (together with
all other such failures) would not have a material adverse effect on the
financial condition or results of operations of Garden State and its
Subsidiaries, taken as a whole.
SECTION 4.05. MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) Garden State shall, and shall cause each of its Subsidiaries to,
maintain its properties in good working order and condition (subject to ordinary
wear and tear) and make all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto and actively conduct and carry
on its business; PROVIDED, HOWEVER, that nothing in this Section shall prevent
Garden State or any of its Subsidiaries from discontinuing the operation and
maintenance of any of its properties, if such discontinuance is, in the judgment
of Garden State or the Subsidiary, as the case may be, desirable in the conduct
of their respective businesses and is not disadvantageous in any material
respect to the Holders.
(b) Garden State shall provide or cause to be provided, for itself
and each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith opinion
of the Company are adequate and appropriate for the conduct of the business of
Garden State and such Subsidiaries in a prudent manner, with reputable insurers
or with the government of the United States of America or an agency or
instrumentality
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thereof, in such amounts, with such deductibles, and by such methods as shall be
customary, in the reasonable, good faith opinion of the Company, for companies
similarly situated in the industry, unless the failure to provide such insurance
(together with all other such failures) would not have a material adverse effect
on the financial condition or results of operations of Garden State and its
Subsidiaries, taken as a whole.
SECTION 4.06. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) Garden State shall deliver to the Trustee, within 120 days after
the end of the Company's fiscal year, an Officers' Certificate stating that a
review of its activities and the activities of its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether it has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge the
Company during such preceding fiscal year has kept, observed, performed and
fulfilled each and every such covenant and no Default or Event of Default
occurred during such year and at the date of such certificate there is no
Default or Event of Default that has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate shall
describe the Default or Event of Default and its status with particularity. The
Officers' Certificate shall also notify the Trustee should the Company elect to
change the manner in which it fixes its fiscal year end. For purposes of this
Section 4.06(a), one of the Officers signing such Officers' Certificate shall be
the Chief Financial Officer, the Chief Executive Officer or the President of the
Company.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied by a written
report of the Company's independent public accountants (who shall be a firm of
established national reputation reasonably satisfactory to the Trustee) that in
conducting their audit of such financial statements (which is directed primarily
to the expression of their opinion on such financial statements taken as a whole
and not toward obtaining knowledge of non-compliance with credit agreements)
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article Four, Five or Six of this
Indenture or, if any such
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violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) (i) If any Default or Event of Default has occurred and is
continuing, (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed default under this Indenture or the Notes or (iii) if the
trustee for or the holder of any other evidence of Debt of the Company or any
Subsidiary seeks to exercise any remedy with respect to a claimed default, the
Company shall deliver to the Trustee by registered or certified mail or by
facsimile transmission followed by hard copy by registered or certified mail an
Officers' Certificate specifying such event, notice or other action and what
action the Company has taken or proposes to take with respect thereto within
five Business Days of its occurrence.
SECTION 4.07. COMPLIANCE WITH LAWS.
Garden State shall comply, and shall cause each of its Subsidiaries
to comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except such as are being contested in good faith and by appropriate
proceedings and except for such noncompliances as could not in the aggregate be
reasonably expected to have a material adverse effect on the financial condition
or results of operations of Garden State and its Subsidiaries taken as a whole.
SECTION 4.08. COMMISSION REPORTS.
(a) The Company shall file with the Trustee and mail to each holder
of Notes, within 15 days after filing with the Commission, copies of the annual,
quarterly and current reports (or copies of such portions of any of the
foregoing as the Commission may by rules and regulations prescribe) which it is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act.
(b) Notwithstanding that the Company is not required by law to
remain subject to the periodic reporting requirements of the Exchange Act, it
will nonetheless continue to file with
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the Commission and deliver to the Trustee, and to each holder of Notes such
annual, quarterly and current reports which are specified in Section 13 or 15(d)
of the Exchange Act.
(c) In addition, the Company shall, at its cost, deliver to each
holder of the Notes quarterly and annual reports substantially equivalent to
those which would be required under the Exchange Act.
(d) Delivery of such reports, information and documents to the
Trustee pursuant to this Section 4.08 is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officers' Certificates).
SECTION 4.09. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 4.10. LIMITATION ON RESTRICTED PAYMENTS.
Garden State will not, and will not permit any of its Restricted
Subsidiaries to, make, directly or indirectly, any Restricted Payment; PROVIDED,
HOWEVER, that Garden State and its Restricted Subsidiaries may make Restricted
Payments so long as at the time of the making of such Restricted Payment and
after giving effect thereto:
(a) no Default or Event of Default shall have occurred or be
continuing as a consequence thereof;
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(b) immediately after giving effect to such Restricted Payment,
Garden State would have been permitted to incur $1.00 of additional Debt
pursuant to the terms of the first paragraph under Section 4.12 hereof;
and
(c) the aggregate amount expended by Garden State and its Restricted
Subsidiaries in connection with all Restricted Payments made subsequent to
October 1, 1997 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 October 1, 1997 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 October 1, 1997 (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 October 1, 1997 (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 October 1, 1997) 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
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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 or employees of
Garden State upon death, disability, retirement or termination of employment in
an aggregate amount not to exceed $3.0 million in any twelve-month period; and
(D) so long as no Default or Event of Default shall have occurred or be
continuing or shall occur as a consequence thereof, and immediately after giving
effect to such Restricted Payment, Garden State would have been permitted to
incur at least $1.00 of additional Debt pursuant to the terms of the first
paragraph under Section 4.12, the redemption, purchase or retirement by Garden
State of the ANI Senior Discount Debentures or the payment of dividends to ANI
in an amount sufficient to allow ANI to redeem, repurchase, or retire the ANI
Senior Discount Debentures, provided, in each such case, the proceeds are
forthwith so used.
SECTION 4.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
Garden State will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (or series of related transactions) (each a "Transaction") with any
Affiliate of Garden State or any Unrestricted Subsidiary of Garden State,
including, without limitation, any sale, purchase, lease or loan or any other
direct or indirect payment, transfer or other disposition of assets, property or
services, unless (a) such Transaction is on terms no less favorable to Garden
State or such Restricted Subsidiary, as the case may be, than those that could
be obtained in a comparable arm's-length transaction with an independent third
party (the "Fairness Condition") and (b) prior to effecting such Transaction,
Garden State shall deliver to the Trustee (i) with respect to any Transaction
involving aggregate consideration in excess of $1.0 million, an officers'
certificate certifying that a majority of the disinterested members of the Board
of Directors of Garden State has approved such Transaction and has determined
that the terms of such Transaction satisfy the Fairness Condition and (ii) in
addition, with respect to any Transaction involving (x) aggregate consideration
in excess of $1.0 million in which there are no disinterested directors or (y)
aggregate
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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
Section 4.10, and (D) the making of Permitted Intercompany Payments. In
connection with this covenant, any determination regarding whether a director is
"disinterested" will be made on the basis of whether such director has, among
other things, a personal stake in the business or transactions requiring any
such determination to be made.
SECTION 4.12. LIMITATION ON ADDITIONAL DEBT.
Garden State may not, and may not permit its Restricted Subsidiaries
to, 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
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preceding paragraph will not apply to: (i) the Notes; (ii) Existing Debt; (iii)
Debt under the Garden State Credit Facility, PROVIDED that the aggregate amount
of such Debt does not, at any time, exceed $350.0 million, less any prepayments
or scheduled payments actually made thereunder (to the extent, in the case of
prepayments on revolving credit indebtedness, that the corresponding commitments
have been permanently reduced); (iv) Debt owing from or to Garden State and its
Restricted Subsidiaries, PROVIDED that any Debt owing from Garden State to its
Restricted Subsidiaries is subordinated to the Notes; (v) other Debt issued
hereafter not to exceed in the aggregate $50.0 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.
SECTION 4.13. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
Garden State will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any consensual 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
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Garden State or a Restricted Subsidiary of Garden State (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, (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 or (H) customary
restrictions on such loans, advances or transfers contained in agreements
governing Permitted Investments.
SECTION 4.14. LIMITATION ON RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors of the Company may, if no Default or Event of
Default shall have occurred and be continuing or would result therefrom,
designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such
designation is at that time permitted under Section 4.10. The Board of Directors
of the Company may, if no Default or Event of Default shall have occurred and be
continuing or would result therefrom, designate an Unrestricted Subsidiary to be
a Restricted Subsidiary; PROVIDED, HOWEVER, that (i) any such redesignation
shall be deemed to be an incurrence as of the date of such redesignation by the
Company and the Restricted Subsidiaries of Debt, if any, of such redesignated
Subsidiary for purposes of Section 4.12 above; and (ii) unless such redesignated
Restricted Subsidiary shall not have any Debt outstanding (other than Debt which
would be permitted under Section 4.12), no such designation shall be permitted
if immediately after giving effect to such redesignation and the Incurrence of
any such Debt, the Company could not incur $1.00 of additional Debt pursuant to
the first paragraph of Section 4.12. Any such designation by the Board of
Directors of the Company shall be evidenced to the Trustee by the filing with
the Trustee of a certified copy of the Board Resolution of the Company's Board
of Directors giving effect to such designation or redesignation and an Officers'
Certificate certifying that such designation or redesignation complied with the
foregoing conditions and setting forth in reasonable detail the underlying
calculations.
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Subsidiaries that are not designated by the Board of Directors as
Restricted or Unrestricted Subsidiaries will be deemed to be Restricted
Subsidiaries. The designation of a Restricted Subsidiary as an Unrestricted
Subsidiary shall be deemed to include a designation of all of the Subsidiaries
of such Unrestricted Subsidiary as Unrestricted Subsidiaries. As of the date of
this Indenture, there are no Unrestricted Subsidiaries.
SECTION 4.15. LIMITATION ON SENIOR SUBORDINATED DEBT.
The Company will not, directly or indirectly, become liable,
contingently or otherwise, with respect to any Debt that is subordinated or
junior in right of payment to any Senior Debt of the Company and senior in right
of payment to the Notes.
SECTION 4.16. CHANGE OF CONTROL.
(a) In the event of a Change of Control, Garden State shall make an
offer to repurchase all or a portion of the outstanding Notes pursuant to the
offer described in paragraph (b) below (the "Change of Control Offer") at a
purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest thereon, if any, to the date of repurchase.
(b) Prior to the repurchase of the Notes, Garden State shall (i)
repay in full all Senior Debt the terms of which require repayment upon a Change
of Control or offer to repay in full all such Debt and to repay the Debt owed to
each holder of such Debt which has accepted such offer, or (ii) obtain the
requisite consents under such Senior Debt to permit the repurchase of the Notes
as provided below. Garden State shall first comply with the covenant in the
preceding sentence before it shall be required to repurchase Notes pursuant to
the provisions described in this Section 4.16. Within 10 Business Days after the
date upon which the Change of Control occurs (the "Change of Control Date")
requiring Garden State to make a Change of Control Offer pursuant to this
Section 4.16 and the conditions set forth in the preceding sentence are
satisfied, Garden State shall so notify the Trustee.
(c) The notice to the Holders shall contain all instructions and
materials necessary to enable such Holders to tender (or cause to be transferred
by book-entry) Notes pursuant to the Change of Control Offer. Within 10 Business
Days following any Change of Control Date, Garden State shall
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send, by first class mail, a notice to each Holder of Notes as of the Change of
Control Date, with a copy to the Trustee, which notice shall govern the terms of
the Change of Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.16 and that all Notes tendered will be accepted for payment;
(2) the purchase price (including the amount of accrued interest)
and the purchase date (which shall be no earlier than 30 days nor later
than 45 days from the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor,
any Note accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day immediately prior to
the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Change of Control Payment Date, a facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Notes the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased;
(7) that Holders whose Notes are purchased only in part will be
issued (by book-entry) new Notes in a principal amount equal to the
unpurchased portion of the Notes surrendered; and
(8) the circumstances and relevant facts regarding such Change of
Control.
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On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Notes or portions thereof tendered pursuant to the Change
of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price of all Notes so tendered and (iii) deliver
to the Trustee (or, in the case of a book-entry transfer, evidence satisfactory
to the Trustee of such Notes) Notes so accepted together with an Officers'
Certificate stating the Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the purchase price, and the Trustee shall
promptly authenticate and mail to such Holders (or cause to be transferred by
book-entry) new Notes equal in principal amount to any unpurchased portion of
the Notes surrendered. Any Notes not so accepted shall be promptly mailed by the
Company to the Holder thereof. For purposes of this Section 4.16, the Trustee
shall act as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a
Change of Control Offer shall be returned by the Trustee to the Company.
(d) 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.
SECTION 4.17. LIMITATION ON SALES OF ASSETS.
Garden State may not, and may not permit its Restricted Subsidiaries
to, directly or indirectly, consummate any Asset Sale unless: (a) at least 85%
of the consideration therefor received by Garden State or such Restricted
Subsidiary shall be in the form of cash or Cash Equivalents, PROVIDED, that the
amount of (i) any liabilities (as shown on Garden State's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto) of Garden State
or any Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Notes or any guarantee thereof) that are assumed by the
transferee of any such assets shall be excluded from such calculation and (ii)
any notes or other obligations received by Garden State or any such Restricted
Subsidiary from such transferee that are immediately converted by Garden State
or such Restricted Subsidiary into cash (to the extent of the cash received)
shall be deemed, to the extent of cash so received, to be cash for purposes of
this provision;
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(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 or other Permitted Investments.
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 this Indenture. To the
extent that the aggregate principal amount of Notes tendered pursuant to an
offer to purchase is less than the Excess Proceeds, Garden State may use such
excess for general corporate purposes. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis.
Notwithstanding the foregoing, if after applying any Net Cash Proceeds received
from Asset Sales in accordance with clauses (i) and (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
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Garden State or such Restricted Subsidiary shall apply all such Excess Proceeds
to repurchase the Notes.
In the event the repurchase of the Notes with Excess Proceeds
constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act
at the time it is required, Garden State will be required to comply with Rule
14e-1 as then in effect with respect to such repurchase.
SECTION 4.18. LIMITATION ON LIENS SECURING CERTAIN DEBTS.
Garden State will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens to secure
any Debt of Garden State which is pari passu with or subordinate in right of
payment to the Notes, other than Liens existing on the date hereof with respect
to the Senior Subordinated Secured Notes, unless the Notes are secured equally
and ratably with such Debt (but on a senior basis if such other Debt is
subordinate to the Notes) as long as such Debt is so secured.
SECTION 4.19. LIMITATION ON BUSINESS.
Garden State will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than in the Permitted Business.
SECTION 4.20. INVESTMENT COMPANY ACT.
Garden State will not take any action that would require it or any
of its Restricted Subsidiaries to register as an investment company under the
Investment Company Act of 1940.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC.
(a) Garden State shall not, in a single transaction or through a
series of related transactions, consolidate with or merge with or into, or sell,
assign, transfer, lease, convey
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or otherwise dispose of all or substantially all of its assets to, another
Person or adopt any plan of liquidation, unless:
(1) either Garden State shall be the survivor of such merger or
consolidation or the surviving Person (the "Survivor") is a corporation,
partnership or trust organized and existing under the laws of the United
States, any State thereof or the District of Columbia.
(2) such Survivor shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee on or prior to
the consummation of such transaction, in a form satisfactory to the
Trustee, all the obligations of Garden State under the Notes and this
Indenture;
(3) immediately after giving effect to such transaction (including
any Debt incurred or anticipated to be incurred in connection with such
transaction) on a pro forma basis as if such transaction and the
incurrence of any such Debt had occurred at the beginning of the
four-quarter period immediately preceding such transaction, the Survivor
or Garden State, as the case may be, would have been permitted to incur
$1.00 of additional Debt in compliance with Section 4.12;
(4) immediately after giving effect to such transaction (including
any Debt incurred or anticipated to be incurred in connection with such
transaction) no Default or Event of Default shall have occurred and be
continuing;
(5) the Survivor will have Consolidated Net Worth immediately after
giving effect to the transaction (including any Debt incurred or
anticipated to be incurred in connection with such transaction), equal to
or greater than the Consolidated Net Worth of Garden State immediately
prior to the transaction; and
(6) Garden State has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, transfer or adoption and such supplemental
indenture comply with this Article Five, that the Survivor (if other than
the Company) agrees to be bound hereby, and that all conditions precedent
herein provided relating to such transaction have been satisfied.
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(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties and assets of one or
more Subsidiaries of Garden State, the Capital Stock of which constitutes all or
substantially all of the properties and assets of Garden State, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
Garden State.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any transfer of assets in
accordance with Section 5.01, the successor Person formed by such consolidation
or into which Garden State is merged or to which such transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
Garden State under this Indenture with the same effect as if such successor
Person had been named as Garden State herein. When a successor corporation
assumes all of the obligations of Garden State hereunder and under the Notes and
agrees to be bound hereby and thereby, the predecessor shall be released from
such obligations.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(1) Garden State defaults in the payment of interest on any Notes
when the same becomes due and payable and such Default continues for a
period of 30 days (whether or not such payment shall be prohibited by
Article Ten);
(2) Garden State defaults in the payment of the stated principal
amount of, or premium on, if any, any Notes when the same becomes due and
payable at maturity, upon acceleration, redemption or otherwise, or
pursuant to a Change of Control Offer or an Asset Sale (whether or not
such payment shall be prohibited by Article Ten);
(3) Garden State fails to observe or perform (a) any covenant or
agreement contained in Section 4.10, 4.12,
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4.14, 4.15, 4.17, 4.18 or 5.01 of this Indenture, or (b) any other
covenant or agreement contained in the Notes or this Indenture, and, in
each case, the Default continues for the period and after the notice
specified below;
(4) failure to pay at final maturity (after any stated grace period)
the principal of and interest on one or more classes of Debt of Garden
State or any of its Restricted Subsidiaries, whether such Debt is
outstanding on the Issue Date or thereafter incurred having, individually
or in the aggregate, an outstanding principal amount exceeding $10.0
million or more or any Debt having, individually or in the aggregate, an
outstanding principal amount exceeding $10.0 million is declared due and
payable prior to the stated maturity;
(5) one or more judgments in an aggregate amount in excess of $10.0
million shall have been rendered against ANI or any of its Significant
Subsidiaries and such judgments remain discharged or unstayed for a period
of 60 days after such judgment or judgments become final and nonappealable
and after notice specified below;
(6) Garden State or any Significant Subsidiary (A) admits in writing
its inability to pay its debts generally as they become due, (B) commences
a voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (C) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (D) consents to the appointment of a Custodian of it or
for substantially all of its property, (E) consents to or acquiesces in
the institution of a bankruptcy or an insolvency proceeding against it,
(F) makes a general assignment for the benefit of its creditors, or (G)
takes any corporate action to authorize or effect any of the foregoing;
and
(7) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of Garden State or any Significant Subsidiary
in an involuntary case or proceeding under any Bankruptcy Law, which shall
(A) approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of Garden State or any
Significant Subsidiary, (B) appoint a Custodian of Garden State or any
Significant Subsidiary or for substantially all of its property or (C)
order the winding-up or liquidation of its affairs; and such judgment,
decree or order shall remain unstayed and
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in effect for a period of 60 consecutive days.
A Default under clause (3) above (other than in the case of any
Default under Section 5.01, which Default shall be an Event of Default with the
notice specified in this paragraph but without the passage of time specified in
this paragraph) is not an Event of Default until the Trustee notifies Garden
State, or the Holders of at least 25% in principal amount of the outstanding
Notes notify Garden State and the Trustee of the Default, and Garden State does
not cure the Default within (i) in the case of clause 3(a) above (except in the
case of Section 5.01 hereof), 30 days, and (ii) in the case of clause 3(b)
above, 45 days, in each case after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that the notice is a
"Notice of Default." Such notice shall be given by the Trustee if so requested
by the Holders of at least 25% in principal amount of the Notes then
outstanding. A Default under clause (5) above shall be an Event of Default with
the notice specified in this paragraph but without the passage of time referred
to in this paragraph.
SECTION 6.02. ACCELERATION.
(a) If an Event of Default (other than an Event of Default specified
in Section 6.01(6) or (7) with respect to the Company) occurs and is continuing
and has not been waived pursuant to Section 6.04, the Trustee may, by notice to
Garden State, or the Holders of at least 25% in principal amount of the Notes
then outstanding may, by written notice to Garden State and the Trustee, and the
Trustee shall, upon the request of such Holders, declare (a "Declaration") the
aggregate principal amount of the Notes outstanding, together with accrued but
unpaid interest thereon to the date of payment, to be due and payable (the
"Default Amount") and, upon any such declaration, the same shall become and be
due and payable; PROVIDED, HOWEVER, that in the event there shall be any amounts
outstanding under the Garden State Credit Facility, the Default Amount shall not
become due and payable until the earlier to occur of either (x) an acceleration,
or a failure to pay at final maturity, under the Garden State Credit Facility,
or (y) five Business Days after the notice has been sent to Garden State and
each of the Representatives under the Garden State Credit Facility (if it is
then outstanding) unless no Events of Default shall be then continuing; and
PROVIDED, FURTHER, HOWEVER, that the Trustee shall be under no obligation to
follow any request of any of the Holders unless such Holders shall have offered
to the Trustee, after request by the Trustee, reasonable security or indemnity
against the costs,
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expenses and liabilities which may be incurred by it in compliance with such
request, order or direction.
(b) If an Event of Default specified in Section 6.01(6) or (7)
occurs with respect to Garden State, the Default Amount shall IPSO FACTO become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Noteholder.
(c) Upon payment of the Default Amount all of Garden State's
obligations under the Notes and this Indenture, other than obligations under
Section 7.07, shall terminate. The Holders of a majority in principal amount of
the Notes then outstanding by notice to the Trustee may rescind a Declaration
and its consequences if (i) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction, (ii) all existing Events of
Default, other than the non-payment of the principal and interest on the Notes
which have become due solely by such declaration of acceleration, have been
cured or waived, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) Garden State has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and (v) in
the event of the cure or waiver of a Default or Event of Default of the type
described in Section 6.01(6) or (7), the Trustee shall have received an
Officers' Certificate and an opinion of Counsel that such Default has been cured
or waived. No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available
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remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the outstanding Notes by notice to the Trustee may waive an
existing Default or Event of Default and its consequences, except a Default in
the payment of principal of or interest on any Note as specified in clauses (1)
and (2) of Section 6.01.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the outstanding
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on it
including, without limitation, any remedies provided for in Section 6.03.
Subject to Section 7.01, however, the Trustee may refuse to follow any direction
that conflicts with any law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of another Noteholder, or that may involve the
Trustee in personal liability; PROVIDED that the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.
SECTION 6.06. LIMITATION ON SUITS.
A Noteholder may not pursue any remedy with respect to this
Indenture or the Notes unless:
(1) the Holder gives to the Trustee notice of a continuing Event of
Default;
(2) Holders of at least 25% in principal amount of the outstanding
Notes make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee reasonable indemnity against
any loss, liability or expense to be incurred in compliance with such
request;
(4) the Trustee does not comply with the request within 45 days
after receipt of the request and the offer of satisfactory indemnity; and
(5) during such 45-day period the Holders of a
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majority in principal amount of the outstanding Notes do not give the
Trustee a direction which, in the opinion of the Trustee, is inconsistent
with the request.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over such other
Noteholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Note, on or
after the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal or interest specified
in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against
Garden State for the whole amount of principal and accrued interest remaining
unpaid, together with interest on overdue principal and, to the extent that
payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum borne by the Notes and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders, allowed in any judicial proceedings relating to the Company or any
other obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any
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monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Noteholder to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Noteholders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, taxes, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Noteholder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article Six, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
Fourth: to Garden State or as a court of competent jurisdiction may
direct.
The Trustee, upon prior notice to Garden State, may fix a record
date and payment date for any payment to Noteholders pursuant to this Section
6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in
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the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent Person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be
implied in this Indenture that are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of
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mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.02 or 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
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(b) Before the Trustee acts or refrains from acting, it may consult
with counsel of its selection (provided such counsel is reasonably
acceptable to the Company) and may require an Officers' Certificate or an
opinion of Counsel, which shall conform to Sections 12.04 and 12.05. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on the advice of such counsel or on such
certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, upon reasonable
notice to the Company, to examine the books, records, and premises of the
Company, personally or by agent or attorney.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred by it in compliance with such request,
order or direction.
(g) Any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company request or Company order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(h) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless
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written notice of any event which is in fact such a default is received by
the Trustee at the Corporate Trust Office of the Trustee, and such notice
references the notes and this Indenture.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee must comply with Sections
7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Notes, it shall not be accountable for the Company's
use of the proceeds from the Notes, and it shall not be responsible for any
statement in the Notes other than the Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Noteholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal of, or interest on, any Note, the Trustee may withhold
the notice if and so long as its board of directors, the executive committee of
its board of directors or a committee of its directors and/or Trust Officers in
good faith determines that withholding the notice is in the interest of the
Noteholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each July 1 beginning with the July 1
following the date of this Indenture, the Trustee shall, to the extent that
any of the events described in TIA Section 313(a) occurred within the
previous twelve months, but not otherwise, mail to each Noteholder a brief
report dated as of such July 1 that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Sections 313(b) and 313(c).
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A copy of each report at the time of its mailing to Noteholders
shall be mailed to the Company and filed with the Commission and each stock
exchange, if any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange and of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Company and the Trustee
for its services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all tax obligations imposed on the Trustee related to
this Indenture and all reasonable out-of-pocket expenses incurred or made by it.
Such expenses shall include the reasonable fees and expenses of the Trustee's
agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor
Trustee and their respective agents, employees, stockholders and directors for,
and hold them harmless against, any and all loss, liability, damage, claim or
expense, including taxes (other than taxes based on the income of the Trustee)
incurred by them except for such actions to the extent caused by any negligence
or bad faith on their part, arising out of or in connection with the acceptance
or administration of this trust including the reasonable costs and expenses of
defending themselves against any claim or liability in connection with the
exercise or performance of any of their rights, powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel, provided that counsel selected by the Company shall be the sole counsel
of record in any judicial or arbitral proceeding. The Company need not pay for
any settlement made without its written consent, which shall not be unreasonably
withheld. The Company need not reimburse any expense or indemnify against any
loss or liability to the extent incurred by the Trustee through its negligence,
bad faith or willful misconduct.
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To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(6) or (7) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor trustee.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the
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rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Noteholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the expense of
the Company), the Company or the Holders of at least 10% in principal amount of
the outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1) and 310(a)(5). The Trustee (or in the
case of a corporation included in a bank holding company system, the related
bank holding company) shall have a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition. In addition, if the Trustee is a corporation included in a bank
holding company system, the Trustee, independently of such bank holding
company, shall meet the capital requirements of TIA Section 310(a)(2). The
Trustee shall comply with TIA Section 310(b); PROVIDED, HOWEVER, that there
shall be excluded from the operation of TIA Section 310(b)(1) any indenture
or indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding, if the
requirements for such exclusion set
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forth in TIA Section 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except that
Garden State's obligations under Sections 7.07, 8.04 and 8.05 shall survive the
effect of this Article Eight) when all outstanding Notes theretofore
authenticated and issued have been delivered to the Trustee for cancellation.
In addition, at Garden State's option, either (a) Garden State shall
be deemed to have been Discharged (as defined below) from its obligations with
respect to the Notes ("legal defeasance"), except for certain obligations,
including those with respect to the transfer or exchange of the Notes, to
replace mutilated, destroyed, lost or stolen Notes and to maintain a registrar
and paying agent in respect of the Notes, at any time after the applicable
conditions set forth below have been satisfied or (b) Garden State shall cease
to be under any obligation to comply with any term, provision or condition set
forth in Sections 4.08, 4.10 through 4.20 and 5.01 ("covenant defeasance") at
any time after the applicable conditions set forth below have been satisfied:
(1) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of
the Notes (i) money in an amount, or (ii) U.S. Legal Tender or U.S.
Government Obligations which through the payment of interest and principal
in respect thereof in accordance with their terms will provide, not later
than one business
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day before the due date of any payment, money in an amount, or (iii) a
combination of (i) and (ii), sufficient, in the opinion (with respect to
(i) and (ii)) of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge each installment of principal of and
interest on the outstanding Notes on the dates such installments of
interest or principal are due; PROVIDED that no deposits made pursuant to
this Section 8.01(l) shall cause the Trustee to have a conflicting
interest as defined in and for purposes of the TIA; PROVIDED, FURTHER,
that no such deposit shall result in the Company, the Trustee or the trust
becoming or being deemed to be an "investment company" under the
Investment Company Act of 1940;
(2) No Event of Default or Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit or, insofar as
Events of Default from bankruptcy or insolvency events are concerned, at
any time in the period ending on the 91st day after the date of deposit;
(3) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the trust funds deposited pursuant to clause
(1) above will not be subject to any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(4) The Company shall have paid or duly provided for payment of all
amounts then due to the Trustee pursuant to Section 7.07 hereof;
(5) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel to the effect that such legal defeasance or covenant
defeasance shall not result in a breach or violation of or constitute a
Default under this Indenture, or any other material agreement or
instrument to which the Company is a party or by which the Company is
bound;
(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit is not required to be
registered as an investment company under the Investment Company Act of
1940, as amended;
(7) the Company delivers to the Trustee an Opinion
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of Counsel to the effect that the Noteholder has a perfected security
interest under applicable law in the U.S. Government Obligations so
deposited;
(8) in the case of legal defeasance, the Company delivers to the
Trustee an Opinion of Counsel confirming that (a) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (b) since the date of the Indenture, there has been a change in
the applicable Federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the
Noteholder will not recognize income, gain or loss for Federal income tax
purposes as a result of such legal defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such legal defeasance had not
occurred;
(9) in the case of covenant defeasance, the Company delivers to the
Trustee an Opinion of Counsel confirming that the Noteholder will not
recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred; and
(10) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to either the legal defeasance or the covenant
defeasance, as the case may be, have been complied with.
Notwithstanding the foregoing provisions of this Section, the
conditions set forth in the foregoing paragraphs (1)(iii), (2), (3), (5), (6)
and (7) need not be satisfied so long as, at the time Garden State makes the
deposit described in paragraph (1), (i) no default under Section 6.01(l),
6.01(2), 6.01(3), 6.01(6) or 6.01(7) has occurred and is continuing on the date
of such deposit and after giving effect thereto and (ii) either (x) a notice of
redemption has been mailed pursuant to Section 3.03 providing for redemption of
all the Notes within 60 days after such mailing and the provisions of Article
Three with respect to such redemption shall have been complied with or (y) the
Stated Maturity of all of the Notes will occur within 30 days. If the conditions
of the preceding sentence are satisfied, Garden State shall be deemed to have
exercised its covenant defeasance option.
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Before or after a deposit, Garden State may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article Three.
"Discharged" means that Garden State shall be deemed to have paid
and discharged the entire indebtedness represented by, and obligations under,
the Notes and to have satisfied all the obligations under this Indenture
relating to the Notes (and the Trustee, at the expense of Garden State, shall
execute proper instruments acknowledging the same), except (i) the rights of the
Holders of Notes to receive, from the trust fund described in clause (1) above,
payment of the principal of and the interest on such Notes when such payments
are due, (ii) Garden State's obligations with respect to the Notes under
Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07 and 7.08 and (iii) the rights,
powers, trusts, duties and immunities of the Trustee hereunder.
SECTION 8.02. ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE.
Subject to Section 8.05, after (i) the conditions of Section 8.01
have been satisfied, (ii) Garden State has paid or caused to be paid all other
sums payable hereunder by Garden State and (iii) Garden State has delivered to
the Trustee an Opinion of Counsel, stating that all conditions precedent
referred to in clause (i) above relating to the satisfaction and discharge of
this Indenture have been complied with, the Trustee upon written request shall
acknowledge in writing the discharge of Garden State's obligations under this
Indenture except for those surviving obligations specified in this Article
Eight.
SECTION 8.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust, money, U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to Section 8.01. It shall
apply the deposited money and the money from U.S. Legal Tender and U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal and accrued and unpaid interest on the
Notes.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.01 or the principal and
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interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.
SECTION 8.04. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall promptly pay to Garden State
any money held by them for the payment of principal or interest that remains
unclaimed for one year; PROVIDED, HOWEVER, that the Trustee or such Paying Agent
may, at the expense of Garden State, cause to be published once in a newspaper
of general circulation in The City of New York or mailed to each Holder, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining will be repaid to
Garden State. After payment to Garden State, Holders entitled to the money must
look to Garden State for payment as general creditors unless an applicable
abandoned property law designates another Person and all liability of the
Trustee and Paying Agent with respect to such money shall cease.
SECTION 8.05. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money, U.S.
Legal Tender or U.S. Government Obligations in accordance with Section 8.01 by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, Garden State's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.01 until such time as the Trustee or Paying Agent is permitted to
apply all such money, U.S. Legal Tender or U.S. Government Obligations in
accordance with Section 8.01; PROVIDED, HOWEVER, that if Garden State has made
any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, Garden State shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money, U.S. Legal
Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
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SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Notes without notice to
or consent of any Noteholder:
(1) to cure any ambiguity, defect or inconsistency; PROVIDED that
such amendment or supplement does not, in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in place
of certificated Notes; or
(4) to make any other change that does not adversely affect in any
material respect the rights of any Noteholders hereunder;
PROVIDED that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07, Garden State, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the outstanding
Notes, may amend or supplement this Indenture or the Notes, without notice to
any other Holders. Subject to Section 6.07, the Holder or Holders of a majority
in aggregate principal amount of the outstanding Notes may waive compliance by
Garden State with any provision of this Indenture or the Notes without notice to
any other Noteholder. No amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, shall, without the consent of each Holder of each Note
affected thereby:
(1) change the stated maturity of the principal of, or any
installment of interest on, any Note or reduce the principal amount
thereof, the rate of interest thereon or any premium payable upon the
redemption thereof, or change
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the coin or currency in which any Note or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment after the stated maturity thereof (or, in
the case of redemption, on or after the redemption date);
(2) reduce the percentage in principal amount of the outstanding
Notes, the consent of the Holders of which is required for any
supplemental indenture or the consent of such Holders is required for any
waiver of compliance with provisions of this Indenture or Defaults
hereunder and their consequences provided for in this Indenture;
(3) modify any of the provisions relating to supplemental indentures
requiring the consent of Holders or relating to the waiver of past
defaults or relating to the waiver of covenants, except to increase any
such percentage of outstanding Notes required for such actions or to
provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of each Noteholder affected thereby;
(4) waive a default in the payment of the principal of or interest
on any Note or modify or waive the Company's obligation to repurchase
Notes under Section 4.16 or 4.17;
(5) except as otherwise permitted by the covenants contained in
Article Five, consent to the assignment or transfer by the Company of any
of its rights and obligations under this Indenture;
(6) make any change in this Section 9.02 or Section 6.04 or 6.07; or
(7) change the time at which any Note must be redeemed or repaid in
accordance with the terms of this Indenture and the Notes.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, Garden State shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
Garden State
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to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.03. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to his Note or portion of his Note by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Noteholder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; PROVIDED that any such waiver shall not impair or
affect the
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right of any Holder to receive payment of principal of and interest on a Note,
on or after the respective due dates expressed in such Note, or to bring suit
for the enforcement of any such payment on or after such respective dates
without the consent of such Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note,
the Trustee may require the Holder of the Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; PROVIDED that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
ARTICLE TEN
SUBORDINATION
SECTION 10.01. NOTES SUBORDINATED TO SENIOR DEBT.
The Company covenants and agrees and the Trustee and each Holder of
the Notes, by its acceptance thereof, likewise covenants and agrees, that all
Notes shall be issued subject to the provisions of this Article Ten; and the
Trustee and each Person holding any Note, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that the payment of
all Obligations on the Notes by the Company
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shall, to the extent and in the manner herein set forth, be subordinated and
junior in right of payment to the prior payment in full in cash or Cash
Equivalents of all Obligations in respect of the Senior Debt; that the
subordination is for the benefit of, and shall be enforceable directly by, the
holders of Senior Debt, and that each holder of Senior Debt whether now
outstanding or hereafter created, incurred, assumed or guaranteed shall be
deemed to have acquired Senior Debt in reliance upon the covenants and
provisions contained in this Indenture and the Notes.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution of assets to creditors of Garden
State upon any dissolution or winding up or total or partial liquidation or
reorganization of Garden State whether voluntary or involuntary or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to Garden State or its property, in an assignment for the benefit of
creditors or any marshalling of Garden State's assets and liabilities:
(a) the holders of Senior Debt of Garden State will first be
entitled to receive payment in full in cash of all Obligations due in respect of
such Senior Debt (including interest accruing after or which would accrue but
for the occurrence of the commencement of any such proceeding, at the rate
specified in the applicable Senior Debt whether or not such interest is an
allowable claim in any such proceeding) before any payment or distribution is
made on account of any Obligations on the Notes, or for the acquisition of any
of the Notes for cash or property or otherwise; and
(b) until all obligations with respect to Senior Debt of Garden
State (as provided in clause (a) above) are paid in full in cash, any
distribution to which the Holders of the Notes otherwise would be entitled but
for this Article Ten shall be made to the holders of Senior Debt, except that
Holders of the Notes may receive securities that are subordinated at least to
the same extent as the Notes to (a) Senior Debt and (b) any securities issued in
exchange for Senior Debt ("subordinated securities").
For purposes of this Article Ten, a distribution may consist of
cash, Cash Equivalents, securities or other property, by set-off or otherwise.
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The consolidation of Garden State with, or the merger of Garden
State into, another corporation or the liquidation or dissolution of Garden
State following the conveyance or transfer of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article Five hereof shall not be deemed a dissolution, winding up,
liquidation or reorganization for the purposes of this Section 10.02 if the
Survivor complies with the conditions set forth in Article Five hereof.
SECTION 10.03. DEFAULT ON SENIOR DEBT.
(a) Upon the final maturity of any Senior Debt by lapse of time,
acceleration or otherwise, all Senior Debt shall first be paid in full in cash
or Cash Equivalents, or such payment duly provided for in cash or Cash
Equivalents or in a manner satisfactory to the holders of such Senior Debt,
before any payment is made by Garden State or any person acting on behalf of
Garden State of the principal, premium, if any, or interest on the Notes.
(b) Garden State may not make any payment upon or distribution in
respect of the Notes or acquire any of the Notes for cash or property or
otherwise (except in or for such subordinated securities) if (i) a default in
the payment of the principal, premium, if any, or interest on Senior Debt occurs
and is continuing beyond any applicable period of grace (whether upon maturity,
at a date fixed for prepayment, as a result of acceleration or otherwise) (a
"payment default") or (ii) any other default occurs and is continuing (or if
such an event of default would occur upon any payment with respect to the Notes
or would arise upon the passage of time as a result of such payment) with
respect to any Designated Senior Debt that permits holders of the Designated
Senior Debt as to which such default relates to accelerate its maturity (a
"nonpayment default") and, in either case, the Trustee receives a notice of such
non-payment default (a "payment blockage notice") from the holders, or from the
trustee, agent or other representative of the holders, of any such Designated
Senior Debt.
(c) Payments on the Notes may and shall be resumed (i) in the case
of a payment default, upon the date on which such default is cured or waived,
and (ii) in the case of a nonpayment default, the earlier of the date on which
such nonpayment default is cured or waived or 179 days after the date on which
the applicable payment blockage notice is received, unless the maturity of any
Designated Senior Debt has
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been accelerated (with respect to a non-payment default such period of time
shall be hereinafter referred to as a "payment blockage period"). No payment
blockage period may be commenced within 360 days after receipt by the Trustee of
any prior payment blockage notice. No nonpayment default that existed or was
continuing on the date of delivery of any payment blockage period to the Trustee
shall be made the basis for a subsequent payment blockage notice unless such
default shall have been cured or waived for a period of not less than 180 days
and all scheduled payments of principal, premium, if any, and interest then due
and payable on the Notes shall have been made.
SECTION 10.04. NO SUSPENSION OF REMEDIES.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 hereof or to pursue any other rights or
remedies hereunder or under applicable law; PROVIDED, HOWEVER, that all Senior
Debt of the Company then due and payable, or which thereafter is declared to be,
or shall otherwise become, due and payable, pursuant to its terms (whether by
acceleration or otherwise) shall first be paid in full in cash or Cash
Equivalents before the Holders or the Trustee are entitled to receive any
payment from Garden State of principal, premium, if any, or interest on the
Notes. If payment of the Notes is accelerated because of an Event of Default,
Garden State shall promptly notify holders of Senior Debt of the acceleration.
SECTION 10.05. WHEN DISTRIBUTIONS MUST BE PAID OVER.
In the event that the Trustee or any Noteholder receives any payment
of any Obligations with respect to the Notes at a time when a Trustee or such
Noteholder has actual knowledge such payment is prohibited by Section 10.02 or
10.03 hereof, such payment shall be held by the Trustee or such Noteholder in
trust for the benefit of, and shall be paid forthwith over and delivered, upon
written request, to, the holders of Senior Debt as their interests may appear or
their agent or representative or the trustee under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or
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for the holders of Senior Debt.
If a distribution is made to the Trustee or any Noteholder that
because of this Article Ten should not have been made to it, the Trustee or such
Noteholder who receives the distribution, upon notice that such distribution
should not have been made, shall hold it in trust for the benefit of, and, upon
written request, pay it over to, the holders of Senior Debt as their interests
may appear, or their agent or representative or the trustee under the indenture
or other agreement (if any) pursuant to which Senior Debt may have been issued,
as their respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article Ten, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Noteholders or the
Company or any other person money or assets to which any holders of Senior Debt
shall be entitled by virtue of this Article Ten, except if such payment is made
as a result of the willful misconduct or negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent
of any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article Ten, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt
provided in this Article Ten.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid
in full, Noteholders shall be subrogated (equally and ratably with all other
Debt PARI PASSU with the Notes) to the rights of holders of Senior Debt to
receive distributions applicable to Senior Debt to the extent that
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distributions otherwise payable to the Noteholders have been applied to the
payment of Senior Debt. A distribution made under this Article to holders of
Senior Debt which otherwise would have been made to Noteholders is not, as
between the Company and Noteholders, a payment by the Company on the Senior
Debt.
SECTION 10.08. RELATIVE RIGHTS.
This Article Ten defines the relative rights of Noteholders and
holders of Senior Debt. Nothing in the Indenture shall:
(a) impair, as between the Company and Noteholders, the obligation
of the Company, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms;
(b) affect the relative rights of Noteholders and creditors of the
Company other than their rights in relation to holders of Senior Debt; or
(c) prevent the Trustee or any Noteholder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Noteholders.
If the Company fails because of this Article to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination
of the indebtedness evidenced by the Notes shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders
of Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the
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Company referred to in this Article Ten, the Trustee and the Noteholders shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the Noteholders for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Debt of the Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article Ten.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article Ten or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment or
distribution by the Trustee, or the taking of any action by the Trustee, and the
Trustee or Paying Agent may continue to make payments on the Notes unless a
Trust Officer of the Trustee shall have received at least five Business Days
prior to the date of such payment written notice of facts that would cause the
payment of any Obligations with respect to the Notes to violate this Article
Ten. Only the Company, a Representative or a holder of an issue of Senior Debt
that has no Representative may give the notice. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any person as a holder of Senior Debt to participate in any payment or
distribution pursuant to this Article, the Trustee may request such person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Debt held by such person, the extent to which such person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such person under this Article, and if such evidence is not
furnished, the Trustee may defer any payment which it may be required to make
for the benefit of such person pursuant to the term of this Indenture pending
judicial determination as to the rights of such person to receive such payment.
Nothing in this Article Ten shall apply to amounts due to, or impair the claims
of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee.
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SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Noteholder by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article Ten, and appoints the
Trustee his attorney-in-fact for any and all such purposes.
SECTION 10.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section 7.01, and
the Holders of the Notes shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the Trustee in
bankruptcy, liquidating trustee, Custodian, receiver, assignee for the benefit
of creditors, agent or other person making such payment, or distribution,
delivered to the Trustee or to the Holders of Notes, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
SECTION 11.02. NOTICES.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier or
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registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company:
Garden State Newspapers, Inc.
1560 Broadway, Suite 1450
Denver, Colorado 80202
Attention: Chief Financial Officer
with a copy to:
Verner, Liipfert, Bernhard,
McPherson and Hand
901 North West 15th Street, Suite 700
Washington, D.C. 20005-2301
Attention: Harold I. Freilich
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21W
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Each of the Company and the Trustee by written notice to each other
such Person may designate additional or different addresses for notices to such
Person. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when receipt is acknowledged, if faxed; and five (5) calendar days
after mailing if sent by registered or certified mail, postage prepaid (except
that a notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given whether or not the addressee receives it.
<PAGE>
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SECTION 11.03. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or the
Notes. The Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is reasonably necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
<PAGE>
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(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 11.06. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Noteholders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. LEGAL HOLIDAYS.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 11.08. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS. Each of the parties hereto agrees to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Indenture.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of Garden State or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or incorporator, as such,
of the Company shall not have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in respect of or by
<PAGE>
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reason of such obligations or their creations. Each Noteholder by accepting a
Note waives and releases all such liability. Such waiver and release are part of
the consideration for the issuance of the Notes.
SECTION 11.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 11.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in
the Notes shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
<PAGE>
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
GARDEN STATE NEWSPAPERS, INC.
By:
Name: Joseph J. Lodovic, IV
Title: Executive Vice President
and Chief Financial
Officer
THE BANK OF NEW YORK,
as Trustee
By:
Name: Remo Reale
Title: Assistant Vice
President
<PAGE>
EXHIBIT A
[FORM OF SERIES A NOTE]
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN
INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
OF REGULATION D IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND
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<PAGE>
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
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<PAGE>
CUSIP No.
GARDEN STATE NEWSPAPERS, INC.
8-5/8% Senior Subordinated Note due 2011, Series A
No. $200,000,000
GARDEN STATE NEWSPAPERS, INC., a Delaware corporation (the
"Company"), for value received, promises to pay to CEDE & CO. or registered
assigns, the principal sum of TWO HUNDRED MILLION Dollars, on July 1, 2011.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
GARDEN STATE NEWSPAPERS, INC.
By:
Name:
Title:
By:
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 8-5/8% Senior Subordinated Notes due 2011, Series
A, referred to in the within-mentioned Indenture.
Dated: , 1999
THE BANK OF NEW YORK, as Trustee
By:
Authorized Signatory
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<PAGE>
(REVERSE OF NOTE)
8-5/8% Senior Subordinated Note due 2011, 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 January 1 and July 1 (each, an "Interest Payment Date") and at
stated maturity, commencing on July 1, 1999. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods).
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal, premium
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal, premium and interest by its check payable in such
U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. THE BANK OF NEW YORK (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or any of
its Subsidiaries may, subject to certain exceptions, act as Registrar or
co-Registrar.
4. INDENTURE. The Company issued the Notes under an Indenture, dated
as of March 16, 1999 (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 8-5/8% Senior Subordinated Notes due 2011, Series A (the "Initial
Notes"), limited (except as otherwise provided in the
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<PAGE>
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 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 July 1, 2004 at the following redemption prices (expressed as a percentage
of principal amount), if redeemed during the twelve-month period commencing on
July 1 of each year set forth below, plus, in each case, accrued interest
thereon to the date of redemption:
Year Percentage
---- ----------
2004......................... 104.312%
2005......................... 102.875%
2006......................... 101.438%
2007 and thereafter.......... 100.000%
(b) OPTIONAL REDEMPTION UPON EQUITY OFFERINGS. At any time, or from
time to time, on or prior to July 1, 2002, 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 108.625% of the aggregate
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<PAGE>
principal amount of Notes to be redeemed, plus accrued and unpaid interest, to
such redemption date; PROVIDED that at least $130.0 million in aggregate
principal amount of Notes remains outstanding immediately after any such
redemption.
As used in the preceding paragraph, "Equity Offering" means the
issuance and sale of Qualified Capital Stock of the Company.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Notes called for redemption shall have
been deposited with the Paying Agent for redemption on such Redemption Date,
then, unless the Company defaults in the payment of such Redemption Price, the
Notes called for redemption will cease to bear interest and only right of the
Holders of such Notes will be to receive the payment of the Redemption Price.
8. CHANGE OF CONTROL OFFER. In the event of a Change of Control,
upon the satisfaction of the conditions set forth in the Indenture, the Company
shall be required to offer to purchase all of the then outstanding Notes
pursuant to a Change of Control Offer at a purchase price equal to 101% of the
principal amount thereof plus accrued interest, if any, to the date of purchase.
Holders of Notes which are the subject of such an offer to repurchase shall
receive an offer to repurchase and may elect to have such Notes repurchased in
accordance with the provisions of the Indenture pursuant to and in accordance
with the terms of the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer or
exchange of any Notes during a period beginning 15 days before the mailing of a
redemption notice for any Notes or portions thereof selected for redemption.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
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<PAGE>
11. UNCLAIMED MONEY. If money for the payment of principal or
interest or premium, if any, remains unclaimed for one year, the Trustee and the
Paying Agent will pay the money back to the Company. After that, all liability
of the Trustee and such Paying Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of, premium and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of, premium and interest on the Notes).
13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Notes. Without consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes in addition
to or in place of certificated Notes, or comply with Article Five of the
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, pay dividends or make certain other
restricted payments, enter into transactions with Affiliates, create dividend or
other payment restrictions affecting Restricted Subsidiaries and merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
15. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. DEFAULTS AND REMEDIES. If an Event of Default
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<PAGE>
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee is not obligated to enforce the Indenture
or the Notes unless it has been offered indemnity or security reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines in good faith that withholding notice is in their
interest.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Restricted and Unrestricted
Subsidiaries or their respective Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
19. AUTHENTICATION. This Note shall not be valid until the Trustee
or authenticating agent manually signs the certificate of authentication on this
Note.
20. GOVERNING LAW. This Note shall be governed by, and construed in
accordance with, the laws of the State of New York but without giving effect to
applicable principles of conflicts of law to the extent that the application of
the law of another jurisdiction would be required thereby.
21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
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
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<PAGE>
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% Senior Subordinated Note
due 2011, 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.
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<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) March [ ], 2001 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
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the Securities Act; or
(3) |_| to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act, that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) |_| outside the United States to a "foreign purchaser" in compliance
with Rule 904 of Regulation S under the Securities Act; or
(5) |_| pursuant to the exemption from registration provided by Rule 144
under the Securities Act; or
(6) |_| pursuant to an effective registration statement under the
Securities Act; or
(7) |_| pursuant to another available exemption from the registration
statement requirements of the Securities Act;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act (an "Affiliate"):
? The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of any
person other than the registered Holder thereof; PROVIDED, HOWEVER, that if item
(3), (4), (5) or (7) is checked, the Company or the Trustee may require, prior
to registering any such transfer of the Note, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3) or (4) and other information as the Trustee or the Company have
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
If none of the foregoing items is checked, the Trustee or Registrar
shall not be obligated to register this Note in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
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Dated: ________________________ Signed:____________________________________
(Sign exactly as name
appears on the other side
of this Note)
Signature Guarantee:____________________________________________________________
Participants in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: ________________________ ____________________________________
NOTICE: To be executed by an
executive officer
Signature Guarantee:____________________________________________________________
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<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)
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<PAGE>
EXHIBIT B
CUSIP NO.
GARDEN STATE NEWSPAPERS, INC.
8-5/8% Senior Subordinated Note due 2011, Series B
No. $200,000,000
GARDEN STATE NEWSPAPERS, INC., a Delaware corporation (the
"Company"), for value received, promises to pay to or registered assigns, the
principal sum of TWO HUNDRED MILLION Dollars, on July 1, 2011.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
GARDEN STATE NEWSPAPERS, INC.
By:
Name:
Title:
By:
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 8-5/8% Senior Subordinated Notes due 2011, Series
B referred to in the within-mentioned Indenture.
Dated: , 1999
THE BANK OF NEW YORK, as Trustee
By:
Authorized Signatory
B-108
<PAGE>
(REVERSE OF NOTE)
8-5/8% Senior Subordinated Note due 2011, Series B
1. INTEREST. GARDEN STATE NEWSPAPERS, INC., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate per annum shown above. Interest on the Notes will accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from the date of original issuance of this Note. The Company will pay
interest semi-annually in arrears on each January 1 and July 1 (each, an
"Interest Payment Date") and at stated maturity, commencing on July 1, 1999.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods).
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are canceled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal, premium
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal, premium and interest by its check payable in such
U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, THE BANK OF NEW YORK (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders. The
Company or any of its Subsidiaries may, subject to certain exceptions, act as
Registrar or co-Registrar.
4. INDENTURE. The Company issued the Notes under an Indenture, dated
as of March 16, 1999 (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 8-5/8% Senior Subordinated Notes due 2011, Series B (the
B-109
<PAGE>
"Unrestricted Notes"), limited (except as otherwise provided in the Indenture)
in aggregate principal amount to $300,000,000, which may be issued under the
Indenture. The Notes include the 8-5/8% Senior Subordinated Notes due 2011,
Series A (the "Initial Notes"), the Private Exchange Notes (as defined in the
Indenture) and the Unrestricted Notes. The Initial Notes, the Private Exchange
Notes and the Unrestricted Notes are treated as a single class of securities
under the Indenture. Capitalized terms used herein shall have the meanings
assigned to them in the Indenture unless otherwise defined herein. The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and the TIA for a
statement of them. The Notes are general unsecured obligations of the Company.
5. SUBORDINATION. The Notes are subordinated in right of payment, in
the manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents of all Senior Debt of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. Each Holder by his acceptance hereof agrees to be bound
by such provisions and authorizes and expressly directs the Trustee, on his
behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
6. (a) OPTIONAL REDEMPTION. The Notes will be redeemable at the
Company's option, in whole at any time or in part from time to time, on and
after July 1, 2004 at the following redemption prices (expressed as a percentage
of principal amount), if redeemed during the twelve-month period commencing on
July 1 of each year set forth below, plus, in each case, accrued interest
thereon to the date of redemption:
Year Percentage
---- ----------
2004 104.312%
2005 102.875%
2006 101.438%
2007 and thereafter 100.000%
(b) OPTIONAL REDEMPTION UPON EQUITY OFFERINGS. At any time, or from
time to time, on or prior to July 1, 2002, 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
A-110
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Notes at a redemption price of 108.625% of the aggregate principal amount of
Notes to be redeemed, plus accrued and unpaid interest, to such redemption date;
PROVIDED that at least $130.0 million in aggregate principal amount of Notes
remains outstanding immediately after any such redemption.
As used in the preceding paragraph, "Equity Offering" means the
issuance and sale of Qualified Capital Stock of the Company.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date if monies for the redemption of the Notes called for redemption shall have
been deposited with the Paying Agent for redemption on such Redemption Date,
then, unless the Company defaults in the payment of such Redemption Price, the
Notes called for redemption will cease to bear interest and the only right of
the Holders of such Notes will be to receive payment of the Redemption Price.
8. CHANGE OF CONTROL OFFER. In the event of a Change of Control,
upon the satisfaction of the conditions set forth in the Indenture, the Company
shall be required to offer to purchase all of the then outstanding Notes
pursuant to a Change of Control Offer at a purchase price equal to 101% of the
principal amount thereof plus accrued interest, if any, to the date of purchase.
Holders of Notes which are the subject of such an offer to repurchase shall
receive an offer to repurchase and may elect to have such Notes repurchased in
accordance with the provisions of the Indenture pursuant to and in accordance
with the terms of the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Notes during a period beginning 15 days before the mailing of a
redemption notice for any Notes or portions thereof selected for redemption.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
B-111
<PAGE>
11. UNCLAIMED MONEY. If money for the payment of principal or
interest or premium, if any, remains unclaimed for one year, the Trustee and the
Paying Agent will pay the money back to the Company. After that, all liability
of the Trustee and such Paying Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of, premium and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of, premium and interest on the Notes).
13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Notes. Without consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes in addition
to or in place of certificated Notes, or comply with Article Five of the
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and its 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
B-112
<PAGE>
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee is not obligated to enforce the Indenture
or the Notes unless it has been offered indemnity or Security reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines in good faith that withholding notice is in their
interest.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under this Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Restricted and Unrestricted
Subsidiaries or their respective Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
19. AUTHENTICATION. This Note shall not be valid until the Trustee
or authenticating agent manually signs the certificate of authentication on this
Note.
20. GOVERNING LAW. This note shall be governed by, and construed in
accordance with, the laws of the State of New York but without giving effect to
applicable principles of conflicts of law to the extent that the application of
the law of another jurisdiction would be required thereby.
21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed
B-113
<PAGE>
on the Notes as a convenience to the Holders of the Notes. No representation is
made as to the accuracy of such numbers as printed on the Notes and reliance may
be placed only on the other identification numbers printed hereon.
23. INDENTURE. Each Holder, by accepting a Note, agrees to be bound
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time. Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture. Requests may be made to:
GARDEN STATE NEWSPAPERS, INC., 1560 Broadway, Suite 1450, Denver, Colorado
80202, Attention: Chief Financial Officer.
B-114
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
- --------------------------------
- --------------------------------------------------------------------------------
(please print or type name and address)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
- --------------------------------------------------------------------------------
attorney to transfer the Note on the books of the Company with full power of
substitution in the premises.
Dated:
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed by the endorser's
bank or broker.
Signature Guarantee:____________________________________________________________
Participants in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
B-115
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.16 [ ] Section 4.17 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state the
amount: $_____________
Date: Your Signature:
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:____________________________________________________________
Participants in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
B-116
<PAGE>
EXHIBIT C
FORM OF LEGEND FOR GLOBAL NOTE
Any Global Note authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Note) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
A-117
<PAGE>
EXHIBIT D
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[ ], [ ]
THE BANK OF NEW YORK
101 Barclay Street, Floor 21W
New York, NY 10286
Ladies and Gentlemen:
In connection with our proposed purchase of 8-5/8% Senior
Subordinated Notes due 2011 (the "Notes") of GARDEN STATE NEWSPAPERS, INC. (the
"Company"), we confirm that:
1. We have received a copy of the Offering Circular (the "Offering
Circular"), dated March 10, 1999, relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated on pages (i)-(ii)
of the Offering Circular and in the section entitled "Notice to Investors" of
the Offering Circular, including the restrictions on duplication and circulation
of the Offering Circular.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Notes (as described in the Offering Circular) and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and conditions
and the Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell any Notes prior to the date that is two years after the
original issuance of the Notes, we will do so only (i) to the Company or any of
its Subsidiaries, (ii) inside the United States in accordance with Rule 144A
under the Securities Act to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act), (iii) inside the United States to an
institutional "accredited investor" (as defined
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<PAGE>
below) that, prior to such transfer, furnishes (or has furnished on its behalf
by a U.S. broker-dealer) to the Trustee (as defined in the Indenture relating to
the Notes), a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Notes (the form of which letter
can be obtained from the Trustee), (iv) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (v) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available), or (vi) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing any of
the Notes from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare plan (as defined in Section 3 of
the Employee Retirement Income Security Act of 1974 ("ERISA")), except as
permitted in accordance with ERISA.
5. We understand that, on any proposed resale of any Notes, we will
be required to furnish to the Trustee and the Company such certification, legal
opinions and other information as the Trustee and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
D-119
<PAGE>
You, the Company, the Trustee and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:_________________________________
Name:
Title:
D-120
<PAGE>
EXHIBIT E
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[ ], [ ]
THE BANK OF NEW YORK
101 Barclay Street, Floor 21W
New York, NY 10286
Re: GARDEN STATE NEWSPAPERS, INC. (the "Company")
8-5/8% Senior Subordinated
Notes due 2011 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $[ ] aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
A-121
<PAGE>
You, the Company and counsel for the Company are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
Authorized Signature
E-122
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of March 16, 1999
among
GARDEN STATE NEWSPAPERS, INC.
as Issuer
and
GOLDMAN, SACHS & CO.
BNY CAPITAL MARKETS, INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
FIRST UNION CAPITAL MARKETS CORP.
as Initial Purchasers
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$200,000,000
8-5/8% SENIOR SUBORDINATED NOTES DUE 2011
<PAGE>
TABLE OF CONTENTS
Page
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Exchange Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
3. Shelf Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
4. Additional Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5. Registration Procedures . . . . . . . . . . . . . . . . . . . . . . . . . 12
6. Registration Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8. Rule 144 and 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9. Underwritten Registrations. . . . . . . . . . . . . . . . . . . . . . . . 27
10. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(a) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . 28
(b) Adjustments Affecting Registrable Notes. . . . . . . . . . . . . . 28
(c) Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . 28
(d) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(e) Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 30
(f) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(g) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(h) Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(i) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(j) Securities Held by the Company or Its Affiliates . . . . . . . . . 31
(k) Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . 31
(l) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 31
-i-
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT"), dated as of
March 16, 1999 by and among Garden State Newspapers, Inc., a Delaware
corporation (the "COMPANY"), and Goldman, Sachs & Co., BNY Capital Markets,
Inc., NationsBanc Montgomery Securities LLC and First Union Capital Markets
Corp. (collectively, the "INITIAL PURCHASERS").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of March 10, 1999, by and among the Company and the Initial
Purchasers (the "PURCHASE AGREEMENT"), which provides for the sale by the
Company to the Initial Purchasers of $200,000,000 aggregate principal amount of
the Company's 8-5/8% Senior Subordinated Notes due 2011 (the "NOTES"). In order
to induce the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement for the benefit of the Initial Purchasers and their direct and
indirect transferees and assigns. The execution and delivery of this Agreement
is a condition to the Initial Purchasers' obligation to purchase the Notes under
the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
ADDITIONAL INTEREST: See Section 4(a) hereof.
ADVICE: See the last paragraph of Section 5 hereof.
AGREEMENT: See the first introductory paragraph hereto.
APPLICABLE PERIOD: See Section 2(b) hereof.
CLOSING DATE: The Closing Date as defined in the Purchase Agreement.
COMPANY: See the first introductory paragraph hereto.
EFFECTIVENESS DATE: The date that is 120 days after the Issue Date.
<PAGE>
-2-
EFFECTIVENESS PERIOD: See Section 3(a) hereof.
EVENT DATE: See Section 4(b) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
EXCHANGE NOTES: See Section 2(a) hereof.
EXCHANGE OFFER: See Section 2(a) hereof.
EXCHANGE OFFER REGISTRATION STATEMENT: See Section 2(a) hereof.
FILING DATE: Within 75 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 March 16, 1999 between the
Company and The Bank of New York, as trustee, pursuant to which the Notes are
being issued, as amended or supplemented from time to time in accordance with
the terms thereof.
INITIAL PURCHASERS: See the first introductory paragraph hereto.
INSPECTORS: See Section 5(o) hereof.
ISSUE DATE: The date on which the original Notes were sold to the
Initial Purchasers pursuant to the Purchase Agreement.
NASD: See Section 5(t) hereof.
NOTES: See the second introductory paragraph hereto.
PARTICIPANT: See Section 7(a) hereof.
PARTICIPATING BROKER-DEALER: See Section 2(b) hereof.
<PAGE>
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PERSON: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
PRIVATE EXCHANGE: See Section 2(b) hereof.
PRIVATE EXCHANGE NOTES: See Section 2(b) hereof.
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, with respect to the terms of the offering of any portion of the
Registrable Notes covered by such Registration Statement including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
PURCHASE AGREEMENT: See the second 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, each Exchange Note as to which Section 2(c)(v)
hereof is applicable upon original issuance and at all times subsequent thereto
and each Private Exchange Note upon original issuance thereof and at all times
subsequent thereto, until in the case of any such Note, Exchange Note or Private
Exchange Note, as the case may be, the earliest to occur of the following: (i) a
Registration Statement (other than, with respect to any Exchange Note as to
which Section 2(c)(v) hereof is applicable, the Exchange Offer Registration
Statement) covering such Note, Exchange Note or Private Exchange Note, as the
case may be, has been declared effective by the SEC and such Note, Exchange Note
or Private Exchange Note, as the case may be, has been disposed of in accordance
with such effective Registration Statement, (ii) such Note, Exchange Note or
Private Exchange Note, as the case may be, is sold in compliance with Rule 144,
(iii) such Note has been exchanged for an Exchange Note or Exchange Notes
pursuant to an Exchange Offer and is entitled to be resold without complying
with the prospectus delivery requirements of the Securities Act or (iv) such
Note, Exchange Note or Private Exchange Note, as
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the case may be, 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.
RULE 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
SHELF NOTICE: See Section 2(c) hereof.
SHELF REGISTRATION: See Section 3(a) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
TRUSTEE: The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Notes and Private Exchange
Notes (if any).
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UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
2. EXCHANGE OFFER
(a) The Company shall file with the SEC no later than the Filing Date
a registration statement relating to an offer to exchange (the "EXCHANGE OFFER")
any and all of the Registrable Notes (other than the Private Exchange Notes, if
any) for a like aggregate principal amount of debt securities of the Company
that are identical in all material respects to the Notes (the "EXCHANGE NOTES")
(and that are entitled to the benefits of the Indenture or a trust indenture
that is identical in all material respects to the Indenture (other than such
changes to the Indenture or any such identical trust indenture as are necessary
to comply with any requirements of the SEC) and that, in either case, has been
qualified under the TIA), except that the Exchange Notes (other than Private
Exchange Notes, if any) shall have been registered pursuant to an effective
Registration Statement under the Securities Act and shall contain no restrictive
legend thereon. The Exchange Offer shall be registered under the Securities Act
on the appropriate form (the "EXCHANGE OFFER REGISTRATION STATEMENT") and shall
comply with all applicable tender offer rules and regulations under the Exchange
Act. The Company agrees to use its reasonable best efforts to (x) cause the
Exchange Offer Registration Statement to be declared effective under the
Securities Act on or before the Effectiveness Date; (y) keep the Exchange Offer
open for at least 30 business days (or longer if required by applicable law)
after the date that notice of the Exchange Offer is mailed to Holders; and
(z) consummate the Exchange Offer on or prior to the 45th day following the
Effectiveness Date. If after such Exchange Offer Registration Statement is
declared effective by the SEC, the Exchange Offer or the issuance of the
Exchange Notes thereunder is interfered with by any stop order, injunction or
other order or requirement of the SEC or any other governmental agency or court,
such Exchange Offer Registration Statement shall be deemed not to have become
effective for purposes of this Agreement. Each Holder who participates in the
Exchange Offer will be required to represent (i) that any Exchange Notes
received by it will be acquired in the ordinary course of its business, (ii)
that such Holder has and will have no arrangement or understanding with any
Person to participate in the distribution (within the meaning of the Securities
Act) of the Exchange Notes in violation of the Securities Act, (iii) that such
Holder is not an "affiliate" (as defined in Rule 405 promulgated under the
Securities Act) of the Com-
<PAGE>
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pany, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and
does not intend to engage in, the distribution of Exchange Notes, (v) if such
Holder is a broker-dealer (a "PARTICIPATING BROKER-DEALER"), that will receive
Exchange Notes for its own account in exchange for Notes that were acquired as a
result of market-making or other trading activities, that it will deliver a
prospectus in connection with any resale of such Exchange Notes and (vi) that
the Holder is not acting on behalf of any persons or entities who could not
truthfully make the foregoing representations. Upon consummation of the
Exchange Offer in accordance with this Section 2, the provisions of this
Agreement shall continue to apply, MUTATIS MUTANDIS, solely with respect to
Registrable Notes that are Private Exchange Notes and Exchange Notes held by
Participating Broker-Dealers (as defined below), and the Company shall have no
further obligation to register Registrable Notes (other than Private Exchange
Notes and other than in respect of any Exchange Notes as to which clause
2(c)(iv) hereof applies) pursuant to Section 3 hereof. No securities other than
the Exchange Notes shall be included in the Exchange Offer Registration
Statement.
(b) The Company shall include within the Prospectus contained in the
Exchange Offer Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchasers, that shall contain a summary
statement of the positions taken or policies made by the Staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Notes received by such broker-dealer in the Exchange Offer (a "PARTICIPATING
BROKER-DEALER"), whether such positions or policies have been publicly
disseminated by the Staff of the SEC or such positions or policies, in the
judgment of the Initial Purchasers, represent the prevailing views of the Staff
of the SEC. Such "Plan of Distribution" section shall also expressly permit the
use of the Prospectus by all Persons subject to the prospectus delivery
requirements of the Securities Act, including all Participating Broker-Dealers,
and include a statement describing the means by which Participating
Broker-Dealers may resell the Exchange Notes.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the Prospectus
contained therein, in order to permit such Prospectus to be lawfully delivered
by all Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as is necessary to comply with
<PAGE>
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applicable law in connection with any resale of the Exchange Notes; PROVIDED,
HOWEVER, that such period shall not exceed 180 days after the consummation of
the Exchange Offer (or such longer period if extended pursuant to the last
paragraph of Section 5 hereof) (the "APPLICABLE PERIOD").
If, prior to consummation of the Exchange Offer, any Initial Purchaser
holds any Notes acquired by it and having, or that are reasonably likely to be
determined to have, the status of an unsold allotment in the initial
distribution, the Company, upon the written request of such Initial Purchaser
simultaneously with the delivery of the Exchange Notes in the Exchange Offer,
shall issue and deliver to the Initial Purchaser in exchange (the "PRIVATE
EXCHANGE") for such Notes held by the Initial Purchaser a like principal amount
of debt securities of the Company that are identical in all material respects to
the Exchange Notes (the "PRIVATE EXCHANGE NOTES") (and that are issued pursuant
to the same indenture as the Exchange Notes), except for the placement of a
restrictive legend on such Private Exchange Notes. The Private Exchange Notes
shall bear the same CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue (A) from the later of (i) the last interest payment date on which
interest was paid on the Note surrendered in exchange therefor or (ii) if the
Note is surrendered for exchange on a date in a period which includes the record
date for an interest payment date to occur on or after the date of such exchange
and as to which interest will be paid, the date of such interest payment date or
(B) if no interest has been paid on such Note, from the Issue Date.
In connection with the Exchange Offer, the Company shall:
(1) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(2) utilize the services of a depository for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(3) permit Holders to withdraw 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
<PAGE>
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(4) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Company shall:
(1) accept for exchange all Notes properly tendered and not validly
withdrawn pursuant to the Exchange Offer or the Private Exchange;
(2) deliver to the Trustee for cancellation all Notes so accepted for
exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes or Private Exchange Notes, as the case may
be, equal in outstanding principal amount to the Notes of such Holder so
accepted for exchange.
The Exchange Notes and the Private Exchange Notes may be issued under
(i) the Indenture or (ii) an indenture identical in all material respects to the
Indenture, which in either event shall provide that (1) the Exchange Notes shall
not be subject to the transfer restrictions set forth in the Indenture and
(2) the Private Exchange Notes shall be subject to the transfer restrictions set
forth in the Indenture. The Indenture or such indenture shall provide that the
Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent
together on all matters as one class and that neither the Exchange Notes, the
Private Exchange Notes 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) any holder of Private Exchange Notes so requests at any
time after the consummation of the Private Exchange or (iv) in the case of any
Holder that participates in the Exchange Offer, such Holder does not receive
Exchange Notes on the date of the exchange that may be sold without restriction
under state and federal securities laws (other than due solely to the status of
such Holder as an affiliate of the Company within the meaning of the Securities
Act), then in each case the Company shall promptly deliver written notice
thereof (the "SHELF NOTICE") to the Trustee and in the case of clauses (i),
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(ii) and (iv), all Holders, in the case of clause (iii), the Holders of the
Private Exchange Notes and in the case of clause (iv), the affected Holder, and
shall file a Shelf Registration pursuant to Section 3 hereof.
3. SHELF REGISTRATION
If a Shelf Notice is delivered as contemplated by Section 2(c) hereof,
then:
(a) SHELF REGISTRATION. The Company shall as promptly as practicable
file with the SEC a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Registrable Notes (the
"SHELF REGISTRATION"). If the Company shall not have yet filed an Exchange
Offer Registration Statement, the Company shall use its best efforts to file
with the SEC the Shelf Registration on or prior to the Filing Date. The Shelf
Registration shall be on Form S-1 or another appropriate form permitting
registration of such Registrable Notes for resale by Holders in the manner or
manners designated by them (including, without limitation, one or more
underwritten offerings). The Company shall not permit any securities other than
the Registrable Notes to be included in the Shelf Registration.
The Company shall use its reasonable best efforts to cause the Shelf
Registration to be declared effective under the Securities Act on or prior to
the Effectiveness Date and to keep the Shelf Registration continuously effective
under the Securities Act until the date that is two years from the Issue Date,
subject to extension pursuant to the last paragraph of Section 5 hereof (the
"EFFECTIVENESS PERIOD"), or such shorter period ending when all Registrable
Notes covered by the Shelf Registration have been sold in the manner set forth
and as contemplated in the Shelf Registration.
(b) WITHDRAWAL OF STOP ORDERS. If the Shelf Registration ceases to
be effective for any reason at any time during the Effectiveness Period (other
than because of the sale of all of the securities registered thereunder), the
Company shall use its best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof.
(c) SUPPLEMENTS AND AMENDMENTS. The Company shall promptly
supplement and amend the Shelf Registration if required by the SEC, the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration or the Securities Act, or if reasonably requested by the
<PAGE>
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Holders of a majority in aggregate principal amount of the Registrable Notes
covered by such Registration Statement or by any underwriter of such Registrable
Notes.
4. ADDITIONAL INTEREST
(a) The Company and the Initial Purchasers agree that the Holders of
Registrable Notes will suffer damages if the Company fails to fulfill its
obligation under Section 2 or Section 3 hereof and that it would not be feasible
to ascertain the extent of such damages with precision. Accordingly, the
Company agrees to pay, as liquidated damages, additional interest on the Notes
("ADDITIONAL INTEREST") under the circumstances and to the extent set forth
below (without duplication):
(i) if (A) neither the Exchange Offer Registration Statement nor the
Shelf Registration Statement is filed with the SEC on or prior to the
applicable filing date or (B) notwithstanding that the Company has
consummated or will consummate an Exchange Offer, the Company is required
to file a Shelf Registration Statement and such Shelf Registration
Statement is not filed on or prior to the date required by this Agreement,
then commencing on the day after either such required filing date,
Additional Interest shall accrue on the principal amount of the Notes at a
rate of 0.25% per annum for the first 90 days immediately following each
such filing date, such Additional Interest rate increasing by an additional
0.25% per annum at the beginning of each subsequent 90-day period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is declared effective by the SEC on or prior
to 120 days after the applicable filing date or (B) notwithstanding that
the Company has consummated or will consummate an Exchange Offer, the
Company is required to file a Shelf Registration Statement and such Shelf
Registration Statement is not declared effective by the SEC on or prior to
the 150th day following the date such Shelf Registration Statement was
filed, then, commencing on the day after the 150th day following the
applicable filing date, Additional Interest shall accrue on the principal
amount of the Notes at a rate of 0.25% per annum for the first 90 days
immediately following such date, such Additional Interest rate increasing
by an additional 0.25% per annum at the beginning of each subsequent 90-day
period; or
<PAGE>
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(iii) if (A) the Company has not exchanged Exchange Notes for all Notes
validly tendered in accordance with the terms of the Exchange Offer on or
prior to the 45th day after the date on which the Exchange Offer
Registration Statement was first declared effective or (B) if applicable,
the Shelf Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the
second anniversary of the Issue Date (other than after such time as all
Notes have been disposed of thereunder), then Additional Interest shall
accrue on the principal amount of the Notes at a rate of 0.25% per annum
for the first 90 days commencing on (x) the 46th day after such effective
date, in the case of (A) above, or (y) the day such Shelf Registration
Statement ceases to be effective, in the case of (B) above, such Additional
Interest rate increasing by an additional 0.25% per annum at the beginning
of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Notes may not exceed
in the aggregate 1.0% per annum; and provided, further, that (1) upon the filing
of the Exchange Offer Registration Statement or a Shelf Registration Statement
(in the case of clause (i) above), (2) upon the effectiveness of the Exchange
Offer Registration Statement or the Shelf Registration Statement (in the case of
clause (ii) above), (3) upon the exchange of Exchange Notes for all Notes
tendered (in the case of clause (iii)(A) above), or (4) upon the effectiveness
of the Shelf Registration Statement which had ceased to remain effective (in the
case of clause (iii)(B) above), Additional Interest on the Notes as a result of
such clause (or the related subclause thereof, as the case may be), shall cease
to accrue.
(b) The Company shall notify the Trustee within one business day
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "EVENT DATE"). Any amounts of
Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this
Section 4 will be payable in cash semi-annually on each January 1 and July 1 (to
the holders of record at the close of business on December 15 or June 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
<PAGE>
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such period (determined on the basis of a 360-day year comprised of twelve
30-day months and, in the case of a partial month, the actual number of days
elapsed) and the denominator of which is 360.
5. REGISTRATION PROCEDURES
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Company shall effect such registration(s) to
permit the sale of the securities covered thereby in accordance with the
intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by the Company hereunder the
Company shall:
(a) Prepare and file with the SEC prior to the applicable filing date
a Registration Statement or Registration Statements as prescribed by Sections 2
or 3 hereof, and use its best efforts to cause each such Registration Statement
to become effective and remain effective as provided herein; PROVIDED, HOWEVER,
that, if (1) such filing is pursuant to Section 3 hereof or (2) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Company shall furnish to and afford the
Holders of the Registrable Notes covered by such Registration Statement or each
such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, a reasonable opportunity to review copies of all
such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed (in each case
at least five business days prior to such filing). The Company shall not file
any Registration Statement or Prospectus or any amendments or supplements
thereto if the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement, or any such
Participating Broker-Dealer, as the case may be, or their counsel, or the
managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Offer Registration Statement,
as the case may be, as may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period or the Applicable Period, as
the case may be; cause the related Prospectus to be
<PAGE>
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supplemented by any prospectus supplement required by applicable law, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions then in
force) under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus; the Company shall be deemed not to have used its
best efforts to keep a Registration Statement effective during the Applicable
Period if it voluntarily takes any action that would cause selling Holders of
the Registrable Notes covered thereby or Participating Broker-Dealers seeking to
sell Exchange Notes not to be able to sell such Registrable Notes or such
Exchange Notes during that period unless such action is required by applicable
law or unless the Company complies with this Agreement, including without
limitation, the provisions of paragraphs 5(k) and 5(u) hereof.
(c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, notify the selling Holders of Registrable Notes, or each
such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, promptly (but in any event within two business
days) and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole expense
of the Company, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Registrable Notes or resales of
Exchange Notes by Participating Broker-Dealers the representations and
warranties of the Company contained in any agreement (including any underwriting
agreement), contemplated
<PAGE>
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by Section 5(n) hereof cease to be true and correct, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of a Registration Statement or any of the
Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or the initiation or
written threat of any proceeding for such purpose, (v) of the happening of any
event, the existence of any condition or any information becoming known that
makes any statement made in such Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respects or that requires the making of any changes in or
amendments or supplements to such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading and (vi) of the
Company's determination that a post-effective amendment to a Registration
Statement would be appropriate.
(d) Use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Notes or the
Exchange Notes for sale in any jurisdiction and, if any such order is issued,
use its best efforts to obtain the withdrawal of any such order at the earliest
possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter or underwriters (if any) or the Holders of
a majority in aggregate principal amount of the Registrable Notes being sold in
connection with an underwritten offering, (i) promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or underwriters (if any), such Holders, or counsel for any
of them determine is reasonably necessary to be included therein, (ii) make all
required filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in such prospec-
<PAGE>
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tus supplement or post-effective amendment and (iii) supplement or make
amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, furnish to each selling Holder of Registrable Notes and
to each such Participating Broker-Dealer who so requests and to counsel and each
managing underwriter, if any, at the sole expense of the Company, one conformed
copy of the Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial statements and schedules
and, if requested, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, deliver to each selling Holder of Registrable Notes, or
each such Participating Broker-Dealer, as the case may be, their respective
counsel and the underwriters, if any, at the sole expense of the Company, as
many copies of the Prospectus or Prospectuses (including each form of
preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto (provided the manner of such use complies with all applicable federal
securities laws, the rules and regulations of the SEC and applicable state
securities "Blue Sky" laws) by each of the selling Holders of Registrable Notes
or each such Participating Broker-Dealer, as the case may be, and the
underwriters or agents, if any, and dealers (if any), in connection with the
offering and sale of the Registrable Notes covered by, or the sale by
Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus
and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or Exchange
Notes or any delivery of a Prospectus contained in the Exchange Offer
Registration Statement by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, use its best efforts to register or
<PAGE>
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qualify such Registrable Notes (and to cooperate with the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case may be,
the managing underwriter or underwriters, if any, and their respective counsel
in connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Notes) for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer or the managing
underwriter or underwriters reasonably request in writing; PROVIDED, HOWEVER,
that where Exchange Notes held by Participating Broker-Dealers or Registrable
Notes are offered other than through an underwritten offering, the Company
agrees to cause the Company's counsel to perform Blue Sky investigations and
file registrations and qualifications required to be filed pursuant to this
Section 5(h); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of the
Exchange Notes held by Participating Broker-Dealers or the Registrable Notes
covered by the applicable Registration Statement; PROVIDED, HOWEVER, that the
Company shall not be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and registered in such names as is
in accordance with the Indenture and as the managing underwriter or
underwriters, if any, or Holders may reasonably request.
(j) Use its best efforts to cause the Registrable Notes covered by
the Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the Holders
thereof or the underwriter or underwriters, if any, to consummate the
disposition of such Registrable Notes, except as may be re-
<PAGE>
-17-
quired solely as a consequence of the nature of such selling Holder's business,
in which case the Company will cooperate in all reasonable respects with the
filing of such Registration Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and
(subject to Section 5(a) hereof) file with the SEC, at the Company's sole
expense, a supplement or post-effective amendment to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, or file with the SEC any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Notes being sold thereunder or to the purchasers of the Exchange Notes to whom
such Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(l) Use its best efforts to cause the Registrable Notes covered by a
Registration Statement or the Exchange Notes, as the case may be, to be rated
with the appropriate rating agencies, if so requested by the Holders of a
majority in aggregate principal amount of Registrable Notes covered by such
Registration Statement or the Exchange Notes, as the case may be, or the
managing underwriter or underwriters, if any.
(m) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with certificates for
the Registrable Notes or Exchange Notes, as the case may be, in a form eligible
for deposit with The Depository Trust Company and (ii) provide a CUSIP number
for the Registrable Notes or Exchange Notes, as the case may be.
(n) In connection with any underwritten offering of Registrable Notes
pursuant to a Shelf Registration, enter into an underwriting agreement as is
customary in underwritten offerings of debt securities similar to the Notes and
take all such other actions as are reasonably requested by the managing
<PAGE>
-18-
underwriter or underwriters in order to expedite or facilitate the registration
or the disposition of such Registrable Notes and, in such connection, (i) make
such representations and warranties to, and covenants with, the underwriters
with respect to the business of the Company and its subsidiaries (including any
acquired business, properties or entity, if applicable) and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily made by
issuers to underwriters in underwritten offerings of debt securities similar to
the Notes, and confirm the same in writing if and when requested; (ii) obtain
the written opinion of counsel to the Company and written updates thereof in
form, scope and substance reasonably satisfactory to the managing underwriter or
underwriters, addressed to the underwriters covering the matters customarily
covered in opinions requested in underwritten offerings of debt similar to the
Notes and such other matters as may be reasonably requested by the managing
underwriter or underwriters; (iii) obtain "cold comfort" letters and updates
thereof in form, scope and substance reasonably satisfactory to the managing
underwriter or underwriters from the independent certified public accountants of
the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included or incorporated by reference in the Registration Statement),
addressed to each of the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings of debt securities similar to the Notes
and such other matters as reasonably requested by the managing underwriter or
underwriters; and (iv) if an underwriting agreement is entered into, the same
shall contain indemnification provisions and procedures no less favorable than
those set forth in Section 7 hereof (or such other provisions and procedures
acceptable to Holders of a majority in aggregate principal amount of Registrable
Notes covered by such Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be indemnified pursuant
to said Section and no more onerous to the indemnifying parties than those set
forth in Section 7. The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to Section 3 hereof
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any
<PAGE>
-19-
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, make available for inspection by any selling Holder of such
Registrable Notes being sold, or each such Participating Broker-Dealer, as the
case may be, any underwriter participating in any such disposition of
Registrable Notes, if any, and any attorney, accountant or other agent retained
by any such selling Holder or each such Participating Broker-Dealer, as the case
may be, or underwriter (collectively, the "INSPECTORS"), at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and instruments of the Company and its
subsidiaries (collectively, the "RECORDS") as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities, and cause
the officers, directors and employees of the Company and its subsidiaries to
supply all information reasonably requested by any such Inspector in connection
with such Registration Statement. Records that the Company determines, in good
faith, to be confidential and any Records that it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i) the disclosure
of such Records (or the portion thereof, if only a portion is appropriate to
disclose (to the extent partial disclosure gives an accurate picture)) is
necessary to avoid or correct a misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, (iii) disclosure of such
information is, in the opinion of counsel for any Inspector, necessary or
advisable in connection with any action, claim, suit or proceeding, directly or
indirectly, involving or potentially involving such Inspector and arising out
of, based upon, relating to or involving this Agreement, or any transactions
contemplated hereby or arising hereunder or (iv) the information in such Records
has been made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company unless and
until such information is generally available to the public. Each selling
Holder of such Registrable Notes and each such Participating Broker-Dealer will
be required to further agree that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company to undertake appropriate action to prevent
disclosure of the Records deemed confidential at the Company's sole expense.
<PAGE>
-20-
(p) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the Exchange Offer
or the first Registration Statement relating to the Registrable Notes; and in
connection therewith, cooperate with the trustee under any such indenture and
the Holders of the Registrable Notes, to effect such changes to such indenture
as may be required for such indenture to be so qualified in accordance with the
terms of the TIA; and execute, and use its best efforts to cause such trustee to
execute, all documents as may be required to effect such changes and all other
forms and documents required to be filed with the SEC to enable such indenture
to be so qualified in a timely manner.
(q) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Notes are sold to underwriters in a firm commitment
or best efforts underwritten offering and (ii) if not sold to underwriters in
such an offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of a Registration Statement, which statements
shall cover said 12-month periods.
(r) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company, in a form customary for
underwritten transactions, addressed to the Trustee for the benefit of all
Holders of Registrable Notes participating in the Exchange Offer or the Private
Exchange, as the case may be, that the Exchange Notes or Private Exchange Notes,
as the case may be, and the related indenture constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to customary exceptions and
qualifications.
(s) If an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by Holders to the Company (or to such
other Person as directed by the Company) in exchange for the Exchange Notes or
the Private Exchange Notes, as the case may be, the Company shall mark, or cause
to be marked, on such Registrable Notes that such Regis-
<PAGE>
-21-
trable Notes are being canceled in exchange for the Exchange Notes or the
Private Exchange Notes, as the case may be; in no event shall such Registrable
Notes be marked as paid or otherwise satisfied.
(t) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(u) Use its best efforts to take all other steps necessary or
advisable to effect the registration of the Registrable Notes covered by a
Registration Statement contemplated hereby.
The Company may require each seller of Registrable Notes as to which
any registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such Registrable Notes as the
Company may, from time to time, reasonably request. The Company may exclude
from such registration the Registrable Notes of any seller who unreasonably
fails to furnish such information within a reasonable time after receiving such
request and in such event shall have no further obligation under this Agreement
with respect to such seller or any subsequent holder of such Registrable Notes.
Each seller as to which any Shelf Registration is being effected agrees to
furnish promptly to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such seller
not materially misleading.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by
such Participating Broker-Dealer, as the case may be, that, upon actual receipt
of any notice from the Company of the happening of any event of the kind
described in Sections 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such
Holder will forthwith discontinue disposition of such Registrable Notes covered
by such Registration Statement or Prospectus or Exchange Notes to be sold by
such Holder or Participating Broker-Dealer, as the case may be, until such
Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus 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
<PAGE>
-22-
amendments or supplements thereto. In the event that the Company shall give any
such notice, each of the Effectiveness Period and the Applicable Period shall be
extended by the number of days during such periods from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Notes covered by such Registration Statement or Exchange Notes to be
sold by such Participating Broker-Dealer, as the case may be, shall have
received (x) the copies of the supplemented or amended Prospectus contemplated
by Section 5(k) hereof or (y) the Advice.
6. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not the Exchange Offer or a Shelf Registration is filed or becomes
effective, including, without limitation, (i) all registration and filing fees
(including, without limitation, (A) fees with respect to filings required to be
made with the NASD in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of counsel in connection
with Blue Sky qualifications of the Registrable Notes or Exchange Notes and
determination of the eligibility of the Registrable Notes or Exchange Notes for
investment under the laws of such jurisdictions (x) where the holders of
Registrable Notes are located, in the case of the Exchange Notes, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange
Notes to be sold by a Participating Broker-Dealer during the Applicable
Period)), (ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Notes or Exchange Notes in a form eligible
for deposit with The Depository Trust Company and of printing prospectuses if
the printing of prospectuses is requested by the managing underwriter or
underwriters, if any, by the Holders of a majority in aggregate principal amount
of the Registrable Notes included in any Registration Statement or sold by any
Participating Broker-Dealer, as the case may be, (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company and
reasonable fees and disbursements of special counsel for the sellers of
Registrable Notes (subject to the provisions of Section 6(b) hereof),
(v) reasonable fees and disbursements of all independent certified public
accountants 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,
<PAGE>
-23-
and any fees associated with making the Registrable Notes or Exchange Notes
eligible for trading through The Depository Trust Company, (vii) Securities Act
liability insurance, if the Company desires such insurance, (viii) fees and
expenses of all other Persons retained by the Company, (ix) internal expenses of
the Company (including, without limitation, all salaries and expenses of
officers and employees of the Company performing legal or accounting duties),
(x) the expense of any annual audit, (xi) the fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange, if applicable, and (xii) the expenses relating to printing, word
processing and distributing all Registration Statements, underwriting
agreements, securities sales agreements, indentures and any other documents
necessary to comply with this Agreement.
(b) The Company shall (i) reimburse the Holders of the Registrable
Notes being registered in a Shelf Registration for the reasonable fees and
disbursements of not more than one counsel (in addition to appropriate local
counsel) chosen by the Holders of a majority in aggregate principal amount of
the Registrable Notes to be included in such Registration Statement and
(ii) reimburse out-of-pocket expenses (other than legal expenses and other than
sales commissions or similar costs) of Holders of Registrable Notes incurred in
connection with the registration and sale of the Registrable Notes pursuant to a
Shelf Registration or in connection with the exchange of Registrable Notes
pursuant to the Exchange Offer. In addition, the Company shall reimburse the
Initial Purchasers for the reasonable fees and expenses of one counsel in
connection with the Exchange Offer, which shall be Cahill Gordon & Reindel, and
shall not be required to pay any other legal expenses in connection therewith.
7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder of
Registrable Notes offered pursuant to a Shelf Registration Statement and each
Participating Broker-Dealer selling Exchange Notes during the Applicable Period,
the directors, officers, agents, and employees of each such Person or its
affiliates, and each other Person, if any, who controls any such Person or its
affiliates within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, a "PARTICIPANT"), from and against any and
all losses, claims, damages and liabilities (including, without limitation, the
reasonable legal fees and other expenses actually incurred in connection with
any suit, action or proceeding
<PAGE>
-24-
or any claim asserted) caused by, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement pursuant to which the offering of such Registrable Notes
or Exchange Notes, as the case may be, is registered (or any amendment thereto)
or related Prospectus (or any amendments or supplements thereto) or any related
preliminary prospectus, or caused by, arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that the Company will not be required to indemnify a Participant if 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.
(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 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 in-
<PAGE>
-25-
curred by such counsel related to such proceeding; PROVIDED, HOWEVER, that the
failure to so notify the Indemnifying Person shall not relieve the Indemnifying
Person of any obligation or liability that it may have hereunder or otherwise
(unless and only to the extent that such failure directly results in the loss or
compromise of any material rights or defenses by the Indemnifying Person and the
Indemnifying Person was not otherwise aware of such action or claim). In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Person shall have failed within a reasonable period of time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that, unless there
exists a conflict among Indemnified Persons, the Indemnifying Person shall not,
in connection with any one such proceeding or separate but substantially similar
related proceeding in the same jurisdiction arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed promptly as they are incurred. Any
such separate firm for the Participants and such control Persons of Participants
shall be designated in writing by Participants who sold a majority in interest
of Registrable Notes and Exchange Notes sold by all such Participants and any
such separate firm for the Company, its directors, its officers and such control
Persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its prior written consent (which consent shall not be
unreasonably withheld), but if settled with such consent or if there be a final
non-appealable judgment for the plaintiff for which the Indemnified Person is
entitled to indemnification pursuant to this Agreement, the Indemnifying Person
agrees to indemnify and hold harmless each Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. No Indemnifying
Person shall, without the prior written consent of the Indemnified Person,
effect any settlement or compromise of any pending or threatened proceeding in
respect of which any Indemnified Person is or could have been a party, and
indemnity could have been sought hereunder by such Indemnified Person,
<PAGE>
-26-
unless such settlement (A) includes an unconditional written release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of any Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the Indemnifying Person or Persons on the
one hand and the Indemnified Person or Persons on the other from the offering of
the Notes or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, not only such relative benefits but also the
relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Participant or such other
Indemnified Person, as the case may be, on the other, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by PRO RATA allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include,
<PAGE>
-27-
subject to the limitations set forth above, any reasonable legal or other
expenses actually incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall a Participant be required to
contribute any amount in excess of the amount by which proceeds received by such
Participant from sales of Registrable Notes or Exchange Notes, as the case may
be, exceeds the amount of any damages that such Participant has otherwise been
required to pay or has paid by reason of such untrue or alleged untrue statement
or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. RULE 144 AND 144A
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner in accordance with
the requirements of the Securities Act and the Exchange Act and, if at any time
the Company is not required to file such reports, it will, upon the request of
any Holder of Registrable Notes, make 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 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
<PAGE>
-28-
Notes included in such offering and reasonably acceptable to the Company.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. MISCELLANEOUS
(a) NO INCONSISTENT AGREEMENTS. The Company has not, as of the date
hereof, and shall not, after the date of this Agreement, enter into any
agreement with respect to any of the Company's securities that is inconsistent
with the rights granted to the Holders of Registrable Notes in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not entered and
will not enter into any agreement with respect to any of its securities that
will grant to any Person piggy-back registration rights with respect to a
Registration Statement.
(b) ADJUSTMENTS AFFECTING REGISTRABLE NOTES. The Company shall not,
directly or indirectly, take any action with respect to the Registrable Notes as
a class that would adversely affect the ability of the Holders of Registrable
Notes to include such Registrable Notes in a registration undertaken pursuant to
this Agreement.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of the Holders of not less than a majority in aggregate principal amount
of the then outstanding Registrable Notes. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders of Registrable Notes whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Notes may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Notes being sold by such Holders
pursuant to such Registration Statement; PROVIDED, HOWEVER, that the provisions
of this sentence may not be amended,
<PAGE>
-29-
modified or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(d) NOTICES. All notices and other communications (including without
limitation any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
1. if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture, with a copy in like manner to the Initial
Purchasers as follows:
GOLDMAN, SACHS & CO.
BNY CAPITAL MARKETS, INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
FIRST UNION CAPITAL MARKETS CORP.
c/o Goldman, Sachs & Co.
23 Old Slip, 8th Floor
New York, New York 10004
Facsimile No.: (212) 902-3000
Attention: Registration Department
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 Initial Purchasers, at the addresses specified in
Section 10(d)(1);
3. if to the Company, at the address as follows:
Garden State Newspapers, Inc.
1560 Broadway, Suite 1450
Denver, CO 80202
Facsimile No.: (303) 894-9327
Attention: Joseph J. Lodovic IV,
Executive Vice President and
Chief Financial Officer
with copies to:
<PAGE>
-30-
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 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 compe-
<PAGE>
-31-
tent jurisdiction to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
(j) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Company or its affiliates (as
such term is defined in Rule 405 under the Securities Act) shall not be counted
in determining whether such consent or approval was given by the Holders of such
required percentage.
(k) THIRD PARTY BENEFICIARIES. Holders of Registrable Notes and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
(l) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement and the Indenture, is intended by the parties as a final and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein and any and all prior oral or
written agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Initial Purchasers on
the one hand and the Company on the other, or between or among any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
successors in interest with respect to the subject matter hereof and thereof are
merged herein and replaced hereby.
<PAGE>
-32-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
GARDEN STATE NEWSPAPERS, INC.
By:
------------------------------
Name: Joseph J. Lodovic, IV
Title: Executive Vice President
and Chief Financial Officer
GOLDMAN, SACHS & CO.
BNY CAPITAL MARKETS, INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
FIRST UNION CAPITAL MARKETS CORP.
By: Goldman, Sachs & Co., as represen-
tative of the Initial Purchasers
By:
------------------------------
Name:
Title:
<PAGE>
Garden State Newspapers, Inc.
Page 1
Exhibit 5
May 28, 1999
Garden State Newspapers, Inc.
1560 Broadway, Suite 1450
Denver, Colorado 80202
To Whom It May Concern:
As your counsel, we are familiar with the corporate proceedings held in
connection with the proposed issuance by Garden State Newspapers, Inc. (the
"Company") of its registered Series B 8 5/8% Senior Subordinated Notes due
2011 (the "Notes") for exchange for privately-placed, unregistered securities
of like terms (the "Unregistered Securities"). In connection therewith, we
have examined the indenture between the Company and The Bank of New York, as
Trustee (the "Indenture"), in the form in which it was executed by the
Company and the Trustee, the Company's Registration Statement on Form S-4
relating to the Notes (Registration No. _________ ), [including the Preliminary
Prospectus filed therewith, and the amendments thereto] , including the
Prospectus, in the forms in which they have been filed with the Securities and
Exchange Commission. We have also examined the Amended and Restated
Certificate of Incorporation of the Company as filed with the Secretary of
State of the State of Delaware.
Based upon the foregoing, we are of the opinion:
1. The Company has been duly incorporated under the laws of the State
of Delaware.
2. When the Registration Statement relating to the Notes has become
effective and the Notes have been duly executed and authenticated in
accordance with the terms of the Indenture against exchange therefor of the
Unregistered Securities, the Notes, which have been duly authorized, will be
validly issued and will constitute valid and legally
<PAGE>
Garden State Newspapers, Inc.
Page 2
binding obligations of the Company in accordance with their terms, except to
the extent that enforcement may be limited by (a) bankruptcy, insolvency,
reorganization, fraud or other laws relating to or affecting the enforcement
of creditors' rights and (b) general principles of equity.
We express no opinion herein other than those as to the laws of the
State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware.
We consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Notes and to the use of our name
whenever appearing in such Registration Statement, including the Prospectus
constituting a part thereof, and any amendment thereto.
Sincerely,
Verner, Liipfert, Bernhard,
McPherson & Hand Chartered
<PAGE>
CREDIT AGREEMENT
Dated as of May 12, 1999
GARDEN STATE NEWSPAPERS, INC., a Delaware corporation, the GUARANTORS
listed on the signature pages hereof, the BANKS listed on the signature pages
hereof, BANK OF AMERICA NT&SA, as Syndication Agent, FIRST UNION NATIONAL BANK,
as Documentation Agent, FLEET NATIONAL BANK, as Co-Documentation Agent, and THE
BANK OF NEW YORK, as Administrative Agent, agree as follows (with certain terms
used herein being defined in Article 11):
ARTICLE 1
CREDIT FACILITY
Section 1.01 COMMITMENT TO LEND. (a) LOANS. Upon the terms and
subject to the conditions of this Agreement, each Bank agrees to make, from time
to time during the period from the Agreement Date to but excluding the Maturity
Date, one or more Loans to the Borrower in an aggregate unpaid principal amount
not exceeding at any time such Bank's Commitment at such time MINUS the sum of
(A) the aggregate amount of such Bank's Letter of Credit Participations at such
time and (B) such Bank's Swing Loan Percentage of the aggregate principal amount
of the Swing Loans outstanding at such time. The aggregate amount of the
Commitments on the Agreement Date is $190,000,000.
(b) SWING LOANS. (i) Upon the terms and subject to the
conditions of this Agreement, the Swing Loan Lender agrees to make, from time to
time from the Agreement Date to but excluding the Maturity Date, one or more
Swing Loans to the Borrower in an aggregate unpaid principal amount not
exceeding at any time the lesser of (A) the aggregate amount of the Commitments
at such time MINUS the sum of the aggregate unpaid principal amount of all Loans
and Swing Loans outstanding at such time and the aggregate amount of the Letter
of Credit Participations outstanding at such time and (B) $5,000,000. All Swing
Loans shall be in an amount not less than $100,000 and shall be in an integral
multiple of $50,000 and shall be made and maintained as Base Rate Loans. All
Swing Loans shall be disbursed by the Swing Loan Lender in Dollars in funds
immediately available to the Borrower by credit to an account of the Borrower at
the Swing Loan Lender's Domestic Lending Office, or in such other manner as may
have been specified in the applicable notice of borrowing and as shall be
acceptable to the Swing Loan Lender, on the day requested, if such request is
received not later than 2:00 p.m. (New York time) on such day, and if received
thereafter on any Business Day, on the next Business Day. Each request by the
Borrower for the making of Swing Loans shall constitute a Representation and
Warranty by the Borrower as of the time of the making of such Swing Loans that
the conditions specified in Sections 2.02(b) and (c) have been fulfilled at such
time.
(ii) Upon demand made to all of the Banks by the Swing
Loan Lender, which demand may be made before or after a Default, but
subject to the provisions of
<PAGE>
Section 1.01(b)(iii), each Bank (other than the Swing Loan Lender) shall
irrevocably and unconditionally purchase from the Swing Loan Lender,
without recourse or warranty, an undivided interest and participation in
the Swing Loans then outstanding, by paying to the Swing Loan Lender,
without reduction or deduction of any kind, including but not limited to
reductions or deductions for set-off, recoupment or counterclaim, in
Dollars immediately available to the Swing Loan Lender at the Swing Loan
Lender's Domestic Lending Office, an amount equal to such Bank's Swing
Loan Percentage of the principal amount of all Swing Loans then
outstanding, and thereafter, except as otherwise provided in the second
succeeding sentence, the Banks' respective interests in such Swing Loans,
and the remaining interest of the Swing Loan Lender in such Swing Loans,
shall in all respects be treated as Loans under this Agreement, but such
Swing Loans shall continue to be evidenced by the Swing Note, and shall
continue to be due and payable by the Borrower in accordance with Section
1.05. If any Bank does not pay any amount which it is required to pay
after giving effect to the provisions of Section 1.01(b)(iii) forthwith
upon the Swing Loan Lender's demand therefor, the Swing Loan Lender shall
be entitled to recover such amount on demand from such Bank, together
with interest thereon, at the Federal Funds Rate for the first three
Business Days, and thereafter at the Base Rate, for each day from the
date of such demand, if made prior to 2:00 p.m. (New York time) on any
Business Day, and if made thereafter on any Business Day, or made on any
day that is not a Business Day, from the next Business Day following the
date of such demand, until the date such amount is paid to the Swing Loan
Lender by such Bank. If such Bank does not pay such amount forthwith
upon the Swing Loan Lender's demand therefor, and until such time as such
Bank makes the required payment, the Swing Loan Lender's remaining
interest in the applicable Swing Loan shall continue to include the
amount of such unpaid participation obligation.
(iii) No Bank shall be obligated to purchase a
participation in any Swing Loan unless (A) the Swing Loan Lender believed
in good faith that the conditions specified in Sections 2.02(b) and (c)
were satisfied at the time such Swing Loan was made or (B) such Bank had
actual knowledge, by receipt of information furnished to it pursuant to
Section 5.01(f) hereof, or otherwise, that any such condition had not
been satisfied and failed to notify the Swing Loan Lender in a writing
received by the Swing Loan Lender one Business Day prior to the time that
it made such Swing Loan that the Swing Loan Lender was not authorized to
make such Swing Loan or (C) the satisfaction of such condition that was
not satisfied had been waived in accordance with the provisions of this
Agreement.
(c) TYPE OF LOANS. Subject to Section 1.07 and the other terms
and conditions of this Agreement, the Loans may, at the option of the Borrower,
be made as, and from time to time continued as or converted into, Base Rate or
Eurodollar Rate Loans of any permitted Type, or any combination thereof.
Section 1.02 MANNER OF BORROWING. (a) The Borrower shall give the
Administrative Agent notice (which shall be irrevocable) no later than 10:00
a.m. (New York time) on, in the case of Base Rate Loans (other than Swing
Loans), the Business Day before the requested date
<PAGE>
for the making of such Loans and, in the case of Eurodollar Rate Loans, the
third Eurodollar Business Day before the requested date for the making of such
Loans. Each such notice shall be in the form of SCHEDULE 1.02 and shall specify
(i) the requested date for the making of the requested Loans, which shall be,
in the case of Base Rate Loans, a Business Day and, in the case of Eurodollar
Rate Loans, a Eurodollar Business Day, (ii) the Type or Types of Loans requested
and (iii) the amount of each such Type of Loan, which amount shall be not less
than, in the case of Base Rate Loans, $500,000 or an integral multiple of
$100,000 in excess thereof and, in the case of Eurodollar Rate Loans, $1,000,000
or an integral multiple of $250,000 in excess thereof, or the aggregate amount
of the applicable unused Commitments, as the case may be. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each Bank of the
contents thereof and of the amount and Type of each Loan to be made by such Bank
on the requested date specified therein.
(b) Not later than 11:00 a.m. (New York time) on each requested
date for the making of Loans (other than Swing Loans), each Bank shall make
available to the Administrative Agent, in Dollars in funds immediately available
to the Administrative Agent at the Administrative Agent's Office, the Loans to
be made by such Bank on such date. Any Bank's failure to make any Loan to be
made by it on the requested date therefor shall not relieve any other Bank of
its obligation to make any Loan to be made by such other Bank on such date, but
such other Bank shall not be liable for such failure.
(c) Unless the Administrative Agent shall have received notice
from a Bank prior to 10:00 a.m. (New York time) on the requested date for the
making of any Loans that such Bank will not make available to the Administrative
Agent the Loans requested to be made by such Bank on such date, the
Administrative Agent may assume that such Bank has made such Loans available to
the Administrative Agent on such date in accordance with Section 1.02(b) and the
Administrative Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount
on behalf of such Bank. If and to the extent such Bank shall not have so made
available to the Administrative Agent the Loans requested to be made by such
Bank on such date and the Administrative Agent shall have so made available to
the Borrower a corresponding amount on behalf of such Bank, such Bank shall, on
demand, pay to the Administrative Agent such corresponding amount together with
interest thereon, for each day from the date such amount shall have been so made
available by the Administrative Agent to the Borrower until the date such amount
shall have been repaid to the Administrative Agent, at the Federal Funds Rate
until (and including) the third Business Day after demand is made and thereafter
at the Base Rate. If such Bank does not pay such corresponding amount promptly
upon the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower and such Borrower shall immediately repay such
corresponding amount to the Administrative Agent together with accrued interest
thereon at the applicable rate or rates provided in Section 1.04(a).
(d) All Loans made available to the Administrative Agent in
accordance with Section 1.02(b) or Section 1.02(c) shall be disbursed by the
Administrative Agent not later than 1:00 p.m. (New York time) on the requested
date therefor in Dollars in funds immediately available to the Borrower by
credit to an account of the Borrower at the Administrative Agent's
<PAGE>
Office or in such other manner as may have been specified in the applicable
notice and as shall be acceptable to the Administrative Agent.
Section 1.03 LETTERS OF CREDIT. (a) Upon the terms and subject to the
conditions of this Agreement, the Issuing Bank shall, from time to time during
the period from the Agreement Date through the tenth Business Day preceding the
Maturity Date, issue one or more Letters of Credit for the account of the
Borrower; provided, that the aggregate principal amount of all Letter of Credit
Participations shall not exceed at any time the lesser of (A) the aggregate
amount of the Commitments at such time minus the aggregate unpaid principal
amount of all Loans and Swing Loans outstanding at such time and (B)
$10,000,000. Each Letter of Credit shall be in a form and shall contain such
terms as shall be reasonably satisfactory to the Issuing Bank.
(b) Each Letter of Credit shall be denominated only in Dollars
and shall expire on or before the first anniversary of the issuance thereof
(PROVIDED, that, any Letter of Credit may include terms that provide for the
automatic renewal thereof for successive one-year periods so long as such terms
include a provision whereby the Issuing Bank shall be entitled to elect that any
such renewal shall not occur if the conditions set forth in Section 2.02(b) and
(c) could not be fulfilled at such time, and the Issuing Bank shall give notice
of such election to the beneficiary thereof) and in any event not later than the
Business Day preceding the Maturity Date. Any extension of the expiry date, or
automatic renewal, of a Letter of Credit to a date beyond the first anniversary
of the issuance thereof shall constitute an "issuance" of such Letter of Credit
for all purposes hereof on, in the case of any such extension, the date on which
such extension shall have been granted and, in the case of any such automatic
renewal, on the tenth Business Day preceding the last day on which the Issuing
Bank is entitled to give notice of its election that any such renewal shall not
occur.
(c) Letters of Credit shall be issued only on a Business Day, and
shall be used for the corporate purposes of the Borrower or the Subsidiaries.
(d) The Borrower shall request the issuance of a Letter of Credit
by furnishing to the Administrative Agent and the Issuing Bank, at least five
Business Days before the requested date of such issuance, notice thereof in the
form of SCHEDULE 1.02 or such other notice as shall be reasonably satisfactory
to the Issuing Bank (and, in the case of any such notice, the Borrower shall be
deemed to have made the Representation and Warranty with respect to such
issuance provided for in the final paragraph of the form of notice set forth in
SCHEDULE 1.02).
(e) Upon the date of issuance of a Letter of Credit, the Issuing
Bank shall be deemed to have granted to each Participating Bank (other than the
Issuing Bank), and each Participating Bank (other than the Issuing Bank) shall
be deemed to have acquired from the Issuing Bank without further action by any
party hereto, a participation in such Letter of Credit and any Drawings that may
at any time be made thereunder, to the extent of such Bank's Participating Bank
Percentage thereof.
(f) The Issuing Bank shall promptly notify the Borrower of its
receipt of each Drawing request with respect to a Letter of Credit, stating the
date and amount of the Drawing requested thereby and the date and amount of each
Drawing disbursed pursuant to such request.
<PAGE>
The failure of the Issuing Bank to give, or delay in giving, any such notice
shall not release or diminish the obligations of the Borrower hereunder in
respect of such Drawing.
(g) The Borrower shall, on the day it receives notice of each
Drawing from the Issuing Bank, if such notice is received prior to 10:00 a.m.
(New York time) on such day, and on the Business Day following the day it
receives such notice from the Issuing Bank, if such notice is received after
10:00 a.m. (New York time) on such day, reimburse such Drawing by paying to the
Issuing Bank in immediately available funds the amount of the payment made by
the Issuing Bank with respect to such Drawing, together (but only if such
Drawing is not reimbursed on the day notice is received) with interest thereon
at a rate per annum equal to the Base Rate as in effect from time to time PLUS
the applicable Base Rate Margin until the day such reimbursement is made. In
the event that the Borrower shall fail to make any such payment when due and for
so long as such failure shall be continuing, the Issuing Bank may give notice of
such failure to the Administrative Agent and each Participating Bank, which
notice shall include, in the case of a Participating Bank, the amount of such
Participating Bank's Participating Bank Percentage of such Drawing, whereupon
each such Participating Bank (other than the Issuing Bank) shall promptly remit
such amount to the Administrative Agent for the account of the Issuing Bank as
provided in Section 1.03(h).
(h) Each Participating Bank (other than the Issuing Bank) shall,
in the event it receives the notice from the Issuing Bank pursuant to Section
1.03(g) at or before 12:00 noon (New York time) on any Business Day, fund its
participation in any unreimbursed Drawing by remitting to the Administrative
Agent, no later than 2:00 p.m. (New York time) on such day, in immediately
available funds, its Participating Bank Percentage of the reimbursement
obligation in respect of each Drawing. The Administrative Agent shall, in the
event it receives such funds from such Participating Bank at or before 2:00 p.m.
(New York time) on any day, no later than 4:00 p.m. (New York time) on such day,
make available the amount thereof to the Issuing Bank, in immediately available
funds. Any amount payable by any Participating Bank to the Administrative Agent
for the account of the Issuing Bank under this Section 1.03(h), and any amount
payable by the Administrative Agent to the Issuing Bank under this Section
1.03(h), shall bear interest for each day from the date due (and including such
day if paid after 2:00 p.m. (New York time), in the case of any such payment by
a Participating Bank to the Administrative Agent, or 4:00 p.m. (New York time),
in the case of any such payment by the Administrative Agent to the Issuing Bank,
on such day) in accordance with this Section 1.03(h) until the date it is
received by the Issuing Bank at a rate equal to the Federal Funds Rate until
(and including) the third Business Day after the date due and thereafter at the
Base Rate. Each Participating Bank shall, upon the demand of the Issuing Bank,
reimburse the Issuing Bank, to the extent the Issuing Bank has not been
reimbursed by the Borrower after demand therefor, for the reasonable costs and
expenses (including reasonable legal fees) incurred by it (other than as a
result of its willful misconduct or gross negligence) in connection with the
collection of amounts due under, the administration of, and the preservation and
enforcement of any rights conferredby, the Letters of Credit or the performance
of the Issuing Bank's obligations under this Agreement in respect thereof (other
than its obligation to make Loans in its capacity as a Bank or Swing Loans in
its capacity as the Swing Loan Lender), to the extent of such Participating
Bank's Participating Bank Percentage (as of the time such costs and expenses are
incurred) of the amount of such
<PAGE>
costs and expenses. The Issuing Bank shall refund any costs and expenses
reimbursed by such Participating Bank that are subsequently recovered from the
Borrower in an amount equal to such Participating Bank's Participating Bank
Percentage thereof.
(i) The obligation of each Participating Bank to make available
to the Issuing Bank the amounts set forth in this Section 1.03 shall be
absolute, unconditional and irrevocable under any and all circumstances without
reduction for any set-off or counterclaim of any nature whatsoever, and may not
be terminated, suspended or delayed for any reason whatsoever, shall not be
subject to any qualification or exception and shall be made in accordance with
the terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or
other right which the Borrower or any Subsidiary may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may be
acting), the Administrative Agent, the Issuing Bank, any Participating
Bank or any other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower
or any Subsidiary and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents; or
(v) the occurrence of any Default.
(j) (i) Without affecting any rights the Participating Banks may
have under Applicable Law, the Borrower agrees that none of the Participating
Banks, the Issuing Bank, the Administrative Agent or their respective officers
or directors shall be liable or responsible for, and the obligations of the
Borrower to the Participating Banks, the Issuing Bank and the Administrative
Agent hereunder shall not in any manner be affected by: (A) the use that may be
made of any Letter of Credit or the proceeds thereof by the beneficiary thereof
or any other Person or any acts or omissions of such beneficiary or any other
Person; (B) the validity or genuineness of documents presented in connection
with any Drawing, or of any endorsements thereon, even if such documents should,
in fact, prove to be in any or all respects, invalid, fraudulent or forged; or
(C) any other circumstances whatsoever in making or failing to make payment
under any Letter of Credit or any other action taken or omitted to be taken by
any Person under or in connection with any Letter of Credit, except that the
Borrower shall have a claim against the Issuing Bank and the Issuing Bank shall
be liable to the Borrower, in each case
<PAGE>
to the extent and only to the extent of any damages suffered by the Borrower
that are caused by (1) the Issuing Bank's willful misconduct or gross negligence
(as determined by a court of competent jurisdiction) in determining whether
documents presented under any Letter of Credit issued by the Issuing Bank
complied with the terms of such Letter of Credit or (2) the Issuing Bank's
willful failure (as determined by a court of competent jurisdiction) to pay
under such Letter of Credit after the presentation to it of documents strictly
complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, in determining whether to
pay under any Letter of Credit, the Issuing Bank shall not have any obligation
relative to the other Banks other than to determine that any documents required
to be delivered under such Letter of Credit appear to have been delivered and
that they appear to comply on their face with the requirements of such Letter of
Credit, regardless of any notice or information to the contrary. Any action
taken or omitted to be taken by the Issuing Bank under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for the Issuing Bank any resulting
liability to any Bank.
(ii) In addition to any other amounts payable under this
Agreement, the Borrower agrees to protect, indemnify, pay and hold the
Issuing Bank harmless from and against any and all claims, costs, charges
and reasonable expenses (including reasonable attorneys' fees) which the
Issuing Bank may incur or be subject to as a consequence, direct or
indirect, of the issuance of, or payment of any Drawing under, any Letter
of Credit, other than as a result of the gross negligence or willful
misconduct of the Issuing Bank as determined by a court of competent
jurisdiction.
(iii) The Issuing Bank shall not be responsible for:
(A) the validity, accuracy, genuineness or legal
effect of any document submitted by any party in connection with
the issuance of Letters of Credit,
(B) the validity of any instrument transferring
or assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds thereof in
whole or in part,
(C) errors, omissions, interruptions or delays in
transmissions or delivery of any messages, by mail, cable,
telecopy, telex or otherwise,
(D) the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such Letter
of Credit, and
(E) any consequence arising from causes beyond
the control of the Issuing Bank, including, without limitation,
any governmental acts.
(k) If any Bank Nonparticipation occurs with respect to any
Bank, (A) the Administrative Agent and such Bank agree, if requested by the
Borrower, to attempt to locate a bank or other financial institution that
desires to accept the assignment of the Loans, Letter of Credit Participations,
Commitments and other rights and obligations hereunder of such Bank and
<PAGE>
(B) if such bank or other financial institution acceptable to the Borrower is
located, such Bank agrees to assign its interest in its Loans, Letter of Credit
Participations, Commitments and other rights and obligations hereunder to such
bank or other financial institution in accordance with Section 9.10(a)(ii).
Section 1.04 INTEREST. (a) RATES. Unless an Event of Default is
continuing, (i) each Loan shall bear interest on the outstanding principal
amount thereof at a rate per annum equal to (A) so long as it is a Base Rate
Loan, the Base Rate as in effect from time to time PLUS the applicable Base Rate
Margin and (B) so long as it is a Eurodollar Rate Loan, the applicable Adjusted
Eurodollar Rate PLUS the applicable Eurodollar Rate Margin and (ii) each other
amount due and payable under the Loan Documents shall, to the maximum extent
permitted by Applicable Law, bear interest at a rate per annum equal to the Base
Rate as in effect from time to time PLUS the applicable Base Rate Margin.
During an Event of Default (and whether before or after judgment), upon notice
from the Administrative Agent to the Borrower given at the direction of the
Required Banks, each Loan (whether or not due) and, to the maximum extent
permitted by Applicable Law, each other amount due and payable under the Loan
Documents shall bear interest at a rate per annum equal to the applicable
Post-Default Rate.
(b) PAYMENT. Interest shall be payable, (i) in the case of
Base Rate Loans, quarterly in arrears on each Interest Payment Date, (ii) in the
case of Eurodollar Rate Loans, on the last day of each applicable Interest
Period (and, if an Interest Period is longer than three months, at intervals of
three months after the first day of such Interest Period), (iii) in the case of
any Loan, when such Loan shall be due (whether at maturity, by reason of notice
of prepayment or acceleration or otherwise) or converted, but only to the extent
then accrued on the amount then so due or converted, and (iv) in the case of all
other amounts due and payable under the Loan Documents, on demand. Interest at
the Post-Default Rate shall be payable on demand.
(c) CONVERSION AND CONTINUATION. (i) All or any part of the
principal amount of Loans of any Type may, on any Business Day, be converted
into any other Type or Types of Loans, except that (A) Eurodollar Rate Loans may
be converted only on the last day of an applicable Interest Period, (B) Base
Rate Loans may be converted into Eurodollar Rate Loans only on a Eurodollar
Business Day and (C) Swing Loans shall be maintained as Base Rate Loans at all
times.
(ii) Base Rate Loans shall continue as Base Rate Loans
unless and until such Loans are converted into Loans of another Type.
Eurodollar Rate Loans of any Type shall continue as Loans of such Type
until the end of the then current Interest Period therefor, at which time
they shall be automatically converted into Base Rate Loans unless the
Borrower shall have given the Administrative Agent notice in accordance
with Section 1.04(c)(iv) requesting either that such Loans continue as
Loans of such Type for another Interest Period or that such Loans be
converted into Loans of another Type at the end of such Interest Period.
(iii) Notwithstanding anything to the contrary contained
in Section 1.04(c)(i) or (ii), during a Default, the Administrative Agent
may, and upon the direction of the
<PAGE>
Required Banks shall, notify the Borrower that Loans may only be
converted into or continued as Loans of certain specified Types and,
thereafter, until no Default shall continue to exist, Loans may not be
converted into or continued as Loans of any Type other than one or more
of such specified Types, PROVIDED that, notwithstanding the foregoing,
Loans may continue as or be converted into Base Rate Loans.
(iv) The Borrower shall give the Administrative Agent
notice (which shall be irrevocable) of each conversion of Loans or
continuation of Eurodollar Rate Loans no later than 10:00 a.m. (New York
time) on, in the case of a conversion into Base Rate Loans, the Business
Day before the requested date of such conversion, and, in the case of a
conversion into or continuation of Eurodollar Rate Loans, the third
Eurodollar Business Day before the requested date of such conversion or
continuation. Each notice of conversion or continuation shall be in the
form of SCHEDULE 1.04(c)(iv) and shall specify (A) the requested date of
such conversion or continuation, (B) the amount and Type and, in the case
of Eurodollar Rate Loans, the last day of the applicable Interest Period
of the Loans to be converted or continued and (C) the amount and Type or
Types of Loans into which such Loans are to be converted or as which such
Loans are to be continued. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each Bank of (x) the contents
thereof, (y) the amount and Type and, in the case of Eurodollar Rate
Loans, the last day of the applicable Interest Period of each Loan to be
converted or continued by such Bank and (z) the amount and Type or Types
of Loans into which such Loans are to be converted or as which such Loans
are to be continued.
(d) MAXIMUM INTEREST RATE. Nothing contained in the Loan
Documents shall require the Borrower at any time to pay interest at a rate
exceeding the Maximum Permissible Rate. If interest payable by the Borrower on
any date would exceed the maximum amount permitted by the Maximum Permissible
Rate, such interest payment shall automatically be reduced to such maximum
permitted amount, and interest for any subsequent period, to the extent less
than the maximum amount permitted for such period by the Maximum Permissible
Rate, shall be increased by the unpaid amount of such reduction. Any interest
actually received for any period in excess of such maximum amount permitted for
such period shall be deemed to have been applied as a prepayment of the Loans
or, if no Loans are outstanding, such excess shall be refunded to the Borrower.
Section 1.05 REPAYMENT. (a) LOANS. Each of the Loans shall mature and
become due and payable, and shall be repaid by the Borrower, on the Maturity
Date.
(b) DRAWINGS. The Borrower shall reimburse the Issuing Bank
for each Drawing under a Letter of Credit on the date determined with respect to
such Drawing in the manner set forth in Section 1.03(g).
Section 1.06 PREPAYMENTS. (a) OPTIONAL PREPAYMENTS. The Borrower may,
at any time and from time to time, prepay the Loans in whole or in part, without
premium or penalty (but subject to Section 7.03), except that any partial
prepayment under this Section (other than a prepayment of Swing Loans) shall be
in an aggregate principal amount of at least, in the case of
<PAGE>
Base Rate Loans, $500,000 or any integral multiple of $100,000 in excess thereof
and, in the case of Eurodollar Rate Loans, $1,000,000 or an integral multiple of
$250,000 in excess thereof, and any prepayment of Eurodollar Rate Loans made on
a day other than the last day of an applicable Interest Period shall be
accompanied by the amount, if any, required to be paid in respect thereof
pursuant to Section 7.03 hereof. The Borrower shall give the Administrative
Agent notice of each prepayment pursuant to this Section 1.06(a) no later than
10:00 a.m. (New York time) on, in the case of a prepayment of Base Rate Loans
(other than Swing Loans), the first Business Day, and, in the case of a
prepayment of Eurodollar Rate Loans, the third Eurodollar Business Day, before
the date of such prepayment and, in the case of a prepayment of Swing Loans, the
day of such prepayment. Each such notice of prepayment shall be in the form of
SCHEDULE 1.06(A) and shall specify (i) the date such prepayment is to be made
and (ii) the amount and Type and, in the case of Eurodollar Rate Loans, the last
day of the applicable Interest Period of the Loans to be prepaid. Upon receipt
of any such notice, the Administrative Agent shall promptly notify each Bank of
the contents thereof and the amount and Type and, in the case of Eurodollar Rate
Loans, the last day of the applicable Interest Period of each Loan of such Bank
to be prepaid. Amounts to be prepaid pursuant to this Section 1.06(a) shall
irrevocably be due and payable on the date specified in the applicable notice of
prepayment, together with interest thereon as provided in Section 1.04(b).
(b) MANDATORY PREPAYMENTS. The Borrower shall, on each date
that a reduction in the aggregate amount of the Commitments causes the sum of
the aggregate outstanding principal amount of the Loans and the aggregate amount
of Letter of Credit Participations to exceed the aggregate amount of the
Commitments, prepay the Loans and the Contingent Reimbursement Obligations, in
an aggregate amount not less than the amount of such excess, together with
interest thereon as provided in Section 1.04(b), on the date of such reduction.
(c) REBORROWING. Amounts of Loans prepaid prior to the
Maturity Date may, subject to the terms and conditions hereof (including, but
not limited to, Sections 1.01 and 1.08(b)), be reborrowed.
Section 1.07 LIMITATION ON TYPES OF LOANS. Notwithstanding anything to
the contrary contained in this Agreement, the Borrower shall borrow, prepay,
convert and continue Loans in a manner such that (a) the aggregate principal
amount of Eurodollar Rate Loans of the same Type and having the same Interest
Period shall at all times be not less than $1,000,000 (b) there shall not be, at
any one time, more than five Interest Periods in effect with respect to
Eurodollar Rate Loans of all Types and (c) no payment of Eurodollar Rate Loans
will have to be made prior to the last day of an applicable Interest Period in
order to repay the Loans in the amounts and (subject to Section 1.12(d)) on the
dates specified in Section 1.05 or determined pursuant to Section 1.06(b).
Section 1.08 REDUCTION AND TERMINATION OF COMMITMENTS. (a) OPTIONAL
REDUCTION OF COMMITMENTS. The Borrower may terminate or reduce the aggregate
amount of the Commitments by giving the Administrative Agent notice (which shall
be irrevocable) thereof no later than 10:00 a.m. (New York time) on the third
Business Day before the requested date of
<PAGE>
such reduction, except that (i) each partial reduction of the aggregate amount
of the Commitments shall be in an aggregate amount equal to $1,000,000 or any
integral multiple of $500,000 in excess thereof and (ii) no reduction may reduce
the aggregate amount of the Commitments to an amount less than the sum of the
aggregate principal amount of all Loans and the amount of all Letter of Credit
Participations outstanding on such date. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
the amount to which such Bank's Commitment is to be reduced.
(b) MANDATORY REDUCTION OF COMMITMENTS. (i) The aggregate
Commitments shall be automatically and permanently reduced by (A) $15,000,000
(subject to reduction as provided in Section 1.08(c)) on September 30, 2004
(which amount shall be increased by the amount, if any, by which the Commitments
had been increased pursuant to Section 1.16) and (B) $25,000,000 (subject to
reduction as provided in Section 1.08(c)) on the last day of each calendar
quarter, commencing December 31, 2004.
(ii) In the event that the Borrower or any Subsidiary
shall receive Net Proceeds from the sale or disposition of any assets
(including any loss or damage to, or condemnation of, such assets), the
aggregate Commitments shall be automatically and permanently reduced (A)
on the fifth day following the end of the Reinvestment Contract Period
with respect to such sale or disposition, in an amount equal to the Net
Proceeds of such sale or disposition less the Reinvested Amount with
respect thereto and (B) on the fifth day following the end of the
Reinvestment Period with respect to such sale or disposition, in an
amount equal to the portion, if any, of such Reinvested Amount that would
have been paid pursuant to Reinvestment Contracts that shall have
terminated, or with respect to which the closing of the transaction
provided for therein shall not have occurred, within such Reinvestment
Period.
(iii) In the event that the Borrower or any Subsidiary
shall issue or otherwise incur Indebtedness (other than the Indebtedness
under the Loan Documents, Existing Debt or any increase of the aggregate
principal amount of the 1999 Notes up to $300,000,000), the net proceeds
of which, together with the aggregate net proceeds of all other such
issuances and incurrences after the Agreement Date, are in excess of
$100,000,000 ("Excess Net Proceeds"), the aggregate Commitments shall be
automatically and permanently reduced on the fifth day following the day
on which the Borrower shall have received such net proceeds in an amount
equal to the portion of such net proceeds constituting Excess Net
Proceeds.
(c) APPLICATION TO SCHEDULED REDUCTIONS. (i) Each reduction of
the Commitments pursuant to Section 1.08(a) shall be applied to the remaining
reductions thereof scheduled to be made pursuant to Section 1.08(b)(i) in the
inverse order in which they are scheduled to occur.
(ii) Each reduction of the Commitments pursuant to
Section 1.08(b)(ii) or 1.08(b)(iii) shall be applied to the remaining
reductions thereof scheduled to be made
<PAGE>
pursuant to Section 1.08(b)(i) (as such amounts may have been previously
reduced by the operation of this Section 1.08(c)) pro rata in accordance
with the relative amounts thereof.
Section 1.09 FEES. (a) COMMITMENT FEES. The Borrower shall pay
to the Administrative Agent for the account of each Bank a commitment fee on the
daily unused aggregate amount of such Bank's Commitment for each day from the
Agreement Date through the Maturity Date, at a rate per annum of (i) so long as
the ratio of Consolidated Debt to Operating Cash Flow is equal to or greater
than 5.50 to 1.00, 0.500%, (ii) so long as the ratio of Consolidated Debt to
Operating Cash Flow is equal to or greater than 4.00 to 1.00, but less than 5.50
to 1.00, 0.375% and (iii) at all other times, 0.250%, payable quarterly in
arrears on successive Interest Payment Dates, on the Maturity Date and on the
date of any reduction of the Commitment (to the extent accrued and unpaid on the
amount of such reduction). For this purpose, Swing Loans shall not constitute a
utilization of any Bank's Commitment.
(b) LETTER OF CREDIT FEES. (i) The Borrower shall pay to the
Administrative Agent for the account of each Participating Bank a letter of
credit fee on the daily aggregate amount of the Contingent Reimbursement
Obligations under each Letter of Credit at a rate per annum equal to the
Eurodollar Rate Margin in effect at such time. Such fees shall be payable in
arrears on successive Interest Payment Dates and on the date of expiration or
termination of each Letter of Credit.
(ii) The Borrower shall pay to the Agent for the account
of the Issuing Bank a letter of credit issuance fee on the daily
aggregate face amount of all Letters of Credit issued hereunder at a rate
per annum of 0.125%. Such fees shall be payable in arrears on successive
Interest Payment Dates and on the date of expiration or termination of
each Letter of Credit; PROVIDED, that no such quarterly payment shall in
any event be less than $125.00.
Section 1.10 COMPUTATION OF INTEREST AND FEES. Interest and the
commitment and letter of credit fees shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed. Interest, commitment
fees and letter of credit fees for any period shall be calculated from and
including the first day thereof to but excluding the last day thereof.
Section 1.11 EVIDENCE OF INDEBTEDNESS. Each Bank's Loans and the
Borrower's obligation to repay such Loans with interest in accordance with the
terms of this Agreement shall be evidenced by this Agreement, the records of
such Banks and a single Note payable to the order of such Bank. The Swing Loans
and the Borrower's obligation to repay the Swing Loans with interest in
accordance with the terms of this Agreement shall be evidenced by this
Agreement, the records of the Swing Loan Lender, and a single Swing Loan Note
payable to the order of the Swing Loan Lender. Each Bank's Letter of Credit
Participations shall be evidenced by this Agreement, the records of such Bank
and the Letters of Credit. The records of each Bank and the Swing Loan Lender
shall be prima facie evidence of such Bank's Loans and Letter of Credit
Participations, of the Swing Loan Lender's Swing Loans and, in each case, of
accrued interest thereon and of all payments made in respect thereof.
<PAGE>
Section 1.12 PAYMENTS BY THE BORROWER. (a) TIME, PLACE AND MANNER.
All payments due to the Administrative Agent, the Swing Loan Lender or the
Issuing Bank under the Loan Documents shall be made to the Administrative Agent
at the Administrative Agent's Office or to such other Person or at such other
address as the Administrative Agent, the Swing Loan Lender or the Issuing Bank,
respectively, may designate by notice to the Borrower. All payments due to any
Bank under the Loan Documents shall, in the case of payments on account of
principal of or interest on the Loans or fees, be made to the Administrative
Agent at the Administrative Agent's Office and, in the case of all other
payments, be made directly to such Bank at its Domestic Lending Office or at
such other address as such Bank may designate by notice to the Borrower. All
payments due to any Bank under the Loan Documents, whether made to the
Administrative Agent or directly to such Bank, shall be made for the account of,
in the case of payments in respect of Eurodollar Rate Loans, such Bank's
Eurodollar Lending Office and, in the case of all other payments, such Bank's
Domestic Lending Office. A payment shall not be deemed to have been made on any
day unless such payment has been received by the required Person, at the
required place of payment, in Dollars in funds immediately available to such
Person at such place, no later than 12:00 noon (New York time) on such day.
(b) NO REDUCTIONS. All payments due to the Administrative
Agent, the Issuing Bank, the Swing Loan Lender or any Bank under the Loan
Documents, and all other terms, conditions, covenants and agreements to be
observed and performed by the Borrower thereunder, shall be made, observed or
performed by the Borrower without any reduction or deduction whatsoever,
including any reduction or deduction for any set-off, recoupment, counterclaim
(whether sounding in tort, contract or otherwise) or Tax except for any Tax
required to be withheld or deducted in accordance with Section 1.14.
(c) AUTHORIZATION TO CHARGE ACCOUNTS. The Borrower hereby
authorizes the Administrative Agent, the Issuing Bank, the Swing Loan Lender and
each Bank, if and to the extent any amount payable by the Borrower under the
Loan Documents (whether payable to such Person or to any other Person that is
the Administrative Agent, the Issuing Bank, the Swing Loan Lender or a Bank) is
not otherwise paid when due, to charge such amount against any or all of the
accounts of such Borrower or any Wholly Owned Subsidiary with the Administrative
Agent, the Issuing Bank, the Swing Loan Lender or any such Bank or any of its
Affiliates (whether maintained at a branch or office located within or without
the United States), with the Borrower remaining liable for any deficiency.
(d) EXTENSION OF PAYMENT DATES. Whenever any payment to the
Administrative Agent, the Issuing Bank, the Swing Loan Lender or any Bank under
the Loan Documents would otherwise be due (except by reason of acceleration) on
a day that is not a Business Day, or, in the case of payments of the principal
of Eurodollar Rate Loans, a Eurodollar Business Day, such payment shall instead
be due on the next succeeding Business or Eurodollar Business Day, as the case
may be, unless, in the case of a payment of the principal of Eurodollar Rate
Loans, such extension would cause payment to be due in the next succeeding
calendar month, in which case such due date shall be advanced to the next
preceding Eurodollar Business Day. If the date any payment under the Loan
Documents is due is extended (whether by
<PAGE>
operation of any Loan Document, Applicable Law or otherwise), such payment shall
bear interest for such extended time at the rate of interest applicable
hereunder.
Section 1.13 DISTRIBUTION OF PAYMENTS BY THE ADMINISTRATIVE AGENT. (a)
The Administrative Agent shall promptly distribute to the Issuing Bank, the
Swing Loan Lender and each Bank its ratable share of each payment received by
the Administrative Agent under the Loan Documents for the account of the Issuing
Bank, the Swing Loan Lender and the Banks by credit to an account of the Issuing
Bank, the Swing Loan Lender or such Bank at the Administrative Agent's Office or
by wire transfer to an account of the Issuing Bank, the Swing Loan Lender or
such Bank at an office of any other commercial bank located in the United
States.
(b) Unless the Administrative Agent shall have received notice
from the applicable Loan Party prior to the date on which any payment is due to
the Banks under the Loan Documents that such Loan Party will not make such
payment in full, the Administrative Agent may assume that such Loan Party has
made such payment in full to the Administrative Agent on such date and the
Administrative Agent in its sole discretion may, in reliance upon such
assumption, cause to be distributed to the Issuing Bank, the Swing Loan Lender
and each Bank on such due date a corresponding amount with respect to the amount
then due the Issuing Bank, the Swing Loan Lender and such Bank. If and to the
extent such Loan Party shall not have so made such payment in full to the
Administrative Agent and the Administrative Agent shall have so distributed to
the Issuing Bank, the Swing Loan Lender or any Bank a corresponding amount, the
Issuing Bank, the Swing Loan Lender or such Bank shall, on demand, repay to the
Administrative Agent the amount so distributed together with interest thereon,
for each day from the date such amount is distributed to the Issuing Bank, the
Swing Loan Lender or such Bank until the date the Issuing Bank, the Swing Loan
Lender or such Bank repays such amount to the Administrative Agent, at the
Federal Funds Rate until (and including) the third Business Day after demand is
made and thereafter at the Base Rate.
Section 1.14 TAXES ON PAYMENTS (a) TAXES PAYABLE BY THE BORROWER. If
any Tax is required to be withheld or deducted from, or is otherwise payable by
the Borrower in connection with, any payment due to any Bank or any
Administrative Agent appointed in accordance with Section 8.08 that is not a
"UNITED STATES PERSON" (as such term is defined in Section 7701(a)(30) of the
Code) hereunder, the Borrower (i) shall, if required, withhold or deduct the
amount of such Tax from such payment and, in any case, pay such Tax to the
appropriate taxing authority in accordance with Applicable Law and (ii) except
in the case of any Bank Tax, shall pay to such Bank or Administrative Agent such
additional amounts as may be necessary so that the net amount received by such
Bank or Administrative Agent with respect to such payment, after withholding or
deducting all Taxes required to be withheld or deducted, is equal to the full
amount payable hereunder. If any Tax is withheld or deducted from, or is
otherwise payable by the Borrower in connection with, any payment due to any
such Bank or Administrative Agent hereunder, the Borrower shall furnish to such
Bank or Administrative Agent the original or a certified copy of a receipt for
such Tax from the applicable taxing authority within 30 days after the date of
such payment (or, if such receipt shall not have been made available by such
taxing authority within such time, the Borrower shall use reasonable efforts to
promptly obtain and
<PAGE>
furnish such receipt). If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to any such Bank or
Administrative Agent the required receipts, the Borrower shall indemnify such
Bank or Administrative Agent for any Taxes, interest, penalties or additions to
Tax that may become payable by such Bank or Administrative Agent as a result of
any such failure.
(b) TAXES PAYABLE BY ANY BANK OR ADMINISTRATIVE AGENT. The
Borrower shall, promptly upon request by any Bank or Administrative Agent that
is not a United States person, pay to any such Bank or Administrative Agent an
amount equal to (i) all Taxes (other than Bank Taxes and without duplication of
amounts paid pursuant to Section 1.14(a)) payable by such Bank or Administrative
Agent with respect to any payment due to such Bank or Administrative Agent
hereunder and (ii) all Taxes (other than Bank Taxes) payable by such Bank or
Administrative Agent as a result of payments made by the Borrower (whether made
to a taxing authority or to such Bank or Administrative Agent) pursuant to
Section 1.14(a) or this Section 1.14(b).
(c) EXEMPTION FROM U.S. WITHHOLDING TAXES. (i) Each Bank that
is not a United States person shall submit to the Borrower and the
Administrative Agent, on or before the fifth day prior to the first Interest
Payment Date occurring after the Agreement Date (or, in the case of a Person
that is not a United States person and that became a Bank by assignment,
promptly upon such assignment), two duly completed and signed copies of either
(A) (1) Form 1001 of the United States Internal Revenue Service entitling such
Bank to a complete exemption from withholding on all amounts to be received by
such Bank pursuant to this Agreement and the Loans or (2) Form 4224 of the
United States Internal Revenue Service relating to all amounts to be received by
such Bank pursuant to this Agreement and the Loans and Form W-9 of the United
States Internal Revenue Service or (B) in the case of any Bank (or Person that
becomes a Bank by assignment) that is exempt from United States Federal
withholding tax pursuant to Sections 871(b) or 881(c) of the Code, Form W-8 of
the United States Internal Revenue Service. Each such Bank shall, from time to
time after submitting any such form, submit to the Borrower and the
Administrative Agent such additional duly completed and signed copies of one or
another such forms (or any successor forms as shall be adopted from time to time
by the relevant United States taxing authorities) as may be (A) requested in
writing by the Borrower or the Administrative Agent and (B) appropriate under
the circumstances and under then current United States law or regulations to
avoid or reduce United States withholding taxes on payments in respect of all
amounts to be received by such Bank pursuant to this Agreement or the Loans.
Upon the request of the Borrower or the Administrative Agent, each Bank that is
a United States person shall submit to the Borrower and the Administrative Agent
a certificate to the effect that it is a United States person.
(ii) If any Bank determines that it is unable to submit
to the Borrower or the Administrative Agent any form or certificate that
such Bank is obligated to submit pursuant to the preceding paragraph, or
that it is required to withdraw or cancel any such form or certificate,
or that any such form or certificate previously submitted has otherwise
become ineffective or inaccurate, such Bank shall promptly notify the
Borrower and the Administrative Agent of such fact.
<PAGE>
(iii) Notwithstanding anything to the contrary contained
herein, the Borrower shall not be required to pay any additional amount
in respect of United States withholding taxes pursuant to Section 1.14(a)
or Section 7.02 to any Bank that (A) is not, on the Agreement Date (or,
in the case of a Person that became a Bank by assignment, on the date of
such assignment), either (x) entitled to submit Form W-8 or Form 1001 of
the United States Internal Revenue Service entitling such Bank to a
complete exemption from withholding on all amounts to be received by such
Bank pursuant to this Agreement and the Loans or Form 4224 of the United
States Internal Revenue Service relating to all amounts to be received by
such Bank pursuant to this Agreement and the Loans and Form W-9 of the
United States Internal Revenue Service or (y) a United States person, (B)
is no longer entitled, or in the case of a Bank that is no longer a
United States person, is not entitled, to submit either such form (or any
successor form as shall be adopted from time to time by the relevant
United States taxing authorities) as a result of any change in
circumstances or other event other than a Regulatory Change or (C) with
respect to any affected interest payments, fails to fulfill its
requirements set forth in Section 1.14(c)(i). If, as a result of a
Regulatory Change, a Bank is no longer entitled to submit Form W-8, Form
W-9, Form 1001 or Form 4224 of the United States Internal Revenue service
(or any successor form), such Bank shall, if requested by the Borrower,
use reasonable efforts to designate another Lending Office or Offices the
designation of which will reduce or eliminate payments under this Section
1.14, provided that such designation would not, in the sole and absolute
discretion of such Bank, be disadvantageous to such Bank in any manner or
contrary to such Bank's policies. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Bank in connection with any
such designation.
(d) NOTIFICATION AND CONTEST If a taxing authority imposes or
seeks to impose upon the Administrative Agent or any Bank any Taxes with respect
to which the Borrower would be required to make a payment under this Section
1.14, the Administrative Agent or such Bank shall promptly notify the Borrower
of such imposition.
(e) CREDITS AND DEDUCTIONS If the Administrative Agent or a
Bank receives a refund or otherwise realizes a reduction of, or credit against,
its Tax liabilities in any taxable year in connection with a Tax indemnified by
the Borrower under this Section 1.14, it shall pay to the Borrower an amount
equal to the net after-tax value to the Administrative Agent or such Bank, in
its sole opinion, of such part of such refund or other reduction as it considers
to be allocable to such payment by the Borrower, having regard to all of the
Administrative Agent's or such Bank's dealings giving rise to similar refunds or
other reductions in relation to the same tax period and to the cost of obtaining
the same; PROVIDED, HOWEVER, that if the Administrative Agent or any Bank has
made a payment to the Borrower pursuant to this Section 1.14(e) and the
applicable refund or other reduction in Tax is subsequently disallowed, the
Borrower shall, promptly upon request by the Administrative Agent or such Bank,
refund to the Administrative Agent or such Bank that portion of such payment
determined by the Administrative Agent or such Bank, in its sole opinion,
relating to such disallowance; and PROVIDED, FURTHER that (i) the Administrative
Agent or such Bank, as the case may be, shall not be obligated to disclose to
the Borrower any information regarding its Tax affairs or computations and (ii)
nothing in this
<PAGE>
Section 1.14(e) shall interfere with the right of the Administrative Agent or
any Bank to arrange its Tax affairs as it deems appropriate.
Section 1.15 PRO RATA TREATMENT. Except to the extent otherwise
provided herein, (a) Loans (other than Swing Loans) shall be made by the Banks
pro rata in accordance with their respective Commitments, (b) Loans of the Banks
shall be converted and continued pro rata in accordance with their respective
amounts of Loans of the Type and, in the case of Eurodollar Rate Loans, having
the Interest Period being so converted or continued, (c) each reduction in the
Commitments shall be made pro rata in accordance with the respective amounts
thereof and (d) each payment of the principal of or interest on the Loans,
reimbursement of Drawings under Letters of Credit or of commitment or letter of
credit fees shall be made for the account of the Banks and, if applicable, the
Issuing Bank or the Swing Loan Lender pro rata in accordance with their
respective amounts thereof then due and payable.
Section 1.16 INCREASE IN COMMITMENTS. (a) At any time within the
period of 24 months immediately following the Agreement Date, the Borrower may
request one or more Banks to increase their respective Commitments, or other
lending institutions to provide Commitments, and, in the sole discretion of each
such Bank or other institution, any such Bank or other institution may agree to
so commit; PROVIDED that (i) no Event of Default then exists or would result
therefrom, (ii) the increase in the Commitments pursuant to any such request
shall be in an aggregate amount of at least $5,000,000, (iii) after giving
effect to such increase, the aggregate Commitments shall not exceed $250,000,000
and (iv) any such other lending institution shall be reasonably satisfactory to
the Administrative Agent, the Issuing Bank and the Swing Loan Lender. In
connection with such increase, Annex A shall be deemed modified to reflect the
increased Commitments of any existing Banks and the identity and the Commitments
of such new lenders, and such new lenders shall be and become Banks hereunder
for all purposes hereof and of the other Loan Documents. In connection with any
such increase, the Borrower shall execute and deliver new Notes to any such new
lenders and the Banks (including such new lenders) shall effect such purchases
and sales among themselves of portions of the outstanding Loans as shall be
necessary to reflect such Commitments, as specified by the Administrative Agent,
and, in connection with such purchases and sales, the Borrower shall pay to each
affected Bank an amount equal to the amount the Borrower would have had to pay
pursuant to Section 7.03 if such Loans, or portions thereof, were prepaid at
such time.
(b) An increase in Commitments pursuant to this Section 1.16
shall become effective so long as each of the following conditions shall have
been fulfilled: (i) the Administrative Agent shall have received opinions of
counsel to the Borrower in form and substance reasonably satisfactory to the
Administrative Agent, and (ii) the Administrative Agent shall have received such
other instruments and documents, in form and substance satisfactory to it, as it
shall have reasonably requested, including an acknowledgment from each
Applicable Bank of the Commitment provided by it.
<PAGE>
ARTICLE 2
CONDITIONS TO LOANS AND LETTERS OF CREDIT
Section 2.01 CONDITIONS TO INITIAL LOANS AND LETTERS OF CREDIT. The
obligation of each Bank to make its initial Loan or the Issuing Bank to issue
the initial Letter of Credit hereunder, whichever shall first occur, is subject
to the determination by each Bank and the Issuing Bank, each in its sole and
absolute discretion, that each of the following conditions has been fulfilled:
(a) the Administrative Agent shall have received each of the
following, in form and substance and, in the case of the materials referred to
in clauses (i), (ii), (vi) and (x), certified in a manner satisfactory to the
Administrative Agent:
(i) a certificate of the Secretary or an Assistant
Secretary of each Loan Party, dated the Agreement Date, substantially in
the form of SCHEDULE 2.01(a)(i), to which shall be attached copies of the
resolutions and by-laws referred to in such certificate;
(ii) a copy of the certificate of incorporation of each
Loan Party, certified, as of a recent date, by the Secretary of State or
other appropriate official of such Person's jurisdiction of
incorporation;
(iii) a good standing certificate with respect to each
Loan Party and each Consolidated Subsidiary, issued as of a recent date
by the Secretary of State or other appropriate official of such Person's
jurisdiction of incorporation;
(iv) an opinion of counsel for each Loan Party, dated the
Agreement Date, in the form of SCHEDULE 2.01(a)(iv), with such changes as
the Administrative Agent shall approve;
(v) an opinion of Winthrop, Stimson, Putnam & Roberts,
special counsel for the Administrative Agent, dated the Agreement Date,
in the form of Schedule 2.01(a)(v);
(vi) a copy of each Governmental Approval and other
consent or approval listed on SCHEDULE 3.03;
(vii) a duly executed Note for each Bank;
(viii) a duly executed Swing Note for the Swing Loan
Lender;
(ix) a duly executed copy of each of the Pledge
Agreements;
(x) a copy of the Tax Sharing Agreement and the
Management Agreement;
(xi) either (A) such duly executed UCC-1 financing
statements and other documents as the Administrative Agent may request,
the filing or recordation of which is
<PAGE>
necessary or appropriate in the Administrative Agent's determination to
create or perfect a security interest in the Collateral under Applicable
Law, or (B) evidence of the filing or recordation of the same in such
offices as the Administrative Agent shall have specified; and
(xii) such instruments and other documents as the
Administrative Agent may request, the execution, delivery, filing or
possession of which is necessary or appropriate in the Administrative
Agent's determination to create or perfect a security interest in the
Collateral under Applicable Law, including but not limited to share
certificates and stock powers executed in blank with respect to the
Capital Securities subject to the Security Interest;
(b) the Administrative Agent shall be satisfied that,
simultaneously with the making of such initial Loans or issuance of such initial
Letters of Credit, all Indebtedness and other amounts payable under the Existing
Credit Agreement will be paid in full and the commitments to lend thereunder
will be terminated, and all Liens in favor of the lenders thereunder will be
terminated of record promptly thereafter;
(c) the Administrative Agent shall be satisfied that the ANI
Senior Discount Notes and the Subordinated Notes shall have been redeemed or
otherwise repaid in full, or defeased in a manner satisfactory to the
Administrative Agent, or will be so redeemed, repaid or defeased promptly
following the date of such initial Loans or Letter of Credit pursuant to
arrangements reasonably satisfactory to the Administrative Agent;
(d) all fees payable on or prior to the Agreement Date pursuant
to Section 1.09, and all amounts payable pursuant to Section 9.02 for which
invoices have been delivered to the Borrower on or prior to the Agreement Date,
shall have been paid in full or arrangements satisfactory to the Administrative
Agent shall have been made to cause them to be paid in full on the Agreement
Date.
Section 2.02 CONDITIONS TO EACH LOAN AND LETTER OF CREDIT. The
obligation of each Bank to make each Loan requested to be made by it, and the
obligation of the Issuing Bank to issue each Letter of Credit requested to be
issued by it (including any request to extend the expiry date of any Letter of
Credit to the date beyond the first anniversary of the original issuance thereof
or any automatic renewal thereof), is subject to the fulfillment of each of the
following conditions:
(a) the Administrative Agent, or in the case of a Swing Loan,
the Swing Loan Lender, shall have received a notice of borrowing with respect to
such Loan complying with the requirements of Section 1.02 or, in the case of a
Swing Loan, a notice of borrowing complying with the requirements of Section
1.01(b)(i) or, a notice of issuance with respect to such Letter of Credit
complying with the requirements of Section 1.03;
(b) each Loan Document Representation and Warranty shall be
true and correct at and as of the time such Loan is to be made or such Letter of
Credit is to be issued, both
<PAGE>
with and without giving effect to such Loan or Letter of Credit and all other
Loans or Letters of Credit to be made or issued at such time and to the
application of the proceeds thereof;
(c) no Default shall have occurred and be continuing at the
time such Loan is to be made or such Letter of Credit is to be issued or would
result from the making of such Loan or the issuance of such Letter of Credit and
all other Loans and Letters of Credit to be made or issued at such time or from
the application of the proceeds thereof;
(d) in the case of any such Loan, such Loan will not contravene
any Applicable Law applicable to such Bank, including Regulation U; and
(e) in the case of any such Letter of Credit, the Issuing Bank
shall have received such other instruments and agreements related thereto as the
Issuing Bank shall have requested.
Except to the extent that the Borrower shall have disclosed in the notice
of borrowing or notice of issuance, or in a subsequent notice given to the Banks
or the Issuing Bank, as the case may be, prior to 5:00 p.m. (New York time) on
the Business Day before the requested date for the making of the requested Loans
or the issuance of the requested Letter of Credit, that a condition specified in
clause (b) or (c) above will not be fulfilled as of the requested time for the
making of such Loans or the issuance of such Letter of Credit, the Borrower
shall be deemed to have made a Representation and Warranty as of the time of the
making of such Loans that the conditions specified in such clauses have been
fulfilled as of such time. No such disclosure by the Borrower that a condition
specified in clause (b) or (c) above will not be fulfilled as of the requested
time for the making of the requested Loans shall affect the right of each Bank
or the Issuing Bank, as the case may be, to not make the Loans requested to be
made by it or to not issue the Letter of Credit requested to be issued by it if,
in such Bank's or the Issuing Bank's determination, such condition has not been
fulfilled at such time.
ARTICLE 3
CERTAIN REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent, each Bank, the Swing Loan
Lender and the Issuing Bank to make each Loan requested to be made by it or
issue each Letter of Credit, the Borrower represents and warrants as follows:
Section 3.01 ORGANIZATION; POWER; QUALIFICATION. The Borrower and each
Subsidiary are corporations duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of incorporation, have
the corporate power and authority to own their respective properties and to
carry on their respective businesses as now being and hereafter proposed to be
conducted and are duly qualified and in good standing as foreign corporations,
and are authorized to do business, in all jurisdictions in which the character
of their respective properties or the nature of their respective businesses
requires such qualification or authorization, except for qualifications and
authorizations the lack of which, singly or in the aggregate, has not
<PAGE>
had and will not have a Materially Adverse Effect on (a) the Borrower and the
Consolidated Subsidiaries taken as a whole, (b) any Loan Document or (c) the
Collateral.
Section 3.02 SUBSIDIARIES. SCHEDULE 3.02 sets forth, as of the
Agreement Date, all of the Subsidiaries, their jurisdictions of incorporation
and the percentages of the various classes of their Capital Securities owned by
the Borrower or another Subsidiary and indicates which Subsidiaries are
Consolidated Subsidiaries. The Borrower or another Subsidiary, as the case may
be, has the unrestricted right to vote (except as may be provided in the Pledge
Agreements), and (subject to limitations imposed by Applicable Law) to receive
dividends and distributions on, all Capital Securities indicated on SCHEDULE
3.02 as owned by the Borrower or such Subsidiary. All such Capital Securities
have been duly authorized and issued and are fully paid and nonassessable.
Section 3.03 AUTHORIZATION; ENFORCEABILITY; REQUIRED CONSENTS; ABSENCE
OF CONFLICTS. The Borrower and each Subsidiary has the power, and has taken all
necessary action (including, if a corporation, any necessary stockholder action)
to authorize it, to execute, deliver and perform in accordance with their
respective terms the Loan Documents to which it is a party and, in the case of
the Borrower, to borrow hereunder in the unused amount of the Commitments. This
Agreement has been, and each of the other Loan Documents to which the Borrower
or any Subsidiary is a party when delivered to the Administrative Agent will
have been, duly executed and delivered by the Borrower and each Subsidiary that
is a party thereto and is, or when so delivered will be, a legal, valid and
binding obligation of such Loan Party, enforceable against such Loan Party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by equitable principles
regardless of whether considered in a proceeding in equity or at law. The
execution, delivery and performance in accordance with their respective terms by
the Borrower and the Subsidiaries of the Loan Documents to which they are
parties, and each borrowing hereunder, whether or not in the amount of the
unused Commitments, do not and (absent any change in any Applicable Law or
applicable Contract) will not (a) require any Governmental Approval or any other
consent or approval, including any consent or approval of the stockholders of
the Borrower or any Subsidiary, other than Governmental Approvals and other
consents and approvals that have been obtained, are final and not subject to
review on appeal or to collateral attack, are in full force and effect and, in
the case of any such Governmental Approval or other consent or approval required
under any Applicable Law or Contract as in effect on the Agreement Date, are
listed on SCHEDULE 3.03, or (b) violate, conflict with, result in a breach of,
constitute a default under, or result in or require the creation of any Lien
(other than the Security Interest) upon any assets of the Borrower or any
Subsidiary under, (i) any Contract to which ANI, the Borrower or any Subsidiary
is a party or by which ANI, the Borrower or any Subsidiary or any of their
respective properties may be bound or (ii) any Applicable Law.
Section 3.04 TAXES. The Borrower and each Subsidiary have (a) filed all
material Tax returns required to have been filed by it under Applicable Law, (b)
paid all Taxes that are due and payable by it or have been assessed against it
except for Taxes the failure to have paid which does not contravene Section 4.01
and such Taxes as are being contested in good faith by
<PAGE>
appropriate proceedings and (c) to the extent required by generally accepted
accounting principles, reserved against all Taxes that are payable by it but are
not yet due or that are due and payable by it or have been assessed against it
but have not yet been paid. Other than the Tax Sharing Agreement, there is in
effect no tax sharing, tax allocation or similar agreement to which the Borrower
or any of its Subsidiaries is a signatory providing for the manner in which tax
payments owing by members of the affiliated group of which the Borrower is the
"common parent" (within the meaning of Section 1504 of the Code) (whether in
respect of Federal or state income or other taxes) are allocated among the
members of such group.
Section 3.05 LITIGATION. Except as set forth on SCHEDULE 3.05, there
are not, in any court or before any arbitrator of any kind or before or by any
governmental or non-governmental body, any actions, suits or proceedings pending
or threatened (nor, to the knowledge of the Borrower and its Subsidiaries, is
there any basis therefor) against or in any other way relating to or affecting
(a) the Borrower or any Subsidiary or any of their respective businesses or
properties, (b) any Loan Document or (c) the Collateral, that, if adversely
determined, would, singly or in the aggregate, have a Materially Adverse Effect
on (x) the Borrower and the Consolidated Subsidiaries taken as a whole, (y) any
Loan Document or (z) the Collateral.
Section 3.06 BURDENSOME PROVISIONS. Neither the Borrower nor any
Subsidiary is a party to or bound by any Contract or Applicable Law, compliance
with which would be reasonably likely to have a Materially Adverse Effect on (a)
the Borrower and the Consolidated Subsidiaries taken as a whole, (b) any Loan
Document or (c) the Collateral.
Section 3.07 NO ADVERSE CHANGE OR EVENT. Since June 30, 1998, no change
in the business, assets, Liabilities, financial condition, results of operations
or business prospects of the Borrower or any Subsidiary has occurred, and no
event has occurred or failed to occur, that has had or would be reasonably
likely to have, either alone or in conjunction with all other such changes,
events and failures, a Materially Adverse Effect on (a) the Borrower and the
Consolidated Subsidiaries taken as a whole, (b) any Loan Document or (c) the
Collateral. Such an adverse change may have occurred, and such an event may
have occurred or failed to occur, at any particular time notwithstanding the
fact that at such time no Default shall have occurred and be continuing.
Section 3.08 ADDITIONAL ADVERSE FACTS. Except for facts and
circumstances disclosed on SCHEDULE 3.05 or SCHEDULE 3.08 or in the notes to the
financial statements referred to in Section 5.02(a), no fact or circumstance is
known to the Borrower, as of the Agreement Date, that, either alone or in
conjunction with all other such facts and circumstances, has had or would be
reasonably likely to have (so far as the Borrower and its Subsidiaries can
foresee) a Materially Adverse Effect on (a) the Borrower and the Consolidated
Subsidiaries taken as a whole, (b) any Loan Document or (c) the Collateral. If
a fact or circumstance disclosed on such Schedules or in such notes should in
the future have a Materially Adverse Effect on (x) the Borrower and the
Consolidated Subsidiaries taken as a whole, (y) any Loan Document or (z) the
Collateral, such Materially Adverse Effect shall be a change or event subject to
Section 3.07 notwithstanding such disclosure.
<PAGE>
Section 3.09 INVESTMENT COMPANY ACT. Neither the Borrower nor any
Subsidiary is an "investment company" or a Person "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940.
Section 3.10 SUBSTANCE RELEASE AND DISPOSAL. Except as disclosed on
SCHEDULE 3.10, to the best of the Borrower's knowledge, (a) there have been no
releases or disposals of hazardous wastes, environmental contaminants or other
substances in quantities or locations that, singly or in the aggregate, would be
reasonably likely to result in the incurrence by the Borrower or any of its
Subsidiaries of remedial obligations under Applicable Law that would be
reasonably likely to have a Materially Adverse Effect on the Borrower and its
Consolidated Subsidiaries taken as a whole, and (b) neither the Borrower nor any
of its Subsidiaries has received any notice or order advising it that it has or
may have any remedial obligation with respect to any such releases or disposals
or that it is or may be responsible for the costs of any remedial action taken
or to be taken by any other Persons with respect to any such releases or
disposals, which obligation or cost, if fully payable, would, singly or in the
aggregate, be reasonably likely to have a Materially Adverse Effect on the
Borrower and its Consolidated Subsidiaries taken as a whole.
Section 3.11 SENIOR OBLIGATIONS. The obligations of the Borrower under
the Loan Documents constitute "Senior Debt" and "Designated Senior Debt", within
the meaning and pursuant to the terms of the 1997 Indenture and the 1999
Indenture.
Section 3.12 YEAR 2000. The Borrower and its Subsidiaries have reviewed
the effect of the Year 2000 Issue on the computer software, hardware and
firmware systems and equipment containing embedded microchips owned or operated
by or for the Borrower and its Subsidiaries or used or relied upon in the
conduct of their business (including systems and equipment supplied by others or
with which such computer systems of the Borrower and its Subsidiaries
interface). The costs to the Borrower and its Subsidiaries of any reprogramming
required as a result of the Year 2000 Issue to permit the proper functioning of
such systems and equipment and the proper processing of data, and the testing of
such reprogramming, and of the reasonably foreseeable consequences of the Year
2000 Issue to the Borrower or any of its Subsidiaries (including reprogramming
errors and the failure of systems or equipment supplied by others) are not
reasonably expected to result in a Default or Event of Default or to have a
Materially Adverse Effect on the Borrower and its Consolidated Subsidiaries
taken as a whole or the Collateral.
ARTICLE 4
CERTAIN COVENANTS
From the Agreement Date and until the Repayment Date,
A. THE BORROWER SHALL AND SHALL CAUSE EACH SUBSIDIARY TO:
Section 4.01 PRESERVATION OF EXISTENCE AND PROPERTIES, SCOPE OF
BUSINESS, COMPLIANCE WITH LAW, PAYMENT OF TAXES AND CLAIMS, PRESERVATION OF
ENFORCEABILITY. (a) Except as permitted by Section 4.10, preserve and maintain
its corporate existence and all of its other
<PAGE>
franchises, licenses, rights and privileges, (b) preserve, protect and obtain
all Intellectual Property, and preserve and maintain in good repair, working
order and condition all other properties, required for the conduct of its
business, (c) engage only in businesses in substantially the same fields as the
businesses conducted on the Agreement Date, or in other businesses directly
related thereto, (d) comply with Applicable Law, (e) pay or discharge when due
all Taxes and all Liabilities that might become a Lien on any of its properties
and (f) take all action and obtain all consents and Governmental Approvals
required so that its obligations under the Loan Documents will at all times be
legal, valid and binding and enforceable in accordance with their respective
terms, except that this Section 4.01 (other than clauses (a), in so far as it
requires any Loan Party to preserve its corporate existence, (c) and (f)) shall
not apply in any circumstance where noncompliance, together with all other
noncompliances with this Section 4.01, will not have a Materially Adverse Effect
on (x) the Borrower and the Consolidated Subsidiaries taken as a whole, (y) any
Loan Document or (z) the Collateral.
Section 4.02 INSURANCE. Maintain insurance with responsible insurance
companies against at least such risks and in at least such amounts as is
customarily maintained by similar businesses, or as may be required by
Applicable Law or reasonably requested by the Required Banks.
B. THE BORROWER SHALL:
Section 4.03 [Reserved].
Section 4.04 ADDITIONAL SUBSIDIARIES. On or prior to the date it forms
or acquires any new Subsidiary, deliver to the Administrative Agent (i)
certificates representing all of the issued and outstanding shares of capital
stock of such new Subsidiary held by the Borrower and its Subsidiaries, together
with appropriate stock powers, duly endorsed in blank, (ii) unless otherwise
agreed by the Required Banks, a Subsidiary Guaranty Supplement in the form of
EXHIBIT B and a Pledge Agreement in the form of EXHIBIT C, each duly executed by
such new Subsidiary, and (iii) such certificates, resolutions, legal opinions,
copies of filings and notices, and other materials, relating to such new
Subsidiary, the documents referred to above and the actions required thereunder,
as the Administrative Agent may reasonably request.
Section 4.05 USE OF PROCEEDS. (a) Use the proceeds of the Loans (i) to
refinance Indebtedness or to pay any dividends to ANI for such purpose (in the
case of the ANI Senior Discount Notes and the Subordinated Notes), (ii) to fund
the purchase price of acquisitions not prohibited hereby, (iii) to fund working
capital requirements, (iv) to pay transaction costs in connection herewith and
(v) for other general corporate purposes, and (b) use the Letters of Credit only
for the purpose specified in Section 1.03(c). None of the proceeds of any of
the Loans and none of the Letters of Credit shall be used to purchase or carry,
or to reduce or retire or refinance any credit incurred to purchase or carry,
any margin stock (within the meaning of Regulations U and X of the Board of
Governors of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying any margin stock. If requested by any Bank,
the Borrower shall complete and sign Part I of a copy of Federal Reserve Form
U-1 referred to in Regulation U and deliver such copy to such Bank.
<PAGE>
C. THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY SUBSIDIARY TO,
DIRECTLY OR INDIRECTLY:
Section 4.06 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except that this Section 4.06 shall not apply to (a) Indebtedness
under the Loan Documents, (b) the Greenco Subordinated Debt (so long as any
Guaranty by the Borrower or any Subsidiary of any such Indebtedness of Newco
shall be subordinated on terms and conditions substantially equivalent to the
terms and conditions (including subordination provisions, covenants, events of
default, remedies and other relevant provisions) of the Greenco Note and the
Greenco Note Purchase Agreement, as determined by the Administrative Agent), the
1997 Subordinated Notes and the 1999 Subordinated Notes, (c) Existing Debt, (d)
Intercompany Debt, (e) Indebtedness in an outstanding aggregate amount not in
excess of $25,000,000 consisting of obligations as lessee under capital leases,
(f) other Indebtedness in an outstanding aggregate amount not in excess of
$50,000,000 and (g) other unsecured Indebtedness of the Borrower so long as (x)
no Default or Event of Default shall have occurred and be continuing at the time
of the incurrence of such Indebtedness, or would result from the incurrence
thereof, (y) the ratio of Consolidated Debt to Operating Cash Flow shall be
equal to or less than 5.00:1 after giving effect to such incurrence and (z) the
material terms of such Indebtedness (1) are no more restrictive or onerous on
the Borrower and its Subsidiaries, or confer greater rights on the holders
thereof, than the terms of the Loan Documents and the rights of the
Administrative Agent and the Banks thereunder and (2) do not (absent the right
to accelerate the maturity thereof upon the occurrence of an event of default in
connection therewith) require the repayment or prepayment of any portion of such
Indebtedness prior to the date that is six months after the Maturity Date.
Section 4.07 GUARANTIES. Be obligated, at any time, in respect of any
Guaranty, except that this Section 4.07 shall not apply to (a) Existing
Guaranties, (b) Permitted Guaranties and (c) guaranties which are permitted
Indebtedness under Section 4.06.
Section 4.08 LIENS. Permit to exist, at any time, any Lien upon any of
its properties or assets of any character, whether now owned or hereafter
acquired, or upon any income or profits therefrom, except that this Section 4.08
shall not apply to Permitted Liens; PROVIDED, HOWEVER, that if, notwithstanding
this Section 4.08, any Lien to which this Section is applicable shall be created
or arise, the Liabilities of the Loan Parties under the Loan Documents shall, to
the extent such Lien attaches to any asset that does not constitute Collateral
or to any asset with respect to which such Lien would be prior to the Security
Interest, automatically be secured by such Lien equally and ratably with the
other Liabilities secured thereby, and the holder of such other Liabilities, by
accepting such Lien, shall be deemed to have agreed thereto and to share with
the Banks, on that basis, the proceeds of such Lien, whether or not the Banks'
security interest shall be perfected; PROVIDED FURTHER, HOWEVER, that
notwithstanding such equal and ratable securing and sharing, the existence of
such Lien shall constitute a default by the Borrower in the performance or
observance of this Section 4.08.
Section 4.09 RESTRICTED PAYMENTS. Make or declare or otherwise become
obligated to make any Restricted Payment, except that this Section 4.09 shall
not apply to any Restricted Payment (a) made by any Subsidiary to the Borrower
or any other Subsidiary (other than the California Partnership, if the aggregate
amount thereof, together with the aggregate amount of
<PAGE>
Investments in the California Partnership by the Borrower and the Subsidiaries
would, without duplication, exceed $25,000,000), (b) consisting of payments
under the Tax Sharing Agreement, (c) consisting of regularly scheduled payments
of interest on the Greenco Note, but only to the extent required in accordance
with the terms thereof to be made in cash, and (d) so long as no Default shall
have occurred and be continuing or would result therefrom, (i) made by the
Borrower to ANI for the purpose of redeeming or purchasing and retiring the 9%
Cumulative Preferred Stock of Denver Newspapers, Inc. held by Media General,
Inc., in an aggregate amount not in excess of $54,000,000 and (ii) made by the
Borrower to ANI in an amount not in excess of the sum of (A) $25,000,000,
(B) $5,000,000 during any fiscal year of the Borrower, commencing with the
fiscal year ending June 30, 2000 and (C) an amount in any fiscal year of the
Borrower equal to 50% of Excess Cash Flow for the immediately preceding fiscal
year commencing with the fiscal year ending June 30, 2000, so long as the ratio
of Consolidated Debt to Operating Cash Flow is less than 4.50 to 1.00 before and
after giving effect thereto, with any portion of such amounts described in
clauses (B) and (C) not paid in such fiscal year being permitted to be carried
forward and paid in any subsequent fiscal year; PROVIDED, HOWEVER, that the
amount of Restricted Payments permitted to be made pursuant to this Section
4.09(d) shall be reduced by the amount of Investments made pursuant to Section
4.12(g).
Section 4.10 MERGER OR CONSOLIDATION, ACQUISITIONS. Merge or
consolidate with any Person, or acquire any assets or business from or Capital
Securities of any Person (other than an acquisition of Capital Securities of a
Subsidiary, as long as such acquisition of Capital Securities is permitted under
Section 4.12(d)), except that, if both before and after giving effect thereto no
Default exits or would exist, this Section 4.10 shall not apply to (a) any
acquisition of assets in the ordinary course of business, (b) any merger or
consolidation of the Borrower with any one or more Persons; PROVIDED, that the
Borrower shall be the continuing Person, (c) any merger or consolidation of any
Subsidiary with any one or more other Subsidiaries so long as, in the case of
the California Partnership, it merges into a Subsidiary that shall have executed
and delivered a Guaranty Agreement and a Pledge Agreement and such Subsidiary
shall be the continuing Person and, in all other cases, if any such Subsidiary
is a Loan Party, it shall be the continuing Person, and (d) any acquisition
(whether by purchase or exchange, and whether constituting a purchase of assets
or stock) of newspaper publishing properties and directly related businesses so
long as, in the event that the aggregate purchase price with respect to such
acquisition is greater than $5,000,000, the Borrower shall have provided to the
Banks a certificate of the president or chief financial officer of the Borrower
stating that (i) each Loan Document Representation and Warranty is true and
correct in all material respects both immediately before and after giving effect
to such acquisition and (ii) no Default shall have occurred and be continuing
both immediately before and after giving effect to such acquisition, and no
Default shall have occurred and be continuing, including under Sections 4.22
through 4.26, after giving pro forma effect to such acquisition and any related
incurrence of Indebtedness by the Borrower or any Subsidiary.
Section 4.11 DISPOSITION OF ASSETS. Sell, lease, license, transfer or
otherwise dispose of any asset or any interest therein, except that this Section
4.11 shall not apply to (a) any disposition of any asset or any interest therein
in the ordinary course of business, (b) any disposition of any obsolete or
retired property not used or useful in its business, (c) any
<PAGE>
disposition of any asset or any interest therein to the Borrower or a Subsidiary
that is a Guarantor, (d) any transaction to which any of the other provisions of
this Agreement (other than Section 4.15) is by its express terms inapplicable,
and (e) any other disposition, so long as no Default shall have occurred and be
continuing immediately prior or after giving effect to such disposition and
(i) such disposition is a sale to any Person for cash in
an amount not less than the fair market value of the assets sold net of
the liabilities assumed, as determined in the good faith judgment of the
Board of Directors of the Borrower or the applicable Subsidiary, and (A)
the Cash Flow Percentage attributable to such assets (including the
portion of assets exchanged, as provided in clause (ii) below, to which
the cash component, if any, of any such exchange is attributable),
together with the Cash Flow Percentage of all other assets sold by the
Borrower and its Subsidiaries pursuant to this clause (i), or exchanged
by the Borrower and its Subsidiaries pursuant to clause (ii) below,
within the prior four fiscal quarters of the Borrower, does not exceed
15% and (B) the Cash Flow Percentage attributable to such assets,
together with the Cash Flow Percentage (determined, with respect to prior
sales, at the time of each such sale) of all assets sold by the Borrower
and its Subsidiaries pursuant to this clause (i), and exchanged by the
Borrower and its Subsidiaries pursuant to clause (ii) below, since the
Agreement Date does not exceed 30%, and (C) the Borrower shall have
furnished to the Banks, not later than the fifth Business Day preceding
the date of any such disposition wherein the sale price is greater than
$5,000,000, a certificate of the president or chief financial officer of
the Borrower stating that (1) each Loan Document Representation and
Warranty is true and correct in all material respects both immediately
before and after giving effect to such disposition and (2) no Default
shall have occurred and be continuing both immediately before and after
giving effect to such disposition, and no Default shall have occurred and
be continuing, including under Sections 4.22 through 4.26, after giving
pro forma effect to such disposition, or
(ii) such disposition is an exchange, with any Person, of
assets exchanged by the Borrower or applicable Subsidiary comprising one
or more newspaper publishing properties or the stock of a Person owning
such property or properties for assets comprising one or more other
newspaper publishing properties of a similar nature and of equal or
greater value, as determined in the good faith judgment of the Board of
Directors of the Borrower or the applicable Subsidiary, and (A) the Cash
Flow Percentage attributable to such assets exchanged by the Borrower or
applicable Subsidiary, together with the Cash Flow Percentage
attributable to all other assets exchanged by the Borrower and its
Subsidiaries pursuant to this clause (ii), or sold by the Borrower and
its Subsidiaries pursuant to clause (i) above, within the prior four
fiscal quarters of the Borrower, does not exceed 15%, (B) the Cash Flow
Percentage attributable to such assets, together with the Cash Flow
Percentage (determined, with respect to prior exchanges, at the time of
each such exchange) attributable to all other assets exchanged by the
Borrower and its Subsidiaries pursuant to this clause (ii), and exchanged
by the Borrower and its Subsidiaries pursuant to clause (i) above, since
the Agreement Date, does not exceed 30%, and (C) the Borrower shall have
furnished to the Banks, not later than the
<PAGE>
fifth Business Day preceding the date of any such exchange wherein the
fair market value of the assets received in exchange is greater than
$5,000,000, a certificate of the president or chief financial officer of
the Borrower stating that (1) each Loan Document Representation and
Warranty is true and correct in all material respects both immediately
before and after giving effect to such disposition, (2) no Default shall
have occurred and be continuing both immediately before and after giving
effect to such disposition, and no Default shall have occurred and be
continuing, including under Sections 4.22 through 4.26, after giving pro
forma effect to such disposition and (3) he value of the assets received
by the Borrower or applicable Subsidiary in such exchange is not less
than the fair market value of the assets disposed by the Borrower or such
Subsidiary in such exchange.
Section 4.12 INVESTMENTS. Make or acquire any Investment or have any
Investment outstanding, except that this Section 4.12 shall not apply to (a)
Existing Investments, (b) Money Market Investments, (c) Investments constituting
acquisitions permitted under Section 4.10, (d) Investments by the Borrower or
any Subsidiary in the Borrower or any Subsidiary that is a Guarantor, (e)
Investments by the Borrower or any Subsidiary in the California Partnership,
PROVIDED that such Investments, together with the aggregate amount of Restricted
Payments made to the California Partnership pursuant to Section 4.09(a), shall
not, without duplication, exceed $25,000,000 in the aggregate, (f) notes or
other instruments received by the Borrower or any Subsidiary as payment for the
disposition of assets in accordance with Section 4.11(a) hereof, (g) Investments
in Denver Newspapers, Inc. so long as the aggregate amount thereof, together
with the aggregate amount of Restricted Payments made pursuant to Section
4.09(d), is not in excess of the maximum amount of Restricted Payments otherwise
permitted to be made pursuant to Section 4.09(d) and (g) other Investments
(other than in the California Partnership) in newspaper publishing properties
and directly related businesses in an aggregate amount not in excess of
$25,000,000.
Section 4.13 TAXES OF OTHER PERSONS. (a) File a consolidated,
combined, unitary or similar group Tax return with any other Person other than,
in the case of the Borrower, a Consolidated Tax Subsidiary or ANI and, in the
case of any such Subsidiary, the Borrower, a Consolidated Tax Subsidiary or ANI
or (b) except as required by Applicable Law or as permitted by Section 4.09
hereof, pay or enter into any Contract to pay any Taxes owing by any Person
other than the Borrower or a Consolidated Tax Subsidiary.
Section 4.14 BENEFIT PLANS. (a) Have, or permit any of its ERISA
Affiliates to have, any Benefit Plan other than an Existing Benefit Plan; (b)
permit any Existing Benefit Plan to be amended in any manner that would cause
the aggregate Unfunded Benefit Liabilities under all Existing Benefit Plans to
exceed $500,000; or (c) permit any Existing Benefit Plan to have a Funded
Current Liability Percentage of less than 60%.
Section 4.15 TRANSACTIONS WITH AFFILIATES. Effect any transaction (or
series of related transactions) (each a "TRANSACTION") with any Affiliate of the
Borrower, 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
<PAGE>
favorable to the Borrower or the applicable 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, the Borrower shall deliver to the Administrative Agent (i)
with respect to any Transaction involving aggregate consideration in excess of
$1,000,000, a certificate of the president or the chief financial officer of the
Borrower certifying that a majority of the disinterested members of the Board of
Directors of the Borrower has approved such Transaction and has determined that
the terms of such Transaction satisfy the Fairness Condition and (ii) with
respect to any Transaction (x) involving aggregate consideration in excess of
$1,000,000 in which there are no disinterested directors or (y) involving
aggregate consideration in excess of $10,000,000, 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 the Borrower or the
applicable Subsidiary from a financial point of view; PROVIDED, HOWEVER, that
clause (b)(ii)(y) shall not apply to purchases of newsprint in the ordinary
course of business by the Borrower and its Subsidiaries from Affiliates of the
Borrower. Notwithstanding the foregoing, this provision shall not apply to (A)
any Transaction, in the ordinary course of business, between the Borrower and a
Wholly Owned Subsidiary of the Borrower, or between Wholly Owned Subsidiaries of
the Borrower, (B) the making of Investments not prohibited by Section 4.12, (C)
the making of any Restricted Payment not prohibited by Section 4.09 and (D) the
payment of fees payable pursuant to the Management Agreement.
Section 4.16 LIMITATION ON RESTRICTIVE COVENANTS. Permit to exist, at
any time, any consensual restriction limiting the ability (whether by covenant,
event of default, subordination or otherwise) of any Subsidiary to (a) pay
dividends or make any other distributions on shares of its capital stock held by
the Borrower or any other Subsidiary, (b) pay any obligation owed to the
Borrower or any other Subsidiary, (c) make any loans or advances to or
investments in the Borrower or in any other Subsidiary, (d) transfer any of its
property or assets to the Borrower or any other Subsidiary or (e) create any
Lien upon its property or assets whether now owned or hereafter acquired or upon
any income or profits therefrom, except that this Section 4.16 shall not apply
to Permitted Restrictive Covenants.
Section 4.17 ISSUANCE OR DISPOSITION OF CAPITAL SECURITIES. Issue any
of its Capital Securities or sell, transfer or otherwise dispose of any Capital
Securities of any Subsidiary, except for (a) any issuance of Capital Securities
that are subjected to the Security Interest in a manner satisfactory to the
Administrative Agent and (b) any disposition of Capital Securities of any
Subsidiary so long as all of the assets of such Subsidiary could have been
disposed of in compliance with Section 4.11(c) or (e).
Section 4.18 SUBSTANCE STORAGE AND DISPOSAL. Permit any hazardous
wastes, environmental contaminants or other substances, the improper release or
disposal of which could result in the incurrence by the Borrower or any of its
Subsidiaries of material remedial obligations under Applicable Law, to be
brought onto or stored on the properties owned or leased by it except for (a)
substances to be used in connection with the business of the Borrower and its
Subsidiaries, pending and during such use and (b) substances that were generated
or used in connection with such business, pending their disposal.
<PAGE>
Section 4.19 MANAGEMENT AGREEMENT; TAX SHARING AGREEMENT. Amend,
supplement or otherwise change (or agree to any amendment, supplement or other
change of) the terms of the Management Agreement or the Tax Sharing Agreement.
Section 4.20 CERTAIN RESTRICTIONS WITH RESPECT TO OTHER INDEBTEDNESS.
Amend, supplement or otherwise change (or agree to any amendment, supplement or
other change of) the terms of the 1997 Subordinated Notes, the 1999 Subordinated
Notes, the 1997 Indenture, the 1999 Indenture, the Greenco Note, the Greenco
Note Purchase Agreement, or make any payment consistent with an amendment,
supplement or change thereto, if the effect of such amendment, supplement or
change is to increase the interest rate payable on the 1997 Subordinated Notes,
the 1999 Subordinated Notes or the Greenco Note, advance the dates upon which
payments of principal or interest are due on the 1997 Subordinated Notes, the
1999 Subordinated Notes or the Greenco Note (including any such change that adds
or modifies mandatory or voluntary prepayments), change, in a manner adverse to
the Borrower and the Subsidiaries or which confers additional rights on the
holders thereof, any event of default or covenant (or any definition relating
thereto) with respect to the 1997 Subordinated Notes, the 1999 Subordinated
Notes or the Greenco Note, change the redemption or repurchase provisions with
respect to the 1997 Subordinated Notes, the 1999 Subordinated Notes or the
Greenco Note in a manner adverse to the Borrower and the Subsidiaries or which
confers additional rights on the holders thereof, change the subordination
provisions of the 1997 Subordinated Notes, the 1999 Subordinated Notes or the
Greenco Note or otherwise increase the obligations of the obligor or confer
additional rights on the holders of the 1997 Subordinated Notes, the 1999
Subordinated Notes or the Greenco Note without, in each case, obtaining the
prior written consent of the Required Banks to such amendment or change.
Section 4.21 YEAR 2000. The Borrower shall take, and shall cause each
of its Subsidiaries to take, all necessary action to complete in all material
respects by September 30, 1999, the reprogramming of computer software, hardware
and firmware systems and equipment containing embedded microchips owned or
operated by or for the Borrower and its Subsidiaries or used or relied upon in
the conduct of their business (including systems and equipment supplied by
others or with which such systems of the Borrower or any of its Subsidiaries
interface) required as a result of the Year 2000 Issue to permit the proper
functioning of such computer systems and other equipment and the testing of such
systems and equipment, as so reprogrammed. At the request of the Administrative
Agent or any Bank, the Borrower shall provide, and shall cause each of its
Subsidiaries to provide, to the Administrative Agent or such Bank reasonable
assurance of its compliance with the preceding sentence.
D. THE BORROWER SHALL NOT AT ANY TIME:
Section 4.22 RATIO OF CONSOLIDATED DEBT TO OPERATING CASH FLOW. Permit
the ratio of Consolidated Debt to Operating Cash Flow at any time during a
period set forth below to be greater than the ratio set forth opposite such
period:
(a) From the Agreement Date through December 31, 1999: 6.50:1;
(b) From January 1, 2000 through December 31, 2000: 6.25:1;
<PAGE>
(c) From January 1, 2001 through June 30, 2001: 6.00:1;
(d) From July 1, 2001 through June 30, 2002: 5.50:1;
(e) From July 1, 2002 through June 30, 2003: 5.00:1; and
(f) From July 1, 2003 and thereafter: 4.75:1;
PROVIDED, HOWEVER, that if the Borrower shall have issued or otherwise incurred
Indebtedness contemplated by Section 4.06(g) at any time prior to July 1, 2002,
the Borrower shall not permit the ratio of Consolidated Debt to Operating Cash
Flow to be greater than 5.00:1 at any time from the date of such issuance or
incurrence through June 30, 2003.
Section 4.23 RATIO OF CONSOLIDATED SENIOR DEBT TO OPERATING CASH FLOW.
Permit the ratio of Consolidated Senior Debt to Operating Cash Flow at any time
to be greater than 3.00:1.
Section 4.24 PRO FORMA INTEREST COVERAGE. Permit the ratio of Operating
Cash Flow to Pro Forma Consolidated Interest Expense determined as of the end of
any fiscal quarter ending in a period set forth below to be less than the ratio
set forth opposite such period:
(a) From the Agreement Date through June 29, 2000: 1.50:1;
(b) From June 30, 2000 through June 29, 2002: 1.75:1; and
(c) From June 30, 2002 and thereafter: 2.00:1.
Section 4.25 PRO FORMA DEBT SERVICE COVERAGE. Permit the ratio of
Operating Cash Flow to Pro Forma Debt Service determined as of the end of any
fiscal quarter to be less than 1.25:1.
Section 4.26 FIXED CHARGE COVERAGE. Permit the ratio of Operating Cash
Flow to Consolidated Fixed Charges determined as of the end of any fiscal
quarter to be less than 1.15:1.
E. THE BORROWER SHALL NOT PERMIT THE CALIFORNIA PARTNERSHIP TO, AND IN
THE CASE OF CLAUSES (b) AND (c) OF SECTION 4.27 THE BORROWER SHALL NOT, DIRECTLY
OR INDIRECTLY:
Section 4.27 CERTAIN ACTIVITIES OF THE CALIFORNIA PARTNERSHIP. (a)
Fail to make such partnership distributions or otherwise transfer its cash and
cash equivalents to the Borrower or any of the Subsidiaries, so that, as a
result of such distributions and transfers, the California Partnership shall own
or hold cash and cash equivalents not in excess of $10,000,000 at any time, (b)
amend, waive, modify or supplement the Contribution Agreement or the Partnership
Agreement in any manner that (i) is adverse to the Borrower or any Subsidiary or
(ii) has the effect of limiting or restricting the transferability of the
partnership interests in the California Partnership held by West Coast MediaNews
or any of its Affiliates or could otherwise have an adverse effect on the
practical ability of the Banks to realize the benefits of the Security Interest
(as the Security Interest applies to the partnership interests in the California
Partnership) and (c)
<PAGE>
take any action or refrain from taking any action the result of which, directly
or indirectly, is that the California Partnership no longer constitutes a
Subsidiary or the Borrower no longer controls, directly or indirectly, the
California Partnership.
F. ANI SHALL NOT, DIRECTLY OR INDIRECTLY:
Section 4.28 INDEBTEDNESS OF ANI. Create, incur, assume or suffer to
exist any Indebtedness, except that this Section 4.28 shall not apply to (a)
Indebtedness under the Loan Documents and (b) its Guaranty of the Greenco Note.
ARTICLE 5
INFORMATION
Section 5.01 INFORMATION TO BE FURNISHED. From the Agreement Date and
until the Repayment Date, the Borrower shall furnish to each Bank:
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within 45 days after the close of each of the first three quarterly
accounting periods in each fiscal year of the Borrower, commencing with the
quarterly period ended March 31, 1999 consolidated and consolidating balance
sheets of the Borrower and the Consolidated Subsidiaries as at the end of such
quarterly period and the related consolidated statements of income, statements
of income of each Consolidated Subsidiary and consolidated statements of cash
flows of the Borrower and the Consolidated Subsidiaries for such quarterly
period and for the elapsed portion of the fiscal year ended with the last day of
such quarterly period, setting forth in each case in comparative form the
figures for the corresponding periods of the previous fiscal year.
(b) MONTHLY REPORTS. As soon as available and in any event
within 45 days after the end of each month, the statements of revenues and
operating expenses of each of the Borrower and its Subsidiaries, for such month
and for the portion of the fiscal year then ended, including comparisons of
operations with budget and the prior year, in the form currently prepared for
management.
(c) YEAR-END FINANCIAL STATEMENTS; ACCOUNTANTS' CERTIFICATE.
As soon as available and in any event within 90 days after the end of each
fiscal year of the Borrower, commencing with the fiscal year ended June 30,
1999:
(i) consolidated and consolidating balance sheets of the
Borrower and the Consolidated Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income, statements of
income of each Consolidated Subsidiary and consolidated statements of
cash flows of the Borrower and the Consolidated Subsidiaries for such
fiscal year, setting forth in comparative form the figures as at the end
of and for the previous fiscal year;
(ii) an audit report of Ernst & Young, or other
independent certified public accountants of recognized standing
reasonably satisfactory to the Required Banks, on
<PAGE>
such of the financial statements referred to in clause (i) as are
consolidated financial statements, which report shall be in scope and
substance reasonably satisfactory to the Required Banks;
(iii) a certificate of such accountants addressed to the
Banks (A) stating that they have caused this Agreement to be reviewed and
that, in making the examination necessary for their report on such
consolidated financial statements, nothing came to their attention that
caused them to believe that, as of the date of such financial statements,
any Default exists in respect of Sections 4.22 through 4.26 insofar as
they relate to accounting matters and (B) having attached the
calculations required to establish whether or not the Borrower was in
compliance with the covenants contained in Sections 4.22 to 4.26; and
(iv) the operating budget summary setting forth the
projections of operating revenues and expenses of the Borrower and the
Subsidiaries for the succeeding budget year.
(d) OFFICER'S CERTIFICATES. At the time that financial
statements are furnished pursuant to Section 5.01(a) or (c), a certificate of
the president or chief financial officer of the Borrower in the form of SCHEDULE
5.01(d). At the time that financial statements are furnished pursuant to
Section 5.01(a) and within 45 days after the end of each fiscal year of the
Borrower, a certificate of the president or chief financial officer of the
Borrower demonstrating the ratios of Consolidated Debt to Operating Cash Flow
and Consolidated Senior Debt to Operating Cash Flow and stating, if applicable,
that a change in the Base Rate Margin or Eurodollar Rate Margin should be made.
(e) REPORTS AND FILINGS. (i) Promptly upon receipt thereof,
copies of all reports, if any, submitted to the Borrower or any Subsidiary, or
the Board of Directors of the Borrower or any Subsidiary, by its independent
certified public accountants, including any management letter; (ii) as soon as
practicable, copies of all such financial statements and reports as ANI, the
Borrower or any Subsidiary shall send to its stockholders and of all
registration statements and all regular or periodic reports that ANI, the
Borrower or any Subsidiary shall file, or may be required to file, with the
Securities and Exchange Commission or any successor commission; (iii) promptly
upon the effectiveness thereof, copies of each amendment, supplement or
modification to the 1997 Indenture or the 1999 Indenture and (iv) as soon as
practicable, copies of all Information furnished to the holders of the 1997
Subordinated Notes or the 1999 Subordinated Notes.
(f) REQUESTED INFORMATION. From time to time and promptly upon
request of any Bank, such Information regarding the Loan Documents, the Loans,
the Letters of Credit or the business, assets, Liabilities, financial condition,
results of operations or business prospects of the Borrower and the Subsidiaries
as such Bank may request, in each case in form and substance and certified in a
manner reasonably satisfactory to the requesting Bank.
(g) NOTICE OF DEFAULTS, MATERIAL ADVERSE CHANGES AND OTHER
MATTERS. Prompt notice of:
<PAGE>
(i) any Default of which the Borrower has knowledge,
(ii) the acquisition or formation of a new Subsidiary
and, in the case of each such new Subsidiary, its name, jurisdiction of
incorporation, the percentages of the various classes of its Capital
Securities owned by the Borrower or another Subsidiary and whether or not
such new Subsidiary is a Consolidated Subsidiary,
(iii) any change in the name of any Subsidiary, its
jurisdiction of incorporation, the percentages of the various classes of
its Capital Securities owned by the Borrower or another Subsidiary or its
status as a Consolidated or non-Consolidated Subsidiary,
(iv) to the extent that the Borrower has knowledge
thereof, the threatening or commencement of, or the occurrence or
nonoccurrence of any change or event relating to, any action, suit or
proceeding that would cause the Representation and Warranty contained in
Section 3.05 to be incorrect if made at such time,
(v) to the extent that the Borrower has knowledge
thereof, the occurrence or nonoccurrence of any change or event that
would cause the Representation and Warranty contained in Section 3.07 or
Section 3.10 to be incorrect if made at such time,
(vi) any event or condition referred to in clauses (i)
through (vii) of Section 6.01(g), whether or not such event or condition
shall constitute an Event of Default,
(vii) any amendment of the certificate of incorporation or
by-laws of the Borrower or any Subsidiary that is a Loan Party, and
(viii) the giving or receipt of any material notice or
other written communication under the Greenco Note Purchase Agreement or
the Partnership Agreement, together with copies of each such notice or
other communication.
Section 5.02 ACCURACY OF FINANCIAL STATEMENTS AND INFORMATION. (a)
HISTORICAL FINANCIAL STATEMENTS. The Borrower hereby represents and warrants
that (i) SCHEDULE 5.02(a) sets forth a complete and correct list of the
financial statements submitted by the Borrower to the Banks in order to induce
them to execute and deliver this Agreement, (ii) such financial statements are
complete and correct and present fairly, in accordance with Generally Accepted
Accounting Principles (except for normal year-end audit adjustments and, in the
case of unaudited financial statements, the absence of footnotes), the
consolidated and, to the extent applicable, consolidating financial position of
the Borrower and the Consolidated Subsidiaries as at their respective dates and
the consolidated and, to the extent applicable, consolidating results of
operations, retained earnings and, as applicable, changes in financial position
or cash flows of the Borrower and such Subsidiaries for the respective periods
to which such statements relate, and (iii) except as disclosed or reflected in
such financial statements or otherwise disclosed in writing to the Banks, as at
December 31, 1998, neither the Borrower nor any Subsidiary had any Liability,
contingent or otherwise, or any unrealized or anticipated loss, that, singly or
in the
<PAGE>
aggregate, has had or would reasonably be expected to have a Materially Adverse
Effect on the Borrower and the Consolidated Subsidiaries taken as a whole.
(b) FUTURE FINANCIAL STATEMENTS. The financial statements
delivered pursuant to Section 5.01(a) or (c) shall be complete and correct and
present fairly, in accordance with Generally Accepted Accounting Principles
(except for changes therein or departures therefrom that are described in the
certificate or report accompanying such statements and that have been approved
in writing by the Borrower's then current independent certified public
accountants, and except for normal year-end audit adjustments and, in the case
of financial statements delivered pursuant to Section 5.01(a), the absence of
footnotes), the consolidated and, if prepared by the Borrower, consolidating
financial position of the Borrower and the Consolidated Subsidiaries as at their
respective dates and the consolidated and, if prepared by the Borrower,
consolidating results of operations, retained earnings and cash flows of the
Borrower and such Subsidiaries for the respective periods to which such
statements relate, and the furnishing of the same to the Banks shall constitute
a representation and warranty by the Borrower made on the date the same are
furnished to the Banks to that effect and to the further effect that, except as
disclosed or reflected in such financial statements, as at the respective dates
thereof, neither the Borrower nor any Subsidiary had any Liability, contingent
or otherwise, or any unrealized or anticipated loss, that, singly or in the
aggregate, has had or might have a Materially Adverse Effect on the Borrower and
the Consolidated Subsidiaries taken as a whole.
(c) HISTORICAL INFORMATION. The Borrower hereby represents and
warrants that all Information furnished to the Administrative Agent or the Banks
by or on behalf of the Borrower or any Subsidiary prior to the Agreement Date in
connection with or pursuant to the Loan Documents and the relationships
established thereunder, at the time the same was so furnished, but in the case
of Information dated as of a prior date, as of such date, (i) in the case of any
Information prepared in the ordinary course of business, was complete and
correct in the light of the purpose prepared, and, in the case of any
Information the preparation of which was requested by any Bank, was complete and
correct in all material respects to the extent necessary to give such Bank true
and accurate knowledge of the subject matter thereof, (ii) did not contain any
untrue statement of a material fact, and (iii) did not omit to state a material
fact necessary in order to make the statements contained therein not misleading
in the light of the circumstances under which they were made.
(d) FUTURE INFORMATION. All Information furnished or to be
furnished to the Administrative Agent or the Banks by or on behalf of the
Borrower or any Subsidiary on or after the Agreement Date in connection with or
pursuant to the Loan Documents or in connection with or pursuant to any
amendment or modification of, or waiver of rights under, the Loan Documents,
shall, at the time the same is so furnished, but in the case of Information
dated as of a prior date, as of such date, (i) in the case of any Information
prepared in the ordinary course of business, be complete and correct in the
light of the purpose prepared, and, in the case of any Information required by
the terms of the Loan Documents or the preparation of which was requested by any
Bank, be complete and correct to the extent necessary to give such Bank true and
accurate knowledge of the subject matter thereof, (ii) not contain any untrue
statement of a material fact, and (iii) not omit to state a material fact
necessary in order to make the statements
<PAGE>
contained therein not misleading in the light of the circumstances under which
they were made, and the furnishing of the same to the Administrative Agent or
any Bank shall constitute a representation and warranty by the Borrower made on
the date the same are so furnished to the effect specified in clauses (i), (ii)
and (iii).
Section 5.03 ADDITIONAL COVENANTS RELATING TO DISCLOSURE. From the
Agreement Date and until the Repayment Date, the Borrower shall and shall cause
each Subsidiary to:
(a) ACCOUNTING METHODS AND FINANCIAL RECORDS. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete), as may be required or necessary to permit (i) the
preparation of financial statements required to be delivered pursuant to Section
5.01(a) and (c) and (ii) the determination of the compliance of the Borrower and
its Subsidiaries with the terms of the Loan Documents.
(b) FISCAL YEAR. Maintain the same opening and closing dates
for each fiscal year as for the fiscal year reflected in the Base Financial
Statements.
(c) VISITS, INSPECTIONS AND DISCUSSIONS. Permit, or, in the
case of premises, property, books, records or Persons not within its immediate
control, promptly take such actions as are necessary or desirable in order to
permit, representatives (whether or not officers or employees) of any Bank, from
time to time upon reasonable prior notice, as often as may be reasonably
requested, to (i) visit any of its premises or property or any premises or
property of others on which any of its property or books and records (or books
and records of others relating to it) may be located, (ii) inspect, and verify
the amount, character and condition of, any of its property, (iii) review and
make extracts from its books and records and books and records of others
relating to it, including management letters prepared by its independent
certified public accountants, and (iv) discuss with any Person (including its
principal officers, independent certified public accountants) its business,
assets, Liabilities, financial condition, results of operation and business
prospects.
Section 5.04 AUTHORIZATION OF THIRD PARTIES TO DELIVER INFORMATION AND
DISCUSS AFFAIRS. The Borrower hereby authorizes and directs each Person whose
preparation or delivery to the Administrative Agent or the Banks of any opinion,
report or other Information is a condition or covenant under the Loan Documents
(including under Article 2 or this Article 5) to so prepare or deliver such
Information for the benefit of the Administrative Agent and the Banks. Until
further written notice from the Borrower, the Borrower further authorizes and
directs all Persons (a) to furnish to the Banks any Information regarding the
matters referred to in Section 5.01(f) that any Bank may request, (b) to permit
representatives of any Bank upon reasonable notice to make the visits,
inspections, reviews and extracts of premises, property, books and records
within their possession and control contemplated by Section 5.03(c) and (c) to
discuss with representatives of any Bank the matters referred to in Section
5.03(c). The Borrower agrees to promptly execute and deliver from time to time
such further authorizations to effect the purposes of this Section 5.04 as the
Administrative Agent or any Bank may reasonably request.
<PAGE>
ARTICLE 6
DEFAULT
Section 6.01 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary, or within or without the control of the Borrower, any
Subsidiary or any other Loan Party, or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or regulation
of any governmental or nongovernmental body:
(a) Any payment of principal of or interest on any of the Loans
or the Notes, any reimbursement of any Drawing or any payment of any fee, or any
cash collateralization of any Contingent Reimbursement Obligation, shall not be
made when and as due (whether at maturity, upon mandatory prepayment, by reason
of notice of prepayment or acceleration or otherwise) and in accordance with the
terms of this Agreement and the Notes;
(b) Any Loan Document Representation and Warranty shall at any
time prove to have been incorrect or misleading in any material respect when
made;
(c) (i) The Borrower shall default in the performance or
observance of:
(A) any term, covenant, condition or agreement
contained in Section 4.01(a) (insofar as such Section requires the
preservation of the corporate existence of each of the Loan
Parties), 4.01(f), 4.05 through 4.28, 5.01(g)(i), 5.03(b) or
5.03(c); or
(B) any term, covenant, condition or agreement
contained in any Loan Document (other than a term, covenant,
condition or agreement a default in the performance or observance
of which is elsewhere in this Section specifically dealt with)
and, if capable of being remedied, such default shall continue
unremedied for a period of 30 days; or
(ii) Any Loan Party shall default in the performance or
observance of:
(A) any term, covenant, condition or agreement
contained in Sections 1.02, 3.01, 3.02(a) (insofar as such Section
requires the preservation of the corporate existence of such Loan
Party), 3.02(d), 3.03(a) or 3.06 of any Pledge Agreement to which
such Loan Party is a party; or
(B) any term, covenant, condition or agreement
contained in any Loan Document (other than any term, covenant,
condition or agreement a default in the performance or observance
of which is elsewhere in this Section specifically dealt with)
and, if capable of being remedied, such default shall continue
unremedied for a period of 30 days after notice shall have been
given by the Administrative Agent to such Loan Party requiring
that such default be cured; or
<PAGE>
(d) (i) ANI, the Borrower, any Subsidiary or any other Loan
Party shall fail to pay, in accordance with its terms and when due and payable
(giving effect to any applicable grace period), any of the principal of or
interest on any of its Indebtedness (other than the Loans) having an aggregate
principal amount in excess of $1,000,000, (ii) the maturity of any such
Indebtedness shall, in whole or in part, have been accelerated, or any such
Indebtedness shall, in whole or in part, have been required to be prepaid prior
to the stated maturity thereof, in accordance with the provisions of any
Contract evidencing, providing for the creation of or concerning such
Indebtedness, or (iii) (A) any event shall have occurred and be continuing that
permits (or, with the passage of time or the giving of notice or both, would
permit) any holder or holders of such Indebtedness, any trustee or agent acting
on behalf of such holder or holders or any other Person so to accelerate such
maturity or require any such prepayment and (B) if the Contract evidencing,
providing for the creation of or concerning such Indebtedness provides for a
cure period for such event, such event shall not be cured prior to the end of
such cure period;
(e) (i) ANI, the Borrower, any Subsidiary or any other Loan
Party shall (A) commence a voluntary case under the Federal bankruptcy laws (as
now or hereafter in effect), (B) file a petition seeking to take advantage of
any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts, (C) consent to
or fail to contest in a timely and appropriate manner any petition filed against
it in an involuntary case under such bankruptcy laws or other laws, (D) apply
for, or consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or the like of itself or of a substantial part of its assets,
domestic or foreign, (E) admit in writing its inability to pay, or generally not
be paying, its debts (other than those that are the subject of bona fide
disputes) as they become due, (F) make a general assignment for the benefit of
creditors, or (G) take any corporate action for the purpose of effecting any of
the foregoing;
(ii) (A) A case or other proceeding shall be commenced
against ANI, the Borrower, any Subsidiary or any other Loan Party seeking
(1) relief under the Federal bankruptcy laws (as now or hereafter in
effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, or (2) the appointment of a trustee, receiver,
custodian, liquidator or the like of ANI, the Borrower, any such
Subsidiary or any other Loan Party, or of all or any substantial part of
the assets, domestic or foreign, of ANI, the Borrower, any such
Subsidiary or any other Loan Party, and such case or proceeding shall
continue undismissed and unstayed for a period of 45 days, or (B) an
order granting the relief requested in such case or proceeding against
ANI, the Borrower, any such Subsidiary or any other Loan Party (including
an order for relief under such Federal bankruptcy laws) shall be entered;
(f) A judgment or order shall be entered against ANI, the
Borrower, any Subsidiary or any other Loan Party by any court, and (i) in the
case of a judgment or order for the payment of money, either (A) such judgment
or order shall continue undischarged and unstayed for a period of 30 days in
which the aggregate amount of all such judgments and orders exceeds $1,000,000
or (B) enforcement proceedings shall have been commenced upon such
<PAGE>
judgment or order and (ii) in the case of any judgment or order for other than
the payment of money, such judgment or order could, in the reasonable judgment
of the Required Banks, together with all other such judgments or orders, have a
Materially Adverse Effect on the Borrower and the Consolidated Subsidiaries
taken as a whole;
(g) (i) any Termination Event shall occur with respect to any
Benefit Plan of the Borrower, any Subsidiary, any other Loan Party or any of
their respective ERISA Affiliates, (ii) any Accumulated Funding Deficiency,
whether or not waived, shall exist with respect to any such Benefit Plan, (iii)
any Person shall engage in any Prohibited Transaction involving any such Benefit
Plan, (iv) the Borrower, any Subsidiary, any other Loan Party or any of their
respective ERISA Affiliates shall be in "default" (as defined in ERISA Section
4219(c)(5)) with respect to payments owing to any such Benefit Plan that is a
Multiemployer Benefit Plan as a result of such Person's complete or partial
withdrawal (as described in ERISA Section 4203 or 4205) therefrom, (v) the
Borrower, any Subsidiary, any other Loan Party or any of their respective ERISA
Affiliates shall fail to pay when due an amount that is payable by it to the
PBGC or to any such Benefit Plan under Title IV of ERISA, (vi) a proceeding
shall be instituted by a fiduciary of any such Benefit Plan against the
Borrower, any Subsidiary, any other Loan Party or any of their respective ERISA
Affiliates to enforce ERISA Section 515 and such proceeding shall not have been
dismissed within 30 days thereafter, or (vii) any other event or condition shall
occur or exist with respect to any such Benefit Plan, except that no event or
condition referred to in clauses (i) through (vii) shall constitute an Event of
Default if it, together with all other such events or conditions at the time
existing, has not subjected, and in the reasonable determination of the Required
Banks will not subject, the Borrower, any Subsidiary or any other Loan Party to
any Liability that, alone or in the aggregate with all such Liabilities for all
such Persons, exceeds $1,000,000;
(h) Any Loan Party or any Affiliate of any Loan Party asserts,
or any Loan Party or any Affiliate of any Loan Party or any other Person
institutes any proceedings seeking to establish, that (i) any provision of the
Loan Documents is invalid, not binding or unenforceable or (ii) the Security
Interest is not a valid and perfected first priority security interest in the
Collateral subject only to Permitted Liens;
(i) Richard B. Scudder, William Dean Singleton, members of
their families, their estates or trusts for the benefit of such Persons shall at
any time cease to be the beneficial owners, directly or indirectly, of common
stock of the Borrower representing not less than 80% of the issued and
outstanding shares of the Borrower's common stock;
(j) William Dean Singleton and Joseph J. Lodovic, IV shall at
any time cease to be senior officers of the Borrower and MediaNews Group, Inc.
or otherwise remain actively involved in the management of the Borrower and
MediaNews Group, Inc. and shall not have been replaced by one or more senior
officers reasonably satisfactory to the Required Banks within 90 days of such
event; or
(k) Unless MediaNews Group, Inc. shall have either merged into
the Borrower or, so long as it is the parent company of the Borrower, merged
into ANI, MediaNews Group,
<PAGE>
Inc. shall at any time cease to manage or supervise the operations of the
Borrower or the Management Agreement shall at any time be terminated or
superseded.
Section 6.02 REMEDIES UPON EVENT OF DEFAULT. During the continuance of
any Event of Default (other than one specified in Section 6.01(e)) and in every
such event, the Administrative Agent, upon notice to the Borrower, may (but
shall not be obligated to), and if directed by the Required Banks shall, do any
or all of the following: (a) declare, in whole or, from time to time, in part,
the principal of and interest on the Loans and the Notes and all other amounts
owing under the Loan Documents to be, and the Loans and the Notes and all such
other amounts shall thereupon and to that extent become, due and payable
(b) demand that the Borrower deliver cash collateral to the Administrative Agent
in an amount equal to the aggregate amount of Contingent Reimbursement
Obligations then outstanding to be held in accordance with Section 9.19 and such
amount shall thereupon become due and payable to the Administrative Agent and
(c) terminate, in whole or, from time to time, in part, the Commitments. Upon
the occurrence of an Event of Default specified in Section 6.01(e),
automatically and without any notice to the Borrower, (a) the principal of and
interest on the Loans and the Notes and all other amounts owing under the Loan
Documents shall be due and payable, (b) the Commitments shall terminate and (c)
an amount equal to the aggregate amount of Contingent Reimbursement Obligations
then outstanding shall be due and payable to the Administrative Agent to be held
in accordance with Section 9.19. Presentment, demand, protest or notice of any
kind (other than the notice provided for in the first sentence of this Section
6.02) are hereby expressly waived.
ARTICLE 7
ADDITIONAL CREDIT FACILITY PROVISIONS
Section 7.01 MANDATORY SUSPENSION AND CONVERSION OF EURODOLLAR RATE
LOANS. A Bank's obligations to make, continue or convert into Eurodollar Rate
Loans of any Type shall be suspended, all such Bank's outstanding Loans of that
Type shall be converted on the last day of their applicable Interest Periods
(or, if earlier, in the case of clause (c) below, on the last day such Bank may
lawfully continue to maintain Loans of that Type or, in the case of clause (d)
below, on the day determined by such Bank to be the last Business Day before the
effective date of the applicable restriction) into, and all pending requests for
the making or continuation of or conversion into Loans of such Type by such Bank
shall be deemed requests for, Base Rate Loans, if:
(a) on or prior to the determination of an interest rate for a
Eurodollar Rate Loan of that Type for any Interest Period, the Administrative
Agent determines that for any reason appropriate information is not available to
it for purposes of determining the Adjusted Eurodollar Rate for such Interest
Period;
(b) on or prior to the first day of any Interest Period for a
Eurodollar Rate Loan of that Type, such Bank determines that the Adjusted
Eurodollar Rate as determined by the Administrative Agent for such Interest
Period would not accurately reflect the cost to such Bank
<PAGE>
of making, continuing or converting into a Eurodollar Rate Loan of such Type for
such Interest Period;
(c) at any time such Bank determines that any Regulatory Change
makes it unlawful or impracticable for such Bank or its applicable Lending
Office to make, continue or convert into any Eurodollar Rate Loan of that Type,
or to comply with its obligations hereunder in respect thereof; or
(d) such Bank determines that, by reason of any Regulatory
Change, such Bank or its applicable Lending Office is restricted, directly or
indirectly, in the amount that it may hold of (i) a category of liabilities that
includes deposits by reference to which, or on the basis of which, the interest
rate applicable to Eurodollar Rate Loans of that Type is directly or indirectly
determined or (ii) the category of assets that includes Eurodollar Rate Loans of
that Type.
If, as a result of this Section 7.01, any Loan of any Bank that would
otherwise be made or maintained as or converted into a Eurodollar Rate Loan of
any Type for any Interest Period is instead made or maintained as or converted
into a Base Rate Loan, then, unless the corresponding Loan of each of the other
Banks is also to be made or maintained as or converted into a Base Rate Loan,
such Loan shall be treated as being a Eurodollar Rate Loan of such Type for such
Interest Period for all purposes of this Agreement (including the timing,
application and proration among the Banks of interest payments, conversions and
prepayments) except for the calculation of the interest rate borne by such Loan.
The Administrative Agent shall promptly notify the Borrower and each Bank of the
existence or occurrence of any condition or circumstance specified in clause (a)
above, and each Bank shall promptly notify the Borrower and the Administrative
Agent of the existence or occurrence of any condition or circumstance specified
in clause (b), (c) or (d) above applicable to such Bank's Loans, but the failure
by the Administrative Agent or such Bank to give any such notice shall not
affect such Bank's rights hereunder.
Section 7.02 REGULATORY CHANGES. If in the determination of any Bank
or, in the case of any Letter of Credit or Drawing, the Issuing Bank (a) any
Regulatory Change shall directly or indirectly (i) reduce the amount of any sum
received or receivable by (A) such Bank with respect to any Eurodollar Rate Loan
or Letter of Credit Participation or the return to be earned by such Bank on any
Eurodollar Rate Loan or Letter of Credit Participation or (B) the Issuing Bank
with respect to any Letter of Credit or Drawing, (ii) impose a cost on (A) such
Bank or any Affiliate of such Bank that is attributable to the making or
maintaining of, or such Bank's commitment to make or acquire, any Eurodollar
Rate Loan or Letter of Credit Participation or (B) the Issuing Bank or any of
its Affiliates that is attributable to the issuance or maintaining of, or the
commitment to issue, any Letter of Credit or the making or maintaining of any
Drawing, (iii) require (A) such Bank or any Affiliate of such Bank to make any
payment on or calculated by reference to the gross amount of any amount received
by such Bank under any Loan Document in respect of its Eurodollar Rate Loans or
its obligations to make Eurodollar Rate Loans or (B) the Issuing Bank or any of
its Affiliates to make any payment on or calculated by reference to the gross
amount of any amount received by the Issuing Bank or any of its Affiliates in
respect of
<PAGE>
any Letter of Credit or its commitment to issue any Letter of Credit or Drawing
or (iv) reduce, or have the effect of reducing, the rate of return on any
capital of (A) such Bank or any Affiliate of such Bank that such Bank or such
Affiliate is required to maintain on account of any Eurodollar Rate Loan or
Letter of Credit Participation or such Bank's commitment to make any Eurodollar
Rate Loan or Letter of Credit Participation or (B) the Issuing Bank or any of
its Affiliates that the Issuing Bank or such Affiliate is required to maintain
on account of any Letter of Credit or Drawing or the Issuing Bank's commitment
to issue any Letter of Credit and (b) such reduction, increased cost or payment
shall not be fully compensated for by an adjustment in the applicable rates of
interest payable under the Loan Documents, then the Borrower shall pay to such
Bank or the Issuing Bank, as the case may be, such additional amounts as such
Bank or the Issuing Bank, as the case may be, determines will, together with any
adjustment in the applicable rates of interest payable hereunder, fully
compensate for such reduction, increased cost or payment. Such additional
amounts shall be payable, in the case of those applicable to prior periods,
within 15 days after request by such Bank or the Issuing Bank, as the case may
be, for such payment and, in the case of those applicable to future periods, on
the dates specified, or determined in accordance with a method specified, by
such Bank or the Issuing Bank, as the case may be. Each Bank and the Issuing
Bank will promptly notify the Borrower of any determination made by it referred
to in clauses (a) and (b) above, but the failure to give such notice shall not
affect such Bank's, or the Issuing Bank's, as the case may be, right to such
compensation.
Section 7.03 FUNDING LOSSES. The Borrower shall pay to each Bank, upon
request, such amount or amounts as such Bank determines are necessary to
compensate it for any loss, cost or expense incurred by it as a result of (a)
any payment, prepayment or conversion of a Eurodollar Rate Loan on a date other
than the last day of an Interest Period for such Eurodollar Rate Loan or (b) a
Eurodollar Rate Loan for any reason not being made or converted, or any payment
of principal thereof or interest thereon not being made, on the date therefor
determined in accordance with the applicable provisions of this Agreement. At
the election of such Bank, and without limiting the generality of the foregoing,
but without duplication, such compensation on account of losses may include an
amount equal to the excess of (i) the interest that would have been received
from the Borrower under this Agreement on any amounts to be reemployed during an
Interest Period or its remaining portion over (ii) the interest component of the
return that such Bank determines it could have obtained had it placed such
amount on deposit in the interbank Dollar market selected by it for a period
equal to such Interest Period or its remaining portion.
Section 7.04 CERTAIN DETERMINATIONS. In making the determinations
contemplated by Sections 7.01, 7.02 and 7.03, each Bank and the Issuing Bank may
make such estimates, assumptions, allocations and the like that such Person in
good faith determines to be appropriate, and such Person's selection thereof in
accordance with this Section 7.04, and the determinations made by such Bank on
the basis thereof, shall be final, binding and conclusive upon the Borrower,
except, in the case of such determinations, for manifest errors in computation
or transmission. Each Bank and the Issuing Bank shall furnish to the Borrower
upon request a certificate outlining in reasonable detail the computation of any
amounts claimed by it under Sections 7.02 and 7.03 and the assumptions
underlying such computations.
<PAGE>
Section 7.05 CHANGE OF LENDING OFFICE. If an event occurs with respect
to a Lending Office of any Bank or, in the case of any Letter of Credit or
Drawing, the Issuing Bank, that makes operable the provisions of clause (c) or
(d) of Section 7.01 or entitles such Bank or the Issuing Bank, as the case may
be, to make a claim under Section 7.02, such Bank or the Issuing Bank, as the
case may be, shall, if requested by the Borrower, use reasonable efforts to
designate another Lending Office or Offices the designation of which will
eliminate such operability or reduce the amount such Bank or the Issuing Bank,
as the case may be, is so entitled to claim, provided that such designation
would not, in the sole and absolute discretion of such Bank, or the Issuing
Bank, as the case may be, be disadvantageous to such Bank in any manner or
contrary to such Bank's or the Issuing Bank's, as the case may be, policies.
Each Bank and the Issuing Bank may at any time and from time to time change any
Lending Office and shall give notice of any such change to the Administrative
Agent and the Borrower. Except in the case of a change in Lending Offices made
at the request of the Borrower, the designation of a new Lending Office by any
Bank or the Issuing Bank shall not make operable the provisions of clause (c) or
(d) of Section 7.01 or entitle such Bank to make a claim under Section 7.02 if
the operability of such clause or such claim results solely from such
designation and not from a subsequent Regulatory Change.
ARTICLE 8
THE AGENTS
Section 8.01 APPOINTMENT AND POWERS. Each Bank hereby irrevocably
appoints and authorizes The Bank of New York, and The Bank of New York hereby
agrees, to act as the agent for and representative (within the meaning of
Section 9-105(m) of the Uniform Commercial Code) of such Bank under the Loan
Documents with such powers as are delegated to the Administrative Agent and the
Secured Party by the terms thereof, together with such other powers as are
reasonably incidental thereto. The Administrative Agent's duties shall be
purely ministerial and it shall have no duties or responsibilities except those
expressly set forth in the Loan Documents. The Administrative Agent shall not
be required under any circumstances to take any action that, in its judgment,
(a) is contrary to any provision of the Loan Documents or Applicable Law or (b)
would expose it to any Liability or expense against which it has not been
indemnified to its satisfaction. The Administrative Agent shall not, by reason
of its serving as the Administrative Agent, be a trustee or other fiduciary for
any Bank. Bank of America NT & SA, in its capacity as Syndication Agent, First
Union National Bank, in its capacity as Documentation Agent, and Fleet National
Bank, in its capacity as Co-Documentation Agent, shall be entitled to all of the
rights (other than with respect to fees payable to the Administrative Agent) and
immunities of the Administrative Agent provided for in the Loan Documents, but
shall have no duties or responsibilities except for those expressly set forth
therein.
Section 8.02 LIMITATION ON ADMINISTRATIVE AGENT'S LIABILITY. Neither
the Administrative Agent nor any of its directors, officers, employees or agents
shall be liable or responsible for any action taken or omitted to be taken by it
or them under or in connection with the Loan Documents, except for its or their
own gross negligence, willful misconduct or knowing violations of law. The
Administrative Agent shall not be responsible to any Bank for (a) any
<PAGE>
recitals, statements, representations or warranties contained in the Loan
Documents or in any certificate or other document referred to or provided for
in, or received by any of the Banks under, the Loan Documents, (b) the validity,
effectiveness or enforceability of the Loan Documents or any such certificate or
other document, (c) the value or sufficiency of the Collateral or (d) any
failure by the Loan Parties to perform any of their obligations under the Loan
Documents. The Administrative Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact so long as the Administrative Agent was not grossly negligent
in selecting or directing such agents or attorneys-in-fact. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telecopier, telegram
or cable) believed by it to be genuine and correct and to have been signed or
given by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts selected
by the Administrative Agent. As to any matters not expressly provided for by
the Loan Documents, the Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under the Loan Documents in
accordance with instructions signed by the Required Banks, and such instructions
of the Required Banks and any action taken or failure to act pursuant thereto
shall be binding on all of the Banks.
Section 8.03 DEFAULTS. The Administrative Agent shall not be deemed to
have knowledge of the occurrence of a Default (other than the non-payment to it
of principal of or interest on Loans or fees) unless the Administrative Agent
has received notice from a Bank or the Borrower specifying such Default and
stating that such notice is a "Notice of Default". In the event that the
Administrative Agent has knowledge of such a non-payment or receives such a
notice of the occurrence of a Default, the Administrative Agent shall give
prompt notice thereof to the Banks. In the event of any Default, the
Administrative Agent shall (a) in the case of a Default that constitutes an
Event of Default, take any or all of the actions referred to in clauses (a), (b)
and (c) of the first sentence of Section 6.02 if so directed by the Required
Banks and (b) in the case of any Default, take such other action with respect to
such Default as shall be reasonably directed by the Required Banks. Unless and
until the Administrative Agent shall have received such directions, in the event
of any Default, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interests of the Banks.
Section 8.04 RIGHTS AS A BANK. Each Person acting as the Administrative
Agent that is also a Bank shall, in its capacity as a Bank, have the same rights
and powers under the Loan Documents as any other Bank and may exercise the same
as though it were not acting as the Administrative Agent, and the term "Bank" or
"Banks" shall include such Person in its individual capacity. Each Person
acting as the Administrative Agent (whether or not such Person is a Bank) and
its Affiliates may (without having to account therefor to any Bank) accept
deposits from, lend money to and generally engage in any kind of banking, trust
or other business with the Loan Parties and their Affiliates as if it were not
acting as the Administrative Agent, and such Person and its Affiliates may
accept fees and other consideration from the Loan Parties and their Affiliates
for services in connection with the Loan Documents or otherwise without having
to account for the same to the Banks.
<PAGE>
Section 8.05 INDEMNIFICATION. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Loan Parties under the
Loan Documents), ratably on the basis of the respective principal amounts of the
Loans outstanding made by the Banks (or, if no Loans are at the time
outstanding, ratably on the basis of their respective Commitments), for any and
all Liabilities, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Administrative Agent (including the
costs and expenses that the Loan Parties are obligated to pay under the Loan
Documents) in any way relating to or arising out of the Loan Documents or any
other documents contemplated thereby or referred to therein or the transactions
contemplated thereby or the enforcement of any of the terms thereof or of any
such other documents, provided that no Bank shall be liable for any of the
foregoing to the extent they arise from gross negligence, willful misconduct or
knowing violations of law by the Administrative Agent.
Section 8.06 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS. Each
Bank agrees that it has made and will continue to make, independently and
without reliance on the Administrative Agent or any other Bank, and based on
such documents and information as it deems appropriate, its own credit analysis
of the Loan Parties, its own evaluation of the Collateral and its own decision
to enter into the Loan Documents and to take or refrain from taking any action
in connection therewith. The Administrative Agent shall not be required to keep
itself informed as to the performance or observance by the Loan Parties of the
Loan Documents or any other document referred to or provided for therein or to
inspect the properties or books of any Loan Party or any Subsidiary thereof or
the Collateral. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Administrative Agent
under the Loan Documents, the Administrative Agent shall have no obligation to
provide any Bank with any information concerning the business, status or
condition of any Loan Party or any Subsidiary thereof, the Loan Documents or the
Collateral that may come into the possession of the Administrative Agent or any
of its Affiliates.
Section 8.07 EXECUTION AND AMENDMENT OF LOAN DOCUMENTS ON BEHALF OF THE
BANKS. Each Bank hereby authorizes the Administrative Agent to (a) execute and
deliver, in the name of and on behalf of such Bank, (i) the Pledge Agreements,
(ii) all UCC financing and continuation statements and other documents the
filing or recordation of which are, in the determination of the Administrative
Agent, necessary or appropriate to create, perfect or maintain the existence or
perfected status of the Security Interest and (iii) any other Loan Document
requiring execution by or on behalf of such Bank, and (b) release Collateral
from the Security Interest to the extent that such Collateral has been disposed
of in accordance with Section 4.11. The Administrative Agent shall consent to
any amendment of any term, covenant, agreement or condition of the Pledge
Agreements, or to any waiver of any right thereunder, if, but only if, the
Administrative Agent is directed to do so in writing by the Required Banks;
PROVIDED, HOWEVER, that (i) the Administrative Agent shall not be required to
consent to any such amendment or waiver that affects its rights or duties and
(ii) the Administrative Agent shall not, unless directed to do so in writing by
each Bank, (A) consent to any assignment by any Loan Party of any of its rights
or obligations under any such agreement or (B) release any Collateral from the
Security Interest, except as specified in clause (b) above.
<PAGE>
Section 8.08 RESIGNATION OF THE ADMINISTRATIVE AGENT. The
Administrative Agent may at any time give notice of its resignation to the Banks
and the Borrower. Upon receipt of any such notice of resignation, the Required
Banks may, after consultation with the Borrower, appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Banks and shall have accepted such appointment within
30 days after the resigning Administrative Agent's giving of notice of
resignation, then the resigning Administrative Agent may, on behalf of the Banks
and after consultation with the Borrower, appoint a successor Administrative
Agent. Upon the acceptance by any Person of its appointment as a successor
Administrative Agent, (a) such Person shall thereupon succeed to and become
vested with all the rights, powers, privileges, duties and obligations of the
resigning Administrative Agent and the resigning Administrative Agent shall be
discharged from its duties and obligations as Administrative Agent under the
Loan Documents and (b) the resigning Administrative Agent shall promptly
transfer all Collateral within its possession or control to the possession or
control of the successor Administrative Agent and shall execute and deliver such
notices, instructions and assignments as may be necessary or desirable to
transfer the rights of the Administrative Agent with respect to the Collateral
to the successor Administrative Agent. After any resigning Administrative
Agent's resignation as Administrative Agent, the provisions of this Article 8
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.
ARTICLE 9
MISCELLANEOUS
Section 9.01 NOTICES AND DELIVERIES. (a) NOTICES AND MATERIALS OTHER
THAN COLLATERAL. Except as provided in Section 9.01(b):
(i) MANNER OF DELIVERY. All notices, communications and
materials (including all Information) to be given or delivered pursuant
to the Loan Documents shall, except in those cases where giving notice by
telephone is expressly permitted, be given or delivered in writing (which
shall include telex and telecopy transmissions). Notices under Sections
1.02, 1.04(c), 1.06, 1.08 and 6.02 may be by telephone, promptly, in the
case of each notice other than one under Section 6.02, confirmed in
writing. In the event of a discrepancy between any telephonic notice and
any written confirmation thereof, such written confirmation shall be
deemed the effective notice except to the extent that the Administrative
Agent has acted in reliance on such telephonic notice.
(ii) ADDRESSES. All notices, communications and
materials to be given or delivered pursuant to the Loan Documents shall
be given or delivered at the following respective addresses and telex,
telecopier and telephone numbers and to the attention of the following
individuals or departments:
(A) if to the Borrower, to it at:
Garden State Newspapers, Inc.
<PAGE>
1560 Broadway, Suite 1485
Denver, CO 80202
Telecopier No.: (303) 820-1929
Telephone No.: (303) 820-1619
Attention: Joseph J. Lodovic, IV
Executive Vice President & Chief
Financial Officer
with a copy to:
Verner, Liipfert, Bernhard, McPherson
and Hand
901-15th Street, N.W.
Washington, D.C. 20005-2301
Telecopier No.: (202) 371-6279
Telephone No.: (202) 371-6000
Attention: Howell E. Begle Jr.
and with a copy to:
Hughes Hubbard & Reed, LLP
One Battery Park Plaza
New York, NY 10004
Telecopier No.: (212) 422-4726
Telephone No.: (212) 837-6000
Attention: James Modlin
(B) if to any Guarantor, to it at the address or
telex, telecopier or telephone number and to the attention of the
individual or department, set forth below such Guarantor's name on ANNEX
B, or in the case of a Guarantor that becomes a Guarantor pursuant to a
Subsidiary Guaranty Supplement, set forth in such Subsidiary Guaranty
Supplement;
<PAGE>
(C) if to the Administrative Agent or the Secured Party,
to it at:
The Bank of New York
Media and Telecommunications Division
One Wall Street, 16th Floor
New York, NY 10286
Telecopier No.: (212) 635-8595/8593
Telephone No.: (212) 635-8609
Attention: John R. Ciulla
Vice President
with a copy to:
The Bank of New York
One Wall Street
New York, NY 10286
Telecopier No.: (212) 635-6365 (6366 or 6367)
Telephone No.: (212) 635-4694
Attention: Genoveso Caviness, Agency Function
Administration, 18th Floor
(D) if to any Bank (including any Bank in its capacity
as the Issuing Bank or the Swing Loan Lender), to it at the address or
telex, telecopier or telephone number and to the attention of the
individual or department, set forth below such Bank's name under the
heading "Notice Address" on ANNEX A or, in the case of a Bank that
becomes a Bank pursuant to an assignment, set forth under the heading
"Notice Address" in the Notice of Assignment given to the Borrower and
the Administrative Agent with respect to such assignment;
or at such other address or telex, telecopier or telephone number or to the
attention of such other individual or department as the party to which such
information pertains may hereafter specify for the purpose in a notice
specifically captioned "Notice of Change of Address" given to (x) if the party
to which such information pertains is the Borrower or any Guarantor, the
Administrative Agent and each Bank, (y) if the party to which such information
pertains is the Administrative Agent, the Borrower, each Guarantor and each Bank
and (z) if the party to which such information pertains is a Bank, the Borrower,
each Guarantor and the Administrative Agent.
(iii) EFFECTIVENESS. Each notice and communication and
any material to be given or delivered pursuant to the Loan Documents
shall be deemed so given or delivered (A) if sent by registered or
certified mail, postage prepaid, return receipt requested, on the third
Business Day after such notice, communication or material, addressed as
above
<PAGE>
provided, is delivered to a United States post office and a receipt
therefor is issued thereby, (B) if sent by any other means of physical
delivery, when such notice, communication or material is delivered to the
appropriate address as above provided, (C) if sent by telex, when such
notice, communication or material is transmitted to the appropriate
number determined as above provided in this Section 9.01 and the
appropriate answer-back is received, (D) if sent by telecopier, when such
notice, communication or material is transmitted to the appropriate
telecopier number as above provided and is received at such number and
(E) if given by telephone, when communicated to the individual or any
member of the department specified as the individual or department to
whose attention notices, communications and materials are to be given or
delivered, or, in the case of notice by the Administrative Agent to the
Borrower under Section 6.02 given by telephone as above provided, if any
individual or any member of the department to whose attention notices,
communications and materials are to be given or delivered is unavailable
at the time, to any other officer or employee of the Borrower, except
that (x) notices of a change of address, telex, telecopier or telephone
number or individual or department to whose attention notices,
communications and materials are to be given or delivered shall not be
deemed given until received and (y) notices, communications and materials
to be given or delivered to the Administrative Agent or any Bank pursuant
to Sections 1.02, 1.04(c), 1.06, 1.08 and 1.13(b) and Article 5 shall not
be deemed given or delivered until received by the officer of the
Administrative Agent or such ank responsible, at the time, for the
administration of the Loan Documents.
(iv) REASONABLE NOTICE. Any requirement under Applicable
Law of reasonable notice by the Administrative Agent or the Banks to the
Borrower or any Guarantor of any event in connection with, or in any way
related to, the Loan Documents or the exercise by the Administrative
Agent or the Banks of any of their rights thereunder shall be met if
notice of such event is given to the Borrower or such Guarantor in the
manner prescribed above at least 10 days before (A) the date of such
event or (B) the date after which such event will occur.
(b) COLLATERAL. Until the Administrative Agent shall otherwise
specify, all Collateral to be delivered to the Administrative Agent pursuant to
the Loan Documents consisting of instruments, securities, chattel paper, letters
of credit or documents shall be delivered to the Administrative Agent at the
Administrative Agent's Office either by hand delivery or by registered or
certified mail, postage prepaid, return receipt requested, in either case
insured in an amount not less than the greater of the aggregate face amount and
the aggregate fair market value of the Collateral so being delivered. All other
Collateral to be delivered to the Administrative Agent pursuant to the Loan
Documents shall be delivered to such Person, at such address, by such means and
in such manner as the Administrative Agent may designate.
Section 9.02 EXPENSES; INDEMNIFICATION. Whether or not any Loans are
made, or any Letter of Credit is issued, hereunder, the Borrower shall:
<PAGE>
(a) pay or reimburse the Administrative Agent, the Issuing
Bank, the Swing Loan Lender and each Bank for all transfer, documentary, stamp
and similar taxes, and all recording and filing fees and taxes, payable in
connection with, arising out of, or in any way related to, the execution,
delivery and performance of the Loan Documents or the making of the Loans or the
issuance of the Letters of Credit;
(b) pay or reimburse the Administrative Agent for all costs and
expenses (including reasonable fees and disbursements of legal counsel,
appraisers, accountants and other experts employed or retained by the
Administrative Agent) incurred by the Administrative Agent in connection with,
arising out of, or in any way related to (i) the negotiation, preparation,
execution and delivery of (A) the Loan Documents and (B) whether or not
executed, any waiver, amendment or consent thereunder or thereto, (ii) after the
occurrence of a Default, consulting with respect to any matter in any way
arising out of, related to, or connected with, the Loan Documents, including (A)
the protection or preservation of the Collateral, (B) the protection,
preservation, exercise or enforcement of any of the rights of the Administrative
Agent, the Issuing Bank, the Swing Loan Lender or the Banks in, under or related
to the Collateral or the Loan Documents or (C) the performance of any of the
obligations of the Administrative Agent, the Issuing Bank, the Swing Loan Lender
or the Banks under or related to the Loan Documents, (iii) protecting or
preserving the Collateral or (iv) after the occurrence of a Default, protecting,
preserving, exercising or enforcing any of the rights of the Administrative
Agent, the Issuing Bank, the Swing Loan Lender or the Banks in, under or related
to the Collateral or the Loan Documents, including defending the Security
Interest as a valid, perfected, first priority security interest in the
Collateral subject only to Permitted Liens;
(c) pay or reimburse each Bank, the Issuing Bank and the Swing
Loan Lender for all costs and expenses (including reasonable fees and
disbursements of legal counsel and other experts employed or retained by such
Bank, the Issuing Bank or the Swing Loan Lender) incurred by such Bank, the
Issuing Bank or the Swing Loan Lender in connection with, arising out of, or in
any way related to protecting, preserving, exercising or enforcing any of its
rights in, under or related to the Collateral or the Loan Documents, in each
case, after the occurrence of a Default; and
(d) indemnify and hold each Indemnified Person harmless from
and against all losses (including judgments, penalties and fines) suffered, and
pay or reimburse each Indemnified Person for all costs and reasonable expenses
(including reasonable fees and disbursements of legal counsel and other experts
employed or retained by such Indemnified Person) incurred, by such Indemnified
Person in connection with, arising out of, or in any way related to (i) any Loan
Document Related Claim (whether asserted by such Indemnified Person, the
Borrower, any Guarantor or any other Person), including the prosecution or
defense thereof and any litigation or proceeding with respect thereto (whether
or not, in the case of any such litigation or proceeding, such Indemnified
Person is a party thereto), or (ii) any investigation, governmental or
otherwise, arising out of, related to, or in any way connected with, the Loan
Documents or the relationships established thereunder, except that the foregoing
indemnity in this subsection (d) shall not be applicable to any loss suffered by
any Indemnified Person to the extent such loss is determined by a judgment of a
court that is binding on the Borrower and such
<PAGE>
Indemnified Person, final and not subject to review on appeal, to be the result
of acts or omissions on the part of such Indemnified Person constituting (x)
willful misconduct, (y) knowing violations of law or (z) in the case of claims
by the Borrower against such Indemnified Person, such Indemnified Person's
failure to observe any other standard applicable to it under any of the other
provisions of the Loan Documents or, but only to the extent not waivable
thereunder, Applicable Law.
Section 9.03 AMOUNTS PAYABLE DUE UPON REQUEST FOR PAYMENT. All amounts
payable by the Borrower under Section 9.02 and under the other provisions of the
Loan Documents shall, except as otherwise expressly provided, be immediately due
upon request for the payment thereof.
Section 9.04 REMEDIES OF THE ESSENCE. The various rights and remedies
of the Administrative Agent, the Issuing Bank, the Swing Loan Lender and the
Banks under the Loan Documents are of the essence of those agreements, and the
Administrative Agent, the Issuing Bank, the Swing Loan Lender and the Banks
shall be entitled to obtain a decree requiring specific performance of each such
right and remedy.
Section 9.05 RIGHTS CUMULATIVE. Each of the rights and remedies of the
Administrative Agent, the Issuing Bank, the Swing Loan Lender and the Banks
under the Loan Documents shall be in addition to all of their other rights and
remedies under the Loan Documents and Applicable Law, and nothing in the Loan
Documents shall be construed as limiting any such rights or remedies.
Section 9.06 CONFIDENTIALITY. The Administrative Agent, the Issuing
Bank, the Swing Loan Lender and the Banks agree to exercise all reasonable
efforts to keep any information delivered or made available by the Borrower
concerning the Collateral or the Borrower, any Guarantor or any Subsidiary
confidential from anyone other than persons employed or retained by such Person
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans of the Administrative Agent, the Issuing Bank, the
Swing Loan Lender or any Bank; PROVIDED, HOWEVER, that nothing herein shall
prevent any Person from disclosing such information (a) to any Affiliate of such
Person or to any other such Person, (b) upon the order of any court or
administrative agency, (c) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Person, (d) that has been publicly
disclosed, (e) in connection with any litigation relating to the Loans, this
Agreement or any transaction contemplated hereby to which any Bank, any Loan
Party or any Administrative Agent may be a party, (f) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (g) to such
Person's legal counsel and independent auditors and (h) to any actual or
proposed participant or assignee of all or any part of the Loans hereunder, if
the intended recipient of such information, prior to such disclosure, agrees for
the benefit of the Borrower to comply with the provisions of this Section 9.06.
Section 9.07 AMENDMENTS; WAIVERS. Any term, covenant, agreement or
condition of the Loan Documents may be amended, and any right under the Loan
Documents may be waived, if, but only if, such amendment or waiver is in writing
and is signed by (a) in the case of an
<PAGE>
amendment or waiver with respect to the Loan Documents referred to in Section
8.07(a), the Administrative Agent, (b) in the case of an amendment or waiver
with respect to any other Loan Document, the Required Banks and, if the rights
and duties of the Administrative Agent, the Issuing Bank, or the Swing Loan
Lender are affected thereby, by the Administrative Agent, the Issuing Bank, or
the Swing Loan Lender, as the case may be and (c) in the case of an amendment
with respect to any Loan Document, by the Borrower and any Guarantor which is a
party thereto; PROVIDED, HOWEVER, that no amendment or waiver shall be
effective, unless in writing and signed by each Bank affected thereby, to the
extent it (i) changes the amount of such Bank's Commitment, (ii) reduces the
principal of or the rate of interest on such Bank's Loans or Note, the amount of
such Bank's Letter of Credit Participations or any fees payable to such Bank
hereunder, (iii) postpones any date fixed for, or reduces the amount of, any
reduction of the Commitments or any payment of principal of or interest on such
Bank's Loans, Note, Letter of Credit Participations or any fees payable to such
Bank hereunder, (iv) releases any Collateral from the Security Interest except
to the extent that such Collateral has been disposed of in accordance with
Section 4.17 (on the basis of the provisions of Section 4.11(e) or, if such
release shall have been consented to by the Required Banks, Section 4.11(c)) or
releases any Guarantor from its obligations under Section 10.01 except to the
extent that all of the Capital Securities of such Guarantor have been disposed
of in accordance with Section 4.17 (on the basis of the provisions of Section
4.11(e) or, if such release shall have been consented to by the Required Banks,
Section 4.11(c)), or (v) amends Section 1.15, this Section 9.07, the definition
of "Required Banks" contained in Section 10.01 or any other provision of this
Agreement requiring the consent or other action of all of the Banks. Unless
otherwise specified in such waiver, a waiver of any right under the Loan
Documents shall be effective only in the specific instance and for the specific
purpose for which given. No election not to exercise, failure to exercise or
delay in exercising any right, nor any course of dealing or performance, shall
operate as a waiver of any right of the Administrative Agent, the Issuing Bank,
the Swing Loan Lender or any Bank under the Loan Documents or Applicable Law,
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right of the
Administrative Agent, the Issuing Bank, the Swing Loan Lender or any Bank under
the Loan Documents or Applicable Law.
Section 9.08 SET-OFF; SUSPENSION OF PAYMENT AND PERFORMANCE. The
Administrative Agent, the Issuing Bank, the Swing Loan Lender and each Bank is
hereby authorized by the Borrower and each Guarantor, at any time and from time
to time, without notice, (a) during any Event of Default, to set off against,
and to appropriate and apply to the payment of, the Liabilities of the Borrower
or any Guarantor under the Loan Documents (whether owing to such Person or to
any other Person that is the Administrative Agent, the Issuing Bank, the Swing
Loan Lender or a Bank and whether matured or unmatured, fixed or contingent or
liquidated or unliquidated and including amounts to which a Bank is entitled
with respect to its Letter of Credit Participations) any and all Liabilities
owing by such Person or any of its Affiliates to the Borrower, each Guarantor or
any Wholly Owned Subsidiary (whether payable in Dollars or any other currency,
whether matured or unmatured and, in the case of Liabilities that are deposits,
whether general or special, time or demand and however evidenced and whether
maintained at a branch or office located within or without the United States)
and (b) during any Event of Default, to suspend the payment and performance of
such Liabilities owing by such Person or its
<PAGE>
Affiliates and, in the case of Liabilities that are deposits, to return as
unpaid for insufficient funds any and all checks and other items drawn against
such deposits.
Section 9.09 SHARING OF RECOVERIES. Each Bank agrees that, if, for any
reason, including as a result of (a) the exercise of any right of counterclaim,
set-off, banker's lien or similar right, (b) its claim in any applicable
bankruptcy, insolvency or other similar law being deemed secured by a Debt owed
by it to any Loan Party, including a claim deemed secured under Section 506 of
the Bankruptcy Code, or (c) the allocation of payments by the Administrative
Agent or any Loan Party in a manner contrary to the provisions of Section 1.15,
such Bank shall receive payment of a proportion of the aggregate amount due and
payable to it hereunder as principal of or interest on the Loans or fees that is
greater than the proportion received by any other Bank in respect of the
aggregate of such amounts due and payable to such other Bank hereunder, then the
Bank receiving such proportionately greater payment shall purchase
participations (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in the rights of the other Banks hereunder so that all
such recoveries with respect to such amounts due and payable hereunder (net of
costs of collection) shall be pro rata; PROVIDED that if all or part of such
proportionately greater payment received by the purchasing Bank is thereafter
recovered by or on behalf of any Loan Party from such Bank, such purchases shall
be rescinded and the purchase prices paid for such participations shall be
returned to such Bank to the extent of such recovery, but without interest
(unless the purchasing Bank is required to pay interest on the amount recovered
to the Person recovering such amount, in which case the selling Bank shall be
required to pay interest at a like rate). The Borrower and each Guarantor
expressly consents to the foregoing arrangements and agrees that any holder of a
participation in any rights hereunder so purchased or acquired pursuant to this
Section 9.09(a) shall, with respect to such participation, be entitled to all of
the rights of a Bank under Sections 7.02, 9.02 and 9.08 (subject to any
condition imposed on a Bank hereunder with respect thereto) and may exercise any
and all rights of set-off with respect to such participation as fully as though
the Borrower and each Guarantor were directly indebted to the holder of such
participation for Loans in the amount of such participation.
Section 9.10 ASSIGNMENTS AND PARTICIPATIONS. (a) ASSIGNMENTS. (i)
Neither the Borrower nor any Guarantor may assign any of its rights or
obligations under the Loan Documents without the prior written consent of (A) in
the case of the Loan Documents referred to in Section 8.07(a), the
Administrative Agent and (B) in the case of any of the other Loan Documents, the
Issuing Bank, the Swing Loan Lender and each Bank, and no assignment of any such
obligation shall release the Borrower or any Guarantor therefrom unless the
Administrative Agent, the Issuing Bank, the Swing Loan Lender and each Bank, as
applicable, shall have consented to such release in a writing specifically
referring to the obligation from which the Borrower or such Guarantor is to be
released.
(ii) Each Bank may from time to time assign any or all of
its rights and obligations under the Loan Documents to one or more
Persons; PROVIDED that, except in the case of the grant of a security
interest to a Federal Reserve Bank (which may be made without condition
or restriction), no such assignment shall be effective unless (A) the
assignment is consented to by the Borrower (unless an Event of Default
exists) the
<PAGE>
Issuing Bank, the Swing Loan Lender and the Administrative Agent, such
consents not to be unreasonably withheld, (B) in the case of a partial
assignment, the assignment shall involve the assignment of not less than
$5,000,000 of the assignor Bank's Commitment, (C) a Notice of Assignment
with respect to the assignment, duly executed by the assignor and the
assignee, shall have been given to the Borrower, the Issuing Bank, the
Swing Loan Lender and the Administrative Agent and (D) except in the case
of an assignment by the Bank that is the Administrative Agent, the
Administrative Agent shall have been paid an assignment fee of $3,500.
Upon any effective assignment, the assignor shall be released from the
obligations so assigned and, in the case of an assignment of all of its
Loans and Commitment, shall cease to be a Bank. In the event of any
effective assignment by a Bank, the Borrower shall issue a new Note to
the assignee Bank (against, other than in the case of a partial
assignment, receipt of the existing Note of the assignor Bank). Nothing
in this Section 9.10 shall limit the right of any Bank to assign its
interest in the Loans and its Note to a Federal Reserve Bank as
collateral security under Regulation A of the Board of Governors of the
Federal Reserve System, but no such assignment shall release such Bank
from its obligations hereunder.
(b) PARTICIPATIONS. Each Bank may from time to time sell or
otherwise grant participations in any or all of its rights and obligations under
the Loan Documents. In the event of any such grant by a Bank of a
participation, such Bank's obligations under the Loan Documents to the other
parties thereto shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, and the Borrower, each Guarantor, the
Issuing Bank, the Swing Loan Lender, the Administrative Agent and the other
Banks may continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations thereunder. A Bank may not grant to any
holder of a participation the right to require such Bank to take or omit to take
any action under the Loan Documents, except that a Bank may grant to any such
holder the right to require such holder's consent to (i) reduce the principal of
or the rate of interest on such Bank's Loans, Note or the amount of such Bank's
Letter of Credit Participations or any fees payable to such Bank hereunder, (ii)
postpone any date fixed for any reduction of the Commitments or any payment of
principal of or interest on such Bank's Loans, Note or the amount of such Bank's
Letter of Credit Participations or any fees payable to such Bank hereunder,
(iii) permit any Loan Party to assign any of its obligations under the Loan
Documents to any other Person or (iv) release any Collateral from the Security
Interest except as required or contemplated by the Loan Documents. Each holder
of a participation in any rights under the Loan Documents, if and to the extent
the applicable participation agreement so provides, shall, with respect to such
participation, be entitled to all of the rights of a Bank as fully as though it
were a Bank under Sections 1.15, 7.02, 7.03, 9.02(d) and 9.07 (subject to any
conditions imposed on a Bank hereunder with respect thereto) and may exercise
any and all rights of set-off with respect to such participation as fully as
though the Borrower were directly indebted to the holder of such participation
for Loans in the amount of such participation; PROVIDED, HOWEVER, that no holder
of a participation shall be entitled to any amounts that would otherwise be
payable to it with respect to its participation unless such amounts would have
been payable to the Bank that granted such participation if such participation
had not been granted.
<PAGE>
(c) LOANS BY SPC DESIGNEES. Notwithstanding anything to the
contrary contained herein, any Bank (a "Granting Bank") may grant to a special
purpose funding vehicle (an "SPC") of such Granting Bank identified as such in
writing from time to time by the Granting Bank to the Administrative Agent and
the Borrower, the option to provide to the Borrower all or any part of any Loan
that such Granting Bank would otherwise be obligated to make to the Borrower
pursuant to this Agreement; PROVIDED that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan, (ii) if an SPC elects not to exercise
such option or otherwise fails to provide all or any part of such Loan the
Granting Bank shall be obligated to make such Loan pursuant to the terms hereof
and (iii) no SPC or Granting Bank shall be entitled to receive any greater
amount pursuant to Section 1.14, 7.02 or 7.03 than the Granting Bank would have
been entitled to receive had the Granting Bank not otherwise granted such SPC
the option to provide any Loan to the Borrower. The making of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Bank to the same extent,
and as if, such Loan were made by such Granting Bank. Each party hereto hereby
agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which a Bank would otherwise be liable so
long as, and to the extent that, the related Granting Bank makes such payment.
In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPC, it will not institute
against or join any other person in instituting against such SPC any bankruptcy,
reorganization, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof.
Notwithstanding the foregoing, the Granting Bank unconditionally agrees to
indemnify the Borrower, the Administrative Agent and each Bank against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
incurred by or asserted against such Borrower, the Administrative Agent or such
Bank, as the case may be, in any way relating to or arising as a consequence of
any such forbearance or delay in the initiation of any such proceeing against
its SPC. Each party hereto hereby acknowledges and agrees that no SPC shall
have the rights of a Bank hereunder, such rights being retained by the
applicable Granting Bank. Accordingly, and without limiting the foregoing, each
party hereby further acknowledges and agrees that no SPC shall have any voting
rights hereunder and that the voting rights attributable to any Loan made by an
SPC shall be exercised only by the relevant Granting Bank and that each Granting
Bank shall serve as the administrative agent and attorney in fact for its SPC
and shall on behalf of its SPC receive any and all payments made for the benefit
of such SPC and take all actions hereunder to the extent, if any, such SPC shall
have any rights hereunder. In addition, notwithstanding anything to the
contrary contained in this Agreement any SPC may (i) with notice to, but without
the prior written consent of any other party hereto, assign all or a portion of
its interest in any Loans to the Granting Bank and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC.
Section 9.11 GOVERNING LAW. The rights and duties of the Borrower, each
Guarantor, the Administrative Agent and the Banks under this Agreement and the
Notes (including matters
<PAGE>
relating to the Maximum Permissible Rate) shall, pursuant to New York General
Obligations Law Section 5-1401, be governed by the law of the State of New York.
Section 9.12 JUDICIAL PROCEEDINGS; WAIVER OF JURY TRIAL. Any judicial
proceeding brought against the Borrower or any Guarantor with respect to any
Loan Document Related Claim may be brought in any court of competent
jurisdiction in the City and County of New York, and, by execution and delivery
of this Agreement, the Borrower and each Guarantor (a) accepts, generally and
unconditionally, the non-exclusive jurisdiction of such courts and any related
appellate court and irrevocably agrees to be bound by any judgment rendered
thereby in connection with any Loan Document Related Claim and (b) irrevocably
waives any objection it may now or hereafter have as to the venue of any such
proceeding brought in such a court or that such a court is an inconvenient
forum. The Borrower and each Guarantor hereby waives personal service of
process and consents that service of process upon it may be made by certified or
registered mail, return receipt requested, at its address specified or
determined in accordance with the provisions of Section 9.01(a)(ii), and service
so made shall be deemed completed on the third Business Day after such service
is deposited in the mail. Nothing herein shall affect the right of the
Administrative Agent, the Issuing Bank, the Swing Loan Lender, any Bank or any
other Indemnified Person to serve process in any other manner permitted by law
or shall limit the right of the Administrative Agent, the Issuing Bank, the
Swing Loan Lender, any Bank or any other Indemnified Person to bring proceedings
against the Borrower or any Guarantor in the courts of any other jurisdiction.
Any judicial proceeding by the Borrower or any Guarantor against the
Administrative Agent, the Issuing Bank, the Swing Loan Lender, or any Bank
involving any Loan Document Related Claim shall be brought only in a court
located in the City and State of New York. THE BORROWER, EACH GUARANTOR, THE
AGENT, THE ISSUING BANK, THE SWING LOAN LENDER AND EACH BANK HEREBY IRREVOCABLY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY LOAN DOCUMENT
RELATED CLAIM.
Section 9.13 LIMITATION OF LIABILITY. NEITHER THE AGENT, THE ISSUING
BANK, THE SWING LOAN LENDER, NOR THE BANKS NOR ANY OTHER INDEMNIFIED PERSON
SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND THE BORROWER AND EACH GUARANTOR
HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR, ANY SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES SUFFERED BY THE BORROWER IN CONNECTION WITH ANY LOAN
DOCUMENT RELATED CLAIM.
Section 9.14 SEVERABILITY OF PROVISIONS. Any provision of the Loan
Documents that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, the Borrower and each
Guarantor hereby waives any provision of Applicable Law that renders any
provision of the Loan Documents prohibited or unenforceable in any respect.
<PAGE>
Section 9.15 COUNTERPARTS. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto were upon the same instrument.
Section 9.16 SURVIVAL OF OBLIGATIONS. Except as otherwise expressly
provided therein, the rights and obligations of the Borrower, each Guarantor,
the Administrative Agent, the Issuing Bank, the Swing Loan Lender, the Banks and
the other Indemnified Persons under the Loan Documents under Sections 1.14, 9.02
and 10.04 (and each other Section reasonably related thereto) shall survive the
Repayment Date and the termination of the Security Interest.
Section 9.17 ENTIRE AGREEMENT. This Agreement, the Notes and the other
Loan Documents embody the entire agreement among the Borrower, each Guarantor,
the Administrative Agent, the Issuing Bank, the Swing Loan Lender, and the Banks
relating to the subject matter hereof and supersede all prior agreements,
representations and understandings, if any, relating to the subject matter
hereof.
Section 9.18 SUCCESSORS AND ASSIGNS. All of the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
Section 9.19 CASH COLLATERAL. If, at any time, payment, prepayment or
cash collateralization of Contingent Reimbursement Obligations shall be required
pursuant to any provision of any of the Loan Documents, such payment, prepayment
or cash collateralization shall be made by deposit of funds in Dollars, in the
amount of such payment, prepayment or cash collateralization, into a cash
collateral account at the Administrative Agent's Office, which account shall be
under the sole dominion and control of the Administrative Agent and is hereby
pledged to the Administrative Agent for the benefit of itself, the Banks and the
Issuing Bank as security for the payment of the Contingent Reimbursement
Obligations and any other amounts that may become payable hereunder. Funds
deposited in such account, and any income thereon, may be applied by the
Administrative Agent against amounts payable under the Loan Documents as such
amounts become due. Any funds remaining in such account when all Contingent
Reimbursement Obligations and other amounts payable under the Loan Documents
have been paid and the Repayment Date shall have occurred shall be promptly
remitted to the Borrower.
ARTICLE 10
GUARANTY
Section 10.01 GUARANTY OF PAYMENT AND PERFORMANCE. Each Guarantor hereby
(a) irrevocably, unconditionally and absolutely guarantees to each Guaranteed
Party the due and punctual payment, observance and performance of all of the
Guaranteed Obligations in accordance with their respective terms and when and as
due (whether at maturity, by reason of acceleration or otherwise), or deemed to
be due pursuant to Section 10.03, and (b) agrees so to pay, observe or perform
the same when so due, or deemed to be due, upon demand.
<PAGE>
Section 10.02 LIMITATION ON GUARANTY. It is the intention of each
Guarantor and the Guaranteed Parties that the obligations of each Guarantor
under the Loan Documents shall be in, but not in excess of, the maximum amount
permitted by Applicable Law. To that end, but only to the extent such
obligations would otherwise be avoidable, the obligations of each Guarantor
under the Loan Documents shall be limited to the maximum amount that, after
giving effect to the incurrence thereof, would not render such Guarantor
insolvent or unable to pay its Debts as they mature or leave such Guarantor with
an unreasonably small capital. The need for any such limitation shall be
determined, and any such needed limitation shall be effective, at the time or
times that such Guarantor is deemed, under Applicable Law, to incur obligations
hereunder. Any such limitation shall be apportioned amongst the Guaranteed
Obligations of the Guaranteed Parties pro rata in accordance with their
respective amounts thereof. This Section 10.02 is intended solely to preserve
the rights of the Guaranteed Parties under the Loan Documents to the maximum
extent permitted by Applicable Law, and no Guarantor nor any other Person shall
have any right under this Section 10.02 that it would not otherwise have under
Applicable Law. For the purposes of this Section 10.02 and Section 10.13,
"insolvency", "unreasonably small capital" and "inability to pay Debts as they
mature" shall be determined in accordance with Applicable Law.
Section 10.03 CONTINUANCE AND ACCELERATION OF GUARANTEED OBLIGATIONS UPON
CERTAIN EVENTS. If:
(a) any Event of Default specified in Section 6.01(e) shall
occur;
(b) any injunction, stay or the like that enjoins any
acceleration, or demand for the payment, observance or performance, of any
Guaranteed Obligations that would otherwise be required or permitted under the
Loan Documents shall become effective; or
(c) any Guaranteed Obligations shall be or be determined to be
or become discharged, disallowed, invalid, illegal, void or otherwise
unenforceable (whether by operation of any present or future law or by order of
any court or governmental agency) against the Borrower;
then (i) such Guaranteed Obligations shall, for all purposes of the Loan
Documents, be deemed (A) in the case of clause (c), to continue to be
outstanding and in full force and effect notwithstanding the unenforceability
thereof against the Borrower and (B) if such is not already the case, to have
thereupon become immediately due and payable and to have commenced bearing
interest at the Post-Default Rate and (ii) the Guaranteed Parties to which such
Guaranteed Obligations are owing may, with respect to such Guaranteed
Obligations, exercise all of the rights and remedies under the Loan Documents
that would be available to them during an Event of Default.
Section 10.04 RECOVERED PAYMENTS. The Guaranteed Obligations shall be
deemed not to have been paid, observed or performed, and each Guarantor's
obligations under the Loan Documents in respect thereof shall continue and not
be discharged, to the extent that any payment, observance or performance thereof
by the Borrower or any other Guarantor or guarantor, or out of the proceeds of
the Collateral or any other collateral, is recovered from or paid over by or for
the account of any Guaranteed Party for any reason, including as a preference
<PAGE>
or fraudulent transfer or by virtue of any subordination (whether present or
future or contractual or otherwise) of the Guaranteed Obligations, whether such
recovery or payment over is effected by any judgment, decree or order of any
court or governmental agency, by any plan of reorganization or by settlement or
compromise by any Guaranteed Party (whether or not consented to by the Borrower,
each Guarantor or any other guarantor) of any claim for any such recovery or
payment over. Each Guarantor hereby expressly agrees that it shall be liable
under the Loan Documents with respect to any Guaranteed Obligation whenever such
a recovery or payment over thereof occurs.
Section 10.05 BINDING NATURE OF CERTAIN ADJUDICATIONS. Each Guarantor
shall be conclusively bound by the adjudication in any action or proceeding,
legal or otherwise, involving any controversy arising under, in connection with,
or in any way related to, any of the Guaranteed Obligations, and by a judgment,
award or decree entered therein, if such Guarantor shall have had the right, or
shall have been given the opportunity, to participate in such action or
proceeding and shall have been given notice of such action or proceeding in time
to exercise such right or avail itself of such opportunity.
Section 10.06 NATURE OF GUARANTOR'S OBLIGATIONS. Each Guarantor's
obligations under this Article 10 (a) are absolute and unconditional, (b) are
unlimited in amount except as provided in Section 10.02, (c) constitute a
guaranty of payment and performance and not a guaranty of collection, (d) are as
primary obligor and not as a surety only, (e) shall be a continuing guaranty of
all present and future Guaranteed Obligations and all promissory notes and other
documentation given in extension or renewal or substitution for any of the
Guaranteed Obligations and (f) shall be irrevocable.
Section 10.07 NO RELEASE OF GUARANTOR. THE OBLIGATIONS OF EACH GUARANTOR
UNDER THIS ARTICLE 10 SHALL NOT BE REDUCED, LIMITED OR TERMINATED, NOR SHALL
SUCH GUARANTOR BE DISCHARGED FROM ANY THEREOF, FOR ANY REASON WHATSOEVER (other
than, subject to Sections 10.04 and 10.11, the payment, observance and
performance of the Guaranteed Obligations), including (and whether or not the
same shall have occurred or failed to occur once or more than once and whether
or not such Guarantor shall have received notice thereof):
(a) (i) any increase in the principal amount of, or interest
rate applicable to, (ii) any extension of the time of payment, observance or
performance of, (iii) any other amendment or modification of any of the other
terms and provisions of, (iv) any release, composition or settlement (whether by
way of acceptance of a plan of reorganization or otherwise) of, (v) any
subordination (whether present or future or contractual or otherwise) of, or
(vi) any discharge, disallowance, invalidity, illegality, voidness or other
unenforceability of, the Guaranteed Obligations;
(b) (i) any failure to obtain, (ii) any release, composition
or settlement of, (iii) any amendment or modification of any of the terms and
provisions of, (iv) any subordination of, or (v) any discharge, disallowance,
invalidity, illegality, voidness or other unenforceability of, any other
guaranties of the Guaranteed Obligations;
<PAGE>
(c) (i) any failure to obtain or any release of, (ii) any
failure to protect or preserve, (iii) any release, compromise, settlement or
extension of the time of payment of any obligations constituting, (iv) any
failure to perfect or maintain the perfection or priority of any Lien upon, (v)
any subordination of any Lien upon, or (vi) any discharge, disallowance,
invalidity, illegality, voidness or other unenforceability of any Lien or
intended Lien upon, the Collateral or any other collateral now or hereafter
securing the Guaranteed Obligations or any other guaranties thereof;
(d) any termination of or change in any relationship between
such Guarantor and the Borrower, including any such termination or change
resulting from a change in the ownership of such Guarantor or the Borrower or
from the cessation of any commercial relationship between such Guarantor and the
Borrower;
(e) any exercise of, or any election not or failure to
exercise, delay in the exercise of, waiver of, or forbearance or other
indulgence with respect to, any right, remedy or power available to the
Guaranteed Parties, including (i) any election not or failure to exercise any
right of setoff, recoupment or counterclaim, (ii) any election of remedies
effected by the Guaranteed Parties, whether or not such election affects the
right to obtain a deficiency judgment, and (iii) any election by the Guaranteed
Parties in any proceeding under the Bankruptcy Code of the application of
Section 1111(b)(2) of such Code; and
(f) ANY OTHER ACT OR FAILURE TO ACT OR ANY OTHER EVENT OR
CIRCUMSTANCE THAT (i) VARIES THE RISK OF SUCH GUARANTOR UNDER THE LOAN DOCUMENTS
OR (ii) BUT FOR THE PROVISIONS HEREOF, WOULD, AS A MATTER OF STATUTE OR RULE OF
LAW OR EQUITY, OPERATE TO REDUCE, LIMIT OR TERMINATE THE OBLIGATIONS OF A
GUARANTOR OR THIRD PARTY SURETY THEREUNDER OR DISCHARGE SUCH GUARANTOR OR THIRD
PARTY SURETY FROM ANY THEREOF.
Section 10.08 CERTAIN WAIVERS. Each Guarantor waives, in each case to
the extent permitted under any Applicable Law:
(a) any requirement, and any right to require, that any right
or power be exercised or any action be taken against the Borrower, any other
Guarantor or guarantor or the Collateral or any other collateral for the
Guaranteed Obligations;
(b) all defenses (other than payment of the Guaranteed
Obligations) to, and all setoffs, counterclaims and claims of recoupment
against, the Guaranteed Obligations that may at any time be available to the
Borrower or any other Guarantor or guarantor;
(c) (i) notice of acceptance of and intention to rely on the
Loan Documents, (ii) notice of the making or renewal of any Loans, the issuance
of any Letters of Credit or other extensions of credit hereunder and of the
incurrence or renewal of any other Guaranteed Obligations, (iii) notice of any
of the matters referred to in Section 10.07 and (iv) all other notices that may
be required by Applicable Law or otherwise to preserve any rights against such
<PAGE>
Guarantor under the Loan Documents, including any notice of default, demand,
dishonor, presentment and protest;
(d) any defense based upon, arising out of or in any way
related to (i) any claim that any sale or other disposition of the Collateral or
any other collateral for the Guaranteed Obligations was not conducted in a
commercially reasonable fashion or that a public sale, should the Guaranteed
Parties have elected to so proceed, was, in and of itself, not a commercially
reasonable method of sale, (ii) any claim that any election of remedies by the
Guaranteed Parties, including the exercise by the Guaranteed Parties of any
rights against the Collateral or any other collateral, impaired, reduced,
released or otherwise extinguished any right that such Guarantor might otherwise
have had against the Borrower, any other Guarantor or any other guarantor or
against the Collateral or any other collateral, including any right of
subrogation, exoneration, reimbursement or contribution or right to obtain a
deficiency judgment, (iii) any claim based upon, arising out of or in any way
related to any of the matters referred to in Section 10.07 and (iv) any claim
that the Loan Documents should be strictly construed against the Guaranteed
Parties; and
(e) ALL OTHER DEFENSES UNDER APPLICABLE LAW THAT WOULD, BUT FOR
THIS CLAUSE (e), BE AVAILABLE TO A GUARANTOR OR THIRD PARTY SURETY AS A DEFENSE
AGAINST OR A REDUCTION OR LIMITATION OF ITS OBLIGATIONS UNDER THIS ARTICLE 10.
Section 10.09 INDEPENDENT CREDIT EVALUATION. Each Guarantor has
independently, and without reliance on any information supplied by the
Guaranteed Parties, taken, and will continue to take, whatever steps it deems
necessary to evaluate the financial condition and affairs of the Borrower, and
the Guaranteed Parties shall have no duty to advise any Guarantor of information
at any time known to them regarding such financial condition or affairs.
Section 10.10 SUBORDINATION OF RIGHTS AGAINST THE BORROWER, OTHER
GUARANTORS AND COLLATERAL. All rights that any Guarantor may at any time have
against the Borrower, any other Guarantor or guarantor or the Collateral or any
other collateral for the Guaranteed Obligations, and all obligations that the
Borrower or any other Guarantor or guarantor may at any time have to any
Guarantor, in each case arising out of the performance by such Guarantor of its
obligations under this Article 10, are hereby expressly subordinated to the
prior payment, observance and performance in full of the Guaranteed Obligations.
No Guarantor shall enforce any of the rights, or attempt to obtain payment or
performance of any of the obligations, subordinated pursuant to this Section
10.10 until the Guaranteed Obligations have been paid, observed and performed in
full, except that such prohibition shall not apply to routine acts, such as the
giving of notices and the filing of continuation statements, necessary to
preserve any such rights. If any amount shall be paid to or recovered by any
Guarantor (whether directly or by way of setoff, recoupment or counterclaim) on
account of any right or obligation subordinated pursuant to this Section 10.10,
such amount shall be held in trust by such Guarantor for the benefit of the
Guaranteed Parties, not commingled with any of such Guarantor's other funds and
forthwith paid over to the Administrative Agent, in the exact form received,
together with any necessary endorsements, to
<PAGE>
be applied and credited against, or held as security for, the Guaranteed
Obligations and the obligations of such Guarantor under the Loan Documents.
Section 10.11 ECONOMIC BENEFITS; SOLVENCY. Each Guarantor represents and
warrants that:
(a) The execution and delivery by the Administrative Agent and
the Banks of this Agreement, and the extensions of credit by the Banks
hereunder, constitute indirect economic benefit to such Guarantor at least equal
to such amount of its obligations under this Article 10.
(b) The guarantee by such Guarantor of the Guaranteed
Obligations and the incurrence by it of its other obligations under the Loan
Documents will not render such Guarantor insolvent or unable to pay its Debts as
they mature or leave such Guarantor with unreasonably small capital.
(c) It does not intend to incur Debts, including those under
the Loan Documents, that would be beyond its ability to pay as such Debts
mature.
ARTICLE 11
INTERPRETATION
Section 11.01 DEFINED TERMS. For the purposes of this Agreement:
"ACCUMULATED FUNDING DEFICIENCY" has the meaning ascribed to that
term in Section 302 of ERISA.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Period, a rate
per annum (rounded upward, if necessary, to the next higher 1/16 of 1%) equal to
the rate obtained by dividing (a) the Eurodollar Rate for such Interest Period
by (b) a percentage equal to 1 MINUS the Reserve Requirement in effect from time
to time during such Interest Period.
"ADMINISTRATIVE AGENT" means The Bank of New York, as agent for
and representative (within the meaning of Section 9-105(m) of the Uniform
Commercial Code) of the Banks under the Loan Documents, and any successor
Administrative Agent appointed pursuant to Section 8.08.
"ADMINISTRATIVE AGENT'S OFFICE" means the address of the
Administrative Agent specified in or determined in accordance with the
provisions of Section 9.01(a)(ii).
"AFFILIATE" means, with respect to a Person, any other Person
that, directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person; unless
otherwise specified, "Affiliate" means an Affiliate of the Borrower.
<PAGE>
"AGREEMENT" means this Agreement, including all schedules, annexes
and exhibits hereto.
"AGREEMENT DATE" means the date set forth as such on the last
signature page hereof, which date is the date that executed copies of this
Agreement were delivered by all parties hereto and, accordingly, this Agreement
became effective. If no such date is so set forth, the Agreement Date shall be
the date as of which this Agreement is dated.
"ANI" means Affiliated Newspapers Investments, Inc., a Delaware
corporation.
"ANI PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the
date hereof, between ANI and the Secured Party, in substantially the form of
EXHIBIT C.
"ANI SENIOR DISCOUNT NOTES" means the 13-1/4% Senior Discount
Debentures of ANI due July 1, 2006.
"APPLICABLE LAW" means, anything in Section 9.11 to the contrary
notwithstanding, (a) all applicable common law and principles of equity and (b)
all applicable provisions of all (i) constitutions, statutes, rules, regulations
and orders of governmental bodies, (ii) Governmental Approvals and (iii) orders,
decisions, judgments and decrees of all courts (whether at law or in equity or
admiralty) and arbitrators.
"BANK" means (a) the Administrative Agent and any Person listed on
the signature pages hereof following the Administrative Agent and (b) any Person
that has been assigned any or all of the rights or obligations of a Bank
pursuant to and in accordance with Section 9.10(a).
"BANK NONPARTICIPATION" means (i) the inability of any Bank to
acquire any Letter of Credit Participation pursuant to Section 1.03(e) or to
make any payment required by it under Section 1.03(h) because of such Bank's
having been subject to receivership, insolvency or other similar laws, (ii) the
refusal of any Bank to acquire any Letter of Credit Participation pursuant to
Section 1.03(e) or to make any payment required by it under Section 1.03(h) or
(iii) the giving by any Bank to the Issuing Bank of any notice (which has not
been retracted) of its intention not to so acquire any Letter of Credit
Participation or to make any such required payment, in each case without
limiting the rights and remedies of the Borrower against such Bank arising out
of any of the foregoing.
"BANK TAX" means any Tax based on or measured by net income or
franchise taxes (imposed in lieu of net income taxes) imposed upon any Bank or
the Administrative Agent by any jurisdiction (or any political subdivision
thereof) in which such Bank, the Administrative Agent or any Lending Office is
organized or located or doing business that is unrelated to this Agreement.
"BASE FINANCIAL STATEMENTS" means the most recent, audited,
consolidated balance sheet of the Borrower and the Consolidated Subsidiaries
referred to in SCHEDULE 5.02(a)
<PAGE>
and the related statements of income, retained earnings and cash flows for the
fiscal year ended with the date of such balance sheet.
"BASE RATE" means, for any day, a rate per annum equal to the
higher of (a) the Prime Rate in effect on such day and (b) the sum of the
Federal Funds Rate in effect on such day PLUS 1/2%.
"BASE RATE LOAN" means any Loan the interest on which is, or is to
be, as the context may require, computed on the basis of the Base Rate.
"BASE RATE MARGIN" means, with respect to Base Rate Loans
outstanding on any day during each period beginning on the 45th day of each
fiscal quarter and ending on the 45th day of the immediately succeeding fiscal
quarter, such percentage as set forth in the following table opposite the
applicable ratio of Consolidated Debt to Operating Cash Flow and under the
applicable ratio of Consolidated Senior Debt to Operating Cash Flow, in each
case determined as of the end of the fiscal quarter immediately preceding such
period:
<TABLE>
<CAPTION>
Ratio of Consolidated Senior Debt
to Operating Cash Flow
--------------------------------------------------------
LESS THAN 2.50:1
but
LESS THAN GREATER THAN OR GREATER THAN OR
2.00:1 EQUAL TO 2.00.1 EQUAL TO 2.50:1
--------- --------------- ---------------
Ratio of Consolidated Applicable
Debt to Operating Cash Flow Base Rate Margin
- ----------------------------------------------------- --------------------------------------------------------
<S> <C> <C> <C>
GREATER THAN OF EQUAL TO 6.00:1 0.625% 0.750% 0.875%
LESS THAN 6.00:1 but GREATER THAN OR EQUAL TO 5.75:1 0.500% 0.625% 0.750%
LESS THAN 5.75:1 but GREATER THAN OR EQUAL TO 5.50:1 0.375% 0.500% 0.625%
LESS THAN 5.50:1 but GREATER THAN OR EQUAL TO 5.00:1 0.125% 0.250% 0.375%
LESS THAN 5.00:1 but GREATER THAN OR EQUAL TO 4.50:1 0.000% 0.000% 0.125%
LESS THAN 4.50:1 but GREATER THAN OR EQUAL TO 4.00:1 0.000% 0.000% 0.000%
LESS THAN 4.00:1 0.000% 0.000% 0.000%
</TABLE>
Notwithstanding the foregoing, if Indebtedness of the Borrower hereunder shall
increase or decrease at any time during any such period (as the result of the
borrowing of Loans, the drawing under Letters of Credit or the repayment of
Loans or such drawings) by an amount sufficient to cause a change in the Base
Rate Margin, such change in the Base Rate Margin shall take effect on the day of
such increase or decrease in Indebtedness hereunder, as the case may be.
Notwithstanding the foregoing, prior to the delivery of the financial statements
of the Borrower for the fiscal quarter ending June 30, 1999 pursuant to Section
5.01(a), the Base Rate Margin shall be the greater of (x) 0.375% and (y) the
Base Rate Margin otherwise determined in accordance with the foregoing.
<PAGE>
"BENEFIT PLAN" means, with respect to any Person, at any time, any
employee benefit plan (including a Multiemployer Benefit Plan), the funding
requirements of which (under Section 302 of ERISA or Section 412 of the Code)
are, or at any time within six years immediately preceding the time in question
were, in whole or in part, the responsibility of such Person.
"BORROWER" means Garden State Newspapers, Inc., a Delaware
corporation.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which banks in New York City are authorized to close.
"CALIFORNIA PARTNERSHIP" means California Newspapers Partnership,
a Delaware general partnership.
"CAPITAL EXPENDITURES" means any expenditures in respect of the
purchase or other acquisition (by way of the acquisition of securities of a
Person or otherwise) of fixed or capital assets (excluding any such asset
acquired in connection with normal replacement and maintenance programs properly
charged to current operations or acquired with proceeds of insurance for the
purpose of replacement thereof) and excluding Investments to which Section 4.12
is by its express terms inapplicable.
"CAPITAL SECURITY" means, with respect to any Person, (a) any
share of capital stock of or other unit of ownership interest in such Person or
(b) any security convertible into, or any option, warrant or other right to
acquire, any share of capital stock of or other unit of ownership interest in
such Person.
"CASH EQUIVALENTS" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than 90 days from the date of acquisition thereof by the Borrower or a
Consolidated Subsidiary, (b) time deposits and certificates of deposit of a Bank
or any United States commercial bank of recognized standing having capital and
surplus in excess of $500,000,000, with maturities of not more than 90 days from
the date of acquisition thereof by the Borrower or a Consolidated Subsidiary,
(c) fully secured repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (a) entered into with
any bank meeting the qualifications specified in clause (b) above, and (d)
commercial paper issued by the parent corporation of a Bank or any United States
commercial bank of recognized standing having capital and surplus in excess of
$500,000,000 and any other commercial paper rated at least A-1 or the equivalent
thereof by Standard & Poor's Ratings Service or at least P-1 or the equivalent
thereof by Moody's Investors Service, Inc. and in each case maturing within 90
days after the date of acquisition thereof by the Borrower or a Consolidated
Subsidiary.
"CASH FLOW PERCENTAGE" means, as of the date of any sale or
exchange of capital stock or assets, the ratio, expressed as a percentage,
derived by dividing (a) Operating Cash Flow attributable thereto for the four
consecutive fiscal quarters of the Borrower ending on, or most
<PAGE>
recently ended prior to, such date for which financial information is available
and has been delivered to the Banks hereunder prior to such date of sale or
exchange by (b) Operating Cash Flow of the Borrower and its Consolidated
Subsidiaries for such period.
"CODE" means the Internal Revenue Code of 1986.
"COLLATERAL" means all property subject to a Lien created pursuant
to the Loan Documents.
"COMMITMENT" means, with respect to any Bank, (i) the amount set
forth opposite such Bank's name under the heading "Commitment" on ANNEX A or, in
the case of a Bank that becomes a Bank pursuant to an assignment in accordance
with Section 9.10(a), the amount of the assignor's Commitment assigned to such
Bank, in either case as the same may be reduced from time to time pursuant to
Section 1.08 or increased or reduced from time to time pursuant to assignments
in accordance with Section 9.10(a) or (ii) as the context may require, the
obligation of such Bank to make Loans in an aggregate unpaid principal amount
not exceeding such amount.
"CONSOLIDATED DEBT" means, at any time, the consolidated
Indebtedness of the Borrower and its Consolidated Subsidiaries as of such time,
MINUS for purposes of determining the ratio of Consolidated Debt to Operating
Cash Flow and the ratio of Consolidated Senior Debt to Operating Cash Flow, the
aggregate amount, if any, of (x) cash and Cash Equivalents held at such time by
the Borrower and its Consolidated Subsidiaries in excess of $2,000,000 and (y)
the Greenco Subordinated Debt outstanding at such time.
"CONSOLIDATED FIXED CHARGES" means, as of any date of
determination, the following, determined with respect to the immediately
preceding four fiscal quarters of the Borrower for which financial statements
have been delivered pursuant to Section 5.01(a) or 5.01(c), the sum of (a) all
Required Repayments, and all other payments of principal of all Indebtedness
(including capital leases) of the Borrower and its Consolidated Subsidiaries
scheduled to have been made during such period, determined on a consolidated
basis, (b) the aggregate amount of Capital Expenditures made by the Borrower and
the Consolidated Subsidiaries during such period, (c) Interest Expense for such
period and (d) without duplication, taxes paid in cash and payments in respect
of taxes made by the Borrower or any Consolidated Subsidiary pursuant to the Tax
Sharing Agreement during such period.
"CONSOLIDATED NET INCOME" means, for any period, the amount of
consolidated net income of the Borrower and the Consolidated Subsidiaries for
such period (taken as a cumulative whole); PROVIDED, that there shall be
excluded: (a) any net income (or net loss) of a Consolidated Subsidiary (i) for
any period during which it was not a Consolidated Subsidiary or (ii), in case of
any such net income, to the extent that the declaration or payment of dividends
or similar distributions by that Consolidated Subsidiary is not at the time
permitted by operation of the terms of any Contract (other than this Agreement)
or Applicable Law; (b) any net income (or net loss) of any Person (other than a
Consolidated Subsidiary) in which the Borrower or any Consolidated Subsidiary
has an ownership interest, except to the extent that any such income has
actually been received by the Borrower or such Subsidiary in the form of cash
dividends or
<PAGE>
similar distributions; (c) any restoration of any contingency reserve, except to
the extent that provision for such reserve was made out of income during such
period; (d) any net gains or losses on the sale or other disposition, not in the
ordinary course of business, of investments and other capital assets; PROVIDED,
that there shall also be excluded any related charges for taxes thereon; (e) any
net gain arising from the collection of the proceeds of any insurance policy;
(f) any write-up of any asset; (g) any net gains resulting from the
extinguishment or defeasance of any Indebtedness; (h) any earnings from
discontinued businesses; and (i) any extraordinary gains or losses.
"CONSOLIDATED SENIOR DEBT" means, at any time, Consolidated Debt
other than Subordinated Debt as of such time.
"CONSOLIDATED SUBSIDIARY" means, with respect to any Person at any
time, any Subsidiary or other Person the accounts of which would be consolidated
with those of such first Person in its consolidated financial statements as of
such time; unless otherwise specified, "Consolidated Subsidiary" means a
Consolidated Subsidiary of the Borrower.
"CONSOLIDATED TAX SUBSIDIARY" means a Subsidiary which could elect
to file consolidated, combined, unitary or similar group Tax returns with ANI,
the Borrower or another Subsidiary.
"CONTINGENT REIMBURSEMENT OBLIGATION" means the contingent
obligation of the Borrower to reimburse the Issuing Bank for any Drawings that
may in the future be made under an outstanding Letter of Credit, whenever
issued. Without limiting the foregoing, the amount of all Contingent
Reimbursement Obligations at any time shall be the aggregate amount available to
be drawn under outstanding Letters of Credit at such time.
"CONTRACT" means (a) any agreement, including an indenture, lease
or license, (b) any deed or other instrument of conveyance, (c) any certificate
of incorporation or charter and (d) any by-law.
"CONTRIBUTION AGREEMENT" means the Contribution Agreement relating
to the formation of the California Partnership dated March 3, 1999 among the
Borrower, Alameda Newspapers, Inc., V&P Publishing, Inc., Internet Media
Publishing, Inc., DR Partners, a Nevada general partnership, Media West-SBC,
Inc., a Delaware corporation, and The Sun Company of San Bernardino, California,
a California corporation.
"DEBT" means any Liability that constitutes "debt" or "Debt" under
section 101(12) of the Bankruptcy Code or under the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any analogous Applicable
Law.
"DEFAULT" means any condition or event that constitutes an Event
of Default or that with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DOLLARS" and the sign "$" mean lawful money of the United States
of America.
<PAGE>
"DOMESTIC LENDING OFFICE" of any Bank or the Swing Loan Lender
means (a) the branch or office of such Bank or the Swing Loan Lender set forth
below such Bank's or the Swing Loan Lender's name under the heading "Domestic
Lending Office" on ANNEX A or, in the case of a Bank that becomes a Bank
pursuant to an assignment, the branch or office of such Bank set forth under the
heading "Domestic Lending Office" in the Notice of Assignment given to the
Borrower, the Issuing Bank, the Swing Loan Lender and the Administrative Agent
with respect to such assignment or (b) such other branch or office of such Bank
or the Swing Loan Lender designated by such Bank or the Swing Loan Lender from
time to time as the branch or office at which its Base Rate Loans and Letter of
Credit Participations or Swing Loans, as the case may be, are to be made or
maintained.
"DRAWING" means the presentation and payment of a drawing under a
Letter of Credit.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" means, with respect to any Person, any other
Person, including a Subsidiary or other Affiliate of such first Person, that is
a member of any group of organizations within the meaning of Code Sections
414(b), (c), (m) or (o) of which such first Person is a member.
"EURODOLLAR BUSINESS DAY" means any Business Day on which dealings
in Dollar deposits are carried on in the relevant interbank market and on which
commercial banks are open for domestic and international business (including
dealings in Dollar deposits) in the jurisdiction in which such interbank market
is located.
"EURODOLLAR LENDING OFFICE" of any Bank means (a) the branch or
office of such Bank set forth below such Bank's name under the heading
"Eurodollar Lending Office" on ANNEX A or, in the case of a Bank that becomes a
Bank pursuant to an assignment, the branch or office of such Bank set forth
under the heading "Eurodollar Lending Office" in the Notice of Assignment given
to the Borrower, the Issuing Bank, the Swing Loan Lender and the Administrative
Agent with respect to such assignment or (b) such other branch or office of such
Bank designated by such Bank from time to time as the branch or office at which
its Eurodollar Rate Loans are to be made or maintained.
"EURODOLLAR RATE" means, for any Interest Period, the rate per
annum determined by the Administrative Agent to be the rate (rounded upward, if
necessary, to the next higher 1/16 of 1%) per annum at which The Bank of New
York offered or would have offered to place with first-class banks in the
interbank market selected by The Bank of New York deposits in Dollars in amounts
comparable to the Eurodollar Rate Loan of The Bank of New York to which such
Interest Period applies, for a period equal to such Interest Period, at the time
as of which The Bank of New York makes such determination.
"EURODOLLAR RATE LOAN" means any Loan the interest on which is, or
is to be, as the context may require, computed on the basis of the Adjusted
Eurodollar Rate.
<PAGE>
"EURODOLLAR RATE MARGIN" means, with respect to Eurodollar Rate
Loans outstanding on any day during any period beginning on the 45th day of each
fiscal quarter and ending on the 45th day of the immediately succeeding fiscal
quarter, such percentage as set forth in the following table opposite the
applicable ratio of Consolidated Debt to Operating Cash Flow and under the
applicable ratio of Consolidated Senior Debt to Operating Cash Flow, in each
case determined as of the end of the fiscal quarter immediately preceding such
period:
<TABLE>
<CAPTION>
Ratio of Consolidated Senior Debt
to Operating Cash Flow
-----------------------------------------------
LESS THAN 2.50:1
but
LESS THAN GREATER THAN OR GREATER THAN OR
2.00:1 EQUAL TO 2.00.1 EQUAL TO 2.50:1
--------- --------------- ---------------
Ratio of Consolidated Applicable Eurodollar
Debt to Operating Cash Flow Rate Margin
- ----------------------------------------------------- -----------------------------------------------
<S> <C> <C> <C>
GREATER THAN OR EQUAL TO 6.00:1 1.875% 2.000% 2.125%
LESS THAN 6.00:1 but GREATER THAN OR EQUAL TO 5.75:1 1.750% 1.875% 2.000%
LESS THAN 5.75:1 but GREATER THAN OR EQUAL TO 5.50:1 1.625% 1.750% 1.875%
LESS THAN 5.50:1 but GREATER THAN OR EQUAL TO 5.00:1 1.375% 1.500% 1.625%
LESS THAN 5.00:1 but GREATER THAN OR EQUAL TO 4.50:1 1.125% 1.250% 1.375%
GREATER THAN OR EQUAL TO 4.50:1 but GREATER THAN OR EQUAL TO 4.00:1 0.875% 1.000% 1.125%
LESS THAN 4.00:1 0.750% 0.875% 1.000%
</TABLE>
Notwithstanding the foregoing, if Indebtedness of the Borrower hereunder shall
increase or decrease at any time during any such period (as the result of the
borrowing of Loans, the drawing under Letters of Credit or the repayment of
Loans or such drawings) by an amount sufficient to cause a change in the
Eurodollar Rate Margin, such change in the Eurodollar Rate Margin shall take
effect on the day of such increase or decrease in Indebtedness hereunder, as the
case may be.
Notwithstanding the foregoing, prior to the delivery of the financial statements
of the Borrower for the fiscal quarter ending June 30, 1999 pursuant to Section
5.01(a), the Eurodollar Rate Margin shall be the greater of (x) 1.625% and (y)
the Eurodollar Rate Margin otherwise determined in accordance with the
foregoing.
"EVENT OF DEFAULT" means any of the events specified in Section
6.01.
"EXCESS CASH FLOW" means, for any period, the excess of (a)
Operating Cash Flow for such period (without giving effect to any adjustment
thereto pursuant to the second sentence of the definition of Operating Cash
Flow) over (b) the sum of (i) Consolidated Fixed Charges for such period, (ii)
the amount of payments of non-operating liabilities as determined in the
consolidated statements of cash flows for such period delivered pursuant to
Section 5.01 and (iii) $2,000,000.
"EXISTING BENEFIT PLAN" means any Benefit Plan listed on SCHEDULE
4.14.
<PAGE>
"EXISTING CREDIT AGREEMENT" means the Credit Agreement dated as of
August 11, 1995, as amended and restated as of October 31, 1996, among the
Borrower, the banks party thereto and The Bank of New York, as agent.
"EXISTING DEBT" means (i) any Indebtedness outstanding on the
Agreement Date, to the extent set forth on SCHEDULE 4.06 and (ii) any
Indebtedness that constitutes a renewal, extension or replacement of any
Existing Debt, but only if (A) at the time such Indebtedness is entered into and
immediately after giving effect thereto, no Default would exist, (B) such
Indebtedness is binding only on the obligor or obligors under the Indebtedness
so renewed, extended or replaced, (C) the principal amount of the Indebtedness
does not exceed the principal amount of the Indebtedness so renewed, extended or
replaced, (D) the Indebtedness bears interest at a rate per annum not exceeding
the rate borne by the Indebtedness so renewed, extended or replaced except for
any increase that is commercially reasonable at the time of such increase and
(E) such Indebtedness does not mature earlier, or amortize (whether by scheduled
or mandatory prepayment or commitment reduction, or otherwise) more rapidly,
than the Indebtedness so renewed, extended or replaced.
"EXISTING GUARANTY" means (i) any Guaranty outstanding on the
Agreement Date, to the extent set forth on SCHEDULE 4.07 and (ii) any Guaranty
that constitutes a renewal, extension or replacement of an Existing Guaranty,
but only if (A) at the time such Guaranty is entered into and immediately after
giving effect thereto, no Default would exist, (B) such Guaranty is binding only
on the obligor or obligors under the Guaranty so renewed, extended or replaced,
(C) the principal amount of the obligations Guaranteed by such Guaranty does not
exceed the principal amount of the obligations Guaranteed by the Guaranty so
renewed, extended or replaced and (D) the obligations Guaranteed by such
Guaranty bear interest at a rate per annum not exceeding the rate borne by the
obligations Guaranteed by the Guaranty so renewed, extended or replaced except
for any increase that is commercially reasonable at the time of such increase.
"EXISTING INVESTMENT" means any Investment outstanding on the
Agreement Date, to the extent set forth on SCHEDULE 4.12, and any renewal or
extension thereof not involving an increase therein as the result of an
additional investment by the Borrower or any Subsidiary.
"FEDERAL FUNDS RATE" means, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York or, if such rate is not so published for any
day that is a Business Day, the average of quotations for such day on such
transactions received by The Bank of New York from three Federal funds brokers
of recognized standing selected by such bank.
"FUNDED CURRENT LIABILITY PERCENTAGE" has the meaning ascribed to
that term in Code Section 401(a)(29).
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means (a) in
the case of the Base Financial Statements, generally accepted accounting
principles at the time of the
<PAGE>
issuance of the Base Financial Statements and (b) in all other cases, the
accounting principles followed in the preparation of the Base Financial
Statements.
"GOVERNMENTAL APPROVAL" means any authorization, consent,
approval, license or exemption of, registration or filing with, or report or
notice to, any governmental unit.
"GREENCO" means Greenco, Inc., a Delaware corporation.
"GREENCO NOTE" means the subordinated promissory note executed by
Borrower to the order of Greenco, in the form set out in Exhibit A-1 to the
Greenco Note Purchase Agreement.
"GREENCO NOTE PURCHASE AGREEMENT" means the Subordinated Note
Purchase Agreement dated as of January 30, 1998 between the Borrower and
Greenco.
"GREENCO SUBORDINATED DEBT" means the Indebtedness of Borrower and
Newco under the Greenco Note, including any Guaranty given by Borrower pursuant
to section 8.6(a) of the Greenco Note Purchase Agreement.
"GUARANTEED OBLIGATIONS" means all Liabilities of the Borrower
owing to, or in favor or for the benefit of, or purporting to be owing to, or in
favor or for the benefit of, the Guaranteed Parties under the Loan Documents or
any Interest Rate Protection Agreement entered into with a Bank or any of its
Affiliates (i) WHETHER NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, (ii)
whether owing to, or in favor or for the benefit of, or purporting to be owing
to or in favor or for the benefit of, Persons that are Guaranteed Parties as of
the Agreement Date or that become Guaranteed Parties by reason of any succession
or assignment at any time thereafter and (iii) WHETHER OR NOT AN ALLOWABLE CLAIM
AGAINST THE BORROWER UNDER THE BANKRUPTCY CODE OR OTHERWISE ENFORCEABLE AGAINST
THE BORROWER, AND INCLUDING, IN ANY EVENT, INTEREST AND OTHER LIABILITIES
ACCRUING OR ARISING AFTER THE FILING BY OR AGAINST THE BORROWER OF A PETITION
UNDER THE BANKRUPTCY CODE THAT WOULD HAVE SO ACCRUED OR ARISEN BUT FOR THE
FILING OF SUCH A PETITION.
"GUARANTEED PARTIES" means all Persons that are, or at any time
were, the Agent, the Issuing Bank, the Swing Loan Lender, a Bank or any other
Indemnified Person.
"GUARANTOR" means (a) ANI and each Subsidiary of the Borrower as
of the Agreement Date (other than the California Partnership and York Newspaper
Company) and (b) each other Subsidiary that shall have executed and delivered a
Subsidiary Guaranty Supplement.
"GUARANTY" of any Person means any obligation, contingent or
otherwise, of such Person (a) to pay any Liability of any other Person or to
otherwise protect, or having the practical effect of protecting, the holder of
any such Liability against loss (whether such obligation arises by virtue of
such Person being a partner of a partnership or participant in a joint venture
or by agreement to pay, to keep well, to purchase assets, goods, securities or
services or to take or pay, or otherwise) or (b) incurred in connection with the
issuance by a third Person of a Guaranty of
<PAGE>
any Liability of any other Person (whether such obligation arises by agreement
to reimburse or indemnify such third Person or otherwise). The word "GUARANTEE"
when used as a verb has the correlative meaning.
"INDEBTEDNESS" of any Person means (a) any obligation of such
Person for borrowed money, (b) any obligation of such Person evidenced by a
bond, debenture, note or other similar instrument, (c) any obligation of such
Person to pay the deferred purchase price of property or services, except a
trade account payable that arises in the ordinary course of business but only if
and so long as the same is payable on customary trade terms, (d) any obligation
of such Person as lessee under a capital lease to the extent that such
obligations are required to be capitalized in accordance with GAAP, (e) any
Mandatorily Redeemable Stock of such Person owned by any Person other than such
Person or a Wholly Owned Subsidiary of such Person (the amount of such
Mandatorily Redeemable Stock to be determined for this purpose as the higher of
the liquidation preference of and the amount payable upon redemption of such
Mandatorily Redeemable Stock), (f) any obligation of such Person to purchase
securities or other property that arises out of or in connection with the sale
of the same or substantially similar securities or property, (g) any
non-contingent obligation of such Person to reimburse any other Person in
respect of amounts paid under a letter of credit or other Guaranty issued by
such other Person to the extent that such reimbursement obligation remains
outstanding after it becomes non-contingent, (h) any Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien on any asset of such Person,
(i) any Indebtedness of others Guaranteed by such Person and (j) any monetary
obligation of such Person arising out of a non-competition agreement entered
into by such Person in connection with the acquisition of assets, stock, or
other equity interest of a third Person. Notwithstanding the foregoing, for
purposes of Sections 4.22 through 4.26 and for purposes of determining the Base
Rate Margin, the Eurodollar Rate Margin and the commitment fees payable pursuant
to Section 1.09(a), Indebtedness of the California Partnership shall constitute
Indebtedness only to the extent of (1) in the case of Existing Indebtedness,
100% of the amount thereof and (2) in the case of other Indebtedness, the
percentage thereof equal to the Borrower's percentage ownership interest in the
California Partnership on the date of determination.
"INDEMNIFIED PERSON" means any Person that is, or at any time was,
the Administrative Agent, the Issuing Bank, the Swing Loan Lender, a Bank, an
Affiliate of the Administrative Agent, the Issuing Bank, the Swing Loan Lender
or a Bank or a director, officer, employee or agent of any such Person.
"INFORMATION" means data, certificates, reports, statements
(including financial statements), opinions of counsel, documents and other
information.
"INTELLECTUAL PROPERTY" means (a) (i) patents and patent rights,
(ii) trademarks, trademark rights, trade names, trade name rights, corporate
names, business names, trade styles, service marks, logos and general
intangibles of like nature and (iii) copyrights, in each case whether
registered, unregistered or under pending registration and, in the case of any
such that are registered or under pending registration, whether registered or
under pending registration
<PAGE>
under the laws of the United States or any other country, (b) reissues,
continuations, continuations-in-part and extensions of any Intellectual Property
referred to in clause (a), and (c) rights relating to any Intellectual Property
referred to in clause (a) or (b), including rights under applications (whether
pending under the laws of the United States or any other country) or licenses
relating thereto.
"INTERCOMPANY DEBT" means Indebtedness owed by the Borrower or any
Consolidated Subsidiary to the Borrower or any Consolidated Subsidiary (other
than the California Partnership).
"INTEREST EXPENSE" means, for any period, without duplication, the
sum of all interest payments and payments in the nature of interest under
capital leases and Mandatorily Redeemable Stock, payable during such period by
the Borrower and its Consolidated Subsidiaries, with respect to all Indebtedness
of such Persons.
"INTEREST PAYMENT DATE" means the last day of March, June,
September and December of each year.
"INTEREST PERIOD" means a period commencing, in the case of the
first Interest Period applicable to a Eurodollar Rate Loan, on the date of the
making of, or conversion into, such Loan, and, in the case of each subsequent,
successive Interest Period applicable thereto, on the last day of the
immediately preceding Interest Period, and ending, depending on the Type of
Loan, on the same day in the first, second, third, sixth or, if made available
by all of the Banks, twelfth calendar month thereafter, except that (a) any
Interest Period that would otherwise end on a day that is not a Eurodollar
Business Day shall be extended to the next succeeding Eurodollar Business Day
unless such Eurodollar Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Eurodollar Business
Day and (b) any Interest Period that begins on the last Eurodollar Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month in which such Interest Period ends) shall end on the
last Eurodollar Business Day of a calendar month.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate
protection agreement, future, option swap, cap or collar agreement or other
arrangement designed to fix interest rates or otherwise hedge against
fluctuations in interest rates.
"INTERNET MEDIA PUBLISHING" means Internet Media Publishing, Inc.,
a Delaware corporation.
"INVESTMENT" of any Person means (a) any Capital Security,
evidence of Indebtedness or other security or instrument issued by any other
Person, (b) any loan, advance or extension of credit to, or any contribution to
the capital of, any other Person and (c) any other investment in any other
Person.
"ISSUING BANK" means The Bank of New York, or such other Bank as
the Borrower, such Bank and The Bank of New York shall agree, in each case in
its capacity as the issuer of each Letter of Credit.
<PAGE>
"LC COMMITMENT" means at any time $10,000,000 MINUS the pro rata
share thereof (computed on the basis of the Commitments at such time) of each
Nonparticipating Bank.
"LENDING OFFICE" of any Bank means the Domestic Lending Office or
the Eurodollar Lending Office of such Bank.
"LETTER OF CREDIT" means a letter of credit issued by the Issuing
Bank pursuant to Section 1.03.
"LETTER OF CREDIT PARTICIPATION" means, in the case of any Bank
(other than the Issuing Bank) with respect to any Letter of Credit, the
participation interest of such Bank in such Letter of Credit acquired pursuant
to Section 1.03(e) and, in the case of the Issuing Bank, its retained interest
in such Letter of Credit. The amount of the Letter of Credit Participation of a
Bank (including the Issuing Bank) in any Letter of Credit at any time shall be
deemed to be the amount equal to such Bank's pro rata share (determined on the
basis of the Commitments at such time of each of the Banks) of the sum of (a)
the aggregate unpaid amount of all Drawings thereunder at such time and (b) the
amount of the Contingent Reimbursement Obligation with respect thereto at such
time that shall not have been prepaid or cash collateralized in accordance with
the terms hereof at such time.
"LIABILITY" of any Person means (in each case, whether with full
or limited recourse) any indebtedness, liability, obligation, covenant or duty
of or binding upon, or any term or condition to be observed by or binding upon,
such Person or any of its assets, of any kind, nature or description, direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, whether arising under Contract, Applicable Law, or
otherwise, whether now existing or hereafter arising, and whether for the
payment of money or the performance or non-performance of any act.
"LIEN" means, with respect to any property or asset (or any income
or profits therefrom) of any Person (in each case whether the same is consensual
or nonconsensual or arises by Contract, operation of law, legal process or
otherwise) (a) any mortgage, lien, pledge, attachment, levy or other security
interest of any kind thereupon or in respect thereof or (b) any other
arrangement, express or implied, under which the same is subordinated,
transferred, sequestered or otherwise identified so as to subject the same to,
or make the same available for, the payment or performance of any Liability in
priority to the payment of the ordinary, unsecured Liabilities of such Person.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset that it 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 relating to such asset.
"LOAN" means any amount advanced by a Bank pursuant to Section
1.01(a)(i) and any Swing Loan.
"LOAN DOCUMENT RELATED CLAIM" means any claim or dispute (whether
arising under Applicable Law, including any "environmental" or similar law,
under Contract or otherwise and, in the case of any proceeding relating to any
such claim or dispute, whether civil,
<PAGE>
criminal, administrative or otherwise) in any way arising out of, related to, or
connected with, the Loan Documents, the relationships established thereunder or
any actions or conduct thereunder or with respect thereto, whether such claim or
dispute arises or is asserted before or after the Agreement Date or before or
after the Repayment Date.
"LOAN DOCUMENT REPRESENTATION AND WARRANTY" means any
"Representation and Warranty" as defined in any Loan Document and any other
representation or warranty made or deemed made under any Loan Document.
"LOAN DOCUMENTS" means (a) this Agreement, the Notes, and the
Pledge Agreements and (b) all other material agreements, documents and
instruments relating to, arising out of, or in any way connected with (i) any
agreement, document or instrument referred to in clause (a), or (ii) any other
agreement, document or instrument referred to in this clause (b).
"LOAN PARTY" means any Person (other than the Administrative
Agent, the Issuing Bank, the Swing Loan Lender, the Documentation Agent or a
Bank) that is a party to a Loan Document.
"MANAGEMENT AGREEMENT" means the Management Agreement dated as of
July 1, 1988 between the Borrower and MediaNews Group, Inc.
"MANDATORILY REDEEMABLE STOCK" means, with respect to any Person,
any share of such Person's capital stock to the extent that it is (a)
redeemable, payable or required to be purchased or otherwise retired or
extinguished, or convertible into any Indebtedness or other Liability of such
Person (other than upon the occurrence of an event of default in connection
therewith), (i) at a fixed or determinable date, whether by operation of a
sinking fund or otherwise, (ii) at the option of any Person other than such
Person or (iii) upon the occurrence of a condition not solely within the control
of such Person, such as a redemption required to be made out of future earnings
or (b) convertible into Mandatorily Redeemable Stock.
"MATERIALLY ADVERSE EFFECT" means, (a) with respect to any Person,
any materially adverse effect on such Person's business, assets, Liabilities,
financial condition, results of operations or business prospects, (b) with
respect to a group of Persons "taken as a whole", any materially adverse effect
on such Persons' business, assets, Liabilities, financial conditions, results of
operations or business prospects taken as a whole on, where appropriate, a
consolidated basis in accordance with Generally Accepted Accounting Principles,
(c) with respect to any Loan Document, any materially adverse effect, on the
binding nature, validity or enforceability thereof as an obligation of any Loan
Party that is a party thereto and (d) with respect to any Collateral, or any
category of Collateral, pledged by any Loan Party, a materially adverse effect
on its value as Collateral or its utility in such Loan Party's business or a
materially adverse effect on the validity, perfection, priority or
enforceability of the Security Interest therein.
"MATURITY DATE" means June 30, 2006.
<PAGE>
"MAXIMUM PERMISSIBLE RATE" means, with respect to interest payable
on any amount, the rate of interest on such amount that, if exceeded, could,
under Applicable Law, result in (a) civil or criminal penalties being imposed on
the payee or (b) the payee's being unable to enforce payment of (or, if
collected, to retain) all or any part of such amount or the interest payable
thereon.
"MONEY MARKET INVESTMENT" means (a) any security issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof having a remaining maturity of not more than
one year, (b) any certificate of deposit, eurodollar time deposit and bankers'
acceptance with remaining maturity of not more than one year, any overnight bank
deposit, and any demand deposit account, in each case with any Bank or with any
United States commercial bank having capital and surplus in excess of
$500,000,000 and rated B or better by Thomson Bankwatch Inc., (c) any repurchase
obligation with a term of not more than seven days for underlying securities of
the types described in clauses (a) and (b) above entered into with any financial
institution meeting the qualifications specified in clause (b) above, and (d)
any commercial paper issued by any Bank or the parent corporation of any Bank
and any other commercial paper rated A-1 or higher by Standard & Poor's Ratings
Services, a division of the McGraw Hill Companies, Inc. or Prime-1 by Moody's
Investors Service, Inc. and in any case having a remaining maturity of not more
than one year and any other short-term instrument consented to by the
Administrative Agent.
"MULTIEMPLOYER BENEFIT PLAN" means any Benefit Plan that is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"1999 INDENTURE" means the Indenture dated _____________, 1999
between the Borrower and The Bank of New York, as trustee, with respect to the
1999 Subordinated Notes.
"1999 SUBORDINATED NOTES" means the 8-5/8% Senior Subordinated
Notes due 2011 of the Borrower.
"1997 INDENTURE" means the Indenture dated October 1, 1997 between
the Borrower and The Bank of New York, as trustee, with respect to the 1997
Subordinated Notes.
"1997 SUBORDINATED NOTES" means the 8-3/4% Senior Subordinated
Notes due 2009, Series A and Series B, of the Borrower.
"NET PROCEEDS" means the proceeds received by the Borrower or any
Subsidiary in cash from the sale, lease, assignment or other disposition of any
asset or property (other than sales of assets in the ordinary course of
business, which, for purposes of this definition, shall not include any
disposition of assets in which the total consideration received or receivable is
in excess of $500,000), net of (a) reasonable and customary fees, costs and
expenses incurred in connection with such sale, lease, assignment or other
disposition and payable by or on behalf of the seller or the transferor of the
assets to which such sale or disposition relates, (b) the amount of all foreign,
Federal, state and local taxes payable as a direct consequence of such sale,
lease, assignment or other disposition and (c) the amount of the Indebtedness
and other Liabilities, if any, attributable to or associated with such asset or
property and repaid out of such proceeds.
<PAGE>
For this purpose, all proceeds of insurance paid on account of the loss of or
damage to any such asset or property, or group of assets or properties, and
awards of compensation for any such asset or property, or group of assets or
properties, taken by condemnation or eminent domain shall be deemed to be Net
Proceeds (PROVIDED that, in the case of proceeds from insurance paid with
respect to any loss or damage to any asset, such proceeds, or any portion
thereof, shall not constitute Net Proceeds if the Administrative Agent has
received notice from the Borrower or any Subsidiary of its intention to use such
proceeds or portion thereof at the time of such loss or damage, and such
proceeds or portion thereof are in fact so used within one year after the
occurrence of such loss or damage to repair, restore or replace such asset).
"NEWCO" shall have the meaning ascribed thereto in the Greenco
Note Purchase Agreement.
"NEW ENGLAND INTERNET MEDIA PUBLISHING" means New England Internet
Media Publishing, Inc., a Delaware corporation.
"NONPARTICIPATING BANK" means a Bank designated by the Issuing
Bank as a Bank with respect to which a Bank Nonparticipation has occurred. The
designation of a Bank by the Issuing Bank as a "Nonparticipating Bank" shall not
affect the status of such Bank as a Participating Bank in respect of Letters of
Credit issued prior to such designation.
"NOTE" means any promissory note in the form of EXHIBIT A-1 or, as
the context may require, any Swing Note.
"NOTICE OF ASSIGNMENT" means any notice to the Borrower, the
Issuing Bank, the Swing Loan Lender and the Administrative Agent with respect to
an assignment pursuant to Section 9.10(a) in the form of SCHEDULE 9.10(A).
"OPERATING CASH FLOW" means, as of any date of determination, the
following, determined with respect to the immediately preceding four fiscal
quarters of the Borrower for which financial statements of the Borrower have
been delivered pursuant to Section 5.01(a) or 5.01(c), as the case may be: (A)
revenues less (B) the sum of (i) cost of sales, (ii) management fees and (iii)
selling, general and administrative expenses (excluding, for any such period of
four fiscal quarters ending on or prior to March 31, 2001, expenses incurred in
connection with the internet activities of the Borrower and the Subsidiaries, in
an aggregate amount not in excess of $1,000,000), in each case for clauses (A)
and (B), of the Borrower and its Subsidiaries, for such period, determined on a
consolidated basis and in accordance with GAAP PLUS (C) the lesser of (i)
dividends received from any Person not constituting a Subsidiary hereunder for
such period and (ii) the Borrower's and its Subsidiaries' percentage interest in
the net income of such Person; PROVIDED that, (x) if any such Subsidiary is not
a Wholly Owned Subsidiary of the Borrower, revenues, cost of sales, management
fees and selling, general and administrative expenses of such Subsidiary and its
Subsidiaries shall be included only to the extent of the Borrower'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
<PAGE>
government regulation applicable to that Subsidiary. Notwithstanding the
foregoing, Operating Cash Flow for any period shall be calculated after giving
effect on a pro forma basis for the period of such calculation to (a) the sale
or other disposition of any Subsidiary or of all or substantially all of the
assets of any Subsidiary during such period and up to and including the date of
determination (the "Reference Period") and (b) the acquisition by the Borrower
or any Subsidiary during the Reference Period of any other Person which, as a
result of such acquisition, becomes a Subsidiary of the Borrower, or the
acquisition of assets during the Reference Period from any Person which
constitutes all or substantially all of an operating unit or business of such
Person, as if such sale or disposition or acquisition occurred on the first day
of the period of such calculation; PROVIDED that to the extent that this
sentence requires that pro forma effect be given to an acquisition of, or an
acquisition of all or substantially all of an operating unit or business from,
any Person, such pro forma calculation shall be based upon the four full fiscal
quarters of such Person or operating unit or business for which financial
information is available immediately preceding such acquisition.
"PARTICIPATING BANK" means a Bank that is not a Nonparticipating
Bank. A Participating Bank shall remain a Participating Bank in all Letters of
Credit with respect to which it was a Participating Bank prior to its
designation as a Nonparticipating Bank.
"PARTICIPATING BANK PERCENTAGE" means, for a Participating Bank,
with respect to any Letter of Credit, the fraction, expressed as a percentage,
the numerator of which is such Participating Bank's Commitment and the
denominator of which is the sum of the aggregate amount of the Commitments of
all Banks that are, at the time of issuance of such Letter of Credit,
Participating Banks.
"PARTNERSHIP AGREEMENT" means the Partnership Agreement relating
to the California Partnership dated March 31, 1999 among West Coast MediaNews,
Donrey Newspapers LLC and ________________.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITTED GUARANTY" means any Guaranty that is (a) an endorsement
of a check for collection in the ordinary course of business or (b) a Guaranty
of and only of the obligations of the Loan Parties under the Loan Documents.
"PERMITTED LIEN" means (a) with respect to any asset that does not
constitute Collateral, (i) any Lien securing and only securing the obligations
of the Loan Parties under the Loan Documents; (ii) any Lien securing a tax,
assessment or other governmental charge or levy or the claim of a materialman,
mechanic, carrier, warehouseman or landlord for labor, materials, supplies or
rentals incurred in the ordinary course of business, but only if payment thereof
shall not at the time be required to be made in accordance with Section 4.01(e)
and foreclosure, distraint, sale or other similar proceedings shall not have
been commenced; (iii) any Lien on the properties and assets of a Subsidiary of
the Borrower securing an obligation owing to the Borrower; (iv) any Lien
consisting of a deposit or pledge made in the ordinary course of business in
connection with, or to secure payment of, obligations under worker's
compensation, unemployment insurance or similar legislation; (v) any Lien
arising pursuant to an order of
<PAGE>
attachment, distraint or similar legal process arising in connection with legal
proceedings, but only if and so long as the execution or other enforcement
thereof is not unstayed for more than 20 days; (vi) any Lien existing on (A) any
property or asset of any Person at the time such Person becomes a Subsidiary or
(B) any property or asset at the time such property or asset is acquired by the
Borrower or a Subsidiary, but only, in the case of either (A) or (B), if and so
long as (1) such Lien was not created in contemplation of such Person becoming a
Subsidiary or such property or asset being acquired, (2) such Lien is and will
remain confined to the property or asset subject to it at the time such Person
becomes a Subsidiary or such property or asset is acquired and to fixed
improvements thereafter erected on such property or asset, (3) such Lien secures
only the obligation secured thereby at the time such Person becomes a Subsidiary
or such property or asset is acquired and (4) the obligation secured by such
Lien is not in default; (vii) any Lien in existence on the Agreement Date to the
extent set forth on SCHEDULE 4.08, but only, in the case of each such Lien, to
the extent it secures an obligation outstanding on the Agreement Date to the
extent set forth on such Schedule; (viii) any Lien securing Purchase Money
Indebtedness but only if, in the case of each such Lien, (A) such Lien shall at
all times be confined solely to the property or asset the purchase price of
which was financed through the incurrence of the Purchase Money Indebtedness
secured by such Lien and to fixed improvements thereafter erected on such
property or asset and (B) such Lien attached to such property or asset within 30
days of the acquisition of such property or asset; or (ix) any Lien constituting
a renewal, extension or replacement of a Lien constituting a Permitted Lien by
virtue of clause (vi), (vii), (viii) or (ix) of this definition, but only if (A)
at the time such Lien is granted and immediately after giving effect thereto, no
Default would exist, (B) such Lien is limited to all or a part of the property
or asset that was subject to the Lien so renewed, extended or replaced and to
fixed improvements thereafter erected on such property or asset, (C) the
principal amount of the obligations secured by such Lien does not exceed the
principal amount of the obligations secured by the Lien so renewed, extended or
replaced and (D) the obligations secured by such Lien bear interest at a rate
per annum not exceeding the rate borne by the obligations secured by the Lien so
renewed, extended or replaced except for any increase that is commercially
reasonable at the time of such increase; and (b) with respect to any asset that
constitutes Collateral, any Lien that constitutes a "Permitted Lien" or
"Permitted Encumbrance" under the applicable Security Agreement, Mortgage or the
Pledge Agreement.
"PERMITTED RESTRICTIVE COVENANT" means (a) any covenant or
restriction contained in any Loan Document, (b) any covenant or restriction
contained in the Greenco Note Purchase Agreement, so long as such covenant or
restriction is not binding on any Person other than Newco, or in the 1997
Indenture, the 1999 Indenture or the Partnership Agreement, (c) any covenant or
restriction binding upon any Person at the time such Person becomes a Subsidiary
of the Borrower if the same is not created in contemplation thereof, (d) any
covenant or restriction of the type contained in Section 4.08 that is contained
in any Contract evidencing or providing for the creation of or concerning
Purchase Money Indebtedness (other than the Greenco Note) so long as such
covenant or restriction is limited to the property purchased therewith, (e) any
covenant or restriction described in SCHEDULE 4.16, but only to the extent such
covenant or restriction is there identified by specific reference to the
provision of the Contract in which such covenant or restriction is contained or
(f) any covenant or restriction that (i) is not more burdensome than an existing
Permitted Restrictive Covenant that is such by virtue of clause (b),
<PAGE>
(c), (d), (e) or (f), (ii) is contained in a Contract constituting a renewal,
extension or replacement of the Contract in which such existing Permitted
Restrictive Covenant is contained and (iii) is binding only on the Person or
Persons bound by such existing Permitted Restrictive Covenant.
"PERSON" means any individual, sole proprietorship, corporation,
limited liability company, partnership, trust, unincorporated organization,
mutual company, joint stock company, estate, union, employee organization,
government or any agency or political subdivision thereof or, for the purpose of
the definition of "ERISA Affiliate", any trade or business.
"PLEDGE AGREEMENTS" means collectively (a) each of the Pledge
Agreements between each Subsidiary and the Administrative Agent, the Pledge
Agreement between the Borrower and the Administrative Agent and the ANI Pledge
Agreement, in each case in substantially the form of EXHIBIT C and (b) any other
pledge agreement entered into pursuant to Section 4.04, in each case in
substantially the form of EXHIBIT C.
"POST-DEFAULT RATE" means the rate otherwise applicable under
Section 1.04(a) PLUS 2.00%.
"PRIME RATE" means the prime commercial lending rate of The Bank
of New York, as publicly announced to be in effect from time to time. The Prime
Rate shall be adjusted automatically, without notice, on the effective date of
any public announcement of any change in such prime commercial lending rate.
The Prime Rate is not necessarily The Bank of New York's lowest rate of
interest.
"PRO FORMA CONSOLIDATED INTEREST EXPENSE" means, as of any date of
determination, Interest Expense projected to be paid during the period of four
full fiscal quarters of the Borrower next succeeding such date on all
Indebtedness. For purposes of computing projected interest for any period under
the preceding sentence, (i) it shall be assumed that the amount of Indebtedness
outstanding on the first day of such period remains outstanding during the
entire period except to the extent that such Indebtedness is subject to a
mandatory payment or prepayment of principal during such period, (ii) if such
Person has committed to incur additional Indebtedness during such period,
interest on such additional Indebtedness shall be taken into account from and
after the date on which such Person is committed to incur it and (iii) where
interest varies with or depends on a floating rate, the rate in effect on the
first day of such period will be assumed to be in effect and remain constant
during the entire period for which interest is being computed after giving
effect to interest rate swaps and similar obligations which are in effect on
such day and will continue in effect for more than half of the period of such
calculation.
"PRO FORMA DEBT SERVICE" means, as of any date of determination,
the sum of (i) all Required Repayments, and all other payments of principal of
all Indebtedness of the Borrower and its Consolidated Subsidiaries scheduled to
be made during the period of four full fiscal quarters of the Borrower next
succeeding such date of determination, and (ii) Pro Forma Consolidated Interest
Expense for such period.
<PAGE>
"PROHIBITED TRANSACTION" means any transaction that is prohibited
under Code Section 4975 or ERISA Section 406 and not exempt under Code Section
4975 or ERISA Section 408.
"PURCHASE MONEY INDEBTEDNESS" means (a) Indebtedness of the
Borrower that is incurred to finance part or all of (but not more than) the
purchase price of tangible property and related assets, PROVIDED that (i)
neither the Borrower nor any Subsidiary had at any time prior to such purchase
any interest in such asset other than a security interest or an interest as
lessee under an operating lease and (ii) such Indebtedness is incurred within 30
days after such purchase, or (b) Indebtedness that (i) constitutes a renewal,
extension or refunding of, but not an increase in the principal amount of,
Purchase Money Indebtedness that is such by virtue of clause (a) or (b) and (ii)
bears interest at a rate per annum that is commercially reasonable at the time
such Indebtedness is incurred.
"REGULATION A" means Regulation A of the Board of Governors of the
Federal Reserve System.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System.
"REGULATION X" means Regulation X of the Board of Governors of the
Federal Reserve System.
"REGULATORY CHANGE" means any Applicable Law, interpretation,
directive, request or guideline (whether or not having the force of law), or any
change therein or in the administration or enforcement thereof, that becomes
effective or is implemented or first required or expected to be complied with
after the Agreement Date, whether the same is (a) the result of an enactment by
a government or any agency or political subdivision thereof, a determination of
a court or regulatory authority, or otherwise or (b) enacted, adopted, issued or
proposed before or after the Agreement Date, including any such Applicable Law,
interpretation, directive, request, guideline or change that imposes, increases
or modifies any Tax, reserve requirement, insurance charge, special deposit
requirement, assessment or capital adequacy requirement, but excluding any such
Applicable Law, interpretation, directive, request, guideline or change that
imposes, increases or modifies any income or franchise tax imposed upon a Bank
by any jurisdiction (or any political subdivision thereof) in which such Bank or
any of its Lending Offices is located or doing business.
"REINVESTED AMOUNT" means, with respect to any Net Proceeds, the
portion thereof that, as of the last day of the Reinvestment Contract Period
with respect thereto, shall have been reinvested pursuant to acquisitions
described in Section 4.10(d) in a manner not prohibited by this Agreement or
will be so reinvested pursuant to a Reinvestment Contract entered into by all of
the parties thereto on or prior to such last day.
<PAGE>
"REINVESTMENT CONTRACT" means a binding contract entered into by
the Borrower or a Subsidiary providing for acquisitions described in Section
4.10(d) in a manner not prohibited by this Agreement.
"REINVESTMENT CONTRACT PERIOD" means, with respect to any sale or
disposition of assets by the Borrower or any Subsidiary, the period from the
date of such sale or disposition to the date that is 270 days after the date of
such sale or disposition.
"REINVESTMENT PERIOD" means, with respect to any sale or
disposition of assets by the Borrower or any Subsidiary, the period from the
date of such sale or disposition to the date that is 360 days after the date of
such sale or disposition.
"REPAYMENT DATE" means the later of (i) the termination of the
Commitments in their entirety (whether as a result of the occurrence of the
Maturity Date, the reduction thereof to zero pursuant to Section 1.08 or the
termination thereof pursuant to Section 6.02), (ii) the payment in full of all
principal of and interest on the Loans and Drawings and all fees and other
amounts payable or accrued hereunder and (iii) the expiration or cancellation
of, or the reduction to zero of the amount available to be drawn under, all
outstanding Letters of Credit.
"REPORTABLE EVENT" means, with respect to any Benefit Plan of any
Person, (a) the occurrence of any of the events set forth in ERISA Sections
4043(c) (other than a Reportable Event as to which the provision of 30 days'
notice to the PBGC is waived under applicable regulations), 4062(e) or 4063(a)
or the regulations thereunder with respect to such Benefit Plan, (b) any event
requiring such Person or any of its ERISA Affiliates to provide security to such
Benefit Plan under Code Section 401(a)(29) or (c) any failure to make a payment
required by Code Section 412(m) with respect to such Benefit Plan.
"REPRESENTATION AND WARRANTY" means any representation or warranty
made by the Borrower, any Guarantor or any other Loan Party pursuant to or under
(a) Section 2.02, Article 3, Section 5.02 or any other provision of this
Agreement or (b) any amendment to, or waiver of rights under, this Agreement,
WHETHER OR NOT, IN THE CASE OF ANY REPRESENTATION OR WARRANTY REFERRED TO IN
CLAUSE (a) OR (b) OF THIS DEFINITION (EXCEPT, IN EACH CASE, TO THE EXTENT
OTHERWISE EXPRESSLY PROVIDED), THE INFORMATION THAT IS THE SUBJECT MATTER
THEREOF IS WITHIN THE KNOWLEDGE OF SUCH LOAN PARTY.
"REQUIRED BANKS" means, at any time, Banks having at least 51% of
the Loans (including, if any Swing Loans are outstanding at such time, such
Banks' pro rata share thereof based on the Commitments at such time) and Letter
of Credit Participations outstanding or, if there are no Loans or Letter of
Credit Participations outstanding, at least 51% of the aggregate amount of the
Commitments.
"REQUIRED REPAYMENTS" means, for any period, an amount equal to
the excess, if any, of (i) the outstanding amount of Loans and Letter of Credit
Participations at the beginning of such period over (ii) the aggregate amount of
the Commitments at the end of such period.
<PAGE>
"RESERVE REQUIREMENT" means, at any time, the then current maximum
rate for which reserves (including any marginal, supplemental or emergency
reserve) are required to be maintained under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding five billion
Dollars against "Eurocurrency liabilities", as that term is used in Regulation
D. The Adjusted Eurodollar Rate shall be adjusted automatically on and as of
the effective date of any change in the Reserve Requirement.
"RESTRICTED PAYMENT" means (a) any payment with respect to or on
account of any of the Borrower's or any Subsidiary's Capital Securities,
including any dividend or other distribution on, or any payment of interest on
or principal of, any such Capital Securities, (b) any payment on account of the
principal of or interest or premium, if any, on any Subordinated Debt (other
than any regularly scheduled payment of interest thereon and any repayment of
principal thereof upon the stated maturity thereof (subject to the subordination
provisions applicable thereto)) or (c) any payment on account of any purchase,
redemption, retirement, exchange, defeasance or conversion of, or on account of
any claim relating to or arising out of the offer, sale or purchase of, any such
Capital Security or any Subordinated Debt. For the purposes of this definition,
a "payment" shall include the transfer of any asset or the incurrence of any
Indebtedness or other Liability (the amount of any such payment to be the fair
market value of such asset or the amount of such obligation, respectively) but
shall not include the issuance of any capital stock of the Borrower other than
Mandatorily Redeemable Stock.
"SECURED PARTY" has the meaning ascribed to such term in the
Pledge Agreements.
"SECURITY INTEREST" means the Liens created, or purported to be
created, by the Loan Documents.
"SUBORDINATED DEBT" means (i) the 1997 Subordinated Notes, (ii)
the 1999 Subordinated Notes, (iii) the Greenco Note and (iv) any other
Indebtedness of the Borrower that is subordinated on terms and conditions, and
that is subject to other terms and conditions, satisfactory in form and
substance to the Required Banks.
"SUBORDINATED NOTES" means the $100,000,000 principal amount of
12% Senior Subordinated Secured Notes of the Borrower due July 1, 2004
"SUBSIDIARY" means, with respect to any Person, any other Person
(a) securities of which having ordinary voting power to elect a majority of the
board of directors (or other persons having similar functions), (b) any other
ownership interests of which ordinarily constitute a majority voting interest,
are at the time, directly or indirectly, owned or controlled by such first
Person, or by one of more of its Subsidiaries, or by such first Person and one
or more of its Subsidiaries or (c) that otherwise constitutes a Consolidated
Subsidiary of such first Person. Unless otherwise specified, "Subsidiary" means
a Subsidiary of the Borrower.
"SUBSIDIARY GUARANTY SUPPLEMENT" means each Subsidiary Guaranty
Supplement entered into pursuant to Section 4.04, in each case in substantially
the form of EXHIBIT B.
<PAGE>
"SWING LOAN" means an amount advanced by the Swing Loan Lender
pursuant to Section 1.01(b) hereof.
"SWING LOAN PERCENTAGE" means, for any Bank, at any time, a
fraction, expressed as a percentage, the numerator of which is such Bank's
Commitment at such time and the denominator of which is the aggregate amount of
the Commitments at such time.
"SWING LOAN LENDER" means The Bank of New York.
"SWING NOTE" means any promissory note in the form of EXHIBIT A-2.
"TAX" means any federal, state or foreign tax, assessment or other
governmental charge or levy of any nature (including any withholding tax) upon a
Person or upon its assets, revenues, income or profits including without
limitation, interest, penalties and additional allowances with respect to such
items.
"TAX SHARING AGREEMENT" means the Federal Tax Sharing Agreement
dated as of May 20, 1994 between the Borrower and ANI.
"TERMINATION EVENT" means, with respect to any Benefit Plan, (a)
any Reportable Event with respect to such Benefit Plan, (b) the termination of
such Benefit Plan, or the filing of a notice of intent to terminate such Benefit
Plan, or the treatment of any amendment to such Benefit Plan as a termination
under ERISA Section 4041(c), (c) the institution of proceedings to terminate
such Benefit Plan under ERISA Section 4042 or (d) the appointment of a trustee
to administer such Benefit Plan under ERISA Section 4042.
"TYPE" means, with respect to Loans, any of the following, each of
which shall be deemed to be a different "Type" of Loan: Base Rate Loans,
Eurodollar Rate Loans having a one-month Interest Period, Eurodollar Rate Loans
having a two-month Interest Period, Eurodollar Rate Loans having a three-month
Interest Period, Eurodollar Rate Loans having a six-month Interest Period and,
if made available by all of the Banks, Eurodollar Rate Loans having a
twelve-month Interest Period. Any Eurodollar Rate Loan having an Interest
Period that differs from the duration specified for a Type of Eurodollar Rate
Loan listed above solely as a result of the operation of clauses (a) and (b) of
the definition of "Interest Period" shall be deemed to be a Loan of such
above-listed Type notwithstanding such difference in duration of Interest
Periods.
"UNFUNDED BENEFIT LIABILITIES" means, with respect to any Benefit
Plan at any time, the amount of unfunded benefit liabilities of such Benefit
Plan at such time as determined under ERISA Section 4001(a)(18).
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as in
effect from time to time in the State of New York.
"WEST COAST MEDIANEWS" means West Coast Media News LLC, a Delaware
limited liability company.
<PAGE>
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person all of the Capital Securities and all other ownership
interests and rights to acquire ownership interests of which (except directors'
qualifying shares) are, directly or indirectly, owned or controlled by such
Person or one or more Wholly Owned Subsidiaries of such Person or by such Person
and one or more of such Subsidiaries; unless otherwise specified, "Wholly Owned
Subsidiary" means a Wholly Owned Subsidiary of the Borrower.
"YEAR 2000 ISSUE" means the failure of computer software, hardware
and firmware systems and equipment containing embedded computer chips to
properly receive, transmit, process, manipulate, store, retrieve, re-transmit or
in any other way utilize data and information due to the occurrence of the year
2000 or the inclusion of dates on or after January 1, 2000.
Section 11.02 OTHER INTERPRETIVE PROVISIONS. (a) Except as otherwise
specified herein, all references herein or in any other Loan Document (i) to any
Person shall be deemed to include such Person's permitted successors and
assigns, (ii) to any Applicable Law defined or referred to herein shall be
deemed references to such Applicable Law or any successor Applicable Law as the
same may have been or may be amended or supplemented from time to time and (iii)
to any Loan Document or Contract defined or referred to herein shall be deemed
references to such Loan Document or Contract (and, in the case of any Note or
any other instrument, any instrument issued in substitution therefor) as the
terms thereof may have been or may be amended, supplemented, waived or otherwise
modified from time to time as permitted hereby.
(b) When used in this Agreement, the words "herein", "hereof"
and "hereunder" and words of similar import shall refer to this Agreement as a
whole and not to any provision of this Agreement, and the words "Article",
"Section", "Annex", "Schedule" and "Exhibit" shall refer to Articles and
Sections of, and Annexes, Schedules and Exhibits to, this Agreement unless
otherwise specified.
(c) Whenever the context so requires, the neuter gender
includes the masculine or feminine, the masculine gender includes the feminine,
and the singular number includes the plural, and vice versa.
(d) Any item or list of items set forth following the word
"including", "include" or "includes" is set forth only for the purpose of
indicating that, regardless of whatever other items are in the category in which
such item or items are "included", such item or items are in such category, and
shall not be construed as indicating that the items in the category in which
such item or items are "included" are limited to such items or to items similar
to such items.
(e) Each authorization in favor of the Administrative Agent,
the Issuing Bank, the Swing Loan Lender, any Bank or any other Person granted by
or pursuant to this Agreement shall be deemed to be irrevocable and coupled with
an interest.
(f) Except as otherwise specified herein, all references herein
to the Administrative Agent, the Issuing Bank, the Swing Loan Lender, any Bank
or any Loan Party shall be deemed to refer to such Person however designated in
Loan Documents, so that (i) a
<PAGE>
reference to rights or duties of the Administrative Agent under the Loan
Documents shall be deemed to include the rights or duties of such Person as the
Secured Party under the Pledge Agreements, (ii) a reference to costs incurred by
a Bank in connection with the Loan Documents shall be deemed to include costs
incurred by such Person as a Principal under (and as defined in) the Pledge
Agreements and (iii) a reference to the obligations of the Borrower or any other
Loan Party under the Loan Documents shall be deemed to include the obligations
of such Person in any capacity under the Loan Documents.
Section 11.03 ACCOUNTING MATTERS. All accounting determinations
hereunder and all computations utilized by the Borrower in complying with the
covenants contained herein shall be made, all accounting terms used herein shall
be interpreted, and all financial statements required to be delivered hereunder
shall be prepared, in accordance with Generally Accepted Accounting Principles,
except, in the case of such financial statements, for changes in Generally
Accepted Accounting Principles that may from time to time be approved by a
significant segment of the accounting profession.
Section 11.04 REPRESENTATIONS AND WARRANTIES. All Representations and
Warranties shall be deemed made (a) in the case of any Representation and
Warranty contained in this Agreement at the time of its initial execution and
delivery, at and as of the Agreement Date, (b) in the case of any Representation
and Warranty contained in this Agreement or any other document at the time any
Loan is made or Letter of Credit is issued, at and as of such time and (c) in
the case of any particular Representation and Warranty, wherever contained, at
such other time or times as such Representation and Warranty is made or deemed
made in accordance with the provisions of this Agreement or the document
pursuant to, under or in connection with which such Representation and Warranty
is made or deemed made.
Section 11.05 CAPTIONS. Captions to Articles, Sections and subsections
of, and Annexes, Schedules and Exhibits to, this Agreement are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or in any way affect the meaning or construction of any
provision of this Agreement.
Section 11.06 INTERPRETATION OF RELATED DOCUMENTS. Except as otherwise
specified therein, terms that are defined herein that are used in Notes,
certificates, opinions and other documents delivered in connection herewith
shall have the meanings ascribed to them herein and such documents shall be
otherwise interpreted in accordance with the provisions of this Article 11.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
GARDEN STATE NEWSPAPERS, INC.
By:
-----------------------------------
Name:
Title:
AFFILIATED NEWSPAPERS
INVESTMENTS, INC.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
ALAMEDA NEWSPAPERS, INC.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
EASTON PUBLISHING COMPANY,
as a Guarantor
By:
-----------------------------------
Name:
Title:
<PAGE>
GARDEN STATE INVESTMENTS, INC.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
GRAHAM NEWSPAPERS, INC.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
HANOVER PUBLISHING CO.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
INTERNET MEDIA PUBLISHING, INC.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
MID-STATES NEWSPAPERS, INC.,
as a Guarantor
By:
-----------------------------------
Name:
<PAGE>
Title:
NEW ENGLAND INTERNET MEDIA
PUBLISHING, INC.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
NEW ENGLAND NEWSPAPERS, INC.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
NJN INVESTMENTS, INC.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
NJN PUBLISHING COMPANY,
as a Guarantor
By:
-----------------------------------
Name:
Title:
SOUTH JERSEY NEWSPAPERS COMPANY,
as a Guarantor
By:
-----------------------------------
Name:
<PAGE>
Title:
V&P PUBLISHING, INC.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
WEST COAST MEDIANEWS LLC,
as a Guarantor
By:
-----------------------------------
Name:
Title:
YORK NEWSPAPERS, INC.,
as a Guarantor
By:
-----------------------------------
Name:
Title:
<PAGE>
THE BANK OF NEW YORK,
as Administrative Agent and as a Bank
By:
-----------------------------------
Name:
Title:
BANK OF AMERICA NT & SA,
as Syndication Agent and as a Bank
By:
-----------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK,
as Documentation Agent and as a Bank
By:
-----------------------------------
Name:
Title:
<PAGE>
FLEET NATIONAL BANK,
as Co-Documentation Agent and as a
Bank
By:
-----------------------------------
Name:
Title:
NORWEST BANK COLORADO, N.A.
as a Bank
By:
-----------------------------------
Name:
Title:
MELLON BANK, N.A.
as a Bank
By:
-----------------------------------
Name:
Title:
CIBC INC.
as a Bank
By:
-----------------------------------
Name:
Title:
<PAGE>
GARDEN STATE NEWSPAPERS, INC.
$200,000,000
8 5/8% SENIOR SUBORDINATED NOTES DUE 2011
PURCHASE AGREEMENT
March 10, 1999
GOLDMAN, SACHS & CO.
BNY CAPITAL MARKETS, INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
FIRST UNION CAPITAL MARKETS CORP.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Dear Ladies and Gentlemen:
Garden State Newspapers, Inc., a Delaware corporation (the "COMPANY"),
hereby confirms its agreement with the Initial Purchasers named in Schedule I
hereto (the "INITIAL PURCHASERS"), as set forth below.
1. THE SECURITIES. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$200,000,000 aggregate principal amount of its 8 5/8% Senior Subordinated Notes
due 2011 (the "NOTES"). The Notes are to be issued under an Indenture, dated as
of March 16, 1999 (the "INDENTURE") by and between the Company and The Bank of
New York, as trustee (the "TRUSTEE").
The Notes will be offered and sold to the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "ACT"), in
reliance on exemptions therefrom.
In connection with the offer and sale of the Notes, the Company has
prepared a preliminary offering circular dated March 3, 1999 (the "PRELIMINARY
OFFERING CIRCULAR") and a final offering circular dated the date hereof (the
"FINAL OFFERING CIRCULAR"; the Preliminary Offering Circular and the Final
Offering Circular herein being referred to collectively as the "OFFERING
CIRCULAR"), each setting forth or including descrip-
<PAGE>
-2-
tions of the terms of the Notes, the terms of the offering and a description of
the Company.
The Company understands that the Initial Purchasers propose to make an
offering of the Notes only on the terms and in the manner set forth in the Final
Offering Circular and Section 8 hereof as soon as the Initial Purchasers deem
advisable after this Agreement has been executed and delivered, to persons whom
the Initial Purchasers reasonably believe to be qualified institutional buyers
("QUALIFIED INSTITUTIONAL BUYERS" or "QIBs") as defined in Rule 144A under the
Act, as such rule may be amended from time to time ("RULE 144A").
The Initial Purchasers and their direct and indirect transferees of
the Notes will be entitled to the benefits of the Registration Rights Agreement,
substantially in the form attached hereto as EXHIBIT A (the "REGISTRATION RIGHTS
AGREEMENT"), to be dated as of the Closing Date (as defined in Section 3 below),
pursuant to which the Company will agree, among other things, to file a
registration statement (the "REGISTRATION STATEMENT") with the Securities and
Exchange Commission (the "COMMISSION") registering the Notes and/or the Exchange
Notes (as defined in the Registration Rights Agreement) under the Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and agrees with each of the Initial Purchasers that:
(a) Neither the Preliminary Offering Circular as of the date thereof
nor the Final Offering Circular as of the date thereof and at all times
subsequent thereto up to the Closing Date contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties set forth in this Section 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with information relating
to the Initial Purchasers furnished to the Company in writing by the
Initial Purchasers expressly for use in the Preliminary Offering Circular,
the Final Offering Circular.
(b) 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
<PAGE>
-3-
and authority to own its properties and conduct its businesses as now
conducted as described in the Offering Circular, 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 on the business, condition (financial or other),
results of operations or prospects of the Company and its subsidiaries,
taken as a whole (a "MATERIAL ADVERSE EFFECT").
(c) The Company has the authorized, issued and outstanding
capitalization set forth in the Offering Circular, 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 the Offering Circular, 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 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 Offering Circular, 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 (as defined in the Indenture) are entitled to have such
securities registered under the Registration Statement or, to the extent so
entitled, written waivers have been obtained.
(d) The Notes, the Exchange Notes and the Private 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 the Indenture, and will be enforceable in
accordance with their
<PAGE>
-4-
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.
(e) 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, in the
case of the Indenture, meets the requirements for qualification under the
Trust Indenture Act of 1939 (the "TIA"). This Agreement and the Indenture
when executed and delivered by the Company (assuming the due authorization,
execution and delivery by the other parties hereto), will each 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.
(f) 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.
(g) 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
<PAGE>
-5-
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 and in connection with the purchase and resale of
the Notes by the Initial Purchasers. 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, 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.
(h) The execution, delivery and performance by the Company of this
Agreement, the Indenture and 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 Initial Purchasers
and the consummation of the transactions described under the heading "Use
of Proceeds" and "Business-California Newspapers Partnership" in the
Offering Circular), 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
<PAGE>
-6-
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.
(i) The Company and its subsidiaries, as the case may be, have
entered into definitive agreements with each of the parties necessary, and,
in order to, consummate the transactions contemplated by this Agreement.
(j) Except as otherwise specifically stated therein, the audited
consolidated financial statements and schedules of the Company and its
consolidated subsidiaries included in the Offering Circular 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 Offering Circular 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 adjustments, and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, except as otherwise stated therein. Ernst & Young LLP
which has examined such audited consolidated financial statements included
in the Offering Circular, is an independent public accounting firm as
defined by the Act and the rules and regulations under the Act.
(k) The pro forma consolidated financial statements and other pro
forma financial information (including the notes thereto) included in the
Offering Circular (A) present fairly in all material respects the
information shown therein, except as specifically stated therein, (B) have
been prepared in accordance with applicable requirements of Regulation S-X
promulgated under the Securities and Exchange Act of 1934, as amended (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 Offering Circular are
set forth in all material respects in the notes to such pro forma
statements and information and such assumptions are
<PAGE>
-7-
reasonable, and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein.
(l) Except as specifically described in the Offering Circular, 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.
(m) 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 Offering Circular, 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 or conflict were sustained, could reasonably
be expected to have, singly or in the aggregate, a Material Adverse Effect.
(n) 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
Offering Circular, the lack of which could reasonably be expected to have,
singly or in the aggregate, a Material Adverse Effect.
(o) Subsequent to the respective dates as of which information is
given in the Offering Circular and except as specifically described
therein, (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 oth-
<PAGE>
-8-
erwise made any dividend or distribution of any kind on its capital stock.
(p) Neither the Company nor any of its subsidiaries 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 Offering Circular 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.
(q) 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 Offering Circular,
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 Offering Circular. Except as specifically set forth in
the Offering Circular, 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 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.
(r) Subsequent to the date of the most recent financial statements
contained in the Offering Circular, there has been no material adverse
change, or any development involving a prospective material adverse change
in or affecting the financial condition or position, results of operations,
business or prospects of the Company and its subsidiaries taken as a whole,
except as specifically set forth in the Offering Circular.
<PAGE>
-9-
(s) 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.
(t) Except as specifically set forth in the Offering Circular 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 of the Company (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 other subsidiary of the
Company, (ii) to make any loans or advances to, or investments in, the
Company or any other subsidiary of the Company or (iii) to transfer any of
its property or assets to the Company or any other subsidiary of the
Company.
(u) 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 T, U or X of the Board of Governors of the
Federal Reserve System.
(v) The Company and each of its subsidiaries have good title to all
real property and good title to all personal and real property described in
the Offering Circular as being owned by it or reflected on the Company's
consolidated balance sheet, and good title to all leasehold estates in the
real property and good title to personal property described in the Offering
Circular as being leased by it, free and clear of all liens, charges,
encumbrances or restrictions, except, in each case, as specifically
described in the Offering Circular. 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 of its subsidiaries
is a party or by which any of them is bound are valid and enforceable
against the Company or any such subsidiary, are, to the best knowledge of
the Company, valid and enforceable against the other party or parties
thereto and are in
<PAGE>
-10-
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.
(w) Both before and after giving effect to the Offering and the
transactions contemplated thereby, neither the Company nor any of its
subsidiaries 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 the Employee Retirement
Income Security Act of 1974 ("ERISA") or the rules and regulations
promulgated thereunder, nor has the Company or any of its subsidiaries
engaged in any unfair labor practice, which in each case could 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 of its subsidiaries 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 of
its subsidiaries 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 of its subsidiaries or, to the best
knowledge of the Company, threatened against the Company or any of its
subsidiaries and (iii) to the best knowledge of the Company, no union
representation question existing with respect to the employees of the
Company or any of its subsidiaries such as could reasonably be expected to
have, singly or in the aggregate, a Material Adverse Effect.
(x) 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. Neither the Company nor
any subsidiary of the Company has received notice from any insurer or agent
of such insurer that substantial capital improvements or other expenditures
will have to be
<PAGE>
-11-
made in order to continue such insurance. All such insurance is
outstanding and duly in force.
(y) 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.
(z) Both before and after giving effect to the Offering and the
transactions contemplated thereby, (i) 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.
(aa) 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.
(bb) The Notes, the Indenture, the Registration Rights Agreement and
this Agreement conform in all material respects to the descriptions thereof
in the Offering Circular.
(cc) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or any of its
subsidiaries has a material relationship to evaluate the extent to which
the business or operations of the Company or any of its subsidiaries will
be affected by the Year 2000 Problem. As a result of such review, the
Company has no reason to believe, and does not believe, that the Year 2000
Problem will have a Material Adverse Effect or result in any material loss
or interference with the Company's business or operations. The "Year 2000
Problem" as used herein means any significant risk that computer hardware
or software used in the receipt,
<PAGE>
-12-
transmission, processing, manipulation, storage, retrieval, retransmission
or other utilization of data or in the operation of mechanical or
electrical systems of any kind will not, in the case of dates or time
periods occurring after December 31, 1999, function at least as effectively
as in the case of dates or time periods occurring prior to January 1, 2000.
3. PURCHASE, SALE AND DELIVERY OF THE NOTES. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers, severally
and not jointly, agree to purchase from the Company, at 97.386% of their
principal amount, the aggregate principal amount of the Notes set forth on the
signature page hereof with respect to each Initial Purchaser. One or more
certificates in definitive form for the Notes that the Initial Purchasers have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Initial Purchasers request upon notice
to the Company at least 48 hours prior to the Closing Date, shall be delivered
by or on behalf of the Company to the Initial Purchasers, against payment by or
on behalf of the Initial Purchasers of the purchase price therefor by wire
transfer payable in immediately available (same day) funds. Such delivery of
and payment for the Notes shall be made at the offices of Cahill Gordon &
Reindel, 80 Pine Street, New York, New York 10005, at 10:00 A.M., New York time,
on March 16, 1999, or at such other place, time or date as the Initial
Purchasers and the Company may agree upon, such time and date of delivery
against payment being herein referred to as the "Closing Date." The Company
will make such certificate or certificates for the Notes available for checking
and packaging by the Initial Purchasers at the offices in New York, New York of
Goldman, Sachs & Co., or at such other place as Goldman, Sachs & Co. may
designate at least 24 hours prior to the Closing Date.
4. OFFERING BY THE INITIAL PURCHASERS. The Initial Purchasers
propose to make an offering of the Notes at the price and upon the terms set
forth in the Final Offering Circular, as soon as practicable after this
Agreement is entered into and as in the judgment of the Initial Purchasers is
advisable.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the Initial Purchasers that:
<PAGE>
-13-
(a) Except as provided in paragraph (c), the Company will not amend
or supplement the Final Offering Circular or any amendment or supplement
thereto, unless the Initial Purchasers shall previously have been advised
and furnished a copy for a reasonable period of time prior to the proposed
amendment or supplement and as to which the Initial Purchasers shall have
given their consent, not to be unreasonably withheld. The Company will,
promptly, upon the reasonable request of the Initial Purchasers or counsel
for the Initial Purchasers, make any amendments or supplements to the
Preliminary Offering Circular or the Final Offering Circular that may be
necessary or advisable in connection with the resale of the Notes by the
Initial Purchasers.
(b) The Company will cooperate with the Initial Purchasers in
arranging for the qualification of the Notes for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Initial
Purchasers may designate and will continue such qualifications in effect
for as long as may be necessary to complete the distribution of the Notes;
PROVIDED, HOWEVER, that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction in which it is not
already so qualified.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchasers of the Notes or the Private Exchange Notes, any
event occurs as a result of which the Final Offering Circular as then
amended or supplemented would include any untrue statement of a material
fact, or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if for any other reason it is necessary at any time to amend
or supplement the Final Offering Circular to comply with applicable law,
the Company will promptly notify the Initial Purchasers thereof and will
prepare at the Company's expense, an amendment or supplement to the Final
Offering Circular that corrects such statement or omission or effects such
compliance.
(d) The Company will, at its expense, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of each
Preliminary Offering Circular or Final Offering Circular or any amendment
or supplement thereto as the Initial Purchasers may reasonably request.
<PAGE>
-14-
(e) The Company will apply the net proceeds from the sale of the
Notes as set forth under "Use of Proceeds" in the Final Offering Circular.
(f) For so long as the Notes remain outstanding, the Company will
furnish to the Initial Purchasers copies of all reports and other
communications (financial or otherwise) furnished by the Company to the
Trustee or to the holders of the Notes and, as soon as available, copies of
any reports or financial statements furnished to or filed by the Company
with the Commission or any national securities exchange on which any class
of securities of the Company may be listed.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared, a copy of any
unaudited interim consolidated financial statements of the Company for any
period subsequent to the period covered by its most recent financial
statements appearing in the Final Offering Circular.
(h) None of the Company, each of its subsidiaries or any of their
respective affiliates will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any "security" (as defined in the Act)
which could be integrated with the sale of the Notes in a manner which
would require the registration under the Act of the Notes.
(i) The Company and each of its subsidiaries will not engage in any
form of general solicitation or general advertising (as those terms are
used in Regulation D under the Act) in connection with the offering of the
Notes or in any manner involving a public offering within the meaning of
Section 4(2) of the Act.
(j) During the period beginning from the date hereof and continuing
until the Closing Date, the Company will not offer, sell, contract to sell
or otherwise dispose of, except as provided hereunder any securities of the
Company that are substantially similar to the Notes, without the prior
written consent of the Initial Purchasers.
(k) For so long as any of the Notes remain outstanding, the Company
will make available at its expense, upon request, to any holder of such
Notes and any prospective purchasers thereof the information specified in
<PAGE>
-15-
Rule 144A(d)(4) under the Act, unless the Company is then subject to
Section 13 or 15(d) of the Exchange Act.
(l) The Company will use its best efforts to (i) permit the Notes to
be designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the Private
Offerings, Resales and Trading through Automated Linkages market (the
"PORTAL MARKET") and (ii) permit the Notes to be eligible for clearance and
settlement through The Depository Trust Company.
6. EXPENSES. The Company agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 10 hereof or otherwise, including all costs and
expenses incident to (i) the printing or other production of documents with
respect to the transactions, including any costs of printing the Preliminary
Offering Circular and the Final Offering Circular and any amendment or
supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements relating
to the delivery to the Initial Purchasers of copies of the foregoing documents,
(iii) the fees and disbursements of the counsel, the accountants and any other
experts or advisors retained by the Company, (iv) preparation (including
printing), issuance and delivery to the Initial Purchasers of the Notes, (v) the
qualification of the Notes under state securities and "Blue Sky" laws, including
filing fees and fees and disbursements of counsel for the Initial Purchasers
relating thereto, (vi) all expenses and listing fees incurred in connection with
the application for quotation of the Notes on the PORTAL Market, (vii) expenses
of the Company and the Initial Purchasers in connection with any meetings with
prospective investors in the Notes, (viii) fees and expenses of the Trustee,
including reasonable fees and expenses of counsel, and (ix) any fees charged by
investment rating agencies for the rating of the Notes. If the sale of the
Notes provided for herein is not consummated because any condition to the
obligations of the Initial Purchasers set forth in Section 7 hereof is not
satisfied, because this Agreement is terminated pursuant to Section 11 hereof or
because of any failure, refusal or inability on the part of the Company to
perform all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder other than by reason of a default by the Initial
Purchasers, the Company will reimburse the Initial Purchasers upon demand for
all out-of-pocket expenses (including the reasonable fees and disbursements of
the Initial Purchasers and of counsel for the
<PAGE>
-16-
Initial Purchasers) that shall have been incurred by the Initial Purchasers in
connection with the proposed purchase and sale of the Notes.
7. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The
obligation of the Initial Purchasers to purchase and pay for the Notes shall be
subject to the following conditions:
(a) The Initial Purchasers shall have received an opinion in form and
substance satisfactory to the Initial Purchasers, dated the Closing Date,
of Verner, Liipfert, Bernhard, McPherson and Hand, counsel for the Company,
substantially in the form of Exhibit B hereto.
(b) The Initial Purchasers shall have received an opinion, dated the
Closing Date, of Cahill Gordon & Reindel, counsel for the Initial
Purchasers, with respect to certain legal matters relating to this
Agreement, and such other related matters as the Initial Purchasers may
require.
(c) The Initial Purchasers shall have received a letter or letters
dated, respectively, the date hereof and the Closing Date, from Ernst &
Young LLP, in form and substance satisfactory to the Initial Purchasers.
(d) The representations and warranties of the Company contained in
this Agreement shall be true and correct as of the date hereof and as of
the Closing Date; the Company shall have complied with all covenants and
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date; and subsequent to the
date of the most recent financial statements in the Final Offering
Circular, there shall not have occurred or become known any material
adverse change in the business, condition (financial or other), results of
operations or prospects of the Company and its subsidiaries, taken as a
whole, except as specifically set forth in the Final Offering Circular (a
"MATERIAL ADVERSE CHANGE").
(e) The sale of the Notes by the Company hereunder shall not be
enjoined (temporarily or permanently) on the Closing Date.
(f) Subsequent to the date as of which information is given in the
Final Offering Circular, except as spe-
<PAGE>
-17-
cifically described in the Final Offering Circular (both before and after
giving effect to the transactions to occur on or before the Closing Date),
none of the Company or any of its subsidiaries shall have incurred any
liabilities or obligations, direct or contingent (other than in the
ordinary course of business) that are material to the Company and its
subsidiaries, taken as a whole, or entered into any transactions not in the
ordinary course of business that are material to the business, condition
(financial or other), results of operations or prospects of the Company and
its subsidiaries, taken as a whole, and, other than as specifically set
forth in the Final Offering Circular, there shall not have been any change
in the capital stock or long-term indebtedness of the Company or its
subsidiaries that is material to the business, condition (financial or
other), results of operations or prospects of the Company and its
subsidiaries, taken as a whole.
(g) Subsequent to the date as of which information is given in the
Final Offering Circular, the conduct of the business and operations of the
Company or any of its subsidiaries has not been interfered with by strike,
fire, flood, hurricane, accident or other calamity (whether or not insured)
or by any court or governmental action, order or decree, and, except as
otherwise stated therein, the properties of the Company or any of its
subsidiaries have not sustained any loss or damage (whether or not insured)
as a result of any such occurrence, except any such interference, loss or
damage which could not reasonably be expected to have a Material Adverse
Effect.
(h) The Initial Purchasers shall have received a certificate, dated
the Closing Date, of the Chairman and the Chief Financial Officer of the
Company to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects as if made on
and as of the Closing Date, and the Company has performed all
covenants and agreements and satisfied all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date,
provided, however that if any such representation or warranty is
already qualified by materiality, such representation or warranty, as
so qualified, is true and correct in all respects;
<PAGE>
-18-
(ii) At the Closing Date, since the date hereof or subsequent to
the respective dates as of which information is given in the Final
Offering Circular (exclusive of any amendment or supplement thereto
after the date hereof), there has not occurred or become known any
event or events that could reasonably be expected to have, singly or
in the aggregate, a Material Adverse Effect;
(iii)Subsequent to the respective dates as of which information
is given in the Final Offering Circular, except in each case as
specifically described in the Final Offering Circular, exclusive of
any amendment or supplement thereto after the date hereof (both before
and after giving effect to the Offering and the transactions
contemplated thereby), none of the Company or any of its Subsidiaries
has incurred any liabilities or obligations, direct or contingent
(other than in the ordinary course of business) that are material to
the Company and its subsidiaries, taken as a whole, or entered into
any transactions not in the ordinary course of business that are
material to the business, condition (financial or other), results of
operations or prospects of the Company and its subsidiaries, taken as
a whole, and, other than as specifically set forth in the Final
Offering Circular, there shall not have been any change in the capital
stock or long-term indebtedness of the Company or its subsidiaries
that is material to the business, condition (financial or other),
results of operations or prospects of the Company and its
subsidiaries, taken as a whole;
(iv) Subsequent to the respective dates as of which information
is given in the Final Offering Circular and exclusive of any amendment
or supplement thereto after the date hereof, the conduct of the
business and operations of the Company or any of its subsidiaries has
not been interfered with by strike, fire, flood, hurricane, accident
or other calamity (whether or not insured) or by any court or
governmental action, order or decree, and, except as otherwise
specifically stated therein, the properties of the Company or any of
its subsidiaries have not sustained any loss or damage (whether or not
insured) as a result of any such occurrence, except any such
interference, loss or damage which could not reasonably
<PAGE>
-19-
be expected to have, singly or in the aggregate, a Material Adverse
Effect; and
(v) The sale of the Notes by the Company hereunder has not been
enjoined (temporarily or permanently).
(i) On or before the Closing Date, the Initial Purchasers and counsel
for the Initial Purchasers shall have received such further documents,
certificates and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company as they shall have
heretofore reasonably requested from the Company.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory to the Initial Purchasers and
counsel for the Initial Purchasers. The Company shall furnish to the Initial
Purchasers such conformed copies of such opinions, certificates, letters,
schedules, documents and instruments in such quantities as the Initial
Purchasers shall reasonably request.
8. OFFERING OF NOTES; RESTRICTIONS ON TRANSFER. Each of the Initial
Purchasers represents and warrants, as to itself only, that it is a QIB. Each
of the Initial Purchasers agrees that (i) it has not and will not solicit offers
for, or offer or sell, the Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Act; and (ii) it has solicited and will solicit offers for the Notes only from,
and will offer the Notes only to (A) in the case of offers inside the United
States, persons whom the Initial Purchasers reasonably believe to be QIBs or, if
any such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
such Initial Purchaser that each such account is a QIB, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A and (B) in the case of offers outside
the United States, to persons other than U.S. persons ("FOREIGN PURCHASERS,"
which term shall included dealers or other professional fiduciaries in the
United States acting on a discretionary basis for foreign beneficial owners
(other than an estate or trust)); PROVIDED, HOWEVER, that, in the case of this
clause (B), in purchasing such Notes such persons are deemed to have
<PAGE>
-20-
represented and agreed as provided in the restrictive legend as set forth on
Exhibit A of the Indenture.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless the Initial Purchasers, their directors, their
officers and their agents and each person, if any, who controls the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and each such person's officers, directors and agents against any
losses, claims, damages or liabilities, joint or several, to which each such
person may become subject under the Act, the Exchange Act or otherwise, insofar
as any such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material fact
contained in (A) any Offering Circular or any amendment thereto or (B) any
application or other document, or any amendment or supplement thereto, executed
by or on behalf of the Company or based upon information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the Notes
under the securities or "Blue Sky" laws thereof or filed with the Commission or
any securities association or securities exchange (each, an "APPLICATION"); or
(ii) the omission or alleged omission to state, in any Offering Circular or
any amendment thereto or any Application, a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse, as incurred, the Initial Purchasers and each such other person for
any reasonable legal or other expenses reasonably incurred by the Initial
Purchasers or such person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action;
PROVIDED, HOWEVER, the Company will not be liable to an Initial
Purchaser in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any Offering Circular or any
amendment or supplement thereto, or any Application in reliance upon and in
conformity with written information furnished to the Company by such Initial
Purchaser specifically for use therein. This indemnity agreement will be in
addition to any liability that the Company may otherwise have to the indemnified
parties. The Company will not, without the prior
<PAGE>
-21-
written consent of the Initial Purchasers, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification by the Initial Purchasers may be
sought hereunder (whether or not the Initial Purchasers or any person who
controls the Initial Purchasers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent to the entry of any
judgment (i) includes an unconditional release of the Initial Purchasers and
each such other person from all liability arising out of such claim, action,
suit or proceeding and (ii) does not include a statement as to, or an admission
of, fault, culpability or a failure to act, by or on behalf of the Initial
Purchasers.
(b) Each Initial Purchaser, severally and not jointly, will indemnify
and hold harmless each of the Company and its directors and officers and their
agents and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, agent or controlling person may become subject under the Act, the
Exchange Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Offering Circular or any amendment or supplement thereto, or any
Application or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in any Offering Circular or any amendment or
supplement thereto, or any Application, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Initial Purchaser specifically for use therein;
and, subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses incurred by the Company or
any such director, officer, controlling person or agent in connection with
investigating or defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action in respect
thereof. This indemnity agreement will be in addition to any liability that the
Initial Purchasers may otherwise have to the indemnified parties. The Initial
Purchasers will not, without the prior written consent of the Company, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit
<PAGE>
-22-
or proceeding in respect of which indemnification by the Company may be sought
hereunder (whether or not the Company or any person who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent to the entry of any judgment (i) includes an unconditional
release of the Company and each such other person from all liability arising out
of such claim, action, suit or proceeding and (ii) does not include a statement
as to, or an admission of, fault, culpability or a failure to act, by or on
behalf of the Company.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party (i) will not relieve it from any
liability under paragraph (a) or (b) above unless it did not otherwise learn of
such action and only if and to the extent that such omission to notify results
in material prejudice to the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraphs (a) and (b) above. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified party; PROVIDED, HOWEVER, that if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the parties in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, or
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action, then, in each
such case, the indemnifying party shall not have the right to direct the defense
of such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate counsel to
defend such action on behalf of such indemnified party or parties at the cost
and expense of the indemnifying
<PAGE>
-23-
party. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 9 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Initial Purchasers in the case
of paragraph (a) of this Section 9 or the Company in the case of paragraph (b)
of this Section 9, representing the indemnified parties under such paragraph (a)
or paragraph (b), as the case may be, who are parties to such action or actions)
or (ii) the indemnifying party has authorized in writing the employment of
counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party, which consent shall not be unreasonably withheld.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
offering of the Notes or (ii) if the allocation provided by the foregoing clause
(i) is not permitted by applicable law, not only such relative benefits but also
the relative fault of the indemnifying party or parties on the one hand and the
indemnified party 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
<PAGE>
-24-
relative benefits received by the Company on the one hand and the Initial
Purchasers on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Initial Purchasers. 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 the Initial
Purchasers 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. The
Company and the Initial Purchasers agre that it would not be equitable if the
amount of such contribution were determined by pro rata or per capita allocation
(even if the Company on the one hand and the Initial Purchasers on the other
hand were treated as one entity for such purpose) or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of this paragraph (d). Notwithstanding any other
provision of this paragraph (d), the Initial Purchasers shall not be obligated
to make contributions hereunder that in the aggregate exceed the total
underwriting discounts and commissions received by the Initial Purchasers under
this Agreement, less the aggregate amount of any damages that the Initial
Purchasers has otherwise been required to pay by reason of the untrue or alleged
untrue statements or the omissions or alleged omissions to state a material
fact, and no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each person, if any, who controls the Initial Purchasers within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Initial Purchasers, and each
director of the Company, each officer of the Company who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company.
10. SURVIVAL CLAUSE. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the Initial Purchasers set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made
<PAGE>
-25-
by or on behalf of the Company, the Initial Purchasers or any of the other
persons referred to in Section 9 hereof and (ii) delivery of and payment for the
Notes. The respective agreements, covenants, indemnities and other statements
set forth in Sections 6 and 9 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
11. TERMINATION. (a) This Agreement may be terminated in the sole
discretion of Goldman, Sachs & Co. by notice to the Company given prior to the
Closing Date in the event that the Company shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if, at or prior to the
Closing Date:
(i) the Company shall have sustained any loss or interference with respect
to its businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, which loss or interference, in the sole
judgment of Goldman, Sachs & Co., has had or could reasonably be expected to
have a Material Adverse Effect, or there shall have been or become known, in the
sole judgment of Goldman, Sachs & Co., any Material Adverse Change, or any
development involving a prospective Material Adverse Change (including without
limitation a change in management or control of the Company), except in each
case as specifically described in the Final Offering Circular (exclusive of any
amendment or supplement thereto);
(ii) trading in securities generally on the New York or American Stock
Exchange shall have been suspended or minimum or maximum prices shall have been
established on any such exchange;
(iii) a banking moratorium shall have been declared by New York or United
States authorities;
(iv) there shall have been or occurred (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an outbreak or
escalation of any other insurrection or armed conflict involving the United
States or any other national or international calamity or emergency or (C) any
material change in the financial markets of the United States which, in any such
case, in the sole judgment of Goldman Sachs & Co., makes it impracticable or
inadvisable to proceed with the offering or the delivery of the Notes as contem-
<PAGE>
-26-
plated by the Final Offering Circular (exclusive of any amendment or supplement
thereto); or
(v) any securities of the Company or any of its subsidiaries shall have
been downgraded or placed on any "watch list" for possible downgrading by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities
of the Company (other than an announcement with positive implications of a
positive upgrading, and no implication of a possible downgrading).
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as otherwise
provided herein.
12. INITIAL PURCHASER DEFAULT.
(a) If any Initial Purchaser shall default in its obligation to
purchase the Notes which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Notes on the terms contained herein. If within thirty-six hours after such
default by any Initial Purchaser you do not arrange for the purchase of such
Notes , then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Notes on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for the
purchase of such Notes, or the Company notifies you that it has so arranged for
the purchase of such Notes, you or the Company shall have the right to postpone
the Closing Date for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Offering Circular, or in
any other documents or arrangements, and the Company agrees to prepare promptly
any amendments to the Offering Circular which in your opinion may thereby be
made necessary. The term "Initial Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such Notes.
(b) If, after giving effect to any arrangements for the purchase of
the Notes of a defaulting Initial Purchaser or Initial Purchasers by you and the
Company as provided in subsection (a) above, the aggregate principal amount of
such Notes
<PAGE>
-27-
which remains unpurchased does not exceed one-eleventh of the aggregate
principal amount of all the Notes, then the Company shall have the right to
require each non-defaulting Initial Purchaser to purchase the principal amount
of which such Initial Purchaser agreed to purchase hereunder and, in addition,
to require each non-defaulting Initial Purchaser to purchase its pro rata share
(based on the principal amount of Notes which such Initial Purchaser agreed to
purchase hereunder) of the Notes of such defaulting Initial Purchaser or Initial
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Initial Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Notes of a defaulting Initial Purchaser or Initial Purchasers by you and the
Company as provided in subsection (a) above, the aggregate principal amount of
Notes which remains unpurchased exceeds one-eleventh of the aggregate principal
amount of all the Notes, or if the Company shall not exercise the right
described in subsection (b) above to require non-defaulting Initial Purchasers
to purchase Notes of a defaulting Initial Purchaser or Initial Purchasers, then
this Agreement shall thereupon terminate, without liability on the part of any
non-defaulting Initial Purchaser or the Company, except for the expenses to be
borne by the Company and the Initial Purchasers as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 9 hereof; but nothing
herein shall relieve a defaulting Initial Purchaser from liability for its
default.
13. INFORMATION SUPPLIED BY THE INITIAL PURCHASERS. The statements
set forth in the last paragraph on the inside front cover page (i), the second
and third sentences of the second paragraph, the fifth, sixth and seventh
paragraphs under the heading "Underwriting" in the Final Offering Circular (to
the extent such statements relate to the Initial Purchasers) constitute the only
information furnished by the Initial Purchasers to the Company. Each Initial
Purchaser confirms that such statements (to the extent such statements relate to
such Initial Purchaser) are correct.
14. NOTICES. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered or telecopied
and confirmed in writing to Goldman, Sachs & Co., 32 Old Slip, 8th Floor, New
York, New York 10004, Attention: Registration Department; if sent to the
Company, shall be mailed or delivered or telecopied and confirmed in writing to
the Company at Garden State Newspapers,
<PAGE>
-28-
Inc., c/o MediaNews Group Inc., 1560 Broadway, Suite 1450, Denver, Colorado
80202, Attention: Chief Financial Officer, with copies to Verner, Liipfert,
Bernhard, McPherson and Hand, 901-15th Street, N.W., Washington, D.C.
20005-2301. Attn: Harold I. Freilich.
15. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained other than the persons described in Section 9 (but
only to the extent provided in such Section); this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the persons specifically referred to therein. No purchaser of Notes
from the Initial Purchasers will be deemed a successor because of such purchase.
16. APPLICABLE LAW. The validity and interpretation of this
agreement, and the terms and conditions set forth herein shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of law.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE>
-29-
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall, when fully executed and delivered by the Company
and the Initial Purchaser constitute a binding agreement among the Company and
the Initial Purchasers.
Very truly yours,
GARDEN STATE NEWSPAPERS, INC.
By:
----------------------------------
Name:
Title:
The foregoing Agreement is hereby con-
firmed and accepted as of the date
first above written.
GOLDMAN, SACHS & CO.
BNY CAPITAL MARKETS, INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
FIRST UNION CAPITAL MARKETS CORP.
By:
--------------------------------
(Goldman, Sachs & Co.)
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
INITIAL PURCHASER SECURITIES TO BE PURCHASED
- ----------------- --------------------------
<S> <C>
Goldman, Sachs & Co. . . . . . . . . . . . . . . . $120,000,000
BNY Capital Markets, Inc.. . . . . . . . . . . . . 30,000,000
Nationsbanc Montgomery Securities LLC. . . . . . . 30,000,000
First Union Capital Markets Corp.. . . . . . . . . 20,000,000
------------
Total . . . . . . . . . . . . . . . $200,000,000
------------
------------
</TABLE>
<PAGE>
EXHIBIT 12.1
RATIO OF EARNINGS TO FIXED CHARGES
GARDEN STATE NEWSPAPERS, INC.
(IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months
Ended
1994 1995 1996 1997 1998 March 31, 1999
---- ---- ---- ---- ---- --------------
<S> <C> <C> <C> <C> <C> <C>
Pretax Income .................. $(15,253) $ 684 $ (752) $ 34,577 $ 34,392 $ 8,666
Fixed Charges:
Interest ................... 21,607 24,539 25,950 30,902 45,311 40,463
Debt Issuance Cost ......... 11,655 -- 1,092 4,508 7,280 5,500
Capital Lease Interest ..... 922 1,120 1,015 1,001 820 616
-------- -------- -------- -------- -------- ------------
$ 34,194 $ 25,659 $ 28,057 $ 36,991 $ 53,411 $ 46,579
======== ======== ======== ======== ======== ============
Ratio of Earnings to
Fixed Charges .............. $(15,253) $ 1.0x $ (752) $ 1.9x $ 1.6x 1.2x
======== ======== ======== ======== ======== =============
</TABLE>
<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 Newspaper, 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
York Newspaper Company
York Newspapers, Inc.
Charleston Newspapers
West Coast MediaNews LLC 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
The Pacifica Tribune
The Wave
Inland Valley Daily Bulletin
Enterprise-Record
Times-Herald
The Hemet News
The Daily Democrat
The Lompoc Record
Ukiah Daily Journal
Redlands Daily Facts
Daily News
San Bernardino County Sun
Brattleboro Publishing Company Delaware The Brattleboro Reformer
Easton Publishing Company Delaware The Express Times
Two Rivers Shopping Times
The Bethlehem Star
Hunterdon Marketplace
- ------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Subsidiaries State of Incorporation Names Under Which It Conducts Business
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Graham Newspapers, Inc. Delaware The Graham Leader
The Lake County Sun
The Jacksboro Gazette
The Jack County Herald
Lake Country Shopper
The Olney Enterprise
Mid-States Newspapers, Inc. Delaware Las Cruces Sun-News
The Daily Nonpareil
Sentinel & Enterprise
Lebanon Daily News
The Shopper Bulletin
Southwest Iowa Shopper Guide
North Country Leader
The Independent
The Palm Advertiser
The Shopping Times
Vos del Valle
North Adams Publishing Company Delaware North Adams Transcript
The Transcript Spotlight
North Eastern Publishing Company Delaware Bennington Banner
The Manchester Journal
The Bennington Shopper
North Jersey Newspaper Company Delaware Herald-News
Community Life
Community Forum
The Ridgewood News
Shopper News
South Bergenite
Suburban News
Paramas Town News
The Dateline Journal
Suburban Life
Suburban Trends
Today
Summit Independent Press
Berkeley Heights and News
Phillipsburg Free Press
Star Gazette
Blairstown Press
Belvidere News
Star Journal
The News Leader
The News
The Hills Bedminster Press
Somerset Messenger Gazette
- ------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Subsidiaries State of Incorporation Names Under Which It Conducts Business
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
North Jersey Newspaper Company
(continued) Delaware Highland Park Herald
The Review
The Chronicle
The Piscataway Review
The Reporter
Cranford Chronicle
The Westfield Record-Press
Pittsfield Publiscations, Inc. Delaware The Berkshire Eagle
The Shopper
South Jersey Newspaper Company Delaware The Gloucester County Times
Today's Sunbeam
Bridgeton Evening News
The Millville Shopper News
The Record
The Advertiser
V&P Publishing, Inc. California Tri-City Weekly
York Newspapers, Inc. Delaware The York Newspaper Company
York Newspaper Company Pennsylvania The York Dispatch
General Partnership The York Sunday News
Weekly Record
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Garden State Newspapers, Inc. Operating Names
---------------------------------------------
San Gabriel Valley Times
Whittier Daily News
Pasadena Star-News
Cheers
Whittier Review Shopper
The Star
Highlander Newspapers
Eureka Times Standard
The Buyers' Guide
On the Market
The Sun
The Sunday Sun
The Evening Sun
The Community Sun
The Daily Times
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement on Form S-4 and related Prospectus of Garden State
Newspapers, Inc., for the registration of $200,000,000 its 8 5/8% Series B
Senior Subordinated Notes Due 2011 and to the incorporation by reference
therein of our reports dated September 4, 1998, with respect to the
consolidated financial statements and Schedule of Garden State Newspapers,
Inc., and Garden State Investments, Inc., included in the Garden State
Newspapers, Inc. Annual Report on (Form 10-K) for the year ended June 30,
1998 filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Denver, Colorado
May 28, 1999
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit 25
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) / /
--------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One 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)
--------------------------
8-5/8% Senior Subordinated Notes Due 2011
(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.)
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.
-2-
<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 24th day of May, 1999.
THE BANK OF NEW YORK
By: /s/MARY LAGUMINA
------------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
<PAGE>
- -------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One 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, 1998, 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
<S> <C> <C>
ASSETS in Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $3,951,273
Interest-bearing balances........................... 4,134,162
Securities:
Held-to-maturity securities......................... 932,468
Available-for-sale securities....................... 4,279,246
Federal funds sold and Securities purchased under
agreements to resell................................ 3,161,626
Loans and lease financing receivables:
Loans and leases, net of unearned
income............................................ 37,861,802
LESS: Allowance for loan and
lease losses...................................... 619,791
LESS: Allocated transfer risk
reserve........................................... 3,572
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,238,439
Trading Assets......................................... 1,551,556
Premises and fixed assets (including capitalized
leases)............................................. 684,181
Other real estate owned................................ 10,404
Investments in unconsolidated subsidiaries and
associated companies................................ 196,032
Customers' liability to this bank on acceptances
outstanding......................................... 895,160
Intangible assets...................................... 1,127,375
Other assets........................................... 1,915,742
-------------
Total assets........................................... $60,077,664
-------------
-------------
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................. $27,020,578
Noninterest-bearing................................. 11,271,304
Interest-bearing.................................... 15,749,274
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 17,197,743
Noninterest-bearing................................. 103,007
Interest-bearing.................................... 17,094,736
Federal funds purchased and Securities sold under
agreements to repurchase............................ 1,761,170
Demand notes issued to the U.S.Treasury................ 125,423
Trading liabilities.................................... 1,625,632
Other borrowed money:
With remaining maturity of one year or less......... 1,903,700
With remaining maturity of more than one year
through three years............................... 0
With remaining maturity of more than three years.... 31,639
Bank's liability on acceptances executed and
outstanding......................................... 900,390
Subordinated notes and debentures...................... 1,308,000
Other liabilities...................................... 2,708,852
-------------
Total liabilities...................................... 54,583,127
-------------
-------------
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 764,443
Undivided profits and capital reserves................. 3,542,168
Net unrealized holding gains (losses) on
available-for-sale securities....................... 82,367
Cumulative foreign currency translation adjustments.... (29,725)
-------------
Total equity capital................................... 5,494,537
-------------
Total liabilities and equity capital................... $60,077,664
-------------
-------------
</TABLE>
<PAGE>
I, Thomas J. Mastro, 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.
Thomas J. Mastro
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. Reyni
Gerald L. Hassell Directors
Alan R. Griffith
- -------------------------------------------------------------------------------
<PAGE>
Exhibit 99.1
LETTER OF TRANSMITTAL
GARDEN STATE NEWSPAPERS, INC.
OFFER FOR ALL OUTSTANDING SERIES A 8 5/8% SENIOR SUBORDINATED NOTES
DUE 2011 IN EXCHANGE FOR SERIES B 8 5/8% SENIOR SUBORDINATED NOTES
DUE 2011, WHICH HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED
PURSUANT TO THE PROSPECTUS DATED _______________________, 1999
- -------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON JULY ___, 1999, UNLESS THE OFFER IS
EXTENDED BY THE ISSUER IN ITS 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 Window, Ground Floor
Attention: Reorganization Section New York, NY 10286
FACSIMILE TRANSMISSIONS:
(212) 815-6330
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(212) 815-5920
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.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL NOTES 1 2 3
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggregate Principal Principal Amount of
Name(s) and Address(es) of Registered Holders: Certificate Amount of Original Original Notes
(Please fill in blank) Number(s)* Notes Tendered**
- --------------------------------------------------------------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
Total
- --------------------------------------------------------------------------------------------------------
* 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.
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
2
(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
----------------------------------------------
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:
-------------------------------------------------------------------
---------------------------------------------------------------------------
<PAGE>
3
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 5/8% Senior Subordinated Notes due 2011 (the
"Original Notes") in exchange for a like aggregate principal amount of Series
B 8 5/8% Senior Subordinated Notes due 2011 (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
_________, 1999 (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.
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's 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
<PAGE>
4
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 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.
<PAGE>
5
- -------------------------------------------------------------------------------
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 , 1999
-----------
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 , 1999
---------
Capacity or Title
---------------------------------------------------------------
Name of Firm
--------------------------------------------------------------------
Address
-------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
--------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
6
- -------------------------------------- -------------------------------------
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
Notes are to be issued in the name Exchange Notes are to be sent to
of someone other than the registered someone other than the registered
Holder of the Original Notes whose Holder of the Original Notes whose
name(s) appear(s) above. name(s) 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.)
- -------------------------------------- -------------------------------------
<PAGE>
7
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 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.
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 original 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
<PAGE>
8
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.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered Holder(s) of
the Original 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 its 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 it 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 reserves 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.
The Issuer's 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.
<PAGE>
9
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 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.
<PAGE>
10
TO BE COMPLETED BY ALL
TENDERING SECURITYHOLDERS
(SEE INSTRUCTION 9)
PAYER'S NAME: THE BANK OF NEW YORK
- --------------------------------------------------------------------------------
Part 1 - PLEASE PROVIDE YOUR TIN IN THE
BOX AT RIGHT AND CERTIFY BY SIGNING AND
DATING BELOW
-----------------------------------------
CERTIFICATION - UNDER THE PENALTIES OF TIN ____________
PERJURY, I CERTIFY THAT Social Security
(1) the number shown on this form is my Number or
correct taxpayer identification Employer
number (or I am waiting for a number Identification
to be issued to me), Number
(2) I am not subject to backup
withholding either because (i) I am -----------------
exempt from backup withholding, (ii)
SUBSTITUTE I have not been notified by the
Form W-9 Internal Revenue Service ("IRS")
Department of the that I am subject to backup
Treasury Internal withholding as a result of a failure
Revenue Service to report all interest or dividends, Part 2
or (iii) the IRS has notified me
that I am no longer subject to Awaiting TIN
Payer's Request backup withholding, and
for Taxpayer (3) any other information provided on
Identification this form is true and correct.
Number (TIN)
and Certification
SIGNATURE _______________ 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.
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
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
8 5/8% SERIES A SENIOR SUBORDINATED NOTES DUE 2011
OF
GARDEN STATE NEWSPAPERS, INC.
This form or one substantially equivalent hereto must be used to accept
the Exchange Offer of Garden State Newspapers, Inc. (the "Company") made
pursuant to the Prospectus dated _____, 1999 (the "Prospectus") if
certificates for the 8 5/8% Series A Senior Subordinated Notes due 2011 (the
"Original Notes") of the Company are not immediately available or if the
Original Notes, the Letter of Transmittal or any other documents required
thereby cannot be delivered to the Exchange Agent or the procedure for
book-entry transfer cannot be completed, prior to 5:00 P.M., New York City
time, on the Expiration Date (as defined in the Prospectus). Such form may
be delivered by hand or transmitted by facsimile transmission, overnight
courier or mail to the Exchange Agent. Capitalized terms used but not
defined herein have the meanings given to them in the Prospectus.
TO: THE BANK OF NEW YORK, THE EXCHANGE AGENT
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 Floor
Attn: Reorganization Section New York, New York 10286
BY FACSIMILE:
(212) 815-6330
(For Eligible Institutions only)
TO CONFIRM BY TELEPHONE
OR FOR INFORMATION:
(212) 815-5920
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT
CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on
the Letter of Transmittal to be used to tender Original Notes is required to
be guaranteed by an "Eligible Institution" under the instructions thereto,
such signature guarantee must appear in the applicable space provided on the
Letter of Transmittal.
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Garden State Newspapers, Inc., a
Delaware corporation (the "Company"), upon the terms and subject to the
conditions set forth in the Prospectus and the Letter of Transmittal (which
together constitute the "Exchange Offer"), receipt of which is hereby
acknowledged, the principal amount of Original Notes pursuant to the
guaranteed delivery procedures set forth in "The Exchange Offer--Guaranteed
Delivery Procedures" in the Prospectus.
All authority herein conferred or agreed to be conferred by this Notice
of Guaranteed Delivery shall survive the death or incapacity of the
undersigned and every obligation of the undersigned under this Notice of
Guaranteed Delivery shall be binding upon the heirs, personal
representatives, executors, administrators, successors, assigns, trustees in
bankruptcy and other legal representatives of the undersigned.
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NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW.
Principal Amount(s) of Original Notes Name(s) of Record Holder(s)
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PLEASE PRINT OR TYPE
Address
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ZIP CODE
Area Code and Tel. No.
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Certificate Nos. (if available) Signature(s)
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- ------------------------------------- Dated:
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If Original Notes will be delivered
by book-entry transfer at The
Depository Trust Company ("DTC"),
Depository Account
No.:
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This Notice of Guaranteed Delivery must be signed by the Holder(s) of
Original Notes exactly as its (their) name(s) appear(s) on certificates for
Original Notes or on a security position listing as the owner of the Original
Notes, or by person(s) authorized to become Holder(s) by endorsements and
documents transmitted with this Notice of Guaranteed Delivery. If signature
is by a trustee, executor, administrator, guardian, attorney-in-fact, officer
of a corporation or other person acting in a fiduciary or representative
capacity, such person must provide the following information:
Please print name(s) and address(es)
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Name(s)
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Capacity:
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Address(es)
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<PAGE>
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GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, 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 Securities Exchange Act of 1934, as amended (the
"Exchange Act"), hereby guarantees that delivery to the Exchange Agent of
certificates for the Original Notes tendered hereby, in proper form for
transfer (or confirmation of electronic delivery of book-entry transfer of
such Original Notes into the Exchange Agent's account at DTC, pursuant to the
procedures for book-entry transfer set forth in the Prospectus), with
delivery of a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) with any required signature guarantees and
any other required documents, will be received by the Exchange Agent at one
of its addresses set forth above within three New York Stock Exchange trading
days after the date of execution of the Notice of Guaranteed Delivery.
Name of Firm
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AUTHORIZED SIGNATURE
Address Name
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PLEASE PRINT OR TYPE
Title
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ZIP CODE
Area Code & Tel. No. Date
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Dated: , 1999
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NOTE: DO NOT SEND ORIGINAL NOTES WITH THIS FORM; ORIGINAL NOTES SHOULD BE
SENT WITH YOUR LETTER OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE
EXCHANGE AGENT WITHIN THREE NEW YORK STOCK EXCHANGE TRADING DAYS
AFTER THE DATE OF EXECUTION OF THE NOTICE OF GUARANTEED DELIVERY.
<PAGE>
Exhibit 99.3
GARDEN STATE NEWSPAPERS, INC.
OFFER TO EXCHANGE ITS OUTSTANDING
8 5/8% SERIES A SENIOR SUBORDINATED NOTES DUE 2011 FOR
ITS 8 5/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2011 WHICH HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON JULY __, 1999, UNLESS THE OFFER IS EXTENDED.
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________ __, 1999
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
We are enclosing the material listed below relating to the offer of
Garden State Newspapers, Inc., a Delaware corporation (the "Company"), to
exchange $1,000 principal amount of its 8 5/8% Series A Senior Subordinated
Notes due 2011 (the "Original Notes"), of which $200,000,000 aggregate
principal amount is outstanding, for each $1,000 principal amount of its
8 5/8% Series B Senior Subordinated Notes due 2011 (the "Exchange Notes"),
which have been registered under the Securities Act of 1933, as amended, upon
the terms and subject to the conditions set forth in the Prospectus, dated
______ __, 1999 (the "Prospectus") and in the related Letter of Transmittal
(which together constitute the "Exchange Offer").
THE EXCHANGE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF
ORIGINAL NOTES BEING TENDERED. The Exchange Offer is, however, subject to
other conditions. We refer you to the section "The Exchange Offer - Certain
Conditions to the Exchange Offer" in the Prospectus.
We are asking you to contact your clients for whom you hold Original
Notes registered in your name (or in the name of your nominee) or who hold
Original Notes registered in their own names. Please bring the Exchange
Offer to their attention as promptly as possible.
For your information and for forwarding to your clients, we are
enclosing the following documents:
1. The Prospectus, dated _____ __, 1999;
2. The Letter of Transmittal for your use and for the information of
your clients;
3. The Notice of Guaranteed Delivery to be used to accept the
Exchange Offer if the Original Notes are not immediately available or if
the Original Notes and all other required documents cannot be delivered to
the Exchange Agent, The Bank of New York, by the Expiration Date (as
defined in the Prospectus) or if the procedure for book-entry transfer
cannot be completed on a timely basis; and
<PAGE>
2
4. A form of letter which may be sent to your clients for whose
account you hold Original Notes registered in your name or the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Exchange Offer.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE
NOTE THAT THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, JULY __, 1999, UNLESS THE EXCHANGE OFFER IS EXTENDED BY
THE COMPANY.
To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Exchange Agent and certificates representing the Original Notes should be
delivered to the Exchange Agent, all in accordance with the instructions set
forth in the Letter of Transmittal and the Prospectus.
If holders of Original Notes wish to tender, but it is impracticable for
them to forward their certificates for Original Notes prior to the expiration
of the Exchange Offer or to comply with the book-entry transfer procedures on
a timely basis, a tender may be effected by following the guaranteed delivery
procedures described in the Prospectus under "The Exchange Offer --
Guaranteed Delivery Procedures."
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to The Bank of New York, the Exchange
Agent, at the address and telephone number set forth below:
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 Floor
Attn: Reorganization Section New York, New York 10286
BY FACSIMILE:
(212) 815-6330
(For Eligible Institutions only)
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(212) 815-5920
Very truly yours,
GARDEN STATE NEWSPAPERS, INC.
<PAGE>
Exhibit 99.4
GARDEN STATE NEWSPAPERS, INC.
OFFER TO EXCHANGE ITS OUTSTANDING
8 5/8% SERIES A SENIOR SUBORDINATED NOTES DUE 2011 FOR ITS
8 5/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2011 WHICH HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.
NEW YORK CITY TIME, ON JULY __, 1999, UNLESS THE OFFER IS EXTENDED.
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________ ___, 1998
To Our Clients:
Enclosed for your consideration are the Prospectus, dated ________ ___,
1999 (the "Prospectus"), and the related Letter of Transmittal (which
together constitute the "Exchange Offer") setting forth an offer by Garden
State Newspapers, Inc., a Delaware corporation (the "Company"), to exchange
$1,000 principal amount of its 8 5/8% Series A Senior Subordinated Notes due
2011 (the "Original Notes"), of which $200,000,000 aggregate principal amount
is outstanding, for each $1,000 principal amount of its 8 5/8% Series B
Senior Subordinated Notes due 2011 (the "Exchange Notes"), which have been
registered under the Securities Act of 1933, as amended, upon the terms and
subject to the conditions set forth in the Prospectus, dated ______ __, 1999
(the "Prospectus") and in the related Letter of Transmittal (which together
constitute the "Exchange Offer").
WE ARE THE HOLDER OF RECORD OF ORIGINAL NOTES FOR YOUR ACCOUNT. A
TENDER OF SUCH ORIGINAL NOTES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO
YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER ORIGINAL
NOTES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all
of the Original Notes held by us for your account, upon the terms and subject
to the conditions set forth in the Prospectus and the Letter of Transmittal.
Your attention is directed to the following:
(1) The Exchange Offer is for any and all outstanding Original Notes.
(2) The Exchange Offer is not conditioned upon any minimum number of
Original Notes being tendered.
(3) The Exchange Offer is subject to certain conditions set forth in
the Prospectus in the section captioned "The Exchange Offer Certain --
Conditions to the Exchange Offer."
(4) The Exchange Offer and withdrawal rights will expire at
5:00 p.m., New York City time, on July __, 1999, unless the Exchange Offer
is extended. Your instructions to us should be forwarded to us in ample
time to permit us to submit a tender on your behalf.
(5) Any transfer taxes applicable to the exchange of Original Notes
pursuant to the Exchange Offer will be paid by the Company, except as
otherwise provided in Instruction 11 of the Letter of Transmittal.
If you wish to have us tender any or all of your Original Notes held by
us for your account upon the terms and subject to the conditions set forth in
the Exchange Offer, please so instruct us by completing, executing, detaching
and returning to us the instruction form on the detachable part hereof.
<PAGE>
GARDEN STATE NEWSPAPERS, INC.
INSTRUCTIONS WITH RESPECT TO
OFFER TO EXCHANGE ITS OUTSTANDING
8 5/8% SERIES A SENIOR SUBORDINATED NOTES DUE 2011
FOR ITS 8 5/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2011 WHICH HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON JULY __, 1999, UNLESS THE OFFER IS EXTENDED.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Prospectus, dated _______ ___, 1999, and the related Letter of Transmittal
(which together constitute the "Exchange Offer") in connection with the offer
by Garden State Newspapers, Inc., a Delaware corporation (the "Company"), to
exchange $1,000 principal amount of its 8 5/8% Series A Senior Subordinated
Notes due 2011 (the "Original Notes"), of which $200,000,000 aggregate
principal amount is outstanding, for each $1,000 principal amount of its
8 5/8% Series B Senior Subordinated Notes due 2011 (the "Exchange Notes"),
which have been registered under the Securities Act of 1933, as amended, upon
the terms and subject to the conditions set forth in the Prospectus, dated
______ __, 1999 (the "Prospectus") and in the related Letter of Transmittal
(which together constitute the "Exchange Offer").
This will instruct you to tender the Original Notes indicated below held
by you for the account of the undersigned, pursuant to the terms and
conditions set forth in the Prospectus and the related Letter of Transmittal.
(Check one).
Box 1 [ ] Please tender my Original Notes held by you for my account. If I
do not wish to tender all of the Original Notes held by you for
my account, I have identified on a signed schedule attached
hereto the number of Original Notes that I do not wish tendered.
Box 2 [ ] Please do not tender any Original Notes held by you for my
account.
Date ____________________, 1999
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Signature(s)
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Please print name(s) here
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Area code and Telephone No.
Unless a specific contrary instruction is given in the space provided,
your signature(s) hereon shall constitute an instruction to us to tender all
Original Notes.
