AMENDMENT NO. 2 TO FORBEARANCE
AGREEMENT
This Amendment
No. 2 to Forbearance Agreement (this “ Amendment No. 2
”), dated as of April 23, 2009 (the “ Amendment
Date ”), is entered into by and among Morris Publishing
Group, LLC (“ MPG ”) and Morris Publishing
Finance Co. (“ MPF ”) (MPG and MPF, each an
“ Issuer ” and together, the “
Issuers ”), each of the undersigned entities listed as
guarantors (collectively, the “ Guarantors ”),
and each of the undersigned holders of the 7% Senior Subordinated
Notes due 2013 Notes (the “ Notes ”) and/or, to
the extent not signing as a holder, their investment advisors or
managers identified on Annex A hereto (collectively, the
“ Holders ”). Each capitalized term
used herein and not otherwise defined herein shall have the meaning
attributed to such term in the Existing Forbearance Agreement (as
defined below).
W I T N E S S E T
H:
WHEREAS , on February 26, 2009, the Issuers, the
Guarantors and the Holders entered into that certain Forbearance
Agreement, dated as of February 26, 2009 (the “ February
26 Forbearance Agreement ”), as amended by that certain
Amendment to Forbearance Agreement, dated as of April 6, 2009 (the
“ April 6 Forbearance Amendment ”, and the
February 26 Forbearance Agreement, as amended by the April 6
Forbearance Agreement, the “ Existing Forbearance
Agreement ”), pursuant to which the Holders agreed, on
the terms and subject to the conditions set forth therein, to
forbear during the Forbearance Period from taking any Remedial
Action under the Indenture and the Notes, and from directing the
Indenture Trustee to exercise any such rights and remedies on their
behalf resulting from the Existing Default and the Payment
Default;
WHEREAS , on April 6, 2009, MPG, the Credit Parties,
certain lenders party thereto, and JPMorgan Chase Bank, N.A., as
administrative agent (the “ Administrative Agent
”), entered into that certain Amendment No. 5 and Waiver No.
4 (‘ Waiver No. 4 ”), pursuant to which the
Administrative Agent agreed to waive certain defaults under the
Credit Agreement;
WHEREAS , the Morris Companies have requested that the
Holders continue to forbear from taking any Remedial Action under
the Indenture and the Notes, and from directing the Indenture
Trustee to exercise any such rights and remedies on the
Holders’ behalf resulting from the Existing Default or the
Payment Default; and
WHEREAS , subject to the terms and conditions set forth
herein, the Holders have agreed to temporarily continue their
forbearance.
NOW,
THEREFORE , in
consideration of the mutual covenants set forth herein and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree
as follows:
SECTION
1.
Amendments to Existing
Forbearance Agreement.
(a)
From
and after the time this Amendment becomes effective in accordance
with Section 2 hereof, the definition of “Forbearance
Termination Event” in Section 1 of the Existing
Forbearance Agreement shall be amended and restated in its entirety
and shall read as follows:
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the
acceleration of the maturity of any obligations under the Credit
Agreement;
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Waiver No. 5,
dated as of April 23, 2009, by and among MPG, MCC, Morris
Communications Holding Company, LLC, Shivers Trading &
Operating Company, MPG Newspaper Holding, LLC, certain subsidiary
guarantors party thereto, certain lenders party thereto and the
Administrative Agent (“ Waiver No. 5 ”),
relating to the Credit Agreement and/or the Morris Companies’
and MCC’s existing senior secured term and revolving credit
facilities (the “ Senior Secured Credit Facilities
”) shall cease to be effective, whether as a result of
termination, expiration in accordance with its terms or
otherwise;
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any amendment,
waiver, supplementation or modification of Waiver No. 4 (except as
a result of the execution of Waiver No. 5), or, following execution
and effectiveness of Waiver No. 5, any amendment,
waiver, supplementation or modification of Waiver No. 5, in any
such case without the consent of each of the Holders;
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the occurrence
of a Default or Event of Default under the Indenture other than the
Existing Default or the Payment Default;
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the filing of a
bankruptcy case, including, without limitation, a chapter 11
bankruptcy proceeding, by or with respect to any of the Morris
Companies or any subsidiary thereof;
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the breach of,
or failure of the Morris Companies to comply with, Section
6(b) of this Agreement;
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the failure of
any representation or warranty made by the Morris Companies in this
Agreement, or any amendments hereto, to be true and correct in all
material respects as of the date when made;
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the failure by
the Morris Companies to comply with any term, condition, covenant
or agreement contained in this Agreement, or any amendments hereto;
or
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5:00 pm. EDT on
May 28, 2009.
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(b)
From
and after the time this Amendment becomes effective in accordance
with Section 2 hereof, the following covenant shall be added
to the end of Section 6 of the Existing Forbearance
Agreement:
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MPG shall
immediately inform the Advisors in writing in the event that it (i)
retains any attorney, accountant, financial advisor, investment
bank, consultant or expert, whether directly or indirectly, where
the contractual or expected cost of such retention shall exceed
$100,000 on an annual basis (collectively, “
Professionals ”) or (ii) modifies the existing
engagement letter, consulting agreement or other retention
arrangement (as the case may be) for any Professional that it had
previously retained. Within two (2) business days of the
request of the Advisors, MPG shall post the new or revised
engagement letter(s), consulting agreement(s) or other retention
arrangement(s), as applicable, to the VDR.
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SECTION
2.
Conditions to
Effectiveness. The effectiveness of this Amendment
No. 2 shall be subject to the satisfaction of each of the following
conditions:
(a)
the
Holders representing in the aggregate more than seventy-five (75)
percent of the outstanding principal amount of the Notes shall have
executed this Amendment No. 2;
(b)
MPG,
MCC and the Administrative Agent shall have executed Waiver No. 5,
in form and substance acceptable to each of the Holders, and
delivered a copy thereof to Stroock;
(c)
the
Holders shall have received a duly executed counterpart of this
Amendment No. 2 from each Morris Company listed on the signature
pages hereto;
(d)
(1)
each of the representations and warranties made by the Issuers and
the Guarantors in the Indenture, the Existing Forbearance
Agreement, the Notes, and any amendments thereto shall be true and
correct in all material respects on and as of the Amendment Date as
though made on and as of such date (unless any such representation
or warranty relates solely to an earlier date, in which case it
shall have been true and correct in all material respects as of
such earlier date); and (2) no Default or Event of Default (except
with respect to the Existing Default and the Payment Default) shall
have occurred or be continuing as of the Amendment Date;
and
(e)
MPG
shall have paid all outstanding fees and expenses of the
Advisors.
SECTION
3.
Representations of the
Holders. Each
Holder severally (but not jointly) represents that, as of the date
hereof: (i) it is the beneficial owner and/or investment advisor or
manager of discretionary accounts for the holders or beneficial
owners of the aggregate principal amount of the Notes listed
opposite such Holder’s name on the disclosure schedule
attached hereto as Schedule 1 ; and (ii) it has the power
and authority to execute, deliver and perform this Amendment No. 2,
either on its own behalf or on behalf of such holders or beneficial
owners for which it acts as investment advisor or
manager.
SECTION
4.
Representations of the
Issuers . The
Morris Companies represent that, as of the date hereof, since the
Forbearance Effective Date, none of the Morris Companies or their
Restricted Subsidiaries has (a) incurred any Li
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