AMENDMENT NO. 3 TO FORBEARANCE
AGREEMENT
This Amendment No. 3 to Forbearance Agreement
(this “ Amendment No. 3 ”), dated as of May 28,
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 Amendment
No. 2 to Forbearance Agreement dated as of April 23, 2009 (the
“ April 23 Forbearance Amendment ”, and the
February 26 Forbearance Agreement, as amended by the April 6
Forbearance Amendment and the April 23 Forbearance Amendment, 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 23, 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 Waiver No. 5 (‘ Waiver
No. 5 ”), 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 No. 3 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. 6,
dated as of May 28, 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. 6 ”),
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. 5 (except as
a result of the execution of Waiver No. 6), or, following execution
and effectiveness of Waiver No. 6, any amendment,
waiver, supplementation or modification of Waiver No. 6, 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
June 12, 2009.
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SECTION 2.
Conditions to
Effectiveness. The effectiveness of this Amendment
No. 3 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. 3;
(b) MPG, MCC and the
Administrative Agent shall have executed Waiver No. 6, 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. 3
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. 3,
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 Liens, other than
Permitted Liens in an aggregate amount not exceeding $10.0 million
or as otherwise required under the Credit Agreement, or
(b) entered into any transaction that would be
prohibited by Section 6(d) of the Existing Forbearance
Agreement (as modified by the April 6 Forbearance Amendment) if
entered into after the effective date of the April 6 Forbearance
Amendment.
SECTION 5.
Reference to and Effect Upon the
Existing Forbearance Agreement .
(a) Except as
specifically a
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