AMENDMENT TO FORBEARANCE
AGREEMENT
This Amendment
to Forbearance Agreement (this “ Amendment ”),
dated as of April 6, 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 “ 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 February 26, 2009, MPG, the Credit Parties
(as defined below), certain lenders party thereto, and JPMorgan
Chase Bank, N.A., as administrative agent (the “
Administrative Agent ”), entered into that certain
Waiver No. 3, 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. 3,
dated as of February 26, 2009, by and among MCC, MPG and the
Administrative Agent (“ Waiver No. 3 ”),
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 (
provided , however , that the occurrence of the event
described in this subsection (b) shall not be a Forbearance
Termination Event if Waiver No. 4 (as defined below) has been
executed and is in effect at the time of such event);
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any amendment,
waiver, supplementation or modification of Waiver No. 3 (except as
a result of the execution of Waiver No. 4), or, following execution
and effectiveness of Waiver No, 4, any amendment,
waiver, supplementation or modification of Waiver No. 4, 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;
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5:00 p.m. EDT
on April 6, 2009 (the “ Expiration Time ”);
provided , however , that if MPG, MCC and the
Administrative Agent shall have (i) executed a waiver to the Credit
Agreement, in form and substance acceptable to each of the Holders
(“ Waiver No. 4 ”), extending through at least
5:00 pm. EDT on April 24, 2009 the waiver set forth in Section
3(a) of Amendment No. 4 and Waiver No. 2 to the Credit
Agreement and
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(ii) delivered
a copy thereof to Stroock, in each case prior to the Expiration
Time, and Waiver No. 4 shall have taken effect in accordance with
its terms prior to the Expiration Time, then the Expiration Time
shall be deemed extended to 5:00 p.m. EDT on April 24, 2009;
or
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Waiver No. 4
shall cease to be effective, whether as a result of termination,
expiration in accordance with its terms or otherwise.
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(b)
The
following covenants shall be added to the end of Section 6
of the Existing Forbearance Agreement:
(c)
On or
before April 7, 2009, MPG shall furnish to the Advisors a detailed
proposal, as revised from the proposal previously disseminated to
the Advisors on February 17, 2009 by the financial advisors for
MPG, for a potential restructuring transaction of the capital
structure of the Morris Companies that assumes a full repayment of
the existing Loans (as defined in the Credit Agreement as of the
date hereof) under the Credit Agreement as a result of which the
Notes (or any securities into which the Notes are, or may be,
exchanged) would become the Morris Companies’ most senior
class of indebtedness.
(d)
None
of (i) the Morris Companies, Morris Communications Company, LLC
(“ MCC ”), Morris Communications Holding
Company, LLC (“ Holdings ”), Shivers Trading
& Operating Company (“ Shivers ”), MPG
Newspaper Holding, LLC (“ MPG Holdings ”),
certain guarantors party to the Credit Agreement (the “
Credit Guarantors ”; and together with MCC, Holdings,
Shivers and MPG Holdings, the “ Credit Parties
”; such Credit Parties, together with the Morris Companies,
being referred to herein as the “ Obligors ”) or
any of their Affiliates, on the one hand, and (ii) the Morris
Companies or any of their Restricted Subsidiaries, on the other
hand, shall directly or indirectly enter into any transaction in
connection with any refinancing in whole or in part of the existing
Loans if, as a direct or indirect result of such refinancing, any
Affiliate of any of the Obligors shall be either a (1) Lender (as
such term is defined in the Credit Agreement as of the date hereof)
or (2) beneficial owner of Indebtedness of the Morris Companies or
any of their Restricted Subsidiaries where such Indebtedness is
Senior Debt, Guarantor Senior Debt or Designated Senior
Debt.
(e)
None
of the Morris Companies or their Restricted Subsidiaries shall
incur any additional Liens, other than Permitted Liens in an
aggregate amount not to exceed $10.0 million or as otherwise
required under the Credit Agreement, without the prior written
consent of holders of Notes that beneficially own more than
66⅔% of the aggregate principal amount of the Notes
outstanding as of the date thereof; provided ,
however , that any additional Liens incurred in order to
consummate a refinancing of the existing Loans with a Lender that
is not an Affiliate of any Obligor shall be deemed to be
“Permitted Liens”.
(f)
On or
before April 10, 2009, MPG and/or its advisors shall provide to the
Advisors: (i) a verbal description of the status of the potential
sale of MCC Outdoor Holding, LLC, MCC Outdoor, LLC (d/b/a Fairway
Outdoor and Fairway Outdoor Advertising) or their Affiliates (taken
together, the “ Selling Parties ”), or any of
their respective assets;
(ii) all
material documentation relating to such transaction, including
without limitation, copies of any proposal or term sheet, letter of
intent, purchase agreement and any material correspondence (in each
case redacted to the extent necessary to maintain the
confidentiality of a bidder’s identity or otherwise comply
with a confidentiality agreement entered into with a bidder)
prepared or delivered by or to any of the Selling Parties in
connection with such potential transaction that relates to (A) the
bid price or value of the assets being sold or (B) the status of
the transaction; (iii) reasonable access to the legal and financial
advisors to the Selling Parties, who shall furnish the Advisors
with information regarding the potential transaction (including
descriptions of transaction structure and consideration to be
received) and its status; and (iv) information regarding any
Dispositions (as defined in the Credit Agreement as of the date
hereof) in an aggregate amount or fair market value equal to or
greater than $5.0 million.
(g)
On or
before April 10, 2009, MPG shall provide to the Advisors (1)
audited consolidated annual financial information of MCC (including
related footnotes) for the period ended December 31, 2007, and (2)
to the extent already prepared by MCC and the Credit Guarantors for
each of their lines of business, meaningful financial information
reflecting such lines of business’ assets, liabilities,
revenues, related expenses and operating performance, including any
internal operating reports, in each case for 2007, 2008 and 2009,
as prepared on a quarterly basis.
(h)
Contemporaneously with the delivery of such financial information
to the Lenders, MPG shall provide to the Advisors audited
consolidated annual financial information of MCC (including related
footnotes) for the period ended December 31, 2008; provided
, however , if such audited consolidated annual financial
information will not be available on or before April 16, 2009, then
MPG shall provide unaudited consolidated annual financial
information of MCC (including related footnotes to the extent
completed) on or before April 10, 2009 and provide such audited
consolidated annual financial information once such information
becomes available.
(i)
On or
before April 10, 2009, the Morris Companies shall
(i) cause the
members of their tax consolidated group to arrange for the Advisors
to have reasonable access to the internal and external tax advisors
for any of the members in such group, and (ii) schedule a call
between the Advisors and sufficiently qualified and knowledgeable
attorneys at Mayer Brown LLP to discuss both the tax opinion to be
rendered in connection with the corporate reorganization described
in Amendment No. 4 to the Credit Agreement and related tax
issues. Any calls or meetings scheduled pursuant to this
subsection shall occur within two (2) Business Days of being
scheduled, or at a later time provided that all participating
parties shall agree.
(j)
On or
before April 10, 2009, MPG shall schedule calls between the
Advisors and those representatives of the Morris C
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