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AMENDMENT TO FORBEARANCE AGREEMENT

Default Notice Forbearance Agreement

AMENDMENT TO FORBEARANCE AGREEMENT | Document Parties: Morris Publishing Group, LLC | Morris Publishing Finance Co You are currently viewing:
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Morris Publishing Group, LLC | Morris Publishing Finance Co

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Title: AMENDMENT TO FORBEARANCE AGREEMENT
Governing Law: New York     Date: 8/12/2009
Law Firm: Mayer Brown    

AMENDMENT TO FORBEARANCE AGREEMENT, Parties: morris publishing group  llc , morris publishing finance co
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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:

 


 

 

 

(a)

the acceleration of the maturity of any obligations under the Credit Agreement;

 

 

(b)

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);

 

 

(c)

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;

 

 

(d)

the occurrence of a Default or Event of Default under the Indenture other than the Existing Default or the Payment Default;

 

 

(e)

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;

 

 

(f)

the breach of, or failure of the Morris Companies to comply with, Section 6(b) of this Agreement;

 

 

(g)

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;

 

 

(h)

the failure by the Morris Companies to comply with any term, condition, covenant or agreement contained in this Agreement, or any amendments hereto;

 

 

(i)

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

 

 

(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

 

 

(j)

Waiver No. 4 shall cease to be effective, whether as a result of termination, expiration in accordance with its terms or otherwise.

 


 

 

(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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