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Exhibit 2(dd)
DEBENTURE AGREEMENT
This Debenture Agreement (this "Agreement") is made as of October 9, 1996,
among United Magazine Company, an Ohio corporation (the "Company"), each person
who executes a counterpart signature page to this Agreement, who shall be listed
on the schedule attached hereto as Exhibit A (collectively, the "Holders" and
individually, a "Holder"), and ▇▇▇▇ ▇▇▇▇▇▇▇▇, who shall serve as trustee under
this Agreement (the "Trustee").
Background Information
A. Effective July 30 and 31, 1996, the Company entered into agreements
(the "Stock Transfer and Exchange Agreements") pursuant to which the
stockholders of The ▇▇▇▇▇ Companies, an Ohio corporation ("▇▇▇▇▇"), and Michiana
News Service, Inc., a Michigan corporation ("Michiana"), will contribute all of
the shares of stock of ▇▇▇▇▇ and Michiana to the Company in exchange for which
the stockholders of ▇▇▇▇▇ and Michiana will receive common shares of the Company
and senior and subordinated debentures of the Company.
B. Effective July 29, 1996, the Company entered into an asset transfer and
exchange agreement with Northern News Company, effective August 1, 1996, the
Company entered into an asset transfer and exchange agreement with Ohio
Periodical Distributors, Inc. and effective August 2, 1996, the Company entered
into an asset transfer and exchange agreement with Wholesalers Leasing, Inc.
(collectively, the "Asset Transfer Agreements"), pursuant to which assets and
business operations of those entities related to the wholesale distribution of
periodicals will be contributed to the Company in exchange for common shares of
the Company and senior and subordinated debentures of the Company. Effective
August 2, 1996, the Company entered into stock transfer and exchange agreements
(also included within the definition of "Stock Transfer and Exchange Agreements"
pursuant to this Agreement), pursuant to which the stockholders of The ▇▇▇▇▇▇▇
Companies and Read-mor Book Stores, Inc. will contribute all of the shares of
stock of The ▇▇▇▇▇▇▇ Companies and of Read-mor Book Stores, Inc. to the Company
in exchange for which such stockholders will receive common shares of the
Company and senior and subordinated debentures of the Company. The entities
referred to in this paragraph are hereinafter collectively referred to as the
"▇▇▇▇▇▇▇ Companies".
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C. This agreement is being executed in connection with the closing of the
transactions contemplated by the Stock Transfer and Exchange Agreements and the
Asset Transfer Agreements (collectively, the "Acquisition Agreements").
D. The senior and subordinated debentures of the Company (collectively,
the "Debentures") to be issued in connection with the closing of the Acquisition
Agreements are being issued pursuant to the terms and conditions of this
Agreement. Each person who is to receive a Debenture must execute a counterpart
signature page to this Agreement, in the form attached hereto as Exhibit B, and
agree to be bound by the terms and conditions of this Agreement as a condition
to receiving any Debentures.
E. The Trustee is willing to serve as trustee for the Debenture holders
pursuant to the terms and conditions of this Agreement.
Statement of Agreement
The parties hereby acknowledge the accuracy of the above Background
Information and hereby agree as follows:
1. Issuance of Debentures. Upon the execution of this Agreement by the
Company, or from time to time thereafter, the Company may execute and issue
Senior Debentures up to an aggregate principal amount of $41,000,000 and
Subordinated Debentures up to an aggregate principal amount of $33,000,000. The
Acquisition Agreements provide for Senior Debentures and Subordinated Debentures
to be issued to the stockholders of ▇▇▇▇▇ and Michiana and to the ▇▇▇▇▇▇▇
Companies or the shareholders thereof in the following aggregate principal
amounts:
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▇▇▇▇▇▇▇ Companies Michiana Share-
▇▇▇▇▇ Shareholders or Shareholders holders
Principal amount of
Senior Debentures: $16,800,000 $ 9,439,815 $3,500,000
Principal amount of
Subordinated
Debentures: $12,713,689 $ 7,404,646 $2,707,596
Total Principal
Amount: $29,513,689 $16,844,461 $6,207,596
In the event that the Company enters into an agreement for the acquisition,
merger or consolidation of the Company or any of its subsidiaries with the
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ News Company ("▇▇▇▇▇") and if the terms of such acquisition
agreement require it, then the Company may issue up to $11,000,000 of Senior
Debentures and up to $8,000,000 of Subordinated Debentures in connection with
the transactions contemplated by such agreement. The purchase prices and
conversion formulas contained in each acquisition agreement are subject to
adjustment, and the actual amount of Senior and Subordinated Debentures to be
issued to the stockholders of each company and the actual amount to be issued to
each stockholder (or in the case of asset transfer agreements to the
transferring company), shall be the amounts determined pursuant to the
Acquisition Agreements. In the event that such adjustments would require the
issuance of Debentures in excess of the aggregate number of Debentures
authorized pursuant to this Agreement, the amount of Subordinated Debentures
which may be issued pursuant to this Agreement shall be increased to equal the
amount required to be issued pursuant to any such adjustment. The principal
amount of the Senior Debentures issued to the ▇▇▇▇▇ stockholders shall
hereinafter be referred to as the "▇▇▇▇▇ Senior Debt", the principal amount of
the Senior Debentures issued to the ▇▇▇▇▇▇▇ Companies or their stockholders
shall hereinafter be referred to as the "▇▇▇▇▇▇▇ Senior Debt", the principal
amount of the Senior Debentures issued to the Michiana stockholders shall
hereinafter be referred to as the "Michiana Senior Debt" and the principal
amount of any Senior Debentures issued to ▇▇▇▇▇ or the shareholders of ▇▇▇▇▇
shall hereinafter be referred to as the "▇▇▇▇▇ Senior Debt".
2. Terms of Senior Debentures. The Senior Debentures shall be designated as "8%
Senior Debentures Due 2002", shall mature on January 1, 2002, and shall bear
interest at the rate of 8% per annum, from July 1, 1996, provided that interest
on the ▇▇▇▇▇ Senior Debt shall begin to accrue on an effective date set
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forth in an acquisition agreement with ▇▇▇▇▇. Interest shall be payable
quarterly on January 1, April 1, July 1 and October 1, commencing on the later
of October 1, 1996 or the date of final closing of a particular acquisition,
until the principal thereof is paid. Interest on the Senior Debentures shall be
computed on the basis of a year of 12 30-day months. The person in whose name
any Senior Debenture is registered at the close of business on any record date
with respect to any interest payment date shall be entitled to receive the
interest and principal payable with respect to such debenture on such interest
payment date. The term "record date" with respect to any interest payment date
shall mean the December 15, March 15, June 15 or September 15 preceding such
January 1, April 1, July 1 or October 1 interest payment date. Principal on the
Senior Debentures shall be paid quarterly on each interest payment date
(commencing April 1, 1997) as follows:
Payment Date Principal Payment
October 1, 1996 $ 0
January 1, 1997 $ 0
April 1, 1997 $1,250,000
July 1, 1997 $1,250,000
October 1, 1997 $1,250,000
January 1, 1998 $1,250,000
April 1, 1998 $1,562,500
July 1, 1998 $1,562,500
October 1, 1998 $1,562,500
January 1, 1999 $1,562,500
April 1, 1999 $1,562,500
July 1, 1999 $1,562,500
October 1, 1999 $1,562,500
January 1, 2000 $1,562,500
April 1, 2000 $1,562,500
July 1, 2000 $1,562,500
October 1, 2000 $1,562,500
January 1, 2001 $1,562,500
April 1, 2001 $1,562,500
July 1, 2001 $1,562,500
October 1, 2001 $1,562,500
January 1, 2002 $1,562,500
Total $30,000,000
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In the event that Senior Debentures are issued to ▇▇▇▇▇ or the
shareholders of ▇▇▇▇▇, the foregoing payment schedule shall be adjusted by the
Company to reflect the addition of payments of principal on the ▇▇▇▇▇ Senior
Debt.
It is understood and agreed by all parties to this Agreement that the
Senior Debentures, as described in this Agreement, have been created solely to
facilitate a closing on the Stock Transfer and Exchange Agreements and the Asset
Transfer Agreements, as hereinabove referenced. It is, therefore, a requirement
under this Agreement that the Company shall use reasonable efforts to retire the
Senior Debentures as soon as practical either through the acquisition of
additional equity funds or through additional financing. At such time as the
Company obtains such equity funds or new financing which is not allocated for
working capital or other purposes, the first $16,800,000 of such funds shall be
paid first to those persons holding the ▇▇▇▇▇ Senior Debt, and no other holders
of Senior Debentures shall be entitled to any payment of principal from such
funds until the ▇▇▇▇▇ Senior Debt has been paid in full. Thereafter, the next
$9,439,815 of such funds shall be paid first to those persons holding the
▇▇▇▇▇▇▇ Senior Debt, and no other holders of Senior Debentures shall be entitled
to any payment of principal from such funds until the ▇▇▇▇▇▇▇ Senior Debt has
been paid in full. The balance of any such equity funding or new financing shall
then be paid to the holders of all Senior Debentures, pro rata, in proportion to
the principal amount of Senior Debentures held by them. Notwithstanding the
foregoing to the contrary, in the event that Senior Debentures are issued to
▇▇▇▇▇ or the shareholders of ▇▇▇▇▇, then after the ▇▇▇▇▇ Senior Debt has been
paid in full, the balance of such equity funding or new financing shall be paid
to the holders of the ▇▇▇▇▇▇▇ Senior Debt, Michiana Senior Debt and ▇▇▇▇▇ Senior
Debt pro rata, in proportion to the principal amount of Senior Debentures held
by such persons.
Otherwise during the term of this Agreement, quarterly payments of
principal and interest, as scheduled hereinabove, will be paid to the holders of
the Senior Debentures in payment of their quarterly amount due in the following
order: (a) ▇▇▇▇▇ Senior Debt; (b) ▇▇▇▇▇▇▇ Senior Debt; and (c) Majerek Senior
Debt; provided, however, that no holders of Senior Debentures other than the
▇▇▇▇▇ Shareholders shall be entitled to any payment of principal until the ▇▇▇▇▇
Senior Debt has been paid in full, and after payment of the ▇▇▇▇▇ Senior Debt,
no holders of Senior Debentures shall be entitled to any payment of principal
until the ▇▇▇▇▇▇▇ Senior Debt has been paid in full. Notwithstanding the
foregoing to the contrary, in the event that Senior Debentures are issued to
▇▇▇▇▇ or the ▇▇▇▇▇ Shareholders, then after the ▇▇▇▇▇ Senior Debt has been paid
in full, all quarterly payments of principal and interest shall be paid to the
holders of the ▇▇▇▇▇▇▇ Senior Debt, Michiana Senior Debt and ▇▇▇▇▇ Senior Debt,
pro rata, in proportion to the principal amount of Senior Debentures held by
such persons.
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The principal of and interest on the Senior Debentures shall be payable by
check mailed to the addresses of the persons entitled thereto as such addresses
shall appear on the Debenture Register (as defined in Section 14).
3. Terms of Subordinated Debentures. The Subordinated Debentures shall be
designated as "10% Subordinated Debentures Due 2004", shall mature on January 1,
2004, and shall bear interest at the rate of 10% per annum, from July 1, 1996,
provided that interest on the Subordinated Debentures issued to ▇▇▇▇▇ or the
▇▇▇▇▇ Shareholders shall begin to accrue on the effective date set forth in the
acquisition agreement with ▇▇▇▇▇. Interest shall be payable in quarterly
installments on January 1, April 1, July 1 and October 1, commencing on the
later of October 1, 1996 or the date of final closing of a particular
acquisition, until the principal thereof is paid. Interest on the Subordinated
Debentures shall be computed on the basis of a year of 12 30-day months. The
person in whose name any Subordinated Debenture is registered at the close of
business on any record date with respect to any interest payment date shall be
entitled to receive the interest and principal payable on such interest payment
date. The term "record date" with respect to any interest payment date shall
mean the December 15, March 15, June 15 or September 15 preceding such January
1, April 1, July 1 or October 1 interest payment date. Principal on the
Subordinated Debentures shall be paid quarterly on each interest payment date
(commencing April 1, 1999) as follows:
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Payment Date Principal Payment
October 1, 1996 $ 0
January 1, 1997 $ 0
April 1, 1997 $ 0
July 1, 1997 $ 0
October 1, 1997 $ 0
January 1, 1998 $ 0
April 1, 1998 $ 0
July 1, 1998 $ 0
October 1, 1998 $ 0
January 1, 1999 $ 0
April 1, 1999 $1,250,000
July 1, 1999 $1,250,000
October 1, 1999 $1,250,000
January 1, 2000 $1,250,000
April 1, 2000 $1,250,000
July 1, 2000 $1,250,000
October 1, 2000 $1,250,000
January 1, 2001 $1,250,000
April 1, 2001 $1,250,000
July 1, 2001 $1,250,000
October 1, 2001 $1,250,000
January 1, 2002 $1,250,000
April 1, 2002 $1,250,000
July 1, 2002 $1,250,000
October 1, 2002 $1,250,000
January 1, 2003 $1,250,000
April 1, 2003 $1,250,000
July 1, 2003 $1,250,000
October 1, 2003 $1,250,000
January 1, 2004 $1,250,000
Total $25,000,000
provided, however, that no holders of Subordinated Debentures shall be entitled
to any payment of principal until the Senior Debentures have been paid in full.
In the event that a scheduled payment of principal on the Subordinated
Debentures cannot be made because the Senior Debentures have not been paid in
full, then the amount otherwise payable as principal on the Subordinated
Debentures shall be applied to the payment of the Senior Debentures, to the
extent of the outstanding principal and interest thereon. In the event that
Subordinated Debentures are
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issued to ▇▇▇▇▇ or the ▇▇▇▇▇ Shareholders, the foregoing payment schedule shall
be adjusted by the Company to reflect the addition of payments of principal on
such additional Subordinated Debentures.
All holders of Subordinated Debentures shall receive principal payments
pro rata in proportion to the principal amount of Subordinated Debentures held
by them.
The principal of and interest on the Subordinated Debentures shall be
payable by check mailed to the addresses of the persons entitled thereto as such
addresses shall appear on the Debenture Register.
4. Form of Debentures. The Senior Debentures shall be substantially in the
form attached hereto as Exhibit C, and the Subordinated Debentures shall be
substantially in the form attached hereto as Exhibit D.
5. Security and Mortgage Interests. To secure the prompt payment,
performance and observance in full of all obligations of the Company pursuant to
this agreement, the Company and its subsidiaries shall execute security
agreements, in the form attached hereto as Exhibit E (the "Security Agreement"),
granting separate security interests to the Trustee for the benefit of the
holders of the Senior Debentures and for the benefit of the holders of the
Subordinated Debentures in all inventory, accounts receivable, general
intangibles, instruments, records, equipment, supplies, leasehold improvements,
fixtures, furniture, computer software, computer data bases, computers, and all
other tangible and intangible personal property now or hereafter owned, leased
or used in business by the Company and its subsidiaries. In addition, the
Company and its subsidiaries shall execute mortgages, in substantially the form
attached hereto as Exhibit F (the "Mortgages") granting separate mortgages to
the Trustee for the benefit of the holders of the Senior Debentures and for the
benefit of the holders of the Subordinated Debentures in all real property owned
by the Company and its subsidiaries. The Company shall use good faith efforts to
obtain any consents from third parties which may be necessary prior to the
granting of any security interests or mortgages. Financing Statements with
respect to the security interests granted and the Mortgages shall be filed as of
the Escrow Closing or as soon thereafter as is practical, provided that, with
respect to any financing statement or Mortgage not filed as of the Escrow
Closing, such financing statements and Mortgages shall be filed no later than
the final closing. The Company, ▇▇▇▇▇, Michiana and the ▇▇▇▇▇▇▇ Companies, as
the case may be, shall not grant or file any mortgage, security interest or
other lien between the time of the Escrow Closing and the filing of the
mortgages and security agreements in favor of the Trustee, on the property or
other assets subject to such mortgages and security
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agreements. In the event the Company is unable to grant a mortgage or security
interest in any asset because it would cause a default, the Company shall not
grant a mortgage or security interest in such asset to any other party.
(a) The security interests and mortgage interests granted to the Trustee
shall be subordinate only to (a) those existing security interests, mortgages,
liens, encumbrances, easements, restrictions, encroachments or other claims set
forth on Schedule 1 hereto and any refinancing, deferrals, renewals, extensions
and refunding of and amendments, modifications or supplements thereof
(collectively, "Encumbrances"); (b) any Encumbrances granted in conjunction with
debt incurred to prepay or refinance any part of the Senior Debentures; (c)
Encumbrances granted in conjunction with debt incurred for working capital
purposes in an amount [including any debt covered under (a) above] not to
exceed, at any one time, 8% of consolidated net sales; and (d) purchase money
encumbrances granted to secure debt incurred in connection with the purchase of
any asset or equipment for use in the Company's business [collectively, the debt
encompassed by (a), (b), (c) and (d) is referred to as "Senior Indebtedness"],
provided that the Senior Debentures shall have priorities over payments and any
Encumbrances granted in connection with the Subordinated Debentures. The holders
of the Senior Debentures agree to execute any documents necessary to subordinate
their interests to any Encumbrances securing Senior Indebtedness and hereby
authorize the Trustee to execute any such agreement of subordination on their
behalf.
(b) The security interests and mortgage interests granted to the Trustee
for the holders of the Subordinated Debentures shall be subordinate to the
Senior Debentures and to all Senior Indebtedness. Senior Indebtedness with
respect to the Subordinated Debentures shall include Senior Indebtedness as
defined in Paragraph (a) and shall also include the principal of and premium, if
any, and interest on (i) all indebtedness subject to a security interest or
mortgage of the Company and any subsidiary in which it holds at least 51% of the
voting stock ("Controlled Subsidiary"), whether presently existing or hereafter
incurred, including, without limitation; (A) for money borrowed by it or any
Controlled Subsidiary (including lease financing indebtedness); (B) for money
borrowed by others (including lease financing indebtedness) and guaranteed,
directly or indirectly, by the Company or any Controlled Subsidiary; or (C)
constituting purchase money indebtedness, or indebtedness secured by property at
the time of acquisition of such property by the Company or any Controlled
Subsidiary of the Company, for the payment of which the Company or any
Controlled Subsidiary of the Company is directly or contingently liable; and
(ii) all deferrals, renewals, extensions and refunding of, and amendments,
modifications and supplements to, any such indebtedness, provided that by the
terms of the instrument creating or evidencing any such indebtedness referred to
in clause (i) above, it is expressly provided that such
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indebtedness is superior in right of payment to the Subordinated Debentures. As
used herein, the term "purchase money indebtedness" means indebtedness evidenced
by a note, debenture, bond or other instrument (whether or not secured by a lien
or other security interest) issued or assumed as all or a part of the
consideration for the acquisition of property, whether by purchase, merger,
consolidation or otherwise, but does not include any trade accounts payable. In
addition, the Senior Debentures shall constitute Senior Indebtedness with
respect to the Senior Debentures shall constitute Senior Indebtedness with
respect to the Subordinated Debentures. The holders of the Subordinated
Debentures agree to execute any documents necessary to subordinate their
interests to any encumbrances securing debt senior to the Subordinated
Debentures, and hereby authorize the Trustee to execute any such agreement of
subordination on their behalf.
(c) The security interests and mortgages shall be granted to the Trustee
and his successors in trust for the benefit of the holders of the Debentures,
subject to the provisions of this Agreement and of the Security Agreements and
Mortgages. The holders of the Senior Debentures shall be entitled to an equal
and proportionate benefit to the security interests and mortgages granted for
the benefit of the holders of the Senior Debentures, without preference,
priority or distinction of any Senior Debenture holder over any other Senior
Debenture holder. Notwithstanding the foregoing, the holders of the ▇▇▇▇▇ Senior
Debt shall be entitled to be preferred as to payment from any realization upon
any of the collateral for the Senior Debentures and the holders of the ▇▇▇▇▇▇▇
Senior Debt shall be entitled to be preferred as to payment from any realization
upon any collateral for the Senior Debentures after payment of the ▇▇▇▇▇ Senior
Debt, provided that if Senior Debentures have been issued to ▇▇▇▇▇ or the ▇▇▇▇▇
Shareholders, after payment of the ▇▇▇▇▇ Senior Debt, the holders of the ▇▇▇▇▇▇▇
Senior Debt, the Michiana Senior Debt and the ▇▇▇▇▇ Senior Debt shall be
preferred as to payment, pro rata, in proportion to the amount of Senior
Debentures held by them. The holders of the Subordinated Debentures shall be
entitled to an equal and proportionate benefit to the security interests and
mortgages granted for the benefit of the holders of the Subordinated Debentures,
without preference or priority or distinction of any Subordinated Debenture
holder over any other Subordinated Debenture holder.
6. Agreement of Subordination of Debentures. The Company covenants and agrees,
and each Holder of Senior and Subordinated Debentures issued hereunder by his
acceptance thereof likewise covenants and agrees, that all Senior and
Subordinated Debentures shall be issued subject to the provisions of this
section; and each person holding any Senior or Subordinated Debenture, whether
upon original issue or upon transfer or assignment thereof, accepts and agrees
to be bound by such provisions.
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(a) Maturity of Senior Indebtedness. Upon the maturity of any Senior
Indebtedness, by lapse of time, acceleration, or otherwise, no amount shall be
paid by the Company, nor shall the Holder of any Debenture take or receive from
the Company for the account of such Holder, any payment in respect of the
principal of or interest, if any, on such Debenture, unless and until such
matured Senior Indebtedness, and all interest thereon, shall have been paid in
full (to the extent of the security therefor, provided that with respect to
Senior Indebtedness referenced in Sections 5(a)(b) or 5(a)(c), such matured
Senior Indebtedness and all interest thereon shall have been paid in full
whether or not such Senior Indebtedness is fully secured).
(b) Payment Over of Proceeds. Upon any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property, or securities, to creditors upon any dissolution, winding-up,
liquidation, or reorganization of the Company, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership, or other proceedings, all amounts
due or to become due upon all Senior Indebtedness shall first be paid in full,
or payment thereof provided for in money in accordance with its terms (to the
extent of the security therefor, provided that with respect to Senior
Indebtedness referenced in Sections 5(a)(b) or 5(a)(c), such Senior Indebtedness
and all interest thereon, shall have been paid in full or payment thereof
provided for whether or not such Senior Indebtedness is fully secured), before
any payment is made on account of the principal of or interest on the
Debentures, and upon any such dissolution, winding up, liquidation, or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property, or securities, to
which the Holders of the Debentures would be entitled, except for the provisions
of this section, shall (except as aforesaid) be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent, or other person
making such payment or distribution, or by the Holders of the Debentures under
this Agreement if received by them directly, to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear to the extent necessary to pay all
Senior Indebtedness in full, in money or money's worth, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the Holders of the
Debentures.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property, or securities, prohibited by the foregoing, shall be received by the
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Holders of the Debentures before all Senior Indebtedness is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, for application
to the payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in money in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness.
For purposes of this section, the words "cash, property, or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this section with respect to
the Debentures to the payment of all Senior Indebtedness which may at the time
be outstanding; provided that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from such reorganization or readjustment; and
(ii) the rights of the holders of the Senior Indebtedness (other than leases)
and of leases which are assumed are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of the Company
with, or the merger of the Company into, another corporation or the liquidation,
or dissolution of the Company following the conveyance or transfer of its
property as an entirety, or substantially as an entirety, to another corporation
upon the terms and conditions provided for in Section 10 hereof shall not be
deemed a dissolution, winding-up, liquidation, or reorganization for the
purposes of this section if such other corporation shall, as a part of such
consolidation, merger, conveyance, or transfer, comply with the conditions
stated in Section 10 hereof.
(c) Debentures Declared Due. In the event that any of the Debentures are
declared due and payable before their stated maturity because of the occurrence
of an Event of Default (as defined in Section 8), the Holders of the Debentures
shall be entitled to payment only after there shall first have been paid in full
(or such payment shall have been provided for) all Senior Indebtedness referred
to in Sections 5(a)(b) and 5(a)(c) outstanding at the time such Debentures are
declared due and payable and all interest thereon.
(d) Subrogation of Debentures. Subject to the payment in full of all
Senior Indebtedness, the rights of the Holders of the Debentures shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments
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or distributions of cash, property, or securities of the Company applicable to
the Senior Indebtedness until the principal of and interest on the Debentures
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property,
or securities to which the Holders of the Debentures would be entitled except
for the provisions of this section, and no payment over pursuant to the
provisions of this section, to or for the benefit of the holders of Senior
Indebtedness by Holders of the Debentures shall, as between the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Debentures, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness. It is understood that the provisions of this section are
and are intended solely for the purpose of defining the relative rights of the
Holders of the Debentures, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
Nothing contained in this section or elsewhere in this Agreement or
in the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Debentures the principal of and interest on the
Debentures as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders of the Debentures and creditors of the Company other than the holders of
the Senior Indebtedness, nor shall anything herein or therein prevent the Holder
of any Debenture from exercising all remedies otherwise permitted by applicable
law upon default under this Agreement, subject to the rights, if any, under this
section of the holders of Senior Indebtedness in respect of cash, property, or
securities of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred
to in this section, the Holders of the Debentures shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation, or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent, or other person making such payment or distribution, delivered to the
Holders of the Debentures, for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness 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 section.
(e) Payments on Debentures. Except as otherwise set forth in this Section
6, the mere existence of the Senior Indebtedness shall not interfere with or
postpone
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14
the Company's obligation to make the payment of any amount of principal or
interest due on any of the Debentures.
7. Prepayment of Debentures. The Debentures may be redeemed and prepaid at the
discretion of the Company, in whole or from time to time in part, without
premium or penalty, at a redemption price equal to the principal amount thereof
together with accrued interest to the date of redemption. None of the
Subordinated Debentures may be redeemed or prepaid so long as any amount of
principal or interest is outstanding on the Senior Debentures, unless such
amounts are to be paid in full at the time of the redemption of all or a portion
of the Subordinated Debentures.
Until such time as the principal and interest on the ▇▇▇▇▇ Senior Debt has
been paid in full, all prepayments and redemptions of principal on the Senior
Debentures shall be paid to those persons holding the ▇▇▇▇▇ Senior Debt, in
proportion to the principal amount of Senior Debentures held by them, and no
other holders of Senior Debentures shall be entitled to redemption and
prepayment of principal on the Senior Debentures held by them. After the
principal and interest on the ▇▇▇▇▇ Senior Debt has been paid in full, then
until such time as all of the principal and interest on the ▇▇▇▇▇▇▇ Senior Debt
has been paid in full, all prepayments and redemptions of principal on the
Senior Debentures shall be paid to those persons holding the ▇▇▇▇▇▇▇ Senior Debt
in proportion to the principal amount of Senior Debentures held by them, and no
other holders of Senior Debentures shall be entitled to redemption and
prepayment of principal on the Senior Debentures held by them. After the
principal and interest on the ▇▇▇▇▇▇▇ Senior Debt has been paid in full, then
all remaining holders of Senior Debentures shall receive prepayments and
redemptions of principal pro rata in proportion to the principal amount of
Senior Debentures held by them. Notwithstanding the foregoing to the contrary,
if Senior Debentures have been issued to ▇▇▇▇▇ or the ▇▇▇▇▇ Shareholders, then
after principal and interest on the ▇▇▇▇▇ Senior Debt has been paid in full, all
prepayments and redemptions of principal on the Senior Debentures shall be paid
pro rata to the holders of the ▇▇▇▇▇▇▇ Senior Debt, the Michiana Senior Debt and
the ▇▇▇▇▇ Senior Debt in proportion to the principal amount of Senior Debentures
held by them.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than five nor more than 60 days prior to the specified
redemption date, to each Holder of Debentures to be redeemed, at his address
appearing in the Debenture Register. All notices of redemption shall state (a)
the redemption date, (b) the redemption price, (c) if less than all outstanding
Debentures are to be redeemed, the identification (and, in the case of a
Debenture to be redeemed in part, the principal amount of such Debenture) of the
particular Debenture to be
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15
redeemed, and (d) the place or places where such Debentures are to be
surrendered for payment of the redemption price. The Debentures to be redeemed
shall, on the redemption date, become due and payable at the redemption price
and such Debentures shall cease to bear interest. Upon surrender of any such
Debenture for redemption in accordance with the Company's notice, such Debenture
shall be paid by the Company at the redemption price together with accrued
interest to the redemption date. If any Debenture called for redemption shall
not be so paid upon surrender thereof for redemption, the principal shall, until
paid, bear interest from the redemption date at the rate of interest set forth
in Section 2, with respect to Senior Debentures, and in Section 3, with respect
to Subordinated Debentures.
8. Restrictions on the Company.
(a) Executive Committee. The following persons shall serve as members of
any executive committee (the "Executive Committee") pursuant to the terms and
conditions of this Agreement: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "▇▇▇▇▇▇▇ Representative"),
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. (the "▇▇▇▇▇ Representatives") and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Michiana Representative"). In the event that the
Company enters into an agreement for the acquisition, merger or consolidation of
the Company or any of its subsidiaries with the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ News Co., and if
the terms of such acquisition agreement require it, then ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ shall
also become a member of the Executive Committee (the "▇▇▇▇▇ Representative").
(b) Voting in Connection with Future Acquisitions. Until such time as
$12,000,000 of the principal amount of the ▇▇▇▇▇ Senior Debt, and all accrued
interest thereon, has been paid in full, the Company shall not enter into any
agreement to acquire the assets of any person, whether by stock acquisition,
asset acquisition, merger, consolidation or otherwise (each, an "Acquisition"),
nor propose an Acquisition to its shareholders except after first complying with
the procedures set forth in this Section 8(b). In the event of any Acquisition
which the Company desires to consummate, then the Company shall give notice to
each of the members of the Executive Committee. Each member of the Executive
Committee will have ten days after receipt of such notice to request a review by
the Executive Committee, and if any member of the Executive Committee has not
submitted such written request to the Chairman of the Company within ten days of
the notice from the Company, then the Company may proceed with the Acquisition.
If any member of the Executive Committee submits a written request within such
ten day period, then the Company shall not proceed with such Acquisition unless
the Acquisition has first been approved by a majority of the members of the
Executive Committee. Upon payment of the $12,000,000, and accrued interest, on
the ▇▇▇▇▇ Senior Debt, the provisions of this Section 8(b) shall be deemed null
and void.
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16
(c) Consolidation of Operations. Until such time as $12,000,000 of the
principal amount of the ▇▇▇▇▇ Senior Debt, and all accrued interest thereon, has
been paid in full, the Company shall not proceed with any plant closing or other
similar consolidation of the operations of ▇▇▇▇▇, Michiana, The ▇▇▇▇▇▇▇
Companies, Ohio Periodical Distributors, Inc., Northern News Company, MacGregor
News Company and the Company, except after first complying with the procedures
set forth in this Section 8(c). In the event that any such proposed
consolidation involves a plant closing or other material change affecting the
operations formerly operated by The ▇▇▇▇▇ Companies, then the Company shall give
notice to the ▇▇▇▇▇ Representatives of any such proposed consolidation. The
▇▇▇▇▇ Representatives will have ten days after receipt of such notice to request
a review by the Executive Committee, and if neither of the ▇▇▇▇▇ Representatives
has submitted such written request to the Chairman of the Company within ten
days of the notice from the Company, then the Company may proceed with such
proposed consolidation. If either of the ▇▇▇▇▇ Representatives submits a written
request within such ten day period, then the Company shall not proceed with the
proposed consolidation unless such consolidation has been approved by at least a
majority of the members of the Executive Committee. In the event that a proposed
consolidation involves a plant closing or other material change affecting the
operations formerly operated by Michiana, then the Company shall give notice to
the Michiana Representative of such proposed consolidation. The Michiana
Representative will have ten days after receipt of such notice to request a
review by the Executive Committee. If the Michiana Representative has not
submitted such written request to the Chairman of the Company within ten days of
the notice from the Company, then the Company may proceed with such proposed
consolidation. If the Michiana Representative submits a written request within
such ten day period, then the Company shall not proceed with the proposed
consolidation unless such consolidation has been approved by at least a majority
of the members of the Executive Committee. In the event that a proposed
consolidation involves a plant closing or other material change in the
operations formerly operated by The ▇▇▇▇▇▇▇ Companies, Ohio Periodical
Distributors, Inc., Northern News Company or MacGregor News Company, then the
Company shall give notice to the ▇▇▇▇▇▇▇ Representative of such proposed
consolidation, and if the ▇▇▇▇▇▇▇ Representative has not submitted such a
written request to the Chairman of the Company within ten days of the notice
from the Company, then the Company may proceed with the proposed consolidation
unless such consolidation has been approved by at least a majority of the
members of the Executive Committee. In the event that the Company enters into an
agreement for the acquisition, merger or consolidation of the Company or any of
its subsidiaries with the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ News Co., and if required by the terms
of such acquisition agreement, then until such time as the $12,000,000 principal
amount of Senior Debentures issued to the former shareholders of The ▇▇▇▇▇
Companies, and all accrued interest thereon, has been
- 16 -
17
paid in full, then in the event the Company proposes a consolidation involving a
plant closing or other material change affecting the operations formerly
operated by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Co. ("▇▇▇▇▇"), then the Company shall give notice to
the ▇▇▇▇▇ Representative of any such proposed consolidation. The ▇▇▇▇▇
Representative will have ten days after receipt of such notice to request a
review by the Executive Committee, and if the ▇▇▇▇▇ Representative has not
submitted such written request to the Chairman of the Company within ten days of
the notice from the Company, then the Company may proceed with such
consolidation. If the ▇▇▇▇▇ Representative submits a written request within such
ten day period, then the Company shall not proceed with the proposed
consolidation unless such consolidation has been approved by at least a majority
of the members of the Executive Committee. Each of the shareholders shall vote
the Shares owned by him or her with respect to any consolidation subject to this
Section 8(c) in the manner directed by a majority or more of the members of the
Executive Committee. Upon the payment of the $12,000,000, and accrued interest,
on the ▇▇▇▇▇ Senior Debt, the provisions of this Section 8(c) shall be deemed
null and void.
(d) Successor Executive Committee Members. In the event that any member of
the Executive Committee dies, resigns or for any other reason is unable to
continue serving as a member of the Executive Committee, then the vacancy shall
be filled: (a) in the case of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. or ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. or their
successors, by a majority vote of the Shareholders who were formerly
shareholders of The ▇▇▇▇▇ Companies; (b) in the case of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or his
successor, by a majority vote of the Shareholders who were formerly shareholders
of Michiana; (c) in the case of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or his successor, by a
majority vote of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or his successor in interest; and (d) in the
case of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or his successor, by a majority vote of the Shareholders
who were formerly shareholders of ▇▇▇▇▇. Shareholders who are entitled to
appoint an Executive Committee member to fill a vacancy may also remove a member
from such Executive Committee position in the same manner and by the same vote.
9. Events of Default. The following shall be deemed Events of Default by the
Company with respect to the Debentures and a breach of this Agreement:
(a) Failure to pay any installment of interest upon any of the Debentures
as and when the same shall become due and payable, and continuance of such
failure for a period of 30 days after written notice of such failure from the
Trustee; or
(b) Failure to pay the principal of any of the Debentures as and when the
same shall become due and payable, by declaration or otherwise, and the
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18
continuance of such failure for a period of 30 days after written notice of such
failure from the Trustee; or
(c) Failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Debentures or in this Agreement with respect to the Debentures which has
continued for a period of 60 days after the date on which written notice of such
failure, requiring the Company to remedy the same, shall have been given to the
Company by the Trustee; or
(d) Failure on the part of the Company or any subsidiary to perform,
observe or satisfy any obligation or agreement under any security agreement or
mortgage in favor of the Trustee which has continued for a period of 60 days
after the date on which written notice of such failure, requiring the Company to
remedy the same, shall have been given to the Company by the Trustee; or
(e) Commencement by the Company of a voluntary case or other proceeding
seeking liquidation, reorganization, or other relief with respect to itself or
its debts under any bankruptcy, insolvency, or other similar laws now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or any substantial part
of its property, or consent by the Company to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or the making of a general assignment
for the benefit of creditors, or a failure generally to pay its debts as they
become due; or
(f) An involuntary case or other proceeding shall be commenced against the
Company seeking liquidation, reorganization, or other relief with respect to it
or its debts under any bankruptcy, insolvency, or other similar laws now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or any substantial part
of its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 90 consecutive days.
Upon the occurrence of any Event of Default set forth at Sections 8(e) or
(f), all of the principal and accrued interest then outstanding on all of the
Debentures shall automatically without any action by the Trustee, and without
demand, notice or legal process of any kind, be declared, and immediately shall
become, due and payable in full. Upon the occurrence of any Event of Default set
forth at Sections 8(a), (b), (c) or (d), or at any time thereafter, unless the
principal of all of the Debentures shall have already become due and payable,
the Trustee, by one or more notices in writing to the Company, may declare the
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19
principal of all the Senior Debentures, or the principal of all the Senior and
Subordinated Debentures, and the interest accrued thereon to be due and payable
immediately, and upon any such declaration, the same shall become and shall be
immediately due and payable, anything in this Agreement or in the Debentures
contained to the contrary notwithstanding; provided, however, that if, at any
time after the principal of the Debentures shall have been so declared due and
payable, and before any judgment or decree for the payment of the monies due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Debentures and the principal of any and
all Debentures which shall have become due otherwise than by acceleration [with
interest on overdue installments of interest (to the extent that payment of such
interest in enforceable under applicable law) and on such principal at the rate
borne by the Debentures, to the date of such payment or deposit] and the
expenses of such trustee, if any, and all defaults under this Agreement, other
than the nonpayment of principal of and accrued interest on Debentures which
shall have become due by acceleration, shall have been remedied, then and in
every such case, the Trustee, by one or more written notices to the Company,
shall waive all defaults and rescind and annul such declaration and its
consequences; but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair any right consequent
thereon. Upon the occurrence and continuance of an Event of Default, the trustee
may pursue any other remedy available to enforce payment of any payments due
under the Debentures.
10. Consolidation, Merger, Sale, Conveyance and Lease.
(a) Company May Consolidate, Etc. on Certain Terms. Subject to the
provisions of Section 8(b) and (c) and of subsection (b) of this section, the
Trustee shall not unreasonably withhold consent to any consolidation or merger
of the Company with or into any other corporation or corporations (whether or
not affiliated with the Company), or successive consolidations or mergers in
which the Company or its successor or successors shall be a party or parties, or
any sale, conveyance or lease (or successive sales, conveyances or leases) of
all or substantially all of the property of the Company, to any other
corporation (whether or not affiliated with the Company) authorized to acquire
and operate the same and which shall be organized under the laws of a State of
the United States or the District of Columbia; provided, however, and the
Company hereby covenants and agrees, that (i) upon any such consolidation,
merger, sale, conveyance or lease, the due and punctual payment of the principal
and interest on all of the Debentures, according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
this Agreement to be performed by the Company with respect to the Debentures,
shall be expressly assumed by the corporation or other
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20
entity (if other than the Company) formed by such consolidation, or into which
the Company shall have been merged, or by the corporation or other entity which
shall have acquired or leased such property; and (ii) the successor provides
similar security for the payment of the Debentures. Nothing herein, however,
shall be deemed to be a relinquishment of the Trustee's right to the proceeds of
any sale or transfer of any collateral in which he has a lien.
(b) Until such time as all of the outstanding Debentures and all accrued
interest thereon have been paid in full, the Company shall be subject to the
terms of the Shareholders Voting Agreement executed pursuant to Section 12.
(c) Successor Corporation to be Substituted. In case of any consolidation,
merger, sale, conveyance, or lease permitted under the provisions of subsection
(a) of this section, and upon the assumption by the successor corporation or
entity of the due and punctual payment of the principal of and interest on all
of the Debentures and the due and punctual performance of all of the covenants
and conditions of this Agreement to be performed by the Company with respect to
the Debentures, such successor corporation or entity shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the Company. Such successor corporation or entity thereupon may cause to be
signed, and may issue either in its own name or in the name of United Magazine
Company any or all of the Debentures issuable hereunder which theretofore shall
not have been signed and issued by the Company. All the Debentures so issued
shall in all respects have the same legal rank and benefit under this Agreement
as the Debentures theretofore or thereafter issued in accordance with the terms
of this Agreement as though all of such Debentures had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or
lease, such changes in phraseology and form (but not in substance) may be made
in the Debentures thereafter to be issued as may be appropriate.
11. Payment of Principal, Premium and Interest. The Company covenants and agrees
that it will duly and punctually pay or cause to be paid the principal of and
interest accrued on each of the Debentures at the places, at the respective
times, and in the manner provided herein and in the Debentures. Each installment
of interest on the Debentures may be paid by mailing checks for the interest
payable to or upon the written order of the Holders of Debentures entitled
thereto as they shall appear on the Debenture Register.
The Company shall, on or before each due date of the principal of or
interest on the Debentures, set aside and segregate for the benefit of the
Holders
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21
of the Debentures a sum sufficient to pay such principal or interest so becoming
due. If requested by the Trustee to do so, the Company shall pay any amount of
principal or interest due to the Debenture holder to the Trustee, and the
Trustee shall hold all sums held by it as such agent for the payment of the
principal of or interest on the Debentures (whether such sums have been paid to
it by the Company or by any other obligor on the Debentures) in trust for the
benefit of the Holders of the Debentures and shall pay such sums to the
appropriate Debenture holders on the applicable payment date. In such event, the
Company will, prior to each due date of the principal of or interest on the
Debentures, deposit with the Trustee a sum sufficient to pay such principal or
interest.
12. Special Voting Arrangement. Upon execution of this Agreement, and as a
condition thereto, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, certain ▇▇▇▇▇▇▇
corporations and the shareholders of ▇▇▇▇▇ and Michiana, shall enter into a
Shareholders Voting Agreement substantially in the form attached hereto as
Exhibit G.
The Company shall use reasonable efforts to obtain, as soon as possible,
funding from outside sources, such as new bank debt, mezzanine or bridge loan
financing, equity placement, or public offering of shares, in order to raise
funds in order to prepay and redeem all of the Senior Debentures.
13. Provisions Regarding the Trustee. The Trustee hereby accepts the trusts
imposed upon him by this Agreement, and agrees to observe and perform those
trusts, but only upon and subject to the terms and conditions set forth in this
Section, to all of which the parties hereto and the Holders of the Debentures
agree.
(a) In case a default or an Event of Default has occurred and is
continuing hereunder (of which the Trustee has been notified, or is deemed to
have notice), the Trustee may exercise those rights and powers vested in him by
this Agreement, and shall use the same degree of care and skill in his exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) No provisions of this Agreement shall be construed to relieve the
Trustee from liability for his own negligent action, his own negligent failure
to act, or his own willful or intentional misconduct, except that:
(i) The Trustee shall not be liable with respect to any action taken
or omitted to be taken by him in good faith in accordance with the
direction of the Holders of not less than a majority in principal amount
of the Debentures then outstanding relating to the time, method and place
of
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22
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(ii) No provision of this Agreement shall require the Trustee to
expend or risk his own funds or otherwise incur any financial liability in
the performance of any of his duties hereunder, or in the exercise of any
of his rights or powers if adequate indemnity against such risk or
liability is not received by him;
(iii) The Trustee shall be entitled to the advice of counsel
concerning all matters of trusts hereof and duties hereunder. The Trustee
may act upon the opinion or advice of any attorney (who may be the
attorney or attorneys for the Company) approved by the Trustee in the
exercise of reasonable care. The Trustee shall not be responsible for any
loss or damage resulting from any action taken or omitted to be taken in
good faith in reliance upon that opinion or advice; and
(iv) In the absence of bad faith or gross negligence on his part,
the Trustee shall be protected in acting upon any notice, request,
consent, certificate order, affidavit, letter, telegram or other paper or
document reasonably believed by him to be genuine and correct and to have
been signed or sent by the proper person or persons. Any action taken by
the Trustee pursuant to this Agreement upon the request or authority or
consent of any person who is the Holder of any Debentures at the time of
making the request or giving the authority or consent, shall be conclusive
and binding upon all future Holders of the same Debentures issued in
exchange therefor or in place thereof.
(c) Unless otherwise provided herein, all moneys received by the Trustee
under this Agreement shall be held in trust for the purpose for which those
moneys were received, until those moneys are used, applied or invested as
provided herein; provided, that those moneys need not be segregated from other
moneys, except to the extent required by this Agreement or by law.
(d) The Trustee shall be entitled to a trustee's fee from the Company in
the amount of $5,000 per year. In addition, the Trustee shall be entitled to
reimbursement from the Company of all expenses, including legal fees reasonably
and necessarily paid or incurred by him in connection with the provision of
services hereunder.
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23
(e) Resignation by the Trustee. The Trustee may resign at any time from
the trusts created hereby by giving written notice of the resignation to the
Company and the Debenture holders as their names and addresses appear on the
Debenture Register, at the close of business 15 days prior to the mailing. The
resignation shall take effect upon the appointment of a successor Trustee.
(f) Removal of the Trustee. The Trustee may be removed in the manner set
forth in this Section 13(f). Until such time as $12,000,000 of the principal
amount of the ▇▇▇▇▇ Senior Debt, and all accrued interest thereon, has been paid
in full, the initial Trustee (i.e. ▇▇▇▇ ▇▇▇▇▇▇▇▇) may be removed at any time by
an instrument or document or concurrent instruments or documents in writing
delivered to ▇▇. ▇▇▇▇▇▇▇▇ and signed by all of the members of the Executive
Committee. After the earlier of (i) the removal of the initial Trustee or (ii)
the payment of $12,000,000 of the ▇▇▇▇▇ Senior Debt as described above,
whichever is the first to occur, the Trustee may be removed at any time by an
instrument or document or concurrent instruments or documents in writing
delivered to the Trustee, with copies thereof mailed to the Company, and signed
by or on behalf of the Holders of not less than a majority in aggregate
principal amount of the Debentures then outstanding.
The trustee also may be removed at any time for any breach of trust
or for acting or proceeding in violation of, or for failing to act or proceed in
accordance with, any provision of this Agreement with respect to the duties and
obligations of the Trustee by any court of competent jurisdiction upon the
application of the Holders of not less than 20 percent in aggregate principal
amount of the Debentures then outstanding under this Agreement.
Any removal of the Trustee shall take effect upon the appointment of
a successor Trustee by the Holders or the court, respectively.
(g) Appointment of Successor Trustee. If the Trustee shall resign, be
removed, or become otherwise incapable of acting hereunder, then a successor
Trustee shall be appointed in the manner set forth in this Section 13(g). Until
such time as $12,000,000 of the principal amount of the ▇▇▇▇▇ Senior Debt, and
all accrued interest thereon, has been paid in full, a successor to the initial
Trustee (i.e. ▇▇▇▇ ▇▇▇▇▇▇▇▇) shall be appointed by the Executive Committee by an
instrument or document or concurrent instruments or documents in writing signed
by all of the members of the Executive Committee. After the earlier of (i) the
appointment of a successor to the initial Trustee by the Executive Committee or
(ii) the payment of $12,000,000 of the ▇▇▇▇▇ Senior Debt as described above,
whichever is the first to occur, any successor Trustee shall be appointed by the
holders of a majority in aggregate principal amount of the Debentures then
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24
outstanding by instrument or document or concurrent instruments or documents in
writing signed by or on behalf of those Holders. If no appointment of a
successor Trustee shall be made pursuant to the foregoing provisions of this
Section, the holder of any Debentures outstanding hereunder or any retiring
Trustee may apply to any court of competent jurisdiction to appoint a successor
Trustee. Such court may thereupon, after such notice, if any, as such court may
deem proper and prescribe, appoint a successor Trustee.
Every successor Trustee appointed hereunder shall execute and
acknowledge, and shall deliver to its predecessor and the Company, an instrument
or document in writing accepting the appointment. Thereupon, without any further
act, the successor shall become vested with all of the trust, properties,
remedies, powers, rights, duties, obligations, discretions, privileges, claims,
demands, causes of action, immunities, estates, titles, interests and liens of
its predecessor. Upon the written request of its successor or the Company, the
predecessor Trustee (a) shall execute and deliver an instrument or document
transferring to his successor all of the trusts, properties, remedies, powers,
rights, duties, obligations, discretions, privileges, claims, demands, causes of
action, immunities, estates, titles, interests and liens of the predecessor
Trustee hereunder, and (b) shall take any other action necessary to duly assign,
transfer and deliver to its successor all property (including, without
limitation, all securities and moneys) held by him as Trustee.
14. Execution, Delivery, and Dating. The Debentures shall be executed on behalf
of the Company by its Chairman or its President, and by its Secretary or
Assistant Secretary or its Treasurer or Assistant Treasurer under its corporate
seal, if any, reproduced thereon. Provided that if such certificates are
countersigned by a transfer agent or registrar, the signatures of any of such
officers and the seal of the Company upon such certificates may be facsimiles,
engraved, stamped, or printed.
Debentures bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the execution and delivery of such Debentures or did not hold
such offices at the date of such Debentures. Each Debenture shall be dated the
date of its issuance.
15. Registration of Transfer and Exchange. The Company shall cause to be
kept a register (herein sometimes referred to as the "Debenture Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Debentures and of transfers of Debentures.
The
- 24 -
25
Company is hereby appointed "Registrar" for the purpose of registering
Debentures and transfers thereof as herein provided. Unless and until otherwise
determined by the Company, the Company shall act as Debenture Registrar and the
Debenture Register shall be kept at the offices of the Company.
Upon surrender for registration of transfer of any Debenture at the office
of the Company in Dublin, Ohio, maintained for such purpose, the Company shall
execute and deliver, in the name of the designated transferee or transferees,
one or more new Debentures of any authorized denomination or denominations, of a
like aggregate principal amount.
At the option of the Holder, Debenture certificates may be exchanged for
other certificates of any authorized denomination or denominations, of a like
aggregate principal amount, upon surrender of the Debentures to be exchanged at
such office. All Debentures issued upon any registration of transfer or exchange
of Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Agreement as the Debentures
surrendered upon such registration of transfer or exchange.
Every Debenture certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company duly executed, by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer, registration of transfer, or exchange.
16. Mutilated, Destroyed, Lost or Stolen Certificates. If any mutilated
Debenture certificate is surrendered to the Company, or the Company receives
evidence to its satisfaction of the destruction, loss, or theft of any Debenture
certificate and there is delivered to the Company such security or indemnity as
may be required by it to save it harmless, then, in the absence of notice to the
Company that such certificate has been acquired by a bona fide purchaser, the
Company shall execute and deliver, in exchange for any such mutilated
certificate or in lieu of any such destroyed, lost, or stolen certificate, a new
certificate of like tenor and principal amount.
- 25 -
26
In case any such mutilated, destroyed, lost, or stolen Debenture has
become or is about to become due and payable, the Company, in its discretion,
may, instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new certificate under this section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith.
Every new certificate issued pursuant to this section in lieu of any
destroyed, lost, or stolen Debenture shall constitute a substituted contractual
obligation of the Company, whether or not the destroyed, lost, or stolen
certificate shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately with any and all
other certificates duly issued hereunder.
The provisions of this section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost, or stolen certificates.
17. Satisfaction and Discharge of Agreement. This Agreement shall cease to be of
further effect when the Company has paid or caused to be paid all sums payable
hereunder by the Company with respect to the Debentures or all of the Debentures
have been redeemed and the Company has paid all sums due upon redemption.
18. Restrictions on Transfer. The transfer of the Debentures issued pursuant to
this Agreement is restricted and shall not be effected without the Company's
consent except to a purchaser's spouse, parents, grandparents, children,
grandchildren, or siblings, or to the trustee of a trust for the principal
benefit of one or more such persons. In addition, no transfer may be effected
unless the Debentures have been duly registered under all applicable federal and
state securities laws pursuant to then-effective registrations which contemplate
the proposed transfer or unless the Company has received a written opinion of,
or satisfactory to, its legal counsel that the proposed transfer is exempt from
any such registration. Each certificate evidencing the ownership of Debentures
shall be imprinted with a legend stating that they have not been registered
under the Securities Act of 1933, as amended, and may set forth the limitations
on resale or transfer contained in or contemplated by this Agreement. All
restrictions on transfer shall apply to a transferee.
- 26 -
27
19. Stop Transfer Instructions. The Company shall have the right at any time to
issue such "stop transfer" instructions to the Debenture Registrar, if any, as
the Company may deem necessary or appropriate from time to time to prevent any
transfer of the Debentures which is not permitted under this Agreement.
20. Amendments. This Agreement may be amended or superseded in whole or in part
by a subsequent agreement, in writing, executed by the Company, the Trustee and
a majority of the holders of Debentures outstanding at the time of such
amendment.
21. Provisions Binding on Company's Successors. All the covenants,
stipulations, promises and agreements in this Agreement by the Company shall
bind its successors and assigns whether so expressed or not.
22. Official Acts by Successor Corporation. Any act or proceeding by any
provision of this Agreement authorized or required to be done or performed by
any board, committee or officer of the Company shall and may be done and
performed with like force and effect by the like board, committee, or officer of
any corporation that shall at the time be the lawful sole successor of the
Company.
23. Addresses for Notices. Any notice or demand which by any provision of this
Agreement is required or permitted to be given or served may be given or served
by being deposited, postage prepaid, by registered or certified mail, addressed
to that party at, or delivered to, the address specified below:
(a) If to the Company:
United Magazine Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
- 27 -
28
(b) If to the Holders:
The respective address of the Holders set forth on the attached
Exhibit A.
(c) If to the Trustee:
▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Any party may change their respective address listed above or on Exhibit A
by giving the other parties notice of such change.
24. Governing Law. This Agreement and each Debenture shall be deemed to be a
contract made under the laws of the State of Ohio, and for all purposes shall be
construed in accordance with the laws of the State of Ohio, exclusive of
conflict of law principles.
25. Legal Holidays. In any case where the date of maturity of interest on or
principal of the Debentures will be in the City of Columbus, Ohio, a legal
holiday or a day on which banking institutions are authorized by law or
executive order to close ("Legal Holidays"), then payment of such interest on or
principal of the Debentures need not be made on such date but may be made on the
next succeeding day not a Legal Holiday with the same force and effect as if
made on the date of maturity and no interest shall accrue for the period from
and after such date.
26. Benefits of Agreement. Nothing in this Agreement or in the Debentures,
express or implied, shall give to any person, other than the parties hereto and
their successors hereunder, the Holders and the holders of Senior Indebtedness,
any benefit or any legal or equitable right, remedy or claim under this
Agreement.
27. Headings. The titles and headings of the sections of this Agreement have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
- 28 -
29
28. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
UNITED MAGAZINE COMPANY
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman
- 29 -
30
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement,
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company,
an Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those person who have executed counterpart signature
pages to the Agreement pursuant to the terms of the Agreement, who are to be
listed in Exhibit A to the Agreement, hereby agrees to all of the terms and
conditions of the Agreement and to be bound by all of the terms and provisions
thereof.
Dated: October 9, 1996 NORTHERN NEWS COMPANY
a Michigan corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Treasurer
31
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of September 6, 1996 (the "Agreement"), among United Magazine Company,
an Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 21, 1996
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Print Name)
32
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of September 6, 1996 (the "Agreement"), among United Magazine Company,
an Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 21, 1996
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Print Name)
33
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of September 6, 1996 (the "Agreement"), among United Magazine Company,
an Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 21, 1996
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Print Name)
34
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of September 6, 1996 (the "Agreement"), among United Magazine Company,
an Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 21, 1996
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Print Name)
35
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of September 6, 1996 (the "Agreement"), among United Magazine Company,
an Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 21, 1996
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Print Name)
36
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of September 6, 1996 (the "Agreement"), among United Magazine Company,
an Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 21, 1996
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Print Name)
37
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of September 6, 1996 (the "Agreement"), among United Magazine Company,
an Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 21, 1996
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
(Print Name)
38
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of September 6, 1996 (the "Agreement"), among United Magazine Company,
an Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: Oct. 21, 1996
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Print Name)
39
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of September 6, 1996 (the "Agreement"), among United Magazine Company,
an Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: Oct. 21, 1996
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
(Print Name)
40
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Trustee
----------------------------------
(Print Name)
41
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------
(Print Name)
42
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
(Print Name)
43
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
(Print Name)
44
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: Oct. 24, 1996
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
(Print Name)
45
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Print Name)
46
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
(Print Name)
47
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
(Print Name)
48
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Print Name)
49
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
(Print Name)
50
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Print Name)
51
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: October 24, 1996
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Print Name)
52
EXHIBIT A
UNITED MAGAZINE COMPANY
LIST OF DEBENTURE HOLDERS
[SEE EXHIBITS ▇-▇, ▇-▇, ▇▇▇ ▇-▇ ▇▇▇▇▇▇▇▇▇]
53
EXHIBIT A-1
▇▇▇▇▇ Debenture Holders
Debenture holder Principal Amount of Principal Amount of
Name and Address Senior Debentures Held Subordinated Debentures Held
---------------- ---------------------- ----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Trustee $3,360,000 $2,542,700
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. $1,221,696 $ 924,540
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇ $1,221,696 $ 924,540
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ $1,221,696 $ 924,540
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
#▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ $1,221,696 $ 924,540
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
#▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ $1,221,696 $ 924,540
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $1,221,696 $ 924,540
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
[Continued on following page.]
54
EXHIBIT A-1 (cont'd)
▇▇▇▇▇ Debenture Holders
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ 1,221,696 $ 924,540
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ $ 1,222,032 $ 924,800
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇.▇.
#▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ $ 1,222,032 $ 924,800
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ $ 1,222,032 $ 924,800
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇. #▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ $ 1,222,032 $ 924,800
----------- -----------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
#▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TOTAL $16,800,000 $12,713,680
55
EXHIBIT A-2
▇▇▇▇▇▇▇ Debenture Holders
Debenture holder Principal Amount of Principal Amount of
Name and Address Senior Debentures Held Subordinated Debentures Held
---------------- ---------------------- ----------------------------
Northern News Company $1,423,384 $1,093,653
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ---------- ----------
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
TOTAL $1,423,384 $1,093,653
56
EXHIBIT A-3
Michiana Debenture Holders
Debenture holder Principal Amount of Principal Amount of
Name and Address Senior Debentures Held Subordinated Debentures Held
---------------- ---------------------- ----------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $1,785,000 $ 1,380,873.96
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 332,500 $ 257,221.62
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 332,500 $ 257,221.62
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 175,000 $ 135,379.80
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 175,000 $ 135,379.80
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 175,000 $ 135,379.80
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $ 175,000 $ 135,379.80
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 175,000 $ 135,379.80
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 175,000 $ 135,379.80
---------- ----------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TOTAL $3,500,000 $ 2,707,596
57
EXHIBIT B
UNITED MAGAZINE COMPANY
SIGNATURE PAGE
TO
DEBENTURE AGREEMENT
The undersigned, desiring to become a party to the Debenture Agreement
dated as of October 9, 1996 (the "Agreement"), among United Magazine Company, an
Ohio corporation (the "Company"), the trustee for the holders of Debentures
named in the Agreement, and those persons who have executed counterpart
signature pages to the Agreement pursuant to the terms of the Agreement, who are
to be listed in Exhibit A to the Agreement, hereby agrees to all of the terms
and conditions of the Agreement and to be bound by all of the terms and
provisions thereof.
Dated: _____________________, 1996
____________________________________
(Signature)
____________________________________
(Print Name)
58
EXHIBIT C
No.__________ $____________
UNITED MAGAZINE COMPANY
8% Senior Debentures Due 2002
UNITED MAGAZINE COMPANY, an Ohio corporation (the "Company"), for value
received, hereby promises to pay to ___________________________ , or registered
assigns, the principal sum of____________________ Dollars on January 1, 2002,
and to pay interest on said principal sum from the date hereof quarterly on
January 1, April 1, July 1 and October 1 in each year commencing on the later of
October 1, 1996 or the date of final closing of a particular acquisition (as
described in Section 1 of the Agreement (as defined below)), at the rate of 8%
per annum, from _____________, until the principal hereof has been paid or duly
provided for.
This Debenture is issued in accordance with the Debenture Agreement dated
as of October 9, 1996 (the "Agreement"), among the Company, each person listed
on Exhibit A thereto, and the trustee named under the Agreement, and is subject
in all respect to the terms and conditions set forth in the Agreement, which
provisions are hereby incorporated herein by reference to the same extent as
though set forth herein in full, to all of which terms every holder of this
Debenture consents by acceptance hereof.
The interest payable with respect to any interest payment date will, as
provided in the Agreement, be paid to the person in whose name this Debenture is
registered at the close of business on the regular record date for such
interest, which shall be the fifteenth (15th) day (whether or not a business
day) of December, March, June and September, as the case may be (each, a "Record
Date"), next preceding such interest payment date. Subject to the principal
repayment priorities established in Section 2 of the Agreement, payments of the
principal of the Debentures shall be made quarterly on each interest payment
date commencing April 1, 1997, in the amounts as set forth in the table in
Section 2 of the Agreement. Payments of the principal of and interest on this
Debenture will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts and will be paid by check mailed to the address of the person entitled
thereto as such address shall appear on the Debenture Register.
The provisions of this Debenture relating to other matters are set forth
on the reverse hereof, and such provisions shall for all purposes have the same
effect as though fully set forth in this place.
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed by its officers thereunto duly authorized.
UNITED MAGAZINE COMPANY
Effective Date: July 1, 1996 By:________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman
By:________________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary
THE DEBENTURES EVIDENCED HEREBY HAVE BEEN ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES LAWS
PURSUANT TO EXEMPTIONS FROM REGISTRATION, AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED (EACH A "TRANSFER") WITHOUT SUCH
REGISTRATIONS UNLESS ONE OR MORE VALID EXEMPTIONS FROM REGISTRATION ARE
AVAILABLE AND THE COMPANY HAS RECEIVED AN OPINION OF, OR SATISFACTORY TO, ITS
LEGAL COUNSEL THAT SUCH TRANSFER WOULD NOT VIOLATE FEDERAL AND STATE SECURITIES
LAWS.
59
UNITED MAGAZINE COMPANY
8% Senior Debentures Due 2002
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 8% Senior Debentures Due 2002 (herein called the
"Debentures"), limited to the aggregate principal amount of $41,000,000, all
issued or to be issued under and pursuant to the Agreement.
In case an Event of Default, as defined in the Agreement, shall have
occurred and be continuing, the principal of all Debentures may be declared, and
upon such declaration shall become due and payable, in the manner, with the
effect, and subject to the conditions provided in the Agreement.
The indebtedness evidenced by the Debentures is, to the extent and in the
manner provided in the Agreement, expressly subordinate and subject in right of
payment to the prior payment of certain obligations of the Company as specified
in the Agreement and this Debenture is issued subject to the provisions of the
Agreement with respect to such subordination. Each holder of this Debenture, by
accepting the same, agrees to and shall be bound by such provisions.
Subject to the provisions of Section 7 of the Agreement, the Debentures
may be redeemed at the discretion of the Company, in whole or from time to time
in part, at a redemption price equal to the principal amount thereof together
with accrued interest to the date of redemption. Notice of redemption shall be
given and Debentures shall be redeemed as provided in the Agreement.
Interest on the Debentures shall be computed on the basis of a year of
twelve 30-day months.
At the office of the Company in Dublin, Ohio, and in the manner and
subject to the limitations provided in the Agreement, but without payment of any
service charge, Debentures may be exchanged for a like aggregate principal
amount of Debentures of other authorized denominations.
Upon due presentment for registration of transfer of this Debenture at the
office of the Company in Dublin, Ohio, a new Debenture or Debentures of
authorized denominations for an equal aggregate principal amount will be issued
to the transferee in exchange herefor, subject to the limitations provided in
the Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company, any paying agent, and any Debenture Registrar may deem and
treat the registered holder hereof as the absolute owner of this Debenture
(whether or not this Debenture shall be overdue and notwithstanding any notation
of ownership or other writing hereon made by anyone other than the Company or
any Debenture Registrar), for the purpose of receiving payment hereof, or on
account hereof, and for all other purposes, and neither the Company nor any
paying agent nor any Debenture Registrar shall be affected by any notice to the
contrary. All payments made to or upon the order of such registered holder
shall, to the extent of the sum or sums paid, satisfy and discharge liability
for monies payable on this Debenture.
All terms used in this Debenture which are defined in the Agreement shall
have the meanings assigned to them in the Agreement unless otherwise specified
herein.
60
EXHIBIT D
No._____________ $______________
UNITED MAGAZINE COMPANY
10% Subordinated Debentures Due 2004
UNITED MAGAZINE COMPANY, an Ohio corporation (the "Company"), for value
received, hereby promises to pay to___________________________, or registered
assigns, the principal sum of________________________ Dollars on January 1,
2004, and to pay interest on said principal sum from the date hereof quarterly
on January 1, April 1, July 1 and October 1 in each year commencing on the later
of October 1, 1996 or the date of final closing of a particular acquisition (as
described in Section 1 of the Agreement (as defined below)), at the rate of 10%
per annum, from _________________, until the principal hereof has been paid or
duly provided for.
This Debenture is issued in accordance with the Debenture Agreement dated
as of October 9, 1996 (the "Agreement"), among the Company, each person listed
on Exhibit A thereto, and the trustee named under the Agreement, and is subject
in all respect to the terms and conditions set forth in the Agreement, which
provisions are hereby incorporated herein by reference to the same extent as
though set forth herein in full, to all of which terms every holder of this
Debenture consents by acceptance hereof.
The interest payable with respect to any interest payment date will, as
provided in the Agreement, be paid to the person in whose name this Debenture is
registered at the close of business on the regular record date for such
interest, which shall be the fifteenth (15th) day (whether or not a business
day) of December, March, June and September, as the case may be (each, a "Record
Date"), next preceding such interest payment date. Subject to the principal
repayment priorities established in Section 3 of the Agreement, payments of the
principal of the Debentures shall be made quarterly on each interest payment
date, commencing April 1, 1999, in the amounts as set forth in the table in
Section 3 of the Agreement. Payments of the principal of and interest on this
Debenture will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts and will be paid by check mailed to the address of the person entitled
thereto as such address shall appear on the Debenture Register.
The provisions of this Debenture relating to other matters are set forth
on the reverse hereof, and such provisions shall for all purposes have the same
effect as though fully set forth in this place.
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed by its officers thereunto duly authorized.
UNITED MAGAZINE COMPANY
Effective Date: July 1, 1996 By:________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman
By:________________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary
THE DEBENTURES EVIDENCED HEREBY HAVE BEEN ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES LAWS
PURSUANT TO EXEMPTIONS FROM REGISTRATION, AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED (EACH A "TRANSFER") WITHOUT SUCH
REGISTRATIONS UNLESS ONE OR MORE VALID EXEMPTIONS FROM REGISTRATION ARE
AVAILABLE AND THE COMPANY HAS RECEIVED AN OPINION OF, OR SATISFACTORY TO, ITS
LEGAL COUNSEL THAT SUCH TRANSFER WOULD NOT VIOLATE FEDERAL AND STATE SECURITIES
LAWS.
61
UNITED MAGAZINE COMPANY
10% Subordinated Debentures Due 2004
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 10% Subordinated Debentures Due 2004 (herein called
the "Debentures"), limited to the aggregate principal amount of $33,000,000, all
issued or to be issued under and pursuant to the Agreement.
In case an Event of Default, as defined in the Agreement, shall have
occurred and be continuing, the principal of all Debentures may be declared, and
upon such declaration shall become due and payable, in the manner, with the
effect, and subject to the conditions provided in the Agreement.
The indebtedness evidenced by the Debentures is, to the extent and in the
manner provided in the Agreement, expressly subordinate and subject in right of
payment to the prior payment of certain obligations of the Company as specified
in the Agreement and this Debenture is issued subject to the provisions of the
Agreement with respect to such subordination. Each holder of this Debenture, by
accepting the same, agrees to and shall be bound by such provisions.
Subject to the provisions of Section 7 of the Agreement, the Debentures
may be redeemed at the discretion of the Company, in whole or from time to time
in part, at a redemption price equal to the principal amount thereof together
with accrued interest to the date of redemption. Notice of redemption shall be
given and Debentures shall be redeemed as provided in the Agreement.
Interest on the Debentures shall be computed on the basis of a year of
twelve 30-day months.
At the office of the Company in Dublin, Ohio, and in the manner and
subject to the limitations provided in the Agreement, but without payment of any
service charge, Debentures may be exchanged for a like aggregate principal
amount of Debentures of other authorized denominations.
Upon due presentment for registration of transfer of this Debenture at the
office of the Company in Dublin, Ohio, a new Debenture or Debentures of
authorized denominations for an equal aggregate principal amount will be issued
to the transferee in exchange herefor, subject to the limitations provided in
the Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company, any paying agent, and any Debenture Registrar may deem and
treat the registered holder hereof as the absolute owner of this Debenture
(whether or not this Debenture shall be overdue and notwithstanding any notation
of ownership or other writing hereon made by anyone other than the Company or
any Debenture Registrar), for the purpose of receiving payment hereof, or on
account hereof, and for all other purposes, and neither the Company nor any
paying agent nor any Debenture Registrar shall be affected by any notice to the
contrary. All payments made to or upon the order of such registered holder
shall, to the extent of the sum or sums paid, satisfy and discharge liability
for monies payable on this Debenture.
All terms used in this Debenture which are defined in the Agreement shall
have the meanings assigned to them in the Agreement unless otherwise specified
herein.
62
EXHIBIT E
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement") is made and entered into this
___ day of ________, 1996, by and between United Magazine Company, an Ohio
corporation, whose principal executive offices are located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Debtor"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as trustee for the Holders
(as defined hereinbelow), whose mailing address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ ("Secured Party").
RECITALS
A. Pursuant to that certain Debenture Agreement dated as of October 9,
1996 (the "Debenture Agreement") among Debtor, certain individuals named on
Exhibit A attached thereto (the "Holders") and Secured Party, who was appointed
as trustee for the Holders under the Debenture Agreement, Debtor has issued to
each of the Holders certain debentures as described more particularly below.
B. In order to secure Debtor's obligations under such debentures, Debtor
has agreed to execute this Agreement granting to Secured Party on behalf and for
the benefit of the Holders a security interest in, among other things, all of
Debtor's tangible and intangible personal property.
NOW THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Grant of Security Interest. To secure payment and performance of the
Obligations (as defined below), Debtor grants to Secured Party a security
interest in each and all of the following described property of Debtor
(collectively, the "Collateral"):
All of Debtor's inventory, accounts, receivables, general
intangibles, instruments, records, equipment, supplies, leasehold
improvements, fixtures, furniture, computer software, computer
databases, computers, and all other tangible and intangible personal
property now or hereafter owned, leased or used in business by
Debtor and its subsidiaries, and all cash and non-cash proceeds
thereof.
2. Obligations Secured. This Agreement is being made for the purpose of
securing all of Debtor's obligations (a) related to certain "8% Senior
Debentures Due 2002" (the "Debentures") in the aggregate principal amount of
$41,000,000 issued by Debtor in accordance with the terms and conditions of the
Debenture Agreement, which is incorporated herein by reference, (b) under the
Debenture Agreement and this Agreement, and (c) to pay Secured Party's cost of
collecting the Obligations, of realization on Collateral and any expenditure of
Secured Party pursuant hereto, including attorneys' fees and expenses, with
interest at the maximum rate allowed by law from the date of the expenditure
(collectively, the "Obligations"). The principal amount of the Debentures issued
to each respective Holder is set forth opposite such Holder's name on Exhibit A
to the Debenture Agreement.
3. Insurance. Debtor shall maintain fire and extended coverage insurance
on the Collateral, as applicable, with such coverages as are reasonable and
customary in the wholesale periodical distribution industry. All policies of
insurance shall name Secured Party as a loss payee and include a provision
whereby Secured Party shall receive from the insurer not less than thirty (30)
days prior written notice of the insurer's intention to cancel, amend, or modify
such policy. If Debtor fails to provide or maintain any such insurance policies,
Secured Party
63
may obtain and maintain such insurance and pay the premiums thereon, and any
amount paid by Secured Party shall be an additional obligation of Debtor secured
under this Agreement.
4. Warranties. Debtor warrants that: (a) Debtor owns all Collateral free
and clear of all leases, security interests, liens, encumbrances, charges,
liabilities, or claims of any nature, except for the Permitted Encumbrances (as
defined hereinbelow) and the security interest created by this Agreement; (b) no
financing statements covering all or any part of the Collateral are on file with
the Secretary of State of Ohio, the recorder of any county, or any other
recording office except with respect to any Permitted Encumbrance; and (c) by
virtue of this Agreement and the perfection of the security interest granted
hereby in accordance with applicable law, Secured Party has or will have a
valid, enforceable, and perfected security interest in the Collateral subject
only to the Permitted Encumbrances. Debtor shall defend any proceeding which may
affect title to or Secured Party's security interests in any Collateral and
shall indemnify Secured Party for all costs and expenses of Secured Party's
defense.
5. Location of Executive Office, Principal Place of Business and
Collateral. Debtor warrants that: (a) Debtor's principal executive office and
principal place of business are located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇; (b) the
Collateral is and will be kept at Debtor's principal executive office or its
principal place of business or at such other places of business as are set forth
on Exhibit A attached hereto (the "Facilities"); and (c) neither the location of
Debtor's principal executive office or its principal place of business nor the
location of the Collateral will be changed without written notice to Secured
Party at least fifteen (15) days prior to any such change. The foregoing will
not limit Debtor's ability to operate the Facilities in the ordinary course of
business.
6. Use of Collateral. Debtor shall not sell, assign, pledge, lease or
otherwise transfer or encumber any Collateral (except that until an Event of
Default occurs Debtor may sell its inventory in the ordinary course of business)
and shall not change the location of any Collateral without the prior written
consent of Secured Party, which consent shall not be unreasonably withheld.
Notwithstanding anything herein to the contrary, and until an Event of
Default occurs, (a) Debtor may, without the consent of Secured Party, sell,
convey, lease or otherwise transfer, the Collateral or any part thereof in
connection with a plant closing or other similar consolidation of operations
pursuant and subject to the terms and conditions of Section 8(b) of the
Debenture Agreement, provided that proceeds from any such sale, conveyance,
lease, or other transfer shall be paid by Debtor to the Secured Party; (b)
Secured Party shall not unreasonably withhold its consent to a consolidation or
merger, or successive consolidations or mergers, of Debtor with or into any
other corporation or corporations (whether or not affiliated with Debtor), or
any sale, conveyance, lease, or other transfer, or successive sales,
conveyances, leases, or other transfers, of all or substantially all of the
property of Debtor to any other corporation (whether or not affiliated with
Debtor), pursuant and subject to the terms and conditions of Section 10(a) of
the Debenture Agreement, and (c) after the payment of $12,000,000 and accrued
interest, on the ▇▇▇▇▇ Senior Debt, Debtor may, without the consent of Secured
Party, sell, convey, lease, or otherwise transfer, any portion of the Collateral
having a fair value, when added to the aggregate fair value of all such
Collateral (and any other personal property secured by "Security Agreements" and
any real property secured by "Mortgages", in either case, pursuant to the
Debenture Agreement) previously sold, conveyed, leased, or otherwise transferred
under this subsection (c), of no more than $6,000,000.
7. Financing Statements. Debtor shall execute and deliver to Secured Party
one or more financing statements, continuation statements, or amendments
thereto, and such other instruments or notices as are reasonably necessary to
perfect, protect, or preserve the security interest granted or purported to be
granted by this Agreement.
8. Permitted Encumbrances; Subordination. The term "Permitted
Encumbrances" shall mean (a) the existing security interests (the
"Encumbrances") set forth on Exhibit B attached hereto and any refinancing,
deferrals, renewals, extensions and refunding of and amendments, modifications
or supplements thereof, and (b) any Encumbrances granted in conjunction with
indebtedness incurred to prepay or refinance all or any part of the Debentures,
and (c) any Encumbrances granted in conjunction with indebtedness incurred for
working capital purposes in an amount (including the indebtedness covered under
(a) above) not to exceed at any one time eight
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percent (8%) of Debtor's consolidated net sales, and (d) purchase money
Encumbrances granted to secure indebtedness incurred in connection with the
purchase of any asset or equipment for use in Debtor's business (the
indebtedness secured by any of the Permitted Encumbrances is sometimes
hereinafter collectively referred to as the "Senior Indebtedness"). Secured
Party, for itself and on behalf of each of the Holders, shall execute and
deliver to Debtor such documents as may be necessary to evidence or affirm the
subordination of this security interest to all existing and any future Permitted
Encumbrances. Notwithstanding anything in this Agreement to the contrary, the
Debentures shall have priority both in payment and security over Debtor's "10%
Subordinated Debentures Due 2004" issued pursuant to the Debenture Agreement.
9. Execution of Documents. Debtor shall execute any documents and take
such other actions as are necessary from time to time to perfect or protect the
security interest granted or purported to be granted by this Agreement or to
enable Secured Party to exercise or enforce its rights or remedies under this
Agreement.
10. Default. Upon the occurrence of an "Event of Default" (as defined
hereinbelow), Secured Party shall be entitled to such rights and remedies as are
set forth in this Agreement and in section 9 of the Debenture Agreement and,
with respect to the Collateral, all rights and remedies of a secured party upon
default under the Uniform Commercial Code (including without limitation Chapter
1309, Ohio Revised Code). In any action or proceeding to enforce its rights or
remedies under this Agreement, Secured Party shall be entitled forthwith to
immediate exclusive possession and control of the Collateral and to receive
directly all payments due or otherwise being made on any of the Collateral, and,
upon notice to Debtor and application by Secured Party to any court of competent
jurisdiction, shall be entitled to an order giving such immediate exclusive
possession and control to Secured Party or, if Secured Party so elects, to an
order appointing a receiver for the Collateral without any requirement of bond
or other security. For purposes of this Agreement, written notice delivered to
Debtor at least fifteen (15) days prior to the date of public sale of any
Collateral or fifteen (15) days prior to the date after which private sale or
other disposition of any Collateral will be made shall constitute reasonable
notice of any such sale. For purposes of this Agreement, an "Event of Default"
shall mean any of the occurrences constituting "events of default" under section
9 of the Debenture Agreement.
Secured Party's declaration of an Event of Default as provided above and
the exercise of remedies upon any such declaration shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding such
declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation, or reorganization proceeding.
Notwithstanding anything in this Agreement to the contrary, only Secured
Party and its successors and assigns, shall be entitled to declare an Event of
Default under this Agreement and to exercise any remedies or commence any
action, suit or proceeding to enforce any rights granted by this Agreement or
pursuant to applicable law, and in no event shall any Holder have or be
permitted to enforce any of such rights or remedies, unless such Holder is the
named or a successor trustee under the Debenture Agreement and is acting in such
capacity.
11. Notices. All notices and other communications under this Agreement to
be made to either Secured Party or Debtor shall be in writing and shall be
deemed given (a) in the case of delivery, when delivered personally, by
overnight express service or courier to the address set forth below and
addressed to the party involved, (b) in the case of mailing, on the third (3rd)
business day after the notice has been deposited in the United States Mails,
sent by certified or registered mail, postage prepaid, addressed to the other
party at the address as set forth below, and (c) in the case of telecopying,
when the notice has been actually received by the other party (as evidenced by
an electronic confirmation). The initial addresses of the parties hereto for the
delivery of notices are as follows:
If to Secured Party: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Debtor: United Magazine Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Either party hereto may change the address at which notices are to be sent by
the giving of notice of such change to the other party in accordance with the
foregoing procedures.
12. Governing Law. All questions concerning the validity or meaning of
this Agreement or relating to the rights and obligations of the parties with
respect to performance under this Agreement shall be construed and resolved
under the laws of Ohio exclusive of conflict of law principles.
13. Severability. The intention of the parties to this Agreement is to
comply fully with all laws and public policies, and this Agreement shall be
construed consistently with all laws and public policies to the extent possible.
If and to the extent that any court of competent jurisdiction determines it is
impossible to construe any provision of this Agreement consistently with any law
or public policy and consequently holds that provision to be invalid, such
holding shall in no way affect the validity of the other provisions of this
Agreement, which shall remain in full force and effect.
14. Venue. The parties to this Agreement hereby designate the Court of
Common Pleas of Franklin County, Ohio, as a court of proper jurisdiction and
exclusive venue for any actions or proceedings relating to this Agreement;
hereby irrevocably consent to such designation, jurisdiction, and venue; and
hereby waive any objections or defenses relating to jurisdiction or venue with
respect to any action or proceeding initiated in the Court of Common Pleas of
Franklin County, Ohio.
15. Nonwaiver. No failure by either party to insist upon compliance with
any term of this Agreement or to exercise any option, enforce any right, or seek
any remedy upon any default of either party shall affect or constitute a waiver
of the first party's right to insist upon such strict compliance, exercise that
option, enforce that right, or seek that remedy with respect to that default or
any prior, contemporaneous, or subsequent default; nor shall any custom or
practice of the parties at variance with any provision of this Agreement affect,
or constitute a waiver of, either party's right to demand strict compliance with
the provisions of this Agreement.
16. No Third Party Benefit. This Agreement is intended for the exclusive
benefit of Debtor and Secured Party (as trustee on behalf and for the benefit of
the Holders), and their respective heirs, successors, and assigns, and nothing
contained in this Agreement shall be construed as creating any rights or
benefits in or to any third party other than the Holders as provided herein.
17. Complete Agreement. This Agreement (including any exhibits and any
documents incorporated into this Agreement by reference) contains the entire
agreement among the parties and supersedes any prior agreements, negotiations,
representations, or discussions among them with respect to the subject matter of
this Agreement. No additions or other changes to this Agreement shall be binding
upon either party unless made in writing and signed by all parties.
18. Counterparts. This Agreement may be executed in multiple counterparts,
and all such executed counterparts shall constitute one original agreement,
binding on all of the parties, whether or not all of the parties have executed
the same counterparts and whether or not the signature pages from different
counterparts have been combined, and the signature of any party to any
counterpart shall be deemed to be that party's signature to any other
counterpart and may be appended to any other counterpart.
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19. Captions. The captions of the various sections of this Agreement are
not part of the context of this Agreement, but are only labels to assist in
locating those sections and shall be ignored in construing this Agreement.
20. Genders and Numbers. When permitted by the context, each pronoun used
in this Agreement includes the same pronoun in other genders or numbers and each
noun used in this Agreement includes the same noun in other numbers.
21. Successors. This Agreement shall be binding upon, inure to the benefit
of, and be enforceable by and against the respective heirs, personal
representatives, successors and assigns of each party to this Agreement.
22. Cumulative Effect. This Agreement is intended as additional security
to Secured Party and does not supersede, waive, or otherwise affect any other
security interests, guarantees, or other agreements between Secured Party and
Debtor.
IN WITNESS WHEREOF, Debtor and Secured Party have each executed this
Security Agreement as of ___________, 1996.
Signed and acknowledged in the UNITED MAGAZINE COMPANY, an
presence of: Ohio corporation
___________________________________ By:__________________________________
Print Name:________________________ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as its Chief
Executive Officer
___________________________________
Print Name:________________________
SECURED PARTY:
___________________________________ __________________________________________
Print Name:________________________ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as trustee on behalf and
for the benefit of the Holders (as defined
hereinabove)
___________________________________
Print Name:________________________
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EXHIBIT E
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement") is made and entered into this
___ day of ________, 1996, by and between United Magazine Company, an Ohio
corporation, whose principal executive offices are located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Debtor"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as trustee for the Holders
(as defined hereinbelow), whose mailing address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ ("Secured Party").
RECITALS
A. Pursuant to that certain Debenture Agreement dated as of October 9,
1996 (the "Debenture Agreement") among Debtor, certain individuals named on
Exhibit A attached thereto (the "Holders") and Secured Party, who was appointed
as trustee for the Holders under the Debenture Agreement, Debtor has issued to
each of the Holders certain debentures as described more particularly below.
B. In order to secure Debtor's obligations under such debentures, Debtor
has agreed to execute this Agreement granting to Secured Party on behalf and for
the benefit of the Holders a security interest in, among other things, all of
Debtor's tangible and intangible personal property.
NOW THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Grant of Security Interest. To secure payment and performance of the
Obligations (as defined below), Debtor grants to Secured Party a security
interest in each and all of the following described property of Debtor
(collectively, the "Collateral"):
All of Debtor's inventory, accounts, receivables, general
intangibles, instruments, records, equipment, supplies, leasehold
improvements, fixtures, furniture, computer software, computer
databases, computers, and all other tangible and intangible personal
property now or hereafter owned, leased or used in business by
Debtor and its subsidiaries, and all cash and non-cash proceeds
thereof.
2. Obligations Secured. This Agreement is being made for the purpose of
securing all of Debtor's obligations (a) related to certain "10% Subordinated
Debentures Due 2004" (the "Debentures") in the aggregate principal amount of
$33,000,000 issued by Debtor in accordance with the terms and conditions of the
Debenture Agreement, which is incorporated herein by reference, (b) under the
Debenture Agreement and this Agreement, and (c) to pay Secured Party's cost of
collecting the Obligations, of realization on Collateral and any expenditure of
Secured Party pursuant hereto, including attorneys' fees and expenses, with
interest at the maximum rate allowed by law from the date of the expenditure
(collectively, the "Obligations"). The principal amount of the Debentures issued
to each respective Holder is set forth opposite such Holder's name on Exhibit A
to the Debenture Agreement.
3. Insurance. Debtor shall maintain fire and extended coverage insurance
on the Collateral, as applicable, with such coverages as are reasonable and
customary in the wholesale periodical distribution industry. All policies of
insurance shall name Secured Party as a loss payee and include a provision
whereby Secured Party shall receive from the insurer not less than thirty (30)
days prior written notice of the insurer's intention to cancel, amend, or modify
such policy. If Debtor fails to provide or maintain any such insurance policies,
Secured Party
68
may obtain and maintain such insurance and pay the premiums thereon, and any
amount paid by Secured Party shall be an additional obligation of Debtor secured
under this Agreement.
4. Warranties. Debtor warrants that: (a) Debtor owns all Collateral free
and clear of all leases, security interests, liens, encumbrances, charges,
liabilities, or claims of any nature, except for the Permitted Encumbrances (as
defined hereinbelow) and the security interest created by this Agreement; (b) no
financing statements covering all or any part of the Collateral are on file with
the Secretary of State of Ohio, the recorder of any county, or any other
recording office except with respect to any Permitted Encumbrance; and (c) by
virtue of this Agreement and the perfection of the security interest granted
hereby in accordance with applicable law, Secured Party has or will have a
valid, enforceable, and perfected security interest in the Collateral subject
only to the Permitted Encumbrances. Debtor shall defend any proceeding which may
affect title to or Secured Party's security interests in any Collateral and
shall indemnify Secured Party for all costs and expenses of Secured Party's
defense.
5. Location of Executive Office, Principal Place of Business and
Collateral. Debtor warrants that: (a) Debtor's principal executive office and
principal place of business are located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇; (b) the
Collateral is and will be kept at Debtor's principal executive office or
principal place of business or at such other places of business as are set forth
on Exhibit A attached hereto (the "Facilities"); and (c) neither the location of
Debtor's principal executive office or its principal place of business nor the
location of the Collateral will be changed without written notice to Secured
Party at least fifteen (15) days prior to any such change. The foregoing will
not limit Debtor's ability to operate the Facilities in the ordinary course of
business.
6. Use of Collateral. Debtor shall not sell, assign, pledge, lease or
otherwise transfer or encumber any Collateral (except that until an Event of
Default occurs Debtor may sell its inventory in the ordinary course of business)
and shall not change the location of any Collateral without the prior written
consent of Secured Party, which consent shall not be unreasonably withheld.
Notwithstanding anything herein to the contrary, and until an Event of Default
occurs, (a) Debtor may, without the consent of Secured Party, sell, convey,
lease or otherwise transfer, the Collateral or any part thereof in connection
with a plant closing or other similar consolidation of operations pursuant and
subject to the terms and conditions of Section 8(b) of the Debenture Agreement,
provided that proceeds from any such sale, conveyance, lease, or other transfer
shall be paid by Debtor to the Secured Party; (b) Secured Party shall not
unreasonably withhold its consent to a consolidation or merger, or successive
consolidations or mergers, of Debtor with or into any other corporation or
corporations (whether or not affiliated with Debtor), or any sale, conveyance,
lease, or other transfer, or successive sales, conveyances, leases, or other
transfers, of all or substantially all of the property of Debtor to any other
corporation (whether or not affiliated with Debtor), pursuant and subject to the
terms and conditions of Section 10(a) of the Debenture Agreement, and (c) after
the payment of $12,000,000 and accrued interest, on the ▇▇▇▇▇ Senior Debt,
Debtor may, without the consent of Secured Party, sell, convey, lease, or
otherwise transfer, any portion of the Collateral having a fair value, when
added to the aggregate fair value of all such Collateral (and any other personal
property secured by "Security Agreements" and any real property secured by
"Mortgages", in either case, pursuant to the Debenture Agreement) previously
sold, conveyed, leased, or otherwise transferred under this subsection (c), of
no more than $6,000,000.
7. Financing Statements. Debtor shall execute and deliver to Secured Party
one or more financing statements, continuation statements, or amendments
thereto, and such other instruments or notices as are reasonably necessary to
perfect, protect, or preserve the security interest granted or purported to be
granted by this Agreement.
8. Permitted Encumbrances; Subordination. The term "Permitted
Encumbrances" shall mean (a) the existing security interests (the
"Encumbrances") set forth on Exhibit B attached hereto and any refinancing,
deferrals, renewals, extensions and refunding of and amendments, modifications
or supplements thereof, and (b) any Encumbrances granted in conjunction with
indebtedness incurred to prepay or refinance all or any part of the Debentures,
and (c) any Encumbrances granted in conjunction with indebtedness incurred for
working capital purposes in an amount (including the indebtedness covered under
(a) above) not to exceed at any one time eight percent (8%) of Debtor's
consolidated net sales, and (d) purchase money Encumbrances granted to secure
indebtedness incurred in connection with the purchase of any asset or equipment
for use in Debtor's business, and
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(e) Encumbrances granted to secure indebtedness evidenced by Debtor's "8% Senior
Debentures Due 2002" issued in accordance with the Debenture Agreement (the
"Senior Debentures"), and (f) Encumbrances granted to secure the principal of
and premium, if any, and interest on (i) all indebtedness subject to a security
interest or mortgage of Debtor and any subsidiary in which Debtor holds at least
51% of the voting stock ("Controlled Subsidiary"), whether presently existing or
hereafter incurred, including without limitation, (A) for money borrowed by
Debtor or any Controlled Subsidiary (including lease financing indebtedness),
(B) for money borrowed by others (including lease financing indebtedness) and
guaranteed, directly or indirectly, by Debtor or any Controlled Subsidiary, or
(C) constituting purchase money indebtedness, or indebtedness secured by
property at the time of the acquisition of such property by Debtor or any
Controlled Subsidiary, for the payment of which Debtor or any Controlled
Subsidiary is directly or contingently liable; and (ii) all deferrals, renewals,
extensions and refundings of, and amendments, modifications, and supplements to,
any such indebtedness, provided that by the terms of the instrument creating or
evidencing any such indebtedness referred to in clause (i) above, it is
expressly provided that such indebtedness is superior in right of payment to the
Debentures (the indebtedness secured by any of the Permitted Encumbrances is
sometimes hereinafter collectively referred to as the "Senior Indebtedness"). As
used herein, the term "purchase money indebtedness" means indebtedness evidenced
by a note, debenture, bond, or other instrument (whether or not secured by any
lien or other security interest) issued or assumed as all or a part of the
consideration for the acquisition of property, whether by purchase, merger,
consolidation, or otherwise, but does not include any trade accounts payable.
Secured Party, for itself and on behalf of each of the Holders, shall execute
and deliver to Debtor such documents as may be necessary to evidence or affirm
the subordination of this security interest to all existing and any future
Permitted Encumbrances. Notwithstanding anything in this Agreement to the
contrary, the Debentures shall be subordinate both in priority of payment and
security to the Senior Debentures.
9. Execution of Documents. Debtor shall execute any documents and take
such other actions as are necessary from time to time to perfect or protect the
security interest granted or purported to be granted by this Agreement or to
enable Secured Party to exercise or enforce its rights or remedies under this
Agreement.
10. Default. Upon the occurrence of an "Event of Default" (as defined
hereinbelow), Secured Party shall be entitled to such rights and remedies as are
set forth in this Agreement and in section 9 of the Debenture Agreement and,
with respect to the Collateral, all rights and remedies of a secured party upon
default under the Uniform Commercial Code (including without limitation Chapter
1309, Ohio Revised Code). In any action or proceeding to enforce its rights or
remedies under this Agreement, Secured Party shall be entitled forthwith to
immediate exclusive possession and control of the Collateral and to receive
directly all payments due or otherwise being made on any of the Collateral, and,
upon notice to Debtor and application by Secured Party to any court of competent
jurisdiction, shall be entitled to an order giving such immediate exclusive
possession and control to Secured Party or, if Secured Party so elects, to an
order appointing a receiver for the Collateral without any requirement of bond
or other security. For purposes of this Agreement, written notice delivered to
Debtor at least fifteen (15) days prior to the date of public sale of any
Collateral or fifteen (15) days prior to the date after which private sale or
other disposition of any Collateral will be made shall constitute reasonable
notice of any such sale. For purposes of this Agreement, an "Event of Default"
shall mean any of the occurrences constituting "events of default" under section
9 of the Debenture Agreement.
Secured Party's declaration of an Event of Default as provided above and
the exercise of remedies upon any such declaration shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding such
declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation, or reorganization proceeding.
Notwithstanding anything in this Agreement to the contrary, only Secured
Party and its successors and assigns, shall be entitled to declare an Event of
Default under this Agreement and to exercise any remedies or commence any
action, suit or proceeding to enforce any rights granted by this Agreement or
pursuant to applicable law, and in no event shall any Holder have or be
permitted to enforce any of such rights or remedies, unless such Holder is the
named or a successor trustee under the Debenture Agreement and is acting in such
capacity.
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11. Notices. All notices and other communications under this Agreement to
be made to either Secured Party or Debtor shall be in writing and shall be
deemed given (a) in the case of delivery, when delivered personally, by
overnight express service or courier to the address set forth below and
addressed to the party involved, (b) in the case of mailing, on the third (3rd)
business day after the notice has been deposited in the United States Mails,
sent by certified or registered mail, postage prepaid, addressed to the other
party at the address as set forth below, and (c) in the case of telecopying,
when the notice has been actually received by the other party (as evidenced by
an electronic confirmation). The initial addresses of the parties hereto for the
delivery of notices are as follows:
If to Secured Party: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Debtor: United Magazine Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Either party hereto may change the address at which notices are to be sent by
the giving of notice of such change to the other party in accordance with the
foregoing procedures.
12. Governing Law. All questions concerning the validity or meaning of
this Agreement or relating to the rights and obligations of the parties with
respect to performance under this Agreement shall be construed and resolved
under the laws of Ohio exclusive of conflict of law principles.
13. Severability. The intention of the parties to this Agreement is to
comply fully with all laws and public policies, and this Agreement shall be
construed consistently with all laws and public policies to the extent possible.
If and to the extent that any court of competent jurisdiction determines it is
impossible to construe any provision of this Agreement consistently with any law
or public policy and consequently holds that provision to be invalid, such
holding shall in no way affect the validity of the other provisions of this
Agreement, which shall remain in full force and effect.
14. Venue. The parties to this Agreement hereby designate the Court of
Common Pleas of Franklin County, Ohio, as a court of proper jurisdiction and
exclusive venue for any actions or proceedings relating to this Agreement;
hereby irrevocably consent to such designation, jurisdiction, and venue; and
hereby waive any objections or defenses relating to jurisdiction or venue with
respect to any action or proceeding initiated in the Court of Common Pleas of
Franklin County, Ohio.
15. Nonwaiver. No failure by either party to insist upon compliance with
any term of this Agreement or to exercise any option, enforce any right, or seek
any remedy upon any default of either party shall affect or constitute a waiver
of the first party's right to insist upon such strict compliance, exercise that
option, enforce that right, or seek that remedy with respect to that default or
any prior, contemporaneous, or subsequent default; nor shall any custom or
practice of the parties at variance with any provision of this Agreement affect,
or constitute a waiver of, either party's right to demand strict compliance with
the provisions of this Agreement.
16. No Third Party Benefit. This Agreement is intended for the exclusive
benefit of Debtor and Secured Party (as trustee on behalf and for the benefit of
the Holders), and their respective heirs, successors, and assigns, and nothing
contained in this Agreement shall be construed as creating any rights or
benefits in or to any third party other than the Holders as provided herein.
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17. Complete Agreement. This Agreement (including any exhibits and any
documents incorporated into this Agreement by reference) contains the entire
agreement among the parties and supersedes any prior agreements, negotiations,
representations, or discussions among them with respect to the subject matter of
this Agreement. No additions or other changes to this Agreement shall be binding
upon either party unless made in writing and signed by all parties.
18. Counterparts. This Agreement may be executed in multiple counterparts,
and all such executed counterparts shall constitute one original agreement,
binding on all of the parties, whether or not all of the parties have executed
the same counterparts and whether or not the signature pages from different
counterparts have been combined, and the signature of any party to any
counterpart shall be deemed to be that party's signature to any other
counterpart and may be appended to any other counterpart.
19. Captions. The captions of the various sections of this Agreement are
not part of the context of this Agreement, but are only labels to assist in
locating those sections and shall be ignored in construing this Agreement.
20. Genders and Numbers. When permitted by the context, each pronoun used
in this Agreement includes the same pronoun in other genders or numbers and each
noun used in this Agreement includes the same noun in other numbers.
21. Successors. This Agreement shall be binding upon, inure to the benefit
of, and be enforceable by and against the respective heirs, personal
representatives, successors and assigns of each party to this Agreement.
22. Cumulative Effect. This Agreement is intended as additional security
to Secured Party and does not supersede, waive, or otherwise affect any other
security interests, guarantees, or other agreements between Secured Party and
Debtor.
IN WITNESS WHEREOF, Debtor and Secured Party have each executed this
Security Agreement as of ___________, 1996.
Signed and acknowledged in the UNITED MAGAZINE COMPANY, an
presence of: Ohio corporation
_________________________________ By:___________________________________
Print Name:______________________ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as its Chairman
_________________________________
Print Name:______________________
SECURED PARTY:
_________________________________ _______________________________________
Print Name:______________________ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as trustee on behalf and
for the benefit of the Holders (as defined
hereinabove)
_________________________________
Print Name:______________________
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EXHIBIT F
MORTGAGE, ASSIGNMENT OF RENTS
AND LEASES, AND SECURITY AGREEMENT
THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, AND SECURITY AGREEMENT (the
"Mortgage") is made and entered into this ___ day of ________, 1996, by and
between United Magazine Company, an Ohio corporation, whose principal executive
offices are located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Mortgagor"), and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as trustee for the Holders (as defined hereinbelow), whose
mailing address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Mortgagee").
Mortgagor, in consideration of the indebtedness herein recited and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby grants with mortgage covenants to Mortgagee and its
successors and assigns, on behalf and for the benefit of Holders, the real
property described more particularly on Exhibit A attached hereto and
incorporated herein by reference (the "Property").
Mortgagor also grants to Mortgagee all of the rents, issues, and profits
which may arise or be had from the Property or any of it and the estate, right,
title, and interest, either in law or in equity, which Mortgagor now has or may
hereafter acquire in and to all of the Property; all buildings and improvements
now existing or hereafter constructed or placed on the Property; all fixtures of
whatever kind and nature including without limitation all heating, lighting,
sprinkling, plumbing, air conditioning, and ventilating machinery, equipment,
engines, boilers, incinerators, building materials, appliances, and all other
items intended or designated to be incorporated into the building located on the
Property which is physically affixed or annexed to the Property; all attached
carpeting, wall and floor coverings; all pipes, conduits, pumps, boilers, tanks,
motors, engines and furnaces; and all parts, accessories, attachments,
additions, and other replacements thereof, of every kind and description.
The Property and the buildings, improvements, and other items enumerated
in the preceding paragraph are sometimes hereinafter referred to collectively as
the "Premises".
This Mortgage is given by Mortgagor for the purpose of securing
Mortgagor's obligations related to certain "8% Senior Debentures Due 2002" (the
"Debentures") in the aggregate principal amount of $41,000,000 issued by
Mortgagor in accordance with the terms and conditions of that certain Debenture
Agreement dated as of October 9, 1996 (the "Debenture Agreement") among
Mortgagor, the individuals named on Exhibit A attached thereto (the "Holders")
and Mortgagee, which Debenture Agreement is incorporated herein by reference.
The principal amount of the Debentures issued to each respective Holder is set
forth opposite such Holder's name on Exhibit A to the Debenture Agreement.
This Mortgage is intended to be a security agreement pursuant to the
Uniform Commercial Code as enacted in the state in which the Property is located
(the "Code") with respect to any of the collateral described in the second
paragraph of this Mortgage, above, which may be subjected to a security interest
under the Code.
1. Covenants of Mortgagor
Mortgagor, for itself and its successors and assigns, hereby covenants
with Mortgagee, its successors and assigns, that Mortgagor holds a valid fee
simple interest in the Premises; that it has the right to bargain and sell the
same in the manner and form as set forth in this Mortgage; that the Premises are
free from all liens and encumbrances whatsoever except real estate taxes and
assessments not presently due and payable, zoning laws, and the Permitted
Encumbrances (as defined hereinbelow); that Mortgagor will warrant and defend
the Premises and
73
the appurtenances thereto to Mortgagee, its successors and assigns, forever,
against all claims and demands whatsoever except the above-described exceptions;
and hereby covenants and agrees:
a. Payments. To make all payments of principal, interest and other sums
due under the Debentures in accordance with, and at the times and in the amounts
required by, the terms of the Debenture Agreement.
b. Taxes. To pay before they become delinquent all taxes (both general and
special), assessments, water rents, fines or impositions, and governmental
charges levied or assessed against the Premises or any part thereof or interest
therein.
c. Insurance. To keep all buildings and other improvements now existing or
hereafter erected on the Premises insured against loss or damage by fire and
such other hazards typically covered by broad form casualty insurance and to
maintain comprehensive public liability insurance with respect to the Premises.
All policies of insurance shall include standard mortgagee and loss payable
clauses in favor of Mortgagee and a provision for each such insurer to give
Mortgagee not less than thirty (30) days prior written notice of the insurer's
intention to cancel, amend, or modify any policy. All premiums relating to such
insurance shall be paid promptly. In the event of loss, Mortgagor shall give
Mortgagee prompt notice thereof in accordance with section 9 of this Mortgage.
If any portion of the Premises shall be damaged or partially or totally
destroyed while this Mortgage is in effect, the net proceeds payable from any
insurance policy as a result of such damage or destruction shall be paid over to
Mortgagor and used to repair, rebuild, or restore the Premises or, if Mortgagor
elects to not repair, rebuild, or restore the Premises, subject to section 2
hereof, to reduce the indebtedness secured by this Mortgage, whether due or not.
d. Maintenance and Repair. To keep and maintain all buildings,
improvements, appurtenances, fixtures, and other property now or hereafter
comprising a part of the Premises in good condition and repair and to comply
with all laws, ordinances, regulations, and requirements of all legally
constituted authorities respecting the Premises and the use of the Premises.
e. Liens and Encumbrances. To keep the Premises free and clear of all
mortgages, security interests, liens, encumbrances, easements, restrictions,
encroachments or other claims except as provided in section 2 hereinbelow.
f. Waste; Unlawful Acts; Etc. Not to commit, suffer, or permit any waste
on, of, or to the Premises, nor use or permit the use of any portion thereof for
any unlawful act, or any action that would materially diminish or impair the
value of the Premises or the lien or security of this Mortgage.
g. Removal, Alteration of Improvements. Not to remove, demolish, or
substantially alter any building or improvement now or hereafter comprising a
part of the Premises in any manner that would substantially diminish the value
of the Premises without the prior written consent of Mortgagee, which consent
shall not be unreasonably withheld.
h. Transfers and Conveyances of Premises. Not to sell, assign, convey,
lease, or sublease all or any substantial part of the Premises, or any legal or
equitable interest therein, without the prior written consent of Mortgagee,
which consent shall not be unreasonably withheld.
Notwithstanding anything herein to the contrary, and until an Event of
Default occurs, (i) Mortgagor may, without the consent of Mortgagee, sell,
convey, lease or otherwise transfer, the Premises or any part thereof in
connection with a plant closing or other similar consolidation of operations
pursuant and subject to the terms and conditions of Section 8(b) of the
Debenture Agreement, provided that proceeds from any such sale, conveyance,
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lease, or other transfer shall be paid by Mortgagor to the Mortgagee; (ii)
Mortgagee shall not unreasonably withhold its consent to a consolidation or
merger, or successive consolidations or mergers, of Mortgagor with or into any
other corporation or corporations (whether or not affiliated with Mortgagor), or
any sale, conveyance, lease, or other transfer, or successive sales,
conveyances, leases, or other transfers, of all or substantially all of the
property of Mortgagor to any other corporation (whether or not affiliated with
Mortgagor), pursuant and subject to the terms and conditions of Section 10(a) of
the Debenture Agreement, and (iii) after the payment of $12,000,000 and accrued
interest, on the ▇▇▇▇▇ Senior Debt, Mortgagor may, without the consent of
Mortgagee, sell, convey, lease, or otherwise transfer, all or any portion of the
Premises having a fair value, when added to the aggregate fair value of the
portion of the Premises (and any other real property secured by "Mortgages" and
any personal property secured by "Security Agreements", in either case, pursuant
to the Debenture Agreement) previously sold, conveyed, leased, or otherwise
transferred under this subsection (iii), of no more than $6,000,000.
i. Further Assurances. To execute and deliver to Mortgagee and to any
subsequent holder from time to time, such further documents or instruments,
including, but not limited to, mortgages, security agreements, financing
statements, and assignments, that are reasonably necessary so as to perfect the
evidence of the obligations secured by this Mortgage and the lien of Mortgagee
on all or any part of the Premises intended to be hereby mortgaged.
j. Lease of Premises. If, at any time, any of the Premises not released
from this Mortgage under section 1.h. above are subject to a lease or leasing
arrangements, to comply with and observe in all material respects and at all
times Mortgagor's obligations as landlord under all leases of space on or within
the Premises or any part thereof. Unless otherwise consented to by Mortgagee,
which consent shall not be unreasonable withheld, all leases of the Premises or
any part thereof (other than currently existing leases, which need not be
modified) shall specifically provide that such leases are subordinate to this
Mortgage; that the tenant attorns to Mortgagee, such attornment to be effective
upon Mortgagee's acquisition of title to the Premises; that the tenant agrees to
execute such further evidences of attornment as Mortgagee may from time to time
request; that the attornment of the tenant shall not be terminated by
foreclosure; and that Mortgagee may, at Mortgagee's option, accept or reject
such attornments. Except as otherwise provided herein, Mortgagor shall not,
without the prior written consent of Mortgagee, enter into, modify in any
material respect, surrender, or terminate, either orally or in writing, any
lease now existing or hereafter made of all or any part of the Premises which
are not released from this Mortgage, permit an assignment of such a lease
without Mortgagee's written consent, or request or consent to the subordination
of any lease of all or any part of the Premises to any lien subordinate to this
Mortgage, which consent shall not be unreasonably withheld.
k. Assignment of Rents and Revenues. That as part of the consideration for
the indebtedness recited herein, Mortgagor hereby absolutely and unconditionally
assigns and transfers to Mortgagee all of Mortgagor's right, title and interest
in and to the rents and revenues of the Premises, if any, which are now due or
which may become due in the future by virtue of any lease, sublease, or other
agreement for the occupancy or use of all or any part of the Premises. Mortgagor
hereby authorizes Mortgagee or Mortgagee's agents to collect such rents and
revenues and hereby directs each tenant to pay such rents to Mortgagee or
Mortgagee's agents; provided that until the occurrence of an Event of Default
(as defined and set forth in section 5 hereinbelow), Mortgagor shall collect and
receive all rents and revenues as trustee for the benefit of Mortgagee, to apply
the rents and revenues so collected to the sums secured by this Mortgage with
the balance, so long as no such uncured breach has occurred, to the account of
Mortgagor, it being intended by Mortgagor and Mortgagee that this assignment of
rents constitutes an absolute assignment and not an assignment for additional
security only. Upon the occurrence of an Event of Default, and without the
necessity of Mortgagee entering upon and taking and maintaining full control of
the Premises in person, by agent or by a court-appointed receiver, Mortgagee
shall immediately be entitled to possession of all rents and revenues of the
Premises as specified in this section as such rents become due and payable,
including
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but not limited to rents then due and unpaid, and all such rents shall
immediately upon delivery of such notice be held by Mortgagor as trustee for the
benefit of Mortgagee. Commencing upon the occurrence of an Event of Default,
each tenant of the Premises shall make such rents payable to and pay such rents
to Mortgagee or Mortgagee's agents on Mortgagee's written demand to each tenant
therefor, delivered to each tenant personally, by mail or delivering such demand
to the portion of the Premises as is occupied by each respective tenant, without
any liability on the part of such tenant to inquire further as to the existence
of a default by Mortgagor. Mortgagor hereby represents and warrants to Mortgagee
that it has not executed any prior assignment of such rents and has not
executed, and will not execute, any instrument, which would prevent Mortgagee
from exercising its rights under this section; that at the time of execution of
this Mortgage there has been no anticipation or prepayment of any of rent under
any lease for more than one month prior to the due dates of such rents; and that
Mortgagor will not hereafter collect or accept payment of any rents more than
one month prior to the due dates of such rents.
l. Environmental Matters. That, to the best of Mortgagor's actual
knowledge: (i) the Premises are in compliance in all material respects with all
"Environmental Laws" (as defined below); (ii) there are no conditions existing
currently which require cleanup, removal, remedial action, or other response by
Mortgagor pursuant to Environmental Laws; (iii) Mortgagor is not a party to any
litigation or administrative proceeding which asserts or alleges that Mortgagor
violated any Environmental Laws; and (iv) neither the Premises nor Mortgagor are
subject to any judgment, decree, order, or citation related to or arising out of
an alleged violation of any Environmental Laws.
For purposes of this Mortgage: (i) "Environment" or "Environmental" shall
mean any water or water vapor, any land including land surface or subsurface,
air, fish, wildlife, biota and all other natural resources; and (ii)
"Environmental Laws" shall mean all federal, state, and local environmental
laws, statutes, ordinances, and codes relating to the protection of public
health or the Environment and/or governing the use, storage, treatment,
generation, transportation, processing, handling, management, production, or
disposal of solid wastes, toxic substances, hazardous wastes, hazardous
substances, petroleum, petroleum based products, radio-nuclides, or other
radioactive materials and the rules, regulations, policies, guidelines,
interpretations, decisions, orders, and directives of federal, state, and local
government agencies and authorities with respect thereto, including without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), the
Solid Waste Disposal Act, as amended (42 U.S.C. Section 6901, et seq.), the
Toxic Substances Control Act, as amended (15 U.S.C. Section 2601, et seq.), the
Clean Air Act of 1970, as amended (42 U.S.C. Section 7401, et seq.), the Water
Pollution Control Act, as amended (33 U.S.C. Section 1251, et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136, et seq.), the
Atomic Energy Act (23 U.S.C. Section 2011, et seq.), and Chapter 3745 of the
Ohio Administrative Code.
Mortgagor covenants and agrees to comply with all applicable Environmental
Laws and to advise Mortgagee in writing promptly after Mortgagor becomes aware
of any condition or circumstance which makes the warranties contained in this
section incomplete or inaccurate. Any failure of Mortgagor to comply in any
material respect with the Environmental Laws shall be an Event of Default under
this Mortgage.
2. Permitted Encumbrances; Subordination. The term "Permitted Encumbrances"
shall mean (a) the existing mortgages, encumbrances, easements, restrictions,
encroachments and other claims with respect to the Premises (collectively,
"Encumbrances") set forth on Exhibit "B" hereto and any refinancing, deferrals,
renewals, extensions and refunding of and amendments, modifications or
supplements thereof, and (b) any Encumbrances granted in conjunction with
indebtedness incurred to prepay or refinance all or any part of the Debentures,
and (c) any Encumbrances granted in conjunction with indebtedness incurred for
working capital purposes in an amount (including the indebtedness covered under
(a) above) not to exceed at any one time eight percent (8%) of
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Mortgagor's consolidated net sales, and (d) purchase money Encumbrances granted
to secure indebtedness incurred in connection with the purchase of any asset or
equipment for use in Mortgagor's business (the indebtedness secured by any of
the Permitted Encumbrances is sometimes hereinafter collectively referred to as
the "Senior Indebtedness"). Mortgagee, for itself and on behalf of each of the
Holders, shall execute and deliver to Mortgagor such documents as may be
necessary to evidence or affirm the subordination of this mortgage to all
existing and any future Permitted Encumbrances. Notwithstanding anything in this
Mortgage to the contrary, the Debentures shall have priority both in payment and
security over Mortgagor's "10% Subordinated Debentures Due 2004" issued pursuant
to the Debenture Agreement.
3. Failure to Comply with Obligations
Upon the failure of Mortgagor: (a) to perform any obligation to be
performed by Mortgagor under this Mortgage or to pay any taxes, assessments,
insurance premiums, or other payments provided for under this Mortgage, (b) to
pay the cost and expense of maintaining the Premises in the state of repair and
condition required by this Mortgage, (c) to defend its title to the Premises, or
(d) to discharge and pay prior to delinquency any lien or title claimed to have
priority over the lien of this Mortgage (except as otherwise permitted herein),
Mortgagee, or its successors and assigns, may perform such obligations, pay such
taxes, assessments, insurance premiums, or payments, pay the cost and expense of
defending or clearing such title, pay the cost and expense of such repair or
maintenance, and pay any and all amounts paid out by Mortgagee in connection
therewith, including attorneys' fees and costs, shall be deemed to have been
paid to protect the Premises and shall be and become additional indebtedness
secured by this Mortgage.
4. Condemnation
If any portion of the Premises is condemned under any power, or threatened
power, of eminent domain, or acquired for a public use, at any time, the net
proceeds of any condemnation award paid as a result of such condemnation or
acquisition shall be used to repair, rebuild, or restore the Premises or, if
Mortgagor elects to not repair, rebuild or restore the Premises, subject to
section 2 hereof, to reduce the indebtedness secured by this Mortgage, whether
due or not.
5. Default
Upon the occurrence of an "Event of Default" (as defined hereinbelow),
Mortgagee shall be entitled to such rights and remedies as are set forth in
section 9 of the Debenture Agreement and this Mortgage shall become subject to
foreclosure. In such event, Mortgagee shall, as a matter of right and to the
extent permitted by applicable law and without regard to the adequacy of the
Premises as security, be entitled to the appointment of a receiver for all or
any part of the Premises, whether such receivership is incidental to a proposed
judicial sale of the Premises or otherwise, and Mortgagor hereby consents to the
appointment of such a receiver and covenants not to oppose any such appointment.
In the event of foreclosure, the Premises may be sold in their entirety, or as
two or more parcels, at the sole discretion of Mortgagee. For purposes of this
Mortgage, an "Event of Default" shall mean any of the occurrences constituting
"events of default" under section 9 of the Debenture Agreement.
Mortgagee's declaration of an Event of Default as provided above and the
exercise of remedies upon any such declaration shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding such
declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation, or reorganization proceeding.
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Notwithstanding anything in this Mortgage to the contrary, only Mortgagee
and its successors and assigns, shall be entitled to declare an Event of Default
under this Mortgage and to exercise any remedies or commence any action, suit or
proceeding to enforce any rights granted by this Mortgage or pursuant to
applicable law, and in no event shall any Holder have or be permitted to enforce
any of such rights or remedies, unless such Holder is named as trustee, or is a
successor trustee, under the Debenture Agreement and is acting in such capacity.
6. Rights of Payees or Holders of Debentures
The payees of the Debentures secured by this Mortgage may, at any time, by
written agreement with Mortgagor or any successor in interest, and without
notice to any other person, renew or extend the time for payment of the
indebtedness secured by this Mortgage, or any part thereof, or increase or
decrease the rate of interest thereon, without thereby affecting this Mortgage
or its priority over any junior liens or encumbrances, and without releasing any
person from liability.
7. Notices
All notices and other communications under this Mortgage to be made to
either Mortgagee or Mortgagor shall be in writing and shall be deemed given (a)
in the case of delivery, when delivered personally, by overnight express service
or courier to the address set forth below and addressed to the party involved,
(b) in the case of mailing, on the third (3rd) business day after the notice has
been deposited in the United States Mails, sent by certified or registered mail,
postage prepaid, addressed to the other party at the address as set forth below,
and (c) in the case of telecopying, when the notice has been actually received
by the other party (as evidenced by an electronic confirmation). The initial
addresses of the parties hereto for the delivery of notices are as follows:
If to Mortgagee: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Mortgagor: United Magazine Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Either party hereto may change the address at which notices are to be sent by
the giving of notice of such change to the other party in accordance with the
foregoing procedures.
8. Cumulative Rights
The rights and remedies afforded Mortgagee under this Mortgage are
cumulative and Mortgagee, on behalf and for the benefit of the Holders, may
recover judgment thereon, issue execution therefor, and resort to every other
right or remedy available at law or in equity, without first exhausting, and
without affecting or impairing the security of any right or remedy afforded by
this Mortgage.
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9. Severability
The unenforceability or invalidity of any one or more provisions, clauses,
sentences, or paragraphs of this Mortgage shall not render any other provision,
clause, sentence, or paragraph contained in this Mortgage unenforceable or
invalid.
10. Governing Law
All questions concerning the validity or meaning of this Mortgage or
relating to the rights and obligations of the parties with respect to
performance under this Mortgage shall be construed and resolved under the laws
of the state in which the Property is located.
11. Venue
The parties to this Mortgage hereby designate the courts of the state and
county in which the Property is located, as courts of proper jurisdiction and
venue for any actions or proceedings relating to this Mortgage; hereby
irrevocably consent to such designation, jurisdiction, and venue; and hereby
waive any objections or defenses relating to jurisdiction or venue with respect
to any action or proceeding initiated in the courts of the state and county in
which the Property is located.
12. Waiver of Rights
Mortgagee's failure to exercise any option, right or remedy under any
provision of the Debenture Agreement, this Mortgage or any other document,
instrument or agreement evidencing, securing or otherwise executed in connection
the Debentures (collectively, the "Debenture Documents") shall not constitute or
be deemed a waiver of Mortgagee's right to exercise such option, right or remedy
with respect to any past or any subsequent violation of any term or condition of
the Debenture Agreement, this Mortgage or any other Debenture Document.
13. Access to Premises
Any person authorized by Mortgagee shall have the right to enter upon and
inspect the Premises at all reasonable times; provided that Mortgagor shall be
given reasonable advance notice of any such entry and the right of entry shall
be subject to the rights of tenants of space within the Premises.
14. Successors and Assigns
This Mortgage and all terms, conditions, provisions and covenants hereof
shall inure to the benefit of and shall bind the successors and assigns of the
parties to this Mortgage; provided that if Mortgagor shall pay the Debentures
according to their terms, together with all interest, taxes, assessments, and
other sums, amounts or charges which may be payable to Mortgagee and if the
terms, covenants, provisions and conditions contained in this Mortgage, the
Debenture Agreement, and all of the other Debenture Documents are fully and
timely satisfied and performed by Mortgagor as required thereunder, then this
Mortgage shall be void and of no further force and effect.
15. No Third Party Benefit. This Mortgage is intended for the exclusive
benefit of Mortgagor and Mortgagee (as trustee on behalf and for the benefit of
the Holders), and their respective heirs, successors, and assigns, and nothing
contained in this Mortgage shall be construed as creating any rights or benefits
in or to any third party other than the Holders as provided herein.
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16. Captions. The captions of the various sections of this Mortgage are not part
of the context of this Mortgage, but are only labels to assist in locating those
sections and shall be ignored in construing this Mortgage.
17. Complete Agreement. This Mortgage (including any exhibits and any documents
incorporated into this Mortgage by reference) contains the entire agreement
among the parties and supersedes any prior agreements, negotiations,
representations, or discussions among them with respect to the subject matter of
this Mortgage. No additions or other changes to this Mortgage shall be binding
upon either party unless made in writing and signed by each party.
18. Counterparts. This Mortgage may be executed in multiple counterparts, and
all such executed counterparts shall constitute one original agreement, binding
on all parties, whether or not all such parties have executed the same
counterparts and whether or not the signature pages from different counterparts
have been combined, and the signature of any party to any counterpart shall be
deemed to be that party's signature to any other counterpart and may be appended
to any other counterpart.
IN WITNESS WHEREOF, Mortgagor and Mortgagee have each executed this
Mortgage, Assignment of Rents and Leases, and Security Agreement as of
____________, 1996.
Signed and acknowledged in MORTGAGOR:
the presence of:
UNITED MAGAZINE COMPANY, an Ohio
corporation
_____________________________ By:__________________________________
Print Name:__________________ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as its Chairman
_____________________________
Print Name:__________________
MORTGAGEE:
_____________________________ ______________________________________________
Print Name:__________________ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as trustee on behalf and for
the benefit of the Holders (as defined
hereinabove)
_____________________________
Print Name:__________________
[Acknowledgments on the following page.]
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STATE OF OHIO
FRANKLIN COUNTY
The foregoing instrument was acknowledged before me on _________, 1996, by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the Chairman of United Magazine Company, an Ohio corporation,
on behalf of the corporation.
______________________________
Notary Public
STATE OF _____________________
COUNTY OF ____________________
The foregoing instrument was acknowledged before me on _________, 1996, by
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as trustee on behalf and for the benefit of the Holders (as
defined hereinabove).
________________________________
Notary Public
This document was prepared by:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
82
EXHIBIT B
ENCUMBRANCES
83
EXHIBIT F
MORTGAGE, ASSIGNMENT OF RENTS
AND LEASES, AND SECURITY AGREEMENT
THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, AND SECURITY AGREEMENT (the
"Mortgage") is made and entered into this ___ day of ________, 1996, by and
between United Magazine Company, an Ohio corporation, whose principal executive
offices are located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Mortgagor"), and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as trustee for the Holders (as defined hereinbelow), whose
mailing address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Mortgagee").
Mortgagor, in consideration of the indebtedness herein recited and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby grants with mortgage covenants to Mortgagee and its
successors and assigns, on behalf and for the benefit of Holders, the real
property described more particularly on Exhibit A attached hereto and
incorporated herein by reference (the "Property").
Mortgagor also grants to Mortgagee all of the rents, issues, and profits
which may arise or be had from the Property or any of it and the estate, right,
title, and interest, either in law or in equity, which Mortgagor now has or may
hereafter acquire in and to all of the Property; all buildings and improvements
now existing or hereafter constructed or placed on the Property; all fixtures of
whatever kind and nature including without limitation all heating, lighting,
sprinkling, plumbing, air conditioning, and ventilating machinery, equipment,
engines, boilers, incinerators, building materials, appliances, and all other
items intended or designated to be incorporated into the building located on the
Property which is physically affixed or annexed to the Property; all attached
carpeting, wall and floor coverings; all pipes, conduits, pumps, boilers, tanks,
motors, engines and furnaces; and all parts, accessories, attachments,
additions, and other replacements thereof, of every kind and description.
The Property and the buildings, improvements, and other items enumerated
in the preceding paragraph are sometimes hereinafter referred to collectively as
the "Premises".
This Mortgage is given by Mortgagor for the purpose of securing
Mortgagor's obligations related to certain "10% Subordinated Debentures Due
2004" (the "Debentures") in the aggregate principal amount of $33,000,000 issued
by Mortgagor in accordance with the terms and conditions of that certain
Debenture Agreement dated as of October 9, 1996 (the "Debenture Agreement")
among Mortgagor, the individuals named on Exhibit A attached thereto (the
"Holders") and Mortgagee, which Debenture Agreement is incorporated herein by
reference. The principal amount of the Debentures issued to each respective
Holder is set forth opposite such Holder's name on Exhibit A to the Debenture
Agreement.
This Mortgage is intended to be a security agreement pursuant to the
Uniform Commercial Code as enacted in the state in which the Property is located
(the "Code") with respect to any of the collateral described in the second
paragraph of this Mortgage, above, which may be subjected to a security interest
under the Code.
1. Covenants of Mortgagor
Mortgagor, for itself and its successors and assigns, hereby covenants
with Mortgagee, its successors and assigns, that Mortgagor holds a valid fee
simple interest in the Premises; that it has the right to bargain and sell the
same in the manner and form as set forth in this Mortgage; that the Premises are
free from all liens and encumbrances whatsoever except real estate taxes and
assessments not presently due and payable, zoning laws, and the Permitted
Encumbrances (as defined hereinbelow); that Mortgagor will warrant and defend
the Premises and the appurtenances thereto to Mortgagee, its successors and
assigns, forever, against all claims and demands whatsoever except the
above-described exceptions; and hereby covenants and agrees:
84
a. Payments. To make all payments of principal, interest and other sums
due under the Debentures in accordance with, and at the times and in the amounts
required by, the terms of the Debenture Agreement.
b. Taxes. To pay before they become delinquent all taxes (both general and
special), assessments, water rents, fines or impositions, and governmental
charges levied or assessed against the Premises or any part thereof or interest
therein.
c. Insurance. To keep all buildings and other improvements now existing or
hereafter erected on the Premises insured against loss or damage by fire and
such other hazards typically covered by broad form casualty insurance and to
maintain comprehensive public liability insurance with respect to the Premises.
All policies of insurance shall include standard mortgagee and loss payable
clauses in favor of Mortgagee and a provision for each such insurer to give
Mortgagee not less than thirty (30) days prior written notice of the insurer's
intention to cancel, amend, or modify any policy. All premiums relating to such
insurance shall be paid promptly. In the event of loss, Mortgagor shall give
Mortgagee prompt notice thereof in accordance with section 9 of this Mortgage.
If any portion of the Premises shall be damaged or partially or totally
destroyed while this Mortgage is in effect, the net proceeds payable from any
insurance policy as a result of such damage or destruction shall be paid over to
Mortgagor and used to repair, rebuild, or restore the Premises or, if Mortgagor
elects to not repair, rebuild, or restore the Premises, subject to section 2
hereof, to reduce the indebtedness secured by this Mortgage, whether due or not.
d. Maintenance and Repair. To keep and maintain all buildings,
improvements, appurtenances, fixtures, and other property now or hereafter
comprising a part of the Premises in good condition and repair and to comply
with all laws, ordinances, regulations, and requirements of all legally
constituted authorities respecting the Premises and the use of the Premises.
e. Liens and Encumbrances. To keep the Premises free and clear of all
mortgages, security interests, liens, encumbrances, easements, restrictions,
encroachments or other claims except as provided in section 2 hereinbelow.
f. Waste; Unlawful Acts; Etc. Not to commit, suffer, or permit any waste
on, of, or to the Premises, nor use or permit the use of any portion thereof for
any unlawful act, or any action that would materially diminish or impair the
value of the Premises or the lien or security of this Mortgage.
g. Removal, Alteration of Improvements. Not to remove, demolish, or
substantially alter any building or improvement now or hereafter comprising a
part of the Premises in any manner that would substantially diminish the value
of the Premises without the prior written consent of Mortgagee, which consent
shall not be unreasonably withheld.
h. Transfers and Conveyances of Premises. Not to sell, assign, convey,
lease, or sublease all or any substantial part of the Premises, or any legal or
equitable interest therein, without the prior written consent of Mortgagee,
which consent shall not be unreasonably withheld.
Notwithstanding anything herein to the contrary, and until an Event of
Default occurs, (i) Mortgagor may, without the consent of Mortgagee, sell,
convey, lease or otherwise transfer, the Premises or any part thereof in
connection with a plant closing or other similar consolidation of operations
pursuant and subject to the terms and conditions of Section 8(b) of the
Debenture Agreement, provided that proceeds from any such sale, conveyance,
lease, or other transfer shall be paid by Mortgagor to the Mortgagee; (ii)
Mortgagee shall not unreasonably withhold its consent to a consolidation or
merger, or successive consolidations or mergers, of Mortgagor with or into any
other corporation or corporations (whether or not affiliated with Mortgagor), or
any sale, conveyance, lease, or other transfer, or successive sales,
conveyances, leases, or other transfers, of all or substantially all of the
property of Mortgagor to any other corporation (whether or not affiliated with
Mortgagor), pursuant and subject to the terms
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and conditions of Section 10(a) of the Debenture Agreement, and (iii) after the
payment of $12,000,000 and accrued interest, on the ▇▇▇▇▇ Senior Debt, Mortgagor
may, without the consent of Mortgagee, sell, convey, lease, or otherwise
transfer, all or any portion of the Premises having a fair value, when added to
the aggregate fair value of the portion of the Premises (and any other real
property secured by "Mortgages" and any personal property secured by "Security
Agreements", in either case, pursuant to the Debenture Agreement) previously
sold, conveyed, leased, or otherwise transferred under this subsection (iii), of
no more than $6,000,000.
i. Further Assurances. To execute and deliver to Mortgagee and to any
subsequent holder from time to time, such further documents or instruments,
including, but not limited to, mortgages, security agreements, financing
statements, and assignments, that are reasonably necessary so as to perfect the
evidence of the obligations secured by this Mortgage and the lien of Mortgagee
on all or any part of the Premises intended to be hereby mortgaged.
j. Lease of Premises. If, at any time, any of the Premises not released
from this Mortgage under section 1.h. above are subject to a lease or leasing
arrangements, to comply with and observe in all material respects and at all
times Mortgagor's obligations as landlord under all leases of space on or within
the Premises or any part thereof. Unless otherwise consented to by Mortgagee,
which consent shall not be unreasonably withheld, all leases of the Premises or
any part thereof (other than currently existing leases, which need not be
modified) shall specifically provide that such leases are subordinate to this
Mortgage; that the tenant attorns to Mortgagee, such attornment to be effective
upon Mortgagee's acquisition of title to the Premises; that the tenant agrees to
execute such further evidences of attornment as Mortgagee may from time to time
request; that the attornment of the tenant shall not be terminated by
foreclosure; and that Mortgagee may, at Mortgagee's option, accept or reject
such attornments. Except as otherwise provided herein, Mortgagor shall not,
without the prior written consent of Mortgagee, enter into, modify in any
material respect, surrender, or terminate, either orally or in writing, any
lease now existing or hereafter made of all or any part of the Premises which
are not released from this Mortgage, permit an assignment of such a lease
without Mortgagee's written consent, or request or consent to the subordination
of any lease of all or any part of the Premises to any lien subordinate to this
Mortgage, which consent shall not be unreasonably withheld.
k. Assignment of Rents and Revenues. That as part of the consideration for
the indebtedness recited herein, Mortgagor hereby absolutely and unconditionally
assigns and transfers to Mortgagee all of Mortgagor's right, title and interest
in and to the rents and revenues of the Premises, if any, which are now due or
which may become due in the future by virtue of any lease, sublease, or other
agreement for the occupancy or use of all or any part of the Premises. Mortgagor
hereby authorizes Mortgagee or Mortgagee's agents to collect such rents and
revenues and hereby directs each tenant to pay such rents to Mortgagee or
Mortgagee's agents; provided that until the occurrence of an Event of Default
(as defined and set forth in section 5 hereinbelow), Mortgagor shall collect and
receive all rents and revenues as trustee for the benefit of Mortgagee, to apply
the rents and revenues so collected to the sums secured by this Mortgage with
the balance, so long as no such uncured breach has occurred, to the account of
Mortgagor, it being intended by Mortgagor and Mortgagee that this assignment of
rents constitutes an absolute assignment and not an assignment for additional
security only. Upon the occurrence of an Event of Default, and without the
necessity of Mortgagee entering upon and taking and maintaining full control of
the Premises in person, by agent or by a court-appointed receiver, Mortgagee
shall immediately be entitled to possession of all rents and revenues of the
Premises as specified in this section as such rents become due and payable,
including but not limited to rents then due and unpaid, and all such rents shall
immediately upon delivery of such notice be held by Mortgagor as trustee for the
benefit of Mortgagee. Commencing upon the occurrence of an Event of Default,
each tenant of the Premises shall make such rents payable to and pay such rents
to Mortgagee or Mortgagee's agents on Mortgagee's written demand to each tenant
therefor, delivered to each tenant personally, by mail or delivering such demand
to the portion of the Premises as is occupied by each respective tenant, without
any liability on the part of such tenant to inquire further as to the existence
of a default by Mortgagor. Mortgagor hereby represents and warrants to Mortgagee
that it has not executed any prior assignment of such rents and has
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not executed, and will not execute, any instrument, which would prevent
Mortgagee from exercising its rights under this section; that at the time of
execution of this Mortgage there has been no anticipation or prepayment of any
of rent under any lease for more than one month prior to the due dates of such
rents; and that Mortgagor will not hereafter collect or accept payment of any
rents more than one month prior to the due dates of such rents.
l. Environmental Matters. That, to the best of Mortgagor's actual
knowledge: (i) the Premises are in compliance in all material respects with all
"Environmental Laws" (as defined below); (ii) there are no conditions existing
currently which require cleanup, removal, remedial action, or other response by
Mortgagor pursuant to Environmental Laws; (iii) Mortgagor is not a party to any
litigation or administrative proceeding which asserts or alleges that Mortgagor
violated any Environmental Laws; and (iv) neither the Premises nor Mortgagor are
subject to any judgment, decree, order, or citation related to or arising out of
an alleged violation of any Environmental Laws.
For purposes of this Mortgage: (i) "Environment" or "Environmental" shall
mean any water or water vapor, any land including land surface or subsurface,
air, fish, wildlife, biota and all other natural resources; and (ii)
"Environmental Laws" shall mean all federal, state, and local environmental
laws, statutes, ordinances, and codes relating to the protection of public
health or the Environment and/or governing the use, storage, treatment,
generation, transportation, processing, handling, management, production, or
disposal of solid wastes, toxic substances, hazardous wastes, hazardous
substances, petroleum, petroleum based products, radio-nuclides, or other
radioactive materials and the rules, regulations, policies, guidelines,
interpretations, decisions, orders, and directives of federal, state, and local
government agencies and authorities with respect thereto, including without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), the
Solid Waste Disposal Act, as amended (42 U.S.C. Section 6901, et seq.), the
Toxic Substances Control Act, as amended (15 U.S.C. Section 2601, et seq.), the
Clean Air Act of 1970, as amended (42 U.S.C. Section 7401, et seq.), the Water
Pollution Control Act, as amended (33 U.S.C. Section 1251, et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136, et seq.), the
Atomic Energy Act (23 U.S.C. Section 2011, et seq.), and Chapter 3745 of the
Ohio Administrative Code.
Mortgagor covenants and agrees to comply with all applicable Environmental
Laws and to advise Mortgagee in writing promptly after Mortgagor becomes aware
of any condition or circumstance which makes the warranties contained in this
section incomplete or inaccurate. Any failure of Mortgagor to comply in any
material respect with the Environmental Laws shall be an Event of Default under
this Mortgage.
2. Permitted Encumbrances; Subordination. The term "Permitted Encumbrances"
shall mean (a) the existing mortgages, encumbrances, easements, restrictions,
encroachments and other claims with respect to the Premises (collectively,
"Encumbrances") set forth on Exhibit "B" hereto, and any refinancing, deferrals,
renewals, extensions and refunding of any amendments, modifications or
supplements thereof, and (b) any Encumbrances granted in conjunction with
indebtedness incurred to prepay or refinance all or any part of the Debentures,
and (c) any Encumbrances granted in conjunction with indebtedness incurred for
working capital purposes in an amount (including the indebtedness covered under
(a) above) not to exceed at any one time eight percent (8%) of Mortgagor's
consolidated net sales, and (d) purchase money Encumbrances granted to secure
indebtedness incurred in connection with the purchase of any asset or equipment
for use in Mortgagor's business, and (e) Encumbrances granted to secure
indebtedness evidenced by Mortgagor's "8% Senior Debentures Due 2002" issued in
accordance with the Debenture Agreement (the "Senior Debentures"), and (f)
Encumbrances granted to secure the principal of and premium, if any, and
interest on (i) all indebtedness subject to a security interest or mortgage of
Mortgagor and any subsidiary in which Mortgagor holds at least 51% of the voting
stock ("Controlled Subsidiary"), whether presently existing or hereafter
incurred, including without limitation, (A) for money borrowed by Debtor or any
Controlled Subsidiary (including lease financing indebtedness), (B) for money
borrowed by others (including lease financing indebtedness) and guaranteed,
directly or indirectly, by Mortgagor or any Controlled Subsidiary, or (C)
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constituting purchase money indebtedness, or indebtedness secured by property at
the time of the acquisition of such property by Mortgagor or any Controlled
Subsidiary, for the payment of which Mortgagor or any Controlled Subsidiary is
directly or contingently liable; and (ii) all deferrals, renewals, extensions
and refundings of, and amendments, modifications, and supplements to, any such
indebtedness, provided that by the terms of the instrument creating or
evidencing any such indebtedness referred to in clause (i) above, it is
expressly provided that such indebtedness is superior in right of payment to the
Debentures (the indebtedness secured by any of the Permitted Encumbrances is
sometimes hereinafter collectively referred to as the "Senior Indebtedness"). As
used herein, the term "purchase money indebtedness" means indebtedness evidenced
by a note, debenture, bond, or other instrument (whether or not secured by any
lien or other security interest) issued or assumed as all or a part of the
consideration for the acquisition of property, whether by purchase, merger,
consolidation, or otherwise, but does not include any trade accounts payable.
Mortgagee, for itself and on behalf of each of the Holders, shall execute and
deliver to Mortgagor such documents as may be necessary to evidence or affirm
the subordination of this mortgage to all existing and any future Permitted
Encumbrances. Notwithstanding anything in this Mortgage to the contrary, the
Debentures shall be subordinate both in priority of payment and security to the
Senior Debentures.
3. Failure to Comply with Obligations
Upon the failure of Mortgagor: (a) to perform any obligation to be
performed by Mortgagor under this Mortgage or to pay any taxes, assessments,
insurance premiums, or other payments provided for under this Mortgage, (b) to
pay the cost and expense of maintaining the Premises in the state of repair and
condition required by this Mortgage, (c) to defend its title to the Premises, or
(d) to discharge and pay prior to delinquency any lien or title claimed to have
priority over the lien of this Mortgage (except as otherwise permitted herein),
Mortgagee, or its successors and assigns, may perform such obligations, pay such
taxes, assessments, insurance premiums, or payments, pay the cost and expense of
defending or clearing such title, pay the cost and expense of such repair or
maintenance, and pay any and all amounts paid out by Mortgagee in connection
therewith, including attorneys' fees and costs, shall be deemed to have been
paid to protect the Premises and shall be and become additional indebtedness
secured by this Mortgage.
4. Condemnation
If any portion of the Premises is condemned under any power, or threatened
power, of eminent domain, or acquired for a public use, at any time, the net
proceeds of any condemnation award paid as a result of such condemnation or
acquisition shall be used to repair, rebuild, or restore the Premises or, if
Mortgagor elects to not repair, rebuild or restore the Premises, subject to
section 2 hereof, to reduce the indebtedness secured by this Mortgage, whether
due or not.
5. Default
Upon the occurrence of an "Event of Default" (as defined hereinbelow),
Mortgagee shall be entitled to such rights and remedies as are set forth in
section 9 of the Debenture Agreement and this Mortgage shall become subject to
foreclosure. In such event, Mortgagee shall, as a matter of right and to the
extent permitted by applicable law and without regard to the adequacy of the
Premises as security, be entitled to the appointment of a receiver for all or
any part of the Premises, whether such receivership is incidental to a proposed
judicial sale of the Premises or otherwise, and Mortgagor hereby consents to the
appointment of such a receiver and covenants not to oppose any such appointment.
In the event of foreclosure, the Premises may be sold in their entirety, or as
two or more parcels, at the sole discretion of Mortgagee. For purposes of this
Mortgage, an "Event of Default" shall mean any of the occurrences constituting
"events of default" under section 9 of the Debenture Agreement.
Mortgagee's declaration of an Event of Default as provided above and the
exercise of remedies upon any such declaration shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding such
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declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation, or reorganization proceeding.
Notwithstanding anything in this Mortgage to the contrary, only Mortgagee
and its successors and assigns, shall be entitled to declare an Event of Default
under this Mortgage and to exercise any remedies or commence any action, suit or
proceeding to enforce any rights granted by this Mortgage or pursuant to
applicable law, and in no event shall any Holder have or be permitted to enforce
any of such rights or remedies, unless such Holder is named as trustee, or is a
successor trustee, under the Debenture Agreement and is acting in such capacity.
6. Rights of Payees or Holders of Debentures
The payees of the Debentures secured by this Mortgage may, at any time, by
written agreement with Mortgagor or any successor in interest, and without
notice to any other person, renew or extend the time for payment of the
indebtedness secured by this Mortgage, or any part thereof, or increase or
decrease the rate of interest thereon, without thereby affecting this Mortgage
or its priority over any junior liens or encumbrances, and without releasing any
person from liability.
7. Notices
All notices and other communications under this Mortgage to be made to
either Mortgagee or Mortgagor shall be in writing and shall be deemed given (a)
in the case of delivery, when delivered personally, by overnight express service
or courier to the address set forth below and addressed to the party involved,
(b) in the case of mailing, on the third (3rd) business day after the notice has
been deposited in the United States Mails, sent by certified or registered mail,
postage prepaid, addressed to the other party at the address as set forth below,
and (c) in the case of telecopying, when the notice has been actually received
by the other party (as evidenced by an electronic confirmation). The initial
addresses of the parties hereto for the delivery of notices are as follows:
If to Mortgagee: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Mortgagor: United Magazine Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Either party hereto may change the address at which notices are to be sent by
the giving of notice of such change to the other party in accordance with the
foregoing procedures.
8. Cumulative Rights
The rights and remedies afforded Mortgagee under this Mortgage are
cumulative and Mortgagee, on behalf and for the benefit of the Holders, may
recover judgment thereon, issue execution therefor, and resort to every other
right or remedy available at law or in equity, without first exhausting, and
without affecting or impairing the security of any right or remedy afforded by
this Mortgage.
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9. Severability
The unenforceability or invalidity of any one or more provisions, clauses,
sentences, or paragraphs of this Mortgage shall not render any other provision,
clause, sentence, or paragraph contained in this Mortgage unenforceable or
invalid.
10. Governing Law
All questions concerning the validity or meaning of this Mortgage or
relating to the rights and obligations of the parties with respect to
performance under this Mortgage shall be construed and resolved under the laws
of the state in which the Property is located.
11. Venue
The parties to this Mortgage hereby designate the courts of the state and
county in which the Property is located, as courts of proper jurisdiction and
venue for any actions or proceedings relating to this Mortgage; hereby
irrevocably consent to such designation, jurisdiction, and venue; and hereby
waive any objections or defenses relating to jurisdiction or venue with respect
to any action or proceeding initiated in the courts of the state and county in
which the Property is located.
12. Waiver of Rights
Mortgagee's failure to exercise any option, right or remedy under any
provision of the Debenture Agreement, this Mortgage or any other document,
instrument or agreement evidencing, securing or otherwise executed in connection
the Debentures (collectively, the "Debenture Documents") shall not constitute or
be deemed a waiver of Mortgagee's right to exercise such option, right or remedy
with respect to any past or any subsequent violation of any term or condition of
the Debenture Agreement, this Mortgage or any other Debenture Document.
13. Access to Premises
Any person authorized by Mortgagee shall have the right to enter upon and
inspect the Premises at all reasonable times; provided that Mortgagor shall be
given reasonable advance notice of any such entry and the right of entry shall
be subject to the rights of tenants of space within the Premises.
14. Successors and Assigns
This Mortgage and all terms, conditions, provisions and covenants hereof
shall inure to the benefit of and shall bind the successors and assigns of the
parties to this Mortgage; provided that if Mortgagor shall pay the Debentures
according to their terms, together with all interest, taxes, assessments, and
other sums, amounts or charges which may be payable to Mortgagee and if the
terms, covenants, provisions and conditions contained in this Mortgage, the
Debenture Agreement, and all of the other Debenture Documents are fully and
timely satisfied and performed by Mortgagor as required thereunder, then this
Mortgage shall be void and of no further force and effect.
15. No Third Party Benefit. This Mortgage is intended for the exclusive
benefit of Mortgagor and Mortgagee (as trustee on behalf and for the benefit of
the Holders), and their respective heirs, successors, and assigns, and nothing
contained in this Mortgage shall be construed as creating any rights or benefits
in or to any third party other than the Holders as provided herein.
16. Captions. The captions of the various sections of this Mortgage are
not part of the context of this Mortgage, but are only labels to assist in
locating those sections and shall be ignored in construing this Mortgage.
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17. Complete Agreement. This Mortgage (including any exhibits and any documents
incorporated into this Mortgage by reference) contains the entire agreement
among the parties and supersedes any prior agreements, negotiations,
representations, or discussions among them with respect to the subject matter of
this Mortgage. No additions or other changes to this Mortgage shall be binding
upon either party unless made in writing and signed by each party.
18. Counterparts. This Mortgage may be executed in multiple counterparts, and
all such executed counterparts shall constitute one original agreement, binding
on all parties, whether or not all such parties have executed the same
counterparts and whether or not the signature pages from different counterparts
have been combined, and the signature of any party to any counterpart shall be
deemed to be that party's signature to any other counterpart and may be appended
to any other counterpart.
IN WITNESS WHEREOF, Mortgagor and Mortgagee have each executed this
Mortgage, Assignment of Rents and Leases, and Security Agreement as of
____________, 1996.
Signed and acknowledged in MORTGAGOR:
the presence of:
UNITED MAGAZINE COMPANY, an Ohio
corporation
_________________________________ By:__________________________________
Print Name:______________________ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as its Chairman
_________________________________
Print Name:______________________
[Signatures continued on the following page.]
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MORTGAGEE:
_________________________ ___________________________________________________
Print Name:______________ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as trustee on behalf and for
the benefit of the Holders (as defined hereinabove)
_________________________
Print Name:______________
STATE OF OHIO
FRANKLIN COUNTY
The foregoing instrument was acknowledged before me on _________, 1996, by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the Chairman of United Magazine Company, an Ohio corporation,
on behalf of the corporation.
__________________________________________
Notary Public
STATE OF __________________
COUNTY OF _________________
The foregoing instrument was acknowledged before me on _________, 1996, by
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as trustee on behalf and for the benefit of the Holders (as
defined hereinabove).
__________________________________________
Notary Public
This document was prepared by:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
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EXHIBIT B
ENCUMBRANCES
94
SCHEDULE I
1. Security interest in the accounts, equipment, inventory and general
intangibles of Triangle News Company, Inc. in favor of Bank of Boston
Connecticut.
2. Security interest in the accounts, equipment, inventory and general
intangibles of Service News Company of Connecticut in favor of Bank of Boston
Connecticut.
3. Security interest in the accounts, equipment, inventory and general
intangibles of Michiana News Service, Inc. in favor of First Source Bank.
4. Security interest in that part of the inventory of Michiana News
Service, Inc. supplied by secured party in favor of Bantam Doubleday Dell.
5. Security interest in the accounts of Ohio Periodical Distributors,
Inc., Columbus Division, in favor of ▇▇▇▇▇▇ Circulation Company.
6. Security interest in the accounts, equipment, inventory and general
intangibles of Ohio Periodical Distributors, Inc., Cincinnati Division, in favor
of Warner Publisher Services, Inc.
7. Security interest in the accounts, equipment, inventory and general
intangibles of Service News Company of North Carolina in favor of Centura Bank.
8. Security interest in the accounts, inventory and general intangibles of
Service News Company of North Carolina in favor of Warner Publisher Services,
Inc.
9. Security interest in the accounts, inventory and general intangibles of
Service News Company of Connecticut in favor of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, et al.
10. Security interest in the accounts, equipment, inventory and general
intangibles of MacGregor News Agency, Inc. in favor of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, et
al.
11. Security interest in the accounts, equipment, inventory and general
intangibles of Northern News Company in favor of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, et al.
95
12. First mortgage lien in all of Ohio Periodical Distributors, Inc.'s
interest in that certain real property located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, situated in
the City of Cincinnati, and in Section 23, Township 3, Fractional Range 2 of the
Miami Purchase, Millcreek Township, ▇▇▇▇▇▇▇▇ County, State of Ohio in favor of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ in order to secure payment under
note which shall not to exceed $1,200,000, recorded at Volume 5335, Page 1272,
in the ▇▇▇▇▇▇▇▇ County Recorder's office.
13. Security interest in the accounts and inventory of Central News in
favor of City News Agency, Dayton, Ohio. (Purchase money)
14. Security interest in the accounts and inventory of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
News in favor of Welsh News, Mansfield, Ohio. (Purchase money)
NOTE: ADDITIONAL SECURITY INTERESTS IN THE REAL AND PERSONAL PROPERTY OF
▇▇▇▇▇ (AND RELATED COMPANIES) MAY BE ADDED TO THIS SCHEDULE I IN
CONNECTION WITH THE CONSUMMATION OF THAT ACQUISITION.
* All real properties owned by the parties are subject to all easements,
conditions and restrictions of record, real estate taxes and assessments not yet
due and payable, legal highways, and zoning laws and ordinances.