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RESTRUCTURING SUPPORT AGREEMENT
 
This RESTRUCTURING SUPPORT AGREEMENT (together with any amendments, exhibits and
schedules hereto, this “Agreement”), dated as of October 30, 2009, is entered
into by and among Morris Publishing Group, LLC (“MPG”), Morris Publishing
Finance Co. (“MPF”, and together with MPG, the “Issuers”), the subsidiaries of
MPG signatory hereto (the “Guarantors”, and together with the Issuers, the
“Company”), and the holders of (or authorized investment advisors or managers of
discretionary accounts that hold) the 7% Senior Subordinated Notes due 2013 (the
“Notes”) signatory hereto (together with their respective successors and
permitted assigns, the “Consenting Holders” and each, a “Consenting
Holder”).  The Company, each Consenting Holder and any subsequent person or
entity that becomes a party hereto in accordance with the terms hereof are
referred herein as the “Parties” and individually as a “Party”.
 
PRELIMINARY STATEMENTS
 
WHEREAS, as of the date hereof, the Consenting Holders hold, in the aggregate,
approximately 72% of the aggregate principal amount of the Notes outstanding
issued by the Issuers pursuant to that certain Indenture (as amended, modified
or supplemented prior to the date hereof, and together with all exhibits
thereto, the “Existing Indenture”), dated as of August 7, 2003, by and among the
Issuers, the Guarantors and Wachovia Bank, N.A., as Trustee (including successor
trustees, the “Indenture Trustee”);
 
WHEREAS, the Company and the Consenting Holders have agreed to implement a
restructuring and reorganization of the Company as set forth in that certain
Restructuring Term Sheet, dated as of September 23, 2009, as amended by that
certain Amendment to Restructuring Term Sheet, dated as of October 15, 2009,
each as attached hereto as Exhibit A (as may be further amended, modified or
supplemented, the “Restructuring Term Sheet”).  This Agreement and the
Restructuring Term Sheet are the product of arm’s length good faith discussions
between the Company and members of an ad hoc committee of certain holders of the
Notes (the “Ad Hoc Committee”), each of whose members are among the initial
Consenting Holders;
 
WHEREAS, the Company has agreed to implement the restructuring transactions
contemplated by the Restructuring Term Sheet (the “Restructuring Transactions”)
through either (i) an out-of-court exchange offer (the “Exchange Offer”) of
$278,478,000 in principal amount of Notes for $100,000,000 in principal amount
of new senior secured notes (the “New Notes”) or (ii) a pre-packaged plan of
reorganization (the “Conforming Plan”) under chapter 11 of title 11 of the
United States Code, 11 U.S.C. §§ 101-1532 (as amended, the “Bankruptcy Code”),
which in either case shall be consistent in all material respects with the terms
of the Restructuring Term Sheet;
 
WHEREAS, the Company has agreed to commence the Exchange Offer and concurrently
solicit from the holders of the Notes: (i) consents for certain amendments to
the Existing Indenture and (ii) votes (on behalf of their claims against the
Company) to accept the Conforming Plan (collectively, the “Solicitation”) on or
before the Commencement Date (as defined below), or such later date as agreed to
by the Ad Hoc Committee and the Company, and if the Company does not receive the
Requisite Tender (as defined below) in response to the
 
 
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Exchange Offer on or prior to the expiration of the Solicitation (which shall be
open for twenty (20) Business Days or longer, as agreed to by the Parties), the
Company shall file the Conforming Plan, within seven (7) days of the conclusion
of the Solicitation, as part of voluntary reorganization cases under chapter 11
of the Bankruptcy Code (the “Chapter 11 Cases”) in the United States Bankruptcy
Court for the Southern District of Georgia (the “Bankruptcy Court”) to be
jointly administered; and
 
WHEREAS, the Parties acknowledge that, as part of the Restructuring
Transactions, the Company has consummated the Senior Refinancing Transaction
according to the terms of the Restructuring Term Sheet and pursuant to the Ad
Hoc Committee’s consent, and MCC and MPG Revolver Holdings, LLC (“MPG Revolver”)
have deposited the Remaining Senior Debt Balance of the Company into third-party
escrow accounts, pursuant to the Escrow Agreement dated as of October 15, 2009
among MPG, MCC, the Ad Hoc Committee, MPG Newspaper Holding, LLC, MPG Revolver
and Computershare Trust Company, N.A., as escrow agent (the “Escrow Agreement”).
 
NOW, THEREFORE, in consideration of the promises and the mutual covenants set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the Parties, intending to be
legally bound, agree as follows:
 
Section 1. Restructuring.  The Restructuring Term Sheet is expressly
incorporated herein and made part of this Agreement.  The Restructuring Term
Sheet sets forth the material terms and conditions of the Restructuring
Transactions and is supplemented by the terms and conditions of this
Agreement.  In the event of any inconsistency between the Restructuring Term
Sheet and this Agreement, this Agreement shall control.  In the event of any
inconsistency between the Conforming Plan and this Agreement, the Conforming
Plan, as confirmed, shall control.
 
Section 2. Certain Definitions.  As used in this Agreement, the following terms
shall have the following meanings:
 
(a) “Ad Hoc Committee” shall have the meaning given to such term in the
preliminary statements above.
 
(b) “Ad Hoc Committee Advisors” shall have the meaning given to such term in
Section 4(f)(vii) hereof.
 
(c) “Affiliate” means, with respect to any Person, any other Person who directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, such specified Person.  The term “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
“controlling” and “controlled” have meanings correlative of the foregoing.
 
(d) “Agreement” shall have the meaning given to such term in the preliminary
statements above.

 
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(e) “Business Day” means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City, New York or Atlanta, Georgia are
authorized by law, regulation or executive order to remain closed.
 
(f) “Commencement Date” means the date of commencement of the Exchange Offer.
 
(g) “Company” shall have the meaning given to such term in the preliminary
statements above.
 
(h) “Confirmation Date” shall have the meaning given to such term in Section
4(f)(ii)(B) hereof.
 
(i) “Conforming Plan” shall have the meaning given to such term in the
preliminary statements above.
 
(j) “Consenting Holder” shall have the meaning given to such term in the
preliminary statements above.
 
(k) “Consenting Holders’ Termination Event” shall have the meaning given to such
term in Section 5(a) hereof.
 
(l) “Credit Agreement” means that certain Amended and Restated Credit Agreement,
dated as of October 15, 2009 (together with any amendments, exhibits and
schedules thereto, and as may be amended, modified and supplemented from time to
time), by and among the Company, MCC, the lenders party thereto and Tranche
Manager, LLC, as administrative agent.
 
(m) “Definitive Documents” means the agreements, instruments or filings
implementing, effecting or relating to (i) the Exchange Offer and (ii) the
Conforming Plan, including any “first day” pleadings, an offering
memorandum/disclosure statement in connection with the Conforming Plan (the
“Disclosure Statement”), the order of the Bankruptcy Court confirming the
Conforming Plan, and definitive documentation relating to the Company’s
debtor-in-possession financing (if applicable), use of cash collateral, any exit
financing, charter, bylaws and other corporate or organizational documents
(including as contemplated by Section 4(h) and Section 4(j) hereof), shareholder
related agreements, or other related documents, which shall contain terms and
conditions consistent in all material respects with the Restructuring Term Sheet
and otherwise shall be reasonably satisfactory in all respects to the Company
and the Requisite Noteholders, in accordance with Section 7 hereof.
 
(n) “Downstream Affiliate” means, with respect to any Party, any Affiliate of
such Party 10% or more of whose outstanding voting securities are directly or
indirectly owned or held with power to vote, by such Party.
 
(o) “Effective Date” shall have the meaning given to such term in Section 11
hereof.

 
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(p) “Exchange Offer” shall have the meaning given to such term in the
preliminary statements above.
 
(q) “Existing Indenture” shall have the meaning given to such term in the
preliminary statements above.
 
(r) “Existing Senior Indebtedness” means the existing first lien senior
indebtedness of the Company governed by the Credit Agreement.
 
(s) “Filing Date” shall have the meaning given to such term in Section
4(f)(ii)(A) hereof.
 
(t) “Forbearance Agreement” means the Forbearance Agreement dated as of February
26, 2009 (as amended), by and among the Company and the holders of the Notes
party thereto.
 
(u) “Indenture” means the indenture pursuant to which the New Notes will be
issued that will be based in part upon the Existing Indenture.
 
(v) “Indenture Trustee” shall have the meaning given to such term in the
preliminary statements above.
 
(w) “Material Adverse Effect” means a material adverse effect on (i) the
consolidated financial condition, property, operations, business or prospects of
the Company taken as a whole, (ii) the ability of the Company to perform its
obligations under any of the Definitive Documents, (iii) the validity or
enforceability of any of the Definitive Documents, or (iv) the rights and
remedies of the Consenting Holders under any of the Definitive Documents.
 
(x) “MCC” shall have the meaning given to such term in Section 4(i) hereof.
 
(y) “New Note Maturity Date” means the date that is four (4) years and six (6)
months from the date of issuance of the New Notes.
 
(z) “New Notes” shall have the meaning given to such term in the preliminary
statements above.
 
(aa) “Notes” shall have the meaning given to such term in the preliminary
statements above.
 
(bb) “Party” shall have the meaning given to such term in the preliminary
statements above.
 
(cc) “Person” means an individual, partnership, limited liability company,
corporation, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
 
(dd) “Refinanced Debt” shall have the meaning given to such term in Section 4(c)
hereof.

 
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(ee) “Remaining Senior Debt Balance” means the full amount of Existing Senior
Indebtedness that is outstanding after consummation of the Senior Refinancing
Transaction other than the Tranche A Term Loan and the Tranche B Term Loan.
 
(ff) “Requisite Tender” means tender of Notes from holders representing 99% in
aggregate principal amount outstanding of the Notes.
 
(gg) “Requisite Noteholders” means Consenting Holders holding at least 50% in
aggregate principal amount outstanding of the Notes held by the Consenting
Holders in the aggregate.
 
(hh) “Restructuring Effective Date” means either: (i) the effective date of the
Exchange Offer if the Requisite Tender is obtained, or (ii) the effective date
of the Conforming Plan.
 
(ii) “Restructuring Support Period” means the period commencing on the Effective
Date and ending on the date on which this Agreement is terminated in accordance
with Section 5 hereof.
 
(jj) “Restructuring Term Sheet” shall have the meaning given to such term in the
preliminary statements above.
 
(kk) “Restructuring Transactions” shall have the meaning given to such term in
the preliminary statements above.
 
(ll) “Senior Debt Refinancing Documentation” shall have the meaning given to
such term in the Restructuring Term Sheet.
 
(mm) “Senior Indebtedness Cap Amount” means, as of any date of determination,
(i) the aggregate principal amount of the Tranche A Term Loan on October 15,
2009, less (ii) all payments of principal on the Tranche A Term Loan made prior
to such date of determination, plus (iii) the aggregate principal amount of the
Tranche B Term Loan on October 15, 2009, plus (iv) all paid-in-kind interest on
the Tranche B Loan, which paid-in-kind interest has accrued or been added to the
principal thereof, as applicable, prior to such date of determination; provided,
however, this term Senior Indebtedness Cap Amount shall not include amounts
described under clauses (iii) and (iv) above, unless and only to the extent that
the Tranche B Term Loan is refinanced in connection with and as a part of the
refinancing of the Tranche A Term Loan.
 
(nn) “Senior Refinancing Transaction” shall have the meaning given to such term
in the Restructuring Term Sheet.
 
(oo) “Solicitation” shall have the meaning given to such term in the preliminary
statements above.
 
(pp) “Stroock” means Stroock & Stroock & Lavan LLP in its capacity as counsel to
the Ad Hoc Committee.

 
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(qq) “Tranche A Term Loan” shall have the meaning given to such term in the
Credit Agreement as in effect on the date hereof.
 
(rr) “Tranche B Term Loan” shall have the meaning given to such term in the
Credit Agreement as in effect on the date hereof.
 
(ss) “Working Capital Balance” means a balance of cash and cash equivalents at
any financial institution for which a valid control agreement with respect to
the Existing Senior Indebtedness is in place or at a financial institution
acceptable to both the Company and the Requisite Noteholders or Stroock.
 
(tt) “Working Capital Facility” means a first lien, senior secured working
capital revolving credit facility with an aggregate maximum principal amount not
to exceed $10,000,000.
 
Section 3. Agreements of the Consenting Holders.
 
(a) Affirmative Covenants.  Subject to the conditions contained in Section 3(b)
and Section 3(d) hereof, each Consenting Holder agrees that, for the duration of
the Restructuring Support Period, such Consenting Holder shall and shall cause
such Consenting Holders’ Downstream Affiliates to:
 
(i) timely and validly tender or cause to be tendered in the Exchange Offer all
Notes (A) held by such Consenting Holder on the Commencement Date, and (B)
acquired by such Consenting Holder after the Commencement Date promptly, in each
case free and clear of any encumbrances or restrictions, and including any Notes
held by an entity for which such Consenting Holder acts as the investment
advisor or manager, and such Consenting Holder shall not withdraw or revoke any
such tender unless and until this Agreement is terminated in accordance with
Section 5;
 
(ii) provide its consent in favor of the amendment to the Existing Indenture in
the form of Exhibit B as attached hereto;
 
(iii) with respect to any Solicitation of votes to accept the Conforming Plan,
support and timely vote or cause to be voted its claims against the Company
arising under the Notes to accept the Conforming Plan, including by delivering
its duly executed and completed ballot accepting such Conforming Plan on a
timely basis during the Solicitation, subject to the receipt by such Consenting
Holder of the Disclosure Statement and other solicitation materials in respect
of the Conforming Plan that are subsequently approved by the Bankruptcy Court as
complying with section 1126(b) of the Bankruptcy Code; provided, however, that
such vote may, upon written notice to the Company and the other Parties, be
revoked, subject to the terms of any order of the Bankruptcy Court, (and, upon
such revocation, deemed void ab initio) by any Consenting Holder at any time
following the expiration of the Restructuring Support Period;
 
(iv) timely vote against or cause to be voted against and not consent to, or
otherwise directly or indirectly support, solicit, assist, encourage or
participate in the

 
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(v) formulation of, any restructuring or reorganization of the Company (or any
plan or proposal in respect of the same) other than the Restructuring
Transactions;
 
(vi) if the Chapter 11 Cases are filed, not directly or indirectly seek,
solicit, support or encourage the termination or modification of the exclusive
period for the filing of any plan, proposal or offer of dissolution, winding up,
liquidation, reorganization, merger or restructuring of the Company, or take any
other action, including but not limited to initiating any legal proceedings or
enforcing rights as a holder of the Notes, that could prevent, interfere with,
delay or impede the implementation or consummation of the Restructuring
Transactions as contemplated by the Restructuring Term Sheet and the Conforming
Plan; and
 
(vii) not take any action that is inconsistent with, or that would delay
consummation or confirmation of, the Exchange Offer or the Conforming Plan.
 
(b) Certain Conditions.  The obligations of each Consenting Holder set forth in
Section 3(a) hereof are subject to the following conditions:
 
(i) this Agreement shall have become effective in accordance with the provisions
of Section 11;
 
(ii) this Agreement shall not have terminated in accordance with the provisions
of Section 5 hereof; and
 
(iii) prior to filing, the Conforming Plan and all Definitive Documents shall be
consistent in all material respects with the Restructuring Term Sheet and
otherwise shall be reasonably satisfactory in all respects to the Requisite
Noteholders.
 
(c) Rights of Consenting Holders Unaffected.  Nothing contained herein shall
limit (i) (A) the ability of a Consenting Holder to consult with other
Consenting Holders or the Company or (B) the rights of a Consenting Holder under
any applicable bankruptcy, insolvency, foreclosure or similar proceeding,
including, without limitation, appearing as a party in interest in any matter to
be adjudicated in order to be heard concerning any matter arising in the
Chapter 11 Cases, in each case, so long as such consultation or appearance is
not inconsistent with the Consenting Holder’s obligations hereunder or under the
terms of the Restructuring Term Sheet and is not for the purpose of hindering,
delaying or preventing the consummation of the Restructuring Transactions; (ii)
the ability of a Consenting Holder to sell or enter into any transactions in
connection with the Notes or any other claims against or interests in the
Company, subject to Section 3(d) and Section 3(e) hereof; or (iii) the rights of
any Consenting Holder under the Existing Indenture or constitute a waiver or
amendment of any provision of the Existing Indenture, subject to Section 3(a)
and Section 25 hereof.
 
(d) Transfers.  Each Consenting Holder agrees that, for the duration of the
Restructuring Support Period, such Consenting Holder shall not sell, transfer,
loan, hypothecate, assign or otherwise dispose of (including by participation),
in whole or in part, any of the Notes or any option thereon or any right or
interest therein (including the grant of any proxies or the deposit of any Notes
into a voting trust or entry into a voting agreement with respect to any such
Notes), unless the transferee thereof either (i) is a Consenting Holder or (ii)
prior to such transfer, agrees in writing for the benefit of the Parties to
become a Consenting Holder and to be bound by

 
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(e) all of the terms of this Agreement applicable to Consenting Holders by
executing the Joinder attached hereto as Exhibit C (the “Joinder Agreement”),
and delivering an executed copy thereof, within three (3) Business Days of such
execution, to the Company and its advisors as set forth in Section 20 below, and
to Stroock, as counsel to the Ad Hoc Committee, in which event (A) the
transferee shall be deemed to be a Consenting Holder hereunder to the extent of
such transferred rights and obligations and (B) the transferor shall be deemed
to relinquish its rights (and be released from its obligations) under this
Agreement to the extent of such transferred rights and obligations.  Each
Consenting Holder agrees that any sale, transfer or assignment of any Notes that
does not comply with the terms and procedures set forth herein shall be deemed
void ab initio, and the Company and each other Consenting Holder shall have the
right to enforce the voiding of such sale, transfer or
assignment.  Notwithstanding anything contained herein to the contrary, during
the Restructuring Support Period, a Consenting Holder may offer, sell or
otherwise transfer any or all of its Notes to any entity that, as of the
Effective Date was, and as of the date of transfer continues to be, an Affiliate
of the Consenting Holder and is (or executes a Joinder Agreement under which
such entity agrees to become) a Party to this Agreement.  Notwithstanding
anything contained herein to the contrary, during the Restructuring Support
Period, a Party may offer, sell or otherwise transfer any or all of its holdings
of Notes to an entity that, as of the date of transfer, is an Affiliate of a
Consenting Holder that is a Party to this Agreement; provided, however, that
such entity automatically shall be subject to the terms of this Agreement and
deemed a Party hereto and shall execute a Joinder Agreement hereto.
 
(f) Additional Claims or Equity Interests.  To the extent any Party who is a
Consenting Holder (i) acquires additional Notes, (ii) holds or acquires any
other claims against the Company or (iii) holds or acquires any equity interests
in the Company, each such Consenting Holder agrees that such Notes or other
claims or equity interests shall be subject to this Agreement and that, for the
duration of the Restructuring Support Period, it shall vote (or cause to be
voted) any such additional Notes or other claims or equity interests entitled to
vote on the Conforming Plan (in each case, to the extent still held by it or on
its behalf at the time of such vote) in a manner consistent with Section 3(a)
hereof.
 
Section 4. Agreements of the Company.
 
(a) Cash on Hand.  On the Restructuring Effective Date, the Company shall have
at least (x) $15,700,000 of cash on hand less the following amounts paid or
accrued after September 23, 2009: (i) professional fees, (ii) non-recurring
restructuring charges, including those fees, expenses and charges incurred
directly as a result of the Senior Refinancing Transaction, the Restructuring
Transactions or this Agreement or related to the indebtedness or capital
structure of the Company, and all negotiations and transactions directly related
thereto, and (iii) any prepayments or prepayment premiums on the Existing Senior
Indebtedness or Refinanced Debt (the “Initial Cash On Hand”) in excess of (y)
$5,000,000.
 
(b) Remaining Debt.  The aggregate outstanding balance of the Tranche A Term
Loan shall not exceed $19,700,000 at any time.  The aggregate outstanding
balance of the Tranche B Term Loan shall not exceed $6,800,000 (plus accrued
paid-in-kind interest) at any time.  The Tranche A Term Loan shall not be held
by an Affiliate of the Company at any time.  The Credit Agreement may not be
amended to the extent such amendment would:  (i) increase

 
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(c) the aggregate principal amount of the loans then outstanding under the
Credit Agreement (other than any amendment which has effect of capitalizing
interest or fees accruing under the Credit Agreement by adding such amounts to
the principal amount thereunder), (ii) increase the “Tranche A Fixed Rate” or
the “Tranche B Fixed Rate” (in each case, as defined in the Credit Agreement as
in effect on the date hereof) or any other applicable rate of interest, in each
case, as in effect on the date hereof, (iii) amend or modify the requirement
that interest on the Tranche B Term Loans be PIK Interest (as defined in the
Credit Agreement as in effect on the date hereof), (iv) amend or modify Section
2.10(c) of the Credit Agreement in a manner that increases the default interest
rate with respect to the Tranche B Term Loan, (v) amend or modify the definition
of Tranche B/C Event of Default (as such term is defined in the Credit Agreement
as in effect on the date hereof), (vi) amend or modify the Loan Documents (as
defined in the Credit Agreement as in effect on the date hereof) in a manner
that confers additional material rights or remedies in favor of the Tranche B
Lenders (as defined in the Credit Agreement as in effect on the date hereof);
provided, however, that the following amendments and modifications shall not
violate this clause (vi): (A) amendments and modifications to representations
and warranties or covenants (including related definitions), that (x) are not
more restrictive or burdensome to the Company, or (y) if more restrictive or
burdensome to the Company, do not relate to a provision that, if breached, would
constitute a “Tranche B/C Event of Default”, (B) amendments and modifications to
events of default under the Credit Agreement that do not change the definition
of “Tranche B/C Event of Default”, (C) amendments and modifications that are
incorporated pursuant to the requirements of Section 6.15 of the Credit
Agreement as in effect on the date hereof, and (D) amendments and modifications
to cure any ambiguity, defect or inconsistency of a technical nature (in each
case, whether or not favorable to the Tranche B Lenders) in the Loan Documents,
or (vii) amend or modify Section 2.09(a) of the Credit Agreement as in effect on
the date hereof to increase the obligations of the Company thereunder, or amend
or modify the definition of “Borrower Fee Cap” (as defined in the Credit
Agreement as in effect on the date hereof).
 
(d) Refinancing of Tranche A Term Loan and Tranche B Term Loan.  On or prior to
one hundred fifty (150) days after the Restructuring Effective Date, the Company
shall refinance the Tranche A Term Loan and may, at the Company’s option,
refinance the Tranche B Term Loan, in either case with a term loan and/or
revolver provided solely by an unaffiliated commercial bank and not by an
Affiliate of the Company (collectively, the “Refinanced Debt”).  Notwithstanding
anything to the contrary contained herein or in the Credit Agreement, the
Refinanced Debt shall have no prepayment penalties and shall permit (in either
case other than when an event of default under the Refinanced Debt or Working
Capital Facility shall have occurred and be continuing):  (i) cash interest
payments on the New Notes at all times and (ii) amortization payments when there
is no outstanding balance on the Refinanced Debt or Working Capital
Facility.  To the extent that the Tranche B Term Loan is not refinanced on or
prior to one hundred fifty (150) days of the Restructuring Effective Date, the
Tranche B Term Loan shall mature on the New Note Maturity Date and shall only be
capable of amortization or repayment on a pro rata basis with the New
Notes.  Upon the amortization or refinancing of all or any portion of the
Tranche B Term Loan, including any accrued interest, such amortized or
refinanced balance shall no longer be available for borrowing under the Tranche
B Term Loan.  There shall be no amortization of the Tranche B Term Loan during
the Restructuring Support Period, except with respect to a refinancing.  Any
agreement relating to the Refinanced Debt, including the Credit Agreement if the
Credit Agreement is amended, restated, supplemented or

 
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(e) otherwise modified in connection with the Refinanced Debt, shall not contain
any provision to the extent such provision, either individually or when taken
together with other provision(s) in such agreement, would have the effect of, as
compared to the related provision(s) contained in the Credit Agreement as in
effect on the date hereof: (A) resulting in the aggregate principal amount of
Refinanced Debt exceeding the Senior Indebtedness Cap Amount (other than any
provision which would have the effect of capitalizing interest or fees accruing
by adding such amounts to the principal amount thereunder), (B) increasing the
“Tranche A Fixed Rate” or the “Tranche B Fixed Rate” or any other applicable
rate of interest, (C) amending or modifying the requirement that interest on the
Tranche B Term Loans be PIK Interest, (D) amending or modifying Section 2.10(c)
of the Credit Agreement as in effect on the date hereof in a manner increases
the default interest rate with respect to the Tranche B Term Loan, or (E)
amending or modifying the definition of Tranche B/C Event of Default.  Such
Refinanced Debt shall be subject to an Intercreditor Agreement substantially in
the form attached hereto as Exhibit D, with any changes to such Intercreditor
Agreement to be agreed upon between the Company and the Requisite Noteholders.
 
(f) Working Capital Facility.  The Company may enter into a Working Capital
Facility.  The Working Capital Facility shall permit: (i) the payment of
interest on the New Notes at all times (other than when an event of default
under the Working Capital Facility shall have occurred and be continuing), and
(ii) the amortization of the New Notes when there is no outstanding balance on
the Working Capital Facility.  As a condition to obtaining the Working Capital
Facility, the Company shall be required to first use the entire amount available
of the Working Capital Balance to amortize the Tranche A Term Loan or Refinanced
Debt, as applicable.
 
(g) Exchange Offer.  The Company shall commence the Solicitation on or prior to
November 6, 2009, unless otherwise extended by the Requisite Noteholders.  If
the Company receives the Requisite Tender in response to the Exchange Offer at
the conclusion of the Solicitation, the Company shall consummate the Exchange
Offer within three (3) Business Days thereafter.
 
(h) Affirmative Covenants.  The Company agrees that, as of the date hereof
through the Restructuring Effective Date so long as this Agreement has not been
terminated in accordance with its terms, unless (x) otherwise expressly
permitted or required by this Agreement, or (y) otherwise consented to in
writing by the Requisite Noteholders (which consent shall not be unreasonably
withheld or delayed), the Company shall, and shall cause each of its direct and
indirect subsidiaries to, directly or indirectly, do the following:
 
(i) complete the preparation, as soon as practicable after the date hereof, of
each of the Exchange Offer, the Conforming Plan, the Disclosure Statement and
the other Definitive Documents, which documents shall contain terms and
conditions consistent in all material respects with the Restructuring Term Sheet
and otherwise shall be reasonably acceptable to the Requisite Noteholders and
the Company, and distribute such documents and afford reasonable opportunity of
comment and review to the respective legal and financial advisors for the
Consenting Holders in advance of any filing thereof;

 
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(ii) if the Company does not receive the Requisite Tender in response to the
Solicitation of the Exchange Offer (as extended for an additional five (5)
Business Day period at either the Company’s or the Requisite Noteholders’
written request), then the Company shall:
 
(A) commence the Chapter 11 Cases within seven (7) calendar days after the
conclusion of the Solicitation (such date, the “Filing Date”) and on such date,
file the Conforming Plan, the Disclosure Statement and other “first day”
pleadings that are reasonably satisfactory to the Requisite Noteholders;
 
(B) obtain approval of the Disclosure Statement and confirmation of the
Conforming Plan not later than 5:00 P.M. Eastern Time on the date
(the “Confirmation Date”) that is thirty (30) calendar days after the Filing
Date, subject to the schedule of the Bankruptcy Court; and
 
(C) consummate the Conforming Plan not later than 5:00 P.M. Eastern Time on the
date that is eleven (11) calendar days after the Confirmation Date;
 
(iii) whenever practicable, provide draft copies of all motions or applications
and other documents the Company intends to file with the Bankruptcy Court in
connection with the Chapter 11 Cases to counsel for the Ad Hoc Committee at
least four (4) Business Days prior to the date the Company intends to file any
such document and consult in advance in good faith with counsel to the Ad Hoc
Committee regarding the form and substance of any such proposed filing with the
Bankruptcy Court;
 
(iv) maintain their good standing under the laws of the state or other
jurisdiction in which they are incorporated or organized;
 
(v) timely file a formal objection to any motion filed with the Bankruptcy Court
by a third party seeking the entry of an order (A) directing the appointment of
an examiner with expanded powers or a trustee, (B) converting the Chapter 11
Cases to cases under chapter 7 of the Bankruptcy Code, or (C) dismissing the
Chapter 11 Cases;
 
(vi) timely file a formal objection to any motion filed with the Bankruptcy
Court by a third party seeking the entry of an order modifying or terminating
the Company’s exclusive right to file and/or solicit acceptances of a plan of
reorganization;
 
(vii) subject to appropriate confidentiality agreements, provide to each of
Stroock, as counsel to the Ad Hoc Committee, and FTI Consulting, Inc. (such
advisors taken together, the “Ad Hoc Committee Advisors”), without any material
disruption to the conduct of the Company’s business (A) reasonable access during
normal business hours to the Company’s books, records and facilities, (B)
reasonable access to the respective management and advisors of the Company for
the purposes of evaluating the Company’s business plans and participating in the
planning process with respect to the Restructuring Transactions, (C) timely and
reasonable responses to all reasonable diligence requests, and (D) information
with respect to all executory contracts and unexpired leases of the Company for
the purposes of concluding, in consultation with the Company and its advisors,
which executory contracts and unexpired leases the Company intends to assume,
assume and assign, or reject, in the Chapter 11 Cases;

 
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(viii) to the extent permitted by the Bankruptcy Court, timely and fully
discharge all of its obligations then due and owing under any existing
agreements of the Company regarding the payment of the reasonable fees and
expenses of the Ad Hoc Committee Advisors in connection with the Restructuring
Transactions, and (A) on the date that is at least one (1) day prior to the
Commencement Date, the Company shall pay to each of the Ad Hoc Committee
Advisors all reasonable amounts then due and outstanding as provided in the
respective invoices supplied to the Company by the Ad Hoc Committee Advisors
containing a summary of hours and services provided, (B) on the date that is at
least one (1) day prior to the Filing Date, the Company shall pay to Stroock (i)
all reasonable amounts then due and outstanding as provided in an invoice
supplied to the Company containing a summary of hours and services provided and
(ii) a retainer in the amount of $300,000, any unused portion of which shall be
refunded to the Company within forty-five (45) days after the earlier to occur
of (x) the effective date of the Plan or (y) termination of this Agreement; (C)
on the date that is at least one (1) day prior to the Filing Date, the Company
shall pay to FTI (i) all reasonable amounts then due and outstanding as provided
in an invoice supplied to the Company containing a summary of hours and services
provided and (ii) a retainer in the amount of $50,000, any unused portion of
which shall be refunded to the Company within forty-five (45) days after the
earlier to occur of (x) the effective date of the Plan or (y) termination of
this Agreement; and (D) to the extent the reasonable fees and expenses of
Stroock and FTI exceed their respective retainers as of the date of confirmation
of the Conforming Plan, the terms of the Conforming Plan shall provide that the
Company will pay Stroock and FTI their outstanding fees and expenses pursuant to
section 1129(a)(4) of the Bankruptcy Code or otherwise;
 
(ix) notify the Ad Hoc Committee Advisors subject to appropriate confidentiality
agreements of any governmental or third party complaints, litigations,
investigations or hearings (or communications indicating that the same may be
contemplated or threatened), in any such case which could reasonably be
anticipated to have a Material Adverse Effect;
 
(x) prior to the filing of the Chapter 11 Cases, take all actions contemplated
to be taken prior to the filing of the Chapter 11 Cases by the Restructuring
Term Sheet; and
 
(xi) furnish to the Ad Hoc Committee Advisors subject to appropriate
confidentiality agreements prompt written notice upon the occurrence (and in no
event later than two (2) Business Days after such occurrence) of (A) an event,
change, effect, occurrence, development, circumstance or change of fact occurs
that has or would reasonably be expected to have a Material Adverse Effect or
that materially impairs the ability of the Company to perform its obligations
under this Agreement or have a material adverse effect on, or prevent or
materially delay the consummation of, the Restructuring Transactions, or (B) any
breach (or any event that with notice or passage of time, or both, would
constitute a breach) of any of the Definitive Documents.
 
(i) Negative Covenants.  The Company agrees that, as of the date hereof through
the Restructuring Effective Date so long as this Agreement has not been
terminated in accordance with its terms, unless (x) otherwise expressly
permitted or required by this Agreement or the Restructuring Term Sheet or
(y) otherwise consented to in writing by the

 
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(j) Requisite Noteholders or Stroock, as counsel for the Ad Hoc Committee (which
consent shall not be unreasonably withheld or delayed), the Company shall not,
and shall cause each of its direct and indirect subsidiaries not to, directly or
indirectly, do or permit to occur any of the following:
 
(i) propose, support, assist, engage in negotiations in connection with or
participate in the formulation of, any restructuring or reorganization of the
Company (or any plan or proposal in respect of the same) other than the
Restructuring Transactions;
 
(ii) modify the Exchange Offer or the Conforming Plan, in whole or in part, in a
manner that is not consistent in any material respect with this Agreement or the
Restructuring Term Sheet;
 
(iii) withdraw or revoke either the Exchange Offer or the Conforming Plan or
publicly announce its intention not to pursue the Restructuring Transactions;
 
(iv) file (A) any motion or pleading or other Definitive Document with the
Bankruptcy Court (including any modifications or amendments thereof), or (B) any
document in connection with the transactions contemplated in the Definitive
Documents with the Securities Exchange Commission, that in whole or in part, is
not consistent in any material respect with this Agreement, the Restructuring
Term Sheet or the Conforming Plan, and is not otherwise reasonably satisfactory
in all material respects to the Requisite Noteholders or counsel for the Ad Hoc
Committee;
 
(v) move for an order authorizing or directing the assumption or rejection of an
executory contract or unexpired lease other than in accordance with the
Restructuring Term Sheet or the Conforming Plan or as approved in writing by the
Requisite Noteholders;
 
(vi) commence an avoidance action or other legal proceeding that challenges the
validity, enforceability or priority of either the Notes or the New Notes, or
otherwise affects the rights of any Consenting Holder solely in its capacity as
a holder of either Notes or New Notes;
 
(vii) issue, offer, pledge, sell, contract to sell, grant any option or contract
to purchase, purchase any option or contract to sell, or otherwise dispose of,
directly or indirectly, any shares or options, warrants, conversion privileges
or rights of any kind to acquire any shares of, any of its equity interests,
including, without limitation, capital stock or partnership interests;
 
(viii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the equity
interests of the Company;
 
(ix) except as provided in Section 4(h), amend or propose to amend its
respective certificate or articles of incorporation, bylaws or comparable
organizational documents;

 
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(x) split, combine or reclassify any outstanding shares of its capital stock or
other equity interests, or declare, set aside or pay any dividend or other
distribution payable in cash, stock, property or otherwise with respect to any
of its equity interests;
 
(xi) redeem, purchase or acquire or offer to acquire any of its equity
interests, including, without limitation, capital stock or partnership
interests;
 
(xii) acquire or divest (by merger, exchange, consolidation, acquisition of
stock or assets or otherwise) (A) any corporation, partnership, limited
liability company, joint venture or other business organization or division or
(B) assets of the Company, other than in the ordinary course of business;
 
(xiii) except for expenditures approved in writing in advance by the Requisite
Noteholders in their reasonable discretion, which shall not be unreasonably
withheld or delayed, incur capital expenditures in excess of the $1,200,000
amount projected in the 13-week cash flow forecast as of October 19, 2009
provided to Stroock until the earliest to occur of the consummation of the
Exchange Offer, the confirmation of the Conforming Plan or January 19, 2010
(which date may be extended by the mutual written consent of the Parties);
 
(xiv) incur or suffer to exist any indebtedness, except indebtedness existing
and outstanding immediately prior to the date hereof, trade payables and
liabilities arising and incurred in the ordinary course of business, any
refinancing permitted under the Definitive Documents, the Working Capital
Facility, and customary permitted indebtedness;
 
(xv) except in connection with the issuance of the New Notes, any refinancing
permitted under the Definitive Documents, the Working Capital Facility or as
otherwise specifically contemplated herein, incur any liens or security
interests, other than those existing on the date hereof and customary permitted
liens;
 
(xvi) incur any charges, encumbrances or lease obligations other than in the
ordinary course of business consistent with past practices;
 
(xvii) enter into any commitment or agreement with respect to
debtor-in-possession financing, cash collateral and/or exit financing other than
as necessary to effectuate the Restructuring Transactions set forth in the
Restructuring Term Sheet;
 
(xviii) enter into any collective bargaining agreements or materially increase
the benefits under any existing collective bargaining agreements or benefit
plans (except as required by law), without the approval of the Bankruptcy Court;
 
(xix) (A) hire any executive or employee whose total compensation is greater
than $200,000, or (B) increase by greater than five percent (5%) the
compensation for any executive or employee whose total compensation is greater
than $200,000, in each case without the approval of the Bankruptcy Court, if the
total aggregate amount by which amounts paid pursuant to actions taken in
accordance with subsections (A) or (B) above exceeds $200,000 is equal to or
less than $300,000; provided, however, that the restriction set forth in
subsection (A) above shall not apply to the hiring of any executive or employee
in order to replace an

 
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(xx) existing executive or employee where the new executive or employee’s
aggregate compensation is equal to or less than that of the replaced executive
or employee;
 
(xxi) settle any claim or pending litigation where the Company’s liability
exceeds $150,000 per settlement individually, or $500,000 in the aggregate,
without the approval of the Bankruptcy Court; or
 
(xxii) redeem, purchase or acquire or offer to acquire any Notes.
 
(k) Board Observer.  On the Restructuring Effective Date, the Company shall
amend its organizational documents in a manner that is in form and substance
reasonably satisfactory to the Consenting Holders in order to allow, so long as
any New Notes remain outstanding, holders representing a majority in aggregate
principal amount outstanding of such New Notes the right to appoint a non-voting
observer (the “Observer”) to the board of directors of the Company (the
“Board”).  Such Observer shall be permitted to observe each meeting of each
committee of each of the Board and the board of directors (or comparable body)
of each material subsidiary of the Company and each committee of such board (or
comparable body) of each such subsidiary.  Such Observer shall be elected by the
holders of the New Notes for successive one (1) year terms, removable only (A)
by holders of the New Notes representing a majority in aggregate principal
amount outstanding of the New Notes, or (B) by the Company for cause.  Such
Observer shall receive notice of the times and locations of all meetings in
accordance with the procedures in place for delivering notices of such meetings
to the members of the Board.  Such Observer shall be entitled to reimbursement
for reasonable fees and expenses incurred in connection with attending such
meetings.
 
(l) Tax Consolidation Agreement.  On or before the date that is fifteen (15)
Business Days after the Commencement Date, the Company shall amend the Tax
Consolidation Agreement dated as of August 7, 2003 among MPG, Morris
Communications Company, LLC (“MCC”) and Shivers Trading & Operating Company
(“Shivers”), as amended by Amendment No. 1 to Tax Consolidation Agreement dated
as of January 28, 2009 among MPG, MCC, Shivers, Questo, Inc. and MPG Newspaper
Holding, LLC, and such amendment shall (i) provide that any indebtedness of MPG
Newspaper Holding, LLC shall be treated for purposes of the Tax Consolidation
Agreement as if it were a direct obligation of the Company and no other
Affiliate of the Company, (ii) provide that the trustee under the Indenture
shall have an approval right as more fully specified in the Indenture with
respect to elections made or positions taken for tax return purposes, and, in
the case of subclause (D), actions taken, to the extent those elections,
positions or actions taken could reasonably be expected to have any adverse
consequence on the New Notes or the Company,  related to (A) the exchange of the
New Notes for the Notes, (B) the Plan of Reorganization attached as Schedule
VIII to that certain Amendment No. 4 and Waiver No. 2 to the Credit Agreement,
dated as of January 28, 2009, among the Company, Morris, Shivers, MPG Holding,
the guarantors and lenders party there, and JPMorgan Chase Bank, N.A., as
administrative agent, (C) the Senior Refinancing Transaction, or (D) the
indebtedness of MPG Newspaper Holding, LLC, and (iii) include the following
language:
 
“For the avoidance of doubt, and notwithstanding anything to the contrary
contained or implied in this Agreement, the parties

 
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acknowledge and agree that the Company shall not be required to make any
payments to MPG Holding, Questo or any other entity whose income is included in
a consolidated or combined income or franchise tax return of the Group, and
shall be indemnified against the making of any payments to the IRS or other
state or local taxing authority, with respect to any tax consequences or
liabilities arising from or attributable to either (i) the Plan of
Reorganization attached as Schedule VIII to that certain Amendment No. 4 and
Waiver No. 2 to the Credit Agreement, dated as of January 28, 2009, among the
Company, Morris, Shivers, MPG Holding, the guarantors and lenders party there,
and JPMorgan Chase Bank, N.A., as administrative agent, or (ii) the transactions
contemplated by that certain term sheet and related diagram attached as
Attachment A (and described therein as the ‘Senior Refinancing Transaction’, the
“Senior Refinancing Documentation”) to that certain Restructuring Term Sheet
dated as of September 23, 2009 (as amended) among the Company and its
subsidiaries and certain holders of the Company's 7% Senior Subordinated Notes
due 2013 party thereto; provided, however, that in calculating the obligations
of the Company under this Agreement, there shall be taken into account the tax
consequences and liabilities arising from or attributable to the refinancing or
satisfaction of the Company’s senior secured debt and the issuance of the new
MPG Holding debt as described in the Senior Refinancing Documentation, the
issuance of the New Notes in exchange for the Notes (as defined in the
Restructuring Support Agreement), and the payment of related fees and expenses,
all as provided for in connection with the Senior Refinancing Transaction (as
defined in the Restructuring Support Agreement).”
 
(m) Management and Services Agreement.  On or before the date that is fifteen
(15) Business Days after the Commencement Date, the Company shall amend the
Management and Services Agreement dated as of August 7, 2003 (the “MSA”) among
MCC, MSTAR Solutions, LLC (“MSTAR”) and MPG, as amended by (i) the First
Amendment to Management Services Agreement dated August 7, 2003 among MCC, MSTAR
and MPG, (ii) the Second Amendment to Management Services Agreement dated as of
May 16, 2008 among MCC, MSTAR and MPG, and (iii) the Third Amendment to
Management Services Agreement dated as of October 1, 2008 among MCC, MSTAR and
MPG, and such amendment shall fix the combined annual payment of the Morris
Communications Fee (as defined in the MSA) and the MSTAR Solutions Fee (as
defined in the MSA) at actual costs, provided that the combined annual payment
of the Morris Communications Fee and the MSTAR Solutions Fee shall not, under
any circumstances, exceed $22,000,000 in the aggregate during any given calendar
year; provided, however, that the amendment referenced in this section (j) shall
not become effective until the Restructuring Effective Date.
 
(n) Control Agreements.  On or before the Restructuring Effective Date, the
Company shall have entered into deposit account control agreements among the
Company, the

 
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(o) Indenture Trustee, the agent under the Credit Agreement and the relevant
financial institution for each deposit account of the Company for which a
deposit account control agreement currently is, or will be as contemplated by
the Senior Debt Refinancing Documentation, in place for the benefit of the
lenders under the Credit Agreement.
 
(p) Automatic Stay.  The Company acknowledges and agrees and shall not dispute
that after the commencement of the Chapter 11 Cases (if commenced), the giving
of notice of termination by any Party pursuant to this Agreement shall not be a
violation of the automatic stay of section 362 of the Bankruptcy Code (and the
Company hereby waives, to the greatest extent possible, the applicability of the
automatic stay to the giving of such notice).
 
(q) Representations and Warranties.  The Company hereby represents and warrants
to the Consenting Holders that as of the date hereof, there have been no changes
since October 15, 2009 to any of the following documents: (i) the Credit
Agreement, (ii) the Security and Guarantee Agreement (as defined in the Credit
Agreement), (iii) the Transfer Documents (as defined in the Credit Agreement),
or (iv) the Pledge Agreement (as defined in the Credit Agreement).
 
Section 5. Termination of Agreement.
 
(a) Consenting Holders’ Termination Events.  This Agreement may be terminated by
written notice of termination by the Requisite Noteholders, delivered in
accordance with Section 20 hereof, upon the occurrence of, and during the
continuation of, any of the following events (each, a “Consenting Holders’
Termination Event”):
 
(i) a material breach by the Company of any of its obligations under any of the
Definitive Documents;
 
(ii) a material breach by the Company of any of the provisions of Sections
4(a)-(l) of this Agreement;
 
(iii) any representation made by the Company in this Agreement proves to have
been materially incorrect on the date hereof, the date when such representation
was made or on the Effective Date, which breach remains uncured for a period of
three (3) Business Days after delivery to the Consenting Holders, or receipt by
the Company from the Consenting Holders, in either case, of written notice of
such breach;
 
(iv) the issuance by any governmental authority, including any regulatory
authority or court of competent jurisdiction, of any ruling or order enjoining
the consummation of a material portion of the Restructuring Transactions,
provided, however, that it shall not be deemed a material portion for purposes
of this subsection if the Exchange Offer is enjoined and the Conforming Plan has
not been enjoined;
 
(v) any event, change, effect, occurrence, development, circumstance or change
of fact occurs that has or would reasonably be expected to have a Material
Adverse Effect or that materially impairs the ability of the Company to perform
its obligations under this Agreement, which breach remains uncured for a period
of three (3) Business Days after delivery

 
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(vi) to the Consenting Holders, or receipt by the Company from the Consenting
Holders, in either case, of written notice of such breach;
 
(vii) the Bankruptcy Court enters an order that grants relief that is materially
inconsistent with this Agreement, the Restructuring Term Sheet or the Conforming
Plan in any respect;
 
(viii) the Bankruptcy Court enters an order modifying or terminating the
Company’s exclusive right to file and/or solicit acceptances of a plan of
reorganization;
 
(ix) the Bankruptcy Court grants relief terminating, annulling or modifying the
automatic stay (as set forth in section 362 of the Bankruptcy Code) permitting
the taking of any assets of the Company having an aggregate fair market value in
excess of $500,000, except as covered by insurance; provided, however, that the
aggregate liability to the Company after giving effect to any insurance proceeds
shall not exceed $500,000;
 
(x) the commencement of an avoidance action or other legal proceeding by the
Company or any other party with standing to bring such action (a “Proceeding”)
that seeks to challenge the validity, enforceability or priority of the Notes or
the New Notes, or otherwise materially affects the rights and remedies of any
Consenting Holder solely in such Consenting Holder’s capacity as a holder of
Notes or New Notes, which Proceeding is not stayed or dismissed within three (3)
Business Days of the receipt by the Company of written notice of such
Proceeding;
 
(xi) the termination of, or occurrence of an event of default (as defined in the
applicable agreement) under any commitment or agreement to provide post-petition
debtor-in-possession financing or exit financing to the Company to the extent
permitted hereunder, which shall not have been cured within any applicable grace
periods or waived pursuant to the terms of the commitment or agreement governing
such facility;
 
(xii) the termination of, or occurrence of an event of default (as defined in
the applicable order or agreement) under, any order or agreement permitting the
use of cash collateral to the extent permitted hereunder which shall not have
been cured within any applicable grace periods or waived pursuant to the terms
of such order or agreement;
 
(xiii) the Bankruptcy Court having entered an order (A) directing the
appointment of an examiner with expanded powers or a trustee, (B) converting the
Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, or (C)
dismissing the Chapter 11 Cases;
 
(xiv) a material deviation in amount or type from the liabilities previously
disclosed in writing to the Ad Hoc Committee or to the Ad Hoc Committee
Advisors, including liabilities disclosed in the due diligence materials
provided to the Ad Hoc Committee Advisors prior to the commencement of the
Chapter 11 Cases; or
 
(xv) the failure to satisfy any of the conditions to effectiveness set forth in
the Conforming Plan after the Confirmation Date.

 
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(xvi) Company Termination Events.  The Company may terminate this Agreement as
to all Parties upon three (3) Business Days prior written notice, delivered in
accordance with Section 20 hereof, upon the occurrence of any of the following
events:
 
(xvii) the breach by one or more Consenting Holders of any of the
representations, warranties or covenants of such Consenting Holder(s) set forth
in this Agreement, if such breach would have a material adverse impact on the
Company or the consummation of the Restructuring Transactions, which breach
remains uncured for a period of five (5) Business Days after the receipt by the
applicable Consenting Holder(s) from the Company of written notice of such
breach; or
 
(xviii) the issuance by any governmental authority, including any regulatory
authority or court of competent jurisdiction, of any ruling or order enjoining
the consummation of a material portion of the Restructuring Transactions;
provided, however, it shall not be deemed a material portion for purposes of
this subsection if the Exchange Offer is enjoined and the Conforming Plan has
not been enjoined.
 
(b) Mutual Termination.  This Agreement, and the obligations of all Parties
hereunder, may be terminated by mutual written agreement among the Company and
the Requisite Noteholders, and, in all events, this Agreement will be terminated
upon the earlier of the Restructuring Effective Date and September 30, 2010.
 
(c) Effect of Termination.  Upon the termination of this Agreement in accordance
with this Section 5, each Party, subject to Section 14 hereof, shall be
immediately released from its commitments, undertakings and agreements under or
related to this Agreement and shall have all the rights and remedies that it
would have had and shall be entitled to take all actions, whether with respect
to the Restructuring Transactions or otherwise, that it would have been entitled
to take had it not entered into this Agreement, including all rights and
remedies available to it under applicable law, the Notes, the New Notes (if
applicable), the Existing Indenture, the Indenture (if applicable) and any
ancillary documents or agreements thereto; provided, however, that the foregoing
termination shall not affect any agreements or consents in respect of the Senior
Refinancing Transaction as consummated prior to the date hereof.  Upon any such
termination of this Agreement, each Consenting Holder may, upon written notice
to the Company and the other Parties, subject to the terms of any order of the
Bankruptcy Court, revoke its vote or any consents given by such Consenting
Holder prior to such termination, whereupon any such vote or consent shall be
deemed, for all purposes, to be null and void ab initio and shall not be
considered or otherwise used in any manner by the Parties in connection with the
Restructuring Transactions and this Agreement.  If this Agreement has been
terminated in accordance with this Section 5 at a time when permission of the
Bankruptcy Court shall be required for a Consenting Holder to change or withdraw
(or cause to change or withdraw) its vote to accept the Conforming Plan, the
Company shall not oppose any attempt by such Consenting Holder to change or
withdraw (or cause to change or withdraw) such vote at such time.
 
Section 6. Good Faith Cooperation; Further Assurances; Acknowledgment.  The
Parties shall cooperate with each other in good faith and shall coordinate their
activities (to the extent practicable and subject to the terms hereof) in
respect of (a) all matters relating to their

 
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Section 7. rights hereunder in respect of the Company or otherwise in connection
with their relationship with the Company, (b) all matters concerning the
implementation of the Restructuring Term Sheet, the Exchange Offer and the
Conforming Plan, and (c) the consummation of the Restructuring
Transactions.  Furthermore, subject to the terms hereof, each of the Parties
shall take such action as reasonably may be necessary to carry out the purposes
and intent of this Agreement, including making and filing any required
regulatory filings and voting any claims or securities of the Company in favor
of the Restructuring Transactions (provided that no Consenting Holder shall be
required to incur any expense (other than nominal expenses associated with the
performance of its obligations hereunder), liability or other obligation) in
connection therewith, and shall refrain from taking any action that would
frustrate the purposes and intent of this Agreement.  This Agreement is not, and
shall not be deemed, a solicitation for consents to the Exchange Offer or the
Conforming Plan.  This Agreement is not, and shall not be deemed, an offer by
the Company to sell any securities, nor a solicitation for orders to buy such
securities.
 
Section 8. Definitive Documents.  Each Party hereby covenants and agrees to
negotiate in good faith and to execute (to the extent such Party is a party
thereto) the Definitive Documents.  For the avoidance of doubt, the Parties
agree to (a) act in good faith and use commercially reasonable efforts to
implement and consummate (i) the Exchange Offer, and if applicable because the
Requisite Tender was not received in response to the Exchange Offer, (ii) the
Conforming Plan in accordance with the terms of this Agreement, and (b) do all
things reasonably necessary and appropriate in furtherance of consummating the
Restructuring Transactions in accordance with, and within the time frames
contemplated by, this Agreement.
 
Section 9. Representations and Warranties.
 
(a) Each Party, severally (and not jointly), represents and warrants to the
other Parties that the following statements are true, correct and complete in
all material respects as of the date hereof:
 
(i) such Party is validly existing and in good standing under the laws of the
jurisdiction of incorporation or organization, and has all requisite corporate,
partnership, limited liability company or similar authority to enter into this
Agreement and carry out the transactions contemplated hereby and perform its
obligations contemplated hereunder, and the execution and delivery of this
Agreement and the performance of such Party’s obligations hereunder have been
duly authorized by all necessary corporate, limited liability, partnership or
other similar action on its part;
 
(ii) the execution, delivery and performance by such Party of this Agreement
does not and will not (A) violate any provision of law, rule or regulation
applicable to it or any of its subsidiaries or its charter or bylaws (or other
similar governing documents) or those of any of its subsidiaries, or (B)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any material contractual obligation to which it or
any of its subsidiaries is a party;
 
(iii) the execution, delivery and performance by such Party of this Agreement
does not and will not require any registration or filing with, consent or
approval of, or

 
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(iv) notice to, or other action to, with or by, any federal, state or
governmental authority or regulatory body, except such filings as may be
necessary and/or required for disclosure to the Securities and Exchange
Commission and in connection with the Chapter 11 Cases and the Conforming Plan;
and
 
(v) this Agreement is the legally valid and binding obligation of such Party,
enforceable in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability or a ruling of the Bankruptcy Court.
 
(b) Each Consenting Holder severally (and not jointly), represents and warrants
that, as of the date hereof, such Consenting Holder:
 
(i) is the beneficial owner of, or the investment adviser or manager of
discretionary accounts for holders or beneficial owners of, the aggregate
principal amount of Notes set forth on the disclosure schedules attached hereto
as Schedule 1 (the “Relevant Securities”), with the power and authority to (A)
vote and dispose of all or substantially all of such Relevant Securities,
(B) consent to such matters concerning such Relevant Securities, and (C)
exchange, assign and transfer such Relevant Securities, in each case as or on
behalf of the holders or beneficial owners of such Relevant Securities, and is
entitled (for its own account or for the account of other persons claiming
through it) to all of the rights and economic benefits of such holdings; and
 
(ii) has not made any prior assignment, sale, participation, grant, conveyance
or other transfer of, and has not entered into any other agreement (other than
the Restructuring Term Sheet) to assign, sell, participate, grant, convey or
otherwise transfer, in whole or in part, any portion of its right, title or
interests in any Notes (other than ordinary course pledges and/or swaps) that
are inconsistent with the representations and warranties of such Consenting
Holder herein or would render such Consenting Holder otherwise unable to comply
with this Agreement and perform its obligations hereunder.
 
Section 10. Disclosure; Publicity.
 
(a) Not later than the earlier of four (4) Business Days after execution of this
Agreement and one (1) Business Day after commencement of the Exchange Offer,
subject to the provisions set forth in Section 9(b) hereof, the Company shall
file with the Securities and Exchange Commission a Current Report on Form 8-K
and disseminate a press release disclosing the existence of this Agreement and
the terms hereof, with such redactions as may be requested by any Consenting
Holder’s counsel to maintain the confidentiality of the items identified in
Section 9(b) hereof, except as otherwise required by law.  In the event that the
Company fails, in the reasonable judgment of a Consenting Holder, to make the
foregoing disclosures in compliance with the terms specified herein, any such
Consenting Holder may publicly disclose the foregoing, including, without
limitation, this Agreement and all of its exhibits and schedules (subject to the
redactions called for by this Section 9(a) or Section 11 hereof), and the
Company hereby waives any claims against the Consenting Holders arising as a
result of such disclosure by a Consenting Holder in compliance with this
Agreement.

 
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(b) The Company shall submit drafts to Stroock of any press releases and public
documents that constitute disclosure of the existence or terms of this Agreement
or any amendment to the terms of this Agreement at least one (1) Business Day
prior to making any such disclosure, and shall afford them a reasonable
opportunity to comment on such documents and disclosures and shall consider
incorporating any such comments in good faith.  Except as required by law or
otherwise permitted under the terms of any other agreement between the Company
and any Consenting Holder, no Party or its advisors shall (i) use the name of
any Consenting Holder in any public manner or (ii) disclose to any person
(including, for the avoidance of doubt, any other Consenting Holder), other than
advisors to the Company, the principal amount or percentage of any Notes, New
Notes (if applicable) or any other securities of the Company held by any
Consenting Holder, in each case, without such Consenting Holder’s prior written
consent; provided, however, that (i) if such disclosure is required by law,
valid subpoena or regulation, the disclosing Party shall afford the relevant
Consenting Holder a reasonable opportunity to review and comment in advance of
such disclosure and shall take all reasonable measures to limit such disclosure
and (ii) the foregoing shall not prohibit the disclosure of the aggregate
percentage or aggregate principal amount of Notes and New Notes (if applicable)
held by all the Consenting Holders collectively.
 
Section 11. Amendments and Waivers.  This Agreement, including any exhibits or
schedules hereto, may not be modified, amended or supplemented except in a
writing signed by the Company and the Requisite Noteholders; provided, however,
that any modification of, or amendment or supplement to, this Section 10 shall
require the written consent of all of the Parties.  A Consenting Holders’
Termination Event may not be waived except in a writing signed by the Requisite
Noteholders.
 
Section 12. Effectiveness.  This Agreement shall become effective and binding on
the Parties when counterpart signature pages to this Agreement shall have been
executed and delivered by the Company and Consenting Holders, including each of
the parties to the Restructuring Term Sheet, holding at least 66% in aggregate
principal amount of the Notes (such date, the “Effective Date”); provided,
however, that signature pages executed by Consenting Holders shall be delivered
to (a) other Consenting Holders in a redacted form that removes such Consenting
Holders’ holdings of the Notes and (b) the Company and advisors to the
Consenting Holders in an unredacted form.
 
Section 13. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.  THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISIONS WHICH WOULD
REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.  BY ITS EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ANY LEGAL ACTION, SUIT OR PROCEEDING AGAINST IT WITH
RESPECT TO ANY MATTER UNDER OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT RENDERED IN ANY
SUCH ACTION, SUIT OR PROCEEDING, MAY BE BROUGHT IN ANY FEDERAL OR STATE COURT IN
THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE PARTIES

 
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Section 14. HEREBY IRREVOCABLY ACCEPTS AND SUBMITS ITSELF TO THE NONEXCLUSIVE
JURISDICTION OF EACH SUCH COURT, GENERALLY AND UNCONDITIONALLY, WITH RESPECT TO
ANY SUCH ACTION, SUIT OR PROCEEDING.  EACH PARTY HERETO IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.  NOTWITHSTANDING THE FOREGOING CONSENT TO JURISDICTION, FOLLOWING THE
COMMENCEMENT OF THE CHAPTER 11 CASES, EACH OF THE PARTIES AGREES THAT THE UNITED
STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF GEORGIA SHALL HAVE
EXCLUSIVE JURISDICTION WITH RESPECT TO ANY MATTER UNDER OR ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT.
 
Section 15. Specific Performance.  It is understood and agreed by the Parties
that any breach of this Agreement by any Party would give rise to irreparable
damage for which monetary damages would not be an adequate remedy and to the
extent permitted by applicable law, each non-breaching Party shall be entitled
to specific performance and injunctive or other equitable relief as a remedy of
any such breach, without the necessity of proving the inadequacy of money
damages as a remedy, including an order of the Bankruptcy Court requiring any
Party to comply promptly with any of its obligations hereunder.
 
Section 16. Survival.  Notwithstanding the termination of this Agreement
pursuant to Section 5 hereof, the agreements and obligations of the Parties in
this Section 14 and in Sections 5(d), 9, 12, 13, 16, 17, 18, 21, 22, 23, 24 and
25 hereof shall survive such termination and shall continue in full force and
effect for the benefit of the applicable Party in accordance with the terms
hereof.
 
Section 17. Headings.  The headings of the sections, paragraphs and subsections
of this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
 
Section 18. Successors and Assigns; Severability; Several Obligations.  This
Agreement is intended to bind and inure to the benefit of the Parties and their
respective successors, assigns, heirs, executors, administrators and
representatives; provided, however, that nothing contained in this Section 16
shall be deemed to permit sales, assignments or transfers of the Notes or New
Notes (if applicable), or claims arising under the Notes or New Notes (if
applicable), other than in accordance with Section 3(d) of this Agreement.  If
any provision of this Agreement, or the application of any such provision to any
person or circumstance, shall be held invalid or unenforceable in whole or in
part, such invalidity or unenforceability shall attach only to such provision or
part thereof and the remaining part of such provision hereof or the Agreement
shall continue in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party.  Upon any such determination of invalidity, the
Parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.

 
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Section 19. No Third-Party Beneficiaries.  Unless expressly stated herein or as
otherwise provided in the Credit Agreement as of the date hereof, this Agreement
shall be solely for the benefit of the Parties and no other Person shall be a
third-party beneficiary hereof.
 
Section 20. Prior Negotiations; Entire Agreement.  This Agreement, including the
exhibits and schedules hereto, including without limitation, the Restructuring
Term Sheet, constitutes the entire agreement of the Parties, and supersedes any
other prior agreements, arrangements or understandings (whether written or
oral), with respect to the subject matter hereof, except that the Parties
acknowledge that any confidentiality agreements (if any) heretofore executed
between the Company and each Consenting Holder shall continue in full force and
effect.
 
Section 21. Counterparts.  This Agreement may be executed and delivered in any
number of counterparts (including by facsimile or portable document format (PDF)
signatures), each of which shall be deemed to be an original as against any
party whose signature page appears thereon, and all of which shall together
constitute one and the same agreement.
 
Section 22. Notices.  All notices hereunder shall be deemed given if in writing
and delivered, if sent by email (and acknowledged in electronic or other writing
by the recipient), facsimile, courier or by registered or certified mail (return
receipt requested) to the following addresses and facsimile numbers (or at such
other addresses or facsimile numbers as shall be specified by like notice):
 
(1)           If to the Company, to:
   
Morris Publishing Group, LLC
725 Broad Street
Augusta, Georgia 30901
Fax: (706) 722-7125
Attention: Craig S. Mitchell
email: craig.mitchell@morris.com
   
With copies to:
     
Hull, Towill, Norman, Barrett & Salley, P.C.
801 Broad Street, 7th Floor
Augusta, Georgia 30901
Fax: (706) 722-9779
Attention: Mark S. Burgreen
email: msburgreen@hullfirm.com
   

 
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Neal Gerber Eisenberg, LLP
Two North LaSalle Street, Suite 1700
Chicago, Illinois 60602
Fax: (312) 269-1747
Attention: Mark A. Berkoff
               Nicholas M. Miller
email: mberkoff@ngelaw.com
email: nmiller@ngelaw.com
   
(2)           If to a Consenting Holder or a transferee thereof, to the address
or facsimile number set forth below on such Consenting Holder’s signature page
(or as directed by any transferee thereof), as the case may be, with copies to:
     
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
Fax: (212) 806-6006
Attention: Kristopher M. Hansen
                Brett Lawrence
email: khansen@stroock.com
email: blawrence@stroock.com

 
All notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered and the next Business Day after
timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery.  Any notice given by email or facsimile shall be effective
upon written or machine confirmation of transmission.
 
Section 23. Reservation of Rights.  Except as expressly provided otherwise in
this Agreement, nothing herein is intended to, or does, in any manner waive,
limit, impair or restrict the ability of each Consenting Holder to protect and
preserve its rights, remedies and interests, including without limitation, its
claims against the Company.  Nothing herein shall be deemed an admission of any
kind.  If the transactions contemplated herein are not consummated, or if this
Agreement is terminated for any reason, the Parties fully reserve any and all of
their rights.  Pursuant to Rule 408 of the Federal Rules of Evidence, any
applicable state rules of evidence and any other applicable law, foreign or
domestic, this Agreement and all negotiations relating thereto shall not be
admissible into evidence in any proceeding other than a proceeding to enforce
its terms.
 
Section 24. Prevailing Party.  If any Party brings an action or proceeding
against any other Party based upon a breach by such Party of its obligations
hereunder, the prevailing Party shall be entitled to all reasonable expenses
incurred, including reasonable attorneys’, accountants’ and financial advisors
fees in connection with such action or proceeding.
 
Section 25. Relationship Among Parties.  It is understood and agreed that no
Consenting Holder has any duty of trust or confidence in any kind or form with
any other Consenting Holder, and, except as expressly provided in this
Agreement, there are no commitments among or between them.  In this regard, it
is understood and agreed that any Consenting Holder may trade in the Notes, New
Notes (if applicable) or other debt or equity securities of the Company without
the consent of the Company or any other Consenting Holder, subject to applicable
securities laws and the terms of this Agreement; provided, however, that no
Consenting Holder shall have any responsibility for any such trading to any
other entity by virtue

 
-25-

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Section 26. of this Agreement.  No prior history, pattern or practice of sharing
confidences among or between the Consenting Holders shall in any way affect or
negate this understanding and agreement.
 
Section 27. Fiduciary Duties.  Notwithstanding anything to the contrary herein,
nothing in this Agreement shall require (a) the Company or any directors or
officers of the Company (in such person’s capacity as a director or officer of
the Company) to take any action, or to refrain from taking any action, to the
extent required, that would, in the opinion of counsel, conflict with its or
their fiduciary obligations under applicable law, or (b) any Consenting Holder
or representative of a Consenting Holder that becomes a member of a statutory
committee that may be established in the Chapter 11 Cases to take any action, or
to refrain from taking any action, in such person’s capacity as a statutory
committee member to the extent required, that would conflict with fiduciary
obligations applicable to such person under the Bankruptcy Code; provided
however, that nothing in this Agreement shall be construed as requiring any
Consenting Holder to serve on any statutory committee in the Chapter 11
Cases.  Nothing herein will limit or affect, or give rise to any liability, to
the extent required for the discharge of the fiduciary obligations described in
this Section 24.
 
Section 28. Indenture Waiver.  Notwithstanding anything to the contrary herein,
each Consenting Holder hereby waives, solely with respect to the Notes held by
it, any requirement of Sections 4.11 or 4.20 of the Existing Indenture that
would restrict the consummation of the transaction involving the acquisition and
amendment of the senior secured debt of the Company on the terms set forth in
the Term Sheet attached as Attachment A to the Restructuring Term Sheet and
described therein as the “Senior Refinancing Transaction”.
 
[Signature Pages Follow]

 
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the date first written above.
 
 
MORRIS PUBLISHING GROUP, LLC
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
MORRIS PUBLISHING FINANCE CO.
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
YANKTON PRINTING COMPANY
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
BROADCASTER PRESS, INC.
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
THE SUN TIMES, LLC
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
HOMER NEWS, LLC
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance

 

 
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LOG CABIN DEMOCRAT, LLC
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
ATHENS NEWSPAPERS, LLC
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
SOUTHEASTERN NEWSPAPERS COMPANY, LLC
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
STAUFFER COMMUNICATIONS, INC.
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
   
FLORIDA PUBLISHING COMPANY
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
MPG HOLLAND PROPERTY, LLC
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       

 

 
-28-

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SOUTHWESTERN NEWSPAPERS COMPANY, L.P.
 
By: Morris Publishing Group, LLC, its
general partner
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
THE OAK RIDGER, LLC
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       
MPG ALLEGAN PROPERTY, LLC
 
By:
 /s/ Craig S. Mitchell   __________________________
 
Name: Craig S. Mitchell
 
Title: Senior Vice President of Finance
       

 
-29-

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SIGNATURE BLOCK OF CONSENTING HOLDER
 
Name:  Bennett Management Corporation, on behalf of affiliated investment
entities
 
Signature:  /s/ John V. Koerber
 
Name of Signing Person:  John V. Koerber
 
Title of Signing Person:  Managing Director
     
Notice Address:
Bennett Management Corporation
2 Stamford Plaza – Suite 1501
281 Tresser Boulevard
Stamford, CT 06901-3259
 
Attention:
John V. Koerber
Warren Frank
 
Fax:  203-353-3113
 

 
 
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SIGNATURE BLOCK OF CONSENTING HOLDER
 
Name:  MACKAY SHIELDS LLC, as investment adviser or sub-advisor to certain
holders
 
Signature:  /s/ J. Matthew Philo
 
Name of Signing Person:  J. Matthew Philo
 
Title of Signing Person:  Senior Managing Director
     
Notice Address:
MacKay Shields LLC
9 West 57th Street
New York, NY 10019
 
Attention:
J. Matthew Philo
 
Fax:  212-754-9187
 

 
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SIGNATURE BLOCK OF CONSENTING HOLDER
 
Name:  Metropolitan Life Insurance Company
 
Signature:  /s/ Reena S. Pally
 
Name of Signing Person:  Reena S. Pally
 
Title of Signing Person:  Director
     
Notice Address:
10 Park Avenue, POB 1902
Morristown, NJ 07962
 
Attention:
Reena S. Pally
 
Fax:  973-355-4780
 

 
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SIGNATURE BLOCK OF CONSENTING HOLDER
 
Name:  RCG PB, LTD
 
Signature:  /s/ Jeffrey M. Solomon
 
Name of Signing Person:  Jeffrey M. Solomon
 
Title of Signing Person:  Authorized Signatory
     
Notice Address:
599 Lexington Avenue, 20th Floor
New York, NY 10022
 
Attention:
Gregory Sandukas
Michael Schwartz
 
Fax:  212-845-7994
 

 
-33-

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EXHIBIT A
 
MORRIS PUBLISHING GROUP, LLC
 
Restructuring Term Sheet
 
September 23, 2009
 
Set forth below is a binding summary of terms (this “Term Sheet”) offered in
settlement between the parties hereto.  Until publicly disclosed, this term
sheet and the information contained herein shall remain strictly confidential
and may not be shared with any person other than Morris Publishing Group, LLC
(along with its subsidiaries, “MPG” or the “Company”), the ad hoc committee of
holders of the 7% Senior Subordinated Notes due 2013 (the “Ad Hoc Committee”),
the other parties (who are subject to non-disclosure obligations) involved in
the proposed Senior Refinancing Transaction (as defined below), and their
respective professional advisors.  Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Existing Indenture (as
defined below).
 
This Term Sheet shall be binding upon execution by each of the parties hereto
with respect to the subject matter contained in this Term Sheet but otherwise
does not purport to summarize all additional conditions, covenants,
representations and warranties and other provisions that may be contained in
definitive legal documentation for the transactions contemplated hereby, and the
agreement regarding material terms set forth herein is subject to the final
negotiation and execution of the definitive legal documentation for such
transactions.
 
The Transaction
The Company’s exchange of $278,478,000 7% Senior Subordinated Notes due 2013
(plus any accrued and unpaid interest) (the “Existing Notes”) for $100,000,000
principal amount of new notes (the “New Notes”) to the holders of the Existing
Notes, immediately upon the effective date (the “Effective Date”) of either (i)
an out-of-court exchange offer, or (ii) a confirmed plan of reorganization (the
“Plan”).

 
Exhibit A-1

--------------------------------------------------------------------------------

 
 
Summary Terms of the New Notes
 
Issuer
Morris Publishing Group, LLC
Issue
The New Notes shall be issued under an indenture (the “Indenture”) that will be
based in part upon the indenture governing the Existing Notes (the “Existing
Indenture”).
Guarantors
All existing and future subsidiaries that guarantee the Existing Notes
(collectively, the “Guarantors”) shall unconditionally guarantee the
indebtedness, obligations and liabilities of the Company arising under, or in
connection with, the Indenture.
Maturity
The New Notes shall mature on a date four (4) years and six (6) months (the
“Maturity Date”) from the issuance of the New Notes.
Remaining Debt
 
On the Effective Date, the Company must have at least $15.7 million less (i)
professional fees, (ii) restructuring charges, (iii) bank fees in an amount not
to exceed $2.8 million, and (iv) amortization payments on existing first lien
senior indebtedness in an amount not to exceed $2.25 million (the “Initial Cash
on Hand”) in excess of the Working Capital Balance (as defined below) reflected
as a current asset on the Company’s balance sheet.  Until the earliest to occur
of the consummation of the Exchange Offer (as defined below), the confirmation
of the Plan, or December 22, 2009 (which date may be extended by the Ad Hoc
Committee and the Company), the Company shall not make aggregate capital
expenditures in excess of the $650,000 amount projected in the 13-week cash flow
forecast as of September 22, 2009 provided to the Ad Hoc Advisors (as defined
below), except for expenditures approved in writing in advance by the Ad Hoc
Committee in their reasonable discretion, which shall not be unreasonably
withheld or delayed.
 
The aggregate outstanding balance of the Company’s existing term loan shall not
exceed $26.5 million less the Initial Cash on Hand following the consummation of
a senior debt refinancing transaction involving the Company’s affiliates (the
“Senior Refinancing Transaction”) in accordance with the Senior Debt Refinancing
Documentation (as defined below), of which no more than $19.7 million less the
Initial Cash on Hand will be held by an affiliate of ACON Investments, L.L.C.
(the “Term Loan”) and approximately $6.8 million in the aggregate will be held
by a Morris affiliate (the “Revolver”).  The Revolver shall consist solely of
existing first lien indebtedness of the Company that is converted into a second
lien Revolver balance on a dollar-for-dollar basis contemporaneously upon
consummation of the Senior Refinancing Transaction.  The Term Loan shall not be
held by any Affiliate of the Company at any time.

 
Exhibit A-2

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Refinancing of Term Loan and Revolver
 
On or prior to one hundred fifty (150) days from the Effective Date, the Company
shall be obligated to refinance (the “Refinancing”) the Revolver and the Term
Loan with a term loan and/or revolver provided solely by an unaffiliated
commercial bank and not by a Morris affiliate (collectively, the “Refinanced
Debt”).  The Refinanced Debt shall have no prepayment penalties and shall permit
cash coupon and amortization payments on the New Notes.
 
To the extent that the Revolver is not refinanced within one hundred fifty (150)
days of the Effective Date, the Revolver shall mature on the Maturity Date and
shall only be capable of repayment from excess cash payable to the New Notes on
a pro rata basis.  Upon the amortization or refinancing of all or any portion of
the Revolver, including any accrued interest, such amortized or refinanced
balance shall no longer be available for borrowing under the Revolver.
Interest
Until the repayment in full of the Term Loan through cash flow sweeps, the New
Notes shall accrue (i) cash interest at the rate of 5% per annum, payable
quarterly in arrears, and (ii) paid-in-kind (“PIK”) interest at the rate of 10%
per annum, compounded quarterly in arrears, which PIK interest shall increase
the outstanding balance of the New Notes.  Thereafter, the New Notes shall pay
cash interest at the rate of 10% per annum.
 
The Term Loan shall accrue and pay interest at the rate of 15% per annum.
 
The Revolver shall accrue interest solely at a PIK rate equal to the aggregate
interest rate payable on the New Notes.
 
The interest rate payable on the Refinanced Debt shall not exceed LIBOR plus 970
basis points, as calculated on a per annum basis.
 
In the event of a refinancing of the Term Loan and Revolver, the New Notes shall
accrue interest at five percent 5% plus the rate payable on the Refinanced Debt,
with a minimum aggregate interest rate of 10% per annum.  While any Refinanced
Debt remains outstanding, interest on the New Notes shall be payable 50% in cash
and 50% PIK.  For example, if the Refinanced Debt has a per annum interest rate
of 7%, the per annum interest rate of the New Notes shall be 12% (6% PIK and 6%
cash) until the repayment in full (other than the Working Capital Facility) of
the Refinanced Debt, at which time the New Notes shall accrue cash interest at a
per annum rate of 10%.
Default Interest
If an Event of Default (as defined in the Indenture) occurs, and for so long as
an Event of Default continues, cash interest on the New Notes shall accrue at
the applicable rate plus (i) 2% per annum, and (ii) if any portion of the Term
Loan remains outstanding, plus an additional 2% per annum.

 
Exhibit A-3

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Mandatory Redemption/
Repurchase
Subject to certain qualifications or exceptions, upon the occurrence of a Change
of Control (as defined in the Indenture), certain asset dispositions, certain
issuances of debt or equity by the Company, or the Company’s receipt of
insurance or condemnation proceeds, the Company shall be obligated to repurchase
the New Notes, at 101% of their principal amount, plus accrued and unpaid
interest to the date of repurchase.  This repurchase obligation will be
subordinate to repayment of the Term Loan.
Optional Redemption/
Repurchase
The New Notes shall be redeemable by the Company at its option, in whole or in
part, in cash, at any time at a redemption price equal to 103% of the aggregate
principal amount of the New Notes redeemed, declining to 102% in the second
year, 101% in the third year and 100% thereafter (plus accrued and unpaid
interest, if any, to the date of redemption), provided that any required
amortization payments will be applied to reduce principal at 100% of the
outstanding principal amount.
Working Capital Revolving Credit Facility
 
The Company may enter into a secured working capital revolving credit facility
with a maximum available amount of up to $10,000,000 (the “Working Capital
Facility”).  The Working Capital Facility shall permit: (i) the payment of
interest on the New Notes at all times (other than when an event of default
under the Working Capital Facility shall have occurred and be continuing), and
(ii) the amortization of the New Notes when there is no outstanding balance on
the Working Capital Facility.
 
As a condition to obtaining the Working Capital Facility, the Company shall be
required to first use the entire remaining amount of the Working Capital Balance
to amortize the Term Loan or Refinanced Debt, as applicable.

 
Exhibit A-4

--------------------------------------------------------------------------------

 
 
Security/Priority
The New Notes and related guarantees shall be secured by a second lien on all
the assets of the Company and the Guarantors that currently secure the existing
first lien indebtedness of the Company.
 
The New Notes shall rank:
 
1) junior to the Term Loan (or the Refinanced Debt, if applicable) and the
Working Capital Facility;
 
2)pari passu with the Revolver for all purposes, including a subsequent
insolvency proceeding under the Bankruptcy Code, and with respect to principal
payments upon mandatory and optional redemptions/repurchases and required
amortization payments; and
 
3) senior to (a) any senior unsecured obligations of the Company and the
Guarantors; and (b) any future subordinated indebtedness of the Company and the
Guarantors.
 
A customary mutually acceptable intercreditor agreement will be entered into
between the trustee under the Indenture (the “Trustee”) and the agent for the
Term Loan, the terms of which shall be agreed upon by the Ad Hoc Committee and
the agent for the Term Loan prior to the consummation of the Senior Refinancing
Transaction.
Amortization; Excess Free Cash Flow Sweep;
Minimum Cash Balance
Excess Free Cash Flow1 (as defined in the Indenture) greater than the Working
Capital Balance shall be used to amortize the Term Loan (or the Refinanced Debt,
if applicable) first, then the Working Capital Facility, and then the New Notes
and the Revolver (if no Refinanced Debt) on a pro rata basis, on a monthly basis
at 100% of their respective principal amount, plus any accrued and unpaid
interest to the date of amortization.
 
In addition, the Company may maintain a minimum balance of cash and cash
equivalents at an agreed upon financial institution in an aggregate amount of
$5,000,000 (average weekly balance in any calendar month) (the “Working Capital
Balance”); provided, however, that the sum of (i) the Working Capital Balance,
plus (ii) the average availability during any calendar month under the Working
Capital Facility, if applicable, shall at all times be no less than $2,000,000
in the aggregate.

 
Exhibit A-5

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Covenants
Except as specifically contemplated by this Term Sheet, the Indenture shall
contain customary covenants (and others reasonably determined by the holders of
the New Notes to be appropriate) substantially similar to those contained in the
Existing Indenture, including, without limitation the following:
 
Affirmative Covenants:
1) Maintenance of (i) all necessary licenses, permits, trade names, trademarks
and patents, (ii) properties and
(iii) books and records;
 
2) Compliance with (i) material contracts and
(ii) environmental laws;
 
3) Amendment to the Management and Services Agreement, dated as of August 7,
2003 (the “MSA”), between MCC, MSTAR Solutions, LLC (“MSTAR”) and the Company to
fix the combined annual payment of the Morris Communications Fee (as defined in
the MSA) and the MSTAR Solutions Fee (as defined in the MSA) at actual costs;
provided, however, that the combined annual payment of the Morris Communications
Fee and the MSTAR Solutions Fee shall not, under any circumstances, exceed
$22,000,000 in the aggregate during any given calendar year.  The Company shall
deliver a certificate every quarter to the Trustee providing in sufficient
detail information about the costs incurred for such quarter and being charged
for under the MSA.  The Trustee shall make available such information to any
holder of New Notes who requests such information under conditions provided for
in the Indenture;
 
4) The Company shall deliver a certificate every month to the Trustee providing
in sufficient detail information about the Company’s monthly EBITDA, existing
cash, the outstanding balance of each of the Term Loan, the Revolver, the
Working Capital Facility and the Refinanced Debt, as applicable, together with
any amortization payments made during such month on the Term Loan, the Revolver,
the Working Capital Facility and the Refinanced Debt, as applicable.  The
Trustee shall make available such information to any holder of New Notes who
requests such information under conditions provided for in the Indenture; and
 
5) The Company shall deliver a certificate signed by two officers of the Company
every quarter to the Trustee certifying that no default or event of default
under the Indenture exists, or if any default or event of default under the
Indenture exists, specifying the nature and extent thereof, which certificate
shall set forth the calculations required to establish the Total Leverage Ratio
(as defined below) and the Cash Interest Coverage Ratio (as defined below) as of
the last day of such quarter.  The Trustee shall make available such information
to any holder of New Notes who requests such information under conditions
provided for in the Indenture.
 
Negative Covenants:
 
1) Except as otherwise provided for in this Term Sheet, none of the Company or
the Guarantors shall engage in the following:
 
a)incurrence of (i) liens (other than customary permitted liens, including but
not limited to, liens securing the Company’s obligations for workers
compensation liabilities), charges, encumbrances or lease obligations, or (ii)
any other indebtedness (other than customary permitted indebtedness);
 
b)material modifications or amendments to affiliate agreements;
 
c)affiliate transactions outside of the ordinary course and in excess of
$100,000 for any single transaction or $250,000 for a series of transactions;
 
d)certain specified investments;
 
e)mergers and other fundamental changes;
 
f)equity pledges;
 
g)capital expenditures in excess of  $10,000,000  in the aggregate during any
calendar year; or
 
h)repayment and/or modifications of other indebtedness in excess of $100,000,
other than trade debt or in the ordinary course of business.
 
2) Neither the Company nor the Guarantors shall incur any new indebtedness
senior to the New Notes.

 
Exhibit A-6

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Total Leverage Covenant2
“Total Leverage Ratio” shall mean, at any date of determination, the ratio of
all outstanding indebtedness for borrowed money (exclusive of trade payables),
net of cash, of the Company on such date to EBITDA during the preceding four
fiscal quarters.
The Indenture shall contain a maximum Total Leverage Ratio as follows:
 
YEAR                          RATIO
2010                         5.5x
2011 – Q1                      5.5x
2011 – Q2                      5.5x
2011 – Q3                      5.25x
2011 – Q4                      5.25x
2012                         5.0x
2013                         4.75x
2014                         4.5x
Cash Interest Coverage Covenant3
“Cash Interest Coverage Ratio” shall mean, at any date of determination, the
ratio of EBITDA during the preceding four fiscal quarters to cash interest
expense during the preceding four fiscal quarters.
 
The Indenture shall contain a minimum Cash Interest Coverage Ratio as follows:
 
YEAR                 RATIO
2010                      1.8x
2011                      1.8x
2012                      1.8x
2013                      1.9x
2014                      2.1x
Intercompany Obligations
Existing inter-company obligations from Morris Communications Company, LLC to
the Company shall be satisfied as contemplated by the Senior Debt Refinancing
Documentation.
There shall be no intercompany loans from the Company to any Affiliate while the
New Notes are outstanding.
Events of Default
Usual and customary Events of Default substantially similar to those contained
in the Existing Indenture, and also including, without limitation:
 
(i) inability to pay debts; (ii) actual or asserted invalidity or impairment of
any Indenture-related documentation; and            (iii) Change of Control.

 
Exhibit A-7

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The Transaction
 
Means of Transaction Execution
The transaction will be implemented through either (i) an out-of-court exchange
offer (the “Exchange Offer”) consummated as soon as practicable after the
consummation of the Senior Refinancing Transaction, which shall be consummated
on terms substantially similar to those contained in the term sheet and related
acquisition of MPG senior debt diagram (the “Senior Debt Refinancing
Documentation”), each prepared by counsel to the Company and attached hereto as
Attachment A, whereby MCC Outdoor Holding, LLC (“Outdoor”) and MPG Revolver LLC
(“MPG Revolver”) shall immediately deposit the full amount of approximately $110
million of the existing first lien debt (such amount, the “Remaining Senior Debt
Balance”) of the Company into third-party escrow accounts, pursuant to an escrow
agreement acceptable to Outdoor and MPG Revolver, on the one hand, and the Ad
Hoc Committee, on the other hand, and the Exchange Offer shall be conditioned on
the prior consummation of the Senior Refinancing Transaction, or (ii) a
confirmed plan of reorganization pursuant to a chapter 11 filing.  During the
solicitation process, if holders owning Existing Notes in an amount equal to or
greater than 99% of the outstanding Existing Notes consent, the parties will
effectuate the transaction through an out-of-court exchange offer, rather than
pursuant to a chapter 11 filing.
 
The members of the Ad Hoc Committee shall (i) tender their Existing Notes in the
Exchange Offer, and (ii) vote in support of the Plan, in each case in accordance
with the Plan Support Agreement (as defined below).
 
The escrow agreement referenced in the preceding paragraph shall provide that
such escrowed debt shall be (i) cancelled in payment of intercompany
indebtedness of Morris Communications Company and its subsidiaries to the
Company, and/or sold to the Company’s parent and contributed to capital
substantially as contemplated in the Senior Debt Refinancing Documentation, upon
consummation of the Exchange Offer or the Plan, (ii) released to each of Outdoor
and MPG Revolver upon the material breach by the members of the Ad Hoc Committee
of their obligations under this Term Sheet, as determined by the final,
non-appealable order of a court of competent jurisdiction, or (iii) cancelled in
payment of intercompany indebtedness of Morris Communications Company and its
subsidiaries to the Company, and/or sold to the Company’s parent and contributed
to capital substantially as contemplated in the Senior Debt Refinancing
Documentation, upon the material breach by either the Company, the Guarantors,
Outdoor or MPG Revolver of any of their respective obligations hereunder, as
determined by the final, non-appealable order of a court of competent
jurisdiction.  If the Exchange Offer or the Plan fails or is not consummated or
approved as contemplated in this Term Sheet for any reason, including the
failure of any conditions to solicitation, confirmation or effectiveness or the
lack of support from other holders of the Existing Notes, but without material
breach hereof by the Company, the Guarantors, Outdoor, MPG Revolver or the
Members of the Ad Hoc Committee, then (x) the escrow agreement shall contain
terms to be agreed upon by the Ad Hoc Committee and Outdoor and MPG Revolver
designed to use the escrowed debt to restore the parties to the same legal
position (i) as existed on the day prior to the execution of this Term Sheet, or
at the option of the Ad Hoc Committee, (ii) as if the members of the Ad Hoc
Committee had consummated the Exchange Offer with a percentage of the Existing
Notes equal to the percentage of Existing Notes that had tendered their Existing
Notes in the Exchange Offer (such percentage, the “Exchange Offer Percentage”),
but without participation by any non-tendering holders of the Existing Notes,
and with a capital contribution as contemplated in the Senior Debt Refinancing
Documentation in an amount equal to the Exchange Offer Percentage multiplied by
the Remaining Senior Debt Balance (the “Subordinated Senior Debt”) whereby the
Subordinated Senior Debt shall rank junior to the New Notes in all material
respects, including in right of payment and recovery, and (y) each of the
Company, the Guarantors, Outdoor, MPG Revolver shall, and shall direct their
Affiliates to, cooperate in good faith with the members of the Ad Hoc Committee
in order to effectuate the transactions and ensure the treatment of the New
Notes contemplated by this paragraph, including without limitation by executing
any agreements, making any filings and granting any approvals or consents as may
be reasonably required in connection with effecting such transactions or
ensuring such treatment in a chapter 11 case.
 
The Ad Hoc Committee shall give all necessary approvals or consents as may be
reasonably required under the Indenture or the Forbearance Agreement (as
amended) to consummate the Senior Refinancing Transaction; provided, that the Ad
Hoc Committee shall have the right to review all documentation in connection
with the Senior Refinancing Transaction that relates to MPG and the Guarantors,
including without limitation, the Term Loan and the Revolver, and shall have a
consent right over any material terms not previously disclosed to it in writing
as part of the Senior Debt Refinancing Documentation.

 
Exhibit A-8

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Solicitation and Filing
The Company shall commence the solicitation process in accordance with
applicable securities laws on or before October 16, 2009, or such later date as
shall be agreed to by the Ad Hoc Committee.  If the Company does not receive
consent to an out-of-court exchange during the twenty (20) business day
solicitation period (such twenty (20) business day solicitation period to be
extended for an additional five (5) business day period at either the Company’s
or the Ad Hoc Committee’s written request) from holders owning Existing Notes in
an amount equal to or greater than 99% of the outstanding Existing Notes, the
Company shall file a chapter 11 case within seven (7) days after the later of
the conclusion of the solicitation process or the approval by the Ad Hoc
Committee of the disclosure statement to be filed in the Plan.  If the Company
receives the requisite consent for the exchange offer, the Company shall
consummate the exchange offer within five (5) days of the conclusion of the
solicitation process.  All legal documentation necessary to effectuate the
solicitation, the bankruptcy filing, the Exchange Offer and the Plan shall be in
form and substance reasonably satisfactory to the Company and the Ad Hoc
Committee.
Conditions to Solicitation
 
Customary for notes of this type, including, without limitation, that no
Material Adverse Effect (as defined in the Credit Agreement), Event of Default
or Default, other than the Existing Default or the Payment Default (each as
defined in the Forbearance Agreement, dated as of February 26, 2009 (as
amended), by and among the Issuers, the Guarantors and the holders of the
Existing Notes party thereto (the “Forbearance Agreement”)) shall have occurred.
Plan Support Agreement
 
The Company and the Ad Hoc Committee shall execute a plan support agreement (the
“Plan Support Agreement”) on reasonable and customary terms by October 2, 2009,
or such later date as shall be agreed to by the Ad Hoc Committee.
 
Conditions to Confirmation
The Plan shall contain such conditions to confirmation customary in plans of
reorganization of this type, to be agreed upon by the Company and the Ad Hoc
Committee, including, without limitation:
 
 
1.       No Termination Event (as defined in the Plan Support Agreement) shall
have occurred.
 
3.       The Plan (and all documents related thereto), the disclosure statement
(and all solicitation materials related thereto), and the confirmation order
shall be in form and substance acceptable to the Ad Hoc Committee and approved
by the Bankruptcy Court.
Conditions to Effectiveness
The Plan shall contain such conditions to effectiveness customary in plans of
reorganization of this type, to be agreed upon by the Company and the Ad Hoc
Committee.

 
Exhibit A-9

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Treatment/Distributions
     
Holders of the Existing Notes
Holders of the Existing Notes shall receive (i) their pro rata share of the New
Notes and (ii) payment of all reasonable fees, expenses and disbursements of (a)
Stroock & Stroock & Lavan LLP, as counsel to the Ad Hoc Committee (“Stroock”)
and (b) FTI, as financial advisor to the Ad Hoc Committee (“FTI” and together
with Stroock, the “Ad Hoc Advisors”).
Existing Shareholders
Unimpaired
Allowed Trade Claims
Unimpaired
Other Allowed General Unsecured Claims
Unimpaired
Remaining Term Loan
Unimpaired and reinstated
Executory Contracts and Unexpired Leases
Unless otherwise agreed to by the Company and the Ad Hoc Committee, all
executory contracts and unexpired leases as to which the Company is a party
shall be deemed automatically assumed in accordance with the provisions and
requirements of sections 365 and 1123 of the Bankruptcy Code as of the Effective
Date of the Plan.
Professional Claims
On the Effective Date, the Company shall pay all amounts owing to professionals
(including the Ad Hoc Advisors) for all outstanding amounts payable relating to
prior periods through the Effective Date in accordance with section 1129(a)(4)
of the Bankruptcy Code.
Section 503(b) Claims
The Ad Hoc Advisors will be compensated as provided above, however, the Company
will support any application of the Ad Hoc Advisors for allowance and payment of
reasonable fees and expenses incurred pursuant to section 503(b) of the
Bankruptcy Code.  The Ad Hoc Committee will support any application of the
Company’s advisors for allowance and payment of reasonable fees and expenses
incurred pursuant to section 503(b) of the Bankruptcy Code, if applicable.
Exculpation and Indemnification
The Plan and confirmation order shall provide that all rights to exculpation,
indemnification and advancement of expenses for acts or omissions occurring at
or prior to the consummation of the Plan, whether asserted or claimed prior to,
at or after the consummation of the Plan (including any matters arising in
connection with the transactions contemplated by this Term Sheet and the Plan
Support Agreement), existing in favor of each of the directors and officers
(statutory or otherwise) of the Company or their affiliates
(collectively, “Indemnitees”) in the certificate of incorporation or by-laws (or
comparable organization documents) of the Company or any of their affiliates, as
applicable, or in any agreement shall survive the Effective Date and shall
continue in full force and effect (and not be modified, amended or terminated in
any manner adverse to any Indemnitee without the written consent of the affected
Indemnitee) for a period of not less than six (6) years following the
consummation of the Plan.

 
Exhibit A-10

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Corporate Governance
     
Board Observer
The holders of the New Notes shall have the right to appoint an observer (the
“Observer”) to the Board of Directors of the Company (the “Board”), and upon
such appointment the Board shall accept the Observer to the Board.  Such
Observer shall be named to each committee of the Board and the board of
directors (or comparable body) of each material subsidiary of the Company and
each committee of such board (or comparable body) of each such subsidiary.
Public Reporting
The New Notes will be subject to SEC public reporting requirements.

 

   
Miscellaneous
     
Enforceability
This Term Sheet is a valid and binding agreement, enforceable in accordance with
its terms (subject, as to the enforcement of remedies, to any applicable
bankruptcy, insolvency or other laws affecting the enforcement of creditors’
rights).
Fees and Expenses
The Company agrees to pay on demand all reasonable costs and expenses of the Ad
Hoc Committee in connection with the preparation, execution and delivery of this
Term Sheet, including the reasonable fees, costs and expenses of Stroock with
respect thereto.
Reservation of Rights
Prior to the execution of the agreements contemplated hereby by each of the
parties thereto, each party hereto reserves all rights and remedies regarding
these agreements under applicable law or at equity.  Any forbearance by any such
party in exercising its rights or remedies prior to or after the date hereof
shall not in any way impair, limit or restrict in any respect the right of such
party to exercise at any time and in any manner deemed appropriate by it all or
any of such rights or remedies.  The Exchange Offer, or the Plan and
confirmation order, as applicable, shall include derivative releases, mutual
third-party releases and exculpation provisions effective upon
consummation.  Such releases and exculpations shall be for the benefit of and
binding upon the trustee under the Existing Indenture, the Trustee, the holders
of the Existing Notes, the holders of the New Notes, the parties to the Senior
Refinancing Transaction, the Company and the Company’s directors, officers,
employees, and professional advisors, to the fullest extent permitted by
law.  Until the later of the consummation of the Exchange Offer or the
confirmation of the Plan (if applicable), each of the parties hereto reserves
all rights and remedies in existence immediately prior to the date hereof.
 

 
Exhibit A-11

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Governing Law
This Term Sheet is, and the documents contemplated hereby shall be, governed by
the laws of the State of New York.
Jurisdiction & Waiver of Jury Trial
Each of the parties irrevocably submits to the jurisdiction of the courts of the
State of New York located in New York County or of the United States for the
Southern District of New York for the purposes of any suit, action or other
proceeding arising out of this Term Sheet; provided, however that any bankruptcy
proceeding may be filed in the Southern District of Georgia and shall be subject
to any applicable laws of the State of Georgia.
 
Counterparts
This Term Sheet may be executed in any number of counterparts (including by
facsimile or portable document format (PDF) signatures), each of which shall be
deemed to be an original as against any party whose signature page appears
thereon, and all of which shall together constitute one and the same agreement.
Entire Agreement; Modification
This Term Sheet supersedes all prior agreements or understandings, whether
written or oral, between the parties with respect to its subject matter and
constitutes a complete and exclusive statement of the terms of the agreement
between the parties with respect to such subject matter.  In case of any
discrepancy between the terms of this Term Sheet and the Senior Debt Refinancing
Documentation, the terms of this Term Sheet shall govern.
This Term Sheet may not be amended, supplemented or otherwise modified except by
a written agreement executed by the parties signatory hereto.
Forbearance
The Ad Hoc Committee shall continue to extend forbearance under the Forbearance
Agreement until the earlier to occur of (i) the senior lenders ceasing to extend
their waivers under the Company’s existing senior secured credit agreement, or
(ii) October 16, 2009.

--------------------------------------------------------------------------------

1Any interest or principal payments made by the Company on the Working Capital
Facility shall be deducted from the calculation of Excess Free Cash Flow.
2 To be tested quarterly and measured on a trailing 12-month basis.
3 To be tested quarterly and measured on a trailing 12-month basis.
 
 
Exhibit A-12

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AMENDMENT TO RESTRUCTURING TERM SHEET
 
This Amendment to Restructuring Term Sheet (this “Amendment”), dated as of
October 15, 2009 (the “Amendment Date”), is entered into by and among Morris
Publishing Group, LLC (along with its subsidiaries, “MPG” or the “Company”) and
the ad hoc committee of holders of, or as the case may be investment managers of
discretionary accounts holding, the 7% Senior Subordinated Notes due 2013 (the
“Ad Hoc Committee”).  Capitalized terms used and not defined herein shall have
the meaning attributed to such term in the Existing Restructuring Term Sheet (as
defined below).
 
W I T N E S S E T H:
 
WHEREAS, on September 23, 2009, the Company and the Ad Hoc Committee entered
into that certain Restructuring Term Sheet, dated as of September 23, 2009 (the
“Existing Restructuring Term Sheet”).
 
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
 
Section 1. Amendments to Existing Restructuring Term Sheet.  From and after the
date hereof, the Existing Restructuring Term Sheet is hereby amended as follows:
 
(a) The “Plan Support Agreement” section is hereby amended and restated in its
entirety as follows:
 
“The Company and the Ad Hoc Committee shall execute a plan supportagreement (the
“Plan Support Agreement”) on reasonable and customary terms by October 23, 2009,
or such later date as shall be agreed to by the Ad Hoc Committee.”
 
(b) The first sentence of the “Solicitation and Filing” section is hereby
amended and restated as follows:
 
“The Company shall commence the solicitation process in accordancewith
applicable securities laws on or before October 30, 2009.”
 
(c) The first sentence of the second paragraph of the “Remaining Debt” section
is hereby amended and restated as follows:
 
 
“The aggregate outstanding balance of the Company’s existing term loan shall not
exceed $26.5 million less the Initial Cash on Hand on the Effective Date and
after giving effect to the consummation of a senior debt refinancing transaction
involving the Company’s affiliates (the “Senior Refinancing Transaction”) in
accordance with the Senior Debt Refinancing Documentation (as defined below), of
which no more than $19.7 million less the Initial Cash on Hand on the Effective
Date will be held by an affiliate of ACON Investments, L.L.C. (the “Term Loan”)
and approximately $6.8 million in the aggregate will be held by a Morris
affiliate (the “Revolver”).”

 
 
 
Exhibit A-13

--------------------------------------------------------------------------------

 
 
 
(d) Attachment A to the Existing Restructuring Term Sheet shall be replaced in
its entirety by the term sheet and related acquisition of MPG senior debt
diagram attached hereto as Exhibit A.
 
Section 2. Reference to and Effect Upon the Existing Restructuring Term Sheet.
 
(a) Except as specifically amended hereby, the Company and the Ad Hoc Committee
hereby acknowledges and agrees that all terms, conditions and covenants
contained in the Existing Restructuring Term Sheet, as amended hereby, and all
rights and obligations of the Company and the Ad Hoc Committee therein, shall
remain in full force and effect.  The Company and the Ad Hoc Committee hereby
confirms that the Existing Restructuring Term Sheet, as amended hereby, is in
full force and effect.
 
Section 3. Execution in Counterparts.  This Amendment may be executed and
delivered in any number of counterparts (including delivery by facsimile or
portable document format (PDF)), each of which will be deemed an original, but
all of which together will constitute one and the same instrument.
 
Section 4. Integration.  The Existing Restructuring Term Sheet as amended by
this Amendment, together with the documents referenced therein and related
exhibits, attachments, annexes and schedules, constitutes the sole and entire
agreement of the parties to this Amendment with respect to the subject matter
contained herein and therein, and supersedes all prior and contemporaneous
understandings and agreements, both written and oral, with respect to such
subject matter.
 
Section 5. Severability.  Wherever possible, each provision of this Amendment
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Amendment shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Amendment or the Existing
Restructuring Term Sheet.
 
Section 6. Applicable Law.  This Amendment shall be governed by and be construed
and enforced in accordance with, the laws of the State of New York (including
without limitation Sections 5-1401 and 5-1402 of the New York General
Obligations Law).
 
Section 7. Jurisdiction and Waiver of Jury Trial.  EACH OF THE PARTIES
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
THIS TERM SHEET; PROVIDED, HOWEVER THAT ANY BANKRUPTCY PROCEEDING MAY BE FILED
IN THE SOUTHERN DISTRICT OF GEORGIA AND SHALL BE SUBJECT TO ANY APPLICABLE LAWS
OF THE STATE OF GEORGIA.

 
Exhibit A-14

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Section 8. Headings.  Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purposes.
 
Section 9. Confidentiality.  The Company and each Holder (and their respective
successors and assigns) shall not publicly disclose any information provided to
them in connection with this Amendment or the Existing Restructuring Term Sheet,
nor shall they publicly disclose Annex A to this Amendment, except: (1) in any
legal proceeding relating to this Amendment, provided that the Company and/or
Holder, as applicable, shall use its best efforts to maintain the
confidentiality of Annex A in the context of any such proceeding; (2) to the
extent required by applicable law, rules, regulations promulgated thereunder, or
obligations, including, without limitation, U.S. federal securities laws, as
determined after consultation with legal counsel; (3) in response to an oral
question, interrogatory, request for information or documents, subpoena, civil
investigative demand or other process, or a request from a government agency,
regulatory authority or securities exchange; (4) that the Company may summarize
this Amendment in connection with a Form 8-K filing (in lieu of filing this
Amendment as an exhibit thereto); and (5) that the Company may include this
Amendment as an exhibit to the Company’s Form 10-K for the year ending December
31, 2009; provided, however, that the Company shall not include Annex A in any
such filing and shall only disclose Annex A if specifically required to do so by
the Securities and Exchange Commission (“SEC”) after taking all reasonable steps
to resist disclosure, including requesting that Annex A be accorded confidential
treatment by the SEC; provided that in the case of clauses (2), (3) or (5) above
the disclosing party provides notice to the applicable Holder (promptly upon
receipt of the subpoena or request so that the Holder may seek an appropriate
protective order or waive the Company’s requirement for compliance with this
Section 9), unless such notice would be prohibited by law.  The Company will not
oppose any reasonable action by the applicable Holder to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded to the information contained therein.  If the applicable Holder chooses
to oppose the production of such information, it does so at its own
expense.  Responding to any such subpoena or other request, after providing
notice as set forth herein, shall not be deemed to be a breach of any provision
of this Amendment.  Notwithstanding anything to the contrary in this Section 9,
the Company may: (i) disclose the aggregate principal amount of Notes held by
the Holders executing this Amendment, taken as a whole and without reference to
the names of the Holders constituting such amount; and (ii) provide the Trustee
with the executed copy of this Amendment that includes the individual signature
pages of each of the Holders, but only in the event that the Company first
obtain the Trustee’s written consent not to publicly disclose any information
relating to the individual holdings of each Holder.
 
 
 
 
Exhibit A-15

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EXHIBIT TO AMENDMENT 1 TO TERM SHEET
 
Acquisition of and Amendment to Morris Publishing Group, LLC Credit Facility
 
October 15, 2009
 
 
Master Assignment and Agency Transfer Agreement:
Tranche Holdings, LLC (“Newco”) will, pursuant to a Master Assignment and
Assumption (the “Master Assignment”), purchase at par value, for a cash purchase
price not exceeding $136,500,000, the entire amount of the senior secured debt
of Morris Publishing Group, LLC, a Georgia limited liability company
(“Borrower”) outstanding under that certain Credit Agreement, dated as of
December 14, 2005 (as amended through the date hereof, the “Existing Credit
Agreement”), among Morris Publishing Group, LLC as Borrower (“MPG”), Morris
Communications Company, LLC (“MCC”), the lenders party thereto, J.P. Morgan
Securities, Inc. as Sole Lead Arranger and Sole Bookrunner, certain financial
institutions party thereto as Co-Documentation Agents, and JPMorgan Chase Bank,
N.A., as Administrative Agent (the “Existing Agent”).
Pursuant to an Amendment, Resignation, Waiver, Consent and Appointment Agreement
(collectively, the “Agency Transfer Agreement” and together with the Master
Assignment, the “Transfer Documents”), the Existing Agent shall resign and be
replaced by Tranche Manager, LLC (the “New Agent”), and all necessary or
appropriate collateral actions will be taken to ensure that the New Agent has a
first priority perfected security interest in all collateral under the Loan
Documents (as defined in the Existing Credit Agreement), including, without
limitation, the delivery of all possessory collateral to the New Agent and the
assignment of all mortgages, control agreements and access agreements.
 

 
Exhibit A-16

--------------------------------------------------------------------------------

 
 
Amended Credit Agreement:
Contemporaneously with the closing under the Transfer Documents, the Existing
Credit Agreement will be amended and restated (the “Amended Credit Agreement”)
to, among other things, (i) convert all existing loans under the Existing Credit
Agreement into term loans, (ii) allocate such term loans among three tranches in
the following aggregate principal amounts:
Aggregate
Designation                                    Principal Amount
 
Tranche A Term Loans                                             $19,700,000
Tranche B Term Loans 6,800,000
Tranche C Term Loans 110,000,000
 
(iii) provide that all payments (other than payments on account of PIK Interest
(as defined below) that are added to the principal balance of such loan) under
the Amended Credit Agreement shall be applied first, to the Tranche A Term Loans
until paid in full, second, to the Tranche B Term Loans until paid in full and
third, to the Tranche C Term Loans, (iv) as a material inducement for Newco’s
acquisition of the loans and the subsequent transfers of the Tranche B Term
Loans and Tranche C Term Loans to affiliates of the Borrower as described in the
structure chart attached hereto as Exhibit A (the “Structure Chart”), allow for
the disposition of MCC Outdoor, LLC, a Georgia limited liability company
(“Fairway”) to FMO Holdings, LLC ("FMO", in which MCC Outdoor Holdings, LLC
("Outdoor Holdings"), an affiliate of MCC, will own a minority interest)  and
Magic Media, Inc. will own the majority interest pursuant to the Contribution
Agreement (as defined below), including the release of Fairway from its
obligations as a guarantor and grantor under the Loan Documents, the release of
liens on all collateral owned by Fairway and the release of Outdoor Holding's
pledge as collateral of its equity interest in Fairway (collectively, the
“Fairway Release”), (v) provide for, upon the contribution of Fairway by Outdoor
Holding (a current guarantor and grantor under the Loan Documents) to FMO in
accordance with the terms of that certain Contribution Agreement, dated as of
August 7, 2009, by and among Magic Media, Inc., Outdoor Holding and FMO (the
“Contribution Agreement”), a pledge of all of the membership interest in FMO
that will be held by Outdoor Holding (the “FMO Pledge”), (vi) provide for the
deposit of the notes evidencing the Tranche C Term Loans obtained by MCC and its
affiliates in connection with the Contribution Agreement into a third-party
escrow account as requested by the ad hoc committee of holders (the “Ad Hoc
Committee”) of more than 75% of the principal amount outstanding of the Existing
Notes (as defined below) in accordance with the terms of that certain Escrow
Agreement (the “Escrow Agreement”) described in that certain Restructuring Term
Sheet, dated as of September 23, 2009, by and among MPG, its subsidiaries and
the Ad Hoc Committee (the “Restructuring Term Sheet”), and (vii) provide for the
other terms and conditions set forth herein.
 

 
Exhibit A-17

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Lenders Under Amended Credit Agreement (the “Lenders”):
Tranche A Term Loans: Newco shall hold $19.7M (100%)
Tranche B Term Loans: Newco shall initially hold $6.8M, which shall be
transferred in accordance with the terms of the Structure Chart to MPG Revolver
Holdings, LLC (“Revolver Holdings”), an affiliate of MPG (100%)
Tranche C Term Loans: Newco shall initially hold $110M, which shall be
transferred in accordance with the terms of the Structure Chart, and ultimately,
the following entities affiliated with MPG shall hold the Tranche C Term Loans:
(1) Morris Communications Company, LLC shall hold $85.8M (78%)
(2) Revolver Holdings shall hold $24.2M (22%)
Except in the case of the Tranche C Term Loans as provided pursuant to the
Escrow Agreement, none of the holders of the Tranche C Term Loans or the Tranche
B Term Loans will be permitted to transfer their interest without the prior
written consent of the New Agent, which consent may be withheld in its sole
discretion.
 
Payment Priorities Under Amended Credit Agreement
Notwithstanding anything to the contrary contained herein, all payments (other
than payments on account of paid-in-kind interest (“PIK Interest”) that are
added to the principal balance of such loans), and any other proceeds, of the
Tranche B Term Loans and Tranche C Term Loans, however received (including as a
result of the bankruptcy of the Borrower, MCC or any of their respective
affiliates), shall be paid to the holders of the Tranche A Term Loans until paid
in full.
On and after the Notes Refinancing Effective Date (as defined below), all
payments with respect to the Tranche B Term Loans and the Tranche C Term Loans
shall be subject to any requirements applicable thereto pursuant to any
agreement entered into with respect to the Senior Subordinated Notes Refinancing
(as defined below) that is binding on the Tranche B Term Loan Lenders or the
Tranche C Term Loan Lenders that establishes agreements with respect to the
relative priority of payment and collateral sharing with respect to the Tranche
B Term Loans, the Tranche C Terms Loans, and the New Notes, as applicable.
 
Agent
At any time the Tranche A Term Loans are repaid in full, the New Agent, unless
otherwise specified by such New Agent in writing, shall cease to act as agent
under the Amended Credit Agreement, and shall be succeeded by Revolver Holdings
(or its designee).
 

 
Exhibit A-18

--------------------------------------------------------------------------------

 
 
Borrower:
Morris Publishing Group, LLC
 
Guarantors:
MCC and all wholly-owned, domestic Subsidiaries (as defined in the Existing
Credit Agreement) of MCC (other than Fairway) and the Borrower  (together with
MCC, collectively, the “Guarantors”).
 
Collateral:
Except for the assets subject to the Fairway Release, the Amended Credit
Agreement shall be secured by a perfected first priority security interest in
the assets currently securing the Existing Credit Agreement, including, (a)
substantially all personal property of the Borrower and the Guarantors, (b)
certain material real estate interests of the Borrower and the Guarantors, (c)
the equity interests in the Borrower and MCC, and (d) the FMO Pledge, provided,
however, that the FMO Pledge shall only secure the obligations under the Tranche
A Term Loans  (collectively, the “Collateral”).
No other liens shall exist on the Collateral other than (i) customary permitted
liens as currently permitted under the Existing Credit Agreement, and (ii) with
respect to a portion of the Collateral owned by the Borrower and its
Subsidiaries that are Guarantors, a second priority security interest that may
be granted to secure (i) $100,000,000 principal amount of New Notes proposed to
be issued in exchange for the Existing Notes and (ii) on and after the issuance
of the New Notes, the Tranche B Term Loans (which loans shall cease at such time
to be secured by the Collateral that secures the outstanding obligations under
the Amended Credit Agreement).
Upon the occurrence of an Event of Default (as defined below), New Agent may
foreclose on the Collateral, except that New Agent shall not foreclose on the
Collateral of MCC and its subsidiary Guarantors until the earliest to occur of
(a) the Borrower failing to make any interest payment required under the Amended
Credit Agreement, (b) from and after the date that is seven (7) months after the
Closing Date (as defined below), any Event of Default shall occur and/or be
continuing, (c) MCC or any of its subsidiaries shall commence a voluntary case
under the Bankruptcy Code or file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or readjustment of debts,
and (d) a proceeding shall be commenced against MCC or any of its subsidiaries
with or without such entity’s consent, in any court of competent jurisdiction,
under any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding shall continue
undismissed for a period of 60 or more days.  Any event described in clauses (a)
through (d) shall be referred to as an “MCC Foreclosure Event.”
 
FMO Pledge:
Outdoor Holding shall pledge its entire equity interest in FMO (representing a
32% interest)  to New Agent for the exclusive benefit of the New Agent and the
Tranche A Term Loan Lenders.
Without limiting the other remedies available upon the occurrence of an event of
default or an MCC Foreclosure Event, New Agent may foreclose on the FMO Pledge
upon the occurrence of an MCC Foreclosure Event..  The debt shall be discharged
to the extent of the fair market value realized by the Tranche A Term Loan
Lenders in respect of the assets securing the FMO Pledge.
 
Maturity Date:
Two years after closing, with two 6-month extension options (the “Maturity
Date”), provided, however, if the documentation in respect of the New Notes
requires that the Tranche A Term Loans be refinanced on or prior to a certain
date (the “Required Refinance Date”), the maturity date of the Tranche A Term
Loans shall be the earlier of (a) the Maturity Date and (b) the Required
Refinance Date.
 

 
Exhibit A-19

--------------------------------------------------------------------------------

 
 
Interest Rate:
Tranche A Term Loans: 15% payable monthly in arrears (to be increased to 17.5%
for first extension option and 20% for second extension option)
 
Tranche B Term Loans: 15%
 
Tranche C Term Loans: 5%
 
Interest on the Tranche B Term Loans and Tranche C Term Loans shall not be paid
in cash, but will be added to, and increase, the outstanding principal balances
of respective loans (i.e., PIK Interest).
 
Default interest: 4% plus applicable rate.  For Tranche B Term Loans and Tranche
C Term Loans, default interest shall be PIK Interest.
 
Commitment Fees
No commitment fees shall be payable under the Amended Credit Agreement.
 
Fees:
$100,000 fee payable annually in advance to New Agent (the “Administrative
Fee”).
In the event of any prepayment of the Tranche A Term Loan prior to the second
anniversary of the Closing Date, a prepayment fee shall become due in the
amounts set forth below (the “Prepayment Fee”):
(1) during the first year of the loan, a fee equal to 7.5% of such prepayment
amount less the aggregate amount of interest paid in cash on such amount during
the period between the Closing Date and the date of such payment, and
(2) during the second year of the loan, a fee equal to (a) the amount of
interest which would have accrued in respect of such prepayment amount as if
such amount had remained outstanding at all times during the second year of the
loan less (b) the aggregate amount of interest paid in cash on such principal
prepayment amount during the period between the first anniversary of the Closing
Date and the date of such prepayment. With respect to the Prepayment Fee, the
obligation of the Borrower and its Subsidiaries shall be limited to an aggregate
amount of not more than $300,000, with any excess Prepayment Fee obligations
being liabilities of MCC and its Subsidiaries.
 

 
Exhibit A-20

--------------------------------------------------------------------------------

 
 
Amortization:
None.
 
Mandatory Prepayments:
On a quarterly basis (or following the issuance of the New Notes, such more
frequent basis as shall be required by the New Notes), all excess cash flow (to
be defined) will be applied to reduce outstanding borrowings, with funds applied
to the different tranches in accordance with the payment priorities for
application of payments described above.
   
Other mandatory prepayments as may be required as a condition to the
consummation of the Senior Subordinated Notes Refinancing pursuant to the
Restructuring Term Sheet or that certain Plan Support Agreement, described in
the Restructuring Term Sheet, between the Borrower and the Ad Hoc Committee (the
“Plan Support Agreement”).
 
Financial Covenants
Senior Cash Flow Ratio not to exceed 2.00 to 1.
Cash Flow Ratio not to exceed 5.50 to 1.
Fixed Charge Ratio not to be less than 1.05 to 1.
Interest Coverage Ratio not to be less than (i) 2.25 to 1 for each four quarter
period ending in 2009 and (ii) 2.00 to 1 thereafter.
Other financial covenants applicable pursuant to the New Notes, the
Restructuring Term Sheet, or the Plan Support Agreement.
The definitions for the defined terms used above shall be similar to the
definitions in the Existing Credit Agreement, provided, however, that the
definition of Interest Expense referred to in the definition of Interest
Coverage Ratio shall exclude PIK interest.
In addition, until the earlier to occur of (a) the date that is seven (7) months
following the Closing Date, and (b) the consummation of Senior Subordinated
Notes Refinancing, the financial covenants shall be calculated as if the Senior
Subordinated Notes Refinancing has been consummated pursuant to assumptions to
be specified in the Amended Credit Agreement.
 

 
Exhibit A-21

--------------------------------------------------------------------------------

 
 
Affirmative Covenants:
Similar to existing affirmative covenants, with modifications relating to the
consummation of the Senior Subordinated Notes Refinancing and other
modifications to be agreed.
Annual and quarterly financial statements shall be delivered to the New Agent,
the lenders, and RSA FMO Holdings, LLC (“RSA”).
No later than seven (7) months following the Closing Date, the holders of at
least 99% of the currently outstanding 7% senior subordinated unsecured notes of
the Borrower due 2013 (the “Existing Notes”) must have exchanged, amended,
refinanced or restructured their notes, including pursuant to a plan of
reorganization pursuant to the Senior Subordinated Notes Refinancing described
below.
If any covenants, events of default or mandatory prepayment events in the
documentation related to the Senior Subordinated Notes Refinancing, including
the Plan Support Agreement contemplated by the Restructuring Term Sheet, are
either not included in the Amended Credit Agreement or  are more restrictive or
more favorable to the holders of the New Notes than the comparable provisions in
the Amended Credit Agreement, the covenants in the Amended Credit Agreement
shall automatically be amended to incorporate such provisions.  Borrower will
execute such documentation as the New Agent may reasonably request to evidence
the incorporation of such provisions.
 

 
Exhibit A-22

--------------------------------------------------------------------------------

 
 
Negative Covenants:
Similar to existing negative covenants, with modifications relating to the
consummation of the Senior Subordinated Notes Refinancing and other
modifications to be agreed, including that MPG, MCC and their subsidiaries that
are Guarantors shall have no intercompany indebtedness other than indebtedness
that is subordinated to the Tranche A Term Loans on customary terms such that no
enforcement action will be permitted while any obligations under the Tranche A
Term Loans are outstanding.
MPG shall be permitted to consummate an exchange, amendment, refinancing or
restructuring of the Existing Notes (the “Senior Subordinated Notes
Refinancing”) for new senior subordinated second lien notes (“New Notes”)
secured by liens on the assets of MPG and its subsidiaries that are Guarantors.
The terms of the New Notes shall be approved by the New Agent (which terms in
any event shall not include a cross default to the Amended Credit Agreement),
with the result that:
(1) No more than 1% of the Existing Notes may remain outstanding (with a maximum
cash interest rate of 7% per annum payable quarterly in arrears);
(2) The aggregate principal amount of the New Notes shall not exceed
$100,000,000 (if 100% of the Existing Notes are exchanged) with (prior to the
payment in full of all obligations under the Tranche A Term Loans) a maximum
cash interest rate of 5% payable quarterly in arrears and a maximum PIK Interest
rate of 10% per annum compounded quarterly in arrears;
(3) The Tranche C Term Loans shall cease to be outstanding in accordance with
the terms of the Escrow Agreement; and
(4) The Tranche B Term Loans shall cease to be secured by the liens securing the
Amended Credit Agreement, and shall share in the second liens securing the New
Notes on a pari passu basis.
The date on which the Senior Subordinated Notes Refinancing shall be consummated
is referred to herein as the “Notes Refinancing Effective Date”.  On the Notes
Refinancing Effective Date, the Trustee and the New Agent shall enter into an
Intercreditor Agreement in a form agreed by the Ad Hoc Committee and the Tranche
A Term Loan Lender prior to the Closing Date and attached to the Amended Credit
Agreement.
In addition, that certain Forbearance Agreement, dated as of February 26, 2009,
by and among MPG and Morris Publishing Finance Co. (“Morris Finance”) as
issuers, the guarantors party thereto and the Ad Hoc Committee (as amended
through the date hereof, the “Forbearance Agreement”), shall not expire or
terminate, and, except for amendments required in connection with the closing of
the Amended Credit Agreement, shall not be amended without the consent of New
Agent, except that such Forbearance Agreement may be subsequently extended
without the consent of New Agent.
The New Agent shall have approval rights with respect to the Plan Support
Agreement and the Amended Credit Agreement will require that the New Agent be
given the rights and benefits conferred to the noteholders thereunder.
 

 
Exhibit A-23

--------------------------------------------------------------------------------

 
 
Events of Default:
In addition to the other events of default discussed herein, the Events of
Default under the Amended Credit Agreement shall be similar to existing Events
of Default, with modifications to be agreed, including, it shall be an immediate
Event of Default if (1) the Borrower fails to make any payment of principal of
or interest on any Loan when due, (2) in Newco’s sole determination, there has
been a diminution of value in the Collateral, including the assets subject to
the FMO Pledge, (3) in Newco's sole determination, the Borrower is not making
adequate progress to consummate the Senior Subordinated Notes Refinancing, (4)
any term of the Amended Credit Agreement or any right or remedy of the holders
of the Loans is avoided, nullified, set aside recharacterized, amended,
modified, limited or stayed in any way without the prior written consent of the
New Agent or such holder in connection with any bankruptcy proceeding in any
manner, (5) following the Closing Date, the Forbearance Agreement terminates or
the Forbearance Agreement is amended without the approval of New Agent, except
that the Forbearance Agreement may be extended in accordance with the terms
hereof and (6) a default occurs under the New Notes, the Plan Support Agreement
or the Restructuring Term Sheet (collectively, the “Events of Default”).
 

 
Exhibit A-24

--------------------------------------------------------------------------------

 
 
Waiver of Specified Defaults:
On the Closing Date, the Specified Defaults (as defined in Waiver No. 18 to the
Credit Agreement, dated as of October 9, 2009) shall be waived, provided that
such waiver shall expire immediately upon the termination of the Forbearance
Agreement or the occurrence of certain related actions.
 
Amendments and Waivers:
All amendments, waivers and consents shall, unless otherwise delegated to the
New Agent, require the consent of Lenders holding a majority of the Tranche A
Term Loans.
Closing Date:
 
Closing Conditions:
It is anticipated that the closing of the Transfer Documents and the Amended
Credit Agreement shall take place on October 15, 2009 (the “Closing Date”).
It shall be a condition precedent to the consummation of the Amended Credit
Agreement and the Transfer Documents, that (1) MCC as the sole member of Outdoor
Holding shall amend Outdoor Holding’s operating agreement and take other actions
necessary or appropriate to establish Outdoor Holding as a special purpose
entity and a bankruptcy remote entity to the satisfaction of Newco in its sole
and absolute discretion and (2) holders of the Existing Notes shall enter into a
consent agreement satisfactory to the New Agent.
In addition, the Amended Credit Agreement shall be subject to customary closing
conditions, including, without limitation, (1) delivery of an opinion of counsel
of Hull, Towill, Norman, Barrett & Salley, counsel to MPG, in form and substance
reasonably satisfactory to the New Agent and RSA regarding the Amended Credit
Agreement and the related loan documents and, among other things, that the
execution, delivery and performance of the Amended Credit Agreement and the
related loan documents, including the Fairway Release, do not contravene the
terms of that certain Indenture, dated as of August 7, 2003 (as amended by that
certain First Supplemental Indenture, dated as of July 20, 2004, and as further
amended or otherwise modified from time to time, the “Indenture”), by and among
MPG, Morris Finance, the guarantors party thereto, and Wilmington Trust, N.A. as
successor Trustee, or any related agreements or applicable law, or result in the
imposition of liens upon the assets of Fairway, (2) delivery of a certificate by
a responsible officer of (a) MCC and each of its subsidiary Guarantors
certifying that after giving effect to the Amended Credit Agreement and the
related transactions discussed herein such entities shall be solvent on a
consolidated basis and (b) Outdoor Holding certifying that after giving effect
to the Amended Credit Agreement and the related transactions discussed herein
such entity shall be solvent.
Payment of Transaction Expenses:
All costs and expenses of the holder of the Tranche A Term Loans and the New
Agent shall be paid by the Borrower.
Governing Law:
New York

 
Exhibit A-25

--------------------------------------------------------------------------------

 

AMENDMENT NO. 2 TO RESTRUCTURING TERM SHEET
 
This Amendment No. 2 to Restructuring Term Sheet (this “Amendment No. 2”), dated
as of October 23, 2009, is entered into by and among Morris Publishing Group,
LLC (along with its subsidiaries, “MPG” or the “Company”) and the ad hoc
committee of holders of, or as the case may be investment managers of
discretionary accounts holding, the 7% Senior Subordinated Notes due 2013 (the
“Ad Hoc Committee”).  Capitalized terms used and not defined herein shall have
the meaning attributed to such term in the Existing Restructuring Term Sheet (as
defined below).
 
W I T N E S S E T H:
 
WHEREAS, on September 23, 2009, the Company and the Ad Hoc Committee entered
into that certain Restructuring Term Sheet dated as of September 23, 2009 (the
“September 23 Term Sheet”), as amended by that certain Amendment to
Restructuring Term Sheet dated as of October 15, 2009 (the “October 15 Term
Sheet Amendment”, and the September 23 Term Sheet, as amended by the October 15
Term Sheet Amendment, the “Existing Restructuring Term Sheet”).
 
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
 
Section 1. Amendments to Existing Restructuring Term Sheet.  From and after the
date hereof, the Existing Restructuring Term Sheet is hereby amended as follows:
 
(a) The “Plan Support Agreement” section is hereby amended and restated in its
entirety as follows:
 
“The Company and the Ad Hoc Committee shall execute a plan supportagreement (the
“Plan Support Agreement”) on reasonable and customary terms by October 27, 2009,
or such later date as shall be agreed to by the Ad Hoc Committee.”
 
Section 2. Reference to and Effect Upon the Existing Restructuring Term Sheet.
 
(a) Except as specifically amended hereby, the Company and the Ad Hoc Committee
hereby acknowledges and agrees that all terms, conditions and covenants
contained in the Existing Restructuring Term Sheet, as amended hereby, and all
rights and obligations of the Company and the Ad Hoc Committee therein, shall
remain in full force and effect.  The Company and the Ad Hoc Committee hereby
confirms that the Existing Restructuring Term Sheet, as amended hereby, is in
full force and effect.
 
Section 3. Execution in Counterparts.  This Amendment No. 2 may be executed and
delivered in any number of counterparts (including delivery by facsimile or
portable document format (PDF)), each of which will be deemed an original, but
all of which together will constitute one and the same instrument.

 
Exhibit A-26

--------------------------------------------------------------------------------

 

 
Section 4. Integration.  The Existing Restructuring Term Sheet as amended by
this Amendment No. 2, together with the documents referenced therein and related
exhibits, attachments, annexes and schedules, constitutes the sole and entire
agreement of the parties to this Amendment No. 2 with respect to the subject
matter contained herein and therein, and supersedes all prior and
contemporaneous understandings and agreements, both written and oral, with
respect to such subject matter.
 
Section 5. Severability.  Wherever possible, each provision of this Amendment
No. 2 shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Amendment No. 2 shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Amendment No. 2 or the
Existing Restructuring Term Sheet.
 
Section 6. Applicable Law.  This Amendment No. 2 shall be governed by and be
construed and enforced in accordance with, the laws of the State of New York
(including without limitation Sections 5-1401 and 5-1402 of the New York General
Obligations Law).
 
Section 7. Jurisdiction and Waiver of Jury Trial.  EACH OF THE PARTIES
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
THIS TERM SHEET; PROVIDED, HOWEVER THAT ANY BANKRUPTCY PROCEEDING MAY BE FILED
IN THE SOUTHERN DISTRICT OF GEORGIA AND SHALL BE SUBJECT TO ANY APPLICABLE LAWS
OF THE STATE OF GEORGIA.
 
Section 8. Headings.  Section headings in this Amendment No. 2 are included
herein for convenience of reference only and shall not constitute a part of this
Amendment No. 2 for any other purposes.
 
Section 9. Confidentiality.  The Company and each Holder (and their respective
successors and assigns) shall not publicly disclose any information provided to
them in connection with this Amendment No. 2 or the Existing Restructuring Term
Sheet, nor shall they publicly disclose Annex A to this Amendment No. 2, except:
(1) in any legal proceeding relating to this Amendment No. 2, provided that the
Company and/or Holder, as applicable, shall use its best efforts to maintain the
confidentiality of Annex A in the context of any such proceeding; (2) to the
extent required by applicable law, rules, regulations promulgated thereunder, or
obligations, including, without limitation, U.S. federal securities laws, as
determined after consultation with legal counsel; (3) in response to an oral
question, interrogatory, request for information or documents, subpoena, civil
investigative demand or other process, or a request from a government agency,
regulatory authority or securities exchange; (4) that the Company may summarize
this Amendment No. 2 in connection with a Form 8-K filing (in lieu of filing
this Amendment No. 2 as an exhibit thereto); and (5) that the Company may
include this Amendment No. 2 as an exhibit to the Company’s Form 10-K for the
year ending December 31, 2009; provided, however, that the Company shall not
include Annex A in any such filing and shall only disclose Annex A if
specifically required to do so by the Securities and Exchange

 
Exhibit A-27

--------------------------------------------------------------------------------

 

 
Section 10. Commission (“SEC”) after taking all reasonable steps to resist
disclosure, including requesting that Annex A be accorded confidential treatment
by the SEC; provided that in the case of clauses (2), (3) or (5) above the
disclosing party provides notice to the applicable Holder (promptly upon receipt
of the subpoena or request so that the Holder may seek an appropriate protective
order or waive the Company’s requirement for compliance with this Section 9),
unless such notice would be prohibited by law.  The Company will not oppose any
reasonable action by the applicable Holder to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded
to the information contained therein.  If the applicable Holder chooses to
oppose the production of such information, it does so at its own
expense.  Responding to any such subpoena or other request, after providing
notice as set forth herein, shall not be deemed to be a breach of any provision
of this Amendment No. 2.  Notwithstanding anything to the contrary in this
Section 9, the Company may: (i) disclose the aggregate principal amount of Notes
held by the Holders executing this Amendment No. 2, taken as a whole and without
reference to the names of the Holders constituting such amount; and (ii) provide
the Trustee with the executed copy of this Amendment No. 2 that includes the
individual signature pages of each of the Holders, but only in the event that
the Company first obtain the Trustee’s written consent not to publicly disclose
any information relating to the individual holdings of each Holder.
 
 
Exhibit A-28

--------------------------------------------------------------------------------

 

 
AMENDMENT NO. 3 TO RESTRUCTURING TERM SHEET
 
This Amendment No. 3 to Restructuring Term Sheet (this “Amendment No. 3”), dated
as of October 27, 2009, is entered into by and among Morris Publishing Group,
LLC (along with its subsidiaries, “MPG” or the “Company”) and the ad hoc
committee of holders of, or as the case may be investment managers of
discretionary accounts holding, the 7% Senior Subordinated Notes due 2013 (the
“Ad Hoc Committee”).  Capitalized terms used and not defined herein shall have
the meaning attributed to such term in the Existing Restructuring Term Sheet (as
defined below).
 
W I T N E S S E T H:
 
WHEREAS, on September 23, 2009, the Company and the Ad Hoc Committee entered
into that certain Restructuring Term Sheet dated as of September 23, 2009 (the
“September 23 Term Sheet”), as amended by that certain Amendment to
Restructuring Term Sheet dated as of October 15, 2009 (the “October 15 Term
Sheet Amendment”) and Amendment No. 2 to Restructuring Term Sheet dated as of
October 23, 2009 (the “October 23 Term Sheet Amendment”, and the September 23
Term Sheet, as amended by the October 15 Term Sheet Amendment and the October 23
Term Sheet Amendment, the “Existing Restructuring Term Sheet”).
 
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
 
Section 1. Amendments to Existing Restructuring Term Sheet.  From and after the
date hereof, the Existing Restructuring Term Sheet is hereby amended as follows:
 
(a) The “Plan Support Agreement” section is hereby amended and restated in its
entirety as follows:
 
“The Company and the Ad Hoc Committee shall execute a plan supportagreement (the
“Plan Support Agreement”) on reasonable and customary terms by October 30, 2009,
or such later date as shall be agreed to by the Ad Hoc Committee.”
 
(b) The first sentence of the “Solicitation and Filing” section is hereby
amended and restated as follows:
 
“The Company shall commence the solicitation process in accordancewith
applicable securities laws on or before November 6, 2009.”
 
Section 2. Reference to and Effect Upon the Existing Restructuring Term Sheet.
 
(a) Except as specifically amended hereby, the Company and the Ad Hoc Committee
hereby acknowledges and agrees that all terms, conditions and covenants
contained in the Existing Restructuring Term Sheet, as amended hereby, and all
rights and obligations of the Company and the Ad Hoc Committee therein, shall
remain in full force and effect.  The

 
 
Exhibit A-29

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(b) Company and the Ad Hoc Committee hereby confirms that the Existing
Restructuring Term Sheet, as amended hereby, is in full force and effect.
 
Section 3. Execution in Counterparts.  This Amendment No. 3 may be executed and
delivered in any number of counterparts (including delivery by facsimile or
portable document format (PDF)), each of which will be deemed an original, but
all of which together will constitute one and the same instrument.
 
Section 4. Integration.  The Existing Restructuring Term Sheet as amended by
this Amendment No. 3, together with the documents referenced therein and related
exhibits, attachments, annexes and schedules, constitutes the sole and entire
agreement of the parties to this Amendment No. 3 with respect to the subject
matter contained herein and therein, and supersedes all prior and
contemporaneous understandings and agreements, both written and oral, with
respect to such subject matter.
 
Section 5. Severability.  Wherever possible, each provision of this Amendment
No. 3 shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Amendment No. 3 shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Amendment No. 3 or the
Existing Restructuring Term Sheet.
 
Section 6. Applicable Law.  This Amendment No. 3 shall be governed by and be
construed and enforced in accordance with, the laws of the State of New York
(including without limitation Sections 5-1401 and 5-1402 of the New York General
Obligations Law).
 
Section 7. Jurisdiction and Waiver of Jury Trial.  EACH OF THE PARTIES
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
THIS TERM SHEET; PROVIDED, HOWEVER THAT ANY BANKRUPTCY PROCEEDING MAY BE FILED
IN THE SOUTHERN DISTRICT OF GEORGIA AND SHALL BE SUBJECT TO ANY APPLICABLE LAWS
OF THE STATE OF GEORGIA.
 
Section 8. Headings.  Section headings in this Amendment No. 3 are included
herein for convenience of reference only and shall not constitute a part of this
Amendment No. 3 for any other purposes.
 
Section 9. Confidentiality.  The Company and each Holder (and their respective
successors and assigns) shall not publicly disclose any information provided to
them in connection with this Amendment No. 3 or the Existing Restructuring Term
Sheet, nor shall they publicly disclose Annex A to this Amendment No. 3, except:
(1) in any legal proceeding relating to this Amendment No. 3, provided that the
Company and/or Holder, as applicable, shall use its best efforts to maintain the
confidentiality of Annex A in the context of any such proceeding; (2) to the
extent required by applicable law, rules, regulations promulgated thereunder, or
obligations, including, without limitation, U.S. federal securities laws, as
determined after

 
Exhibit A-30

--------------------------------------------------------------------------------

 

 
Section 10. consultation with legal counsel; (3) in response to an oral
question, interrogatory, request for information or documents, subpoena, civil
investigative demand or other process, or a request from a government agency,
regulatory authority or securities exchange; (4) that the Company may summarize
this Amendment No. 3 in connection with a Form 8-K filing (in lieu of filing
this Amendment No. 3 as an exhibit thereto); and (5) that the Company may
include this Amendment No. 3 as an exhibit to the Company’s Form 10-K for the
year ending December 31, 2009; provided, however, that the Company shall not
include Annex A in any such filing and shall only disclose Annex A if
specifically required to do so by the Securities and Exchange Commission (“SEC”)
after taking all reasonable steps to resist disclosure, including requesting
that Annex A be accorded confidential treatment by the SEC; provided that in the
case of clauses (2), (3) or (5) above the disclosing party provides notice to
the applicable Holder (promptly upon receipt of the subpoena or request so that
the Holder may seek an appropriate protective order or waive the Company’s
requirement for compliance with this Section 9), unless such notice would be
prohibited by law.  The Company will not oppose any reasonable action by the
applicable Holder to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded to the information
contained therein.  If the applicable Holder chooses to oppose the production of
such information, it does so at its own expense.  Responding to any such
subpoena or other request, after providing notice as set forth herein, shall not
be deemed to be a breach of any provision of this Amendment No.
3.  Notwithstanding anything to the contrary in this Section 9, the Company may:
(i) disclose the aggregate principal amount of Notes held by the Holders
executing this Amendment No. 3, taken as a whole and without reference to the
names of the Holders constituting such amount; and (ii) provide the Trustee with
the executed copy of this Amendment No. 3 that includes the individual signature
pages of each of the Holders, but only in the event that the Company first
obtain the Trustee’s written consent not to publicly disclose any information
relating to the individual holdings of each Holder.

 
Exhibit A-31

--------------------------------------------------------------------------------

 
 
 
EXHIBIT B
 
SECOND SUPPLEMENTAL INDENTURE
 
SECOND SUPPLEMENTAL INDENTURE, dated as of [__________], 2009 (this “Second
Supplemental Indenture”), by and between Morris Publishing Group, LLC, a Georgia
limited liability company (the “Company” or “Morris Publishing”), Morris
Publishing Finance Co., a Georgia corporation, (“Morris Finance,” and together
with Morris Publishing, each an “Issuer” and together, the “Issuers”), the
subsidiaries of Morris Publishing signatory hereto (the “Guarantors”), and
Wilmington Trust Company FSB, a Delaware banking corporation, as successor
trustee (the “Trustee”), under the Indenture (the “Original Indenture”), dated
as of August 7, 2003 among the Issuers, the Guarantors and Wachovia Bank,
National Association, a national banking association, as trustee (the “Original
Trustee”), as amended by the First Supplemental Indenture, dated as of July 20,
2004, between the Issuers, the Guarantors and the Original Trustee (the Original
Indenture together with such First Supplemental Indenture, the “Indenture”).
Each capitalized term used in this Second Supplemental Indenture and not
otherwise defined herein shall have the meaning assigned to such term in the
Indenture.
 
WITNESSETH:
 
WHEREAS, the Issuers have heretofore executed and delivered to the Trustee the
Original Indenture providing for the issuance of 7% Senior Subordinated Notes
due 2013 (the “Notes”);
 
WHEREAS, Section 9.2 of the Indenture provides that the Issuers and the Trustee
may amend or supplement the Indenture and the Notes, in each case, with the
consent of the Holders of at least a majority in principal amount of the Notes
then outstanding (the “Requisite Consents”);
 
WHEREAS, the Company has initiated an exchange offer with respect to the
outstanding Notes (the “Exchange Offer”), upon the terms and subject to the
conditions set forth in the Exchange Offer Memorandum and Consent Solicitation
Statement, dated [__________], (as the same may be amended, supplemented or
modified, the “Offering Memorandum”);
 
WHEREAS, in connection with the Exchange Offer, the Issuers have proposed the
amendments set forth herein (the “Proposed Amendments”) to the Indenture and the
Notes;
 
WHEREAS, the Exchange Offer is conditioned upon, among other things, the
Proposed Amendments receiving the Requisite Consents, with the effectiveness of
such Proposed Amendments being subject to the acceptance by the Issuers for
exchange of the Notes tendered in the Exchange Offer and the payment of the
[Consideration for Tenders] (as defined in the Offering Memorandum) by the
Issuers, in each case, in accordance with the terms and subject to the
conditions contained in the Offering Memorandum (the “Acceptance”);

 
Exhibit B-1

--------------------------------------------------------------------------------

 

 
WHEREAS, the Company has received and delivered to the Trustee the Requisite
Consents to effect the Proposed Amendments;
 
WHEREAS, the Board of Directors of each Issuer has by resolution authorized the
execution of this Second Supplemental Indenture; and
 
WHEREAS, the Issuers have provided an Officers’ Certificate and an Opinion of
Counsel to the Trustee with respect to this Second Supplemental Indenture, all
in accordance with Section 9.2 of the Indenture.
 
NOW THEREFORE, in consideration of the premises and the covenants and agreements
contained herein, and for other good and valuable consideration the receipt of
which hereby is acknowledged, and for the equal and proportionate benefit of the
Holders of the Notes, the Issuers, the Guarantors and the Trustee hereby agree
as follows:
 
Article I.                      
 
AMENDMENTS TO THE INDENTURE AND THE NOTES
 
1.1 Amendment of Section 3.8 through 3.10.  Section 3.8 through 3.10 of the
Indenture, inclusive, are hereby deleted in their entirety and each such Section
is replaced with the following: “[Intentionally Omitted]”.
 
1.2 Amendment of Sections 4.3 through 4.20.  Sections 4.3 through 4.20 of the
Indenture, inclusive, are hereby deleted in their entirety and each such Section
is replaced with the following: “[Intentionally Omitted]”.
 
1.3 Amendment of Sections 5.1 and 5.2.  Sections 5.1 and 5.2 of the Indenture
are hereby deleted in their entirety and such Sections are replaced with the
following: “[Intentionally Omitted]”.
 
1.4 Amendment of Section 6.1.  Sections 6.1(3)-(8) of the Indenture are hereby
deleted in their entirety and each such Section is replaced with the following:
“[Intentionally Omitted]”.
 
1.5 Amendment of Section 6.2. Section 6.2 of the Indenture is hereby deleted in
its entirety and Section 6.2 is replaced with the following: “[Intentionally
Omitted]”.
 
1.6 Amendment of Defined Terms.  All terms defined in Sections 1.1 and 1.2 of
the Indenture and contained in the articles, sections and clauses of the
Indenture deleted by this Article I of this Second Supplemental Indenture, but
not otherwise used elsewhere in the Indenture, are hereby deleted in their
entirety, mutatis mutandis.
 
1.7 Amendment of Section References.  All references in the Indenture to the
articles, sections and clauses of the Indenture deleted pursuant to this Article
I of this Second Supplemental Indenture are hereby deleted in their entirety,
mutatis mutandis.

 
Exhibit B-2

--------------------------------------------------------------------------------

 

 
1.8 Amendment to Notes.  The Notes are hereby amended to delete or revise all
provisions inconsistent with the amendments to the Indenture effected by this
Article I of this Second Supplemental Indenture.
 
Article II.
 
EFFECTIVENESS
 
2.1 Effectiveness of this Second Supplemental Indenture.  This Second
Supplemental Indenture is entered into pursuant to and consistent with Section
9.2 of the Indenture, and nothing herein shall constitute a waiver, amendment,
modification or deletion of any provision of the Indenture or the Notes
requiring the approval of each Holder affected thereby pursuant to Section 9.2
of the Indenture.  Upon the execution of this Second Supplemental Indenture by
the Issuers, the Guarantors and the Trustee, the Indenture shall be amended and
supplemented in accordance herewith, and this Second Supplemental Indenture
shall form a part of the Indenture for all purposes and each Holder shall be
bound thereby; provided, however, that the provisions of the Indenture and the
Notes referred to in Article I above (such provisions being referred to as the
“Amended Provisions”) will remain in effect in the form they existed prior to
the execution of this Second Supplemental Indenture, and the waivers,
amendments, modifications and deletions to the Amended Provisions will not
become operative, and the terms of the Indenture and the Notes will not be
waived, amended, modified or deleted, in each case, unless and until the
occurrence of the Acceptance.
 
Article III.
 
MISCELLANEOUS
 
3.1 Continuing Effect on the Indenture. Except as expressly provided herein, all
of the terms, provisions and conditions of the Indenture and the Notes
outstanding thereunder shall remain in full force and effect.
 
3.2 Reference and Effect on the Indenture.  Following the Acceptance, each
reference in the Indenture to “the Indenture,” “this Indenture,” “hereunder,”
“hereof” or “herein” shall mean and be a reference to the Indenture as
supplemented by this Second Supplemental Indenture, unless the context otherwise
requires.
 
3.3 Governing Law.  This Second Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
 
3.4 Trustee Acceptance. The Trustee accepts the Indenture, as supplemented
hereby, and agrees to perform the same upon the terms and conditions set forth
therein, as supplemented hereby. The recitals contained herein shall be taken as
the statements of the Issuers, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representation as to the validity or
sufficiency of this Second Supplemental Indenture.

 
Exhibit B-3

--------------------------------------------------------------------------------

 

 
3.5 Counterparts.  The parties may sign any number of copies of this Second
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
 
3.6 Effect of Headings.  The Section headings herein are for convenience of
reference only and shall not effect the construction hereof.
 
3.7 Entire Agreement. This Second Supplemental Indenture, together with the
Indenture as amended hereby, contains the entire agreement of the parties, and
supersedes all other representations, warranties, agreements and understandings
between the parties, oral or otherwise, with respect to the matters contained
herein and therein.
 
3.8 Benefits of Second Supplemental Indenture. Nothing in this Second
Supplemental Indenture or the Indenture, express or implied, shall give to any
person, other than the parties hereto and thereto and their successors hereunder
and thereunder, and the Holders, any benefit of any legal or equitable right,
remedy or claim under the Indenture or the Second Supplemental Indenture.
 
3.9 Trust Indenture Act Controls.  If any provision of this Second Supplemental
Indenture limits, qualifies or conflicts with another provision of this Second
Supplemental Indenture or the Indenture that is required to be included by the
TIA as in force at the date this Second Supplemental Indenture is effective, the
provision required by the TIA shall control.
 
3.10 Severability.  In case any one or more of the provisions of this Second
Supplemental Indenture shall be held invalid, illegal or unenforceable, in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not in
any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
 
 
Exhibit B-4

--------------------------------------------------------------------------------

 
 

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
 
Dated: [__________]
 
MORRIS PUBLISHING GROUP, LLC
     
By:           __________________________
Name:  Craig S. Mitchell
Title:  Vice President, Finance
     
MORRIS PUBLISHING FINANCE CO.
     
By:           __________________________
Name:  Craig S. Mitchell
Title:  Vice President, Finance

YANKTON PRINTING COMPANY
BROADCASTER PRESS, INC.
THE SUN TIMES, LLC
HOMER NEWS, LLC
LOG CABIN DEMOCRAT, LLC
ATHENS NEWSPAPERS, LLC
SOUTHEASTERN NEWSPAPERS COMPANY, LLC
STAUFFER COMMUNICATIONS, INC.
FLORIDA PUBLISHING COMPANY
THE OAK RIDGER, LLC
MPG ALLEGAN PROPERTY, LLC
MPG HOLLAND PROPERTY, LLC
 
By:           __________________________
Name:  Craig S. Mitchell
Title:  Vice President, Finance
 
SOUTHWESTERN NEWSPAPERS COMPANY, L.P.
 
By:           Morris Publishing Group, LLC
its General Partner
 
By:           __________________________
Name:  Craig S. Mitchell
Title:  Vice President, Finance

 
Exhibit B-5

--------------------------------------------------------------------------------

 

 
EXHIBIT C
 
JOINDER
 
This JOINDER, dated as of [__________ __, 20__] (this “Joinder”), is entered
into by [__________________] (the “Joining Party”).
 
1. Definitions.  Capitalized terms used but not defined herein shall have the
meanings set forth in that certain Restructuring Support Agreement dated as of
October 30, 2009 (the “Restructuring Support Agreement”), by and among Morris
Publishing Group, LLC (“MPG”), Morris Publishing Finance Co. (“MPF”, and
together with MPG, the “Issuers”), the subsidiaries of MPG signatory thereto
(the “Guarantors”, and together with the Issuers, the “Company”), and the
holders of (or authorized investment advisors or managers of discretionary
accounts that hold) the 7% Senior Subordinated Notes due 2013 (the “Notes”)
signatory thereto (together with their respective successors and permitted
assigns, the “Consenting Holders” and each, a “Consenting Holder”).
 
2. Agreement to be Bound.  The Joining Party hereby agrees to be bound by all of
the terms of the Restructuring Support Agreement, a copy of which is attached to
this Joinder as Annex I (as the same has been or hereafter may be amended,
restated or otherwise modified from time to time in accordance with the
provisions thereof).  The Joining Party shall hereafter be deemed to be a
“Consenting Holder” and a “Party” for all purposes under the Restructuring
Support Agreement.
 
3. Representations and Warranties.  With respect to the aggregate principal
amount of Notes set forth below its name on the signature page hereof, the
Joining Party hereby makes the representations and warranties of the Consenting
Holders as set forth in Section 8(b) of the Agreement to each other Party to the
Agreement.
4. Governing Law.  This Joinder shall be governed by and construed in accordance
with the internal laws of the State of New York, without regard to any conflicts
of law provisions which would require the application of the law of any other
jurisdiction.
5. Counterparts.  This Joinder may be executed and delivered in any number of
counterparts (including by facsimile or portable document format (PDF)
signatures), each of which shall be deemed to be an original as against any
party whose signature page appears thereon, and all of which shall together
constitute one and the same agreement.
* * * * *
[The Remainder Of This Page Is Intentionally Left Blank]

 
Exhibit-C-1

--------------------------------------------------------------------------------

 

 
IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as
of the date first written above.
 
 
Signature:
 
Name of Signing Person:
 
Title of Signing Person:
     
Notice Address:
 
Attention:
 
Fax:
 

Acknowledged:
 
MORRIS PUBLISHING GROUP, LLC
MORRIS PUBLISHING FINANCE CO.
 
By:   __________________________     
Name:
Title:

 
Exhibit-C-2

--------------------------------------------------------------------------------

 

 
EXHIBIT D
 
INTERCREDITOR AND SUBORDINATION AGREEMENT
 
THIS INTERCREDITOR AND SUBORDINATION AGREEMENT, dated as of [_______], 2009
(this “Agreement”), is made by and among WILMINGTON TRUST FSB, in its capacity
as trustee under the Indenture (as defined below) (together with its successors
and assigns in such capacity, the “Trustee”) and as collateral agent under the
Subordinated  Indebtedness Collateral Documents (as defined below) (together
with its successors in such capacity, the “Subordinated Lien Collateral Agent”),
the TRANCHE B LENDERS (as defined below) and TRANCHE MANAGER, LLC, in its
capacity as administrative agent (together with its successors and assigns in
such capacity, the “Senior Lender Representative”) for the Senior Lenders (as
defined below) under the Credit Agreement (as defined below).
RECITALS
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement, dated
as of October 15, 2009 (the “Credit Agreement”), among Morris Publishing Group,
LLC, a Georgia limited liability company (the “Issuer”), Morris Communications
Company, LLC, a Georgia limited liability company (“MCC”), the lenders party
thereto from time to time and the Senior Lender Representative, the lenders
party thereto agreed, upon the terms and conditions stated therein, to make
certain loans to the Issuer, the repayment of which is secured by, among other
things, security interests in and liens on (i) the Collateral (as defined below)
of the Issuer and all of its present and future Subsidiaries (the “Subsidiary
Guarantors”), (ii) substantially all of the assets of  MCC and each of its
wholly-owned, domestic Subsidiaries MCC together with such Subsidiaries, the
(“MCC Obligors”) and (iii) the equity interests of the Issuer and MCC in
accordance with the Pledge Agreements (as defined in the Credit Agreement) (the
pledgors of such interests, together with the MCC Obligors, the “Credit Facility
Exclusive Obligors”), including mortgages, instruments and guaranties executed
and delivered in connection therewith by the Issuer and the Subsidiary
Guarantors, and such other agreements, instruments and certificates entered into
in connection with the Credit Agreement (collectively, the “Loan Documents”);
WHEREAS, the Issuer and Morris Publishing Finance Co., a Georgia corporation
(“Morris Finance,” and together with the Issuer, the “Notes Issuers”), the
guarantors named therein and the Trustee entered into that certain Indenture,
dated as of the date hereof (the “Indenture”), whereby indebtedness was incurred
by the Notes Issuers, the repayment of which is guaranteed by the Subsidiary
Guarantors (other than Morris Finance) and secured on a second-priority basis by
security interests in and liens on the Collateral of the Issuer and the
Subsidiary Guarantors pursuant to the Subordinated Indebtedness Collateral
Documents (as defined below);
WHEREAS, the Tranche A Lenders (as defined below) hold  Senior Indebtedness (as
defined below) that is senior in right of payment to the obligations of the
Issuer and the Subsidiary Guarantors in respect of the Notes Indebtedness (as
defined below) and the Tranche B Indebtedness (as defined below), and the
Tranche B Lenders hold Tranche B Indebtedness that is junior in right of payment
to the obligations of the Issuer and the Subsidiary Guarantors owing in respect
of the Senior Indebtedness and pari passu in right of payment with the
obligations owing in respect of the Notes Indebtedness;

 
Exhibit D-1

--------------------------------------------------------------------------------

 
 
WHEREAS, the obligations in respect of the Tranche B Indebtedness are secured on
a second-priority basis by security interests in and liens on the Collateral of
the Issuer and the Subsidiary Guarantors pursuant to the Subordinated
Indebtedness Collateral Documents;
WHEREAS, the Trustee, Tranche B Lenders and the Senior Lender Representative
desire to enter into this Agreement concerning the priority in right of payment
of the Senior Indebtedness and the Subordinated Indebtedness (as defined below);
WHEREAS, the Subordinated Lien Collateral Agent and the Senior Lender
Representative desire to enter into this Agreement concerning the priority of
their respective security interests in and liens on the Collateral;
WHEREAS, the Trustee, the Tranche B Lenders and the Senior Lender Representative
desire that the Senior Indebtedness be senior in right of payment to the
Subordinated Indebtedness in the manner and to the extent provided for in this
Agreement;
WHEREAS, the Subordinated Lien Collateral Agent and the Senior Lender
Representative desire that the priority of the security interests in and liens
on the Collateral under the Credit Facility Loan Documents (as defined below) be
senior in priority to the security interests in and liens on the Collateral
under the Subordinated Indebtedness Collateral Documents in the manner and to
the extent provided for in this Agreement;
WHEREAS, the rights and benefits of this Agreement in respect of the Senior
Indebtedness are intended to accrue solely for the benefit of the Senior Lender
Representative and the Senior Lenders, and neither the Tranche B Lenders nor any
other lender under the Credit Agreement shall be entitled to any of the rights
and benefits of this Agreement as a Senior Secured Party;
WHEREAS, the terms of the Credit Agreement permit the Issuer, Morris Finance and
the other Subsidiary Guarantors to enter into the Indenture and the other Notes
Documents, and in connection therewith, authorize and direct the Senior Lender
Representative to enter into an intercreditor and subordination agreement in
substantially the form and substance of this Agreement;
WHEREAS, the terms of the Indenture permit the Issuer, Morris Finance and the
other Subsidiary Guarantors to enter into the Credit Facility Loan Documents
and, in connection therewith, the terms of the Subordinated Indebtedness
Collateral Documents authorize and direct the Subordinated Lien Collateral Agent
to enter into an intercreditor and subordination agreement in substantially the
form and substance of this Agreement; and
WHEREAS, pursuant to the Subordinated Indebtedness Collateral Documents, the
Tranche B Lenders have authorized and directed the Subordinated Lien Collateral
Agent, in its capacity as secured party under the Subordinated Indebtedness
Collateral Documents, to enter into this Agreement on the terms set forth
herein.

Exhibit D-2
 
 
NOW, THEREFORE, the Senior Lender Representative, the Subordinated Lien
Collateral Agent , the Trustee and the Tranche B Lenders hereby agree as
follows:
 
                  ARTICLE I                      
 
DEFINITIONS
 
Section 1.1 Definitions.  As used in this Agreement, the following terms shall
have the respective meanings set forth below:
 
“Agreement” has the meaning set forth in the preamble.
“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereinafter in effect, or any successor statute.
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed.
“Collateral” means assets, real or personal, tangible or intangible, wherever
located, now owned or hereafter acquired by the Issuer or any Subsidiary
Guarantor now or at any time hereafter subject to a Lien securing or purporting
to secure any Senior Indebtedness or Subordinated Indebtedness, including all
proceeds of such assets; provided, however, that in no event shall “Collateral”
include the Credit Facility Exclusive Collateral or any proceeds thereof.
“Credit Agreement” has the meaning set forth in the recitals.
“Credit Agreement Closing Date” means October 15, 2009.
“Credit Facility Exclusive Collateral” means all property and assets of the
Credit Facility Exclusive Obligors securing or purporting to secure the Senior
Indebtedness.  For the avoidance of doubt, “Credit Facility Exclusive
Collateral” shall not include any property or assets of the Issuer, the
Subsidiary Guarantors, or any of their respective Subsidiaries.
“Credit Facility Exclusive Obligor” has the meaning set forth in the recitals.
“Credit Facility Loan Documents” means the Credit Agreement and the Loan
Documents.
“Disposition” means, with respect to any asset, any sale, lease, exchange,
transfer or other disposition of such asset or any interest therein.
“Enforcement Action” means, with respect to any Party, (a) the commencement of
any action or proceeding, whether judicial or otherwise, for the enforcement of
such Party’s rights and remedies with respect to the Collateral, and including
commencement of any receivership, foreclosure proceedings or other actions
against, or any other sale of, collection on, or disposition of, any Collateral,
or any exercise of remedies with respect to the Collateral under the
Subordinated Indebtedness Financing Documents or the Credit Facility Loan
Documents, including any Insolvency Proceeding; (b) notifying any third-party
account debtors of the Issuer

 
Exhibit D-3

--------------------------------------------------------------------------------

 
 
or any Subsidiary Guarantor to make payment directly to such Party or to any of
its agents or other Persons acting on its behalf; or (c) the exercise of any
right of set-off against the Issuer or any Subsidiary Guarantor.
“Enforcement Event” means (a) a Notes Payment Default, (b) an Event of Default
under the Notes Documents (other than a Notes Payment Default) and the
acceleration by the Holders of the maturity of all the Notes in accordance with
the terms of the Indenture or (c) the commencement of an Insolvency Proceeding
with respect to the Issuer or any Subsidiary Guarantor.
“Enforcement Event Notice” has the meaning set forth in Section 4.2.
“Entitled Party” has the meaning set forth in Section 5.1(a).
“Event of Default” means (i) in the case of the Senior Indebtedness, any “Event
of Default” under any Credit Facility Loan Document and includes any other
default under or breach of the Credit Facility Loan Documents that would entitle
any Senior Secured Party to declare any Senior Indebtedness thereunder to be due
and payable prior to its stated maturity, (ii) in the case of the Notes
Documents, any “Event of Default” under any Notes Document and includes any
other default under or breach of the Notes Documents that would entitle the
Trustee to declare any Notes Indebtedness thereunder to be due and payable prior
to its stated maturity, or (iii) in the case of the Tranche B Indebtedness, a
Tranche B Event of Default.
“Financing Documents” means the Subordinated Indebtedness Financing Documents
and the Credit Facility Loan Documents.
“Governmental Authority” means the government of the United States of America,
or of any other nation, or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
“Holders” means the holders of the Notes, solely in such capacity.
“Indebtedness” means the Senior Indebtedness or the Subordinated Indebtedness,
as applicable.
“Indenture” has the meaning set forth in the recitals.
“Insolvency Proceeding” means any proceeding, whether voluntary or involuntary,
for the purposes of dissolution, winding up, liquidation, arrangement or
reorganization of the Issuer, any Subsidiary Guarantor, or their respective
successors or assigns, whether in bankruptcy, insolvency, arrangement,
reorganization or receivership proceedings, or upon an assignment for the
benefit of creditors or any other marshaling of the assets and liabilities of
the Issuer, any Subsidiary Guarantor, or their respective successors or assigns.
“Issuer” has the meaning set forth in the recitals.

 
Exhibit D-4

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“Liens” means, with respect to any Property, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such Property.
“Lien Priority” means, with respect to any Lien in and to the Collateral, the
order of priority of such Lien as specified in Sections 3.1 and 3.2.
“Loan Documents” has the meaning set forth in the recitals.
“MCC” has the meaning set forth in the recitals.
“MCC Obligors” has the meaning set forth in the recitals.
“Morris Finance” has the meaning set forth in the recitals.
“Notes” means the notes issued under the Indenture.
“Notes Documents” means the Indenture, the Notes and the Subordinated
Indebtedness Collateral Documents, and such other agreements, instruments and
certificates executed and delivered (or issued) by the Issuer, the Subsidiary
Guarantors or any of their respective Subsidiaries pursuant to the Indenture or
any of the foregoing.
“Notes Indebtedness” means all present and future obligations, contingent or
otherwise, of the Issuer and the Subsidiary Guarantors to the Subordinated Lien
Collateral Agent, the Trustee and Holders, including all indebtedness, guarantee
obligations, indemnities, fees, expenses, interest payments and other amounts
payable from time to time, arising under or pursuant to the Notes Documents,
including, in each case, interest, fees, costs and expenses accruing after the
initiation of any Insolvency Proceeding (irrespective of whether allowed or
recovered as a claim in such proceeding), and including the secured claims of
the Subordinated Lien Collateral Agent, the Trustee and the Holders arising
under or pursuant to the Notes Documents in respect of the Collateral in any
Insolvency Proceeding.
“Notes Issuers” has the meaning set forth in the recitals.
“Notes Payment Default” means an Event of Default arising out of the failure to
make any payment of any principal of, premium, if any, or interest, fees, costs
and expenses on the Notes Indebtedness when such becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise, after giving effect to any cure or grace period.
“Other Default” means an Event of Default described in clause (i) of the
definition of Event of Default set forth herein (other than a Payment Default).
“Party” means the Subordinated Lien Collateral Agent, on its own behalf and on
behalf of the Subordinated Lienholders, and the Senior Lender Representative, on
its own behalf and on behalf of the Senior Lenders.
“Payment Blockage Period” has the meaning set forth in Section 2.2(b).

 
Exhibit D-5

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“Payment Default” means an Event of Default arising out of the failure to make
any payment of any principal of, premium, if any, or interest, fees, costs and
expenses on the Senior Indebtedness when such becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or otherwise,
after giving effect to any cure or grace period.
“Payment-In-Full” means, as at any time of determination, the payment in cash
(or otherwise to the extent the holders of the Indebtedness accept satisfaction
of amounts due by settlement in a form other than cash) in full of the Senior
Indebtedness (other than contingent obligations as to which no claim has been
made at such time of determination) or the Subordinated Indebtedness (other than
contingent obligations as to which no claim has been made at such time of
determination), as the case may be.
“Payment Blockage Notice” has the meaning set forth in Section 2.2(b).
“Permitted Enforcement Action” means, with respect to actions of each
Subordinated Indebtedness Secured Party, (i) filing of a claim or statement of
interest with respect to the Subordinated Indebtedness; provided that an
Insolvency Proceeding has been commenced by or against the Issuer or any
Subsidiary Guarantor; (ii) taking any action in order to create, perfect,
preserve or protect its Lien on the Collateral; provided, that no such action
is, or could reasonably be expected to be, inconsistent with the terms of this
Agreement, including, without limitation, the automatic release of the Liens of
the Subordinated Lien Collateral Agent provided for in Section 5.3(a);
(iii) filing any necessary responsive or defensive pleadings in opposition to
any motion, claim, adversary proceeding or other pleading made by any person
objecting to or otherwise seeking the disallowance of the claims of the
Subordinated Indebtedness Secured Parties, including any claims secured by the
Collateral, if any, in each case, to the extent not inconsistent with the terms
of this Agreement; (iv) voting on any plan of reorganization, filing any proof
of claim, making other filings and making any arguments and motions with respect
to the Subordinated Indebtedness and the Collateral, in each case, to the extent
not inconsistent with the terms of this Agreement; (v) filing any pleadings,
objections, motions or agreements which assert rights or interests available to
unsecured creditors of any Subsidiary Guarantor arising under either any
Insolvency Proceeding or applicable non-bankruptcy law, in each case, to the
extent consistent with the terms of this Agreement; and (vi) exercising any of
its rights or remedies with respect to the Collateral after the termination of
the Standstill Period to the extent permitted by Section 4.2(b).
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Property” means any right or interest in or to property of any kind whatsoever
and whether tangible or intangible.
“Refinance” means, with respect to any Senior Indebtedness (or, to the extent
permitted by Section 4.7, any Tranche B Indebtedness), to refinance, extend,
renew, restructure (including by the amendment and restatement of any instrument
or agreement evidencing such Indebtedness) or replace or to issue other
indebtedness or commitments to provide indebtedness in exchange or replacement
for, such Indebtedness or commitments to provide indebtedness, in whole or in
part.  “Refinanced” and “Refinancing” shall have correlative meanings.

 
Exhibit D-6

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“Refinancing Notice” has the meaning assigned to such term in Section 4.7(c).
“Replacement Collateral Agent” has the meaning assigned to such term in Section
4.7(c).
“Replacement Credit Facility Obligations” has the meaning assigned to such term
in Section 4.7(c).
“Replacement Credit Facility Documents” has the meaning assigned to such term in
Section 4.7(c).
“Restricted Payment” means any payment or distribution of any kind (by setoff or
otherwise) with respect to Subordinated Indebtedness (other than the payment of
the Trustee’s fees and expenses pursuant to Section 7.7 of the Indenture),
including the principal of, premium, if any, or interest on the Notes, or on
account of the acquisition or redemption of the Notes (including any repurchase
of the Notes), for cash or property (including, without limitation, pursuant to
Article III of the Indenture.
“Secured Liability” means the Subordinated Indebtedness and the Senior
Indebtedness.
“Senior Indebtedness” means all present and future obligations, contingent or
otherwise, of the Issuer, the Subsidiary Guarantors, the Credit Facility
Exclusive Obligors and any other obligor from time to time under the Credit
Facility Loan Documents, to the Senior Lender Representative and the Senior
Lenders, including all indebtedness, guarantee obligations, indemnities, fees,
expenses, interest payments and other amounts payable from time to time, arising
under or pursuant to the Credit Facility Loan Documents, including, in each
case, interest, fees, costs and expenses accruing after the initiation of any
Insolvency Proceeding (irrespective of whether allowed or recovered as a claim
in such proceeding), and including the secured claims of the Senior Lender
Representative and the Senior Lenders arising under or pursuant to the Credit
Facility Documents in respect of the Collateral in any Insolvency Proceeding;
provided, however that the aggregate principal amount of the Senior Indebtedness
shall be limited to the Senior Indebtedness Cap Amount; and, provided, further,
in no event shall any Tranche B Indebtedness be or be deemed to be “Senior
Indebtedness”.
“Senior Indebtedness Cap Amount” means, as of any date of determination, (i) the
aggregate principal amount of the Tranche A Term Loan Commitments on the Credit
Agreement Closing Date, less (ii) all payments of principal on the Tranche A
Term Loans made prior to such date of determination, plus (iii) the aggregate
principal amount of the Tranche B Term Loans on the Credit Agreement Closing
Date, plus (iv) all paid-in-kind interest on the Tranche B Term Loans, which
paid-in-kind interest has accrued or been added to the principal thereof, as
applicable, prior to such date of determination; provided, however, this term
Senior Indebtedness Cap Amount shall not include amounts described under clauses
(iii) and (iv) above, unless and only to the extent that the Tranche B Term
Loans are Refinanced in connection with and as a part of the Refinancing of the
Tranche A Term Loans.

 
Exhibit D-7

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“Senior Lenders” means, collectively, the lender or lenders from time to time
party to the Credit Agreement holding a Tranche A Term Loan Commitment or an
outstanding Tranche A Term Loan  (it being understood that, notwithstanding the
incurrence of the Tranche B Indebtedness pursuant to the Credit Agreement, no
Tranche B Lender shall constitute a Senior Lender for any purpose of this
Agreement).
“Senior Lender Representative” has the meaning set forth in the preamble and, in
any event, no Tranche B Lender nor any affiliate, representative, agent or
attorney of a Tranche B Lender shall be a “Senior Lender Representative” other
than the Administrative Agent (as defined in the Credit Agreement) (so long as
the Administrative Agent is not a Tranche B Lender or an affiliate of a Tranche
B Lender).
“Senior Secured Parties” means the Senior Lenders and the Senior Lender
Representative.
“Standstill Period” has the meaning set forth in Section 4.2(b).
“Subordinated Indebtedness” means the Notes Indebtedness and the Tranche B
Indebtedness.
“Subordinated Indebtedness Collateral Documents” means the Subordinated Lien
Security Agreement, any mortgage or deed of trust, and any other agreement,
document or instrument pursuant to which a Lien is granted securing any
Subordinated Indebtedness or under which rights or remedies with respect to such
Liens are governed.
“Subordinated Indebtedness Financing Documents” means the Notes Documents and
the Tranche B Loan Documents.
“Subordinated Indebtedness Secured Parties” means the Subordinated Lien
Collateral Agent, the Trustee and the Subordinated Lienholders.
“Subordinated Lien Collateral Agent” has the meaning set forth in the preamble.
“Subordinated Lienholders” means the Holders and the Tranche B Lenders.
“Subordinated Lien Security Agreement” shall mean the [Security and Collateral
Agency Agreement, dated as of _________ __], 2009, among the Issuer, the
Subsidiary Guarantors, the Tranche B Lenders, the Trustee and the Subordinated
Lien Collateral Agent].
“Subsidiary” means, for any Person, any corporation, limited liability company,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, limited liability company, partnership or other
entity (irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, limited liability
company, partnership or other entity shall have or might have voting power by
reason of the happening of

 
Exhibit D-8

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any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.
“Subsidiary Guarantors” has the meaning set forth in the recitals.
“Tranche A Lenders” means, collectively, the lender or lenders from time to time
party to the Credit Agreement holding a Tranche A Term Loan Commitment or an
outstanding Tranche A Term Loan.
“Tranche A Term Loan” means each term loan made by a Tranche A Lender to the
Issuer pursuant to the Credit Agreement.
“Tranche A Term Loan Commitment” means, with respect to each Tranche A Lender,
the commitment, if any, of such Tranche A Lender under the Credit Agreement to
make or continue one or more Tranche A Term Loans.
“Tranche B Indebtedness” means all present and future obligations, contingent or
otherwise, of the Issuer and the Subsidiary Guarantors to the Tranche B Lenders,
including all indebtedness, guarantee obligations, indemnities, fees, expenses,
interest payments and other amounts payable from time to time, arising under or
pursuant to the Tranche B Loan Documents, including, in each case, interest,
fees, costs and expenses accruing after the initiation of any Insolvency
Proceeding (irrespective of whether allowed or recovered as a claim in such
proceeding), and including the secured claims of the Tranche B Lenders arising
under or pursuant to the Tranche B Loan Documents in respect of the Collateral
in any Insolvency Proceeding.
“Tranche B Lenders” means, collectively, the lender or lenders from time to time
party to the Credit Agreement holding a Tranche B Term Loan Commitment or an
outstanding Tranche B Term Loan.
“Tranche B Loan Documents” means the Credit Agreement, the Subordinated
Indebtedness Collateral Documents, and such other agreements, instruments and
certificates executed and delivered (or issued) by the Issuer, the Subsidiary
Guarantors or any of their respective Subsidiaries for the benefit of the
Tranche B Lenders pursuant to the Credit Agreement or any of the foregoing.
“Tranche B Event of Default” means (i) an event described in clause (a) of
Article VII of the Credit Agreement in respect of a Tranche B Term Loan and (ii)
any event constituting an “Event of Default” under the Notes.
“Tranche B Term Loan” means each term loan made by a Tranche B Lender to the
Issuer pursuant to the Credit Agreement.
“Tranche B Term Loan Commitment” means, with respect to each Tranche B Lender,
the commitment, if any, of such Tranche B Lender under the Credit Agreement to
make or continue one or more Tranche B Term Loans.

 
Exhibit D-9

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“Trustee” has the meaning set forth in the preamble.
“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of New York.
“Yield Maintenance Agreement” means that certain letter agreement, dated October
15, 2009, among the Senior Lenders, MCC and certain Subsidiaries of MCC.
Section 1.2 Miscellaneous.  All definitions herein (whether set forth herein
directly or by reference to definitions in other documents) shall be equally
applicable to both the singular and the plural forms of the terms defined.  The
words “hereof,” “herein” or “hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.  Article and section references are to
articles and sections of this Agreement unless otherwise specified.  The term
“including” means “including without limitation.”  Unless the context requires
otherwise, any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as amended, restated, extended, renewed, replaced, refinanced,
supplemented or otherwise modified from time to time.  For clarity, no use of
the defined term “Credit Agreement” in this Agreement shall have the effect of
subordinating the Senior Indebtedness in right of payment or lien priority to
the Subordinated Indebtedness.
ARTICLE II
SUBORDINATION
Section 2.1 Subordinated Indebtedness Subordinated to Senior Indebtedness.  The
Subordinated Lien Collateral Agent, the Trustee, on behalf of the Holders, and
each of the Tranche B Lenders, agrees that each Restricted Payment is
subordinated, to the extent and in the manner provided in this Article II, to
the prior Payment-In-Full of all Senior Indebtedness.  These subordination
provisions are for the benefit of the Senior Lenders.
Section 2.2 No Payment on Subordinated Indebtedness in Certain Circumstances.
(a) If a Payment Default has occurred, the Issuer may not, and each Subsidiary
Guarantor may not, make any Restricted Payment, until the earlier to occur of
(x) the date on which such Payment Default has been cured or waived or otherwise
has ceased to exist and (y) the date on which the Payment-in-Full of all Senior
Indebtedness has occurred.
(b) If an Other Default has occurred and such Other Default permits the Senior
Lender Representative or the Senior Lenders to declare the Senior Indebtedness
to be due and payable, then no Restricted Payment may be made by the Issuer or
on behalf of the Issuer or by or on behalf of any Subsidiary Guarantor with
respect to any Subordinated Indebtedness for a period of time (the “Payment
Blockage Period”) commencing upon delivery by the Senior Lender Representative
to the Issuer, the Tranche B Lenders, the Trustee and the Subordinated Lien
Collateral Agent of written notice stating that such Other Default has occurred
and is continuing and at the time of such notice permits the Senior Lender
Representative or the Senior Lenders to declare the Senior Indebtedness to be
due and payable

 
Exhibit D-10

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(c) (the “Payment Blockage Notice”) and continuing until the earlier to occur of
(x) unless the Senior Indebtedness has been declared due and payable, 180 days
after the date of delivery of such Payment Blockage Notice and (y) the date on
which such Other Default has been cured or waived or otherwise has ceased to
exist.
A Payment Blockage Notice shall be not given unless and until 360 days have
elapsed since the effectiveness of the immediately prior Payment Blockage
Notice.  No Other Default that existed or was continuing upon the commencement
of any Payment Blockage Period shall be made the basis for the commencement of
any other Payment Blockage Period unless such Other Default shall have been
cured or waived for a period of not less than 90 days (for purposes of this
provision, any subsequent action, or any subsequent breach of any financial
covenant for a period commencing after such Payment Blockage Notice that, in
either case, would give rise to a new Other Default, even though it is an event
that would also have been a separate breach pursuant to any provision under
which a prior Other Default previously existed, shall constitute a new Other
Default for this purpose).  No more than five Payment Blockage Periods under
this Section 2.2(b) may be initiated by the Senior Lender Representative or the
Senior Lenders during the term of this Agreement.  Notwithstanding anything in
this Section 2.2 to the contrary,  (i) with respect to blockages initiated
pursuant to an Other Default, the Issuer and the Subsidiary Guarantors may pay
and Subordinated Lienholders may receive and retain any Restricted Payment
before receipt of the Payment Blockage Notice, and (ii) interest will accrue on
the Subordinated Indebtedness even if a Restricted Payment is blocked.
Section 2.3 [Intentionally Omitted].
Section 2.4 Payments or Distributions to be Held in Trust for the Benefit of the
Senior Secured Parties.  In furtherance of the provisions of Section 2.1, in the
event that, notwithstanding the provisions of Section 2.2 or 4.4, any Restricted
Payment shall be received by any Subordinated Indebtedness Secured Party at a
time when such Restricted Payment is prohibited by Section 2.2 or 4.4 or any
payment or distribution of any Credit Facility Exclusive Obligor’s assets shall
be received by any Subordinated Indebtedness Secured Party, such payment or
distribution shall be held in trust for the benefit of the Senior Secured
Parties and shall be paid or delivered by such Subordinated Indebtedness Secured
Party to the Senior Lender Representative for payment in accordance with the
Credit Agreement to the Senior Secured Parties of any Senior Indebtedness then
outstanding, to the extent necessary to pay or to provide for the payment of
such Senior Indebtedness in cash or cash equivalents (or otherwise to the extent
the Senior Secured Parties accept satisfaction of amounts due by settlement in
other than cash or cash equivalents) after giving effect to any concurrent
payment or distribution to the Senior Secured Parties.
Section 2.5 [Intentionally Omitted].
Section 2.6 Relative Rights.  This Article II defines the relative rights of the
Subordinated Indebtedness Secured Parties and the Senior Secured
Parties.  Nothing herein shall: (i) impair, as between the Issuer or any
Subsidiary Guarantor and the Senior Secured Parties, the obligation of the
Issuer or such Subsidiary Guarantor, which is absolute and unconditional, to pay
the Senior Indebtedness in accordance with its terms; (ii) affect the relative
rights of the Senior Secured Parties and creditors of the Issuer or such
Subsidiary Guarantor other than their

 
Exhibit D-11

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Section 2.7 rights in relation to the Subordinated Indebtedness; or (iii)
prevent the Senior Secured Parties or any of them from exercising available
remedies upon a Default (as defined in the Credit Agreement) or Event of Default
under the Credit Facility Loan Documents, subject to the rights of the
Subordinated Indebtedness Secured Parties as provided for herein.  Nothing
herein shall:  (x) impair, as between the Issuer or any Subsidiary Guarantor and
the Subordinated Indebtedness Secured Parties, the obligation of the Issuer or
such Subsidiary Guarantor, which is absolute and unconditional, to pay the
Subordinated Indebtedness in accordance with its terms; (y) affect the relative
rights of the Subordinated Indebtedness Secured Parties and creditors of the
Issuer or any Subsidiary Guarantor other than their rights in relation to the
Senior Secured Parties; or (z) except as provided for herein, prevent any
Subordinated Indebtedness Secured Party from exercising its available remedies
upon a Default (as defined in the Indenture) or Event of Default under the
Subordinated Indebtedness Financing Documents, subject to the rights of the
Senior Secured Parties as provided for herein.
Section 2.8 Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.  The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until the Trustee shall have received written notice
thereof from the Issuer or from the Senior Lender Representative and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Sections 7.1 and 7.2 of the Indenture, shall be entitled in all respects
conclusively to assume that no such fact exists.
Notwithstanding anything to the contrary in this Article II or in the Indenture
or in the Notes, upon any distribution of assets of the Issuer and the
Subsidiary Guarantors referred to in this Article II, the Trustee, subject to
the provisions of 7.1 and 7.2 of the Indenture, and the Holders 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 liquidating
trustee or agent or other Person making any distribution to the Trustee or to
the Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the Senior Secured Parties and the holders of other
Indebtedness of the Issuer or any Subsidiary Guarantor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article II so long as such court has been
apprised of the provisions of, or the order, decree or certificate makes
reference to, the provisions of this Article II.
Section 2.9 Application by Trustee of Assets Deposited with It.  To the extent
depositing amounts in trust with the Trustee pursuant to and in accordance with
Article VIII of the Indenture is not prohibited by Section 2.2 or 4.4, such
amounts shall, (a) be for the sole benefit of Holders and (b) to the extent the
making of such deposit by any of the Notes Issuers shall otherwise (i) not be in
contravention of any term or provision of the Credit Agreement and (ii) be
allocated for the payment of the Notes, not be subject to the subordination
provisions of this Article II.  Otherwise, any deposit of assets with the
Trustee or any paying agent, registrar or co-registrar (whether or not in trust)
for the payment of principal of or interest on any Notes Indebtedness shall be
subject to the provisions of Sections 2.1, 2.2, 2.4, 2.5 and 4.4; provided,
that, if on the date on which by the terms of the Indenture any such assets may
become distributable for any purpose (including without limitation, the payment
of either principal of or interest on any Note) the Trustee or such paying agent
shall not have received with respect to

 
Exhibit D-12

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Section 2.10 such assets the written notice provided for in Section 2.7, then
the Trustee or such paying agent shall have full power and authority to receive
such assets and to apply the same to the purpose for which they were received,
and shall not be affected by any notice to the contrary which may be received by
it on or after such date.
Section 2.11 Subordination Rights Not Impaired by Acts or Omissions of the
Issuer, the Subsidiary Guarantors or Senior Secured Parties.  No right of any
present or future Senior Secured Party to enforce the subordination provisions
contained in this Article II shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Issuer, any Subsidiary
Guarantor or any Credit Facility Exclusive Obligor or by any act or failure to
act, in good faith, by any such Senior Secured Party, regardless of any
knowledge thereof which any such Senior Secured Party may have or be otherwise
charged with.
The subordination provisions contained in this Agreement are for the benefit of
the Senior Secured Parties.  Neither the Tranche B Lenders nor any other lender
under the Credit Agreement shall be entitled to any of the rights and benefits
of this Agreement as a Senior Secured Party.
Section 2.12 Holders Authorize Trustee to Effectuate Subordination of
Notes.  Pursuant to the Indenture, each Holder of the Notes by its acceptance
thereof authorized and expressly directed the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provisions contained in this Article II and to protect the rights of the Holders
pursuant to the Indenture, and appointed the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Issuer or any Subsidiary Guarantor (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or any other marshaling of assets and liabilities of
the Issuer or any Subsidiary Guarantor), the immediate filing of a claim for the
unpaid balance of his Notes in the form required in said proceedings and cause
said claim to be approved.  In the event of any liquidation or reorganization of
the Issuer or any Subsidiary Guarantor in bankruptcy, insolvency, receivership
or similar proceeding, if the Holders of the Notes (or the Trustee on their
behalf) have not filed any claim, proof of claim, or other instrument of similar
character necessary to enforce the obligations of the Issuer or any Subsidiary
Guarantor in respect of the Notes at least thirty (30) days before the
expiration of the time to file the same, then in such event, but only in such
event, the Senior Lender Representative on their behalf may, as an
attorney-in-fact for such Holders, file any such claim, proof of claim, or other
instrument of similar character on behalf of such Holders.  Nothing herein
contained shall be deemed to authorize the Trustee, the Senior Lenders or their
respective representative to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee, the Senior Lenders or their respective representative to
vote in respect of the claim of any Holder in any such proceeding.
Section 2.13 Article II Not to Prevent Events of Default.  The failure to make a
Restricted Payment on, or in respect of, the Subordinated Indebtedness by reason
of any provision of this Article II shall not be construed as preventing the
occurrence of a Default (as defined in the Indenture) or an Event of Default
under the Subordinated Indebtedness Financing Documents.

 
Exhibit D-13

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Section 2.14 No Fiduciary Duty of Trustee and Senior Secured Parties of One to
the Other.
(a) The Trustee, on the one hand, and each of the Senior Secured Parties, on the
other hand, shall not be deemed to owe any fiduciary duty to each other.  With
respect to each other, the Senior Secured Parties and the Trustee undertake to
perform or to observe only such of the covenants or obligations as are
specifically set forth in this Article II and no implied covenants or
obligations between them shall be read into this Agreement.  In the event of any
conflict between any duty of the Senior Lender Representative to the Senior
Lenders and to the Subordinated Lienholders, the Senior Lender Representative is
expressly authorized to resolve such conflict in favor of the Senior
Lenders.  In the event of any conflict between the fiduciary duty of the Trustee
to the Subordinated Lienholders and to the Senior Lenders, the Trustee is
expressly authorized to resolve such conflict in favor of the Subordinated
Lienholders.
(b) The Trustee, for itself and on behalf of the Holders, and the Tranche B
Lenders agree that none of the Senior Secured Parties shall have any liability
to the Trustee or any Subordinated Lienholder, and hereby waive any claim
against any of the Senior Secured Parties arising out of any and all actions
which the Senior Lender Representative or any other Senior Secured Party may
take or permit or omit to take with respect to (i) the Credit Facility Loan
Documents (other than this Agreement), (ii) the collection of the Senior
Indebtedness, (iii) the maintenance of, the preservation of, the foreclosure
upon or the disposition of any Collateral, (iv) any election by the Senior
Lender Representative or any other Senior Secured Party, in any proceeding
instituted under the Bankruptcy Code, of the application of Section 1111(b) of
the Bankruptcy Code or (v) any borrowing of, or grant of a security interest or
administrative expense priority under Section 364 of the Bankruptcy Code to,
Issuer or any of its Subsidiaries, as debtor-in-possession.
ARTICLE III
LIEN PRIORITY
Section 3.1 Agreement to Subordinate Liens.  The Subordinated Lien Collateral
Agent hereby agrees that, until the Payment-In-Full of the Senior Indebtedness,
any and all Liens now or hereafter held by the Subordinated Lien Collateral
Agent for the benefit of itself and the Subordinated Lienholders on the
Collateral securing the Subordinated Indebtedness are and shall be junior and
subordinate in all respects to any and all Liens of the Senior Lender
Representative on the Collateral securing the Senior Indebtedness, and
irrespective of whether the rights of the Senior Lender Representative under
this Article III shall be void and of no further force and the Liens of the
Senior Lender Representative in and to the Collateral are avoided, disallowed,
set aside or otherwise invalidated in any action or proceeding by a court,
tribunal or administrative agency of competent jurisdiction.  The subordination
of the Liens of the Subordinated Lien Collateral Agent for the benefit of itself
and the Subordinated Lienholders on the Collateral in favor of the Senior Lender
Representative provided for herein shall not be deemed to (a) subordinate the
Liens of the Subordinated Lien Collateral Agent to the Liens of any other Person
other than the Senior Lender Representative for the benefit of the Senior

 
Exhibit D-14

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Section 3.2 Lenders, or (b) subordinate the Subordinated Indebtedness to any
Indebtedness of the Issuer or any of the Subsidiary Guarantors, other than the
Senior Indebtedness.
Section 3.3 No Contest; Excluded Assets.  Each of the Parties, the Trustee and
the Tranche B Lenders agrees that it will not (and hereby waives any right to)
attack or contest or support any other person in attacking or supporting, in any
proceeding (including any Insolvency Proceeding), the validity, perfection,
priority or enforceability of the Liens of the Senior Lender Representative or
the Subordinated Lien Collateral Agent, as applicable, or finance or urge any
other Person to do so; provided that each Party may enforce its rights and
privileges under this Agreement without being deemed to have violated this
provision.  Except as described in Sections 3.5 and 3.6, the terms and
conditions of this Agreement shall not apply to any property or assets
(including property or assets that do not constitute Collateral) that one Party
has a Lien on and the other Party does not to the extent such Lien is not
prohibited hereunder.
Section 3.4 Exercise of Rights.
(a) The Subordinated Lien Collateral Agent may exercise, and nothing herein
shall constitute a waiver of, any right it may have at law or in equity to
receive notice of, or to commence or join with any creditor in commencing any
Insolvency Proceeding; provided that, until the Payment-In-Full of the Senior
Indebtedness, the exercise of any such right by the Subordinated Lien Collateral
Agent shall be (i) subject to the Lien Priority and the application of proceeds
of Collateral under Section 4.4, and (ii) subject to the provisions of
Sections 4.1 and 4.2.
(b) Notwithstanding any other provision hereof, the Subordinated Lien Collateral
Agent and the Subordinated Lienholders may make such demands or file such claims
as may be necessary to prevent the waiver or bar of such claims under applicable
statutes of limitations or other statutes, court orders or rules of procedure.
Section 3.5 Priority of Liens.  Notwithstanding the time, manner, order or
method of grant, creation, attachment or perfection of any security interest in,
or Lien upon, the Collateral, irrespective of the descriptions of Collateral
contained in the Financing Documents, including any financing statements, and
notwithstanding any provision of the UCC or any other applicable law, the
provisions of any Financing Document, any defect or deficiency or alleged
deficiency in any of the foregoing or any other circumstance whatsoever, the
Parties, the Trustee and the Tranche B Lenders agree among themselves that Liens
of the Subordinated Lien Collateral Agent and the Senior Lender Representative
in the Collateral shall be governed by the Lien Priority, which shall be
controlling in the event of any conflict between this Agreement and any of the
Financing Documents.
Section 3.6 Limitation on Liens.
(a) The Subordinated Lien Collateral Agent, for itself and on behalf of the
Subordinated Lienholders, agrees that, until the Payment-In-Full of the Senior
Indebtedness, neither the Issuer nor any other Person shall grant or permit any
additional Liens on any asset to secure any of the Subordinated Indebtedness;
provided, however, that in the case of any assets

 
Exhibit D-15

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(b) (other than the Credit Facility Exclusive Collateral) such additional Liens
may be granted if the Issuer or such other Person has granted, or substantially
concurrently therewith grants, a Lien on such asset to secure the Senior
Indebtedness with each such Lien to be subject to the provisions of this
Agreement, including, without limitation, Section 3.1.
(c) The Senior Lender Representative, for itself and on behalf of the Senior
Lenders, agrees that, until the Payment-In-Full of the Subordinated
Indebtedness, neither the Issuer nor any other Person (other than a Credit
Facility Exclusive Obligor) shall grant or permit any additional Liens on any
asset (other than the Credit Facility Exclusive Collateral) to secure any of the
Senior Indebtedness; provided, however, that in the case of any assets (other
than the Credit Facility Exclusive Collateral) such additional Liens may be
granted if the Issuer or such other Person has granted, or substantially
concurrently therewith grants, a Lien on such asset to secure the Subordinated
Indebtedness with each such Lien to be subject to the provisions of this
Agreement, including, without limitation, Section 3.1.
(d) To the extent that Section 3.5(a) or (b) or Section 3.6 is not complied with
for any reason, without limiting any other right or remedy available to the
Senior Secured Parties or the Subordinated Indebtedness Secured Parties, the
Subordinated Lien Collateral Agent agrees, for itself and on behalf of the
Subordinated Lienholders, and the Senior Lender Representative agrees, for
itself and on behalf of the Senior Lenders, that any amounts received by or
distributed to any Subordinated Indebtedness Secured Party or any Senior Secured
Party pursuant to or as a result of any Lien granted and existing in
contravention of this Section 3.5 shall be subject to Section
2.4.  Notwithstanding the foregoing or any other provision in this Agreement to
the contrary, the provisions of this Section 3.5 are not intended to, nor shall
they be deemed to, affect in any manner the enforceability against the Issuer,
any Subsidiary Guarantor or any other Person of any such Lien granted and
existing contrary to the terms of this Section 3.5.
Section 3.7 Credit Facility Exclusive Collateral.  Notwithstanding anything to
the contrary in this Agreement, the Subordinated Lien Collateral Agent, for
itself and on behalf of the Subordinated Lienholders, acknowledges and agrees
that the Subordinated Lien Collateral Agent and the Subordinated Lienholders
shall have no rights with respect to the Credit Facility Exclusive Collateral or
against any Credit Facility Exclusive Obligor, and in no event shall any of the
obligations of the Senior Lender Representative or Senior Secured Parties under
this Agreement with respect to the Collateral apply to the Credit Facility
Exclusive Collateral.
ARTICLE IV
ACTIONS OF THE PARTIES
Section 4.1 Limitation on Certain Actions.  Subject to Sections 4.2 and 4.6,
until the date of the Payment-In-Full of the Senior Indebtedness, the
Subordinated Lien Collateral Agent will not, without the prior written consent
of the Senior Lender Representative, take any Enforcement Action.
Section 4.2 Standstill Period.

 
Exhibit D-16

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Section 4.3 Until the date of the Payment-In-Full of the Senior Indebtedness, if
an Enforcement Event has occurred and is continuing, the Subordinated Lien
Collateral Agent, on behalf of the Subordinated Lienholders, will give the
Senior Lender Representative written notice thereof (an “Enforcement Event
Notice”).
(a) Until the Payment-In-Full of the Senior Indebtedness and subject to the Lien
Priority and the application of all proceeds of the Collateral in accordance
with Section 4.4, whether or not any Insolvency Proceeding has been commenced by
or against the Issuer or any Subsidiary Guarantor, (i) the Subordinated Lien
Collateral Agent, the Holders (by their acceptance of the benefits of the Notes
Documents) and the Tranche B Lenders (by their execution and delivery of this
Agreement and the Subordinated Lien Security Agreement and acceptance of the
benefits thereof) will not take an Enforcement Action; provided, however, that
the Subordinated Lien Collateral Agent and the Holders may take an Enforcement
Action in connection with an Enforcement Event after the passage of a period of
180 days since the date of delivery to the Senior Lender Representative of an
Enforcement Event Notice (such period, the “Standstill Period”); provided, that
with respect to any Enforcement Event Notice delivered solely in connection with
an Enforcement Event constituting a Notes Payment Default, so long as such Notes
Payment Default is then continuing; provided, further, that notwithstanding
anything to the contrary herein, in no event shall the Subordinated Lien
Collateral Agent or Holders take any Enforcement Action if, notwithstanding the
expiration of the Standstill Period, the Senior Lender Representative shall have
commenced and be diligently pursuing the exercise its rights or remedies
(including any Enforcement Action) with respect to all or any material portion
of the Collateral (prompt notice of such exercise to be given to the
Subordinated Lien Collateral Agent); and (ii) subject to the rights of the
Subordinated Lien Collateral Agent and the Holders under clause (i) above, the
Senior Secured Parties shall have the exclusive right to enforce rights,
exercise remedies and make determinations regarding release, disposition, or
restrictions with respect to the Collateral without any consultation with or the
consent of the Subordinated Lien Collateral Agent or the Subordinated
Lienholders, and the Subordinated Lien Collateral Agent shall take any action
reasonably requested by the Senior Lender Representative in order to effectuate
any such enforcement, exercise, release or disposition.  The Senior Lender
Representative shall exercise its rights and remedies with respect to the
Collateral in accordance with the terms of the Credit Facility Loan Documents
and, after the Payment-In-Full of the Senior Indebtedness, the Subordinated Lien
Collateral Agent shall exercise its rights and remedies with respect to the
Collateral, in accordance with the Subordinated Indebtedness Collateral
Documents.  In exercising rights and remedies with respect to the Collateral,
each Senior Secured Party (by its acceptance of the benefits of the Credit
Facility Loan Documents) agrees that it may enforce the provisions of the Credit
Facility Loan Documents and exercise remedies thereunder, all in such order and
in such manner as it may determine in the exercise of its sole discretion,
subject to acting in a commercially reasonable manner in accordance with the UCC
and the terms of this Agreement and the Credit Facility Loan Documents.  Such
exercise and enforcement shall include, without limitation, the rights of an
agent appointed by them to sell or otherwise dispose of Collateral upon
foreclosure, to incur expenses in connection with such sale or disposition, to
credit bid their respective debt and to exercise all the rights and remedies of
a secured lender under the Uniform Commercial Code of any applicable
jurisdiction and of a secured creditor under debtor relief laws.  In exercising
rights and remedies with respect to the Collateral when permitted hereunder,
each Subordinated Indebtedness Secured Party (by its acceptance of the benefits
of the applicable Subordinated Indebtedness Financing Documents)

 
Exhibit D-17

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(b) agrees that it may enforce the provisions of the applicable Subordinated
Indebtedness Financing Documents and exercise remedies thereunder, all in such
order and in such manner as it may determine in the exercise of their sole
discretion, subject to acting in a commercially reasonable manner in accordance
with the UCC and the terms of this Agreement and the Subordinated Indebtedness
Financing Documents.  Such exercise and enforcement shall include, without
limitation, the rights of an agent appointed by them to sell or otherwise
dispose of Collateral upon foreclosure, to incur expenses in connection with
such sale or disposition, to credit bid their respective debt and to exercise
all the rights and remedies of a secured lender under the Uniform Commercial
Code of any applicable jurisdiction and of a secured creditor under debtor
relief laws.
(c) Except as expressly provided for in this Agreement, nothing in this
Agreement shall prevent the Parties hereto from exercising any other remedy, or
taking any other action, under any of the Financing Documents; provided,
however, that the Subordinated Lien Collateral Agent may not seek an injunction
or similar remedy to prevent the Senior Lender Representative from enforcing or
protecting the rights, claims, liens and interests of the Senior Lenders
following an Event of Default under the Credit Agreement to the extent the
foregoing is not prohibited by this Agreement.
(d) Notwithstanding anything herein to the contrary, each Subordinated
Indebtedness Secured Party may take any Permitted Enforcement Action.
Section 4.4 Foreclosure.  Any Party taking an Enforcement Action as permitted
hereunder may enforce its applicable Financing Documents independently as to the
Issuer and each Subsidiary Guarantor and independently of any other remedy or
security such Party at any time may have or hold in connection with its
applicable Secured Liabilities, and it shall not be necessary for such Party to
marshal assets in favor of the other Party or any other Person or to proceed
upon or against or exhaust any other security or remedy before proceeding to
enforce the Financing Documents.  Each of the Subordinated Lien Collateral Agent
(until the Payment-In-Full of the Senior Indebtedness) and the Senior Lender
Representative (until the Payment-In-Full of the Subordinated Indebtedness)
expressly waives any right to require the other to marshal assets in its favor
or to proceed against any Collateral provided by the Issuer or any Subsidiary
Guarantor, or any other property, assets, or collateral provided by the Issuer,
any Subsidiary Guarantor, or any other Person, and agrees that the Party taking
such permitted Enforcement Action may proceed against the Issuer, any Subsidiary
Guarantor, any Collateral or other property, assets, or other collateral
provided by any of them or by any other Person, in such order as it shall
determine in its sole and absolute discretion.
Section 4.5 Distribution.  Each of the Parties, the Trustee and the Tranche B
Lenders agrees that, upon any distribution as a result of an Enforcement Action,
or the receipt of any other payment or distribution with respect to the
Collateral or any other assets of the Issuer or any Subsidiary Guarantor, the
proceeds thereof (including insurance and condemnation proceeds) shall be
distributed in the order of, and in accordance with, the following priorities:
(a) FIRST:

 
Exhibit D-18

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(b) if the Enforcement Action is taken or entitled to be taken by the Senior
Lender Representative, to the payment of all reasonable and documented
out-of-pocket costs and expenses, commissions and taxes of the Senior Lender
Representative incurred in connection with taking any such Enforcement Action or
other realization, including all reasonable and documented expenses (including
attorneys’ fees and expenses), liabilities and advances made or incurred by the
Senior Lender Representative in connection therewith; and
(i) if the Enforcement Action is taken and entitled to be taken hereunder by the
Subordinated Lien Collateral Agent, to the payment of all reasonable and
documented out-of-pocket costs and expenses, commissions and taxes of the
Subordinated Lien Collateral Agent incurred in connection with taking any such
Enforcement Action or other realization, including all reasonable and documented
expenses (including attorneys’ fees and expenses), liabilities and advances made
or incurred by the Subordinated Lien Collateral Agent in connection therewith;
(c) SECOND, to the extent not previously paid, to the Senior Lender
Representative, until the Payment-In-Full of the Senior Indebtedness; and
(d) THIRD, to the extent not previously paid, to the Subordinated Lien
Collateral Agent for distribution pursuant to the Subordinated Indebtedness
Collateral Documents, until the Payment-In-Full of all Subordinated
Indebtedness.
Section 4.6 [Intentionally Omitted].
Section 4.7 Rights as Unsecured Creditors; Right to Required Payments.  Except
as expressly set forth in this Agreement, nothing shall limit or restrict the
rights and remedies of the Subordinated Lien Collateral Agent or the
Subordinated Lienholders as unsecured creditors of the Issuer or the Subsidiary
Guarantors.
Section 4.8 Senior Lenders’ and Holders’ Consent to Certain Transactions; Effect
of Refinancing of Senior Indebtedness.
(a) The Senior Secured Parties may amend, supplement and otherwise modify the
Credit Facility Loan Documents or waive any term thereof, in each case, without
the consent of the Subordinated Indebtedness Secured Parties; provided that such
amendment, supplement, modification or waiver does not (i) increase the
aggregate principal amount of the loans then outstanding under the Credit
Agreement (other than any amendment which has effect of capitalizing interest or
fees accruing under the Credit Agreement by adding such amounts to the principal
amount thereunder), (ii) increase the “Tranche A Fixed Rate” or the “Tranche B
Fixed Rate” (in each case, as defined in the Credit Agreement) or any other
applicable rate of interest, (iii) amend or modify the requirement that interest
on the Tranche B Term Loans be PIK Interest (as defined in the Credit
Agreement), (iv) amend or modify Section 2.10(c) of the Credit Agreement in a
manner increases the default interest rate with respect to the Tranche B Term
Loans, or causes it to accrue at any time when default interest is not permitted
to accrue under the Notes Documents, (v) amend or modify the definition of
“Tranche B/C Event of Default” (as defined in the Credit Agreement), (vi) amend
or modify the Credit Facility Loan Documents in a manner that confers additional
material rights or remedies in favor of the Tranche B Lenders;

 
Exhibit D-19

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(b) provided, however, that the following amendments and modifications shall not
violate this clause (vi): (A) amendments and modifications to representations
and warranties or covenants (including related definitions), that (x) are not
more restrictive or burdensome to the Issuer or any Subsidiary Guarantor, or (y)
if more restrictive or burdensome to the Issuer or any Subsidiary Guarantor, do
not relate to a provision that, if breached, would constitute a “Tranche B/C
Event of Default”, (B) amendments and modifications to Events of Default that do
not change the definition of “Tranche B/C Event of Default”, (C) amendments and
modifications that are incorporated pursuant to the requirements of Section 6.15
of the Credit Agreement or otherwise to conform to amendments and modifications
made to any Notes Document, (D) amendments and modifications providing benefits
to the Tranche B Lenders that are shared on a pari passu basis with the Holders,
and (E) amendments and modifications to cure any ambiguity, defect or
inconsistency of a technical nature (in each case, whether or not favorable to
the Tranche B Lenders) in the Credit Facility Loan Documents, (vii) amend or
modify Section 2.09(a) to increase the obligations of the Issuer or any
Subsidiary Guarantor thereunder, or amend or modify the definition of “Borrower
Fee Cap” (as defined in the Credit Agreement) or (viii) contravene the
provisions of this Agreement; provided, however, that the limitations set forth
in this Section 4.7 shall not apply to any amendments or modifications relating
solely to obligations of Credit Facility Exclusive Obligors or Credit Facility
Exclusive Collateral.
(c) The Subordinated Lien Collateral Agent, the Trustee and the Holders may
amend, supplement and otherwise modify the Notes Documents or waive any term
thereof, in each case, without the consent of the Senior Secured Parties;
provided that such amendment, supplement, modification or waiver does not (i)
increase the principal amount then outstanding under the Notes Documents (other
than any amendment which has effect of capitalizing interest or fees accruing
thereunder by adding such amounts to the principal amount thereunder), (ii)
increase the cash interest rate or any other applicable rate of interest that is
paid in cash, (iii) amend or modify any covenant or event of default in any
Notes Document in such a manner as to make such covenant or event of default
materially more restrictive to, or materially increase the obligations of, the
Issuer and the Subsidiary Guarantors or (iv) contravene the provisions of this
Agreement.  For clarity, no consent by the Senior Secured Parties to any such
amendment, supplement, modification or waiver of any Notes Document will be
required if such amendment, supplement, modification or waiver seeks to do only
one or more of the following:
(i) amend the maturity date of the Notes to a date later than the date set forth
in the Indenture and Notes as in effect on the date hereof, or decrease the
amount of any scheduled principal amortization payment on or any interest rate
applicable to the amounts owed on the Notes, or delete any mandatory prepayment
provision with respect to the Notes;
(ii) delete or waive any Default (as defined in the Indenture) or Event of
Default under the Indenture;
(iii) amend or modify any covenant in any Notes Document in such a manner as to
make such covenant less restrictive to the Issuer and the Subsidiary Guarantors;
or

 
Exhibit D-20

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(iv) cure any ambiguity, defect or inconsistency of a technical nature (in each
case, whether or not favorable to the Notes Issuers) in the Notes Documents.
(d) If, (x) the Issuer Refinances the Senior Indebtedness substantially
contemporaneously with the Payment-In-Full of such Senior Indebtedness (which
Refinancing may also include a refinancing of the Tranche B Indebtedness
substantially contemporaneously with the Payment-In-Full of such Tranche B
Indebtedness), (y) such Refinancing is permitted by the terms of the Indenture
and (z) the Issuer gives to the Subordinated Lien Collateral Agent written
notice (the “Refinancing Notice”) electing to apply the provisions of this
Section 4.7(c) to such Refinancing, then (i) the Payment-in-Full of the Senior
Indebtedness shall automatically be deemed not to have occurred for all purposes
of this Agreement, (ii) the indebtedness incurred in connection with such
Refinancing and all other obligations under or in connection with the loan,
security, guarantee and credit documents evidencing such indebtedness (the
“Replacement Credit Facility Obligations”) shall automatically be treated as
Senior Indebtedness for all purposes of this Agreement, including for purposes
of the Lien Priority and rights in respect of Collateral set forth herein;
provided, however, that aggregate principal amount of such Replacement Credit
Facility Obligations shall not exceed the Senior Indebtedness Cap Amount, as in
effect immediately prior to such Refinancing, (iii) the credit agreement and
other documents evidencing or relating to such Replacement Credit Facility
Obligations, including security documents pursuant to which the Issuer or any
Subsidiary Guarantor has granted a Lien to secure any Replacement Credit
Facility Obligation (collectively, the “Replacement Credit Facility Documents”),
shall automatically be treated as the Credit Agreement and the Credit Facility
Loan Documents for all purposes of this Agreement, (iv) the collateral agent
under the Replacement Credit Facility Documents (the “Replacement Collateral
Agent”) shall be deemed to be the Senior Lender Representative for all purposes
of this Agreement, and (v) the lenders under the Replacement Credit Facility
Documents shall be deemed to be the Senior Lenders for all purposes of this
Agreement.  Upon receipt of a Refinancing Notice, which notice shall include the
identity of the Replacement Collateral Agent, the Subordinated Lien Collateral
Agent and the Trustee shall promptly (x) enter into such documents and
agreements (including amendments or supplements to this Agreement) as such
Replacement Collateral Agent may reasonably request in order to provide to the
Replacement Collateral Agent the rights, remedies and powers and authorities
contemplated hereby, in each case consistent in all respects with the terms of
this Agreement and (y) deliver to the Replacement Collateral Agent any
Collateral of the type described in Section 5.2 hereof held by the Subordinated
Lien Collateral Agent together with any necessary endorsements (or otherwise
allow the Replacement Collateral Agent to obtain control of such Collateral). 
Section 4.9 Option to Purchase.  Upon the acceleration of all of the Senior
Indebtedness in accordance with the relevant Credit Facility Loan Documents (and
without prejudice to the enforcement of the rights and remedies of the Senior
Lender Representative or the other Senior Secured Parties with respect to the
Collateral), the Holders shall have the option to purchase without recourse or
warranty all, but not less than all, of the Senior Indebtedness outstanding at
the time of such purchase and all other rights, obligations and claims of the
Senior Secured Parties (each of the Senior Secured Parties so agreeing by its
acceptance of the benefits of the Credit Facility Loan Documents other than the
rights and benefits of the Senior Secured Parties under the Yield Maintenance
Agreement), and, upon any such purchase, such Holders

 
Exhibit D-21

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Section 4.10 shall assume and such Senior Lenders shall be relieved of all
obligations under the Credit Facility Loan Documents (including, without
limitation, any obligation to make loans), for a purchase price equal to the
aggregate outstanding amount of all of the outstanding Senior Indebtedness,
together with accrued and unpaid interest thereon and fees to the date of
payment of such amount and all other amounts then payable to such Senior Lenders
under the Credit Facility Loan Documents (including any prepayment fee, if any,
that would become owing by the Issuer to the extent set forth in Section 2.09(a)
of the Credit Agreement on the purchase date if the Credit Agreement were paid
in full by the Issuer on such date, provided, that in no event shall the amount
of any such prepayment fee included as part of the purchase price under this
Section 4.8 exceed the “Borrower Fee Cap” (as defined in the Credit Agreement as
of the Credit Agreement Closing Date)); provided, that upon any such purchase,
the Lien held by the Senior Lender Representative in and to the Credit Facility
Exclusive Collateral and all obligations of the Credit Facility Exclusive
Obligors under the Credit Facility Loan Documents that constitute Senior
Indebtedness shall terminate and be released automatically, unconditionally,
simultaneously and without further action, and to the extent reasonably
requested in writing by the Issuer or any Credit Facility Exclusive Obligor, the
Subordinated Lien Collateral Agent and the Holders will use commercially
reasonable efforts to cooperate in providing any necessary or appropriate
releases in furtherance of the foregoing.  Each of the Senior Lenders agrees (i)
that the Senior Lender Representative shall provide the Subordinated Lien
Collateral Agent a copy of any acceleration notice at the time that such notice
is provided to the Issuer and (ii) following receipt of such acceleration
notice, the Holders shall have the option, exercisable within ten (10) Business
Days of receipt of such notice, to provide five (5) Business Days prior written
irrevocable notice of the exercise of their purchase option in connection
therewith.
ARTICLE V
ENFORCEMENT OF PRIORITIES
Section 5.1 In Furtherance of Lien Priorities.  Each of the Parties, the Trustee
and the Tranche B Lenders agrees as follows:
(a) All payments or distributions of or with respect to the Collateral that are
received by any Party, the Trustee or the Tranche B Lenders contrary to the
provisions of this Agreement shall be segregated from other funds and property
held by such Party or the Tranche B Lenders, as applicable, and shall be held in
trust for the Party entitled thereto (the “Entitled Party”) in accordance with
the provisions of Section 4.4 and such Party shall forthwith pay over such
remaining proceeds to the Entitled Party in the same form as so received (with
any necessary endorsement) to be applied (in the case of cash) or held as
Collateral (in the case of non-cash property or securities) in accordance with
the provisions hereof and the provisions of the applicable Financing Documents.
(b) After the date of the Payment-In-Full of the Senior Indebtedness or the date
of consummation of any sale of the Senior Indebtedness under Section 4.8, the
Senior Lender Representative will promptly execute and deliver all further
instruments and documents, and take all further acts that may be necessary, or
that the Subordinated Lien Collateral Agent may reasonably request, to permit
the Subordinated Lien Collateral Agent to evidence the

 
Exhibit D-22

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(c) termination of the Lien Priority hereunder, or in furtherance thereof;
provided that (x) the Senior Lender Representative shall not be required to pay
over any payment or distribution, execute any instruments or documents, or take
any other action referred to in this Section 5.1(b) to the extent that such
action would contravene any applicable law, order or other applicable legal
requirement, and in the event of a controversy or dispute, the Senior Lender
Representative may interplead any payment or distribution in any court of
competent jurisdiction; and (y) the Senior Lender Representative shall not incur
any liability to the Subordinated Lien Collateral Agent for failure to provide
any such further instruments and documents or take any further acts described in
subclause (x) of this proviso.
(d) Each of the Senior Lender Representative and the Subordinated Lien
Collateral Agent is hereby authorized to demand specific performance of this
Agreement, whether or not the Issuer or any Subsidiary Guarantor shall have
complied with any of the provisions hereof applicable to it, at any time when
either such Party shall have failed to comply with the provisions of this
Agreement applicable to it.  Each Party hereby irrevocably waives any defense
based on the adequacy of a remedy at law, which might be asserted as a bar to
such remedy of specific performance.
Section 5.2 Perfection of Possessory Security Interests.  For the limited
purpose of perfecting the security interests of the Parties in those types or
items of Collateral in which a security interest only may be perfected by
possession or control, each Party hereby appoints the other as its
representative for the limited purpose of possessing on its behalf any such
Collateral that may come into the possession or control of such other Party from
time to time, and each Party agrees to act as the other’s representative for
such limited purpose of perfecting the other’s security interest by possession
or control through a representative as a gratuitous bailee for the other Party,
provided that neither the Party shall incur any liability to the other by virtue
of acting as the other’s representative or bailee hereunder.  Each of the
Parties, the Trustee and the Tranche B Lenders acknowledges and agrees that so
long as the Credit Facility Documents are in effect, the Issuer and the
Subsidiary Guarantors shall deliver all items of Collateral in which a security
interest may be perfected by possession to the Senior Lender
Representative.  Upon the Payment-In-Full of the Senior Indebtedness or the date
of consummation of any sale of the Senior Indebtedness under Section 4.8, the
Senior Lender Representative shall transfer, at the Issuer’s cost, all items of
Collateral in its possession to the Subordinated Lien Collateral Agent.
Section 5.3 Dispositions of Collateral and Effect thereof on Subordinated Lien
Collateral Agent’s Liens.
(a) The Subordinated Lien Collateral Agent, for itself and on behalf of the
Subordinated Lienholders, agrees that, until the Payment-In-Full of the Senior
Indebtedness, in the event of a Disposition of any Collateral to a Person that
is not an affiliate of the Issuer or a Subsidiary Guarantor (regardless of
whether or not an Event of Default has occurred and is continuing under the
Notes Documents at the time of such Disposition), the Lien held by the
Subordinated Lien Collateral Agent, for the benefit of itself and the
Subordinated Lienholders, in and to such Collateral (and, if such Collateral is
all of the equity interests of the Issuer or a Subsidiary Guarantor, all
obligations of the Issuer or such Subsidiary Guarantor under the Notes
Documents) shall terminate and be released automatically, unconditionally,
simultaneously and

 
Exhibit D-23

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(b) without further action if the applicable Liens held by the Senior Lender
Representative, for the benefit of itself and the other Senior Secured Parties,
in and to such Collateral (and, if such Collateral is all of the equity
interests of the Issuer or a Subsidiary Guarantor, all obligations of the Issuer
or such Subsidiary Guarantor under the Credit Facility Loan Documents) are
released and if such Disposition either (x) is then not prohibited by the Notes
Documents or (y) occurs in connection with the foreclosure by the Senior Lender
Representative upon or other exercise of rights and remedies with respect to
such Collateral; provided, that, in the case of a Disposition pursuant to
subclause (y) above, the proceeds of any such Disposition received by any Senior
Secured Party shall be applied to repay Senior Indebtedness and the Subordinated
Indebtedness in accordance with the terms hereof; provided, further, that, in
the case of a Disposition pursuant to subclause (x) or (y) above, the Lien held
by the Subordinated Lien Collateral Agent, for the benefit of itself and the
Subordinated Lienholders, shall remain in full force and effect with respect to
any proceeds of such Disposition that remain after the Payment-In-Full of the
Senior Indebtedness.
(c) To the extent reasonably requested in writing by the Senior Lender
Representative, the Subordinated Lien Collateral Agent will cooperate in
providing any necessary or appropriate releases to permit a Disposition of
Collateral, as provided in Section 5.3(a), by the Senior Lender Representative
therein free and clear of the Subordinated Lien Collateral Agent’s junior
Lien.  Until the Payment-In-Full of the Senior Indebtedness, the Subordinated
Lien Collateral Agent, for itself and on behalf of the Subordinated Lienholders,
hereby appoints the Senior Lender Representative, and any officer or agent of
the Senior Lender Representative as the Senior Lender Representative may
designate from time to time, with full power of substitution, as the
attorney-in-fact of the Subordinated Lien Collateral Agent and each Subordinated
Lienholder for the purpose of entering into any such release and other
instruments and carrying out the provisions of this Section 5.3(b) and taking
any action and executing any instrument that the Senior Lender Representative
may reasonably deem necessary to accomplish the purposes of this Section 5.3(b),
which appointment is irrevocable and coupled with an interest.
Section 5.4 Unenforceable Liens.  Notwithstanding anything to the contrary
contained herein, if in any Insolvency Proceeding of the Issuer, any of the
Subsidiary Guarantors or their respective successors or assigns, a determination
is made that any Lien of the Senior Lender Representative encumbering the
Collateral is not enforceable for any reason, then the Subordinated Lien
Collateral Agent, for itself and on behalf of the Subordinated Lienholders,
agrees that, any distribution or recovery that they may receive with respect to,
or allocable to, the value of the assets intended to constitute such Collateral
or any proceeds thereof, shall be segregated and held in trust and forthwith
paid over to the Senior Lender Representative for the benefit of the Senior
Secured Parties in the same form as received without recourse, representation or
warranty (other than a representation of the Subordinated Lien Collateral Agent
that it has not otherwise sold, assigned, transferred or pledged any right,
title or interest in and to such distribution or recovery) but with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct.
Section 5.5 Insurance and Condemnation Awards.  Until the Payment-In-Full of the
Senior Indebtedness, the Senior Lender Representative and the other Senior
Secured Parties shall have the exclusive right, subject to the rights (if any)
of the Issuer and the

 
Exhibit D-24

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Section 5.6 Subsidiary Guarantors under the Credit Facility Loan Documents, to
settle and adjust any insurance policy or claim covering or constituting
Collateral and to approve any award granted in any condemnation or similar
proceeding, or any deed in lieu of condemnation, in respect of any
Collateral.  All proceeds of any such policy and any such award, or any payments
with respect to a deed in lieu of condemnation, shall constitute Collateral,
subject to the rights (if any) of the Issuer and Subsidiary Guarantors under the
Credit Facility Loan Documents, and shall be paid in accordance with Section
4.4.  Until the Payment-In-Full of the Senior Indebtedness, if the Subordinated
Lien Collateral Agent, the Trustee or any Subordinated Lienholder shall, at any
time, receive any proceeds of any such insurance policy or any such award or
payment in violation of this Section 5.5, it shall immediately transfer and pay
over such proceeds to the Senior Lender Representative in accordance with
Section 2.4.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Rights of Subrogation.  The Trustee and the Subordinated Lien
Collateral Agent agree that no payment or distribution to any Senior Secured
Party pursuant to the provisions of this Agreement shall entitle the Trustee or
the Subordinated Lien Collateral Agent to exercise any rights of subrogation in
respect thereof until the date of Payment-In-Full of the Senior
Indebtedness.  Each of the Parties, the Trustee and the Tranche B Lenders
acknowledges and agrees that the value of any payments or distributions in cash,
property or other assets received by the Subordinated Lien Collateral Agent, the
Trustee or the Subordinated Lienholders that are paid over to the Senior Secured
Parties pursuant to this Agreement shall not reduce any of the Subordinated
Indebtedness.
Section 6.2 Further Assurances; Reimbursement of Collateral Agent.  (a)  The
Parties and the Tranche B Lenders will, at their own expense and at any time and
from time to time, promptly execute and deliver all further instruments and
documents, and take all further reasonable action (including the recordation of
a subordination agreement in the appropriate recorder’s office), that may be
necessary or desirable, or that either Party may reasonably request, in order to
protect any right or interest granted or purported to be granted hereby or to
enable such Party to exercise and enforce its rights and remedies hereunder;
provided that neither the Parties nor the Tranche B Lenders shall be required to
pay over any payment or distribution, execute any instruments or documents, or
take any other action referred to in this Section 6.2(a) to the extent that such
action would contravene any law, order or other legal requirement binding upon
such Party or Tranche B Lender, and in the event of a controversy or dispute,
any Party or Tranche B Lender may interplead any payment or distribution in any
court of competent jurisdiction, without further responsibility in respect of
such payment or distribution under this Section 6.2(a).
(b)  The Collateral Agent shall be entitled to reimbursement for all costs and
expenses incurred by it hereunder as set forth in Section 7.7 of the Indenture.

 
Exhibit D-25

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Defenses Similar to Suretyship Defenses. All rights, interests, agreements and
obligations of each of the Parties under this Agreement shall remain in full
force and effect irrespective of:
(a) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Secured Liabilities, or any other amendment or waiver of
or any consent to departure from the Financing Documents;
(b) any exchange, release, non-enforcement or non-perfection of any Party’s
Liens with respect to any Collateral, or any release, amendment or waiver of or
consent to departure from any guaranty, for all or any of the Secured
Liabilities; or
(c) any failure by any Party to marshal assets in favor of the other Party or
any other Person or to proceed upon or against or exhaust any security or remedy
before proceeding to enforce the Financing Documents.
Section 6.3 Amendments, Etc.  No amendment or waiver of any provision of this
Agreement and no consent to any departure by any Party, the Trustee or Tranche B
Lender shall be effective unless (a) the same is in writing and signed by (x)
each Party and the Trustee and (y) if and to the extent provided for in the
Subordinated Indebtedness Collateral Documents, each Tranche B Lender, and (b)
in the case of any such amendment, waiver or consent with respect to Section
4.7(c), the consent of the Issuer (which consent shall not be unreasonably
withheld, conditioned or delayed).  Any amendment, waiver or consent permitted
by this Section 6.4 shall be effective only in the specific instance and for the
specific purpose for which given.
Section 6.4 Addresses for Notices.  All demands, notices and other
communications provided for hereunder shall be in writing, and if to the
Subordinated Lien Collateral Agent or the Trustee, mailed, sent by facsimile or
electronic mail, or delivered to it at the following address:
Wilmington Trust FSB
50 South Sixth Street, Suite 1290
Minneapolis, MN  55402-1544
Facsimile:
E.mail:
Attention: Corporate Client Services
and if to the Senior Lender Representative, mailed or sent by electronic mail,
or delivered to it at the following address:
Tranche Manager, LLC
c/o ACON Investments, LLC
1133 Connecticut Avenue, NW
Washington, DC  20036
Facsimile:
E.mail: bjohnson@aconinvestments.com
Attention: Barry Johnson

 
Exhibit D-26

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       With copy to

Tranche Manager, LLC
c/o ACON Investments, LLC
1133 Connecticut Avenue, NW, Washington, DC 20036,
Facsimile:
E.mail:: dprawda@aconinvestments.com
Attention: Daniel Prawda
and if to the Tranche B Lenders, mailed or sent by electronic mail, or delivered
to it at the following address:
MPG Revolver Holdings, LLC
[ADDRESS]
Facsimile:
E.mail:
Attention:
or as to any Party, such other address designated by such Party in a written
notice to the other Party and the Tranche B Lenders, and as to the Trustee, such
other address designated by the Trustee in a written notice to the Parties and
the Tranche B Lenders, and as to any Tranche B Lender, such other address
designated by such Tranche B Lender in a written notice to the Parties, the
Trustee and the other Tranche B Lenders, in each case, complying as to delivery
with the terms of this Section 6.5.  All such demands, notices and other
communications shall be effective:  (a) if mailed, two Business Days after
deposit in the mails, postage prepaid; (b) if sent by facsimile, when receipt is
acknowledged by the receiving facsimile equipment (or at the opening of the next
Business Day if receipt is after normal business hours); or (c) if by other
means, when delivered.
Section 6.5 No Waiver of Remedies.  No failure on the part of any Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.  The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 6.6 Termination of Agreement.  This Agreement shall (a) be binding upon
the Parties, the Trustee the Tranche B Lenders and their successors and assigns;
(b) inure to the benefit of and be enforceable by the Parties, the Trustee and
the Tranche B Lenders and their respective successors, transferees and assigns;
and (c) terminate (i) upon the Payment-In-Full of the Senior Indebtedness or
(ii) in the event that any of the Issuer, the Subsidiary Guarantors or their
respective affiliates becomes the Senior Lender Representative hereunder or a
Senior Lender under the Credit Facility Loan Documents; provided that the
obligations of the Parties, the Trustee and the Tranche B Lenders under
Sections 5.1, 5.2, 6.2(a) and 6.16 shall survive this Agreement; provided,
further, that any actions requested of the Senior Lender Representative
following the termination of the Senior Indebtedness shall be at the sole cost
and expense of the Issuer.
Section 6.7 Governing Law; Entire Agreement.  This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to

 
Exhibit D-27

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Section 6.8 contracts made and to be performed in New York, including
Sections 5-1401 and 5-1402 of the New York General Obligations Law.  Subject to
Section 6.17, this Agreement constitutes the entire agreement and understanding
among the Parties, the Trustee and the Tranche B Lenders with respect to the
subject matter hereof and supersedes any prior agreements, written or oral, with
respect thereto.
Section 6.9 Consent to Jurisdiction. Each of the Parties, the Trustee and
Tranche B Lenders hereby consents to the jurisdiction of any state or federal
court located within the Borough of Manhattan, State of New York and agrees
that, all actions or proceedings arising out of or relating to this Agreement
shall be litigated in such courts.  Each of the Parties, the Trustee and the
Tranche B Lenders expressly submits and consents to the jurisdiction of the
aforesaid courts and waives any defense of forum non conveniens.  Each of the
Parties, the Trustee and the Tranche B Lenders hereby agrees that any and all
service of process shall be made in accordance with applicable law.
Section 6.10 Waiver of Jury Trial.  The Parties, the Trustee and the Tranche B
Lenders hereby waive their respective rights to a jury trial of any claim or
cause of action based upon or arising out of this Agreement.  Each of the
Parties, the Trustee and the Tranche B Lenders acknowledges that this waiver is
a material inducement to enter into a business relationship, that each has
relied on the waiver in entering into this Agreement and that each will continue
to rely on the waiver in their related future dealings.  Each of the Parties,
the Trustee and the Tranche B Lenders warrants and represents that each has had
the opportunity of reviewing this jury waiver with legal counsel, and that each
knowingly and voluntarily waives its jury trial rights.
Section 6.11 Counterparts.  This Agreement may be executed in any number of
counterparts, and it is not necessary that the signatures of the Parties, the
Trustee and the Tranche B Lenders be contained on any one counterpart hereof,
each counterpart will be deemed to be an original, and all together shall
constitute one and the same document.  Delivery of an executed counterpart of a
signature page to this Agreement by telecopy or other electronic means shall be
effective as delivery of a manually executed counterpart of this Agreement.
Section 6.12 No Third Party Beneficiary.  This Agreement is solely for the
benefit of the Parties (and their successors and assigns) and the holders from
time to time of the Secured Liabilities (including the Senior Lenders and the
Subordinated Lienholders).  No other Person (including the Issuer, any
Subsidiary Guarantor, any Credit Facility Exclusive Obligor or any subsidiary or
affiliate of the Issuer) shall be deemed to be a third party beneficiary of this
Agreement or shall have any rights to enforce any provisions hereof.
Section 6.13 Headings.  The headings of the articles and sections of this
Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.
Section 6.14 Severability.  If any of the provisions in this Agreement shall,
for any reason, be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement and shall not invalidate the Lien Priority or any other
priority set forth in this Agreement.

 
Exhibit D-28

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Section 6.15 Subordinated Lien Collateral Agent and Trustee
Status.  Notwithstanding any term herein to the contrary, it is hereby expressly
agreed and acknowledged that the subordination and related agreements set forth
herein by the Trustee and the Subordinated Lien Collateral Agent are made solely
in their respective capacities as trustee with respect to the Notes or secured
party on behalf of the Subordinated Lienholders under the Subordinated
Indebtedness Collateral Documents(and not in their respective individual
commercial capacities, except to the extent that the Trustee or the Subordinate
Lien Collateral Agent is or becomes a Holder).  The Trustee and Subordinated
Lien Collateral Agent shall not have any duties, obligations, or
responsibilities to the Senior Lender Representative under this Agreement except
as expressly set forth herein.  Nothing in this Agreement shall be construed to
operate as a waiver by the Trustee or the Subordinated Lien Collateral Agent,
with respect to the Notes Issuers or any Subsidiary Guarantor or any
Subordinated Lienholder, of the benefit of any exculpatory provisions,
presumptions, indemnities, protections, benefits, immunities or reliance rights
contained in the Indenture, and, by their acknowledgment hereof, the Notes
Issuers and the Subsidiary Guarantors expressly agree that as between them and
the Trustee or the Subordinated Lien Collateral Agent, the Trustee and the
Subordinated Lien Collateral Agent shall have such benefit with respect to all
actions or omissions by the Subordinated Lien Collateral Agent or the Trustee
pursuant to this Agreement.  For all purposes of this Agreement, the Trustee and
the Subordinated Lien Collateral Agent may (a) rely in good faith, as to matters
of fact, on any representation of fact believed by the Trustee or Subordinated
Lien Collateral Agent to be true (without any duty of investigation) and that is
contained in a written certificate of any authorized representative of the Notes
Issuers or any Subsidiary Guarantor or of the Senior Lender Representative;
(b) rely in good faith, as to matters of law, on any advice received from its
legal counsel or an opinion of its counsel, counsel to the Notes Issuers or
counsel to the Senior Lender Representative, and shall have no liability for any
action or omission taken in reliance thereon; and (c) assume in good faith
(without any duty of investigation), and rely upon, the genuineness, due
authority, validity, and accuracy of any certificate, instrument, notice, or
other document believed by it in good faith to be genuine and presented by the
proper person.
Section 6.16 Reinstatement.
(a) The provisions of this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the Secured
Liabilities is, other than as a result of any intentional fraud of the Senior
Lender Representative, the Subordinated Lien Collateral Agent, the Trustee or
any Tranche B Lender, as applicable, rescinded or must otherwise be returned by
the applicable Party, the Trustee or Tranche B Lender for any reason, including
without limitation, upon the insolvency, bankruptcy, or reorganization of the
Issuer, any Subsidiary Guarantor, or otherwise, all as though such payment has
not been made.
(b) It is further agreed that any diminution (whether pursuant to court decree
or otherwise, including without limitation for any of the reasons described in
the preceding sentence) of the Issuer’s or any Subsidiary Guarantor’s obligation
to make any distribution or payment of any of the Senior Indebtedness, except to
the extent such diminution occurs by reason of the repayment (which has not been
disgorged or returned) of such Senior Indebtedness in cash or cash equivalents,
shall have no force or effect for purposes of this

 
Exhibit D-29

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(c) Agreement, with any turnover of payments as otherwise calculated pursuant to
this Agreement to be made as if no such diminution had occurred.
Section 6.17 Credit Agreement Controls Relationship between Senior Lenders and
Tranche B Lenders.  Notwithstanding anything to the contrary herein, and solely
with respect to the relative rights of the Tranche B Term Lenders and the Senior
Secured Parties, to the extent that any rights are provided to the Tranche B
Lenders under this Agreement, whether to enforce obligations or exercise
remedies, such rights and remedies shall in any event be subject to the
requirements of the Credit Agreement, and subject to the restrictions on any
amendment, supplement, modification or waiver with respect to the Credit
Facility Loan Documents set forth in clauses (a)(iii) through (a)(vi) of Section
4.7, any inconsistency between this Agreement and the Credit Agreement shall be
resolved in favor of the Credit Agreement for such purpose.
[Signature pages follow]

 
Exhibit D-30

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IN WITNESS WHEREOF, each of the Senior Lender Representative, the Subordinated
Lien Collateral Agent, the Trustee and the Tranche B Lenders has caused this
Agreement to be duty executed and delivered as of the date first above written.
Senior Lender Representative:
 
TRANCHE MANAGER, LLC
   
By:
   
Name:
 
Title:
   
Subordinated Lien Collateral Agent:
 
WILMINGTON TRUST FSB, as Subordinated Lien Collateral Agent
   
By:
    
Name:
 
Title:
   
Trustee:
 
WILMINGTON TRUST FSB, as Trustee
   
By:
   
Name:
 
Title:
   
Tranche B Lender:
 
MPG REVOLVER HOLDINGS, LLC
   
By:
   
Name:
 
Title:

 
Exhibit D-31

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ACKNOWLEDGMENT AND CONSENT
Each of the undersigned hereby acknowledges that (a) it has received a copy of
the foregoing Intercreditor and Subordination Agreement and consents thereto,
and agrees to recognize all rights granted hereby to the parties thereto, and
will not do any act or perform any obligation which is not in accordance with
the agreements set forth in such Intercreditor and Subordination Agreement, and
(b) it is not an intended beneficiary or third-party beneficiary under the
Intercreditor and Subordination Agreement.
Dated as of [__________ __], 2009.

 
Issuer:
 
MORRIS PUBLISHING GROUP, LLC
   
By:
   
Name:
 
Title:
   
Subsidiary Guarantors:
 
MORRIS PUBLISHING FINANCE CO.
   
By:
   
Name:
 
Title:
   
YANKTON PRINTING COMPANY
BROADCASTER PRESS, INC.
THE SUN TIMES, LLC
HOMER NEWS, LLC
LOG CABIN DEMOCRAT, LLC
ATHENS NEWSPAPERS, LLC
SOUTHEASTERN NEWSPAPERS COMPANY, LLC
STAUFFER COMMUNICATIONS, INC.
FLORIDA PUBLISHING COMPANY
THE OAK RIDGER, LLC
MPG ALLEGAN PROPERTY, LLC
MPG HOLLAND PROPERTY, LLC
   
By:
   
Name:
 
Title:
 
SOUTHWESTERN NEWSPAPERS COMPANY, L.P.,
By: Morris Publishing Group, LLC, its general partner
 
       By:
   
Name:
 
Title:
 

 
Exhibit D-32

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