EXECUTIONVERSION

 

This PLAN SUPPORT AGREEMENT, dated as of September 3, 2009 (this “Agreement”), is entered into by and among:

 

(A)           the undersigned holders (collectively, the “Senior Noteholders”) of 11-¾% senior notes due 2011 (the “Senior Notes”) of Haights Cross Operating Company (“HCOC”) issued pursuant to the Senior Note Indenture;

 

(B)           the undersigned holders (collectively, the “Senior Discount Noteholders” and, together with the Senior Noteholders, the “Noteholders”) of 12-½% senior discount notes due 2011 (the “Senior Discount Notes”) of Haights Cross Communications, Inc. (“HCC”) issued pursuant to the Senior Discount Note Indenture;

 

(C)           each of the lenders under that certain Credit Agreement, dated as of August 15, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among HCOC, as borrower, the guarantors party thereto, including HCC, and DDJ Capital Management, LLC, as administrative agent on behalf of the lenders party thereto from time to time (collectively, the “Credit Agreement Lenders” and, together with the Noteholders, the “Plan Support Parties”); and

 

(D)           HCC, HCOC and all of its direct and indirect U.S. subsidiaries party to Prepetition Indebtedness, Triumph Learning, LLC, SNEP, LLC and Recorded Books, LLC (collectively, the “Company”).

 

WHEREAS:

 

A.           The Company and the Plan Support Parties have discussed consummating a financial restructuring (the “Restructuring”) of the Senior Notes, the Senior Discount Notes and the Credit Agreement Loans (collectively, the “Prepetition Indebtedness”) on substantially the terms set forth in the term sheet attached hereto as Exhibit A (the “Term Sheet”).

 

B.           The Credit Agreement Lenders have agreed to extend the Forbearance Agreement pursuant to the Extension Letter.

 

C.           The Company and each Plan Support Party (each a “Party” and collectively, the “Parties”) anticipate that the Restructuring will be implemented either (1) through a solicitation of votes for a “prepackaged” plan of reorganization (a “Prepackaged Case”) pursuant to a transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and sections 1125 and 1145 of chapter 11 of title 11 of the United States Code, 11 U.S.C. §§101 et seq. (as may be amended from time to time, the “Bankruptcy Code”) or (2) through a “prenegotiated” plan of reorganization (a “Prenegotiated Case”), whereby the Definitive Documents will be finalized prior to the Petition Date, and votes on the Plan will be solicited during the Chapter 11 Cases, in either event involving chapter 11 proceedings commenced in either the United States Bankruptcy Court for the Southern District of New York or the District of Delaware, as determined by the Company and the Requisite Plan Support Parties (the “Bankruptcy Court”).

 

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Party, intending to be legally bound hereby, agrees as follows:

 

SECTION 1. Definitions.  The following terms shall have the following definitions:

 

“Administrative Expense Claims” has the meaning set forth in the Term Sheet.

 

“Agent” has the meaning set forth in the Credit Agreement.

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Agreement Effective Date” has the meaning set forth in Section 2 hereof.

 

“Assumption Agreement” has the meaning set forth in Section 6 hereof.

 

“Ballot” means the ballot distributed with the Disclosure Statement for voting on the Plan.

 

“Bankruptcy Code” has the meaning set forth in the recitals hereto.

 

“Bankruptcy Court” has the meaning set forth in the recitals hereto.

 

“Bankruptcy Court Filing” has the meaning set forth in Section 8 hereof.

 

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in New York City.

 

“Cash Collateral Stipulation” means a stipulation between the Credit Agreement Lenders, the Agent and the Filing Entities providing for the use of Cash Collateral during the pendency of the Chapter 11 Cases and the provision of “adequate protection” for the benefit of the Credit Agreement Lenders, in form and substance reasonably satisfactory to the Credit Agreement Lenders and the Company.

 

“Cash Collateral” means all cash in which the Filing Entities have an interest that is “cash collateral,” within the meaning of section 363(a) of the Bankruptcy Code, of the Credit Agreement Lenders.

 

“Chapter 11 Cases” means the voluntary chapter 11 proceedings to be commenced in the Bankruptcy Court by the Filing Entities for the purpose of consummating the Transactions.

 

“Company” has the meaning set forth in the preamble hereto.

 

“Credit Agreement” has the meaning set forth in the preamble hereto.

 

“Credit Agreement Lenders” has the meaning set forth in the preamble hereto.

 

“Credit Agreement Loans” means the loans made under the Credit Agreement.

 

“Credit Parties” has the meaning set forth in the Credit Agreement.

 

“DDJ” means DDJ Capital Management, LLC.

 

“Definitive Documentation Completion Date” has the meaning set forth in Section 4(a)(iii)(B)(1) hereof.

 

“Definitive Documents” means the First Day Papers, the Disclosure Statement, the Plan, the Intercreditor Agreement, the Cash Collateral Stipulation, the indentures with respect to the New First Lien Notes and New Second Lien Notes, the Exit Warrants, the shareholders agreement among the holders of the Reorganized HCC Common Stock, and all related documents, exhibits, annexes and schedules, in the respective forms attached to the IC Acknowledgment (to the extent applicable), as such documents may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof and with such immaterial clarifications and grammatical changes as may be necessary.

 

“Disclosure Statement” means the solicitation and disclosure statement describing, among other things, the Plan and the Restructuring contemplated by the Term Sheet, in the form attached to the IC Acknowledgement.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exit Warrants” means the warrants described in Schedule 3 to the Term Sheet.

 

“Extension Letter” means that certain letter agreement, dated as of the date hereof, by and among the Credit Parties, the Agent and the Credit Agreement Lenders party thereto, as such letter agreement may be modified from time to time.

 

“Filing Entities” means HCC, HCOC, and any direct or indirect U.S. subsidiaries.

 

“Financing Commitment” means a commitment letter from one or more financial institutions, reasonably acceptable in form and substance to the Requisite Plan Support Parties and the Company, committing such financial institutions to provide $100 million of debt financing to the Reorganized Company, on terms and conditions reasonably acceptable to the Requisite Plan Support Parties and the Company and, in any event, not on terms and conditions less favorable than the New First Lien Notes (as reasonably determined by the Requisite Plan Support Parties and the Company).

 

“First Day Papers” means any and all “first day” motions to be filed in connection with the Chapter 11 Cases (and all exhibits, supplements or annexes thereto), including, without limitation, for approval of the Cash Collateral Stipulation.

“Forbearance Agreement” means that certain Fourth Forbearance Agreement and Amendment No. 1 to Credit Agreement, dated as of May 7, 2009, as amended by that certain (i) letter agreement, dated as of June 5, 2009, by and among the Credit Parties, the Agent and the Credit Agreement Lenders party thereto, (ii) letter agreement, dated as of July 16, 2009, by and among the Credit Parties, the Agent and the Credit Agreement Lenders party thereto, (iii) letter agreement, dated as of July 30, 2009, by and among the Credit Parties, the Agent and the Credit Agreement Lenders party thereto, (iv) letter agreement, dated as of August 7, 2009, by and among the Credit Parties, the Agent and the Credit Agreement Lenders party thereto, (v) letter agreement, dated as of August 20, 2009, by and among the Credit Parties, the Agent and the Credit Agreement Lenders party thereto and (vi) the Extension Letter, as such agreement may be further modified or amended from time to time.

 

“HCC” has the meaning set forth in the preamble hereto.

 

“HCOC” has the meaning set forth in the preamble hereto.

 

“IC Acknowledgment” has the meaning set forth in Section 10 hereof.

 

“Indentures” means, collectively, the Senior Note Indenture and the Senior Discount Note Indenture.

 

“Informal Committee of Senior Notes” means the informal committee consisting of DDJ, Bennett Management Corporation, AIG Global Investment Corp. and GoldenTree Asset Management, in each case on behalf of certain funds and accounts, so long as (a) the funds and/or accounts such firms manage and/or advise continue to hold Prepetition HCOC Indebtedness and (b) such firms have not resigned from such committee.

 

“Intercreditor Agreement” has the meaning set forth in the Term Sheet.

 

“Material Adverse Change” has the meaning set forth in Section 5(f)(vi) hereof.

 

“New Event of Default” means any “Event of Default” under Sections 8.1(a) (payment default), 8.1(b) (representations), 8.1(f) (cross-default) (so long as any notice or grace period relating to any applicable “Material Indebtedness” or “Material Rental Obligation” has expired, and provided that in no event shall any “Event of Default” arising from or relating to any breach or violation of the Indentures constitute a “New Event of Default”), 8.1(j) (certain judgments), 8.1(k) (certain ERISA events), 8.1(l) (change of control), 8.1(m) (validity of Liens of Credit Agreement Lenders), 8.1(n) (certain uninsured losses) and/or 8.1(o) (challenge to Credit Agreement or related loan documents by Guarantors) of the Credit Agreement, except that “New Event of Default”: shall not include any Event of Default that is the subject of a Specified Forbearance Item.

 

“New First Lien Notes” means the notes described in Schedule 1 to the Term Sheet.

 

“New Second Lien Notes” means the notes described in Schedule 2 to the Term Sheet.

 

“Noteholders” has the meaning set forth in the preamble hereto.

 

“Outside Date” means November 3, 2009, as may be extended in accordance with the terms hereof.

 

“Party” has the meaning set forth in the recitals hereto.

 

“Person” means and includes an individual, a partnership, a joint venture, a limited liability company, a corporation, a trust, an unincorporated organization, a group or any legal entity or association.

 

“Petition Date” means, with respect to each Filing Entity, the date on which it commences a Chapter 11 Case.

 

“Plan Effective Date” means the date on which the Plan becomes effective in accordance with the terms thereof.

 

“Plan Support Party” has the meaning set forth in the recitals hereto.

 

“Plan” means the Filing Entities’ joint “prepackaged” or “prenegotiated” plan of reorganization, in respect of the Chapter 11 Cases, as applicable, including all exhibits and supplements thereto, the terms of which are consistent with the Term Sheet, and in the form attached to the IC Acknowledgement.

 

“PPS Completion Date” has the meaning set forth in Section 4(a)(iii)(A)(3) hereof.

 

“Prenegotiated Case” has the meaning set forth in the recitals hereto.

 

“Prepackaged Case” has the meaning set forth in the recitals hereto.

 

“Prepackaged Solicitation” means a prepetition solicitation of votes on the Plan in a manner exempt from registration under the Securities Act.

 

“Prepetition HCOC Indebtedness” means, collectively, the Senior Notes and the Credit Agreement Loans.

 

“Prepetition Indebtedness” has the meaning set forth in the recitals hereto.

 

“Priority Tax Claims” has the meaning set forth in the Term Sheet.

 

“Qualifying Committee Member” means any member of the Informal Committee of Senior Notes holding an aggregate principal amount of at least $35 million in Prepetition HCOC Indebtedness.

 

“Representative” means, with respect to any Party, such Party’s affiliates and its and their directors, officers, employees, agents and advisors (including, without limitation, financial advisors, counsel and accountants).

 

“Reorganized Company” means, collectively, the Filing Entities as reorganized pursuant to the Plan.

 

 

“Reorganized HCC” means HCC as reorganized pursuant to the Plan.

 

“Reorganized HCC Common Stock” has the meaning set forth in the Term Sheet.

 

“Reorganized HCOC” means HCOC as reorganized pursuant to the Plan.

 

“Requisite Plan Support Parties” means all of the members of the Informal Committee of Senior Notes that are Qualifying Committee Members, and any assignee (pursuant to Section 6 hereof) of the Prepetition HCOC Indebtedness so long as such assignee holds (a) at least $35 million in aggregate principal amount of Prepetition HCOC Indebtedness and (b) less than $15 million in aggregate principal amount of Senior Discount Notes; provided, however, that for purposes of Section 5(f)(i) hereof, solely the Plan Support Parties that are in compliance with the terms of Section 3(c) and (d) hereof shall be considered in the use of this term.

 

“Restructuring” has the meaning set forth in the recitals hereto.

 

“Rights Offering” has the meaning set forth in the Term Sheet.

 

“Rights Offering Proceeds” has the meaning set forth in the Term Sheet.

 

“Senior Discount Note Indenture” means the indenture governing the Senior Discount Notes, among HCC as obligor and Wells Fargo Bank Minnesota, N.A. as trustee, dated as of February 2, 2004, as subsequently amended, modified or supplemented, and the agreements entered into and documents delivered in connection therewith.

 

“Senior Discount Noteholders” has the meaning set forth in the preamble hereto.

 

“Senior Discount Notes” has the meaning set forth in the preamble hereto.

 

“Senior Note Indenture” means the indenture governing the Senior Notes, among HCOC as obligor, HCC as parent guarantor, the subsidiary guarantors named therein, and Wells Fargo Bank Minnesota, N.A. as trustee, dated as of August 20, 2003, as subsequently amended, modified or supplemented, and the agreements entered into and documents delivered in connection therewith.

 

“Senior Noteholders” has the meaning set forth in the preamble hereto.

 

“Senior Notes” has the meaning set forth in the preamble hereto.

 

“Solicitation Period” means the period during which votes to accept or reject the Plan are being solicited.

 

“Specified Forbearance Item” has the meaning set forth in the Forbearance Agreement, as modified by the Extension Letter.

 

“Superior Proposal” means either (a) a bona fide written proposal for a transaction or series of transactions that the Board of Directors of the Company determines (after consultation with its legal and financial advisors) in good faith (i) is reasonably likely to be consummated in a timely manner, taking into account all factors deemed relevant by such Board of Directors and (ii) if consummated would, taking into account all factors deemed relevant by such Board of Directors, result in a cash payment (upon the closing of the transaction or series of transactions contemplated in such proposal) to or for the benefit of the holders of the Prepetition HCOC Indebtedness of all amounts due and owing on account thereof (including postpetition interest, if any) or (b) any proposal for a transaction or series of transactions with respect to which the Required Plan Support Parties provide written consent to have treated as a “Superior Proposal” hereunder.

 

“Target Commencement Date” means October 15, 2009.

 

“Term Sheet” has the meaning set forth in the recitals hereto.

 

“Termination Date” has the meaning set forth in Section 5 hereof.

 

“Termination Event” has the meaning set forth in Section 5 hereof.

 

“Transactions” means, collectively, the transactions contemplated in this Agreement, the Plan and the Term Sheet (and all exhibits, supplements or annexes thereto).

 

“Transfer” has the meaning set forth in Section 6 hereof.

 

“Transferee” has the meaning set forth in Section 6 hereof.

 

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Term Sheet.

 

SECTION 2. Agreement Effective Date; Conditions Precedent.  This Agreement shall be effective at 12:01 a.m. prevailing Eastern Time on the date on which the following conditions have been satisfied (the “Agreement Effective Date”):

 

(a)           the Company shall have executed and delivered counterpart signature pages to this Agreement to counsel to the Informal Committee of Senior Notes;

 

(b)           the Requisite Plan Support Parties shall have delivered to the Company counterpart signature pages to this Agreement; and

 

(c)           the Informal Committee of Senior Notes shall have determined that, except for ordinary course claims for professionals, employees, and the lease of HCC headquarters, substantially all of which are for the benefit of HCOC and its direct and indirect subsidiaries and for which HCC receives reimbursement from HCOC, no claims exist against HCC as of the date hereof, and no such claims are expected to exist as of the filing of the Chapter 11 Cases, other than claims (A) representing or in connection with (i) the Senior Discount Notes, (ii) the guaranty under the Credit Agreement, (iii) the guaranty under the Senior Note Indenture and (iv) the equity of HCC or (B) in an amount and of a priority reasonably acceptable to the Requisite Plan Support Parties.

 

SECTION 3. Commitment of Plan Support Parties. Subject to the occurrence of the Agreement Effective Date and prior to the occurrence of the Termination Date (if applicable), each Plan Support Party shall:

 

(a)           vote (or cause or instruct any custodian, nominee or other agent to timely vote) all Prepetition Indebtedness beneficially owned by such Plan Support Party or for which it is the nominee, investment manager or advisor for beneficial holders thereof in favor of the Plan in accordance with the applicable procedures set forth in the Disclosure Statement and accompanying voting materials, and timely return a duly-executed Ballot in connection therewith no later than the tenth (10th) Business Day following the date of commencement of the Solicitation Period (in either a Prepackaged Case, Prenegotiated Case or otherwise);

 

(b)           not withdraw or revoke its tender, consent or vote, except to the extent that the terms of the related plan of reorganization are inconsistent with the terms of the Definitive Documents;

 

(c)           with respect to all Senior Notes or Senior Discount Notes held by such Plan Support Party, forbear from exercising any rights or remedies it may have in respect of such notes in accordance with the terms and conditions contained in the Forbearance Agreement, as if (i) such Plan Support Party were party to the Forbearance Agreement in its capacity of a holder of such notes and (ii) the Forbearance Agreement specifically referenced and related to the exercise of rights and remedies under any and all documents relating to such notes;

 

(d)           forbear from exercising any rights or remedies it may have in respect of the Credit Agreement in accordance with the terms and conditions contained in the Forbearance Agreement;

 

(e)           following the commencement of the Chapter 11 Cases, not (i) object, on any grounds, to the terms, conditions, nature or amount of the Filing Entities’ proposed use of Cash Collateral, except to the extent that such terms are inconsistent with the terms contained in the Definitive Documents, (ii) object, on any grounds, to confirmation of the Plan (without limiting any right to object to a plan of reorganization containing terms that are inconsistent with the terms of the Definitive Documents), or (iii) directly or indirectly seek, solicit, support, vote for, agree to, accept or encourage (x) any objection to the Plan or (y) any other plan of reorganization or liquidation or any sale process with respect to the Company (or any of its business units), including any sale under section 363 of the Bankruptcy Code;

 

(f)           not take any other action, including, without limitation, initiating any legal proceeding that is inconsistent with, or that would be reasonably likely to interfere with, delay or impede, directly or indirectly, with the consummation of the Restructuring and the Transactions;

 

(g)           use its commercially reasonable efforts to work with the Company in its efforts to satisfy the relevant timeline set forth in Section 4(a)(iii) hereof and to provide the IC Acknowledgment as soon as practicable;

 

(g)           permit the filing of this Agreement with the Bankruptcy Court and as an exhibit to the Plan; provided, that unless required by the Bankruptcy Court, the portions of the signature pages reflecting the holdings of Prepetition Indebtedness of the Plan Support Parties shall be redacted from any such filing; and

 

(h)           not raise any objection and not support any objection to any retention by the Company of:  (a) Brown Rudnick LLP as its legal counsel; and/or (b) Houlihan Lokey, as its financial advisor, so long as such retention is based on terms and conditions that are substantially the same as were disclosed to the Plan Support Parties prior to the date hereof.

 

Notwithstanding the foregoing, nothing in this Agreement shall be construed as to prohibit any Party from appearing as a party-in-interest in any matter to be adjudicated in the Chapter 11 Cases so long as such appearance and the positions advocated in connection therewith are not materially inconsistent with the terms contained herein or in the Definitive Documents and are not for the purpose of hindering, delaying or preventing the consummation of the Transactions.

 

SECTION 4. The Company Commitment and Covenants.  (a) The Company agrees:

 

(i)           to support and use its commercially reasonable efforts to complete the Restructuring;

 

(ii)           to use its commercially reasonable best efforts to obtain a Financing Commitment and consummate the transactions contemplated thereunder in sufficient time so as not to delay the consummation of the Plan;

 

(iii)           (A)  in the event of a Prepackaged Case, to use its commercially reasonable efforts to:

 

(1)           commence the Prepackaged Solicitation on or prior to the Target Commencement Date;

 

(2)           complete the Prepackaged Solicitation on or prior to the twentieth (20th) Business Day after the actual date on which the Prepackaged Solicitation is commenced;

 

(3)           commence the Prepackaged Case on or prior to the fifth (5th) Business Day after the completion of the Prepackaged Solicitation (the date of such completion, the “PPS Completion Date”);

 

(4)           take all steps reasonably necessary and desirable to obtain an order of the Bankruptcy Court confirming the Plan on or prior to the forty-fifth (45th) Business Day after the PPS Completion Date; and

 

(5)           take all steps reasonably necessary and desirable to cause the effective date of the Plan to occur on or prior to the fifty-fifth (55th) Business Day after the PPS Completion Date, and

 

(B)           in the event of a Prenegotiated Case, to use its commercially reasonable efforts to:

 

(1)           finalize the Definitive Documents on or prior to Target Commencement Date (the date on which the Definitive Documents are finalized, the “Definitive Documentation Completion Date”);

 

(2)           commence the Prenegotiated Case on or prior to the fifth (5th) Business Day after the Definitive Documentation Completion Date;

 

(3)           take all steps reasonably necessary and desirable to cause the hearing to approve the Disclosure Statement to be held on or prior to the fiftieth (50th) day after the Definitive Documentation Completion Date;

 

(4)           take all steps reasonably necessary and desirable to obtain an order of the Bankruptcy Court confirming the Plan on or prior to the eighty-fifth (85th) day after the Definitive Documentation Completion Date; and

 

(5)           take all steps reasonably necessary and desirable to cause the effective date of the Plan to occur on or prior to the one hundredth (100th) day after the Definitive Documentation Completion Date, and

 

(iv)           to take commercially reasonable efforts to do all things reasonably necessary and appropriate in furtherance of the Restructuring, including, without limitation, contesting  and immediately seeking to dismiss any involuntary chapter 11 proceeding, receivership, or other insolvency proceeding involuntarily commenced against the Company, or converting such proceeding into a chapter 11 proceeding consistent with the terms of this Agreement;

 

(v)           to take commercially reasonable efforts to obtain any and all required and material regulatory and/or third-party approvals for the Restructuring;

 

(vi)           not to commence, with respect to a Prepackaged Case, the Prepackaged Solicitation, and with respect to a Prenegotiated Case, the Chapter 11 Cases, prior to execution and delivery of the IC Acknowledgment by the Requisite Plan Support Parties; and

 

(vii)           within four (4) Business Days of the Agreement Effective Date, file with the Securities and Exchange Commission (a) a Form 8-K disclosing the material terms of the Restructuring, in form and substance reasonably satisfactory to the Company and the Requisite Plan Support Parties and (b) a Form 15 Notice of Suspension of Duty to File Reports under the Exchange Act.

 

(b)           On or prior to the tenth (10th) Business Day prior to the Target Commencement Date, the Company and the Requisite Plan Support Parties shall determine (which determination shall be recorded in writing) whether to effectuate the Restructuring through a Prepackaged Case or a Prenegotiated Case.

 

(c)           The Company shall pay (i) all reasonable fees and out-of-pocket expenses of the financial adviser, if any (subject to a written fee agreement setting forth the terms of such engagement, which shall be reasonably satisfactory to the Company), and the legal advisers (including local counsel) to the Informal Committee of Senior Notes, in the case of Shearman & Sterling LLP, in accordance with the terms of that certain fee letter between HCOC and Shearman & Sterling LLP, dated August 14, 2009, as may be amended from time to time and (ii) all reasonable fees and out-of-pocket expenses of advisers to the Agent and Credit Agreement Lenders.

 

(d)           Nothing in this Agreement shall be deemed to prevent the Company from taking, or refraining from taking, any action that it is obligated to take, or refrain from taking, in the performance of any fiduciary or similar duty which the Board of Directors of the Company owes to any other person, so long as such action (or inaction) is in response to, or in connection with, a Superior Proposal.  The Company, upon the decision of its Board of Directors to take, or refrain from taking, any action, which action or inaction would be contrary to the terms hereof, shall promptly deliver to the counsel to the Informal Committee of Senior Notes a written notice that the Company has elected to exercise its “fiduciary out” rights under this Section 4(d).

 

(e)           The Company shall cause WF Howes Limited to comply with the terms and conditions contained in this Agreement as if such entity were party hereto.

 

SECTION 5. Termination.

 

(a)           This Agreement shall terminate at 10:00 p.m. prevailing Eastern Time on the Outside Date if: (i) a determination has been made pursuant to Section 4(b) to effectuate the Restructuring through a Prepackaged Case and the Prepackaged Solicitation has not been commenced on or before the Outside Date or (ii) a determination has been made pursuant to Section 4(b) to effectuate the Restructuring through a Prenegotiated Case and the IC Acknowledgement for the Definitive Documents has not been finalized on or before the Outside Date.

 

(b)           Automatic Termination in respect of a Prepackaged Case.  If the Prepackaged Solicitation is commenced on or prior to the Outside Date, the occurrence of any of the following events also shall be a “Termination Event”:

 

(i)           if the Prepackaged Solicitation has not been concluded by 11:59 p.m. prevailing Eastern Time on the twenty-fifth (25th) Business Day after the Outside Date;

 

(ii)           if the Company fails to commence the Prepackaged Case by 11:59 p.m. prevailing Eastern Time on the twenty-eighth (28th) Business Day after the Outside Date;

 

(iii)           if the effective date of the Plan does not occur by 11:59 p.m. prevailing Eastern Time on the seventieth (70th) Business Day after the Outside Date;

 

(iv)           if the Company without the consent of the Requisite Plan Support Parties (1) withdraws from or takes any action materially inconsistent with the Plan or the Restructuring (which withdrawal or action, if capable of being reversed, has not been reversed within five (5) days of the giving of written notice by the Requisite Plan Support Parties to the Company), (2) without the consent of the Requisite Plan Support Parties, supports any plan of reorganization other than the Plan or supports any sale process with respect to the Company (or any of its business units), including any sale under section 363 of the Bankruptcy Code, (3) moves to dismiss any of the Chapter 11 Cases, (4) moves for conversion of any of the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, (5) moves for appointment of a trustee or an examiner with expanded powers pursuant to section 1104 of the Bankruptcy Code in any of the Chapter 11 Cases, (6) breaches any material term contained in the Cash Collateral Stipulation (subject to any applicable cure periods) or (7) seeks to reject or otherwise invalidate, in whole or in part, this Agreement; or

 

(v)           if (1) a trustee or an examiner with expanded powers is appointed in any of the Chapter 11 Cases, (2) any of the Chapter 11 Cases is converted to a case under chapter 7 of the Bankruptcy Code or (3) any of the Chapter 11 Cases is dismissed.

 

(c)           Automatic Termination in respect of a Prenegotiated Case.  If the IC Acknowledgement is duly executed and delivered by the Company and the Requisite Plan Support Parties on or prior to the Outside Date, the occurrence of any of the following events shall be a Termination Event:

 

(i)           if the Company fails to commence the Prenegotiated Case by 11:59 p.m. prevailing Eastern Time on the second (2nd) Business Day after the Outside Date;

 

(ii)           if the Bankruptcy Court does not approve the Disclosure Statement and permit solicitation of the Plan by 11:59 p.m. prevailing Eastern Time on the fifty-fifth (55th) day after the Outside Date;

 

(iii)           if the Bankruptcy Court does not confirm the Plan by 11:59 p.m. prevailing Eastern Time on the ninety-fifth (95th) day after the Outside Date;

 

(iv)           if the effective date of the Plan does not occur by 11:59 p.m. prevailing Eastern Time on the hundred tenth (110th) day after the Outside Date;

 

(v)           if the Company without the consent of the Requisite Plan Support Parties (1) withdraws from or takes any action materially inconsistent with the Plan or the Restructuring (which withdrawal or action, if capable of being reversed, has not been reversed within five (5) days of the giving of written notice by the Requisite Plan Support Parties to the Company), (2) without the consent of the Requisite Plan Support Parties, supports any plan of reorganization other than the Plan or supports any sale process with respect to the Company (or any of its business units), including any sale under section 363 of the Bankruptcy Code, (3) moves to dismiss any of the Chapter 11 Cases, (4) moves for conversion of any of the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, (5) moves for appointment of a trustee or an examiner with expanded powers pursuant to section 1104 of the Bankruptcy Code in any of the Chapter 11 Cases, (6) breaches any material term contained in the Cash Collateral Stipulation (subject to any applicable cure periods) or (7) seeks to reject or otherwise invalidate, in whole or in part, this Agreement; or

 

(vi)           if (1) a trustee or an examiner with expanded powers is appointed in any of the Chapter 11 Cases, (2) any of the Chapter 11 Cases is converted to a case under chapter 7 of the Bankruptcy Code or (3) any of the Chapter 11 Cases is dismissed.

 

(d)           This Agreement shall terminate upon the earlier of (i) the date of receipt of any notice delivered pursuant to Section 4(d) hereof and (ii) the date upon which any action is taken or not taken by the Company, which action or inaction is contrary to the terms of this Agreement, in reliance upon Section 4(d) hereof.

 

(e)           Notwithstanding any provision in this Agreement to the contrary, upon the written consent of the Requisite Plan Support Parties and the Company, (i) the dates set forth in Sections 5(b)(i) through (iii) or 5(c)(i) through (iv) may be extended prior to or upon each such date and such later dates agreed to in lieu thereof and shall be of the same force and effect as the dates provided herein; and (ii) the automatic termination of this Agreement pursuant to Sections 5(b)(iv) through (v), 5(c)(v) through (vi) and 5(d) may be reversed by a written notice of the Required Plan Support Parties within three Business Days of the occurrence of any event described therein (in which case the terms of this Agreement shall be reinstated in full as if no such termination had occurred; provided, however, that no Plan Support Party shall be deemed to be in breach of this Agreement as a result of any actions taken (or not taken) between the time of such automatic termination and the delivery of such notice).

 

(f)           Termination Contingent Upon Vote by the Requisite Plan Support Parties.  This Agreement shall terminate and be of no further force or effect upon written notice to the Company from the Requisite Plan Support Parties that:

(i)           the trustee under any of the Indentures, or holders of more than 50% of the face amount of Senior Discount Notes or the Senior Notes, as the case may be (A) have commenced any action or proceeding to collect or recover any amount that is or may become due and payable with respect to such notes in which the movant or movants seeks or seek a judgment lien, a prejudgment lien or attachment or any form of equitable relief (including any injunctive relief) and the Company had not filed for protection under chapter 11 of the Bankruptcy Code as of the date and time of such written notice of termination  or (B) have commenced any other action or proceeding to collect or recover any amount that is or may become due and payable with respect to such notes and an order granting the relief requested in such action or proceeding has been entered by the applicable court; for the avoidance of doubt, issuance of a default letter or reservation of rights letter and/or charging the default rate applicable to the Senior Notes or Senior Discount Notes shall not constitute or be deemed to be an action or proceeding under the immediately preceding provision;

 

(ii)           there has occurred and is continuing any New Event of Default that is not waived by the requisite Credit Agreement Lenders and two (2) Business Days shall have elapsed since Agent’s delivery of written notice to the Company with respect thereto;

 

(iii)           any court of competent jurisdiction or other competent governmental or regulatory authority issues an order making illegal or otherwise restricting, preventing or prohibiting the consummation of the Restructuring contemplated hereby;

 

(iv)           either (1) a filing or commencement by any Filing Entity of (x) any motion, application, adversary proceeding or cause of action challenging the validity, enforceability, perfection or priority of or seeking avoidance of the liens securing the obligations referred to in the Credit Agreement, and related agreements (collectively, the “Secured Obligations”) or (y) any other motion, application, adversary proceeding or cause of action challenging the validity, enforceability, perfection or priority of or seeking the avoidance of the Secured Obligations, or that is adversarial to the Agent or any of the Credit Agreement Lenders (or if the Filing Entities support any such motion, application or adversary proceeding commenced by any third party or consent to the standing of any such third party) or (2) the entry of an order of the Bankruptcy Court providing relief against the interests of any Credit Agreement Lender with respect to any of the foregoing causes of action or proceedings;

 

(v)           a filing by any Filing Entity of any motion, application or adversary proceeding seeking to invalidate or disallow in any respect the claims in respect of the Senior Notes or the Senior Discount Notes;

(vi)           there occurs any change, effect, event, occurrence, development, circumstance or state of facts which has or would reasonably be expected to have a materially adverse effect on the business, properties, operations, financial condition or results of operations of the Company (including its foreign subsidiaries and their respective businesses), taken as a whole or which materially impair the Company’s ability to perform its obligations under this Agreement or have a materially adverse effect on or prevent or materially delay the consummation of the transactions contemplated by this Agreement; provided that in no event shall any of the following, alone or in combination, be taken into account in determining whether there has been or would reasonably likely be, a material adverse effect:  (i) any effect directly resulting from the public announcement of and compliance with the terms and conditions of this Agreement or the transactions contemplated hereby; or (ii) any effect that results from events, circumstances or situations affecting general worldwide economic or capital market conditions, including acts of war, acts of terrorism or natural disasters, so long as such effect does not disproportionately affect the Company (a “Material Adverse Change”); or

 

(vii)           the Company has materially breached any representation, warranty, covenant or agreement contained in this Agreement, which breach (if capable of being cured) has not been cured within five (5) days after the giving of written notice by the Requisite Plan Support Parties to the Company of such breach.

 

(g)           Termination Contingent Upon Determination by the Company.  This Agreement shall terminate and be of no further force or effect upon written notice to the Plan Support Parties from the Company that:

 

(i)           any court of competent jurisdiction or other competent governmental or regulatory authority issues an order making illegal or otherwise restricting, preventing or prohibiting the consummation of the Restructuring contemplated hereby;

 

(ii)           any of the Plan Support Parties has materially breached any representation, warranty, covenant or agreement contained in this Agreement, which breach (if capable of being cured) has not been cured within five (5) days after the giving of written notice by the Company to the Plan Support Parties of such breach; or

 

(iii)           the Company has received, and has accepted, a Superior Proposal.

 

Any termination of this Agreement pursuant to this Section 5 shall constitute a “Termination Event”.  The date on which a Termination Event occurs shall be referred to as the “Termination Date”.  Upon termination of this Agreement, the parties’ respective obligations hereunder shall cease to exist and the parties shall all be restored to the same position that they were in, and shall have the same legal rights that they possessed, immediately prior to their execution and delivery hereof; provided, however, that, no such termination shall relieve any party from liability for its breach or non-performance of its obligations hereunder prior to the date of such termination.  It is expressly agreed that Sections 5, 13, 21, 24, 26, 30 and the second sentence of 27 shall survive termination of this Agreement.

SECTION 6. Transfer of Prepetition Indebtedness.  If, following execution of this Agreement by a Plan Support Party, such Plan Support Party hypothecates, pledges, conveys, transfers, assigns or sells (each, a “Transfer”) all or a part of the Prepetition Indebtedness held by such Plan Support Party to any Person (each such Person, a “Transferee”), such Transferee must, as a condition precedent to such Transfer, execute an assumption in substantially the form set forth hereto as Exhibit B (the “Assumption Agreement”), a fully executed copy of which shall be delivered to the Company and Shearman & Sterling LLP, counsel to the Informal Committee of Senior Notes.  Any Transfer that is made in violation of the immediately preceding sentence shall be null and void.  A Plan Support Party shall notify the Company in writing of any Transfer by it of any Prepetition Indebtedness within five Business Days of the execution of an agreement (or trade confirmation) in respect of such Transfer.

 

SECTION 7. Plan Support Party Representations.  Each Plan Support Party represents and warrants to each other Party that:

 

(a)           as of the date of this Agreement, it is the beneficial owner of the face amount of the Prepetition Indebtedness, or is the nominee, investment manager or advisor for beneficial holders of the Prepetition Indebtedness in the principal amount set forth on its signature page hereto;

 

(b)           subject to Section 28(b) hereof, there is no Prepetition Indebtedness of which it or any affiliate is the beneficial owner, or is the nominee, investment manager or advisor for beneficial holders thereof, that are not set forth on the signature page hereto;

 

(c)           other than pursuant to this Agreement, such Prepetition Indebtedness is free and clear of any pledge, lien, security interest, charge, claim, equity, option, proxy, voting restriction, right of first refusal or other limitation on disposition or encumbrances of any kind, that would adversely affect in any way such Plan Support Party’s performance of its obligations contained in this Agreement at the time such obligations are required to be performed;

 

(d)           as of the date of this Agreement, such Party is duly organized, validly existing, and in good standing under the laws of the state of its organization (to the extent applicable to such type of organization), and has all requisite corporate, partnership, or limited liability company power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement; and

 

(e)           assuming the due execution and delivery of this Agreement by the Company, this Agreement is the legally valid and binding obligation of it, enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency, or similar laws, or by equitable principles relating to or limiting creditors’ rights generally.

SECTION 8. Cooperation of the Parties.  The Informal Committee of Senior Notes is hereby authorized by each Plan Support Party to continue to pursue and negotiate the terms of the Restructuring and the Definitive Documents containing terms substantially in accordance with the terms set forth in the Term Sheet.  Subject to the occurrence of the Agreement Effective Date and until the occurrence of the Termination Date (if applicable), the Parties will (x) negotiate in good faith the definitive documentation necessary to implement the Restructuring, which shall be, in all material respects, substantially in accordance with the terms and conditions contained in the Term Sheet, and (y) act in good faith to support the implementation and documentation of the Restructuring.  Without limiting the generality of the foregoing, prior to the commencement of and during the Chapter 11 Cases, the Company shall use its commercially reasonable efforts to provide advance draft copies of all substantive motions or applications, requests for relief, objections, responses, replies and other documents the Company intends to file with the Bankruptcy Court (each a “Bankruptcy Court Filing”) to counsel for the Informal Committee of Senior Notes at least three (3) Business Days prior to the date when the Company intends to file any such document, and one (1) Business Day prior to the date when the Company intends to file any procedural motions, and shall consult in good faith with counsel to the Informal Committee of Senior Notes regarding the form and substance of any such proposed filing with the Bankruptcy Court, and shall refrain from making public or filing with a Bankruptcy Court any Bankruptcy Court Filing without the prior consent of the Requisite Plan Support Parties, which consent will not be unreasonably withheld, conditioned or delayed; provided, that if the Company cannot meet its obligations to provide such advance notice, it shall use commercially reasonable efforts to provide as much notice as possible.

 

SECTION 9. Service on Official Committee.  Notwithstanding anything herein to the contrary, if a Plan Support Party is appointed to and serves on an official committee in the Chapter 11 Cases, the terms of this Agreement shall not be construed to limit such Plan Support Party’s exercise of its fiduciary duties in its role as a member of such committee, and any exercise of such fiduciary duties shall not be deemed to constitute a breach of the terms of this Agreement; provided, however, that serving as a member of such committee shall not relieve the Plan Support Party of any obligations to vote in favor of the Plan; provided further that nothing in this Agreement shall be construed as requiring any Plan Support Party to serve on any official committee in the Chapter 11 Cases.

 

SECTION 10. Certification of Definitive Documents.  Prior to the commencement of the Prepackaged Solicitation, or prior to the final agreement of the Definitive Documents, in the event of a Prenegotiated Case, upon the agreement of the Company and the Requisite Plan Support Parties that the Definitive Documents are in final form, the Company and the Requisite Plan Support Parties shall enter into a written intercreditor acknowledgment substantially in the form attached hereto as Exhibit C (the “IC Acknowledgment”), confirming that the documents attached thereto are in final form and are consistent with the terms set forth in the Term Sheet.  Such determination and delivery of the IC Acknowledgment by the Parties shall not be unreasonably withheld, conditioned or delayed by any of the Parties.

 

SECTION 11. Exclusivity.  Except as expressly set forth herein (including, without limitation, under Section 4(d) hereof), neither the Company nor any of its Representatives will, other than to, from or with respect to the Informal Committee of Senior Notes:  (x) solicit, initiate, encourage or accept any inquiries, proposals or offers from any Person (i) relating to financial restructuring of the Company or any of its subsidiaries or the debt thereof or (ii) enter into any other extraordinary business transaction involving or otherwise relating to the Company; or (y) participate in any discussions, conversations, negotiations or other communications with any other Person regarding, or furnish to any other Person any information with respect to, or otherwise cooperate in any way, assist or participate in, facilitate or encourage any effort or attempt by any Person to seek to do any of the foregoing.

SECTION 12. The Company Representations.  The Company represents to each other Party that:

 

(a)           as of the date of this Agreement, it is duly organized, validly existing, and in good standing under the laws of the state of its organization, and has all requisite corporate, partnership, or limited liability company power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;

 

(b)           assuming the due execution and delivery of this Agreement by the Plan Support Parties, this Agreement is the legally valid and binding obligation of it, enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency, or similar laws, or by equitable principles relating to or limiting creditors’ rights generally;

 

(c)           as of the date of this Agreement, it is not aware of any event that, due to any fiduciary or similar duty to any other person, is reasonably expected to prevent it from taking any action required of it under this Agreement;

 

(d)           as of the date of this Agreement, it is not aware of any “Event of Default” under the Credit Agreement that is not the subject of a Specified Forbearance Item; and

 

(e)           as of the date of this Agreement, it is not aware of any event or circumstance that is reasonably expected to (including with the passage of time) give rise to a termination of, or the ability to terminate, this Agreement under Sections 5(b)(iv), (v), 5(c)(v), (vi) or 5(f) hereof.

 

SECTION 13. Entire Agreement; Conflict.  This Agreement, including schedules and annexes, constitutes the entire agreement of the Parties with respect to the subject matter of this Agreement, and supersedes all other prior negotiations, agreements and understandings, whether written or oral, among the Parties with respect to the subject matter of this Agreement; provided, however, that any confidentiality agreement executed by any Plan Support Party shall survive this Agreement and shall continue to be in full force and effect, in accordance with the terms thereof, irrespective of the terms hereof; provided further that the Parties shall enter into various Definitive Documents to give effect to the transactions contemplated in this Agreement.  Notwithstanding the foregoing, nothing in this Agreement shall be deemed a waiver of any obligations of the Company under the covenants set forth in the Prepetition Indebtedness documents.  In the event that any terms hereof conflict with the terms contained in the Credit Agreement or any of the Indentures, this Agreement shall govern.

 

SECTION 14. Survival of Agreement.  Each of the Parties acknowledges and agrees: (a) that this Agreement is being executed in connection with negotiations concerning a possible financial restructuring of the Company and in contemplation of the Chapter 11 Cases; and (b) it is the intention of the Parties that, to the fullest extent permitted under applicable law, the rights granted in this Agreement are enforceable by each signatory hereto without approval of the Bankruptcy Court.

SECTION 15. Acquisition of Additional Debt.  This Agreement shall in no way be construed to preclude any Plan Support Party from acquiring additional Prepetition Indebtedness; provided, however, that any such additional Prepetition Indebtedness automatically shall be deemed to be subject to the terms of this Agreement and the representation contained in Section 7 hereof shall be deemed to have been made with respect to any Prepetition Indebtedness acquired by a Plan Support Party after the date hereof.  A Plan Support Party shall notify the Company and counsel for the Informal Committee of Senior Notes, in writing, of any Prepetition Indebtedness acquired by it within five (5) Business Days of the execution of an agreement (or trade confirmation) in respect of such acquisition.

 

SECTION 16. Public Announcements.  Except as required by applicable law or regulation, or the rules of any applicable stock exchange or regulatory body, or in filings to be made with the Bankruptcy Court (which shall be governed by Section 8 of this Agreement), neither the Company nor the Plan Support Parties shall, nor shall they permit any of their respective affiliates to, make any public announcement or otherwise communicate with any news media in respect of this Agreement or the transactions contemplated hereby or by the Definitive Documents without the prior written consent of such parties (which consent shall not be unreasonably withheld or delayed); provided, however, that notwithstanding the foregoing, the Company may issue one or more press releases or filings with the Securities and Exchange Commission related to the execution and delivery of this Agreement and the transactions contemplated hereby and shall provide a draft copy thereof at least one (1) Business Day prior to its dissemination or release and reasonably consult with counsel to the Informal Committee of Senior Notes with respect to the text thereof.  The foregoing shall not prohibit the Company from disclosing the existence of this Agreement or the approximate aggregate holdings of Prepetition Indebtedness by the Plan Support Parties as a group.

 

SECTION 17. Waiver.  If the transactions contemplated herein are not consummated, or following the occurrence of the Termination Date, if applicable, nothing shall be construed herein as a waiver by any Party of any or all of such Party’s rights and the Parties expressly reserve any and all of their respective rights.  Pursuant to Federal Rule of Evidence 408 and any other applicable rules of evidence, this Agreement and all negotiations relating hereto shall not be admissible into evidence in any proceeding other than a proceeding to enforce its terms.

 

SECTION 18. Counterparts.  This Agreement may be executed in one or more counterparts, each of which, when so executed, shall constitute the same instrument and the counterparts may be delivered by facsimile transmission or by electronic mail in portable document format (.pdf).

 

SECTION 19. Amendments. Except as otherwise provided herein, this Agreement may not be modified, amended or supplemented without the prior written consent of the Company and the Requisite Plan Support Parties.

 

SECTION 20. Headings.  The headings of the sections, paragraphs, subsections and subparagraphs of this Agreement are inserted for convenience only and shall not affect the interpretation hereof.

SECTION 21. Specific Performance.  It is understood and agreed by the Parties that money damages would be an insufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief as a remedy of any such breach, including, without limitation, an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder.

 

SECTION 22. Relationship Among Parties.  Notwithstanding anything herein to the contrary, the duties and obligations of the Plan Support Parties under this Agreement shall be several, not joint.  Furthermore, it is understood and agreed that no Plan Support Party has any duty of trust or confidence in any form with any other Plan Support Party, and there are no commitments among or between them.  In this regard, it is understood and agreed that any Plan Support Party may trade in the Prepetition Indebtedness or other debt or equity securities of the Company without the consent of the Company or any other Plan Support Party, subject to applicable securities laws and Sections 6 and 15 of this Agreement.  No Plan Support Party shall have any responsibility for any such trading by any other entity by virtue of this Agreement.  No prior history, pattern or practice of sharing confidences among or between Plan Support Parties shall in any way affect or negate this understanding and agreement.

 

SECTION 23. Severability.  Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement 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 Agreement.

 

SECTION 24. Governing Law, Consent to Jurisdiction; and Waiver of Jury Trial.

 

(a)           This Agreement will be governed by, and construed in accordance with, the laws of the State of New York.  By its execution and delivery of this Agreement, the Parties irrevocably and unconditionally agree that any legal action, suit or proceeding against it with respect to any matter arising 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 the United States District Court for the Southern District of New York, and by execution and delivery of this Agreement, the Parties irrevocably accept and submit themselves to the exclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding.  Notwithstanding the foregoing consent to New York jurisdiction, if the Chapter 11 Cases are commenced, the Parties agree that the Bankruptcy Court will have exclusive jurisdiction of all matters arising out of or in connection with this Agreement.

 

(b)           THE PARTIES IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

SECTION 25. Notices.  All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally or by facsimile transmission or mailed (first class postage prepaid) to the parties at the following addresses or facsimile numbers:

 

If to a Plan Support Party, to the address set forth beneath such Plan Support Party’s name below, with a copy to:

 

If to the Informal Committee of Senior Noteholders:

 

Shearman & Sterling LLP

599 Lexington Avenue

New York, NY 10022

Attn:       Andrew V. Tenzer, Esq.

Michael H. Torkin, Esq.

Telephone:   ###-###-####

Facsimile:   ###-###-####

 

If to Agent under the Credit Agreement:

 

David Ruediger

Edwards Angell Palmer & Dodge LLP

111 Huntington Avenue

Boston, MA  02199-7613

Tel:  617 ###-###-####

Fax: 617 ###-###-####

Email:   ***@***

 

Beth Duggan

Senior Legal Counsel

DDJ Capital Management, LLC

130 Turner Street

Building 3, Suite 600

Waltham, MA 02453

Telephone No.: 781 ###-###-####

Fax No.: 781 ###-###-####

Email: ***@***

 

If to the Company:

 

Haights Cross Communications, Inc.

10 New King Street

Suite 102

White Plains, NY 10604

Attn:  Paul J. Crecca, President and Chief Executive Officer

Telephone:   ###-###-####

Facsimile:   ###-###-####

with a copy to:

 

Brown Rudnick LLP

One Financial Center

Boston, MA 02111

Attn:     Philip J. Flink, Esq.

  Steven D. Pohl, Esq.

Telephone:   ###-###-####

Facsimile:   ###-###-####

 

SECTION 26. Assignment; No Third-Party Beneficiaries.  The terms and provisions of this Agreement are intended solely for the benefit of the Parties hereto and their respective successors and permitted assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any other person.

 

SECTION 27. Access to Information.  The Company shall, and shall cause its Representatives, financial advisers, investment bankers and counsel to afford the Plan Support Parties, potential financing sources and their respective authorized Representatives and legal and financial advisers reasonable access to the Company’s management, offices, properties, book and records for purposes of undertaking due diligence, evaluating the Company’s business plan and participation in the Plan process; provided, that if in the reasonable judgment of counsel to the Company such access would void the right of the Company to maintain attorney-client, attorney work product or any other applicable privilege as to non-disclosure of information, then denial of such access shall not be a breach of this Agreement.  To the extent such information is provided to the  Credit Agreement Lenders it will be deemed subject to the confidentiality provisions of the Credit Agreement, and any other Plan Support Party shall execute a confidentiality agreement with the Company on comparable terms and conditions.

 

SECTION 28. Acknowledgment.  (a) This Agreement is not and shall not be deemed to be, under applicable law, a solicitation for acceptance of the Plan.

 

(b)           The Parties acknowledge that all representations, warranties and covenants made by any Plan Support Party on behalf of the accounts that it manages are being made only with respect to the Prepetition Indebtedness held in such accounts, and shall not apply to (or be deemed to be made in relation to) any Prepetition Indebtedness that may be beneficially owned by the entity on whose behalf such accounts are managed that are not held through such accounts.

 

(c)           Each Plan Support Party acknowledges that this Agreement modifies certain rights and remedies it may have under the Credit Agreement or the Indentures, and hereby agrees that it shall not attempt to exercise any rights or remedies under the Credit Agreement or the Indentures (or instruct the Agent or the indenture trustees to the Indentures to exercise any such rights or remedies) in contravention of the terms hereof.

 

SECTION 29. Further Assurances.  All of the parties hereto shall execute such documents and use commercially reasonable efforts to perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations or other actions by, or giving any notices to, or making any filings with, any governmental authority or any other person) as may be reasonably required or desirable to consummate the Restructuring/

SECTION 30. Indemnification.  The Company hereby agrees to indemnify and hold harmless the Plan Support Parties and/or the accounts the Plan Support Parties manage or advise, and each of their respective affiliates, officers, directors, members, partners, employees, agents, advisers, attorneys, and representatives (each an “Indemnified Party”) from and against any and all claims (of the Company or any third party), damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel) that may be suffered or incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with or in relation to any investigation, litigation or proceeding) arising out of or in connection with this Agreement or the Transactions, except to the extent such claims, damages, losses, liabilities or expenses are found in a final non-appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence, bad faith or willful misconduct.  The foregoing indemnity shall survive termination of this Agreement and shall constitute a joint and several obligation of each entity constituting the “Company” as defined herein.

IN WITNESS WHEREOF, the Company and the Plan Support Parties have executed this Agreement as of the date first written above.