-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BzrAYnU5QVEzsqELPHsI1WGNJ0kuVnMhg/rdR74RmR4P/D1K4eTZ7uw4PNlM/6sV DMIVtEqcdBs3UWwKWZUXwQ== 0000950123-03-006874.txt : 20030606 0000950123-03-006874.hdr.sgml : 20030606 20030606163315 ACCESSION NUMBER: 0000950123-03-006874 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 18 FILED AS OF DATE: 20030606 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MEDIA DISTRIBUTION & MARKETING GROUP INC CENTRAL INDEX KEY: 0001171634 IRS NUMBER: 650963860 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-17 FILM NUMBER: 03736144 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL EXAMINER INC CENTRAL INDEX KEY: 0001171635 IRS NUMBER: 650963855 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-07 FILM NUMBER: 03736134 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MEDIA PROPERTY GROUP INC CENTRAL INDEX KEY: 0001171636 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-16 FILM NUMBER: 03736143 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MEDIA MINI MAGS INC CENTRAL INDEX KEY: 0001171637 IRS NUMBER: 650963854 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-15 FILM NUMBER: 03736142 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MEDIA NEWSPAPER GROUP INC CENTRAL INDEX KEY: 0001171638 IRS NUMBER: 650963864 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-14 FILM NUMBER: 03736141 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYL COMMUNICATIONS CENTRAL INDEX KEY: 0001238801 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-01 FILM NUMBER: 03736128 BUSINESS ADDRESS: STREET 1: C/O AMERICAN MEDIA INC STREET 2: 1000 AMERICAN MEDIA WAY CITY: BOCA RATON STATE: FL ZIP: 33464 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: C/O AMERICAN MEDIA INC STREET 2: 1000 AMERICAN MEDIA WAY CITY: BOCA RATON STATE: FL ZIP: 33464 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEIDER PUBLICATIONS LLC CENTRAL INDEX KEY: 0001238802 IRS NUMBER: 753091848 STATE OF INCORPORATION: CA FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-02 FILM NUMBER: 03736129 BUSINESS ADDRESS: STREET 1: C/O AMERICAN MEDIA INC STREET 2: 1000 AMERICAN MEDIA WAY CITY: BOCA RATON STATE: FL ZIP: 33464 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: C/O AMERICA MEDIA INC STREET 2: 1000 AMERICAN MEDIA WAY CITY: BOCA RATON STATE: FL ZIP: 33464 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMI FILM INC CENTRAL INDEX KEY: 0001238808 IRS NUMBER: 522377127 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-03 FILM NUMBER: 03736130 BUSINESS ADDRESS: STREET 1: C/O AMERICAN MEDIA INC STREET 2: 1000 AMERICAN MEDIA WAY CITY: BOCA RATON STATE: FL ZIP: 33464 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: C/O AMERICAN MEDIA INC STREET 2: 1000 AMERICAN MEDIA WAY CITY: BOCA RATON STATE: FL ZIP: 33464 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMI BOOKS INC CENTRAL INDEX KEY: 0001238812 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-04 FILM NUMBER: 03736131 BUSINESS ADDRESS: STREET 1: C/O AMERICAN MEDIA INC STREET 2: 1000 AMERICAN MEDIA WAY CITY: BOCA RATON STATE: FL ZIP: 33464 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: C/O AMERICAN MEDIA INC STREET 2: 1000 AMERICAN MEDIA WAY CITY: BOCA RATON STATE: FL ZIP: 33464 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STAR EDITORIAL INC CENTRAL INDEX KEY: 0000853934 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 592719233 STATE OF INCORPORATION: DE FISCAL YEAR END: 0326 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-05 FILM NUMBER: 03736132 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FORMER COMPANY: FORMER CONFORMED NAME: VIDEO DIGEST INC DATE OF NAME CHANGE: 19910920 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COUNTRY MUSIC MEDIA GROUP INC CENTRAL INDEX KEY: 0001091526 IRS NUMBER: 650462019 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-13 FILM NUMBER: 03736140 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33464 FORMER COMPANY: FORMER CONFORMED NAME: COUNTRY WEEKLY INC DATE OF NAME CHANGE: 19990721 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AM AUTO WORLD WEEKLY INC CENTRAL INDEX KEY: 0001171629 IRS NUMBER: 650963857 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-20 FILM NUMBER: 03736147 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MEDIA CONSUMER ENTERTAINMENT INC CENTRAL INDEX KEY: 0001171630 IRS NUMBER: 650963852 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-19 FILM NUMBER: 03736146 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MEDIA CONSUMER MAGAZINE GROUP INC CENTRAL INDEX KEY: 0001171631 IRS NUMBER: 650963863 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-18 FILM NUMBER: 03736145 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLOBE EDITORIAL INC CENTRAL INDEX KEY: 0001171632 IRS NUMBER: 650963859 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-10 FILM NUMBER: 03736137 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIRAL EDITORIAL INC CENTRAL INDEX KEY: 0001171633 IRS NUMBER: 650963841 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-09 FILM NUMBER: 03736136 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLOBE COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000041870 IRS NUMBER: 362702593 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-11 FILM NUMBER: 03736138 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MEDIA OPERATIONS INC CENTRAL INDEX KEY: 0000853927 STANDARD INDUSTRIAL CLASSIFICATION: PERIODICALS: PUBLISHING OR PUBLISHING AND PRINTING [2721] IRS NUMBER: 650203383 STATE OF INCORPORATION: DE FISCAL YEAR END: 0329 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925 FILM NUMBER: 03736127 BUSINESS ADDRESS: STREET 1: 600 SOUTHEAST COAST AVE CITY: LANTANA STATE: FL ZIP: 33462 BUSINESS PHONE: 5615401000 MAIL ADDRESS: STREET 1: 600 SOUTH EAST COAST AVE CITY: LANTANA STATE: FL ZIP: 33462 FORMER COMPANY: FORMER CONFORMED NAME: ENQUIRER STAR INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: GP GROUP INC DATE OF NAME CHANGE: 19910815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL ENQUIRER INC CENTRAL INDEX KEY: 0000853928 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 582764097 STATE OF INCORPORATION: FL FISCAL YEAR END: 0327 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-08 FILM NUMBER: 03736135 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619891225 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DISTRIBUTION SERVICES INC CENTRAL INDEX KEY: 0000853930 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 591641185 STATE OF INCORPORATION: DE FISCAL YEAR END: 0326 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-12 FILM NUMBER: 03736139 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NDSI INC CENTRAL INDEX KEY: 0000853933 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 592632066 STATE OF INCORPORATION: DE FISCAL YEAR END: 0325 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-105925-06 FILM NUMBER: 03736133 BUSINESS ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 5619977733 MAIL ADDRESS: STREET 1: 190 CONGRESS PARK DRIVE STREET 2: SUITE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 S-4 1 y86871sv4.txt FORM S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 6, 2003 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- AMERICAN MEDIA OPERATIONS, INC. (Exact Name of Registrant as Specified In Its Charter) DELAWARE 2721 59-2094424 (State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer of Incorporation or Organization) Classification Code Number) Identification Number)
1000 AMERICAN MEDIA WAY BOCA RATON, FLORIDA 33464 (561) 997-7733 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) MICHAEL B. KAHANE 1000 AMERICAN MEDIA WAY BOCA RATON, FLORIDA 33464 (561) 997-7733 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) --------------------- WITH A COPY TO: JOHN B. TEHAN, ESQ. SIMPSON THACHER & BARTLETT LLP 425 LEXINGTON AVENUE NEW YORK, NEW YORK 10017 (212) 455-2000 --------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. --------------------- If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act Registration number of the earlier effective Registration Statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Registration Statement number of the earlier effective Registration Statement for the same offering. [ ] CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED PER NOTE PRICE(1) REGISTRATION FEE - --------------------------------------------------------------------------------------------------------------------------- 8 7/8% Senior Subordinated Notes due 2011........................ $150,000,000 100% $150,000,000 $12,135 - --------------------------------------------------------------------------------------------------------------------------- Guarantee of 8 7/8% Senior Subordinated Notes due 2011(2)......................... $150,000,000 100% $150,000,000 (3) - --------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee. (2) See inside facing page for additional registrant guarantors. (3) Pursuant to Rule 457(n) under the Securities Act of 1933, as amended, no separate fee for the Guarantee is payable. THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TABLE OF ADDITIONAL REGISTRANT GUARANTORS
EXACT NAME OF REGISTRANT STATE OR OTHER JURISDICTION OF I.R.S. EMPLOYER GUARANTOR AS SPECIFIED IN ITS CHARTER INCORPORATION OR ORGANIZATION IDENTIFICATION NUMBER - ------------------------------------- ------------------------------ --------------------- AM Auto World Weekly, Inc. Delaware 65-0963857 American Media Consumer Entertainment Delaware 65-0963852 Inc. American Media Consumer Magazine Delaware 65-0963863 Group, Inc. American Media Distribution & Delaware 65-0963860 Marketing Group, Inc. American Media Property Group, Inc. Delaware 01-0704153 American Media Mini Mags, Inc. Delaware 65-0963854 American Media Newspaper Group, Inc. Delaware 65-0963864 Country Music Media Group, Inc. Delaware 65-0462019 Distribution Services, Inc. Delaware 59-1641185 Globe Communications Corp. Delaware 36-2702593 Globe Editorial, Inc. Delaware 65-0963859 Mira! Editorial, Inc. Delaware 65-0963841 National Enquirer, Inc. Florida 59-2764097 National Examiner, Inc. Delaware 65-0963855 NDSI, Inc. Delaware 59-2632066 Star Editorial, Inc. Delaware 59-2719233 ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER EXACT NAME OF REGISTRANT INCLUDING AREA CODE, OF REGISTRANT GUARANTOR AS SPECIFIED IN ITS CHARTER GUARANTOR'S PRINCIPAL EXECUTIVE OFFICES - ------------------------------------- --------------------------------------- AM Auto World Weekly, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 American Media Consumer Entertainment 1000 American Media Way Inc. Boca Raton, FL 33464 (561) 997-7733 American Media Consumer Magazine 1000 American Media Way Group, Inc. Boca Raton, FL 33464 (561) 997-7733 American Media Distribution & 1000 American Media Way Marketing Group, Inc. Boca Raton, FL 33464 (561) 997-7733 American Media Property Group, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 American Media Mini Mags, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 American Media Newspaper Group, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 Country Music Media Group, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 Distribution Services, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 Globe Communications Corp. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 Globe Editorial, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 Mira! Editorial, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 National Enquirer, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 National Examiner, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 NDSI, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 Star Editorial, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733
EXACT NAME OF REGISTRANT STATE OR OTHER JURISDICTION OF I.R.S. EMPLOYER GUARANTOR AS SPECIFIED IN ITS CHARTER INCORPORATION OR ORGANIZATION IDENTIFICATION NUMBER - ------------------------------------- ------------------------------ --------------------- AMI Books, Inc. Delaware 52-2377122 AMI Films, Inc. Delaware 52-2377127 Weider Publications, LLC Delaware 75-3091848 SYL Communications California 95-4262903 ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER EXACT NAME OF REGISTRANT INCLUDING AREA CODE, OF REGISTRANT GUARANTOR AS SPECIFIED IN ITS CHARTER GUARANTOR'S PRINCIPAL EXECUTIVE OFFICES - ------------------------------------- --------------------------------------- AMI Books, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 AMI Films, Inc. 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 Weider Publications, LLC 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733 SYL Communications 1000 American Media Way Boca Raton, FL 33464 (561) 997-7733
The information in this prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JUNE 6, 2003 PROSPECTUS $150,000,000 American Media Operations, Inc. OFFER TO EXCHANGE OF $150,000,000 8 7/8% SENIOR SUBORDINATED NOTES DUE 2011, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, FOR ANY AND ALL 8 7/8% SENIOR SUBORDINATED NOTES DUE 2011 Material Terms of the Exchange Offer - The exchange offer expires at 5:00 p.m., New York City time, on , 2003, unless extended. - The exchange notes to be issued shall be exchanged for up to all of our outstanding 8 7/8% Senior Subordinated Notes due 2011. - The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange. - All outstanding notes that are validly tendered and not validly withdrawn will be exchanged. - Tenders of outstanding notes may be withdrawn any time prior to the expiration of the exchange offer. - The exchange of outstanding notes should not be a taxable exchange for U.S. federal income tax purposes. - We will not receive any proceeds from the exchange offer. - The terms of the exchange notes to be issued are substantially identical to the outstanding notes, except for certain transfer restrictions and registration rights relating to the outstanding notes. YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 15 OF THIS PROSPECTUS BEFORE PARTICIPATING IN THIS EXCHANGE OFFER. --------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------------- The date of this prospectus is , 2003. No dealer, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the securities to which it relates or any offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs since the date hereof or that the information contained herein is correct as of any time subsequent to its date. Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the consummation of the exchange offer, it will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." TABLE OF CONTENTS
PAGE ---- ABOUT THIS PROSPECTUS....................................... ii FORWARD-LOOKING STATEMENTS.................................. ii WHERE YOU CAN FIND ADDITIONAL INFORMATION................... iii INCORPORATION BY REFERENCE.................................. iii INDUSTRY DATA AND CIRCULATION INFORMATION................... iii SUMMARY..................................................... 1 RISK FACTORS................................................ 15 USE OF PROCEEDS............................................. 26 CAPITALIZATION.............................................. 26 UNAUDITED PRO FORMA FINANCIAL INFORMATION................... 27 THE EXCHANGE OFFER.......................................... 30 DESCRIPTION OF OTHER INDEBTEDNESS........................... 41 DESCRIPTION OF THE EXCHANGE NOTES........................... 44 CERTAIN U.S. FEDERAL TAX CONSEQUENCES....................... 82 PLAN OF DISTRIBUTION........................................ 86 LEGAL MATTERS............................................... 87 EXPERTS..................................................... 87 CHANGE IN ACCOUNTANTS....................................... 87
i ABOUT THIS PROSPECTUS American Media Operations, Inc. is a Delaware corporation. Our principal executive offices are located at 1000 American Media Way, Boca Raton, Florida 33464 and our telephone number is (561) 997-7733. Unless the context otherwise requires, in this prospectus: - "we," "us," "our" and the "Company" refer to American Media Operations, Inc. and its subsidiaries, - "Holdings" refers to American Media, Inc., our parent company, - "Weider" refers to Weider Publications, LLC and its subsidiaries, and - "Acquisition" refers to the acquisition of Weider. FORWARD-LOOKING STATEMENTS Some of the information presented or incorporated by reference in this prospectus constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including, in particular, the statements about our plans, strategies and prospects under the heading "Summary" included in this prospectus and under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" incorporated by reference in this prospectus. We have used the words "may," "will," "expect," "anticipate," "believe," "estimate," "plan," "intend," and similar expressions to identify forward-looking statements. We have based these forward-looking statements on our current assumptions, expectations and projections about future events. We caution you that a variety of factors could cause business conditions and results to differ materially from what is contained in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions about us, including, among other things: - our high degree of leverage and significant debt service obligations, - our ability to increase circulation and advertising revenues, - market conditions for our publications, - our ability to develop new publications and services, - outcomes of pending and future litigation, - the effects of terrorism, including bioterrorism, on our business, - increasing competition by domestic and foreign media companies, - increased costs and business disruption resulting from diminished service levels from our wholesalers, - the introduction and increased popularity over the long term of alternative technologies for the provision of news and information, - declines in spending levels by advertisers and consumers, - the ability in a challenging environment to continue to develop new sources of circulation, - lower than expected valuations associated with cash flows and revenues may result in the inability to realize the value of recorded intangibles and goodwill. - changes in the cost of paper used by us, - any future changes in our management, and - general risks associated with the publishing industry. ii You should not put undue reliance on any forward-looking statements. You should understand that many important factors, including those discussed under the heading "Risk Factors" included in this prospectus and the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" incorporated by reference in this prospectus, could cause our results to differ materially from those expressed or suggested in any forward-looking statements. These forward-looking statements speak only as of the date of this prospectus, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. WHERE YOU CAN FIND ADDITIONAL INFORMATION We are subject to the information requirements of the Exchange Act and, in accordance therewith, file reports and other information with the Securities and Exchange Commission. Such reports and other information can be inspected and copied at the Public Reference Section of the SEC located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549 and at regional public reference facilities maintained by the SEC located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials can be obtained from the Public Reference Section of the SEC at prescribed rates. Such materials may also be accessed electronically by means of the SEC's home page on the Internet (http://www.sec.gov). We, together with the subsidiary guarantors, have filed a registration statement on Form S-4 to register with the SEC the exchange notes to be issued in exchange for the outstanding notes. This prospectus is part of that registration statement. As allowed by the SEC's rules, this prospectus does not contain all of the information you can find in the registration statement or the exhibits to the registration statement. INCORPORATION BY REFERENCE Rather than include certain information in this prospectus that we have already included in reports filed with the SEC, we are incorporating this information by reference, which means that we can disclose important information to you by referring to those publicly filed documents containing the information. This information incorporated by reference is considered to be part of this prospectus, and future information that we file with the SEC after the date of this prospectus and prior to the termination of the exchange offer will automatically update and supersede the information in this prospectus. We incorporate by reference our Annual Report on Form 10-K for the fiscal year ended March 31, 2003 and our Current Report on Form 8-K filed on June 6, 2003 and any future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act until all the notes offered under this prospectus are sold. --------------------- INDUSTRY DATA AND CIRCULATION INFORMATION Information contained in this prospectus concerning publishing industry data, circulation information, rankings, readership information (e.g., multiple readers per copy) and other industry and market information, including our general expectations concerning the publishing industry, are based on estimates prepared by us based on certain assumptions and our knowledge of the publishing industry as well as data from various third party sources. These sources include, but are not limited to, the report of the Audit Bureau of Circulations ("ABC"), BPA Circulation Statements, Statement of Ownership figures filed with the U.S. Postal Service, Mediamark Research Inc. ("MRI") syndicated research data and Veronis Suhler Stevenson research data. While we are not aware of any misstatements regarding any industry data presented in this prospectus we have not independently verified any of the data from any of these sources and, as a result, this data may be imprecise. Our estimates, in particular as they relate to our general expectations concerning the publishing industry, involve risks and uncertainties and are subject to change based on various factors. Unless otherwise indicated, all average weekly circulation information for our tabloid publications is an average of actual weekly single copy circulation for the fiscal year ended March 31, 2003. Unless otherwise indicated, all average circulation information for Weider's publications is an average of actual per issue circulation for the twelve months ended March 31, 2003. All references to "circulation" are to single copy and subscription circulation, unless otherwise specified. iii SUMMARY This summary highlights information contained elsewhere in, or incorporated by reference in, this prospectus. You should read all the information contained or incorporated by reference in this prospectus carefully, including the information under the heading "Risk Factors" and the financial information included elsewhere in, or incorporated by reference in, this prospectus. All references to a particular fiscal year are to the four fiscal quarters ended the last Monday in March of the fiscal year specified. AMERICAN MEDIA OPERATIONS, INC. OVERVIEW We are a leading publisher in the field of general interest magazines, publishing National Enquirer, Star, Globe, National Examiner, Weekly World News, Sun, Country Weekly, Country Music Magazine, MIRA!, Auto World Magazine and other smaller monthly publications with a current aggregate weekly circulation of approximately 5.2 million copies. National Enquirer, Star, and Globe, our premier titles, have the third, fourth and sixth highest weekly single copy circulation, respectively, of any weekly periodical in the United States. We are the leader in total weekly single copy circulation of magazines in the United States and Canada with approximately 35% of total U.S. and Canadian circulation for audited weekly publications. We derive approximately 79% of our revenues from circulation, predominantly single copy sales in retail outlets, and the remainder from advertising and other sources. National Enquirer, Star, Globe and National Examiner are distributed in approximately 150,000 retail outlets in the United States and Canada, representing, in the opinion of management, substantially complete coverage of periodical outlets in these countries. Distribution Services, Inc. ("DSI"), our subsidiary, arranges for the placement and merchandising of our publications and third-party publications at retail outlets throughout the United States and Canada. In addition, DSI provides marketing, merchandising and information-gathering services for third parties. Our tabloid publications are among the most well-known and widely distributed titles in the publishing industry. While our tabloid publications have a current aggregate weekly newsstand circulation of approximately 4.3 million copies, they enjoy a weekly readership of over 27 million people due to multiple readers per copy sold. Our other titles (including the Mini Mags, Micro Mags and Digests) contribute an additional readership of over 21 million, giving our titles a total readership in excess of 48 million. As a result, we believe our publications enjoy strong consumer brand awareness with a large and loyal readership base. On January 23, 2003, we acquired Weider Publications, LLC, a privately held company controlled by Weider Health and Fitness. Weider is the leading worldwide publisher of health and fitness magazines, with a total estimated readership of 25 million in the United States, more than any other publisher in the health and fitness category. The health and fitness category is the fastest growing advertising segment of special interest magazines. Weider currently publishes seven magazines, including Muscle & Fitness, Shape, Men's Fitness, Muscle & Fitness Hers, Flex, Fit Pregnancy and Natural Health, with an aggregate average circulation of approximately 4 million copies. Our publications include the following titles: - National Enquirer is a weekly celebrity focused publication with an editorial content devoted to investigative reporting, celebrities and features, human interest stories and articles covering lifestyle topics such as health, food and household affairs. National Enquirer is the third highest selling weekly periodical based on U.S., Canadian and U.K. single copy circulation. We sell on average 1.4 million single copies of National Enquirer per week in the United States, Canada and the United Kingdom. National Enquirer has a total average weekly circulation of approximately 1.7 million copies, including subscriptions, with a total estimated readership in the United States, Canada and the United Kingdom of 13.9 million. - Star is a weekly celebrity news-based periodical dedicated to covering the stars of movies, television and music, as well as the lives of the rich and famous from politics, business, royalty and other areas. Star's editorial content also incorporates fashion, health, fitness and diet features, all with a celebrity spin. Star is the fourth highest selling weekly periodical in the United States and Canada based on single copy circulation, selling on average 1.1 million copies per week. Star has a total average weekly 1 circulation of approximately 1.3 million copies, including subscriptions, with a total estimated readership in the United States and Canada of 6.6 million. - Globe is a weekly tabloid with celebrity features that are edgier than National Enquirer and Star, with a greater emphasis on investigative crime stories. Globe is the sixth highest selling weekly periodical in the United States and Canada based on single copy circulation, selling on average 559,000 copies per week. Globe has a total average weekly circulation of approximately 603,000 copies, including subscriptions, with an estimated readership of 3.9 million. - National Examiner's editorial content consists of celebrity and human-interest stories, differentiating itself from the other titles through its upbeat positioning as the "gossip, games and good news" tabloid. National Examiner has an average weekly single copy circulation of 263,000 copies with a total average weekly circulation of approximately 280,000 copies, including subscriptions. Total readership is estimated at 1.1 million. - Weekly World News is a tabloid devoted to the publication of bizarre and strange but true stories. There is much humorous original content and the paper has created several characters that have become staples of pop culture. Weekly World News has an average weekly single copy circulation of 178,000 copies, with a total average weekly circulation of approximately 197,000 copies, including subscriptions. Total readership is estimated at 800,000. - Sun's editorial content is skewed to an older target audience and focuses on religion, health, holistic remedies, predictions and prophecies. Sun also includes entertaining and unusual articles from around the world. Sun has an average weekly single copy circulation of approximately 145,000 copies, with a total readership estimated at 600,000. - Country Weekly is an entertainment magazine presenting various aspects of country music and related lifestyles, events and personalities, and has the highest bi-weekly circulation of any such magazine in its category. Country Weekly is a bi-weekly publication and has an average single copy circulation of 215,000 copies, with a total average bi-weekly circulation of approximately 400,000 copies, including subscriptions. Total readership is estimated at 3.3 million. - Country Music is a bi-monthly publication that is also an entertainment magazine presenting various aspects of country music and related lifestyles, events and personalities. We acquired Country Music on August 1, 2000. Country Music has an average single copy circulation of approximately 22,000 copies, with a total average circulation of approximately 300,000 copies, including subscriptions. Total readership is estimated at 4.8 million. - Mini-Mags, Micro-Mags and Digest are pocket-sized books covering such topics as diets, health, horoscopes, astrology and pets. We believe we are the largest such publisher in the field, producing approximately 100 million copies annually. With the acquisition of Weider we plan on leveraging certain Weider brands to enhance the editorial content of several of our Mini-Mags, Micro-Mags and Digest titles. - Mira! is a Spanish language magazine that features exclusive news, gossip and goings-on about the hottest stars in the Latino community, along with interviews and in-depth stories spotlighting them at work and at play. It is distributed at checkout counters in supermarkets, bodegas and mass merchandisers in the top 43 Hispanic markets in the United States. The magazine was launched in June 2000 and has a total bi-weekly circulation of approximately 107,000 copies and an estimated total readership of 856,000. - Auto World targets the in-market buyer and we believe is the only automotive magazine sold at checkout counters in supermarkets and mass merchandisers. The readership is 35% female, which we believe gives Auto World the highest number of women readers of any automotive title. Articles focus on buying new and pre-owned cars, road tests, comparison tests, news, pricing, recalls and rebates. - New Media. We have web sites for the National Enquirer (nationalenquirer.com), Star (starmagazine.com), Country Weekly (countryweekly.com), Country Music (countrymusicmagazine.com), Weekly World News (weeklyworldnews.com), Auto World (amiautoworld.com) and Nopi Street Perform- 2 ance Compact (streetperformancecompact.com). The Weekly World News site was voted one of the 100 Best Internet Sites by PC Magazine and we have content syndication agreements in place with Lycos, Yahoo, iWon, Excite and Keen. Weider's publications include the following titles: - Muscle & Fitness is a premier monthly fitness-related lifestyle magazine, appealing to exercise enthusiasts and athletes of all ages, especially those focused on resistance training, body fat control and sports nutrition. Muscle & Fitness has more than 60 years of brand equity and has served as a successful brand extension foundation for new titles. Muscle & Fitness has a total average monthly circulation of approximately 428,000 copies, with monthly subscriptions of 218,000, and an estimated total readership of 7.9 million. - Shape is the leader in circulation and advertising revenues in the attractive and growing women's active lifestyle category. Shape's mission is to help women lead a healthier lifestyle by providing useful information on exercise techniques, nutrition, psychology, beauty and other inspirational topics. Shape has a total average monthly circulation of approximately 1.7 million copies, with monthly subscriptions of 1.3 million, and an estimated total readership of 5.7 million. - Men's Fitness is a leading monthly magazine for men with active lifestyles. The magazine promotes a multi-training approach towards exercise and offers information and advice in the areas of fitness, career, and relationships. Men's Fitness has a total average monthly circulation of approximately 664,000 copies, with monthly subscriptions of 565,000, and an estimated total readership of 6.4 million. - Muscle & Fitness Hers was launched in 2000 as a female focused magazine from Muscle & Fitness. The magazine targets the underserved market of female fitness enthusiasts and athletes. The editorial style and content emphasizes resistance training and sports nutrition designed to improve physical appearance, strength, health and sports performance. The magazine was published seven times in calendar 2002, and will be expanded to ten issues in fiscal 2004. Muscle & Fitness Hers has a total average circulation per issue of approximately 256,000 copies, with subscriptions per issue of 82,000, and an estimated total readership of 1.2 million. - Flex, which was spun off from Muscle & Fitness in 1983, is a monthly magazine devoted to professional bodybuilding. The magazine delivers nutrition and performance science information for bodybuilding enthusiasts. As Flex is a premier title in the bodybuilding segment it receives a significant share of advertising devoted to this special interest category. Flex has a total average monthly circulation of approximately 153,000 copies, with monthly subscriptions of 51,000, and an estimated total readership of 918,000. - Fit Pregnancy was spun off from Shape in 1995. Fit Pregnancy's editorial focus makes it a premier lifestyle magazine for women during pregnancy and the first couple of years after childbirth. The bi-monthly magazine delivers authoritative information on health, fashion, food and fitness. Fit Pregnancy recently increased its editorial emphasis on the two-year postpartum period and as a result has expanded its postnatal products advertising. Fit Pregnancy has a total average circulation per issue of approximately 508,000 copies, with subscriptions per issue of 411,000, and an estimated total readership of 2.0 million. - Natural Health is a leading wellness magazine published ten times a year, offering readers practical information to benefit from the latest scientific knowledge and advancements in the field of natural health, including advice to improve well-being and combat illness. Published for more than 30 years, Natural Health is one of the longest continuously published and most widely read paid publications in its field. Natural Health has a total average circulation per issue of approximately 327,000 copies, with subscriptions per issue of 272,000, and an estimated total readership of 785,000. - New Media. We have web sites for Muscle & Fitness (muscleandfitness.com), Flex (flexonline.com), Mens Fitness (mensfitness.com), Muscle & Fitness Hers (muscleandfitnesshers.com), Shape (shape.com), Natural Health (naturalhealthmagazine.com) and Fit Pregnancy (fitpregnancy.com). We maintain an online fitness portal (fitnessonline.com) and also sell a paid subscription based interactive online weight loss & exercise program, (iShape.com). 3 THE ACQUISITION On January 23, 2003, we acquired the magazine business of Weider for $357.3 million, which includes a post-closing working capital adjustment of $7.3 million, and Weider Publications, LLC became a wholly owned subsidiary of American Media Operations, Inc. In connection with the Acquisition, Weider Publications, LLC entered into certain other agreements with Weider Health and Fitness and its subsidiaries, the terms of which are described under the heading "Certain Relationships and Related Transactions" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2003, which is incorporated herein by reference. The Acquisition, and the related financings, including the borrowings under our amended and restated credit facilities (the "Amended and Restated Credit Facilities"), are collectively referred to in this prospectus as the Transactions. THE RECAPITALIZATION On May 7, 1999, EMP Group L.L.C., (the "LLC"), a company formed by Evercore Partners, referred to as Evercore in this prospectus, acquired Holdings, our parent company (the "1999 Acquisition"). On April 17, 2003, we completed a series of transactions whereby principals and affiliates of Evercore and Thomas H. Lee Partners, referred to as T.H. Lee in this prospectus, David J. Pecker, our Chief Executive Officer, other members of management and certain other investors contributed approximately $434,570,000 in cash and existing ownership interests of the LLC, our ultimate parent, valued at approximately $73,270,000, to a merger vehicle which was merged with and into the LLC in exchange for newly issued ownership interests of the LLC. These transactions are referred to collectively as the "Recapitalization" in this prospectus. Please see "Security Ownership of Certain Beneficial Owners and Management" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2003, which is incorporated herein by reference for a summary of our ownership structure and Note 14 to the consolidated financial statements incorporated herein by reference. Evercore, based in New York and Los Angeles, makes private equity and venture capital investments and provides strategic, financial and restructuring advisory services. T.H. Lee makes private equity investments and manages four private equity funds, with aggregate capital commitments of approximately $12 billion. 4 THE EXCHANGE OFFER THE EXCHANGE OFFER............ We are offering to exchange up to $150,000,000 aggregate principal amount of our 8 7/8% Senior Subordinated Notes due 2011, which have been registered under the Securities Act, which we refer to in this prospectus as the exchange notes, for up to $150,000,000 aggregate principal amount of our 8 7/8% Senior Subordinated Notes due 2011, which we refer to in this prospectus as the outstanding notes. Outstanding notes may be exchanged only in integral multiples of $1,000. EXCHANGE NOTES................ The forms and terms of the exchange notes are identical in all material respects to the terms of the outstanding notes, except for certain transfer restrictions, registration rights and liquidated damages provisions relating to the outstanding notes. EXPIRATION DATE; WITHDRAWAL OF TENDER........................ Unless we extend the exchange offer, it will expire at 5:00 p.m., New York City time, on , 2003. You may withdraw any outstanding notes you tender pursuant to the exchange offer at any time prior to the expiration of the exchange offer. We will return, as promptly as practicable after the expiration or termination of the exchange offer, any outstanding notes not accepted for exchange for any reason without expense to you. CERTAIN CONDITIONS TO THE EXCHANGE OFFER................ The exchange offer is subject to the following conditions, which we may waive, which permit us to refuse acceptance of the outstanding notes or to terminate the exchange offer if: - a lawsuit is instituted or threatened in a court or before a government agency which may impair our ability to proceed with the exchange offer; - a law, statute, rule or regulation is proposed or enacted or interpreted by the SEC which may impair our ability to proceed with the exchange offer; or - any governmental approval is not received which we think is necessary to consummate the exchange offer. PROCEDURES FOR TENDERING OUTSTANDING NOTES............. If you wish to accept the exchange offer, you must complete, sign and date the letter of transmittal in accordance with the instructions, and deliver the letter of transmittal, along with the outstanding notes and any other required documentation, to the exchange agent. By executing the letter of transmittal, you will represent to us that, among other things: - any exchange notes you receive will be acquired in the ordinary course of your business; - you have no arrangement or understanding with any person to participate in the distribution of the exchange notes; and - you are not an affiliate of the Company or, if you are an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. 5 If you hold your outstanding notes through The Depository Trust Company and wish to participate in the exchange offer, you may do so through The Depository Trust Company's Automated Tender Offer Program ("ATOP"). By tendering outstanding notes through ATOP, you will agree to be bound by the letter of transmittal as though you had executed it. INTEREST ON THE EXCHANGE NOTES......................... Interest on the exchange notes will accrue from the date of their issuance at the rate of 8 7/8% per annum. Interest on the outstanding notes exchanged for exchange notes will cease to accrue upon issuance of the exchange notes. PAYMENT OF INTEREST ON THE EXCHANGE NOTES................ Interest is payable every six months on January 15 and July 15, beginning July 15, 2003. The interest payment made to holders of the exchange notes on July 15, 2003 will include the interest on the outstanding notes exchanged for such exchange notes accrued and unpaid as of the date of issuance of the exchange notes. SPECIAL PROCEDURES FOR BENEFICIAL OWNERS............. If you are a beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and wish to tender such notes in the exchange offer, please contact the registered holder as soon as possible and instruct them to tender on your behalf and comply with our instructions set forth elsewhere in this prospectus. GUARANTEED DELIVERY PROCEDURE..................... If you wish to tender your outstanding notes, you may, in certain instances, do so according to the guaranteed delivery procedures set forth elsewhere in this prospectus under "The Exchange Offer -- Guaranteed Delivery Procedures." EXCHANGE AND REGISTRATION RIGHTS AGREEMENT.............. On January 23, 2003, we sold the outstanding notes and the related guarantees to the initial purchasers in a transaction exempt from the registration requirements of the Securities Act. At that time, we entered into an exchange and registration rights agreement with the initial purchasers that grants the holders of the outstanding notes certain exchange and registration rights. The exchange offer satisfies those rights, which terminate upon consummation of the exchange offer. You will not be entitled to any exchange or registration rights with respect to the exchange notes. However, outstanding notes that are not tendered in the exchange offer may experience a significantly more limited trading market, which might adversely affect the liquidity of any remaining outstanding notes. See "Risk Factors -- Risks Related to the Exchange Offer -- The market value of your current notes may be lower if you do not exchange your outstanding notes or fail to properly tender your outstanding notes for exchange." CERTAIN FEDERAL TAX CONSIDERATIONS................ With respect to the exchange of the outstanding notes for the exchange notes: - the exchange will not constitute a taxable exchange for U.S. federal income tax purposes; - you will not recognize gain or loss upon receipt of the exchange notes; 6 - you must include interest in gross income to the same extent as the outstanding notes; and - you will be able to tack the holding period of the exchange notes to the holding period of the outstanding notes. USE OF PROCEEDS............... We will not receive any proceeds from the exchange of outstanding notes pursuant to the exchange offer. EXCHANGE AGENT................ We have appointed J.P. Morgan Trust Company, National Association as the exchange agent for the exchange offer. The address of the Exchange Agent is 3800 Colonnade Parkway, Suite 490, Birmingham, Alabama 35243 and its telephone number at that address is (205) 968-0506. 7 THE EXCHANGE NOTES Pursuant to the exchange offer, we are offering to exchange up to $150,000,000 aggregate principal amount of the exchange notes for up to an equal aggregate principal amount of the outstanding notes. The form and terms of the exchange notes are the same as the form and terms of the outstanding notes, except that the exchange notes will have been registered under the Securities Act and will not bear legends restricting their transfer. The holders of exchange notes will not be entitled to certain rights of holders of the outstanding notes under the exchange and registration rights agreement, which rights will terminate upon the consummation of the exchange offer. The exchange notes will evidence the same debt of the outstanding notes and will be issued under, and be entitled to the benefits of, the indenture, dated as of January 23, 2003, between us, our subsidiary guarantors and J.P. Morgan Trust Company, National Association. ISSUER........................ American Media Operations, Inc. NOTES OFFERED................. $150,000,000 in aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011, which have been registered under the Securities Act. MATURITY DATE................. January 15, 2011. INTEREST...................... Annual rate: 8 7/8% Payment frequency: every six months on January 15 and July 15, beginning July 15, 2003. OPTIONAL REDEMPTION........... On or after January 15, 2007, we may redeem some or all of the exchange notes at the redemption prices listed in the section entitled "Description of the Exchange Notes -- Optional Redemption." Prior to such date, we may not redeem the exchange notes, except as described in the following sentence. At any time prior to January 15, 2006, we may, on one or more occasions, redeem up to 35% of the original aggregate principal amount of the exchange notes with the net cash proceeds of certain offerings of equity at a redemption price equal to 108.875% of the principal amount thereof, plus accrued and unpaid interest and liquidated damages thereon, if any, so long as - at least 65% of the original aggregate principal amount of the exchange notes remain outstanding after each such redemption and - any such redemption by us is made within 60 days of such equity offering. CHANGE OF CONTROL............. Upon the occurrence of a change of control, you will have the right to require us to repurchase all or a portion of your exchange notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and liquidated damages thereon, if any, to the date of repurchase; provided, however, that notwithstanding a change of control, we will not be obligated to repurchase the exchange notes pursuant to a change of control offer in the event that we have exercised our right to redeem all the exchange notes, as described under "Optional Redemption" above. See "Description of the Exchange Notes -- Change of Control." NOTE GUARANTEES............... The exchange notes will be fully and unconditionally guaranteed (each such guarantee, a "Note Guarantee"), on an unsecured senior subordinated basis by each of our domestic subsidiaries existing on the issue date of the exchange notes and by each of our 8 future domestic restricted subsidiaries (collectively, the "Note Guarantors"). The Note Guarantees will be subordinated to the guarantees of our senior indebtedness issued by the Note Guarantors under our Amended and Restated Credit Facilities. The exchange notes will not be guaranteed by our current or future foreign subsidiaries. As of and for the fiscal year ended March 31, 2003, after eliminating inter-company activity, these non-guarantor foreign subsidiaries (i) had approximately $2.0 million of total liabilities (including trade payables), (ii) had approximately 0.3% of our assets and (iii) generated approximately 0.1% of our operating revenues. See "Description of the Exchange Notes -- Overview of the Exchange Notes and the Note Guarantees -- The Note Guarantees." RANKING....................... The exchange notes will be unsecured and subordinated in right of payment to all of our existing and future senior indebtedness, including all of our borrowings under our Amended and Restated Credit Facilities. The exchange notes will rank equal in right of payment with all of our existing and future senior subordinated indebtedness (including any outstanding notes not exchanged for exchange notes and our existing $400 million aggregate principle amount of 10 1/4% Series B Senior Subordinated Notes due 2009 (the "existing notes")) and senior to all of our future subordinated obligations. We are a holding company and as such we derive all of our operating income and cash flow from our subsidiaries. The Note Guarantees will be unsecured and subordinated in right of payment to all existing and future senior indebtedness of the Note Guarantors, including all guarantees of the Note Guarantors under our Amended and Restated Credit Facilities. The Note Guarantees will rank equal in right of payment with all of the existing and future senior subordinated indebtedness of the Note Guarantors (including the guarantees of any outstanding notes not exchanged for exchange notes and the guarantees of the existing notes) and be senior to all of the existing and future subordinated obligations of the Note Guarantors. The exchange notes and the Note Guarantees will be effectively subordinated to the liabilities, including trade payables, and preferred stock of any subsidiary of the Company that is not a Note Guarantor. See "Description of the Notes -- Ranking." As of March 31, 2003, there was outstanding: (a) $468.8 million of senior indebtedness of the Company, consisting of our borrowings under our amended and restated credit facilities (excluding unused commitments under our Amended and Restated Credit Facilities), all of which would have been secured indebtedness; (b) $550.7 million of senior subordinated indebtedness of the Company (including the outstanding notes and the existing notes) and no indebtedness of the Company that is subordinate or junior in right of repayment to the exchange notes; 9 (c) no senior indebtedness of the Note Guarantors (excluding their guarantees of our indebtedness under our Amended and Restated Credit Facilities); and (d) no senior subordinated indebtedness of the Note Guarantors (excluding the guarantees of the outstanding notes and the existing notes and the Note Guarantees) and no indebtedness of the Note Guarantors that is subordinate or junior in right of payment to the guarantees of the outstanding notes. The indenture relating to the exchange notes permits us and our subsidiaries to incur a significant amount of additional indebtedness. CERTAIN COVENANTS............. The indenture under which the exchange notes will be issued and under which the outstanding notes were issued, limits, among other things, our ability and the ability of our subsidiaries to: - borrow money; - guarantee other indebtedness; - use assets as security in other transactions; - pay dividends on stock, redeem stock or redeem subordinated debt; - make investments; - enter into agreements that restrict dividends from subsidiaries; - sell assets; - enter into affiliate transactions; - sell capital stock of subsidiaries; - enter into new lines of business; and - merge or consolidate. For more details, see "Description of the Exchange Notes -- Certain Covenants." ABSENCE OF A PUBLIC MARKET FOR THE EXCHANGE NOTES............ In general, you may freely transfer the exchange notes. However, there are exceptions to this general statement. Holders of exchange notes may not freely transfer the exchange notes if: - they acquire the exchange notes outside of their ordinary course of business; - they have an arrangement with any person to participate in the distribution of the exchange notes; or - they are an affiliate of ours. Further, the exchange notes will be new securities for which there will not initially be a market. As a result, the development or liquidity of any market for the exchange notes may not occur. The initial purchasers of the outstanding notes have advised us that they currently intend to make a market in the exchange notes. However, 10 you should be aware that the initial purchasers are not obligated to do so. In the event such a market may develop, the initial purchasers may discontinue it any time without notice. We do not intend to apply for listing of the exchange notes on any securities exchange or on any automated dealer quotation system. USE OF PROCEEDS............... We will not receive proceeds from the exchange offer. RISK FACTORS You should carefully consider the information under the caption "Risk Factors" and all other information contained or incorporated by reference in this prospectus before tendering your outstanding notes. 11 SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION The following table sets forth certain of our summary historical and pro forma financial information and the notes related thereto. The summary historical financial information for the fiscal periods ended May 6, 1999 and March 27, 2000 and as of March 27, 2000 and March 26, 2001 has been derived from, and should be read in conjunction with, our audited historical financial statements and the notes related thereto, which are not incorporated by reference in this prospectus. The summary historical financial information for the fiscal period ended March 26, 2001 and as of and for the fiscal periods ended March 25, 2002 and March 31, 2003 has been derived from, and should be read in conjunction with, our audited historical financial statements and the notes related thereto, which are incorporated by reference in this prospectus. The unaudited pro forma financial information for the fiscal year ended March 31, 2003 has been derived from the unaudited pro forma financial information and the notes thereto included elsewhere in this prospectus. Such pro forma financial information gives effect to the Transactions as if they had been consummated as of the beginning of the fiscal year presented, is for informational purposes only and does not purport to be indicative of the results of operations that would have actually been obtained had the Transactions in fact occurred for the fiscal year presented, nor are they indicative of, or projections of, our results of operations for any future period or date. The Acquisition was accounted for using the purchase method of accounting. Allocations of purchase price have been determined based upon information presently available and are subject to change as additional information becomes available. The parent of American Media Operations, Inc. was purchased on May 7, 1999 resulting in a change in our historical cost basis of various assets and liabilities. Accordingly, our historical financial information provided and incorporated by reference in this prospectus for periods prior to May 7, 1999 is not comparable to our post-acquisition financial information. For purposes of this presentation, all historical financial information for periods prior to May 7, 1999 is referred to as the "Predecessor Company" and all periods subsequent to May 7, 1999 are referred to as the "Company." [A solid black vertical line has been inserted in the table where financial information may not be comparable across periods.] The following summary historical and pro forma financial information should be read in conjunction with "Summary -- The Acquisition," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Unaudited Pro Forma Financial Information" and our financial statements and the notes related thereto included elsewhere or incorporated by reference in this prospectus. 12 SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
PREDECESSOR COMPANY THE COMPANY PRO FORMA ------------- ------------------------------------------------------------------ -------------- SIX WEEKS FORTY-SIX WEEKS FROM FROM MAY 7, MARCH 30, 1999 FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR THROUGH THROUGH ENDED ENDED ENDED ENDED MAY 6, 1999 MARCH 27, 2000 MARCH 26, 2001 MARCH 25, 2002 MARCH 31, 2003 MARCH 31, 2003 ------------- --------------- -------------- -------------- -------------- -------------- (DOLLARS IN THOUSANDS) STATEMENT OF INCOME (LOSS) DATA: Operating Revenues: Circulation............... $24,587 $ 233,135 $ 314,497 $ 308,809 $ 314,089 $352,968 Advertising............... 2,640 22,521 37,141 39,915 61,303 153,848 Other..................... 2,308 20,187 20,563 19,407 24,341 28,419 ------- ---------- ---------- ---------- ---------- -------- 29,535 275,843 372,201 368,131 399,733 535,235 ------- ---------- ---------- ---------- ---------- -------- Operating Expenses: Editorial................. 3,040 29,567 39,286 37,027 39,967 53,843 Production................ 7,784 71,465 103,132 104,275 107,687 144,172 Distribution, circulation and other cost of sales................... 4,996 39,965 49,430 49,914 56,857 78,465 Selling, general and administrative expenses................ 3,248 37,865 41,050 41,912 54,515 98,111 Performance unit and equity plan compensation............ -- -- -- -- -- 21,138 Transaction costs......... -- -- -- -- -- 1,334 Gain on insurance settlement.............. -- -- -- -- (7,613) (7,613) Depreciation and amortization............ 3,703 57,209 76,733 88,170 31,664 40,392 ------- ---------- ---------- ---------- ---------- -------- 22,771 236,071 309,631 321,298 283,077 429,842 Operating income............ 6,764 39,772 62,570 46,833 116,656 105,393 Interest expense............ (4,837) (57,466) (71,742) (65,167) (60,065) (77,171) Other income (expense), net....................... 25 125 751 (139) 288 288 ------- ---------- ---------- ---------- ---------- -------- Income (loss) before provision for income taxes and extraordinary charge.................... 1,952 (17,569) (8,421) (18,473) 56,879 28,510 Provision for income taxes..................... 1,365 1,361 6,875 3,009 21,463 11,112 ------- ---------- ---------- ---------- ---------- -------- Income (loss) before extraordinary charge...... 587 (18,930) (15,296) (21,482) 35,416 17,398 Extraordinary charge, net of income taxes(1)........... -- (2,581) -- -- -- -- ------- ---------- ---------- ---------- ---------- -------- Net income (loss)........... $ 587 $ (21,511) $ (15,296) $ (21,482) $ 35,416 $ 17,398 ------- ---------- ---------- ---------- ---------- -------- OTHER DATA: EBITDA(2)................... $10,467 $ 96,981 $ 139,303 $ 135,003 $ 148,320 -- BALANCE SHEET DATA (AT END OF PERIOD): Total assets................ N/M $1,169,307 $1,134,990 $1,083,492 $1,500,260 N/M Total debt.................. N/M 680,874 680,874 748,459 1,019,550 N/M Total stockholder's equity.................... N/M 201,698 186,493 89,368 174,920 N/M
- --------------- (1) In connection with the 1999 Acquisition, a fee related to an unused bridge loan commitment totaling approximately $4.1 million ($2.6 million net of income taxes) was charged as an extraordinary loss for the period from May 7, 1999 to March 27, 2000. (2) EBITDA is defined as operating income before depreciation and amortization. EBITDA is not a measure of performance defined by generally accepted accounting principles ("GAAP") in the United States. EBITDA should not be considered in isolation or as a substitute for net income or cash flows from operating activities, which have been prepared in accordance with GAAP or as a measure of our operating performance, profitability or liquidity. We believe EBITDA provides useful information regarding our ability to service our debt, and we understand that such information is considered by certain investors to be an additional basis for evaluating a company's ability to pay interest and repay debt. 13 EBITDA is a widely used performance measure for publishing companies and is provided here as a supplemental measure of operating performance to operating income calculated in accordance with GAAP. A reconciliation from operating income to EBITDA is as follows:
PREDECESSOR COMPANY THE COMPANY -------------- ------------------------------------------------------------------- SIX WEEKS FORTY-SIX WEEKS FROM MARCH 30, FROM MAY 7, 1999 FISCAL YEAR FISCAL YEAR FISCAL YEAR THROUGH THROUGH ENDED ENDED ENDED MAY 6, 1999 MARCH 27, 2000 MARCH 26, 2001 MARCH 25, 2002 MARCH 31, 2003 -------------- ---------------- -------------- -------------- -------------- (IN THOUSANDS) Operating income........................... $ 6,764 $39,772 $ 62,570 $ 46,833 $116,656 Add (deduct): Depreciation and amortization.............. 3,703 57,209 76,733 88,170 31,664 ------- ------- -------- -------- -------- EBITDA..................................... $10,467 $96,981 $139,303 $135,003 $148,320 ======= ======= ======== ======== ========
- --------------- 14 RISK FACTORS Before you tender your outstanding notes in the exchange offer, you should be aware that there are various risks, including those described below. You should carefully consider these risk factors, together with the other information contained in and incorporated by reference in this prospectus before tendering your outstanding notes. RISKS RELATED TO THE EXCHANGE OFFER THE MARKET VALUE OF YOUR OUTSTANDING NOTES MAY BE LOWER IF YOU DO NOT EXCHANGE YOUR OUTSTANDING NOTES OR FAIL TO PROPERLY TENDER YOUR OUTSTANDING NOTES FOR EXCHANGE NOTES. Consequences of Failure to Exchange. To the extent that the outstanding notes are tendered and accepted for exchange pursuant to the exchange offer, the trading market for outstanding notes that remain outstanding may be significantly more limited, which might adversely affect the liquidity of the outstanding notes not tendered for exchange notes. The extent of the market and the availability of price quotations for outstanding notes would depend upon a number of factors, including the number of holders of outstanding notes remaining at such time and the interest in maintaining a market in such outstanding notes on the part of securities firms. An issue of securities with a smaller outstanding market value available for trading, or float, may command a lower price than would a comparable issue of securities with a greater float. Therefore, the market price for outstanding notes that are not exchanged in the exchange offer for exchange notes may be affected adversely to the extent that the amount that outstanding notes exchanged pursuant to the exchange offer reduces the float. The reduced float also may tend to make the trading price of the outstanding notes that are not exchanged more volatile. Any outstanding notes that remain outstanding following consummation of the exchange offer will continue to be subject to the same transfer restrictions currently applicable to the outstanding notes. Consequences of Failure to Properly Tender. Issuance of the exchange notes in exchange for the outstanding notes pursuant to the exchange offer will be made following the prior satisfaction, or waiver, of the conditions set forth in "The Exchange Offer -- Certain Conditions to the Exchange Offer" and only after timely receipt by the exchange agent of such outstanding notes, a properly completed and duly executed letter of transmittal and all other required documents. Therefore, holders of outstanding notes desiring to tender such outstanding notes in exchange for exchange notes should allow sufficient time to ensure timely delivery of all required documentation. Neither we, the exchange agent nor any other person is under any duty to give notification of defects or irregularities with respect to the tenders of outstanding notes for exchange notes. Any outstanding notes that are not properly tendered in the exchange offer pursuant to the requirements explained in "The Exchange Offer -- Procedures For Tendering," following consummation of the exchange offer, will remain outstanding. IF YOU FAIL TO TENDER YOUR OUTSTANDING NOTES FOR EXCHANGE, YOUR ABILITY TO TRANSFER SUCH NOTES WILL BE LIMITED. We issued the outstanding notes in a private offering. As a result, the outstanding notes have not been registered under the Securities Act, and may not be resold by purchasers thereof unless the outstanding notes are subsequently registered or an exemption from the registration requirements of the Securities Act is available. The outstanding notes that are not tendered in the exchange offer will continue to be subject to the existing restrictions upon their transfer. We will have no obligation to provide for the registration under the Securities Act of unexchanged outstanding notes. THERE IS NO PUBLIC MARKET FOR THE EXCHANGE NOTES AND WE CANNOT ASSURE YOU WHETHER AN ACTIVE TRADING MARKET FOR THE EXCHANGE NOTES WILL DEVELOP. The exchange notes will be new securities for which there currently is no market. Accordingly, we cannot assure you as to the development or liquidity of any market for the exchange notes, and we will have no obligation to create such a market. At the time of the private placement of the outstanding notes, the initial purchasers of the outstanding notes advised us that they intended to make a market in the outstanding notes 15 and, if issued, the exchange notes. However, the initial purchasers are not obligated to make a market in, the exchange notes, and they may discontinue such activities at any time in their sole discretion. The liquidity of any market for the exchange notes will depend upon the number of holders of the exchange notes, the overall market for high yield securities, our financial performance and prospects, the prospects for companies in our industry generally, the interest of securities dealers in making a market in the exchange notes and other factors. RISKS RELATING TO THE EXCHANGE NOTES OUR SIGNIFICANT INDEBTEDNESS COULD IMPAIR OUR ABILITY TO OPERATE AND EXPOSE US TO CERTAIN RISKS. We are highly leveraged. In addition, we incurred substantial debt to finance the Acquisition. Our future performance could be affected by our substantial amount of debt. As of March 31, 2003, we had total debt (excluding unused commitments under our Amended and Restated Credit Facilities) of $1,019.6 million and total stockholder's equity of $174.9 million, giving us a total debt to equity ratio of 5.8 to 1.0. In addition, subject to restrictions in our Amended and Restated Credit Facilities and in the indentures for the exchange notes and the existing notes, we may borrow more money for working capital, capital expenditures, acquisitions or for other purposes. Our high level of debt could have important consequences for you, including the following: - we may have difficulty borrowing money in the future for working capital, capital expenditures, acquisitions or other purposes; - we will need to use a large portion of the money earned by our subsidiaries to pay principal and interest on the Amended and Restated Credit Facilities, the exchange notes, the existing notes and other debt, which will reduce the amount of money available to us to finance our operations and other business activities; - some of our debt has a variable rate of interest, which exposes us to the risk of increased interest rates; - debt under our Amended and Restated Credit Facilities will be secured and will mature prior to the exchange notes; - we may have a much higher level of debt than certain of our competitors, which may put us at a competitive disadvantage; - our debt level makes us more vulnerable to economic downturns and adverse developments in our business; - our debt level reduces our flexibility in responding to changing business and economic conditions, including increased competition in the publishing industry; and - our debt level limits our ability to pursue other business opportunities, borrow more money for operations or capital in the future and implement our business strategy. On a proforma basis, our interest expense for the fiscal year ended March 31, 2003 was $77.2 million. On the same basis, for the fiscal year ended March 31, 2003 our ratio of earnings to fixed charges was 1.4x. We expect to obtain the money to pay our expenses and to pay the principal and interest on the exchange notes, the existing notes, our Amended and Restated Credit Facilities and other debt from the operations of our subsidiaries, including Weider. Therefore, our ability to meet our expenses and debt service obligations depends on the future performance of our subsidiaries, which will be affected by financial, business, economic and other factors. We will not be able to control many of these factors, such as economic conditions and pressure from competitors. We cannot be certain that the money earned by our subsidiaries will be sufficient to allow us to pay principal and interest on our debt (including the exchange notes) and meet our other obligations. If we do not have enough money, we may be required to refinance all or part of our existing debt, including the exchange notes, sell assets, borrow more money or raise equity. We cannot guarantee that we will be able to refinance our debt, sell assets, borrow more money or raise equity on terms acceptable to us or at all. In addition, the terms of existing or future debt agreements, including our Amended and Restated Credit Facilities and our indentures, may restrict us from adopting any of these alternatives. 16 Under our Amended and Restated Credit Facilities, we also must comply with certain specified financial ratios and tests. If we do not comply with these or other covenants and restrictions contained in our Amended and Restated Credit Facilities, we could default under our Amended and Restated Credit Facilities. Such debt, together with accrued interest, could then be declared immediately due and payable. Our ability to comply with such provisions may be affected by events beyond our control. See "Description of Other Indebtedness." THE EXCHANGE NOTES AND THE NOTE GUARANTEES ARE CONTRACTUALLY SUBORDINATED TO OUR SENIOR INDEBTEDNESS. The exchange notes will be contractually subordinated in right of payment to all of our senior indebtedness and the Note Guarantees will be contractually subordinated in right of payment to all senior indebtedness of the Note Guarantors. In addition, the exchange notes and the Note Guarantees will be effectively subordinated to any secured indebtedness of the Company and the Note Guarantors to the extent of the value of the assets securing such indebtedness. As of March 31, 2003, we had approximately $468.8 million of senior indebtedness (excluding unused commitments under our Amended and Restated Credit Facilities), all of which is secured indebtedness, and the Note Guarantors had no senior indebtedness (excluding their guarantees of our indebtedness under our Amended and Restated Credit Facilities). The indentures permit us and the Note Guarantors to borrow certain additional debt, which may be senior indebtedness. We may not pay principal, premium (if any), interest or other amounts on account of the exchange notes or the Note Guarantees in the event of a payment default or certain other defaults in respect of certain senior indebtedness (including indebtedness under our Amended and Restated Credit Facilities) unless such indebtedness has been paid in full or the default has been cured or waived. In addition, in the event of certain other defaults with respect to such senior indebtedness, we may not be permitted to pay any amount on account of the exchange notes or the Note Guarantees for a designated period of time. If we or the Note Guarantors are declared bankrupt or insolvent, or if there is a payment default under, or an acceleration of, any senior indebtedness, we are required to pay the lenders under our Amended and Restated Credit Facilities and any other creditors who are holders of senior indebtedness in full before we apply any of our assets to pay you. Accordingly, we may not have enough assets remaining after payments to holders of such senior indebtedness to pay you. Further, our Amended and Restated Credit Facilities will, and our future senior indebtedness may, prohibit us from repurchasing any exchange notes prior to maturity, even though the indenture requires us to offer to repurchase exchange notes in certain circumstances. If we or the Note Guarantors make certain asset sales or if a change of control occurs when we are prohibited from repurchasing exchange notes, we could ask our lenders under our Amended and Restated Credit Facilities (or such future senior indebtedness) for permission to repurchase the exchange notes or we could attempt to refinance the borrowings that contain such prohibitions. If we do not obtain such a consent to repay such borrowings or are unable to refinance such borrowings, we would be unable to repurchase the exchange notes. Our failure to repurchase tendered exchange notes at a time when such repurchase is required by the indenture would constitute an event of default under the indenture, which, in turn, would constitute a default under the Amended and Restated Credit Facilities and may constitute an event of default under such future senior indebtedness. In such circumstances, the subordination provisions in the indenture would restrict payments to you. See "Description of Other Indebtedness," "Description of the Exchange Notes -- Ranking," "Description of the Exchange Notes -- Change of Control" and "Description of the Exchange Notes -- Certain Covenants." OUR HOLDING COMPANY STRUCTURE MAY SUBORDINATE THE EXCHANGE NOTES TO THE OBLIGATIONS OF OUR SUBSIDIARIES. We are a holding company and as such we conduct substantially all our operations through our subsidiaries. As a holding company, we are dependent upon dividends or other intercompany transfers of funds from our subsidiaries to meet our debt service and other obligations. Generally, creditors of a subsidiary will have a superior claim to the assets and earnings of such subsidiary than the claims of creditors of its parent company, except to the extent the claims of the parent's creditors are guaranteed by the subsidiary. 17 Our foreign subsidiaries will not guarantee the payment of interest on and principal of the exchange notes. Any right that we have to receive any assets of our subsidiaries that are not Note Guarantors upon the liquidation or reorganization of those subsidiaries, and the consequent right of holders of exchange notes to realize proceeds from the sale of the assets of those subsidiaries, will be structurally subordinated to the claims of those subsidiaries' creditors, including trade creditors and holders of debt issued by those subsidiaries. As of and for the fiscal year ended March 31, 2003, after eliminating inter-company activity, our foreign subsidiaries (i) had approximately $2.0 million of total liabilities (including trade payables), (ii) had approximately 0.3% of our assets and (iii) generated approximately 0.1% of our operating revenues. Although the Note Guarantees provide the holders of the exchange notes with a direct claim against the assets of the Note Guarantors, enforcement of the Note Guarantees against any Note Guarantor may be subject to legal challenge in a bankruptcy or reorganization case or a lawsuit by or on behalf of creditors of such Note Guarantor, and would be subject to certain defenses available to guarantors generally. See "-- Under fraudulent conveyance laws, courts could void obligations under the exchange notes or the Note Guarantees." To the extent that the Note Guarantees are not enforceable, the exchange notes would be effectively subordinated to all liabilities of the Note Guarantors, including trade payables of the Note Guarantors. Accordingly, in the event of our dissolution, bankruptcy, liquidation or reorganization, the holders of the exchange notes may not receive any amounts with respect to the exchange notes until after the payment in full of the claims of creditors of our subsidiaries. In addition, the Note Guarantees will be general unsecured obligations of the Note Guarantors that will be subordinated to all senior indebtedness of the Note Guarantors. Although the indenture limits the ability of the Note Guarantors to incur indebtedness and issue preferred stock, there are certain significant qualifications and exceptions. The indenture does not limit such subsidiaries from incurring liabilities that are excluded from the definitions of indebtedness, disqualified stock or preferred stock under the indenture. See "Description of the Exchange Notes -- Certain Covenants -- Limitations on Indebtedness." In addition, the ability of the Company's and the Note Guarantors' subsidiaries to pay dividends and make other payments to us may be restricted by, among other things, applicable corporate and other laws and regulations and agreements of the subsidiaries. Although the indenture limits the ability of such subsidiaries to enter into consensual restrictions on their ability to pay dividends and make other payments, such limitations are subject to a number of significant qualifications and exceptions. See "Description of the Exchange Notes -- Certain Covenants -- Limitations on Restrictions on Distributions from Restricted Subsidiaries." COVENANTS IN OUR DEBT AGREEMENTS RESTRICT OUR BUSINESS IN MANY WAYS. Our indentures contain covenants with respect to us that restrict, among other things, - the incurrence of additional indebtedness and the issuance of disqualified stock and preferred stock; - the payment of dividends on and redemptions of capital stock and the redemption of indebtedness that is subordinated in right of payment to the Notes; - certain other restricted payments including, without limitation, investments; - certain sales of assets; - certain transactions with affiliates; and - consolidations, mergers and transfers of all or substantially all of our assets. In addition, our Amended and Restated Credit Facilities contain other and more restrictive covenants and prohibit us from prepaying our other indebtedness (including the exchange notes and the existing notes) while indebtedness under our Amended and Restated Credit Facilities is outstanding. Our Amended and Restated Credit Facilities also require us to maintain specified financial ratios and satisfy financial condition tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control and there can be no assurance that we will meet those ratios and tests. A breach of any of these covenants, ratios, tests or 18 restrictions could result in an event of default under our Amended and Restated Credit Facilities and/or our indentures. Upon the occurrence of an event of default under our Amended and Restated Credit Facilities, the lenders could elect to declare all amounts outstanding under our credit facility, together with accrued interest, to be immediately due and payable. If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure such indebtedness. If the lenders under our credit facility accelerate the payment of the indebtedness, we cannot assure you that our assets would be sufficient to repay in full such indebtedness and our other indebtedness, including the exchange notes. See "Description of Other Indebtedness" and "Description of the Exchange Notes -- Certain Covenants." ALL OF OUR ASSETS SECURE OUR OBLIGATIONS UNDER THE AMENDED AND RESTATED CREDIT FACILITIES. In addition to being contractually subordinated to all existing and future senior indebtedness, our obligations under the exchange notes will be unsecured while our obligations under our Amended and Restated Credit Facilities are secured by first priority or equivalent security interests in substantially all tangible and intangible assets of Holdings, the Company and each of our existing and subsequently acquired or organized domestic subsidiaries, including all the capital stock of, or other equity interests in, the Company, each of our direct or indirect domestic and first-tier foreign subsidiaries and each of our subsequently acquired or organized direct or indirect domestic and first-tier foreign subsidiaries (which, in the case of a foreign subsidiary, shall in each case be limited to 65% of such capital stock or equity interests, as the case may be). If we or one of our restricted subsidiaries are declared bankrupt or insolvent or if we default under our Amended and Restated Credit Facilities, the lenders could declare all of the funds borrowed thereunder, together with accrued interest, immediately due and payable. If we were unable to repay such indebtedness, the lenders could foreclose on the pledged stock of our subsidiaries and on the assets in which they have been granted a security interest, in each case to your exclusion, even if an event of default exists under the Indenture at such time. Furthermore, under the Note Guarantees, if all shares of any Note Guarantor are sold to persons pursuant to an enforcement of the pledge of shares in such Note Guarantor for the benefit of the senior lenders, then the applicable Note Guarantor will be released from its Note Guarantee automatically and immediately upon such sale. See "Description of Other Indebtedness." WE MAY NOT BE PERMITTED OR HAVE THE ABILITY TO PURCHASE THE EXCHANGE NOTES UPON A CHANGE OF CONTROL AS REQUIRED BY OUR INDENTURES. Upon a change of control under our indentures, we will be required to offer to purchase all of the exchange notes and the existing notes then outstanding at 101% of their principal amount, plus accrued but unpaid interest and liquidated damages, if any, to the date of repurchase. If a change of control were to occur, we cannot assure you that we would have sufficient funds to pay the purchase price for the exchange notes and the existing notes, and we expect that we would require third-party financing to finance such repurchase; however, we cannot assure you that we would be able to obtain such financing on favorable terms, if at all. In addition, our Amended and Restated Credit Facilities restrict our ability to repurchase the exchange notes and the existing notes, including pursuant to an offer in connection with a change of control. A change of control under the indentures may result in an event of default under our Amended and Restated Credit Facilities and may cause the acceleration of other senior indebtedness, if any, in which case the subordination provisions of the exchange notes and the existing notes would require payment in full of our Amended and Restated Credit Facilities and any other senior indebtedness before we could repurchase the exchange notes and the existing notes. Our future indebtedness may also contain restrictions on repayment requirements with respect to certain events or transactions that could constitute a change of control under the indentures. See "Description of Other Indebtedness" and "Description of the Exchange Notes -- Change of Control." The inability to repay senior indebtedness, if accelerated, and to purchase all of the tendered exchange notes, would each constitute an event of default under the indentures. 19 UNDER FRAUDULENT CONVEYANCE LAWS, A COURT COULD VOID OBLIGATIONS UNDER THE EXCHANGE NOTES OR NOTE GUARANTEES. The incurrence of indebtedness by us or the Note Guarantors, such as the exchange notes or the Note Guarantees, may be subject to review under federal bankruptcy law or relevant state fraudulent conveyance laws if a bankruptcy case or lawsuit is commenced by or on behalf of unpaid creditors. Under these laws, if in such case or lawsuit a court were to find that, at the time we or any Note Guarantor incurred indebtedness (including indebtedness under the exchange notes or the Note Guarantees), (a) we or any Note Guarantor, as applicable, incurred such indebtedness with the intent of hindering, delaying or defrauding current or future creditors; or (b) (i) we or any Note Guarantor, as applicable, received less than reasonably equivalent value or fair consideration for incurring such indebtedness; and (ii) we or any Note Guarantor, as applicable, (1) were insolvent or were rendered insolvent by reason of any of the transactions; (2) were engaged, or about to engage, in a business or transaction for which the assets remaining with us or such Note Guarantor constituted unreasonably small capital to carry on our or its business; (3) intended to incur, or believed that we or such Note Guarantor would incur, debts beyond our or its ability to pay as such debts matured (as all of the foregoing terms are defined in or interpreted under the relevant fraudulent transfer or conveyance statutes); or (4) were a defendant in an action for money damages, or had a judgment for money damages docketed against us or such Note Guarantor (in either case, if, after final judgment, the judgment is unsatisfied), then such court could avoid or subordinate the amounts owing under the exchange notes or the Note Guarantees to our or such Note Guarantor's presently existing and future indebtedness and take other actions detrimental to you. The measure of insolvency for purposes of the foregoing considerations will vary depending upon the law of the jurisdiction that is being applied in any such proceeding. Generally, however, a debtor would be considered insolvent if, at the time such debtor incurred the indebtedness, either (a) the sum of its debts (including contingent liabilities) is greater than its assets, at fair valuation, or (b) the present fair saleable value of its assets is less than the amount required to pay the probable liability on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured. There can be no assurance as to what standards a court would use to determine whether we or any Note Guarantor were solvent at the relevant time, or whether, whatever standard was used, the exchange notes would not be avoided or further subordinated on another of the grounds set forth above. We and the Note Guarantors believe that at the time we initially incur indebtedness constituting the exchange notes and the Note Guarantees, we and each Note Guarantor will: (a) (i) neither be insolvent nor rendered insolvent thereby; (ii) be in possession of sufficient capital to run our respective businesses effectively; and (iii) be incurring debts within our respective abilities to pay as the same mature or become due; and (b) have sufficient assets to satisfy any probable money judgment against any of us in any pending action. In reaching the foregoing conclusions, we have relied upon our analyses of internal cash flow projections and estimated values of assets and liabilities. However, we cannot assure you that a court passing on such questions would reach the same conclusions. 20 Additionally, under federal bankruptcy or applicable state insolvency law, if certain bankruptcy or insolvency proceedings were initiated by or against us or any Note Guarantor within 90 days after any payment by us with respect to the exchange notes or by such Note Guarantor under the applicable Note Guarantee or if we or such Note Guarantor anticipated becoming insolvent at the time of such payment, all or a portion of such payment could be avoided as a preferential transfer and the recipient of such payment could be required to return such payment. RISKS RELATING TO OUR BUSINESS OUR PUBLICATIONS HAVE EXPERIENCED DECLINES IN SINGLE COPY CIRCULATION. Single copy circulation of each of National Enquirer and Star has experienced declines. For example, in fiscal 2000, National Enquirer and Star had average weekly single copy circulation of approximately 1.7 million and 1.4 million copies, respectively, which declined in fiscal 2003 to approximately 1.4 million and 1.1 million copies, respectively. Our other publications also have experienced declines in single copy circulation. We believe that the principal factors contributing to these declines in circulation include (a) a general industry-wide decline in single copy circulation of individual publications due to an increasing number of publications in the industry; (b) diminished service levels from wholesalers who distribute our magazines to retailers and fill the pockets at checkout counters as a result of consolidation among wholesalers and their related efforts to cut expense; (c) the October 2001 anthrax incident at our Boca Raton headquarters; and (d) increased competition from other publications and forms of media, such as certain newspapers, television and Internet sites concentrating on celebrity news. See "--Terrorist attacks, such as the September 11, 2001 terrorist attacks and the October anthrax incident at our Boca Raton headquarters, and other acts of violence or war may affect the financial markets and our business, results of operation and financial condition." In January 2002, we successfully negotiated multi-year contracts with all of our major U.S. wholesalers for the complete distribution of our product line and improved service levels. However, we cannot assure you that service levels will improve or that if service levels do improve, circulation of our publications will increase. In addition, we have experienced declines in the aggregate single copy circulation for our six tabloids and Country Weekly of 6.9% for fiscal year 2003 compared to fiscal 2002 primarily as a result of the factors described above. Historically, we have offset declines in single copy circulation, in part, through increases in cover prices. In April 2002, we expanded National Enquirer and Star to 60 pages from 48 pages and raised cover prices from $1.89 to $2.09. In April 2003, we increased the U.S. cover price of both National Enquirer and Star from $2.09 to $2.19. In April 2003, we expanded Globe to 60 pages from 48 pages and raised cover prices from $1.99 to $2.19. We cannot assure you that we will be able to increase cover prices without decreasing circulation, or be able to take other measures, such as increasing advertising and promotion of our titles to offset such circulation declines, or that the single copy circulation declines described above will be reversed. Continued declines in circulation, or declines in circulation of Weider's publications, could have a material adverse effect on our business or financial performance. See "--If we fail to implement our business strategy, our business will be adversely affected" below. THE FEDERAL TRADE COMMISSION AND FOOD AND DRUG ADMINISTRATION MAY TAKE ACTIONS AGAINST ADVERTISERS THAT COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS. A portion of our revenues comes from advertising of dietary supplements and other nutritional products, a category which has received and continues to receive scrutiny from the Food and Drug Administration ("FDA") and the Federal Trade Commission ("FTC"). These agencies have selectively taken actions against individual advertisers that have made false or misleading claims about their products, and these actions 21 have had material adverse effects on such advertisers and their advertising budgets. To date, neither we nor other media that print or broadcast dietary supplement advertisements or nutritional products have been made party to these actions; however, the FTC has publicly expressed an interest in including the media in such actions, suggesting that the media should bear some level of responsibility for the content of advertisements carried by them. We believe there are substantial legal barriers to instituting such actions against the media, and that any such actions would only occur after a normal fact finding and implementation period. We would rigorously defend against any such actions and would seek to implement new advertisement procurement procedures in response to any such actions. However, we cannot assure you that our results of operations would not suffer if the FTC or FDA were to bring any such actions against us. In addition, we cannot assure you that our results of operations will not suffer if the FTC or FDA continues to successfully bring such actions against our dietary supplement and nutritional supplement advertisers. GENERAL ECONOMIC TRENDS MAY REDUCE OUR ADVERTISING REVENUES. For the twelve months ended December 31, 2002, Weider generated 68% of its revenues from advertisements, and, on a pro forma basis for the twelve months ended March 31, 2003, we generated 29% of our revenues from advertisements. Advertising revenues are subject to the risks arising from adverse changes in domestic and global economic conditions. A decline in the level of business activity of our advertisers could have an adverse effect on our revenues and profit margins. Because of the recent economic slowdown in the United States, many advertisers are reducing advertising expenditures. The impact of this slowdown on us is difficult to predict, but it may result in reductions in purchases of advertising. If the current economic slowdown continues or worsens, our results of operations may be adversely affected. IF WE FAIL TO IMPLEMENT OUR BUSINESS STRATEGY, OUR BUSINESS WILL BE ADVERSELY AFFECTED. Our future financial performance and success are dependent in large part upon our ability to successfully implement our business strategy. We cannot assure you that we will be able to successfully implement our business strategy or be able to improve our operating results. In particular, we cannot assure you that we will be able to increase circulation of our publications, obtain new sources of advertising revenues, generate additional revenues by building on the brand names of our publications, attract new clients for DSI or raise the cover prices of our publications without causing a decline in circulation. Furthermore, any growth through acquisitions and investments will be dependent upon identifying suitable acquisition or investment candidates and successfully consummating such transactions and integrating the acquired operations at reasonable costs. We may not successfully integrate any acquired businesses and may not achieve anticipated revenue and cost benefits. In addition, lower than expected valuations associated with cash flows and revenues may result in the inability to realize the value of recorded intangibles and goodwill. Such acquisitions and investments may require additional funding which may be provided in the form of additional debt, equity financing or a combination thereof. We cannot assure you that any such additional financing will be available to us on acceptable terms or at all or that we will be permitted under the terms of our Amended and Restated Credit Facilities (or any replacement thereof) or under the terms of our indentures to obtain such financing for such purpose. See "Description of Other Indebtedness" and "Description of the Exchange Notes--Certain Covenants." Implementation of our business strategy could be affected by a number of factors beyond our control, such as increased competition, legal developments, general economic conditions or increased operating costs or expenses. In particular, there has been a recent trend of increased consolidation among both retailers and wholesalers of magazines. This consolidation has caused an increase in margin pressure on publishers. Because National Enquirer, Star and Globe have been consistently among the highest revenue-producing magazines to both retailers and wholesalers, we do not believe the increased consolidation among retailers and wholesalers will have a material adverse effect on us and, as such, we do not believe this trend will have a material adverse effect on the Weider publications. Nevertheless, we cannot assure you that such consolidation will not have a material adverse effect on us in the future. 22 Any failure to successfully implement our business strategy may adversely affect our ability to service our indebtedness, including our ability to make principal and interest payments on the Notes. We may, in addition, decide to alter or discontinue certain aspects of our business strategy at any time. TERRORIST ATTACKS, SUCH AS THE SEPTEMBER 11, 2001 TERRORIST ATTACKS AND THE OCTOBER ANTHRAX INCIDENT AT OUR BOCA RATON HEADQUARTERS, AND OTHER ACTS OF VIOLENCE OR WAR MAY AFFECT THE FINANCIAL MARKETS AND OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION. As a result of the September 11, 2001 terrorist attacks and subsequent events, there has been considerable uncertainty in world financial markets. The full effect of these events, as well as concerns about future terrorist attacks, on the financial markets is not yet known, but could include, among other things, increased volatility in the prices of securities, including the exchange notes. These uncertainties could also adversely affect our ability to obtain financing on terms acceptable to us or at all to finance our acquisitions, capital expenditures or our working capital. Terrorist attacks may negatively affect our operations and financial condition. There can be no assurance that there will not be further terrorist attacks against the United States or U.S. businesses. These attacks or armed conflicts may directly impact our physical facilities or those of our retailers and customers. These events could cause consumer confidence and spending to decrease or result in the increased volatility in the U.S. and world financial markets and economy. They could result in an economic recession in the United States or abroad. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs. Our Boca Raton headquarters, which housed substantially all of our editorial operations (including our photo, clipping and research libraries), executive offices and certain administrative functions, was closed on October 7, 2001 by the Palm Beach County Health Department when traces of anthrax were found on a computer keyboard following the death of one of our photo editors from inhalation anthrax. In response to the closure of our Boca Raton facility, we immediately implemented our hurricane disaster plan to produce all of our weekly publications as originally scheduled. While this inhibited the production of our publications, we printed all of our tabloids that week and we believe that our operations have substantially returned to normal. In February 2002, the Palm Beach County Health Department quarantined the Boca Raton facility for an additional 18 months. We have entered into a two year lease for a 53,000 square foot facility two blocks from our Boca Raton headquarters which expires in February 2004. In April 2003, we sold our Boca Raton headquarters. In addition, our circulation has declined since the September 11, 2001 terrorist attacks and the October anthrax incident. We believe that as a result of the anthrax incident, we have experienced a decline in circulation. When the incident first occurred, there were specific concerns and consumer discomfort and lack of knowledge with respect to the safety of our magazines. We quickly responded to these safety concerns with an extensive public relations effort to educate consumers that there was no health risk in buying our magazines. Since the first issues following the anthrax incident, our unit sales have steadily improved, although they remain below pre-September 11, 2001 levels. We cannot predict what effect, if any, future acts of terrorism may have on our circulation. However, the consequences of these events could have a material adverse effect on our business, results of operations and financial condition. See "--Our publications have experienced declines in single copy circulation." OUR BUSINESS MAY BE ADVERSELY AFFECTED IF THE PRICE OF PAPER INCREASES. Our operating income may be significantly affected by changes in the price of paper used in our publications. For the fiscal year ended March 31, 2003, these costs represented approximately 12% of our revenues. We have currently committed a significant portion of our volume and pricing requirements with our major suppliers through December 2005. If paper prices increase in the future and we cannot pass these costs on to our customers, such increases may have a material adverse effect on us. We do not currently hedge against increases in paper prices but are reviewing various hedging strategies against future increases in paper prices. 23 WE OPERATE IN A VERY COMPETITIVE BUSINESS ENVIRONMENT. National Enquirer, Globe, Star, National Examiner, Weekly World News, Sun, Mira!, Country Music and Country Weekly compete in varying degrees with other publications sold at retailers' checkout counters, as well as forms of media concentrating on celebrity news, such as certain newspapers, magazines and television and radio programs. We believe that historical declines in single copy circulation of National Enquirer, Globe, Star and National Examiner have resulted in part from increased competition from these publications and forms of media. Competition for circulation is largely based upon the content of the publication, its placement in retail outlets and, to a lesser extent, its price. Competition for advertising revenues is largely based upon circulation levels, readership, demographics, price and advertising results. Many of our competitors have substantially larger operating staffs, greater capital resources and greater revenues from their publications. In this respect, we may be at a competitive disadvantage with such entities. We believe that our most significant direct competitors in the print media are AOL Time Warner Inc. (which publishes People, In Style and Entertainment Weekly), Wenner Media, Inc., (which publishes US Weekly), Gemstar TV Guide, Inc. (which publishes TV Guide) and Bauer (which publishes In-Touch). We also face competition from the use of the Internet and new on-line ventures focusing on celebrity news. In addition we compete with many other companies providing marketing and distribution services, such as full-service national distributors, wholesalers and publishers with their own marketing organizations. Certain of our competitors have substantially larger operating staffs and greater capital resources. In this respect, we may be at a competitive disadvantage with such entities. Each of Weider's specialty consumer magazines faces competition in its subject area from a variety of publishers and competes for readers on the basis of the high quality of its targeted editorial content. Competition for advertising revenues is largely based upon circulation levels, readership, demographics, price and advertising results. We believe that Weider's most significant direct competitors include Conde Nast Publications, Inc. (which publishes Self), Gruner + Jahr Publishing (which publishes Fitness, Parents and Child), Rodale Inc. (which publishes Men's Health and Organic Style), Wenner Media, Inc. (which publishes Men's Journal), Advanced Research Press (which publishes Muscular Development) and Muscle Media Publishing (which publishes Muscle Media). Increased competition may result in less demand for our products and services which may have a material adverse effect on our business, results of operation and financial condition. OUR PERFORMANCE COULD BE ADVERSELY AFFECTED IF WE LOSE OUR KEY PERSONNEL. We believe that our success is largely dependent on the abilities and experience of Mr. Pecker, our chairman and chief executive officer, and our senior management team. The loss of the services of Mr. Pecker or one or more of these senior executives could adversely affect our ability to effectively manage our overall operations or successfully execute current or future business strategies. We have entered into a five-year employment contract with Mr. Pecker, which expires on April 17, 2008 and is automatically extended for one- year periods unless sixty days prior written notice is given to the contrary. In addition, we believe that our success will depend upon our ongoing ability to attract and retain qualified management and other employees. WE ARE CONTROLLED BY EVERCORE AND T.H. LEE, WHOSE INTERESTS IN OUR BUSINESS MAY BE DIFFERENT THAN YOURS. Evercore and T.H. Lee have effective control of us by virtue of its rights to appoint a majority of the Board of Managers and a majority of the Board of Directors of our parent entities. As a result, Evercore and T.H. Lee control our policies and operations and have the power to appoint new management and approve any action requiring stockholder approval (including adopting amendments to our certificate of incorporation and approving mergers or sales of substantially all of our assets). We cannot assure you that the interests of Evercore and T.H. Lee will not conflict with your interests. 24 PENDING AND FUTURE LITIGATION COULD MATERIALLY AFFECT OUR OPERATIONS. We are involved in a number of litigation matters which have arisen in the ordinary course of our business. Because the focus of our publications often involves controversial celebrities or subjects, the risk of defamation or invasion of privacy litigation arises in the ordinary course of our business. Our experience suggests that the claims for damages made in such lawsuits are heavily inflated and, in any event, any reasonably foreseeable material liability or settlement would be covered by insurance. We have not experienced any difficulty obtaining such insurance and do not expect to experience any material difficulty in the future. In addition, as of March 31, 2003, we established a $1.9 million reserve for pending legal cases. There are currently no claims pending that we believe would have a material adverse effect on our operations. We cannot assure you that we will continue to be able to obtain insurance on terms acceptable to us or at all or that any pending or future litigation, if adversely determined, would not have a material adverse effect on our business and financial condition. OUR FORMER USE OF ARTHUR ANDERSEN LLP AS OUR INDEPENDENT AUDITOR MAY POSE RISKS TO US AND WILL LIMIT YOUR ABILITY TO SEEK POTENTIAL RECOVERIES FROM THEM RELATED TO THEIR WORK. On June 15, 2002, Arthur Andersen LLP, or Andersen, our former independent auditor, was convicted on a federal obstruction of justice charge. On July 9, 2002 we dismissed Andersen and appointed Deloitte & Touche LLP to succeed Andersen as our independent auditors. Our audited consolidated financial statements for fiscal 2002 that are incorporated by reference in this prospectus were audited by Andersen. While Andersen has previously consented to the inclusion of its audit report for such periods in our reports filed with the SEC, Andersen is no longer able to reissue a consent to including or incorporating by reference its audit reports relating to such financial statements in our SEC filings as may be required under SEC rules. The SEC has provided certain regulatory relief designed to allow companies that file reports with the SEC to dispense with the requirement of filing a consent of Andersen in certain circumstances. Notwithstanding the SEC's regulatory relief, an investor's ability to seek potential recoveries from Andersen related to any claims that an investor may assert as a result of the work performed by Andersen may be limited significantly by the lack of such consent and the diminished amount of assets of Andersen that are or may be available to satisfy any such claims. 25 USE OF PROCEEDS We will not receive any proceeds from the exchange offer. CAPITALIZATION The following table sets forth our capitalization as of March 31, 2003. The table should be read in conjunction with "Summary -- Summary Historical and Pro Forma Financial Information," "Unaudited Pro Forma Financial Information," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the notes related thereto included elsewhere in or incorporated by reference in this prospectus.
MARCH 31, 2003 ---------------------- (DOLLARS IN THOUSANDS) Debt (including current maturities): Amended and Restated Credit Facilities(1) Revolving credit facility.............................. $ -- Tranche A Term Loan.................................... 7,756 Tranche C Term Loan.................................... 321,054 Tranche C-1 Term Loan.................................. 140,000 ---------- Total Amended and Restated Credit Facilities......... 468,810 Existing notes............................................ 400,000 Outstanding notes......................................... 150,000 Other debt(2)............................................. 740 ---------- Total debt........................................... 1,019,550 ---------- Total stockholder's equity.................................. 174,920 ---------- Total capitalization........................................ $1,194,470 ==========
- --------------- (1) Our existing credit facilities consist of (i) a Tranche A Term Loan which matures in April 2006, (ii) a Tranche C Term Loan which matures in April 2007, (iii) a Tranche C-1 Term Loan which matures in April 2007 and (iv) a $60.0 million revolving credit facility which matures in April 2006. All borrowings under our Amended and Restated Credit Facilities are senior secured indebtedness. As of March 31, 2003 there were no amounts outstanding under the revolving credit facility. See "Description of Other Indebtedness -- Our Amended and Restated Credit Facilities." (2) Other debt is comprised of our 11.63% Senior Subordinated Notes due 2004. 26 UNAUDITED PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma financial information is based on our and Weider's historical financial statements incorporated by reference in this prospectus, adjusted to give effect to the Transactions. Certain of Weider's historical financial information has been reclassified to conform with our financial statement presentation. All references to our 2003 fiscal year are to the fifty-three weeks ended March 31, 2003. Weider's historical results for the period from April 1, 2002 to January 23, 2002 are derived by subtracting the quarter ended March 31, 2002 from Weider's audited financial statements for the year ended December 31, 2002 and adding Weider's results of operations for the period from January 1, 2003 to January 23, 2003. We acquired Weider on January 23, 2003, and consequently, Weider's operating results subsequent to such date are included in our consolidated operating results. See "Summary -- The Acquisition." The unaudited pro forma consolidated statement of operations for the fifty-three weeks ended March 31, 2003, gives pro forma effect to the Transactions as if they had occurred on March 26, 2002, the beginning of our 2003 fiscal year. The unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what our results of operations would actually have been had the Transactions occurred at such time or to project our results of operations for any future period or date. The pro forma adjustments are based on available information and various assumptions that we believe are reasonable. The pro forma adjustments and certain assumptions are described in the accompanying notes. The Acquisition was accounted for using the purchase method of accounting. Allocations of the purchase price have been determined based upon information presently available and are subject to change as additional information becomes available. The unaudited pro forma financial information should be read in conjunction with "Summary -- Summary Historical and Pro Forma Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical financial statements and the related notes to such financial statements included elsewhere or incorporated by reference in this prospectus. 27 AMERICAN MEDIA OPERATIONS, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE FIFTY-THREE WEEKS ENDED MARCH 31, 2003
FISCAL YEAR APRIL 1, 2002 ENDED THRU MARCH 31, 2003 JANUARY 23, 2003 PRO FORMA AMERICAN MEDIA WEIDER ADJUSTMENTS PRO FORMA -------------- ---------------- ----------- --------- Operating Revenues: Circulation........................... $314,089 $ 38,879 $ -- $352,968 Advertising........................... 61,303 92,545 -- 153,848 Other................................. 24,341 4,078 -- 28,419 -------- -------- -------- -------- 399,733 135,502 -- 535,235 -------- -------- -------- -------- Operating Expenses: Editorial............................. 39,967 13,876 -- 53,843 Production............................ 107,687 36,485 -- 144,172 Distribution, circulation and other cost of sales...................... 56,857 21,608 -- 78,465 Selling, general and administrative expenses........................... 54,515 42,929 667(1) 98,111 Performance unit and equity plan compensation....................... -- 21,138 -- 21,138 Transaction costs..................... -- 1,334 -- 1,334 Gain on insurance settlement.......... (7,613) -- -- (7,613) Depreciation and amortization......... 31,664 3,572 5,156(2) 40,392 -------- -------- -------- -------- 283,077 140,942 5,823 429,842 Operating income (loss)................. 116,656 (5,440) (5,823) 105,393 Interest expense........................ (60,065) (3,942) (13,164)(3) (77,171) Other income (expense), net............. 288 -- -- 288 -------- -------- -------- -------- Income (loss) before provision for income taxes.......................... 56,879 (9,382) (18,987) 28,510 Provision for income taxes.............. 21,463 (3,326) (7,025)(4) 11,112 -------- -------- -------- -------- Net income (loss)....................... $ 35,416 $ (6,056) $(11,962) $ 17,398 ======== ======== ======== ========
See the accompanying notes to the Unaudited Pro Forma Consolidated Statement of Operations 28 NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS The following unaudited pro forma adjustments relate to the Acquisition and are derived as if the Transactions had occurred on March 26, 2002: (1) Represents adjustments necessary to reflect a full year of expenses related to the Company's athlete endorsement and trademark licensing agreements with Weider Health and Fitness. (2) Represents the amortization, on a straight-line basis, of the following items arising from the Acquisition: (a) covenants not to compete for certain founders of Weider over five to seven years, (b) Weider's subscription lists over three years, (c) advertising relationships over three years, and (d) customer relationships over eight years. The pro forma adjustment is net of the elimination of Weider historical amortization of other intangible assets.
FISCAL YEAR ENDED MARCH 31, 2003 -------------- (IN THOUSANDS) Amortization of covenants not to compete.................... $1,369 Amortization of subscription lists.......................... 2,610 Amortization of advertising relationships................... 2,015 Amortization of customer relationships...................... 1,004 Elimination of historical Weider amortization............... (1,842) ------ $5,156 ======
(3) Represents adjustments necessary to reflect pro forma interest expense and amortization of deferred debt issuance costs based on pro forma debt levels and applicable interest rates, net of the elimination of Weider historical interest expense. A 1% change in our weighted average interest rate on our variable debt would result in a change of $4.7 million in our interest expense for the fiscal year ended March 31, 2003.
FISCAL YEAR ENDED MARCH 31, 2003 -------------- (IN THOUSANDS) Interest on Tranche C-1 Term Loan........................... $ 4,783 Interest on 8 7/8% Senior Subordinated notes................ 10,866 Amortization of deferred debt issuance costs................ 1,457 Elimination of Weider historical interest expense........... (3,942) ------- $13,164 =======
(4) Represents a reduction in the provision for income taxes as a result of the pro forma adjustments to income before income taxes, computed at an effective tax rate of 37%. 29 THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER At the time we issued the outstanding notes, we entered into an exchange and registration rights agreement with the initial purchasers of the outstanding notes in which we agreed, under certain circumstances, to file a registration statement relating to an offer to exchange the outstanding notes for exchange notes. We also agreed to use our reasonable best efforts to cause such offer to be consummated within 225 days following the issuance of the outstanding notes. The form and terms of the exchange notes are the same as the form and terms of the outstanding notes, except that the exchange notes will have been registered under the Securities Act and will not bear legends restricting their transfer. The outstanding notes were issued on January 23, 2003. Under the circumstances set forth below, we will use our reasonable best efforts to cause the SEC to declare effective a shelf registration statement with respect to the resale of the outstanding notes and keep the statement effective for up to two years after the effective date of the shelf registration statement. These circumstances include: - if pursuant to any changes in law, SEC rules or regulations or applicable interpretations thereof by the staff of the SEC do not permit us to effect the exchange offer as contemplated by the exchange and registration rights agreement; - if any outstanding notes validly tendered in the exchange offer are not exchanged for exchange notes within 225 days after the issuance of the outstanding notes; - if the initial purchasers of the outstanding notes so requests (but only with respect to any outstanding notes not eligible to be exchanged for exchange notes in the exchange offer); or - if any holder of the outstanding notes notifies us that it is not permitted to participate in the exchange offer or would not receive fully tradable exchange notes pursuant to the exchange offer. If we fail to comply with certain obligations under the exchange and registration rights agreement, we will be required to pay liquidated damages to holders of the outstanding notes. The objective of the exchange offer is to make the exchange notes freely transferable by the holders without further registration or any prospectus delivery requirements under the Securities Act of 1933. Each holder of outstanding notes that wishes to exchange outstanding notes for exchange notes in the exchange offer will be required to make the following representations: - any exchange notes will be acquired in the ordinary course of its business; - such holder has no arrangement with any person to participate in the distribution of the exchange notes; and - such holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of the Company or if it is an affiliate, that it will comply with applicable registration and prospectus delivery requirements of the Securities Act. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See "Plan of Distribution". RESALE OF EXCHANGE NOTES Based on interpretations of the SEC staff set forth in no action letters issued to unrelated third parties, we believe that exchange notes issued under the exchange offer in exchange for outstanding notes may be offered 30 for resale, resold and otherwise transferred by any exchange note holder without compliance with the registration and prospectus delivery provisions of the Securities Act, if: - such holder is not an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act; - such exchange notes are acquired in the ordinary course of the holder's business; and - the holder does not intend to participate in the distribution of such exchange notes. Any holder who tenders in the exchange offer with the intention of participating in any manner in a distribution of the exchange notes: - cannot rely on the position of the staff of the SEC enunciated in "Exxon Capital Holdings Corporation" or similar interpretive letters; and - must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. This prospectus may be used for an offer to resell, for the resale or for other retransfer of exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. Please read the section captioned "Plan of Distribution" for more details regarding the transfer of exchange notes. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange any outstanding notes properly tendered and not withdrawn prior to the expiration date of the exchange offer. We will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding notes surrendered under the exchange offer. Outstanding notes may be tendered only in integral multiples of $1,000. The form and terms of the exchange notes will be substantially identical to the form and terms of the outstanding notes except that the issuance of the exchange notes will have been registered under the Securities Act, and the exchange notes will not bear legends restricting their transfer. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the outstanding notes. Consequently, the exchange notes and the outstanding notes will be treated as a single class of debt securities under that indenture. The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange. As of the date of this prospectus, $150.0 million aggregate principal amount of the outstanding notes is outstanding. This prospectus and the letter of transmittal are being sent to all registered holders of outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the exchange offer. We intend to conduct the exchange offer in accordance with the provisions of the exchange and registration rights agreement, the applicable requirements of the Securities Act and the Securities Exchange Act of 1934 and the rules and regulations of the SEC. Outstanding notes that are not tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits such holders have under the indenture relating to the outstanding notes. We will be deemed to have accepted for exchange properly tendered outstanding notes when we give oral (promptly confirmed in writing) or written notice of the acceptance to the exchange agent. The exchange 31 agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from us and delivering exchange notes to such holders. Subject to the terms of the exchange and registration rights agreement, we expressly reserve the right to amend or terminate the exchange offer, and not to accept for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under the caption "-- Certain Conditions to the Exchange Offer." Holders who tender outstanding notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important that you read the section labeled "-- Fees and Expenses" below for more details regarding fees and expenses incurred in the exchange offer. EXPIRATION DATE; EXTENSIONS; AMENDMENTS The exchange offer will expire at 5:00 p.m., New York City time on , 2003, unless in our sole discretion, we extend it. In order to extend the exchange offer, we will notify the exchange agent orally (promptly confirmed in writing) or in writing of any extension. We will notify the registered holders of outstanding notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date. We reserve the right, in our sole discretion: - to delay accepting for exchange any outstanding notes, to extend the exchange offer or to terminate the exchange offer and to refuse to accept outstanding notes not previously accepted if any of the conditions set forth below under "-- Certain Conditions to the Exchange Offer" have not been satisfied, by giving oral (promptly confirmed in writing) or written notice of such delay, extension or termination to the exchange agent; or - subject to the terms of the exchange and registration rights agreement, to amend the terms of the exchange offer in any manner. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders of outstanding notes. If we amend the exchange offer in a manner that it determines to constitute a material change, we will promptly disclose such amendment in a manner reasonably calculated to inform the holders of outstanding notes of such amendment. Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we shall have no obligation to publish, advertise, or otherwise communicate any such public announcement, other than by making a timely release to a financial news service. If we extend the period of time during which the exchange offer is open, or if we are delayed in accepting for exchange of, or in issuing and exchanging the exchange notes for, any outstanding notes, or are unable to accept for exchange of, or issue exchange notes for, any outstanding notes pursuant to the exchange offer for any reason, then, without prejudice to our rights under the exchange offer, the exchange agent may, on our behalf, retain all outstanding notes tendered, and such outstanding notes may not be withdrawn except as otherwise provided below in "-- Withdrawal of Tenders." The right to delay acceptance for exchange of, or the issuance and the exchange of the exchange notes for, any outstanding notes is subject to applicable law, including Rule 14e-1(c) under the Exchange Act, which requires that we either deliver the exchange notes or return the outstanding notes deposited by or on behalf of the holders thereof promptly after termination or withdrawal of the exchange offer. INTEREST ON THE EXCHANGE NOTES The exchange notes will bear interest at a rate of 8 7/8% per annum, payable semi-annually, on January 15 and July 15 of each year, commencing on July 15, 2003, which interest will accrue from the date of issuance. 32 Holders of the outstanding notes not exchanged for exchange notes will continue to receive interest payments on the outstanding notes on regularly scheduled interest payment dates pursuant to the terms of the outstanding notes. Interest on the outstanding notes accepted for exchange will cease to accrue upon issuance of the exchange notes. Holders of exchange notes will receive interest on July 15, 2003 from the date of initial issuance of the exchange notes, plus an amount equal to the interest on the outstanding notes exchanged for exchange notes accrued and unpaid through the date of issuance of the notes. CERTAIN CONDITIONS TO THE EXCHANGE OFFER Notwithstanding any other term of the exchange offer, we will not be required to accept for exchange, or exchange any exchange notes for, any outstanding notes, and may terminate the exchange offer as provided in this prospectus before accepting any outstanding notes for exchange, if: - any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer which, in our reasonable judgment, might materially impair our ability to proceed with the exchange offer; - any law, statute, rule or regulation is proposed, adopted or enacted, or any existing law, statute, rule or regulation is interpreted by the staff of the SEC, which, in our reasonable judgment, might materially impair our ability to proceed with the exchange offer; or - any governmental approval has not been obtained, which approval we shall, in our reasonable discretion, deem necessary for the consummation of the exchange offer as contemplated hereby. In addition, we will not be obligated to accept for exchange the outstanding notes of any holder that has not made to us: - the representations described under "-- Purpose and Effect of the Exchange Offer," "-- Procedures for Tendering" and "Plan of Distribution"; and - such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to us an appropriate form for registration of the exchange notes under the Securities Act. If we determine in our sole discretion that any of these foregoing conditions are not satisfied, we may - refuse to accept any outstanding notes and return all outstanding notes to the tendering holders; - extend the exchange offer and retain all outstanding notes tendered prior to the expiration of the exchange offer, subject, however, to the rights of holders to withdraw such outstanding notes; or - waive such unsatisfied conditions with respect to the exchange offer and accept all properly tendered outstanding notes which have not been withdrawn If such waiver constitutes a material change to the exchange offer, we will promptly disclose such waiver by means of a prospectus supplement that will be distributed to the registered holders of the outstanding notes and we will extend the exchange offer for a period of five to ten business days, depending on the significance of the waiver and the manner of disclosure to the registered holders, if the exchange offer would otherwise expire during such five to ten day business period. These conditions are for our sole benefit and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times in its sole discretion. If we fail at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of such right. Each such right will be deemed an ongoing right that we may assert at any time or from time to time. In addition, we will not accept for exchange any outstanding notes tendered, and will not issue exchange notes in exchange for any such outstanding notes, if at such time any stop order will be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939, as amended. 33 PROCEDURES FOR TENDERING Only a holder of outstanding notes may tender such outstanding notes in the exchange offer. To tender in the exchange offer, a holder must: - complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal; have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires; and mail or deliver such letter of transmittal or facsimile to the exchange agent so that the exchange agent receives such letter of transmittal prior to 5:00 p.m., New York City time on the expiration date; or - comply with the Automated Tender Offer Program ("ATOP") procedures of The Depository Trust Company ("DTC") described below. In addition, either: - the exchange agent must receive outstanding notes along with the letter of transmittal; or - the exchange agent must receive, prior to the expiration date, a timely confirmation of book-entry transfer of such outstanding notes into the exchange agent's account at DTC according to the procedures for book-entry transfer described below including a properly transmitted agent's message; or - the holder must comply with the guaranteed delivery procedures described below. To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at the address set forth below under "-- Exchange Agent" prior to 5:00 p.m., New York City time on the expiration date. The tender by a holder that is not withdrawn prior to the 5:00 p.m., New York City time on the expiration date will constitute an agreement between such holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal. The method of delivery of outstanding notes, the letter of transmittal and all other required documents to the exchange agent is at the holder's election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service. In all cases, holders should allow sufficient time to assure delivery to the exchange agent before the expiration date. Holders should not send the letter of transmittal or outstanding notes to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them. Any beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owners' behalf. If such beneficial owner wishes to tender on its own behalf, it must, prior to completing and executing the letter of transmittal and delivering its outstanding notes either: - make appropriate arrangements to register ownership of the outstanding notes in such owner's name; or - obtain a properly completed bond power from the registered holder of outstanding notes. The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See "Plan of Distribution." 34 Signatures on a letter of transmittal or a notice of withdrawal described below must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another "eligible institution" within the meaning of Rule 17Ad-15 under the Exchange Act, unless the outstanding notes tendered pursuant thereto are tendered: - by a registered holder who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal; or - for the account of an eligible institution. If the letter of transmittal is signed by a person other than the registered holder of any outstanding notes listed on the outstanding notes, such outstanding notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder's name appears on the outstanding notes and an eligible institution must guarantee the signature on the bond power. If the letter of transmittal or any outstanding notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing. Unless waived by us, they should also submit evidence satisfactory to us of their authority to deliver the letter of transmittal. The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC's system may use ATOP to tender outstanding notes. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. Accordingly, the letter of transmittal need not be completed by a holder tendering through ATOP. They may do so by causing DTC to transfer the outstanding notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agent's message to the exchange agent. The term "agent's message" means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, to the effect that: - DTC has received an express acknowledgment from a participant in ATOP that is tendering outstanding notes that are the subject of such book-entry confirmation; - such participant has received and agrees to be bound by the terms of the letter of transmittal (or, in the case of an agent's message relating to guaranteed delivery, that such participant has received and agrees to be bound by the applicable notice of guaranteed delivery); and - the agreement may be enforced against such participant. We will determine in our sole discretion all questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered outstanding notes and withdrawal of tendered outstanding notes. Our determination will be final and binding. We reserve the absolute right to reject any outstanding notes not properly tendered or any outstanding notes the acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular outstanding notes. Our interpretation of the terms and conditions of the exchange offer (including the instructions in the letter of transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of outstanding notes, neither we, the exchange agent nor any other person will incur any liability for failure to give such notification. Tenders of outstanding notes will not be deemed made until such defects or irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the exchange agent without cost to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date. 35 In all cases, we will issue exchange notes for outstanding notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives: - outstanding notes or a timely book-entry confirmation of such outstanding notes into the exchange agent's account at DTC; and - a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent's message. If any tendered outstanding notes are not accepted for exchange for any reason set forth in the terms and conditions of the exchange offer or if outstanding notes are submitted for a greater principal amount than the holder desires to exchange, such unaccepted or non-exchanged outstanding notes will be returned without expense to the tendering holder thereof, or, in the case of outstanding notes tendered by book-entry transfer into the exchange agent's account at the book-entry transfer facility pursuant to the book-entry transfer procedures described below, such non-exchanged notes will be credited to an account maintained with such book-entry transfer facility, as promptly as practicable after the expiration or termination of the exchange offer. By signing the letter of transmittal, each tendering holder of outstanding notes will represent to us that, among other things: - any exchange notes that the holder receives will be acquired in the ordinary course of its business; - the holder has no arrangement or understanding with any person or entity to participate in the distribution of the exchange notes; - if the holder is not a broker-dealer, that it is not engaged in and does not intend to engage in the distribution of the exchange notes; - if the holder is a broker-dealer that will receive exchange notes for its own account in exchange for outstanding notes that were acquired as a result of market-making activities, that it will deliver a prospectus, as required by law, in connection with any resale of such exchange notes; and - the holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of ours or, if the holder is an affiliate, it will comply with any applicable registration and prospectus delivery requirements of the Securities Act. BOOK-ENTRY TRANSFER The exchange agent will make a request to establish an account with respect to the outstanding notes at DTC for purposes of the exchange offer promptly after the date of this prospectus; and any financial institution that is a participant in DTC's system may make book-entry delivery of outstanding notes by causing DTC to transfer such outstanding notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. Holders of outstanding notes who are unable to deliver confirmation of the book-entry tender of their outstanding notes into the exchange agent's account at DTC or all other documents of transmittal to the exchange agent on or prior to the expiration date must tender their outstanding notes according to the guaranteed delivery procedures described below. GUARANTEED DELIVERY PROCEDURES Holders wishing to tender their outstanding notes but whose outstanding notes are not immediately available or who cannot deliver their outstanding notes, the letter of transmittal or any other required 36 documents to the exchange agent or comply with the applicable ATOP procedures prior to the expiration date may tender if: - the tender is made through an eligible institution; - prior to the expiration date, the exchange agent receives from such eligible institution either a properly completed and duly executed notice of guaranteed delivery (by facsimile transmission, mail or hand delivery) or a properly transmitted agent's message in lieu of a notice of guaranteed delivery: - setting forth the name and address of the holder, the registered number(s) of such outstanding notes and the principal amount of outstanding notes tendered; - stating that the tender is being made thereby; and - guaranteeing that, within three (3) New York Stock Exchange trading days after the expiration date, the letter of transmittal (or facsimile thereof) together with the outstanding notes or a book-entry confirmation, and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and - the exchange agent receives such properly completed and executed letter of transmittal (or facsimile thereof), as well as all tendered outstanding notes in proper form for transfer or a book-entry confirmation, and all other documents required by the letter of transmittal, within three (3) New York State Exchange trading days after the expiration date. Upon request to the exchange agent, a notice of guaranteed delivery will be sent to holders who wish to tender their outstanding notes according to the guaranteed delivery procedures set forth above. WITHDRAWAL OF TENDERS Except as otherwise provided in this prospectus, holders of outstanding notes may withdraw their tenders at any time prior to the 5:00 p.m., New York City time expiration date. For a withdrawal to be effective: - the exchange agent must receive a written notice (which may be by telegram, telex, facsimile transmission or letter) of withdrawal at the address set forth below under "-- Exchange Agent", or - holders must comply with the appropriate ATOP procedures. Any such notice of withdrawal must: - specify the name of the person who tendered the outstanding notes to be withdrawn; - identify the outstanding notes to be withdrawn (including the principal amount of such outstanding notes); and - where certificates for outstanding notes have been transmitted, specify the name in which such outstanding notes were registered, if different from that of the withdrawing holder. If certificates for outstanding notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of such certificates, the withdrawing holder must also submit: - the serial numbers of the particular certificates to be withdrawn; and - a signed notice of withdrawal with signatures guaranteed by an eligible institution unless such holder is an eligible institution. If outstanding notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of such facility. We will determine all questions as to the validity, form and eligibility (including time of receipt) of such notices, and our determination shall be final and binding on all parties. We will deem any outstanding notes so withdrawn not 37 to have been validly tendered for exchange for purposes of the exchange offer. Any outstanding notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder (or, in the case of outstanding notes tendered by book-entry transfer into the exchange agent's account at DTC according to the procedures described above, such outstanding notes will be credited to an account maintained with DTC for outstanding notes) as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn outstanding notes may be retendered by following one of the procedures described under "-- Procedures for Tendering" above at any time on or prior to the 5:00 p.m., New York City time, on the expiration date. EXCHANGE AGENT J.P. Morgan Trust Company, National Association has been appointed as exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the notice of guaranteed delivery to the exchange agent addressed as follows: For Delivery by Registered or Certified Mail, Hand or by Overnight Courier: J.P. Morgan Trust Company, National Association 3800 Colonnade Parkway, Suite 490 Birmingham, Alabama 35243 By Facsimile Transmission (for eligible institutions only): (205) 968-9145 Confirm facsimile by telephone only: (205) 968-0506 DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL. FEES AND EXPENSES We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitations by telegraph, telephone or in person by our officers and regular employees and those of our affiliates. We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses. We will pay the cash expenses to be incurred in connection with the exchange offer. The expenses are estimated in the aggregate to be approximately $100,000. They include: - SEC registration fees; - fees and expenses of the exchange agent and trustee; - accounting and legal fees and printing costs; and - related fees and expenses. 38 TRANSFER TAXES We will pay all transfer taxes, if any, applicable to the exchange of outstanding notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes (whether imposed on the registered holder or any other person) if: - certificates representing outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of outstanding notes tendered; - tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal; or - a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange offer. If satisfactory evidence of payment of such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed to that tendering holder. Holders who tender their outstanding notes for exchange will not be required to pay any transfer taxes. However, holders who instruct us to register exchange notes in the name of, or request that outstanding notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be required to pay any applicable transfer tax. CONSEQUENCES OF FAILURE TO EXCHANGE Holders of outstanding notes who do not exchange their notes for exchange notes under the exchange offer will remain subject to the restrictions on transfer of such outstanding notes: - as set forth in the legend printed on the outstanding notes as a consequence of the issuance of the outstanding notes pursuant to the exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and - otherwise as set forth in the offering memorandum distributed in connection with the private offering of the outstanding notes. In general, the outstanding notes may not be offered or sold unless they are registered under the Securities Act, or if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the exchange and registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act. Based on interpretations of the SEC staff, exchange notes issued pursuant to the exchange offer may be offered for resale, resold or otherwise transferred by their holders (other than any such holder that is our "affiliate" within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the holders acquired the exchange notes in the ordinary course of the holders' business and the holders have no arrangement or understanding with respect to the distribution of the exchange notes to be acquired in the exchange offer. Any holder who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes: - should not rely on the above-described interpretations of the SEC; and - must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. To the extent outstanding notes are tendered and accepted in the exchange offer, the principal amount of outstanding notes will decrease with a resulting decrease in the liquidity in the market for those notes. Accordingly, the liquidity of the market of the outstanding notes could be adversely affected. See "Risk Factors -- Risks Related to the Exchange Offer -- The market value of your outstanding notes may be lower if you do not exchange your outstanding notes or fail to properly tender your outstanding notes for exchange." 39 ACCOUNTING TREATMENT We will record the exchange notes in our accounting records at the same carrying value as the outstanding notes, which is the aggregate principal amount, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the exchange offer. We will record the expenses of the exchange offer as incurred. OTHER Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take. We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes. 40 DESCRIPTION OF OTHER INDEBTEDNESS OUR AMENDED AND RESTATED CREDIT FACILITIES The description set forth below does not purport to be complete and is qualified in its entirety by reference to certain agreements setting forth the principal terms and conditions of the Amended and Restated Credit Facilities. Capitalized terms used but not otherwise defined in this "Description of Other Indebtedness--Our Amended and Restated Credit Facilities" shall have the meaning assigned to them in the Amended and Restated Credit Facilities. Our Amended and Restated Credit Facilities provide senior secured financing consisting of a Tranche A Term Loan facility maturing April 1, 2006, a Tranche C Term Loan facility maturing April 1, 2007, a Tranche C-1 Term Loan facility maturing April 1, 2007 and a $60.0 million revolving credit facility maturing April 1, 2006. The Amended and Restated Credit Facilities are provided by a syndicate of banks and other financial institutions led by JPMorgan Chase Bank, as administrative agent and collateral agent, and J.P. Morgan Securities Inc., as sole lead arranger. The Tranche A Term Loan and the revolving credit facility bear interest (subject to performance based stepdowns) at a rate equal to LIBOR plus 3.0% or, at our option, the alternate base rate (as defined in the Amended and Restated Credit Facilities) plus 2.0%. The Tranche C Term Loan and the Tranche C-1 Term Loan bear the same interest rate, which is equal to LIBOR plus 2.75% or, at our option, the alternate base rate (as defined in the Amended and Restated Credit Facilities) plus 1.75%. The Tranche A Term Loan facility, the Tranche C Term Loan facility and the Tranche C-1 Term Loan facility amortize in quarterly amounts based upon the annual amounts shown below:
- ---------------------------------------------------------------------------------------------- TRANCHE A TRANCHE C TRANCHE C-1 TERM LOAN TERM LOAN TERM LOAN (DOLLARS IN MILLIONS) FACILITY FACILITY FACILITY - ---------------------------------------------------------------------------------------------- Fiscal Year 2004......................................... $ 1.9 $ 3.2 $ 1.4 Fiscal Year 2005......................................... 2.4 3.2 1.4 Fiscal Year 2006......................................... 2.8 3.3 1.4 Fiscal Year 2007......................................... 0.7 233.7 101.9 Fiscal Year 2008......................................... -- 77.6 33.9 ----------------------------------- Total............................................... $ 7.8 $ 321.0 $ 140.0 - ----------------------------------------------------------------------------------------------
Our obligations under the Amended and Restated Credit Facilities are unconditionally and irrevocably guaranteed by Holdings and each of our domestic subsidiaries. In addition, the Amended and Restated Credit Facilities are secured by first priority or equivalent security interests in substantially all tangible and intangible assets of Holdings, the Company and each of our existing and subsequently acquired or organized domestic subsidiaries, including all the capital stock of, or other equity interests in, the Company, each of our direct or indirect domestic and first-tier foreign subsidiaries and each of our subsequently acquired or organized direct or indirect domestic and first-tier foreign subsidiaries (which, in the case of a foreign subsidiary, shall in each case be limited to 65% of such capital stock or equity interests, as the case may be). The Amended and Restated Credit Facilities are subject to mandatory prepayment with, in general, - 100% of the proceeds of asset sales, - 50% of our excess cash flow (as defined in the Amended and Restated Credit Facilities), 41 - 50% of the proceeds of equity offerings, and - 100% of the proceeds from the issuance of debt obligations, subject to certain exceptions. The Amended and Restated Credit Facilities contain a number of covenants that, among other things, restrict the ability of Holdings, the Company and our subsidiaries to incur additional indebtedness, create liens on assets, repay other indebtedness, pay certain restricted payments and dividends and engage in certain transactions with subsidiaries and affiliates and otherwise restrict corporate activities. The Amended and Restated Credit Facilities also contain covenants that among other things, restrict the ability of the Company and our subsidiaries to dispose of assets, incur guarantee obligations, make investments, loans or advances, make certain acquisitions, make capital expenditures and enter into sale and leaseback transactions. In addition, under the Amended and Restated Credit Facilities we are required to comply with specified financial ratios and tests, including minimum fixed charge coverage and interest coverage ratios and maximum leverage ratios. The Amended and Restated Credit Facilities also contain certain customary events of default. EXISTING NOTES On April 30, 1999 we sold $250,000,000 and on February 14, 2002 we sold $150,000,000 aggregate principal amount of our 10 1/4% Series B Senior Subordinated Notes due 2009 (the "existing notes"). Interest on the existing notes is due on May 1 and November 1 of each year and the maturity date of the existing notes is May 1, 2009. If we fail to make payments on the existing notes, our guarantor subsidiaries must make them instead. These guarantees are senior subordinated obligations of our guarantor subsidiaries. Each of the Note Guarantors also guarantees the existing notes. The existing notes are unsecured and subordinated in right of payment to all of our existing and future senior indebtedness, including all borrowings under our Amended and Restated Credit Facilities. The existing notes rank equally in right of payment with all of our existing and future senior subordinated indebtedness, including the exchange notes, and senior to all of our existing and future subordinated obligations. The note guarantees are unsecured and subordinated in right of payment to all existing and future senior indebtedness of our guarantor subsidiaries, including all guarantees of the guarantor subsidiaries under our Amended and Restated Credit Facilities. The guarantees rank equally in right of payment with all of the existing and future senior subordinated indebtedness of the guarantor subsidiaries, including the Note Guarantees, and senior to all of the existing and future subordinated obligations of the guarantor subsidiaries. We cannot redeem the existing notes prior to May 1, 2004, except as described below. After this date, we can redeem some or all of the existing notes at specified redemption prices, plus accrued interest to the redemption date. If there is a change of control, we must give holders of the existing notes the opportunity to sell to us their existing notes at a purchase price of 101% of their principal amount, plus accrued and unpaid interest, unless we have previously exercised our right to redeem all of the existing notes. The indenture governing the existing notes contains covenants that limit our ability and that of our restricted subsidiaries, subject to important exceptions and qualifications, to, among other things, - borrow money; - guarantee other indebtedness; - use assets as security in other transactions; - pay dividends on stock, redeem stock or redeem subordinated debt; - make investments; - enter into agreements that restrict dividends from subsidiaries; - sell assets; 42 - enter into affiliate transactions; - sell capital stock of subsidiaries; - enter into new lines of business; and - merge or consolidate. The indenture governing the existing notes contains customary events of default. 43 DESCRIPTION OF THE EXCHANGE NOTES GENERAL We issued the outstanding notes and will issue the exchange notes under an indenture dated as of January 23, 2003, among the Company, the Note Guarantors and J.P. Morgan Trust Company, National Association, as trustee (the "Trustee"), a copy of which is available upon request to us. The indenture contains provisions which define your rights under the exchange notes. In addition, the indenture governs the obligations of the Company and of each Note Guarantor under the exchange notes. The terms of the exchange notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended. On January 23, 2003, we issued $150.0 million aggregate principal amount of outstanding notes under the indenture. The terms of the exchange notes are identical in all material respects to the outstanding notes, except for certain transfer restrictions and registration and other rights relating to the exchange of the outstanding notes for the exchange notes. The Trustee will authenticate and deliver exchange notes for original issue only in exchange for a like principal amount of outstanding notes. Any outstanding notes that remain outstanding after the consummation of the exchange offer, together with the exchange notes, will be treated as a single class of securities under the indenture. Accordingly, all references in this section to specified percentages in aggregate principal amount of the outstanding exchange notes shall be deemed to mean, at any time after the exchange offer is consummated, such percentage in aggregate principal amount of the outstanding notes and exchange notes then outstanding. Certain of our Subsidiaries will guarantee the exchange notes and therefore will be subject to many of the provisions contained in this "Description of the Exchange Notes." Each Subsidiary which guarantees the exchange notes is referred to in this section as a "Note Guarantor." Each such guarantee is termed a "Note Guarantee." Definitions of certain terms used in this section may be found under the heading "-- Certain Definitions." For purposes of this section, the term "Company" refers only to American Media Operations, Inc. and not any of its Subsidiaries. The following description is meant to be only a summary of certain provisions of the indenture. It does not restate the terms of the indenture in their entirety. We urge that you carefully read the indenture as it, and not this description, governs your rights as Holders. OVERVIEW OF THE EXCHANGE NOTES AND THE NOTE GUARANTEES THE EXCHANGE NOTES These exchange notes: - are general unsecured obligations of the Company; - will rank equally in right of payment with all existing and future Senior Subordinated Indebtedness of the Company; - are subordinated in right of payment to any future Senior Indebtedness of the Company; - are senior in right of payment to any future Subordinated Obligations of the Company; - will be effectively subordinated to any Secured Indebtedness of the Company and its Subsidiaries to the extent of the value of the assets securing such Indebtedness; and - will be effectively subordinated to all liabilities (including Trade Payables) and preferred stock of each Subsidiary of the Company that is not a Note Guarantor. 44 THE NOTE GUARANTEES These exchange notes are guaranteed by each of our Domestic Subsidiaries. The Note Guarantees: - will be general unsecured obligations of each Note Guarantor; - will rank equally in right of payment with any existing and future Senior Subordinated Indebtedness of each Note Guarantor; - will be subordinated in right of payment to all existing and future Senior Indebtedness of each Note Guarantor; - will be senior in right of payment to any future Subordinated Obligations of each Note Guarantor; and - will be effectively subordinated to any Secured Indebtedness of each Note Guarantor to the extent of the value of the assets securing such Indebtedness. The exchange notes will not be guaranteed by our current or future Foreign Subsidiaries. As of and for the fiscal year ended March 31, 2003, after eliminating inter-company activity, these non-guarantor Foreign Subsidiaries would have (i) had approximately $2.0 million of total liabilities (including Trade Payables), (ii) had approximately 0.3% of our assets and (iii) generated approximately 0.1% of our operating revenues. PRINCIPAL, MATURITY AND INTEREST The exchange notes will mature on January 15, 2011. The exchange notes are in fully registered form, without coupons, in denominations of $1,000 and any integral multiple of $1,000. Each exchange note bears interest at a rate of 8 7/8% beginning on the date of its issuance, or from the most recent date to which interest has been paid or provided for. We pay interest semi-annually to Holders of record at the close of business on the January 1 or July 1 immediately preceding the interest payment date on January 15 and July 15 of each year, beginning July 15, 2003. INDENTURE MAY BE USED FOR FUTURE ISSUANCES We may from time to time issue additional notes having identical terms and conditions to the exchange notes (the "Additional Notes"). We will only be permitted to issue such Additional Notes if at the time of such issuance we are in compliance with the covenants contained in the Indenture. Any Additional Notes will be part of the same issue as the exchange notes and will vote on all matters with the exchange notes. PAYING AGENT AND REGISTRAR The payment of principal, premium, if any, and interest on the exchange notes is payable at any office of ours or any agency designated by us. We have initially designated the corporate trust office of the Trustee to act as our agent in such matters. The location of the corporate trust office is 2001 Bryan Street, 9th Floor, Dallas, Texas 75201. We, however, reserve the right to pay interest to Holders by check mailed directly to Holders at their registered addresses. Holders may exchange or transfer their exchange notes at the same location given in the preceding paragraph. No service charge will be made for any registration of transfer or exchange of exchange notes. We, however, may require Holders to pay any transfer tax or other similar governmental charge payable in connection with any such transfer or exchange. OPTIONAL REDEMPTION Except as set forth in the following paragraph, we may not redeem the exchange notes prior to January 15, 2007. On or after this date, we may redeem the exchange notes, in whole or in part, on not less than 30 nor more than 60 days' prior notice, at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest and liquidated damages thereon, if any, to the redemption 45 date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period commencing on January 15 of the years set forth below:
- ------------------------------------------------------------------------- REDEMPTION YEAR PRICE - ------------------------------------------------------------------------- 2007........................................................ 104.438% 2008........................................................ 102.958% 2009........................................................ 101.479% 2010 and thereafter......................................... 100.000%
SELECTION If we partially redeem exchange notes, the Trustee will select the exchange notes to be redeemed on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate, although no note of $1,000 in original principal amount or less will be redeemed in part. If we redeem any note in part only, the notice of redemption relating to such note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original note. On and after the redemption date, interest will cease to accrue on exchange notes or portions thereof called for redemption so long as we have deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest and liquidated damages thereon, if any, the exchange notes to be redeemed. RANKING The exchange notes will be unsecured Senior Subordinated Indebtedness of the Company, will be subordinated in right of payment to all existing and future Senior Indebtedness of the Company, will rank equally in right of payment with all existing and future Senior Subordinated Indebtedness of the Company (including any outstanding notes not exchanged) and will be senior in right of payment to all existing and future Subordinated Obligations of the Company. The exchange notes also will be effectively subordinated to any Secured Indebtedness of the Company and its Subsidiaries to the extent of the value of the assets securing such Indebtedness, as well as to all liabilities of any future Subsidiaries which will not be Note Guarantors. However, payment from the money or the proceeds of U.S. Government Obligations held in any defeasance trust described below under the caption "-- Defeasance" will not be subordinated to any Senior Indebtedness or subject to the restrictions described herein. The Note Guarantees will be unsecured Senior Subordinated Indebtedness of the applicable Note Guarantor, will be subordinated in right of payment to all existing and future Senior Indebtedness of such Note Guarantor, will rank equally in right of payment with all existing and future Senior Subordinated Indebtedness of such Note Guarantor and will be senior in right of payment to all existing and future Subordinated Obligations of such Note Guarantor. The Note Guarantees also will be effectively subordinated to any Secured Indebtedness of the applicable Note Guarantor to the extent of the value of the assets securing such Secured Indebtedness. We currently conduct all of our operations through our Subsidiaries. To the extent such Subsidiaries are not Note Guarantors, creditors of such Subsidiaries, including trade creditors, and preferred stockholders, if any, of such Subsidiaries generally will have priority with respect to the assets and earnings of such Subsidiaries over the claims of creditors of the Company, including Holders. The exchange notes, therefore, will be effectively subordinated to the claims of creditors, including trade creditors, and preferred stockholders, if any, of Subsidiaries of the Company that are not Note Guarantors. For example, the Company's Foreign Subsidiaries will not guarantee the exchange Notes and, under certain circumstances, the Company will be able to designate future Domestic Subsidiaries as Unrestricted Subsidiaries, which will not guarantee the exchange notes. 46 As of March 31, 2003 we would have had outstanding: (a) $468.8 million of Senior Indebtedness of the Company, consisting of our borrowings under our Amended and Restated Credit Facilities (excluding unused commitment under our Amended and Restated Credit Facilities), all of which would have been Secured Indebtedness; (b) $550.7 million of Senior Subordinated Indebtedness of the Company (including the existing notes and the outstanding notes) and no indebtedness of the Company that is subordinate or junior in right of repayment to the exchange notes; (c) no Senior Indebtedness of the Note Guarantors (excluding their Guarantees of our Indebtedness under our Amended and Restated Credit Facilities); and (d) no Senior Subordinated Indebtedness of the Note Guarantors (excluding the guarantees of the existing notes and the Note Guarantees) and no Indebtedness of the Note Guarantors that is subordinate or junior in right of payment to the guarantees of the existing notes and the Note Guarantees. Although the amount of additional indebtedness the Company and its Restricted Subsidiaries can incur is limited, the Company and its Restricted Subsidiaries may be able to incur substantial amounts of additional Indebtedness in certain circumstances. Such Indebtedness may be Senior Indebtedness. See "-- Certain Covenants -- Limitation on Indebtedness" below. "Senior Indebtedness" of the Company or any Note Guarantor means the principal of, premium (if any) and accrued and unpaid interest on (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization of the Company or any Note Guarantor, regardless of whether or not a claim for post-filing interest is allowed in such proceedings), and fees and other amounts owing in respect of, Bank Indebtedness and all other Indebtedness of the Company or any Note Guarantor, whether outstanding on the Closing Date or thereafter Incurred, unless in the instrument creating or evidencing the same or pursuant to which the same is outstanding it is provided that such obligations are not superior, or are subordinated, in right of payment to the exchange notes or such Note Guarantor's Note Guarantee; provided, however, that Senior Indebtedness shall not include: (a) any obligation of the Company to any Subsidiary of the Company or of such Note Guarantor to the Company or any other Subsidiary of the Company; (b) any liability for Federal, state, local or other taxes owed or owing by the Company or such Note Guarantor; (c) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including Guarantees thereof or instruments evidencing such liabilities); (d) any Indebtedness or obligation of the Company or such Note Guarantor (and any accrued and unpaid interest in respect thereof) that by its terms is subordinate or junior in any respect to any other Indebtedness or obligation of the Company or such Note Guarantor, including any Senior Subordinated Indebtedness and any Subordinated Obligations; (e) any obligations with respect to any Capital Stock; or (f) any Indebtedness Incurred in violation of the indenture. Only Indebtedness of the Company that is Senior Indebtedness will rank senior to the exchange notes. The exchange notes will rank equally in all respects with all other Senior Subordinated Indebtedness of the Company. The Company will not Incur, directly or indirectly, any Indebtedness which is subordinate or junior in ranking in any respect to Senior Indebtedness unless such Indebtedness is Senior Subordinated Indebtedness or is expressly subordinated in right of payment to Senior Subordinated Indebtedness. Unsecured Indebtedness is not deemed to be subordinate or junior to Secured Indebtedness merely because it is unsecured. We may not pay principal of, premium (if any) or interest on the exchange notes, or make any deposit pursuant to the provisions described under "-- Defeasance" below, and may not otherwise repurchase, redeem 47 or otherwise retire any exchange notes (except that Holders may receive and retain (a) Permitted Junior Securities and (b) payments made from the trust described under "-- Defeasance" below) (collectively, "pay the exchange notes") if: (a) any Designated Senior Indebtedness is not paid when due, or (b) any other default on Designated Senior Indebtedness occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms unless, in either case, (i) the default has been cured or waived and any such acceleration has been rescinded, or (ii) such Designated Senior Indebtedness has been paid in full; provided, however, that we may pay the exchange notes without regard to the foregoing if the Company and the Trustee receive written notice approving such payment from the Representative of the Designated Senior Indebtedness with respect to which either of the events set forth in clause (a) or (b) above has occurred and is continuing. During the continuance of any default (other than a default described in clause (a) or (b) above) with respect to any Designated Senior Indebtedness of the Company pursuant to which the maturity thereof may be accelerated immediately without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, we may not pay the exchange notes for a period (a "Payment Blockage Period") commencing upon the receipt by the Trustee (with a copy to us) of written notice (a "Blockage Notice") of such default from the Representative of such Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and ending 179 days thereafter (or earlier if such Payment Blockage Period is terminated: (a) by written notice to the Trustee and the Company from the Person or Persons who gave such Blockage Notice, (b) by repayment in full of such Designated Senior Indebtedness, or (c) because no defaults are continuing). Notwithstanding the provisions described in the immediately preceding sentence (but subject to the provisions contained in the second preceding sentence), unless the holders of such Designated Senior Indebtedness or the Representative of such holders have accelerated the maturity of such Designated Senior Indebtedness, the Company may resume payments on the exchange notes after the end of such Payment Blockage Period. Not more than one Blockage Notice may be given in any consecutive 360-day period, irrespective of the number of defaults with respect to Designated Senior Indebtedness during such period. However, if any Blockage Notice within such 360-day period is given by or on behalf of any holders of Designated Senior Indebtedness other than the Bank Indebtedness, the Representative of the Bank Indebtedness may give another Blockage Notice within such period. In no event, however, may the total number of days during which any Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate during any 360 consecutive day period. For purposes of this paragraph, no default or event of default that existed or was continuing on the date of the commencement of any Payment Blockage Period with respect to the Designated Senior Indebtedness initiating such Payment Blockage Period shall be, or be made, the basis of the commencement of a subsequent Payment Blockage Period by the Representative of such Designated Senior Indebtedness, whether or not within a period of 360 consecutive days, unless such default or event of default shall have been cured or waived for a period of not less than 90 consecutive days. 48 Upon any payment or distribution of the assets of the Company to creditors upon a total or partial liquidation or a total or partial dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property: (a) the holders of Senior Indebtedness of the Company will be entitled to receive payment in full of such Senior Indebtedness before the Holders are entitled to receive any payment of principal of or interest on the exchange notes; and (b) until such Senior Indebtedness is paid in full any payment or distribution to which Holders would be entitled but for the subordination provisions of the indenture will be made to holders of such Senior Indebtedness as their interests may appear (except that Holders may receive and retain (i) Permitted Junior Securities and (ii) payments made from the trust as described under "-- Defeasance" so long as, on the date or dates the respective amounts were paid into the trust, such payments were made with respect to the exchange notes without violating the subordination provisions described herein); if a distribution is made to Holders that due to the subordination provisions of the indenture should not have been made to them, such Holders will be required to hold it in trust for the holders of Senior Indebtedness of the Company and pay it over to them as their interests may appear. If payment of the exchange notes is accelerated because of an Event of Default, the Company or the Trustee shall promptly notify the holders of the Designated Senior Indebtedness of the Company (or their Representative) of the acceleration. If any Designated Senior Indebtedness of the Company is outstanding, the Company may not pay the exchange notes until five Business Days after such holders or the Representative of such Designated Senior Indebtedness receive notice of such acceleration and, thereafter, may pay the exchange notes only if the subordination provisions of the indenture otherwise permit payment at that time. By reason of the subordination provisions of the indenture, in the event of insolvency, creditors of the Company who are holders of Senior Indebtedness of the Company may recover more, ratably, than the Holders, and creditors of the Company who are not holders of Senior Indebtedness of the Company or of Senior Subordinated Indebtedness of the Company (including the exchange notes) may recover less, ratably, than holders of Senior Indebtedness of the Company and Senior Subordinated Indebtedness of the Company. NOTE GUARANTEES All of the Company's Domestic Subsidiaries and certain future Subsidiaries of the Company (as described below), as primary obligors and not merely as sureties, will jointly and severally irrevocably and unconditionally Guarantee on an unsecured senior subordinated basis the performance and full and punctual payment when due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all obligations of the Company under the indenture (including obligations to the Trustee) and the exchange notes, whether for payment of principal of or interest on or liquidated damages in respect of the exchange notes, expenses, indemnification or otherwise (all such obligations guaranteed by such Note Guarantors being herein called the "Guaranteed Obligations"). Such Note Guarantors will agree to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable counsel fees and expenses) incurred by the Trustee or the Holders in enforcing any rights under the Note Guarantees. Each Note Guarantee will be limited in amount to an amount not to exceed the maximum amount that can be Guaranteed by the applicable Note Guarantor without rendering the Note Guarantee, as it relates to such Note Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. After the Closing Date, the Company will cause each future Domestic Subsidiary to execute and deliver to the Trustee a supplemental indenture pursuant to which such Domestic Subsidiary will Guarantee payment of the exchange notes. See "-- Certain Covenants -- Future Note Guarantors" below. Under certain circumstances, the Company will be able to designate Domestic Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries will not Guarantee the exchange notes and therefore will not be subject to any of the restrictive covenants set forth in the indenture. The obligations of a Note Guarantor under its Note Guarantee are senior subordinated obligations. As such, the rights of Holders to receive payment by a Note Guarantor pursuant to its Note Guarantee will be 49 subordinated in right of payment to the rights of holders of Senior Indebtedness of such Note Guarantor. The terms of the subordination provisions described above with respect to the Company's obligations under the exchange notes apply equally to a Note Guarantor and the obligations of such Note Guarantor under its Note Guarantee. Each Note Guarantee is a continuing guarantee and shall (a) remain in full force and effect until payment in full of all the Guaranteed Obligations, (b) be binding upon each Note Guarantor and its successors and (c) inure to the benefit of, and be enforceable by, the Trustee, the Holders and their successors, transferees and assigns. A Note Guarantor shall be released from all obligations under its Note Guarantee and under the indenture upon (a) the merger or consolidation of such Note Guarantor with or into any Person other than the Company or a Subsidiary or Affiliate of the Company where such Note Guarantor is not the surviving entity of such consolidation or merger or (b) the sale or transfer by the Company or any Subsidiary of the Company of the Capital Stock of such Note Guarantor (or by any other Person as a result of a foreclosure of any Lien on such Capital Stock securing Senior Indebtedness), where, after such sale or transfer, such Note Guarantor is no longer a Subsidiary of the Company; provided, however, that each such merger, consolidation, sale or transfer by the Company or such Subsidiary or Affiliate (i) shall comply with the terms of the indenture, including the covenant described under "-- Certain Covenants -- Limitation on Sales of Assets and Subsidiary Stock" or (ii) in the case of a sale or transfer as a result of a foreclosure of any Lien securing Senior Indebtedness by the holder of such Lien, the net proceeds therefrom shall be applied in compliance with the terms of the indenture that would apply to a sale thereof by the Company. CHANGE OF CONTROL Upon the occurrence of any of the following events (each a "Change of Control"), each Holder will have the right to require the Company to repurchase all or any part of such Holder's exchange notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and liquidated damages thereon, if any, to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that notwithstanding the occurrence of a Change of Control, the Company shall not be obligated to repurchase the exchange notes pursuant to this section in the event that it has exercised its right to redeem all the exchange notes under the terms of the section titled "-- Optional Redemption": (a) prior to the earlier to occur of (i) the first public offering of common stock of American Media, Inc. or (ii) the first public offering of common stock of the Company, the Permitted Holders cease to be the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a majority in the aggregate of the total voting power of the Voting Stock of the Company or American Media, Inc., whether as a result of issuance of securities of American Media, Inc. or the Company, any merger, consolidation, liquidation or dissolution of American Media, Inc. or the Company, any direct or indirect transfer of securities by any Permitted Holder or otherwise (for purposes of this clause (a) and clause (b) below, the Permitted Holders shall be deemed to beneficially own any Voting Stock of an entity (the "specified entity") held by any other entity (the "parent entity") so long as the Permitted Holders beneficially own (as so defined), directly or indirectly, in the aggregate a majority of the voting power of the Voting Stock of the parent entity); (b) (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in clause (a) above, except that for purposes of this clause (b) such person shall be deemed to have "beneficial ownership" of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of the Company or Holdings and (ii) the Permitted Holders "beneficially own" (as defined in clause (a) above), directly or indirectly, in the aggregate a lesser percentage of the total voting power of the Voting Stock of the Company or American Media, Inc. than such other person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election 50 a majority of the board of directors of the Company or American Media, Inc., as the case may be (for the purposes of this clause (b), such other person shall be deemed to beneficially own any Voting Stock of a specified entity held by a parent entity, if such other person is the beneficial owner (as defined in this clause (b)), directly or indirectly, of more than 35% of the voting power of the Voting Stock of such parent entity and the Permitted Holders "beneficially own" (as defined in clause (a) above), directly or indirectly, in the aggregate a lesser percentage of the voting power of the Voting Stock of such parent entity and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the board of directors of such parent entity); (c) during any period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of the Company or American Media, Inc., as the case may be (together with any new directors whose election by such board of directors of the Company or American Media, Inc., as the case may be, or whose nomination for election by the shareholders of the Company or American Media, Inc., as the case may be, was approved by a vote of 66 2/3% of the directors of the Company or American Media, Inc., as the case may be, then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of the Company or American Media, Inc., as the case may be, then in office; (d) the adoption of a plan relating to the liquidation or dissolution of the Company or American Media, Inc.; (e) the merger or consolidation of the Company or American Media, Inc. with or into another Person or the merger of another Person with or into the Company or American Media, Inc., or the sale of all or substantially all the assets of the Company or American Media, Inc. to another Person (other than a Person that is controlled by the Permitted Holders), and, in the case of any such merger or consolidation, the securities of the Company or American Media, Inc. that are outstanding immediately prior to such transaction and which represent 100% of the aggregate voting power of the Voting Stock of the Company or American Media, Inc. are changed into or exchanged for cash, securities or property, unless pursuant to such transaction such securities are changed into or exchanged for, in addition to any other consideration, securities of the surviving Person or transferee that represent immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving Person or transferee; or (f) Evercore no longer has the direct or indirect power to appoint or to approve the appointment of a majority of the managers of (or other individuals comprising) the board of managers or other governing body of EMP Group L.L.C. In the event that at the time of such Change of Control the terms of the Bank Indebtedness restrict or prohibit the repurchase of exchange notes pursuant to this covenant, then prior to the mailing of the notice to Holders provided for in the immediately following paragraph but in any event within 30 days following any Change of Control, the Company shall: (a) repay in full all Bank Indebtedness or offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender who has accepted such offer, or (b) obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the exchange notes as provided for in the immediately following paragraph. Within 30 days following any Change of Control (unless the Company has exercised its right to redeem the exchange notes as described under "-- Optional Redemption"), the Company shall mail a notice to each Holder with a copy to the Trustee (the "Change of Control Offer") stating: (a) that a Change of Control has occurred and that such Holder has the right to require the Company to purchase such Holder's exchange notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and liquidated damages, if any, to the date of 51 repurchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date); (b) the circumstances and relevant facts and financial information regarding such Change of Control; (c) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and (d) the instructions determined by the Company, consistent with this covenant, that a Holder must follow in order to have its exchange notes purchased. The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by the Company and purchases all exchange notes validly tendered and not withdrawn under such Change of Control Offer. The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of exchange notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this covenant by virtue thereof. The Change of Control purchase feature is a result of negotiations between the Company and the Initial Purchasers. Management has no present intention to engage in a transaction involving a Change of Control, although it is possible that the Company would decide to do so in the future. Subject to the limitations discussed below, the Company could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the indenture, but that could increase the amount of Indebtedness outstanding at such time or otherwise affect the Company's capital structure or credit ratings. Restrictions on the ability of the Company to incur additional Indebtedness are contained in the covenants described under "-- Certain Covenants -- Limitation on Indebtedness." Such restrictions can only be waived with the consent of the Holders of a majority in principal amount of the exchange notes then outstanding. The occurrence of certain of the events which would constitute a Change of Control would constitute a default under the Credit Agreement. Future Senior Indebtedness of the Company may contain prohibitions of certain events which would constitute a Change of Control or require such Senior Indebtedness to be repurchased upon a Change of Control. Moreover, the exercise by the Holders of their right to require the Company to repurchase the exchange notes could cause a default under such Senior Indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on the Company. Finally, the Company's ability to pay cash to the Holders upon a repurchase may be limited by the Company's then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required repurchases. The provisions under the indenture relative to the Company's obligation to make an offer to repurchase the exchange notes as a result of a Change of Control may be waived or modified with the written consent of the Holders of a majority in principal amount of the exchange notes. With respect to the disposition of property or assets, the phrase "all or substantially all" as used in the indenture varies according to the facts and circumstances of the subject transaction, has no clearly established meaning under New York law (which is the choice of law under the indenture) and is subject to judicial interpretation. Accordingly, in certain circumstances there may be a degree of uncertainty in ascertaining whether a particular transaction would involve a disposition of "all or substantially all" of the property or assets of a Person, and therefore it may be unclear as to whether a Change of Control has occurred and whether the Company is required to make an offer to repurchase the exchange notes as described above. 52 CERTAIN COVENANTS The indenture contains covenants including, among others, the following: Limitation on Indebtedness. (a) The Company will not, and will not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided, however, that the Company or any Note Guarantor may Incur Indebtedness if on the date of such Incurrence and after giving effect thereto the Leverage Ratio would be less than 6.25:1. (b) Notwithstanding the foregoing paragraph (a), the Company and its Restricted Subsidiaries may Incur the following Indebtedness: (i) Bank Indebtedness Incurred in an aggregate principal amount not to exceed $650 million at any one time outstanding less the aggregate amount of all mandatory prepayments, repayments, redemptions or purchases of principal of such Indebtedness pursuant to the covenant described under "-- Limitation on Sales of Assets and Subsidiary Stock"; (ii) Indebtedness of the Company owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Company or any Restricted Subsidiary; provided, however, that (1) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the issuer thereof, (2) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the exchange notes, (3) if a Restricted Subsidiary is the obligor, any such Indebtedness is made pursuant to an intercompany note; and (4) if a Note Guarantor is the obligor, such Indebtedness is subordinated in right of payment to the Note Guarantee of such Note Guarantor; (iii) Indebtedness (1) represented by the exchange notes (not including any Additional Notes) and the Note Guarantees, (2) outstanding on the Closing Date (other than the Indebtedness described in clauses (i) and (ii) above), (3) consisting of Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (iii) (including Refinancing Indebtedness) or the foregoing paragraph (a) and (4) consisting of Guarantees by the Company or any Note Guarantor of any Indebtedness permitted hereunder; provided that if such Indebtedness is by its express terms subordinated in right of payment to the exchange notes or a Note Guarantee of a Note Guarantor, as applicable, any such Guarantee with respect to such Indebtedness shall be subordinated in right of payment to the exchange notes or such Note Guarantor's Note Guarantee substantially to the same extent as such Indebtedness is subordinated to the exchange notes or the Note Guarantee, as applicable; (iv) (1) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, however, that on the date that such Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to the foregoing paragraph (a) after giving effect to the Incurrence of such Indebtedness pursuant to this clause (iv) and (2) Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect of Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause (iv); (v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any Note Guarantor, to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) and including all Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (v) does not exceed 2% of Total Assets; 53 (vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence; (vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of the indenture, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary of the Company for the purpose of financing such acquisition; provided, however, that (1) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (1)) and (2) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including the Fair Market Value of noncash proceeds (such Fair Market Value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition; (viii) Hedging Obligations that are incurred in the ordinary course of business (but in any event excluding Hedging Obligations entered into for speculative purposes); provided, however, that such Hedging Obligations do not increase the Indebtedness of the Company outstanding at any time other than as a result of fluctuations in interest rates or currency exchange rates or by reason of fees, indemnities and compensation payable thereunder; (ix) Obligations in respect of performance and surety bonds and completion guarantees that are incurred by the Company or any Restricted Subsidiary in the ordinary course of business; (x) Indebtedness arising from honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five business days; and (xi) Indebtedness (other than Indebtedness permitted to be Incurred pursuant to the foregoing paragraph (a) or any other clause of this paragraph (b)) in an aggregate principal amount on the date of Incurrence that, when added to all other Indebtedness Incurred pursuant to this clause (xi) and then outstanding, shall not exceed $45.0 million (it being understood that any Indebtedness incurred pursuant to this clause (xi) shall cease to be deemed to be Incurred or outstanding for purposes hereof but shall be deemed Incurred for purposes of paragraph (a) from and after the first date on which the Company could have incurred such Indebtedness under paragraph (a) without reliance on this clause (xi)). (c) Notwithstanding the foregoing, the Company may not Incur any Indebtedness pursuant to paragraph (b) above if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated Obligations unless such Indebtedness will be subordinated to the exchange notes to at least the same extent as such Subordinated Obligations. The Company may not Incur any Indebtedness if such Indebtedness is subordinate or junior in ranking in any respect to any Senior Indebtedness unless such Indebtedness is Senior Subordinated Indebtedness or is expressly subordinated in right of payment to Senior Subordinated Indebtedness. In addition, the Company may not Incur any Secured Indebtedness which is not Senior Indebtedness unless contemporaneously therewith effective provision is made to secure the exchange notes equally and ratably with (or on a senior basis to, in the case of Indebtedness subordinated in right of payment to the exchange notes) such Secured Indebtedness for so long as such Secured Indebtedness is secured by a Lien. A Note Guarantor may not Incur any Indebtedness if such Indebtedness is by its terms expressly subordinate or junior in ranking in any respect to any Senior Indebtedness of such Note Guarantor unless such Indebtedness is Senior Subordinated Indebtedness of such 54 Note Guarantor or is expressly subordinated in right of payment to Senior Subordinated Indebtedness of such Note Guarantor. In addition, a Note Guarantor may not Incur any Secured Indebtedness that is not Senior Indebtedness of such Note Guarantor unless contemporaneously therewith effective provision is made to secure the Note Guarantee of such Note Guarantor equally and ratably with (or on a senior basis to, in the case of Indebtedness subordinated in right of payment to such Note Guarantee) such Secured Indebtedness for as long as such Secured Indebtedness is secured by a Lien. (d) Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may Incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies. For purposes of determining the outstanding principal amount of any particular Indebtedness Incurred pursuant to this covenant, (i) Indebtedness Incurred pursuant to the Credit Agreement prior to or on the Closing Date shall be treated as Incurred pursuant to clause (i) of paragraph (b) above, (ii) Indebtedness permitted by this covenant need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness and (iii) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in this covenant, the Company, in its sole discretion, shall classify such Indebtedness and only be required to include the amount of such Indebtedness in one of such clauses. Limitation on Restricted Payments. (a) The Company will not, and will not permit any Restricted Subsidiary, directly or indirectly, to: (i) declare or pay any dividend or make any distribution on or in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving the Company) or similar payment to the direct or indirect holders of its Capital Stock except dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock) and except dividends or distributions payable to the Company or another Restricted Subsidiary (and, if such Restricted Subsidiary has shareholders other than the Company or other Restricted Subsidiaries, to its other shareholders on a pro rata basis), (ii) purchase, redeem, retire or otherwise acquire for value any Capital Stock of American Media, Inc., the Company or any Restricted Subsidiary held by Persons other than the Company or another Restricted Subsidiary, (iii) purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations (other than the purchase, repurchase or other acquisition of Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of acquisition and other than Indebtedness described in clause (ii) of paragraph (b) of the covenants described under "-- Limitation on Indebtedness") or (iv) make any Investment (other than a Permitted Investment) in any Person (any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition, retirement or Investment being herein referred to as a "Restricted Payment") if at the time the Company or such Restricted Subsidiary makes such Restricted Payment: (1) a Default will have occurred and be continuing (or would result therefrom); (2) the Company could not Incur at least $1.00 of additional Indebtedness under paragraph (a) of the covenant described under "-- Limitation on Indebtedness"; or (3) the aggregate amount of such Restricted Payment and all other Restricted Payments (including, if the amount so expended is other than in cash, the Fair Market Value of such Restricted Payments) declared or made subsequent to the Closing Date would exceed the sum of, without duplication: (A) (i) $54.4 million plus (ii) 100% of EBITDA accrued during the period (treated as one accounting period) from December 24, 2002 to the end of the most recent fiscal quarter 55 ending prior to the date of such Restricted Payment for which financial statements are available (or, in case such EBITDA during such period is a deficit minus 100% of such deficit), minus (iii) 140% of Consolidated Interest Expense accrued during the period (treated as one accounting period) from December 24, 2002 to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which financial statements are available; (B) the aggregate Net Cash Proceeds and the Fair Market Value of property or assets used or useful in a Permitted Business, in each case received by the Company from capital contributions or the issue or sale of its Capital Stock (other than Disqualified Stock) on or subsequent to the Closing Date (other than an issuance or sale to (i) a Subsidiary of the Company or (ii) an employee stock ownership plan or other trust established by the Company or any of its Subsidiaries to the extent such sale is financed by loans from or from Indebtedness guaranteed by the Company unless such loans or Indebtedness have been repaid with cash on or prior to the date of determination); (C) the amount by which Indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company's balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to the Closing Date of any Indebtedness of the Company or its Restricted Subsidiaries issued after the Closing Date which is convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash or the Fair Market Value of other property distributed by the Company or any Restricted Subsidiary upon such conversion or exchange); (D) 100% of the aggregate amount received in cash from (i) the sale or other disposition (other than to the Company or a Restricted Subsidiary) of Investments (other than Permitted Investments) ("Restricted Investments") made by the Company and its Restricted Subsidiaries after the Closing Date and from repurchases and redemptions after the Closing Date of such Restricted Investments from the Company and its Restricted Subsidiaries by any Person (other than the Company or any of its Subsidiaries or Affiliates) and from repayments of loans or advances after the Closing Date which constituted Restricted Investments or (ii) the sale (other than to the Company or a Subsidiary or an Affiliate) after the Closing Date of the Capital Stock of an Unrestricted Subsidiary, in an amount not to exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously made by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was included in the calculation of the amount of Restricted Payments; provided, however, that no amount will be included in this clause (D) to the extent it is already included in Consolidated Net Income; and (E) the amount equal to the net reduction in Investments in Unrestricted Subsidiaries since the Closing Date resulting from (i) payments of dividends, repayments of the principal of loans or advances or other transfers of assets to the Company or any Restricted Subsidiary from Unrestricted Subsidiaries or (ii) the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the definition of "Investment") not to exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously made by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was included in the calculation of the amount of Restricted Payments; provided, however, that no amount will be included in this clause (E) to the extent it is already included in Consolidated Net Income. (b) The provisions of the foregoing paragraph (a) will not prohibit: (i) any purchase, repurchase, retirement or other acquisition or retirement for value of Capital Stock or Subordinated Obligations of the Company made by exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or other trust established by the Company or any of its Subsidiaries to the extent such sale is financed by 56 loans from or from Indebtedness guaranteed by the Company unless such loans or Indebtedness have been repaid with cash on or prior to the date of determination); provided, however, that (1) such Restricted Payment will be excluded in subsequent calculations of the amount of Restricted Payments and (2) the Net Cash Proceeds from such sale applied in the manner set forth in this clause (i) will be excluded from the calculation of amounts under clause (iv)(3)(B) of paragraph (a) above; (ii) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations of the Company made by exchange for, or out of the proceeds of the substantially concurrent sale of, Indebtedness of the Company that is permitted to be Incurred pursuant to the covenant described under "-- Limitation on Indebtedness"; provided, however, that such purchase, repurchase, redemption, defeasance or other acquisition or retirement for value will be excluded in subsequent calculations of the amount of Restricted Payments; (iii) any purchase or redemption of Subordinated Obligations from Net Available Cash to the extent permitted by the covenant described under "-- Limitation on Sales of Assets and Subsidiary Stock"; provided, however, that such purchase or redemption will be excluded in subsequent calculations of the amount of Restricted Payments; (iv) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with this covenant; provided, however, that such dividend will be included in subsequent calculations of the amount of Restricted Payments; (v) the repurchase or other acquisition of shares of, or options to purchase shares of, Capital Stock of the Company or any of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such common stock; provided, however, that the aggregate amount of such repurchases or acquisitions in any fiscal year of the Company after the Closing Date shall not exceed, together with the aggregate amount of all payments made under clause (vi)(3) of this paragraph (b) below in such fiscal year, in the aggregate $5.0 million (with unused amounts in any fiscal year being carried over to succeeding fiscal years subject to a maximum of $10.0 million in any one fiscal year), up to a maximum aggregate amount, together with the aggregate amount of all payments made under clause (vi)(3) of this paragraph (b) below, of $25.0 million during the period from and after the Closing Date; provided further, however, that such repurchases and other acquisitions shall be included in subsequent calculations of the amount of Restricted Payments; (vi) the payment of dividends, other distributions or other amounts by the Company for the purposes set forth in clauses (1) through (4) below; provided, however, that such dividend, distribution or amount set forth in clauses (1) through (4) shall be included in subsequent calculations of the amount of Restricted Payments for the purposes of paragraph (a) above: (1) to American Media, Inc. in amounts equal to the amounts required for American Media, Inc. to pay franchise taxes and other fees required to maintain its corporate existence and provide for other operating costs of up to $2.0 million per fiscal year; (2) to American Media, Inc. in amounts equal to amounts required for American Media, Inc. to pay Federal, state and local income taxes to the extent such income taxes are attributable to the income of the Company and its Restricted Subsidiaries (and, to the extent of amounts actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries); (3) to American Media, Inc. in amounts equal to amounts expended by American Media, Inc. to repurchase Capital Stock of American Media, Inc. owned by former employees of the Company 57 or its Subsidiaries or their assigns, estates and heirs; provided, however, that the aggregate amount paid, loaned or advanced to American Media, Inc. pursuant to this clause (3) in any fiscal year of the Company after the Closing Date shall not exceed, together with the aggregate amount of all payments made under clause (v) of this paragraph (b) above during such fiscal year, in the aggregate, $5.0 million (with unused amounts in any fiscal year being carried over to succeeding fiscal years subject to a maximum of $10.0 million in any one fiscal year), up to a maximum aggregate amount, together with the aggregate amount of all payments made under clause (v) of this paragraph (b) above, of $25.0 million during the period from and after the Closing Date, plus any amounts contributed by American Media, Inc. to the Company as a result of resales of such repurchased shares of Capital Stock; and (4) to American Media, Inc. in amounts required to pay the annual monitoring fee to Evercore; provided, however, that the aggregate amount paid, loaned or delivered to American Media, Inc. pursuant to this clause (4) shall not, in the aggregate, exceed $750,000 per fiscal year; (vii) the payment of dividends on the Company's common stock (or the payment of dividends to American Media, Inc. to fund the payment by American Media, Inc. of dividends on American Media, Inc.'s common stock) following the first public offering of common stock of the Company or American Media, Inc., as the case may be, after the Closing Date, of up to 6% per annum of the net proceeds received by the Company or contributed to the Company by American Media, Inc. from such public offering; provided, however, that (1) the aggregate amount of all such dividends shall not exceed the aggregate amount of net proceeds received by the Company or contributed to the Company by American Media, Inc. from such public offering, (2) at the time of, and after giving effect to, any payment permitted under this clause (vii), no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof and (3) any such payment shall be included in subsequent calculations of the amount of Restricted Payments; (viii) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Company or any of its Restricted Subsidiaries issued or Incurred in accordance with the covenant described under "-- Limitation on Indebtedness"; provided, however, that such payments shall be excluded in subsequent calculations of the amount of Restricted Payments; or (ix) other Restricted Payments in an aggregate amount not to exceed $35.0 million since the Closing Date; provided, however, that at the time of, and after giving effect to, any payment permitted under this clause (ix), no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and provided further that any such payment shall be included in subsequent calculations of the amount of Restricted Payments. Limitation on Restrictions on Distributions from Restricted Subsidiaries. The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to: (a) pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligations owed to the Company or any of its Restricted Subsidiaries, (b) make any loans or advances to the Company or any of the Restricted Subsidiaries or (c) transfer any of its property or assets to the Company or any of its Restricted Subsidiaries, except: (i) any encumbrance or restriction pursuant to applicable law or an agreement in effect at or entered into on the Closing Date; (ii) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction or series of related transactions pursuant to which such 58 Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company) and outstanding on such date; (iii) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause (i) or (ii) of this covenant or this clause (iii) or contained in any amendment to an agreement referred to in clause (i) or (ii) of this covenant or this clause (iii); provided, however, that the encumbrances and restrictions contained in any such Refinancing agreement or amendment are no less favorable, in the aggregate, to the Holders than the encumbrances and restrictions contained in such predecessor agreements; (iv) in the case of clause (c), any encumbrance or restriction (1) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract, or (2) contained in security agreements securing Indebtedness of a Restricted Subsidiary to the extent such encumbrance or restriction restricts the transfer of the property subject to such security agreements; (v) with respect to a Restricted Subsidiary, any restriction imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; and (vi) in the case of clause (c), any encumbrance or restriction pursuant to any agreement relating to Purchase Money Indebtedness that is Incurred subsequent to the Closing Date in compliance with the covenant described under "-- Limitation on Indebtedness." Limitation on Sales of Assets and Subsidiary Stock. (a) The Company will not, and will not permit any Restricted Subsidiary to, make any Asset Disposition unless: (i) the Company or such Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming sole responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the Fair Market Value of the shares and assets subject to such Asset Disposition, (ii) at least 75% of the consideration thereof received by the Company or such Restricted Subsidiary is in the form of cash or Temporary Cash Investments; provided that the amount of (1) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet or in the notes thereto) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the exchange notes), that are assumed by the transferee of any such assets (provided that the Company or such Restricted Subsidiary is released from all liability with respect thereto), (2) any securities received by the Company or such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received) within 90 days following the closing of such Asset Disposition and (3) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause (3) that is at that time outstanding, not to exceed the greater of (A) $25.0 million or (B) 3% of Total Assets at time of receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value), shall be deemed to be cash for purposes of this provision and for no other purpose; and (iii) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company (or such Restricted Subsidiary, as the case may be) (1) first, (A) to the extent the Company elects (or is required by the terms of any Indebtedness), to prepay, repay, redeem or purchase Senior Indebtedness of the Company or Indebtedness (other than any Disqualified Stock) of a Restricted Subsidiary (in each case other 59 than Indebtedness owed to the Company or an Affiliate of the Company and other than Preferred Stock) or (B) to the extent the Company or such Restricted Subsidiary elects, to acquire Additional Assets (including by means of an Investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received by the Company or another Restricted Subsidiary), in each case within one year from the later of such Asset Disposition or the receipt of such Net Available Cash; (2) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (1), to make an Offer (as defined below) to purchase exchange notes pursuant to and subject to the conditions set forth in section (b) of this covenant; provided, however, that if the Company elects (or is required by the terms of any other Senior Subordinated Indebtedness), such Offer may be made ratably to purchase the exchange notes and other Senior Subordinated Indebtedness of the Company; and (3) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (1) and (2), for any general corporate purpose permitted pursuant to the terms of the indenture; provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (1)(A) or (2) above, the Company or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing provisions of this covenant, the Company and the Restricted Subsidiaries will not be required to apply any Net Available Cash in accordance with this covenant except to the extent that the aggregate Net Available Cash from all Asset Dispositions that is not applied in accordance with this covenant exceeds $5.0 million. (b) In the event of an Asset Disposition that requires the purchase of exchange notes (and other Senior Subordinated Indebtedness) pursuant to clause (a)(iii)(2) of this covenant, the Company will be required to purchase exchange notes (and other Senior Subordinated Indebtedness) tendered pursuant to an offer by the Company for the exchange notes (and other Senior Subordinated Indebtedness) (the "Offer") at a purchase price of 100% of their principal amount plus accrued and unpaid interest and liquidated damages, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) in accordance with the procedures (including prorating in the event of oversubscription), set forth in the indenture. If the aggregate purchase price of exchange notes (and other Senior Subordinated Indebtedness) tendered pursuant to the Offer is less than the Net Available Cash allotted to the purchase of the exchange notes (and other Senior Subordinated Indebtedness), the Company may apply the remaining Net Available Cash for any general corporate purpose permitted pursuant to the terms of the indenture. The Company will not be required to make an Offer for exchange notes (and other Senior Subordinated Indebtedness) pursuant to this covenant if the Net Available Cash available therefor (after application of the proceeds as provided in clauses (a)(iii)(1)) is less than $10.0 million for any particular Asset Disposition (which lesser amount will be carried forward for purposes of determining whether an Offer is required with respect to the Net Available Cash from any subsequent Asset Disposition). (c) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of exchange notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this covenant by virtue thereof. Limitation on Transactions with Affiliates. (a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into or conduct any transaction or series of related 60 transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Company (an "Affiliate Transaction") unless such Affiliate Transaction is on terms: (i) that are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could be obtained at the time of such transaction in arm's-length dealings with a Person who is not such an Affiliate, (ii) that, in the event such Affiliate Transaction involves an aggregate amount in excess of $2.0 million, (1) are set forth in writing and (2) have been approved by a majority of the members of the Board of Directors having no personal stake in such Affiliate Transaction and (iii) that, in the event such Affiliate Transaction involves an amount in excess of $10.0 million, have been determined in writing by a nationally recognized appraisal or investment banking firm to be fair, from a financial standpoint, to the Company and its Restricted Subsidiaries or not materially less favorable than those that might reasonably have been obtained in an arm's-length transaction. (b) The provisions of the foregoing paragraph (a) will not prohibit (i) any Restricted Payment permitted to be paid pursuant to the covenant described under "-- Limitation on Restricted Payments," (ii) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the Board of Directors, (iii) the grant of stock options or similar rights to employees and directors of the Company pursuant to plans approved by the Board of Directors, (iv) loans or advances to employees of the Company or any of its Restricted Subsidiaries in the ordinary course of business not in excess of $5.0 million in the aggregate outstanding at any one time, (v) the payment of reasonable fees to directors of the Company and its Subsidiaries who are not employees of the Company or its Subsidiaries, or (vi) any transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries. Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries. The Company will not sell or otherwise dispose of any shares of Capital Stock of a Restricted Subsidiary, and will not permit any Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise dispose of any shares of its Capital Stock except: (a) to the Company or a Restricted Subsidiary; or (b) if, immediately after giving effect to such issuance or sale, such Restricted Subsidiary would continue to be a Restricted Subsidiary or if, immediately after giving effect to such issuance or sale, such Restricted Subsidiary would no longer be a Restricted Subsidiary and the Investment of the Company in such Person after giving effect to such issuance or sale would have been permitted to be made under the covenant described under "-- Limitation on Restricted Payments" as if made on the date of such issuance or sale (and such Investment shall be deemed to be an Investment made for the purposes of such covenant). The proceeds of any sale of such Capital Stock permitted hereby will be treated as Net Available Cash from an Asset Disposition and must be applied in accordance with the terms of the covenant described under "-- Limitation of Sales of Assets and Subsidiary Stock." Limitation on Lines of Business. The Company will not, and will not permit any Restricted Subsidiary to, engage in any business, other than a Permitted Business. 61 SEC Reports. Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the SEC and provide the Trustee and Holders and prospective Holders (upon request) within 15 days after it files them with the SEC, copies of its annual report and the information, documents and other reports that are specified in Sections 13 and 15(d) of the Exchange Act; provided, however, the Company shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event the Company will make available such information to the Trustee, Holders and prospective Holders (upon request) within 15 days after the time the Company would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act. Notwithstanding the foregoing, such requirements shall be deemed satisfied prior to the commencement of the Exchange Offer (as defined) or the effectiveness of the Shelf Registration Statement (as defined) by the filing with the SEC of the Exchange Offer Registration Statement (as defined) and/or Shelf Registration Statement, and any amendments thereto, with such financial information that satisfies Regulation S-X of the Securities Act. The Company also will comply with the other provisions of Section 314(a) of the TIA. Future Note Guarantors. The Company will cause each Domestic Subsidiary organized or acquired after the date hereof to become a Note Guarantor, and execute and deliver to the Trustee a supplemental indenture in the form set forth in the indenture pursuant to which such Domestic Subsidiary will Guarantee payment of the exchange notes. Each Note Guarantee will be limited to an amount not to exceed the maximum amount that can be Guaranteed by that Domestic Subsidiary without rendering the Note Guarantee, as it relates to such Domestic Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. MERGER AND CONSOLIDATION (a) The indenture will provide that the Company will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless: (i) the resulting, surviving or transferee Person (the "Successor Company") will be a corporation organized and existing under the laws of the United States, any State thereof or the District of Columbia and the Successor Company (if not the Company) will expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the exchange notes and the indenture; (ii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; (iii) immediately after giving effect to such transaction, the Successor Company would be able to Incur an additional $1.00 of Indebtedness under paragraph (a) of the covenant described under "-- Certain Covenants -- Limitation on Indebtedness"; and (iv) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the indenture. The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company under the indenture, but the predecessor Company in the case of a conveyance, transfer or lease of all or substantially all its assets will not be released from the obligation to pay the principal of and interest on the exchange notes. (b) In addition, the Company will not permit any Note Guarantor to consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets to, any Person unless: (i) the resulting, surviving or transferee Person will be a corporation organized and existing under the laws of the United States, any State thereof or the District of Columbia, and such Person (if not such 62 Note Guarantor) will expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of such Note Guarantor under its Note Guarantee; (ii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the resulting, surviving or transferee Person as a result of such transaction as having been Incurred by such Person at the time of such transaction), no Default shall have occurred and be continuing; and (iii) the Company will have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the indenture; (iv) provided, however, that the foregoing shall not apply to any such consolidation or merger with or into, or conveyance, transfer or lease to, any Person if the resulting, surviving or transferee Person will not be a Subsidiary of the Company and the other terms of the indenture, including the covenant described under "-- Certain Covenants -- Limitations on Sales of Assets and Subsidiary Stock," are complied with. (c) Notwithstanding the foregoing: (i) any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Company and (ii) the Company may merge with an Affiliate incorporated solely for the purpose of reincorporating the Company in another jurisdiction to realize tax or other benefits. DEFAULTS Each of the following is an Event of Default: (a) default in any payment of interest on any exchange note when due and payable, whether or not prohibited by the provisions described under "-- Ranking" above, continued for 30 days, (b) a default in the payment of principal of any exchange note when due and payable at its Stated Maturity, upon required redemption or repurchase, upon declaration or otherwise, whether or not such payment is prohibited by the provisions described under "-- Ranking" above, (c) the failure by the Company to comply with its obligations under the covenant described under "-- Merger and Consolidation" above, (d) the failure by the Company to comply for 30 days after notice with any of its obligations under the covenants described under "-- Change of Control" or "-- Certain Covenants" above (in each case, other than a failure to purchase exchange notes), (e) the failure by the Company to comply for 60 days after notice with its other agreements contained in the exchange notes or the indenture, (f) the failure by the Company or any Restricted Subsidiary to pay any Indebtedness within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $25.0 million or its foreign currency equivalent (the "cross acceleration provision") and such failure continues for 10 days after receipt of the notice specified in the indenture, (g) certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary (the "bankruptcy provisions"), (h) the rendering of any judgment or decree for the payment of money in excess of $25.0 million (net of any amounts with respect to which a reputable and creditworthy insurance company has 63 acknowledged liability in writing) or its foreign currency equivalent against the Company or a Restricted Subsidiary if: (i) an enforcement proceeding thereon is commenced by any creditor, or (ii) such judgment or decree remains outstanding for a period of 60 days following such judgment and is not discharged, waived or stayed (the "judgment default provision") or (iii) any Note Guarantee ceases to be in full force and effect (except as contemplated by the terms thereof) or any Note Guarantor or Person acting by or on behalf of such Note Guarantor denies or disaffirms such Note Guarantor's obligations under the indenture or any Note Guarantee and such Default continues for 10 days after receipt of the notice specified in the indenture. The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. However, a default under clauses (d), (e), (f) or (j) will not constitute an Event of Default until the Trustee notifies the Company or the Holders of at least 25% in principal amount of the exchange notes notify the Company of the default and the Company or the Note Guarantor, as applicable, does not cure such default within the time specified after receipt of such notice. If an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the exchange notes by notice to the Company and the Trustee may declare the principal of and accrued but unpaid interest on all the exchange notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest on all the exchange notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the exchange notes may rescind any such acceleration with respect to the exchange notes and its consequences. Subject to the provisions of the indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to the indenture or the exchange notes unless: (a) such Holder has previously given the Trustee notice that an Event of Default is continuing, (b) Holders of at least 25% in principal amount of the exchange notes have requested the Trustee in writing to pursue the remedy, (c) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense, (d) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and (e) the Holders of a majority in principal amount of the exchange notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the Holders of a majority in principal amount of the exchange notes will be given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability. Prior to 64 taking any action under the indenture, the Trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. The indenture provides that if a Default occurs and is continuing and is known to the Trustee, the Trustee must mail to each Holder notice of the Default within the earlier of 90 days after it occurs or 30 days after it is known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Note (including payments pursuant to the redemption provisions of such Note), the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the Holders. In addition, the Company will be required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Company will also be required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which with the giving of notice or the lapse of time would become an Event of Default, their status and what action the Company is taking or proposes to take in respect thereof. AMENDMENTS AND WAIVERS Subject to certain exceptions, the indenture or the exchange notes may be amended with the written consent of the Holders of a majority in principal amount of the exchange notes then outstanding and any past default or compliance with any provisions may be waived with the consent of the Holders of a majority in principal amount of the exchange notes then outstanding. However, without the consent of each Holder of a note affected, no amendment may, among other things: (a) reduce the amount of exchange notes whose Holders must consent to an amendment, (b) reduce the rate of or extend the time for payment of interest or any liquidated damages on any exchange note, (c) reduce the principal of or extend the Stated Maturity of any exchange note, (d) reduce the premium payable upon the redemption of any exchange note or change the time at which any Note may be redeemed as described under "-- Optional Redemption" above, (e) make any exchange note payable in money other than that stated in the Note, (f) make any change to the subordination provisions of the indenture that adversely affects the rights of any Holder, (g) impair the right of any Holder to receive payment of principal of, and interest or any liquidated damages on, such Holder's exchange notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder's exchange notes, (h) make any change in the amendment provisions which require each Holder's consent or in the waiver provisions or (i) modify the Note Guarantees in any manner adverse to the Holders. Without the consent of any Holder, the Company and the Trustee may amend the indenture to: (a) cure any ambiguity, omission, defect or inconsistency, (b) provide for the assumption by a successor corporation of the obligations of the Company under the indenture, (c) provide for uncertificated exchange notes in addition to or in place of certificated exchange notes (provided that the uncertificated exchange notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated exchange notes are described in Section 163(f)(2)(B) of the Code), (d) make any change in the subordination provisions of the indenture that would limit or terminate the benefits available to any holder of Senior Indebtedness of the Company (or any representative 65 thereof) under such subordination provisions, or to add additional Note Guarantees with respect to the exchange notes, (e) secure the exchange notes, (f) add to the covenants of the Company for the benefit of the Holders or to surrender any right or power conferred upon the Company, (g) make any change that does not adversely affect the rights of any Holder, subject to the provisions of the indenture, (h) provide for the issuance of the exchange notes, Additional Notes or Private Exchange Notes (as defined in the exchange and registration rights agreement), or (i) comply with any requirement of the SEC in connection with the qualification of the indenture under the TIA. However, no amendment may be made to the subordination provisions of the indenture that adversely affects the rights of any holder of Senior Indebtedness of the Company then outstanding unless the holders of such Senior Indebtedness (or any group or representative thereof authorized to give a consent) consent to such change. The consent of the Holders will not be necessary under the indenture to approve the particular form of any proposed amendment. It will be sufficient if such consent approves the substance of the proposed amendment. After an amendment under the indenture becomes effective, the Company will be required to mail to Holders a notice briefly describing such amendment. However, the failure to give such notice to all Holders, or any defect therein, will not impair or affect the validity of the amendment. TRANSFER AND EXCHANGE A Holder will be able to transfer or exchange the exchange notes in accordance with the indenture. Upon any transfer or exchange, the registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes required by law or permitted by the indenture. The Company will not be required to transfer or exchange any exchange note selected for redemption or to transfer or exchange any exchange note for a period of 15 days prior to a selection of exchange notes to be redeemed. The exchange notes will be issued in registered form and the registered Holder will be treated as the owner of such exchange note for all purposes. DEFEASANCE The Company may at any time terminate all its obligations under the exchange notes and the indenture ("legal defeasance"), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the exchange notes, to replace mutilated, destroyed, lost or stolen exchange notes and to maintain a registrar and paying agent in respect of the exchange notes. In addition, the indenture provides that the Company at any time may terminate: (a) its obligations under the covenants described under "-- Certain Covenants," and (b) the operation of the cross-acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries and the judgment default provision described under "-- Defaults" above and the limitations contained in clause (iii) under paragraph (a) of "-- Merger and Consolidation" above ("covenant defeasance"). In the event that the Company exercises its legal defeasance option or its covenant defeasance option, each Note Guarantor will be released from all of its obligations with respect to its Note Guarantee. The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Company exercises its legal defeasance option, payment of the exchange notes may 66 not be accelerated because of an Event of Default with respect thereto. If the Company exercises its covenant defeasance option, payment of the exchange notes may not be accelerated because of an Event of Default specified in clause (d), (f), (g) (with respect only to Significant Subsidiaries), or (h) (with respect only to Significant Subsidiaries) under "-- Defaults" above or because of the failure of the Company to comply with clause (iii) under paragraph (a) of "-- Merger and Consolidation" above. In order to exercise either defeasance option, the Company must irrevocably deposit in trust (the "defeasance trust") with the Trustee money in an amount sufficient or U.S. Government Obligations, the principal of, and interest on which, will be sufficient, or a combination thereof sufficient, to pay the principal, premium (if any) and interest on the exchange notes when due at redemption or maturity, as the case may be, including interest thereon to maturity or such redemption date, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or other change in applicable Federal income tax law). CONCERNING THE TRUSTEE JPMorgan Trust Company, National Association is the Trustee under the indenture and has been appointed by the Company as Registrar and Paying Agent with regard to the exchange notes. GOVERNING LAW The indenture provides that it and the exchange notes will be governed by, and construed in accordance with, the laws of the State of New York. CERTAIN DEFINITIONS "Acquisition" means the acquisition of Weider Publications, LLC as described in this prospectus. "Additional Assets" means: (a) any property or assets (other than Indebtedness and Capital Stock) to be used by the Company or a Restricted Subsidiary in a Permitted Business; (b) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or (c) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary; provided, however, that any such Restricted Subsidiary described in clauses (b) or (c) above is primarily engaged in a Related Business. "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. For purposes of the provisions described under "-- Certain Covenants -- Limitation on Transactions with Affiliates" and "-- Certain Covenants -- Limitation on Sales of Assets and Subsidiary Stock" only, "Affiliate" shall also mean any beneficial owner of shares representing 10% or more of the total voting power of the Voting Stock (on a fully diluted basis) of the Company or American Media, Inc. or of rights or warrants to purchase such Voting Stock (whether or not currently exercisable) and any Person who would be an Affiliate of any such beneficial owner pursuant to the first sentence hereof. "Asset Disposition" means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of 67 a merger, consolidation, or similar transaction (each referred to for the purposes of this definition as a "disposition"), of: (a) any shares of Capital Stock of a Restricted Subsidiary (other than directors' qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary), (b) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary, or (c) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary; other than, in the case of (a), (b) and (c) above: (i) a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Note Guarantor, (ii) any sale of Capital Stock in, or Indebtedness or other securities of, an Unrestricted Subsidiary, (iii) transactions permitted under paragraph (a) under "-- Merger and Consolidation," (iv) an issuance of Capital Stock by a Restricted Subsidiary of the Company to the Company or to a Restricted Subsidiary, (v) for purposes of the provisions described under "-- Certain Covenants -- Limitation on Sales of Assets and Subsidiary Stock" only, a disposition subject to the covenant described under "-- Certain Covenants -- Limitation on Restricted Payments," (vi) any Permitted Asset Swap and (vii) any disposition of assets with a Fair Market Value of not more than $2.5 million. "Attributable Debt" in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the exchange notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended). "Average Life" means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing: (a) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or scheduled redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment, by (b) the sum of all such payments. "Bank Indebtedness" means any and all amounts payable under or in respect of the Credit Agreement and any Refinancing Indebtedness with respect thereto, as amended from time to time, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof. "Board of Directors" means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of the Board of Directors of the Company. "Business Day" means each day which is not a Legal Holiday. "Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. 68 "Capitalized Lease Obligations" means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty. "Closing Date" means the date of the indenture. "Code" means the Internal Revenue Code of 1986, as amended. "Consolidated Interest Expense" means, for any period, the total interest expense of the Company and its Consolidated Restricted Subsidiaries, plus, to the extent Incurred by the Company and its Restricted Subsidiaries in such period but not included in such interest expense: (a) interest expense attributable to Capitalized Lease Obligations and the interest expense attributable to leases constituting part of a Sale/Leaseback Transaction, (b) amortization of debt discount and debt issuance costs, (c) capitalized interest, (d) noncash interest expense, (e) commissions, discounts and other fees and charges attributable to letters of credit and bankers' acceptance financing, (f) interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by the Company or any Restricted Subsidiary, (g) net costs associated with Hedging Obligations, (h) dividends in respect of all Disqualified Stock of the Company and all Preferred Stock of any of the Restricted Subsidiaries of the Company, to the extent held by Persons other than the Company or a Wholly Owned Subsidiary, (i) interest Incurred in connection with investments in discontinued operations and (j) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company) in connection with Indebtedness Incurred by such plan or trust. Notwithstanding anything to the contrary contained herein, commissions, discounts, yield and other fees and charges Incurred in connection with any transaction pursuant to which the Company or any Subsidiary of the Company may sell, convey or otherwise transfer or grant a security interest in any accounts receivable or related assets shall be included in Consolidated Interest Expense. "Consolidated Net Income" means, for any period, the net income of the Company and its Consolidated Subsidiaries for such period; provided, however, that there shall not be included in such Consolidated Net Income: (a) any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary, except that (i) subject to the limitations contained in clause (d) below, the Company's equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution made to a Restricted Subsidiary, to the limitations contained in clause (c) below) and 69 (ii) the Company's equity in a net loss of any such Person for such period shall be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Company or a Restricted Subsidiary; (b) any net income (or loss) of any person acquired by the Company or a Subsidiary in a pooling of interests transaction for any period prior to the date of such acquisition; (c) any net income (or loss) of any Restricted Subsidiary (other than any Note Guarantor) if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that (i) subject to the limitations contained in clause (d) below, the Company's equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution made to another Restricted Subsidiary, to the limitation contained in this clause) and (ii) the Company's equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income; (d) any gain (loss) realized upon the sale or other disposition of any asset of the Company or its Consolidated Subsidiaries (including pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business and any gain (loss) realized upon the sale or other disposition of any Capital Stock of any Person; (e) any extraordinary gain or loss; and (f) the cumulative effect of a change in accounting principles. "Consolidation" means the consolidation of the amounts of each of the Restricted Subsidiaries with those of the Company in accordance with GAAP consistently applied; provided, however, that "Consolidation" will not include consolidation of the accounts of any Unrestricted Subsidiary, but the interest of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary will be accounted for as an investment. The term "Consolidated" has a correlative meaning. "Credit Agreement" means the credit agreement dated as of May 7, 1999, as amended and restated as of November 1, 1999, as amended as of February 11, 2002, as amended and restated in connection with the Acquisition, as amended, restated, supplemented, waived, replaced (whether or not upon termination), restructured, repaid, refunded, refinanced or otherwise modified from time to time including any agreement extending the maturity thereof or otherwise restructuring all or any portion of the Indebtedness under such agreement or increasing the amount loaned thereunder or altering the maturity thereof, initially among American Media, Inc., the Company, the lenders thereunder and JP Morgan Chase Bank, as administrative agent for such lenders. "Currency Agreement" means with respect to any Person any foreign exchange contract, currency swap agreements or other similar agreement or arrangement to which such Person is a party or of which it is a beneficiary. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Designated Noncash Consideration" means the Fair Market Value of noncash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Disposition that is so designated as Designated Noncash Consideration pursuant to an Officers' Certificate, setting forth the basis of such valuation, less the amount of Temporary Cash Investments received in connection with a subsequent sale of such Designated Noncash Consideration. 70 "Designated Senior Indebtedness" of the Company means: (a) the Bank Indebtedness and (b) any other Senior Indebtedness of the Company that, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof are committed to lend up to at least $10.0 million and is specifically designated by the Company in the instrument evidencing or governing such Senior Indebtedness as "Designated Senior Indebtedness" for purposes of the indenture. "Designated Senior Indebtedness" of a Note Guarantor has a correlative meaning. "Disqualified Stock" means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event: (a) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (b) is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock convertible or exchangeable solely at the option of the Company or a Restricted Subsidiary; provided that any such conversion or exchange shall be deemed an Incurrence of Indebtedness or an issuance of Disqualified Stock, as applicable) or (c) is redeemable at the option of the holder thereof, in whole or in part, in each case on or prior to 91 days after the Stated Maturity of the exchange notes, provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an "asset sale" or "change of control" occurring prior to 91 days after the Stated Maturity of the exchange notes shall not constitute Disqualified Stock if the "asset sale" or "change of control" provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the provisions of the covenants described under "-- Change of Control" and "-- Certain Covenants -- Limitation on Sale of Assets and Subsidiary Stock"; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company in order to satisfy applicable statutory or regulatory obligations or as a result of such employee's termination, death or disability. "Domestic Subsidiary" means each Restricted Subsidiary of the Company other than a Foreign Subsidiary. "EBITDA" for any period means the Consolidated Net Income for such period, plus, without duplication, the following to the extent deducted in calculating such Consolidated Net Income: (a) Consolidated income tax expense, (b) Consolidated Interest Expense, (c) Consolidated depreciation expense, (d) Consolidated amortization expense (excluding amortization expense attributable to a prepaid cash item that was paid in a prior period), (e) any nonrecurring expenses or charges related to any Equity Offering, Permitted Investment, acquisition (including the Acquisition) or Indebtedness permitted to be incurred by the indenture (whether or not successful), (f) the amount of any annual monitoring fees paid to Evercore in an amount not to exceed $750,000 during any fiscal year, and 71 (g) any other noncash charges reducing Consolidated Net Income for such period (excluding any such charge which consists of or requires an accrual of, or cash reserve for, any anticipated cash charges for any prior or in any future period). Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and noncash charges of, a Restricted Subsidiary of the Company shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income; provided, however, that with respect to any Restricted Subsidiary other than a Note Guarantor, such amount shall be added to Consolidated Net Income to compute EBITDA only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders. "Equity Offering" means any public or private sale of common stock or Preferred Stock of the Company or American Media, Inc. (other than Disqualified Stock), other than public offerings with respect to the Company's or American Media Inc.'s common stock registered on Form S-8 or other issuances upon exercise of options by employees of the Company or any of its Restricted Subsidiaries. "Evercore" means Evercore Capital Partners L.P., a Delaware limited partnership, and its Affiliates. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Existing Notes" means the $400,000,000 aggregate principal amount of the Company's 10 1/4% Series B Senior Subordinated Notes due 2009. "Fair Market Value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. For purposes of clause (iv)(3)(B) under paragraph (a) of the covenant described under "-- Certain Covenants -- Limitation on Restricted Payments," the definition of "Permitted Asset Swap" and calculating the Fair Market Value of Designated Noncash Consideration, the Fair Market Value of property or assets other than cash which involves (a) an aggregate amount in excess of $2.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors and (b) an aggregate amount in excess of $10.0 million, shall have been determined in writing by a nationally recognized appraisal or investment banking firm. For all other purposes of the indenture, Fair Market Value will be determined in good faith by the Board of Directors, whose determination will be conclusive and evidenced by a resolution of the Board of Directors. "Foreign Subsidiary" means each Restricted Subsidiary of the Company that is organized under the laws of any country other than the United States, any State thereof, the District of Columbia or any territory thereof. "GAAP" means generally accepted accounting principles in the United States as in effect as of the Closing Date, including those set forth in: (a) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (b) statements and pronouncements of the Financial Accounting Standards Board, (c) such other statements by such other entities as approved by a significant segment of the accounting profession and (d) unless otherwise indicated, all ratios and computations based on GAAP contained in the indenture shall be computed in conformity with GAAP. 72 "Guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person: (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take- or- pay, or to maintain financial statement conditions or otherwise) or (b) entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. The term "Guarantor" shall mean any Person Guaranteeing any obligation. "Hedging Obligations" of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement. "Holder" means the Person in whose name an exchange note is registered on the Registrar's books. "Incur" means issue, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary. The term "Incurrence" when used as a noun shall have a correlative meaning. The accretion of principal of a non-interest bearing or other discount security shall not be deemed the Incurrence of Indebtedness. "Indebtedness" means, with respect to any Person on any date of determination (without duplication): (a) the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money; (b) the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, exchange notes or other similar instruments; (c) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto); (d) all obligations of such Person to pay the deferred and unpaid purchase price of property or services (except Trade Payables), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services; (e) all Capitalized Lease Obligations and all Attributable Debt of such Person; (f) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (but excluding, in each case, any accrued dividends); (g) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of Indebtedness of such Person shall be the lesser of (i) the Fair Market Value of such asset at such date of determination and (ii) the amount of such Indebtedness of such other Persons; (h) to the extent not otherwise included in this definition, Hedging Obligations of such Person; (i) to the extent not otherwise included, the amount then outstanding (i.e., advanced, and received by, and available for use by, such Person) under any receivables financing (as set forth in the books and 73 records of such Person and confirmed by the agent, trustee or other representative of the institution or group providing such receivables financing); and (j) all obligations of the type referred to in clauses (a) through (i) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date. "Interest Rate Agreement" means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary. "Investment" in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender) or other extension of credit (including by way of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person; provided that (a) Hedging Obligations entered into in the ordinary course of business and in compliance with the indenture, (b) endorsements of negotiable instruments and documents in the ordinary course of business and (c) an acquisition of assets, Capital Stock or other securities by the Company for consideration consisting exclusively of Capital Stock (other than Disqualified Stock) of the Company shall not be deemed to be an Investment. For purposes of the definition of "Unrestricted Subsidiary" and the covenant described under "-- Certain Covenants -- Limitation on Restricted Payments": (a) "Investment" shall include the portion (proportionate to the Company's equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to (i) the Company's "Investment" in such Subsidiary at the time of such redesignation less (ii) the portion (proportionate to the Company's equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and (b) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer. "Legal Holiday" means a Saturday, Sunday or other day on which banking institutions in New York State are not required by law or regulation to be open. "Leverage Ratio" as of any date of determination means the ratio of: (a) Total Consolidated Indebtedness as of the date of determination to (b) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters ending at the end of the most recent fiscal quarter for which financial statements are available, provided, however, that (i) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Leverage Ratio is an Incurrence of Indebtedness, EBITDA and, for the purpose of calculating EBITDA, Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first 74 day of such period and the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such period, (ii) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) on the date of the transaction giving rise to the need to calculate the Leverage Ratio, EBITDA and, for the purpose of calculating EBITDA, Consolidated Interest Expense for such period shall be calculated on a pro forma basis as if such discharge had occurred on the first day of such period and as if the Company or such Restricted Subsidiary has not earned the interest income actually earned during such period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness, (iii) if since the beginning of such period the Company or any Restricted Subsidiary shall have made any Asset Disposition, EBITDA for such period shall be reduced by an amount equal to EBITDA (if positive) directly attributable to the assets that are the subject of such Asset Disposition for such period or increased by an amount equal to EBITDA (if negative) directly attributable thereto for such period and, for the purpose of calculating EBITDA, Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Asset Disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale), (iv) if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction causing a calculation to be made hereunder, which constitutes all or substantially all of an operating unit of a business, EBITDA and, for the purpose of calculating EBITDA, Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period, and (v) if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Asset Disposition or any Investment or acquisition of assets that would have required an adjustment pursuant to clause (iii) or (iv) above if made by the Company or a Restricted Subsidiary during such period, EBITDA and, for the purpose of calculating EBITDA, Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition of assets occurred on the first day of such period. For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of the Company. Any such pro forma calculations may include operating expense reductions for such period resulting from the acquisition which is being given pro forma effect that (a) would be permitted pursuant to Article XI of Regulation S-X under the Securities Act or (b) have been realized or for which the steps necessary for realization have been taken or are reasonably expected to be taken within six months following any such acquisition, including, but not limited to, the execution or termination of any contracts, the termination of any personnel or the closing (or approval by the Board of Directors of any closing) of any facility, as applicable, provided that, in either case, such adjustments 75 are set forth in an Officers' Certificate signed by the Company's chief financial officer and another Officer which states (i) the amount of such adjustment or adjustments, (ii) that such adjustment or adjustments are based on the reasonable good faith beliefs of the officers executing such Officers' Certificate at the time of such execution and (iii) that any related Incurrence of Indebtedness is permitted pursuant to the indenture. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term as at the date of determination in excess of twelve months). "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "Net Available Cash" from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other noncash form) therefrom, in each case net of: (a) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP, as a consequence of such Asset Disposition, (b) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition, (c) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition and (d) appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition. "Net Cash Proceeds," with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys' fees, accountants' fees, underwriters' or placement agents' fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof. "Note Guarantee" means each Guarantee of the obligations with respect to the exchange notes issued by any Person pursuant to the terms of the indenture. Each such Note Guarantee will have subordination provisions equivalent to those contained in the indenture and will be substantially in the form prescribed in the indenture. "Note Guarantor" means any Person that has issued a Note Guarantee. "Officer" means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the Company. An "Officer" of a Note Guarantor has a correlative meeting. "Officers' Certificate" means a certificate signed by two Officers. "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or a Note Guarantor, as applicable, or the Trustee. "Permitted Asset Swap" means any one or more transactions in which the Company or any Restricted Subsidiary exchanges assets (other than the trademarks or other assets related to National Enquirer or Star) 76 for consideration consisting of (a) assets used or useful in a Permitted Business and (b) any cash or Temporary Cash Investments (provided that such cash or Temporary Cash Investments will be considered Net Available Cash from an Asset Disposition); provided, however, that the Fair Market Value of the assets received by the Company or such Restricted Subsidiary in such exchange, together with the amount of any cash or Temporary Cash Investments also received in such exchange, shall be at least equal to the Fair Market Value of the assets exchanged by the Company or such Restricted Subsidiary. "Permitted Business" means any business engaged in by the Company or any Restricted Subsidiary on the Closing Date and any Related Business. "Permitted Holders" means EMP Group L.L.C. and any Person acting in the capacity of an underwriter in connection with a public or private offering of the Company's or American Media Inc.'s Capital Stock. "Permitted Investment" means (a) an Investment by the Company or any Restricted Subsidiary in the Company, a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is a Permitted Business; (b) an Investment by the Company or any Restricted Subsidiary in another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary; provided, however, that such Person's primary business is a Permitted Business; (c) an Investment by the Company or any Restricted Subsidiary in Temporary Cash Investments; (d) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances; (e) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business; (f) loans or advances to employees of the Company or such Restricted Subsidiary made in the ordinary course of business not exceeding $5 million in the aggregate outstanding at any time; (g) an Investment by the Company or any Restricted Subsidiary in stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments; (h) an Investment by the Company or any Restricted Subsidiary in any Person to the extent such Investment represents the non-cash portion of the consideration received for an Asset Disposition that was made pursuant to and in compliance with the covenant described under "-- Certain Covenants -- Limitation on Sales of Assets and Subsidiary Stock"; (i) any Investment existing on the Closing Date; (j) guarantees (including Guarantees) of Indebtedness permitted under the indenture; and (k) without duplication, any Investment in any Person, the amount of which, together with all other Investments in other Persons made pursuant to this clause (k) does not exceed $40.0 million in the aggregate at any time outstanding. "Permitted Junior Securities" shall mean debt or equity securities of the Company or any successor corporation issued pursuant to a plan of reorganization or readjustment of the Company that are subordinated to the payment of all then-outstanding Senior Indebtedness of the Company at least to the same extent that the exchange notes are subordinated to the payment of all Senior Indebtedness of the Company on the Closing Date, so long as to the extent that any Senior Indebtedness of the Company outstanding on the date of 77 consummation of any such plan of reorganization or readjustment is not paid in full in cash or Cash Equivalents on such date, the holders of any such Senior Indebtedness not so paid in full in cash have consented to the terms of such plan or reorganization or readjustment. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Stock," as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person. "principal" of an exchange note means the principal of the exchange note plus the premium, if any, payable on the exchange note which is due or overdue or is to become due at the relevant time. "Purchase Money Indebtedness" means Indebtedness: (a) consisting of the deferred purchase price of an asset, conditional sale obligations, obligations under any title retention agreement and other purchase money obligations, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset being financed, and (b) incurred to finance the acquisition by the Company or a Restricted Subsidiary of such asset, including additions and improvements; provided, however, that such Indebtedness is incurred within 180 days after the acquisition by the Company or such Restricted Subsidiary of such asset. "Refinance" means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness. "Refinanced" and "Refinancing" shall have correlative meanings. "Refinancing Indebtedness" means Indebtedness that is Incurred to refund, refinance, replace, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) any Indebtedness of the Company or any Restricted Subsidiary existing on the Closing Date or Incurred in compliance with the indenture (including Indebtedness of the Company that Refinances Refinancing Indebtedness); provided, however, that: (a) the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced, (b) the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the remaining Average Life of the Indebtedness being refinanced, (c) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price), plus costs related to the issuance of such Refinancing Indebtedness, that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being Refinanced and (d) if the Indebtedness being Refinanced is subordinated in right of payment to the exchange notes, such Refinancing Indebtedness is subordinated in right of payment to the exchange notes at least to the same extent as the Indebtedness being Refinanced; provided further, however, that Refinancing Indebtedness shall not include: (i) Indebtedness of a Restricted Subsidiary other than a Note Guarantor that Refinances Indebtedness of the Company or (ii) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary. "Related Business" means any business related, ancillary or complementary to the businesses of the Company and the Restricted Subsidiaries on the Closing Date. 78 "Representative" means the trustee, agent or representative (if any) for an issue of Senior Indebtedness of the Company. "Restricted Subsidiary" means any Subsidiary of the Company other than an Unrestricted Subsidiary. "Sale/Leaseback Transaction" means an arrangement relating to property now owned or hereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or such Restricted Subsidiary leases it from such Person, other than leases between the Company and a Wholly Owned Subsidiary or between Wholly Owned Subsidiaries. "SEC" means the Securities and Exchange Commission. "Secured Indebtedness" means any Indebtedness of the Company secured by a Lien. "Secured Indebtedness" of a Note Guarantor has a correlative meaning. "Senior Subordinated Indebtedness" of the Company means the exchange notes, the existing notes and any other Indebtedness of the Company that specifically provides that such Indebtedness is to rank equal with the exchange notes in right of payment and is not subordinated by its terms in right of payment to any Indebtedness or other obligation of the Company which is not Senior Indebtedness. "Senior Subordinated Indebtedness" of a Note Guarantor has a correlative meaning. "Significant Subsidiary" means any Restricted Subsidiary that would be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred). "Subordinated Obligation" means any Indebtedness of the Company (whether outstanding on the Closing Date or thereafter Incurred) that is subordinate or junior in right of payment to the exchange notes pursuant to a written agreement. "Subordinated Obligation" of a Note Guarantor has a correlative meaning. "Subsidiary" of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by: (a) such Person, (b) such Person and one or more Subsidiaries of such Person or (c) one or more Subsidiaries of such Person. "Temporary Cash Investments" means any of the following: (a) any investment in direct obligations of the United States or any agency thereof or obligations Guaranteed by the United States or any agency thereof, (b) investments in time deposit accounts, certificates of deposit and money market deposits maturing within 180 days of the date of acquisition thereof issued by a bank or trust company that is organized under the laws of the United States, any state thereof or any foreign country recognized by the United States having capital, surplus and undivided profits aggregating in excess of $250,000,000 (or the foreign currency equivalent thereof) and whose long-term debt is rated "A" (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act), 79 (c) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (a) above entered into with a bank meeting the qualifications described in clause (b) above, (d) investments in commercial paper, maturing not more than 90 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States or any foreign country recognized by the United States with a rating at the time as of which any investment therein is made of "P-1" (or higher) according to Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings Service, a division of The McGraw- Hill Companies, Inc. ("S&P"), and (e) investments in securities with maturities of six months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, or by any political subdivision or taxing authority thereof, and rated at least "A" by S&P or "A" by Moody's Investors Service, Inc. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. sec.sec. 77aaa -- 77bbbb) as in effect on the Closing Date. "Total Assets" means the total Consolidated assets of the Company and its Restricted Subsidiaries, as shown on the most recent balance sheet of the Company. "Total Consolidated Indebtedness" means the aggregate amount of all Indebtedness of the Company and its Restricted Subsidiaries, outstanding as of such date of determination, determined on a Consolidated basis, after giving effect to any Incurrence of Indebtedness and the application of the proceeds therefrom giving rise to such determination. "Trade Payables" means, with respect to any Person, any accounts payable or any indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods or services. "Trustee" means the party named as such in the indenture until a successor replaces it and, thereafter, means the successor. "Trust Officer" means the Chairman of the Board, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Unrestricted Subsidiary" means: (a) any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below and (b) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that either: (i) the Subsidiary to be so designated has total Consolidated assets of $1,000 or less or (ii) if such Subsidiary has Consolidated assets greater than $1,000, then such designation would be permitted under the covenant entitled "Limitation on Restricted Payments." The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation: (1) the Company could Incur $1.00 of additional Indebtedness under paragraph (a) of the covenant described under "-- Certain Covenants -- Limitation on Indebtedness" and 80 (2) no Default shall have occurred and be continuing. Any such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted Subsidiary by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions. "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States is pledged and which are not callable or redeemable at the issuer's option. "Voting Stock" of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof. "Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company all the Capital Stock of which (other than directors' qualifying shares) is owned by the Company and/or one or more Wholly Owned Subsidiaries. 81 CERTAIN U.S. FEDERAL TAX CONSEQUENCES The following is a summary of certain U.S. federal tax consequences to holders who receive exchange notes in the exchange of the ownership and disposition of exchange notes as of the date hereof. Except where noted, this summary deals only with exchange notes held as capital assets, and it does not deal with special situations. For example, this summary does not address tax consequences to holders who may be subject to special tax treatment, such as dealers in securities or currencies, financial institutions, regulated investment companies, real estate investment trusts, tax-exempt entities, insurance companies, persons holding exchange notes as a part of a hedging, integrated, conversion or constructive sale transaction or a straddle, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, persons liable for alternative minimum tax or holders of exchange notes whose "functional currency" is not the U.S. dollar. In addition, this summary does not represent a detailed description of the U.S. federal income tax consequences applicable to you if you are subject to special treatment under the U.S. federal income tax laws (including if you are a U.S. expatriate, "controlled foreign corporation," "passive foreign investment company," "foreign personal holding company" or a corporation that accumulates earnings to avoid U.S. federal income tax). This summary is based upon provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations, rulings and judicial decisions as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those summarized below. If a partnership holds exchange notes, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding exchange notes, you should consult your tax advisors. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES TO YOU OF THE OWNERSHIP OF THE EXCHANGE NOTES, AS WELL AS THE CONSEQUENCES TO YOU ARISING UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION. CONSEQUENCES OF REGISTERED EXCHANGE OFFER The exchange of outstanding notes pursuant to the registered exchange offer will not constitute a material modification of the terms of the outstanding notes and therefore will not constitute a taxable event for U.S. federal income tax purposes. In that event, the exchange would have no U.S. federal income tax consequences to a holder, so that the holder's holding period and adjusted tax basis for an exchange note would not be affected, and the U.S. holder would continue to take into account income in respect of an exchange note in the same manner as before the exchange. CONSEQUENCES TO U.S. HOLDERS The following is a summary of certain U.S. federal tax consequences that will apply to you if you are a U.S. holder of exchange notes. Certain consequences to "Non-U.S. holders" of exchange notes, which are beneficial owners of exchange notes who are not U.S. holders, are described under "-- Consequences to Non-U.S. Holders" below. A "U.S. holder" means a person that is one of the following: - a citizen or resident of the U.S.; - a corporation or partnership created or organized in or under the laws of the U.S. or any political subdivision thereof; - an estate the income of which is subject to U.S. federal income taxation regardless of its source; or - a trust if it (1) is subject to the primary supervision of a court within the U.S. and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. 82 PAYMENTS OF INTEREST Except as set forth below, interest on an exchange note will generally be taxable to you as ordinary income at the time it is paid or accrued in accordance with your method of accounting for tax purposes. MARKET DISCOUNT If a U.S. holder purchased an outstanding note for an amount that is less than its adjusted issue price, the amount of the difference is treated as "market discount" for U.S. federal income tax purposes, unless that difference is less than a specified de minimis amount. Under the market discount rules, a U.S. holder will be required to treat any payment, other than qualified stated interest, on, or any gain on the sale, exchange, retirement or other disposition of, an exchange note as ordinary income to the extent of the market discount that a U.S. holder has not previously included in income and is treated as having accrued on the exchange note at the time of its payment or disposition. In addition, a U.S. holder may be required to defer, until the maturity of the exchange note or its earlier disposition in a taxable transaction, the deduction of all or a portion of the interest expense on any indebtedness attributable to the exchange note. Any market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the exchange note, unless a U.S. holder elects to accrue on a constant interest method. A U.S. holder may elect to include market discount in income currently as it accrues, on either a ratable or constant interest method, in which case the rule described above regarding deferral of interest deductions will not apply. A U.S. holder's election to include market discount in income currently, once made, applies to all market discount obligations acquired by the U.S. holder on or after the first taxable year to which a U.S. holder's election applies and may not be revoked without the consent of the Internal Revenue Service("IRS"). U.S. holders should consult their own tax advisors before making this election. AMORTIZABLE BOND PREMIUM If you purchased an outstanding note at a price that exceeds the amount payable at the maturity of the outstanding note (not taking into account any portion of the purchase price attributable to accrued but unpaid interest, if any), you will be considered to have purchased the outstanding note at a "premium". You generally may elect to amortize the premium over the remaining term of the outstanding note on a constant yield method as an offset to interest when includible in income under your regular accounting method. In the case of instruments that provide for alternative payment schedules, such as the outstanding notes and the exchange notes, amortizable bond premium is calculated by assuming that (a) you will exercise or not exercise options in a manner that maximizes your yield, and (b) we will exercise or not exercise options in a manner that minimizes your yield (except that we will be assumed to exercise call options in a manner that maximizes your yield). If you do not elect to amortize bond premium, that premium will decrease the gain or increase the loss you would otherwise recognize on disposition of an exchange note. Your election to amortize premium on a constant yield method will also apply to all debt obligations held or subsequently acquired by you on or after the first day of the first taxable year to which the election applies. You may not revoke the election without the consent of the IRS. You should consult your own tax advisor before making this election. DISPOSITION OF NOTES A U.S. holder's tax basis in an exchange note will, in general, be the U.S. holder's cost therefor, reduced by any amortized premium. Upon the sale, exchange, retirement or other disposition of an exchange note, a U.S. holder will recognize gain or loss equal to the difference between the amount realized upon the sale, exchange, retirement or other disposition (not including an amount equal to any accrued interest which will be treated as a payment of interest for U.S. federal income tax purposes) and the adjusted tax basis of the exchange note. Capital gains of individuals derived in respect of capital assets held for more than one year are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. 83 INFORMATION REPORTING AND BACKUP WITHHOLDING In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on the exchange notes and to the proceeds of sale of an exchange note made to you (unless you are an exempt recipient such as a corporation). A backup withholding tax will apply to such payments if you fail to provide a taxpayer identification number, a certification of other exempt status, or fail to report in full dividend and interest income. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability provided the required information is furnished to the IRS. CONSEQUENCES TO NON-U.S. HOLDERS U.S. FEDERAL WITHHOLDING TAX The 30% U.S. federal withholding tax will not apply to any payment of principal or interest on an exchange note provided that: - interest paid on the exchange note is not effectively connected with your conduct of a trade or business in the United States; - you do not actually (or constructively) own 10% or more of the total combined voting power of all classes of our voting stock within the meaning of the Code and applicable U.S. Treasury regulations; - you are not a controlled foreign corporation that is related to us through stock ownership; - you are not a bank whose receipt of interest on the notes is described in section 881(c)(3)(A) of the Code; and - either (a) you provide your name and address on an IRS Form W-8BEN (or other applicable form), and certify, under penalties of perjury, that you are not a U.S. person or (b) you hold your exchange notes through certain foreign intermediaries and satisfy the certification requirements of applicable U.S. Treasury regulations. Special certification and other rules apply to certain non-U.S. holders that are entities rather than individuals. If you cannot satisfy the requirements described above, payments of interest made to you will be subject to the 30% U.S. federal withholding tax, unless you provide us with a properly executed (1) IRS Form W-8BEN (or other applicable form) claiming an exemption from or reduction in withholding under the benefit of an applicable income tax treaty or (2) IRS Form W-8ECI (or other applicable form) stating that interest paid on an exchange note is not subject to withholding tax because it is effectively connected with your conduct of a trade or business in the U.S. (as discussed below under "U.S. Federal Income Tax"). The 30% U.S. federal withholding tax generally will not apply to any gain that you realize on the sale, exchange, retirement or other disposition of an exchange note. U.S. FEDERAL INCOME TAX If you are engaged in a trade or business in the U.S. and interest on the exchange notes is effectively connected with the conduct of that trade or business, you will be subject to U.S. federal income tax on that interest on a net income basis (although exempt from the 30% withholding tax, provided certain certification and disclosure requirements discussed above in "U.S. Federal Withholding Tax" are complied with) in the same manner as if you were a U.S. person as defined under the Code. In addition, if you are a foreign corporation, you may be subject to a branch profits tax equal to 30% (or lower applicable income tax treaty rate) of your earnings and profits for the taxable year, subject to adjustments, that are effectively connected with the conduct by you of a trade or business in the U.S. 84 Any gain realized on the disposition of an exchange note (other than gain representing accrued interest, which will be treated as a payment of interest for U.S. federal income tax purposes) generally will not be subject to U.S. federal income tax unless: - the gain is effectively connected with the conduct of a trade or business in the U.S. by you, or - you are an individual who is present in the U.S. for 183 days or more in the taxable year of that disposition, and certain other conditions are met. U.S. FEDERAL ESTATE TAX Your estate will not be subject to U.S. federal estate tax on notes beneficially owned by you at the time of your death, provided that any payment to you on the notes would be eligible for exemption from the 30% federal withholding tax under the "portfolio interest rule" described above under "U.S. Federal Withholding Tax" without regard to the statement requirement described in the last bullet point. INFORMATION REPORTING AND BACKUP WITHHOLDING Generally, we must report to the IRS and to you the amount of interest paid to you and the amount of tax, if any, withheld with respect to those payments. Copies of the information returns reporting such interest payments and any withholding may also be made available to the tax authorities in the country in which you reside under the provisions of an applicable income tax treaty. In general, you will not be subject to backup withholding with respect to payments that we make to you provided that we do not have actual knowledge or reason to know that you are a U.S. person, as defined under the Code, and you have provided the statement described above in the last bullet point under "U.S. Federal Withholding Tax." You will be subject to information and reporting and, depending on the circumstances, backup withholding with respect to the proceeds of the sale of a note within the United States or conducted through certain U.S.-related financial intermediaries, unless the payor of the proceeds receives the statement described above and does not have actual knowledge or reason to know that you are a U.S. person, as defined under the Code, or you otherwise establish an exemption. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability provided the required information is furnished to the IRS. 85 PLAN OF DISTRIBUTION Based on interpretations by the SEC set forth in no-action letters issued to third parties, we believe that exchange notes issued pursuant to the exchange offer in exchange for the outstanding notes may be offered for resale, resold and otherwise transferred by holders thereof, other than any holder which is: - an "affiliate" of us within the meaning of Rule 405 under the Securities Act; - a broker-dealer who acquired exchange notes directly from us; or - broker-dealers who acquired exchange notes as a result of market-making or other trading activities, without compliance with the registration and prospectus delivery provisions of the Securities Act provided that such exchange notes are acquired in the ordinary course of such holders' business, and such holders are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of such exchange notes. However, broker-dealers receiving exchange notes in the exchange offer will be subject to a prospectus delivery requirement with respect to resales of such exchange notes. To date, the SEC has taken the position that these broker-dealers may fulfill their prospectus delivery requirements with respect to transactions involving an exchange of securities such as the exchange pursuant to the exchange offer, other than a resale of an unsold allotment from the sale of the outstanding notes to the initial purchasers, with the prospectus contained in the exchange offer registration statement. Pursuant to the exchange and registration rights agreement, we have agreed to permit these broker-dealers to use this prospectus in connection with the resale of such exchange notes. We have agreed that, for a period of 180 days after the expiration date, we will make this prospectus, and any amendment or supplement to this prospectus, available to any broker-dealer that requests such documents in the letter of transmittal. The objective of the exchange offer is to make the exchange notes freely transferable by the holders without further registration or any prospectus delivery requirements under the Securities Act of 1933. Each holder of the outstanding notes who wishes to exchange its outstanding notes for exchange notes in the exchange offer will be required to make certain representations to us as set forth in "The Exchange Offer -- Procedures for Tendering." Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired as a result of market-making activities or other trading activities. Until , 2003, all dealers effecting transactions in the exchange notes may be required to deliver a prospectus. We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the consummation of the exchange offer, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the 86 exchange offer, including the expenses of one counsel for the holders of the outstanding notes, other than commissions or concessions of any broker-dealers, and will indemnify the holders of the outstanding notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act. LEGAL MATTERS Certain legal matters with respect to the exchange notes are being passed upon for us by Simpson Thacher & Bartlett LLP, New York, New York. EXPERTS The consolidated financial statements incorporated in this prospectus by reference to the Company's Annual Report on Form 10-K for the year ended March 31, 2003 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference (which report expresses an unqualified opinion and includes an explanatory paragraph relating to a change in the method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets and an explanatory paragraph concerning the application of procedures relating to certain disclosures of financial statement amounts related to the fiscal year 2002 and 2001 financial statements that were audited by other auditors who have ceased operations), and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The combined consolidated financial statements of Weider Publications, Inc. and subsidiaries and Weider Interactive Networks, Inc. incorporated in this prospectus by reference from the Current Report on Form 8-K of American Media Operations, Inc. filed on June 6, 2003, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference (which report expresses an unqualified opinion and includes an explanatory paragraph relating to a change in the method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets), and has been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. CHANGE IN ACCOUNTANTS As discussed in a Current Report on Form 8-K that the Company filed with the Commission on July 12, 2002, as amended by a Current Report on Form 8-K/A filed with the Commission on July 26, 2002, the Company dismissed its independent auditors, Arthur Andersen LLP, on July 9, 2002 and engaged the services of Deloitte & Touche LLP as the Company's new independent auditors for the fiscal year ending March 31, 2003. The Company's Board of Directors authorized the dismissal of Arthur Andersen LLP and the engagement of Deloitte & Touche LLP. Arthur Andersen LLP's reports on the Company's consolidated financial statements for the fiscal year ended March 25, 2002 did not contain an adverse opinion, or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal year ended March 25, 2002 there were no disagreements with Arthur Andersen on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which disagreement, if not resolved to Arthur Andersen's satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report on the Company's consolidated financial statements for such year. 87 AMERICAN MEDIA, INC. LOGO PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law (the "DGCL") permits the Company's board of directors to indemnify any person against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action (except settlements or judgments in derivative suits), suit or proceeding in which such person is made a party by reason of his or her being or having been a director, officer, employee or agent of the Company, in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act of 1933, as amended (the "Securities Act"). The statute provides that indemnification pursuant to its provisions is not exclusive of other rights of indemnification to which a person may be entitled under any by-law, agreement, vote of stockholders or disinterested directors, or otherwise. The Company's by-laws provide for the mandatory indemnification of its directors, officers, employees and other agents to the maximum extent permitted by the DGCL, and the Company has entered into agreements with its officers, directors and certain key employees implementing such indemnification. As permitted by Sections 102 and 145 of the DGCL the Company's certificate of incorporation eliminates a director's personal liability for monetary damages to the Company and its stockholders arising from a breach or alleged breach of a director's fiduciary duty except for liability under Section 174 of the DGCL, for liability for any breach of the director's duty of loyalty to the Company or its stockholders, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law or for any transaction which the director derived an improper personal benefit. The directors and officers of the Company are covered by insurance policies indemnifying against certain liabilities, including certain liabilities arising under the Securities Act which might be incurred by them in such capabilities and against which they cannot be indemnified by the Company. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Exhibits
EXHIBIT NUMBER DESCRIPTION - ------- ----------- *1 -- Purchase Agreement, dated as of January 16, 2003, among American Media Operations, Inc., AM Auto World Weekly, Inc, American Media Consumer Entertainment Inc., American Media Consumer Magazine Group, Inc., American Media Distribution & Marketing Group, Inc., American Media Property Group, Inc., American Media Mini Mags, Inc., American Media Newspaper Group, Inc., Country Music Media Group, Inc., Distribution Services, Inc., Globe Communications Corp., Globe Editorial, Inc., Mira! Editorial, Inc., National Enquirer, Inc., National Examiner, Inc., NDSI, Inc., Star Editorial, Inc., AMI Books, Inc., AMI Films, Inc., Weider Publications, LLC, SYL Communications, J.P. Morgan Securities Inc. and Bear, Stearns & Co. Inc. ***2.1 -- Agreement and Plan of Merger, dated as of February 16, 1999, by and between EMP Acquisition Corp., a Delaware corporation, and American Media, Inc., a Delaware corporation. ***2.2 -- Certificate of Merger of EMP Acquisition Corp. with and into American Media, Inc. (under Section 251 of the General Corporation Law of the State of Delaware) ****2.3 -- Stock and Asset Purchase Agreement, dated as of November 1, 1999, among Mike Rosenbloom, Globe International Publishing, Inc., Globe International, Inc., EMP Group LLC and American Media Operations, Inc. ##2.4 -- Purchase and Contribution Agreement, dated as of November 26, 2002, by and among Weider Health and Fitness, Weider Interactive Networks, Inc., Weider Health and Fitness, LLC, Weider Publications, LLC, EMP Group L.L.C., and American Media Operations, Inc.
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EXHIBIT NUMBER DESCRIPTION - ------- ----------- ###2.5 -- Agreement and Plan of Merger, dated February 24, 2003, by and among EMP Group L.L.C. and EMP Merger Corporation. ###2.6 -- Amendment No. 1 to the Agreement and Plan of Merger, dated April 14, 2003, by and between EMP Group L.L.C. and EMP Merger Corporation. ###2.7 -- Contribution Agreement, dated as of February 24, 2003, by and among EMP Merger Corporation and the persons set forth on the signature pages thereto. ###2.8 -- Amendment No. 1 to the Contribution Agreement, dated April 14, 2003, by and among EMP Merger Corporation and the persons set forth on the signature pages thereto. ####3.1 -- Certificate of Incorporation of Enquirer/Star Group, Inc. and amendments thereto.(1) ####3.2 -- Amended By-laws of Enquirer/Star, Inc.(1) #####3.3 -- Amendment of Certificate of Incorporation of Operations dated November 7, 1994 changing its name to American Media Operations, Inc. from Enquirer/Star, Inc. *****3.4 -- Articles of Incorporation of AM Auto World Weekly, Inc. *****3.5 -- Bylaws of AM Auto World Weekly, Inc. *****3.6 -- Articles of Incorporation of American Media Consumer Entertainment Inc. *****3.7 -- Bylaws of American Media Consumer Entertainment Inc. *****3.8 -- Articles of Incorporation of American Media Consumer Magazine Group, Inc. *****3.9 -- Bylaws of American Media Consumer Magazine Group, Inc. *****3.10 -- Articles of Incorporation of American Media Distribution & Marketing Group, Inc. *****3.11 -- Bylaws of American Media Distribution & Marketing Group, Inc. *****3.12 -- Articles of Incorporation of American Media Property Group, Inc. *****3.13 -- Bylaws of American Media Property Group, Inc. *****3.14 -- Articles of Incorporation of American Media Mini Mags, Inc. *****3.15 -- Bylaws of American Media Mini Mags, Inc. *****3.16 -- Articles of Incorporation of American Media Newspaper Group, Inc. *****3.17 -- Bylaws of American Media Newspaper Group, Inc. ***3.18 -- Articles of Incorporation of Country Music Media Group, Inc. (formerly known as Country Weekly, Inc.) ***3.19 -- Bylaws of Country Music Media Group, Inc. (formerly known as Country Weekly, Inc.) ***3.20 -- Articles of Incorporation of Distribution Services, Inc. ***3.21 -- Bylaws of Distribution Services, Inc. *****3.22 -- Articles of Incorporation of Globe Communications Corp. *****3.23 -- Bylaws of Globe Communications Corp. *****3.24 -- Articles of Incorporation of Globe Editorial, Inc. *****3.25 -- Bylaws of Globe Editorial, Inc. *****3.26 -- Articles of Incorporation of Mira! Editorial, Inc. *****3.27 -- Bylaws of Mira! Editorial, Inc. ***3.28 -- Articles of Incorporation of National Enquirer, Inc. ***3.29 -- Bylaws of National Enquirer, Inc. *****3.30 -- Articles of Incorporation of National Examiner, Inc. *****3.31 -- Bylaws of National Examiner, Inc. ***3.32 -- Articles of Incorporation of NDSI, Inc. ***3.33 -- Bylaws of NDSI, Inc. ***3.34 -- Articles of Incorporation of Star Editorial, Inc. ***3.35 -- Bylaws of Star Editorial, Inc.
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EXHIBIT NUMBER DESCRIPTION - ------- ----------- *3.36 -- Articles of Incorporation of AMI Books, Inc. *3.37 -- Bylaws of AMI Books, Inc. *3.38 -- Articles of Incorporation of AMI Films, Inc. *3.39 -- Bylaws of AMI Films, Inc. *3.40 -- Certificate of Formation of Weider Publications, LLC *3.41 -- Limited Liability Company Agreement of Weider Publications, LLC *3.42 -- Articles of Incorporation of SYL Communications (f/k/a/Wieder Communications) *3.43 -- Bylaws of SYL Communications (f/k/a/Wieder Communications) ***4.1 -- Indenture, dated as of May 7, 1999, among American Media Operations, Inc., National Enquirer, Inc., Star Editorial, Inc., SOM Publishing, Inc., Weekly World News, Inc., Country Weekly, Inc., Distribution Services, Inc., Fairview Printing, Inc., NDSI, Inc., Biocide, Inc., American Media Marketing, Inc., Health Xtra, Inc., Retail Marketing Network and Marketing Services, Inc., and The Chase Manhattan Bank, a New York banking corporation, as trustee. ***4.2 -- Indemnity, Subrogation and Contribution Agreement, dated as of May 7, 1999, among American Media Operations, Inc., each subsidiary of American Media, Inc. listed on Schedule I thereto and The Chase Manhattan Bank, as collateral agent for the Secured Parties (as defined in the Security Agreement). ***4.3 -- Pledge Agreement, dated as of May 7, 1999, among American Media Operations, Inc., American Media, Inc., each subsidiary of Media listed on Schedule I thereto and The Chase Manhattan Bank, as Collateral Agent for the Secured Parties (as defined in the Security Agreement). ***4.4 -- Security Agreement, dated as of May 7, 1999, among American Media Operations, Inc., American Media, Inc., each subsidiary of Media listed on Schedule I thereto and The Chase Manhattan Bank, as collateral agent for the Secured Parties (as defined herein). ****4.5 -- Credit Agreement, dated as of May 7, 1999, as Amended and Restated as of November 1, 1999, among American Media Inc., American Media Operations, Inc., the Lenders party thereto, and The Chase Manhattan Bank, as Administrative Agent. *****4.6 Amendment, dated as of February 11, 2002, to the Credit Agreement, dated as of May 7, 1999, among American Media Inc., American Media Operations, Inc., the Lenders party thereto, and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Administrative Agent. *****4.7 -- Indenture, dated as of February 14, 2002, among American Media Operations, Inc., AM Auto World Weekly, Inc., American Media Consumer Entertainment Inc., American Media Consumer Magazine Group, Inc., American Media Distribution & Marketing Group, Inc., American Media Property Group, Inc., American Media Mini Mags, Inc., American Media Newspaper Group, Inc., Country Music Media Group, Inc., Distribution Services, Inc., Globe Communications Corp., Globe Editorial, Inc., Mira! Editorial, Inc., National Enquirer, Inc., National Examiner, Inc., NDSI, Inc., Star Editorial, Inc., and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee. ##4.8 -- Indenture, dated as of January 23, 2003, among American Media Operations, Inc., AM Auto World Weekly, Inc, American Media Consumer Entertainment Inc., American Media Consumer Magazine Group, Inc., American Media Distribution & Marketing Group, Inc., American Media Property Group, Inc., American Media Mini Mags, Inc., American Media Newspaper Group, Inc., Country Music Media Group, Inc., Distribution Services, Inc., Globe Communications Corp., Globe Editorial, Inc., Mira! Editorial, Inc., National Enquirer, Inc., National Examiner, Inc., NDSI, Inc., Star Editorial, Inc., AMI Books, Inc., AMI Films, Inc., Weider Publications, LLC, SYL Communications, and J.P. Morgan Trust Company, National Association, as trustee.
II-3
EXHIBIT NUMBER DESCRIPTION - ------- ----------- ##4.9 -- Amendment and Restatement Agreement, dated as of January 23, 2003, among American Media Operations, Inc., American Media, Inc., the lenders party thereto, and JPMorgan Chase Bank, as Administrative Agent, under the Credit Agreement, dated as of May 7, 1999, as amended and restated as of May 21, 2002, among the parties thereto. ******4.10 -- Reaffirmation and Amendment Agreement, as of January 23, 2003, among American Media Operations, Inc., American Media, Inc., the Subsidiary Loan Parties and JPMorgan Chase Bank, as Administrative Agent and Collateral Agent under the Restated Credit Agreement. ******4.11 -- Amendment No. 1 dated as of March 5, 2003 to the Amended and Restated Credit Agreement dated as of January 23, 2003, among American Media Inc., American Media Operations, Inc., the lenders party thereto and JPMorgan Chase Bank, as Administrative Agent. *****4.12 -- Exchange and Registration Rights Agreement, dated as of January 23, 2003, among American Media Operations, Inc., AM Auto World Weekly, Inc., American Media Consumer Entertainment Inc., American Media Consumer Magazine Group, Inc., American Media Distribution & Marketing Group, Inc., American Media Property Group, Inc., American Media Mini Mags, Inc., American Media Newspaper Group, Inc., Country Music Media Group, Inc., Distribution Services, Inc., Globe Communications Corp., Globe Editorial, Inc., Mira! Editorial, Inc., National Enquirer, Inc., National Examiner, Inc., NDSI, Inc., Star Editorial, Inc., AMI Books, Inc., AMI Films, Inc., Weider Publications, LLC, SYL Communications, J.P. Morgan Securities Inc. and Bear, Stearns & Co. Inc. *5 -- Opinion of Simpson Thacher & Bartlett LLP. ######10.1 -- Tax Sharing Agreement, dated as of March 31, 1992, among Enquirer/Star Group Inc. and its subsidiaries.(1) ###10.2 -- Management Agreement, dated as of April 17, 2003, by and between American Media, Inc., THL Managers V, LLC and Evercore Advisors L.P. ******10.3 -- Amended and Restated Employment Agreement dated February 24, 2003, of David J. Pecker. #10.4 Side Letter regarding David J. Pecker Employment Agreement, dated April 13, 1999 ****10.5 -- Mike Rosenbloom Employment Agreement, dated as of November 1, 1999. *12 -- Computation of Ratio of Earnings to Fixed Charges. *21 -- Subsidiaries of American Media Operations, Inc. *23.1 -- Consent of Deloitte and Touche LLP (American Media). *23.2 -- Consent of Deloitte and Touche LLP (Weider). *23.3 -- Consent of Simpson Thacher & Bartlett LLP (included in Exhibit 5). *24 -- Powers of Attorney (included on pages II-6 through II-26). *25 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of J.P. Morgan Trust Company, National Association, as Trustee. *99.1 -- Form of Letter of Transmittal. *99.2 -- Form of Notice of Guaranteed Delivery.
- --------------- (1) Enquirer/Star, Inc. is now named American Media Operations, Inc.; Enquirer/Star Group, Inc. is now named American Media, Inc. * Filed herewith. ** To be filed by amendment. *** Incorporated by reference to our Registration Statement on Form S-4 filed August 28, 1999. **** Incorporated by reference to our Annual Report on Form 10-K for fiscal 2000 filed June 26, 2000. II-4 ***** Incorporated by reference to our Registration Statement on Form S-4 filed April 23, 2002. ****** Incorporated by reference to our Annual Report on Form 10-K for fiscal 2003 filed June 6, 2003. # Incorporated by reference to our Annual Report on Form 10-K for fiscal 1999 filed June 28, 1999. ## Incorporated by reference to the Form 8-K filed January 27, 2003. ### Incorporated by reference to the Form 8-K filed April 24, 2003. #### Incorporated by reference to our Registration Statement on Form S-1 filed March 25, 1992. ##### Incorporated by reference to our Annual Report on Form 10-K for fiscal 1995 filed June 23, 1995. ###### Incorporated by reference to the Annual Report on Form 10-K for American Media for fiscal 1992 filed June 25, 1992. ITEM 22. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of any such request, and to send the incorporated documents by first class mail or other equally prompt means, including information contained in documents filed after the effective date of this registration statement through the date of responding to such request. (2) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this registration statement when it became effective. (3) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 20 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. If a claim of indemnification against such liabilities, other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in a successful defense of any action, suit or proceeding, is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-5 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. AMERICAN MEDIA OPERATIONS, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of American Media Operations, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, June 6, 2003 ------------------------------------------------ President, Chief Executive David J. Pecker Officer and Director (Principal Executive Officer) /s/ JOHN A. MILEY Executive Vice President and June 6, 2003 ------------------------------------------------ Chief Financial Officer John A. Miley (Principal Financial and Accounting Officer) /s/ AUSTIN M. BEUTNER Director June 6, 2003 ------------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 ------------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 ------------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 ------------------------------------------------ Michael Garin
II-6 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. AM AUTO WORLD WEEKLY, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of AM Auto World Weekly, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, June 6, 2003 ------------------------------------------------ President, Chief Executive David J. Pecker Officer and Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 ------------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 ------------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 ------------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 ------------------------------------------------ Michael Garin
II-7 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. AMERICAN MEDIA CONSUMER ENTERTAINMENT INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of American Media Consumer Entertainment Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, June 6, 2003 - --------------------------------------------- Chief Executive Officer and David J. Pecker Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 - --------------------------------------------- Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - --------------------------------------------- Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - --------------------------------------------- Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - --------------------------------------------- Michael Garin
II-8 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. AMERICAN MEDIA CONSUMER MAGAZINE GROUP, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of American Media Consumer Magazine Group, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, June 6, 2003 - ------------------------------------------ Chief Executive Officer and David J. Pecker Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-9 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. AMERICAN MEDIA DISTRIBUTION & MARKETING GROUP, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of American Media Distribution & Marketing Group, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, June 6, 2003 - ------------------------------------------ Chief Executive Officer and David J. Pecker Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-10 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. AMERICAN MEDIA PROPERTY GROUP, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of American Media Property Group, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, June 6, 2003 - ------------------------------------------ Chief Executive Officer and David J. Pecker Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-11 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. AMERICAN MEDIA MINI MAGS, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of American Media Mini Mags, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, June 6, 2003 ------------------------------------------------ President, Chief Executive David J. Pecker Officer and Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 ------------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 ------------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 ------------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 ------------------------------------------------ Michael Garin
II-12 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. AMERICAN MEDIA NEWSPAPER GROUP, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of American Media Newspaper Group, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, June 6, 2003 ------------------------------------------------ President, Chief Executive David J. Pecker Officer and Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 ------------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 ------------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 ------------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 ------------------------------------------------ Michael Garin
II-13 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. COUNTRY MUSIC MEDIA GROUP, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of Country Music Media Group, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, June 6, 2003 ------------------------------------------------ President, Chief Executive David J. Pecker Officer and Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 ------------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 ------------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 ------------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 ------------------------------------------------ Michael Garin
II-14 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. DISTRIBUTION SERVICES, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of Distribution Services, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, June 6, 2003 ------------------------------------------------ President, Chief Executive David J. Pecker Officer and Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 ------------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 ------------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 ------------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 ------------------------------------------------ Michael Garin
II-15 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. GLOBE COMMUNICATIONS CORP. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of Globe Communications Corp. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, June 6, 2003 - ------------------------------------------ Chief Executive Officer and David J. Pecker Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-16 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. GLOBE EDITORIAL, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of Globe Editorial, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, June 6, 2003 - ------------------------------------------ Chief Executive Officer and Director David J. Pecker /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-17 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. MIRA! EDITORIAL, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of Mira! Editorial, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, June 6, 2003 ------------------------------------------------ President, Chief Executive David J. Pecker Officer and Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 ------------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 ------------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 ------------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 ------------------------------------------------ Michael Garin
II-18 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. NATIONAL ENQUIRER, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of National Enquirer, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, June 6, 2003 ------------------------------------------------ President, Chief Executive David J. Pecker Officer and Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 ------------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 ------------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 ------------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 ------------------------------------------------ Michael Garin
II-19 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. NATIONAL EXAMINER, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of National Examiner, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, June 6, 2003 - ------------------------------------------ Chief Executive Officer and David J. Pecker Director /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-20 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. NDSI, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of NDSI, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, Chief June 6, 2003 - ------------------------------------------ Executive Officer and Director David J. Pecker /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-21 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. AMI BOOKS, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of AMI Books, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, June 6, 2003 - ------------------------------------------ Chief Executive Officer and Director David J. Pecker /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-22 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. AMI FILMS, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of AMI Films, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, June 6, 2003 - ------------------------------------------ Chief Executive Officer and Director David J. Pecker /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-23 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. WEIDER PUBLICATIONS, LLC By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of Weider Publications, LLC (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, June 6, 2003 - ------------------------------------------ Chief Executive Officer and Director David J. Pecker /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-24 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. SYL COMMUNICATIONS By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of SYL Communications (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, Chief June 6, 2003 - ------------------------------------------ Executive Officer and Director David J. Pecker /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-25 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON JUNE 6, 2003. STAR EDITORIAL, INC. By /s/ DAVID J. PECKER ------------------------------------ Name: David J. Pecker Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned directors and officers of Star Editorial, Inc. (the "Company") do hereby constitute and appoint David J. Pecker and John A. Miley, or either of them, our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names and in the capacities indicated below, any and all amendments (including post-effective amendments) hereto and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID J. PECKER Chairman of the Board, President, Chief June 6, 2003 - ------------------------------------------ Executive Officer and Director David J. Pecker /s/ AUSTIN M. BEUTNER Director June 6, 2003 - ------------------------------------------ Austin M. Beutner /s/ NEERAJ MITAL Director June 6, 2003 - ------------------------------------------ Neeraj Mital /s/ SOREN OBERG Director June 6, 2003 - ------------------------------------------ Soren Oberg /s/ MICHAEL GARIN Director June 6, 2003 - ------------------------------------------ Michael Garin
II-26 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- *1 -- Purchase Agreement, dated as of January 16, 2003, among American Media Operations, Inc., AM Auto World Weekly, Inc, American Media Consumer Entertainment Inc., American Media Consumer Magazine Group, Inc., American Media Distribution & Marketing Group, Inc., American Media Property Group, Inc., American Media Mini Mags, Inc., American Media Newspaper Group, Inc., Country Music Media Group, Inc., Distribution Services, Inc., Globe Communications Corp., Globe Editorial, Inc., Mira! Editorial, Inc., National Enquirer, Inc., National Examiner, Inc., NDSI, Inc., Star Editorial, Inc., AMI Books, Inc., AMI Films, Inc., Weider Publications, LLC, SYL Communications, J.P. Morgan Securities Inc. and Bear, Stearns & Co. Inc. ***2.1 -- Agreement and Plan of Merger, dated as of February 16, 1999, by and between EMP Acquisition Corp., a Delaware corporation, and American Media, Inc., a Delaware corporation. ***2.2 -- Certificate of Merger of EMP Acquisition Corp. with and into American Media, Inc. (under Section 251 of the General Corporation Law of the State of Delaware) ****2.3 -- Stock and Asset Purchase Agreement, dated as of November 1, 1999, among Mike Rosenbloom, Globe International Publishing, Inc., Globe International, Inc., EMP Group LLC and American Media Operations, Inc. ##2.4 -- Purchase and Contribution Agreement, dated as of November 26, 2002, by and among Weider Health and Fitness, Weider Interactive Networks, Inc., Weider Health and Fitness, LLC, Weider Publications, LLC, EMP Group L.L.C., and American Media Operations, Inc. ###2.5 -- Agreement and Plan of Merger, dated February 24, 2003, by and among EMP Group L.L.C. and EMP Merger Corporation. ###2.6 -- Amendment No. 1 to the Agreement and Plan of Merger, dated April 14, 2003, by and between EMP Group L.L.C. and EMP Merger Corporation. ###2.7 -- Contribution Agreement, dated as of February 24, 2003, by and among EMP Merger Corporation and the persons set forth on the signature pages thereto. ###2.8 -- Amendment No. 1 to the Contribution Agreement, dated April 14, 2003, by and among EMP Merger Corporation and the persons set forth on the signature pages thereto. ####3.1 -- Certificate of Incorporation of Enquirer/Star Group, Inc. and amendments thereto.(1) ####3.2 -- Amended By-laws of Enquirer/Star, Inc.(1) #####3.3 -- Amendment of Certificate of Incorporation of Operations dated November 7, 1994 changing its name to American Media Operations, Inc. from Enquirer/Star, Inc. *****3.4 -- Articles of Incorporation of AM Auto World Weekly, Inc. *****3.5 -- Bylaws of AM Auto World Weekly, Inc. *****3.6 -- Articles of Incorporation of American Media Consumer Entertainment Inc. *****3.7 -- Bylaws of American Media Consumer Entertainment Inc. *****3.8 -- Articles of Incorporation of American Media Consumer Magazine Group, Inc. *****3.9 -- Bylaws of American Media Consumer Magazine Group, Inc. *****3.10 -- Articles of Incorporation of American Media Distribution & Marketing Group, Inc. *****3.11 -- Bylaws of American Media Distribution & Marketing Group, Inc. *****3.12 -- Articles of Incorporation of American Media Property Group, Inc. *****3.13 -- Bylaws of American Media Property Group, Inc. *****3.14 -- Articles of Incorporation of American Media Mini Mags, Inc. *****3.15 -- Bylaws of American Media Mini Mags, Inc. *****3.16 -- Articles of Incorporation of American Media Newspaper Group, Inc. *****3.17 -- Bylaws of American Media Newspaper Group, Inc. ***3.18 -- Articles of Incorporation of Country Music Media Group, Inc. (formerly known as Country Weekly, Inc.)
EXHIBIT NUMBER DESCRIPTION - ------- ----------- ***3.19 -- Bylaws of Country Music Media Group, Inc. (formerly known as Country Weekly, Inc.) ***3.20 -- Articles of Incorporation of Distribution Services, Inc. ***3.21 -- Bylaws of Distribution Services, Inc. *****3.22 -- Articles of Incorporation of Globe Communications Corp. *****3.23 -- Bylaws of Globe Communications Corp. *****3.24 -- Articles of Incorporation of Globe Editorial, Inc. *****3.25 -- Bylaws of Globe Editorial, Inc. *****3.26 -- Articles of Incorporation of Mira! Editorial, Inc. *****3.27 -- Bylaws of Mira! Editorial, Inc. ***3.28 -- Articles of Incorporation of National Enquirer, Inc. ***3.29 -- Bylaws of National Enquirer, Inc. *****3.30 -- Articles of Incorporation of National Examiner, Inc. *****3.31 -- Bylaws of National Examiner, Inc. ***3.32 -- Articles of Incorporation of NDSI, Inc. ***3.33 -- Bylaws of NDSI, Inc. ***3.34 -- Articles of Incorporation of Star Editorial, Inc. ***3.35 -- Bylaws of Star Editorial, Inc. *3.36 -- Articles of Incorporation of AMI Books, Inc. *3.37 -- Bylaws of AMI Books, Inc. *3.38 -- Articles of Incorporation of AMI Films, Inc. *3.39 -- Bylaws of AMI Films, Inc. *3.40 -- Certificate of Formation of Weider Publications, LLC *3.41 -- Limited Liability Company Agreement of Weider Publications, LLC *3.42 -- Articles of Incorporation of SYL Communications (f/k/a/ Wieder Communications) *3.43 -- Bylaws of SYL Communications (f/k/a/ Wieder Communications) ***4.1 -- Indenture, dated as of May 7, 1999, among American Media Operations, Inc., National Enquirer, Inc., Star Editorial, Inc., SOM Publishing, Inc., Weekly World News, Inc., Country Weekly, Inc., Distribution Services, Inc., Fairview Printing, Inc., NDSI, Inc., Biocide, Inc., American Media Marketing, Inc., Health Xtra, Inc., Retail Marketing Network and Marketing Services, Inc., and The Chase Manhattan Bank, a New York banking corporation, as trustee. ***4.2 -- Indemnity, Subrogation and Contribution Agreement, dated as of May 7, 1999, among American Media Operations, Inc., each subsidiary of American Media, Inc. listed on Schedule I thereto and The Chase Manhattan Bank, as collateral agent for the Secured Parties (as defined in the Security Agreement). ***4.3 -- Pledge Agreement, dated as of May 7, 1999, among American Media Operations, Inc., American Media, Inc., each subsidiary of Media listed on Schedule I thereto and The Chase Manhattan Bank, as Collateral Agent for the Secured Parties (as defined in the Security Agreement). ***4.4 -- Security Agreement, dated as of May 7, 1999, among American Media Operations, Inc., American Media, Inc., each subsidiary of Media listed on Schedule I thereto and The Chase Manhattan Bank, as collateral agent for the Secured Parties (as defined herein). ****4.5 -- Credit Agreement, dated as of May 7, 1999, as Amended and Restated as of November 1, 1999, among American Media Inc., American Media Operations, Inc., the Lenders party thereto, and The Chase Manhattan Bank, as Administrative Agent. *****4.6 Amendment, dated as of February 11, 2002, to the Credit Agreement, dated as of May 7, 1999, among American Media Inc., American Media Operations, Inc., the Lenders party thereto, and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Administrative Agent.
EXHIBIT NUMBER DESCRIPTION - ------- ----------- *****4.7 -- Indenture, dated as of February 14, 2002, among American Media Operations, Inc., AM Auto World Weekly, Inc., American Media Consumer Entertainment Inc., American Media Consumer Magazine Group, Inc., American Media Distribution & Marketing Group, Inc., American Media Property Group, Inc., American Media Mini Mags, Inc., American Media Newspaper Group, Inc., Country Music Media Group, Inc., Distribution Services, Inc., Globe Communications Corp., Globe Editorial, Inc., Mira! Editorial, Inc., National Enquirer, Inc., National Examiner, Inc., NDSI, Inc., Star Editorial, Inc., and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee. ##4.8 -- Indenture, dated as of January 23, 2003, among American Media Operations, Inc., AM Auto World Weekly, Inc, American Media Consumer Entertainment Inc., American Media Consumer Magazine Group, Inc., American Media Distribution & Marketing Group, Inc., American Media Property Group, Inc., American Media Mini Mags, Inc., American Media Newspaper Group, Inc., Country Music Media Group, Inc., Distribution Services, Inc., Globe Communications Corp., Globe Editorial, Inc., Mira! Editorial, Inc., National Enquirer, Inc., National Examiner, Inc., NDSI, Inc., Star Editorial, Inc., AMI Books, Inc., AMI Films, Inc., Weider Publications, LLC, SYL Communications, and J.P. Morgan Trust Company, National Association, as trustee. ##4.9 -- Amendment and Restatement Agreement, dated as of January 23, 2003, among American Media Operations, Inc., American Media, Inc., the lenders party thereto, and JPMorgan Chase Bank, as Administrative Agent, under the Credit Agreement, dated as of May 7, 1999, as amended and restated as of May 21, 2002, among the parties thereto. ******4.10 -- Reaffirmation and Amendment Agreement, as of January 23, 2003, among American Media Operations, Inc., American Media, Inc., the Subsidiary Loan Parties and JPMorgan Chase Bank, as Administrative Agent and Collateral Agent under the Restated Credit Agreement. ******4.11 -- Amendment No. 1 dated as of March 5, 2003 to the Amended and Restated Credit Agreement dated as of January 23, 2003, among American Media Inc., American Media Operations, Inc., the lenders party thereto and JPMorgan Chase Bank, as Administrative Agent. *****4.12 -- Exchange and Registration Rights Agreement, dated as of January 23, 2003, among American Media Operations, Inc., AM Auto World Weekly, Inc., American Media Consumer Entertainment Inc., American Media Consumer Magazine Group, Inc., American Media Distribution & Marketing Group, Inc., American Media Property Group, Inc., American Media Mini Mags, Inc., American Media Newspaper Group, Inc., Country Music Media Group, Inc., Distribution Services, Inc., Globe Communications Corp., Globe Editorial, Inc., Mira! Editorial, Inc., National Enquirer, Inc., National Examiner, Inc., NDSI, Inc., Star Editorial, Inc., AMI Books, Inc., AMI Films, Inc., Weider Publications, LLC, SYL Communications, J.P. Morgan Securities Inc. and Bear, Stearns & Co. Inc. *5 -- Opinion of Simpson Thacher & Bartlett LLP. ######10.1 -- Tax Sharing Agreement, dated as of March 31, 1992, among Enquirer/Star Group, Inc. and its subsidiaries.(1) ###10.2 -- Management Agreement, dated as of April 17, 2003, by and between American Media, Inc., THL Managers V, LLC and Evercore Advisors L.P. ******10.3 -- Amended and Restated Employment Agreement dated February 24, 2003, of David J. Pecker. #10.4 Side Letter regarding David J. Pecker Employment Agreement, dated April 13, 1999. ****10.5 -- Mike Rosenbloom Employment Agreement, dated as of November 1, 1999.
EXHIBIT NUMBER DESCRIPTION - ------- ----------- *12 -- Computation of Ratio of Earnings to Fixed Charges. *21 -- Subsidiaries of American Media Operations, Inc. *23.1 -- Consent of Deloitte and Touche LLP (American Media). *23.2 -- Consent of Deloitte and Touche LLP (Weider). *23.3 -- Consent of Simpson Thacher & Bartlett LLP (included in Exhibit 5). *24 -- Powers of Attorney (included on pages II-6 through II-26). *25 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of J.P. Morgan Trust Company, National Association, as Trustee. *99.1 -- Form of Letter of Transmittal. *99.2 -- Form of Notice of Guaranteed Delivery.
- --------------- (1) Enquirer/Star, Inc. is now named American Media Operations, Inc.; Enquirer/Star Group, Inc. is now named American Media, Inc. * Filed herewith. ** To be filed by amendment. *** Incorporated by reference to our Registration Statement on Form S-4 filed August 28, 1999. **** Incorporated by reference to our March 27, 2000 Form 10-K for fiscal 2000 filed June 26, 2000. ***** Incorporated by reference to our Registration Statement on Form S-4 filed April 23, 2002. ****** Incorporated by reference to our March 31, 2003 Form 10-K for fiscal 2003 filed June 6, 2003. # Incorporated by reference to our March 29, 1999 for fiscal 1999 Form 10-K filed June 28, 1999. ## Incorporated by reference to the Form 8-K filed January 27, 2003. ### Incorporated by reference to the Form 8-K filed April 24, 2003. #### Incorporated by reference to our Registration Statement on Form S-1 filed March 25, 1992. ##### Incorporated by reference to our Annual Report on Form 10-K for fiscal 1995 filed June 23, 1995. ###### Incorporated by reference to the Annual Report on Form 10-K for American Media for fiscal 1992 filed June 25, 1992. EX-1 3 y86871exv1.txt PURCHASE AGREEMENT Exhibit 1 CONFORMED COPY AMERICAN MEDIA OPERATIONS, INC. $150,000,000 8 7/8 Senior Subordinated Notes due 2011 PURCHASE AGREEMENT January 16, 2003 J.P. MORGAN SECURITIES INC. BEAR, STEARNS & CO. INC. c/o J.P. Morgan Securities Inc. 270 Park Avenue New York, New York 10017 Ladies and Gentlemen: American Media Operations, Inc., a Delaware corporation (the "Company"), proposes to issue and sell $150,000,000 aggregate principal amount of its 8 7/8 Senior Subordinated Notes due 2011 (the "Securities"). The Securities will be issued pursuant to an Indenture to be dated as of January 23, 2003 (the "Indenture"), among the Company, the subsidiaries of the Company listed on the signature pages hereof and J.P. Morgan Trust Company, National Association, as trustee (the "Trustee"). The Securities will be guaranteed on an unsecured senior subordinated basis by the Company's existing subsidiaries listed on the signature pages hereto (the "Existing Guarantors") and by Weider Publications, LLC ("Weider Publications") and SYL Communications ("SYL" and, together with Weider Publications, the "Weider Guarantors"). The Existing Guarantors and the Weider Guarantors are collectively referred to herein as the "Guarantors". The Company and the Guarantors hereby confirm their agreement with J.P. Morgan Securities Inc. ("JPMorgan") and Bear, Stearns & Co. Inc. ("Bear Stearns" and, together with JPMorgan, the "Initial Purchasers") concerning the purchase of the Securities from the Company by the several Initial Purchasers. The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon an exemption therefrom. The Company has prepared a preliminary offering memorandum dated January 3, 2003 (such preliminary offering memorandum, including any information incorporated therein by reference, the "Preliminary Offering Memorandum") and will prepare an offering memorandum dated the date hereof (such offering memorandum, including any information incorporated therein by reference, the "Offering Memorandum") setting forth and incorporating by reference information concerning the Company and the Securities. The Preliminary Offering Memorandum and the Offering Memorandum will incorporate by reference the items titled "Financial Statements and Supplementary Data," "Executive Compensation" and 2 "Security Ownership of Certain Beneficial Owners and Management" from the Company's Annual Report on Form 10-K for the fiscal year ended March 25, 2002, and "Financial Statements" and "Quantitative and Qualitative Disclosures About Market Risk" from the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 23, 2002, filed with the Securities and Exchange Commission (the "Commission") on June 14, 2002 and November 7, 2002, respectively, and any amendment or supplemental or additional filings made with the Commission in the future (collectively, the "SEC Reports"). Copies of the Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered by the Company to the Initial Purchasers pursuant to the terms of this Agreement. Any references herein to the Preliminary Offering Memorandum and the Offering Memorandum shall be deemed to include any amendment or supplement thereto, and any amendment or supplemental or additional filing made with the Commission in the future, unless otherwise noted. The Company hereby confirms that it has authorized the use of the Preliminary Offering Memorandum and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers in accordance with Section 2. The Company and EMP Group L.L.C. (the "LLC") entered into a Purchase and Contribution Agreement (the "Acquisition Agreement"), dated as of November 26, 2002, with Weider Health and Fitness, Weider Health and Fitness, LLC, Weider Interactive Networks, Inc. ("WIN") and Weider Publications, a newly formed company to which the magazine publishing business of Weider Publications, Inc. ("WPI") and WIN will be contributed prior to the Closing Date, pursuant to which the Company has agreed, subject to certain conditions, to purchase all of the equity interests of Weider Publications (the "Acquisition"). On the Closing Date, in connection with the Acquisition, (i) Weider Publications will enter into an Asset Contribution Agreement with WPI and WIN (the "Contribution Agreement"), (ii) Weider Publications will enter into a Trademark Licensing Agreement with Weider Health and Fitness (the "Trademark Agreement"), (iii) Weider Publications will enter into an Athlete Endorsement Cooperative Agreement with Weider Health and Fitness (the "Endorsement Agreement"), (iv) Weider Publications will enter into a Services Agreement with Weider Health and Fitness (the "Services Agreement") and (v) Weider Publications will enter into an Advertising Agreement with Weider Nutrition International, Inc. and Weider Health and Fitness (the "Advertising Agreement" and, together with the Acquisition Agreement, the Contribution Agreement, the Trademark Agreement, the Endorsement Agreement and the Services Agreement, the "Primary Acquisition Documents"). The foregoing transactions, together with all other transactions contemplated by the Primary Acquisition Documents, are referred to herein as the "Acquisition Transactions." The term "Subsidiaries" means all subsidiaries of the Company after giving effect to the Acquisition. Holders of the Securities (including the Initial Purchasers and their direct and indirect transferees) will be entitled to the benefits of an Exchange and Registration Rights Agreement, substantially in the form attached hereto as Annex A (the "Registration Rights Agreement"), pursuant to which the Company will agree to file with the Commission (a) a registration statement under the Securities Act (the "Exchange Offer Registration Statement") registering an issue of senior subordinated notes of the Company (the "Exchange Securities") which are identical in all material respects to the Securities (except that the Exchange Securities will not contain terms with respect to transfer restrictions) and (b) under certain circumstances, a 3 shelf registration statement pursuant to Rule 415 under the Securities Act (the "Shelf Registration Statement"). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Offering Memorandum. References to information or data "contained in", "included in" or "described in" the Preliminary Offering Memorandum or the Offering Memorandum includes information incorporated by reference from the SEC Reports. 1. Representations, Warranties and Agreements of the Company and the Guarantors. The Company and each of the Guarantors represent and warrant to, and agree with, the Initial Purchasers on and as of the date hereof (except with respect to any representation and warranty that speaks as of the Closing Date) and the Closing Date (as defined in Section 3) after giving effect to the Acquisition Transactions that: (a) Each of the Preliminary Offering Memorandum (including the SEC Reports) and the Offering Memorandum (including the SEC Reports), as of their respective dates, did not, and on the Closing Date the Offering Memorandum will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Guarantors make no representation or warranty as to information contained in or omitted from the Preliminary Offering Memorandum or the Offering Memorandum in reliance upon and in conformity with written information relating to the Initial Purchasers furnished to the Company by or on behalf of any Initial Purchaser specifically for use therein (the "Initial Purchasers' Information"). (b) Each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its respective date, contains all of the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act. (c) Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 2 and their compliance with the agreements set forth therein, it is not necessary, in connection with the issuance and sale of the Securities to the Initial Purchasers and the offer, resale and delivery of the Securities by the Initial Purchasers in the manner contemplated by this Agreement and the Offering Memorandum, to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). (d) The Company and each of its Subsidiaries have been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to 4 conduct the businesses in which they are engaged, except where the failure to so qualify or have such power or authority would not, singularly or in the aggregate, have a material adverse effect on the condition (financial or otherwise), results of operations or business of the Company and its Subsidiaries taken as a whole (a "Material Adverse Effect"). Weider Publications is a newly formed limited liability company that has been formed solely for the purpose of engaging in the Acquisition Transactions and has not engaged in any other business or operations and does not have any material liabilities, other than those assumed or incurred in connection with the Acquisition Transactions. (e) The Company will have an authorized capitalization as set forth in the Offering Memorandum under the heading "Capitalization"; and all of the outstanding shares of capital stock of America Media, Inc., a Delaware corporation and the Company's parent company ("Holdings") and of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. All of the outstanding shares of capital stock of each Subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and except as described in the Offering Memorandum under the caption "Description of other indebtedness," are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction upon voting or transfer or any other claim of any third party. All the capital stock (i) of the Company is owned directly by Holdings and (ii) of Holdings is owned directly by the LLC, in each case, except as described in the Offering Memorandum under the caption "Description of other indebtedness," free and clear of any lien, charge, encumbrance, security interest, restriction upon voting or transfer or any other claim of any third party. As of the Closing Date, Evercore Capital Partners L.P. has the power to appoint a majority of the managers of the Board of Managers of the LLC. (f) The statements set forth under the sections titled (i) "Security Ownership of Certain Beneficial Owners and Management" incorporated by reference from the Company's Annual Report on Form 10-K for the fiscal year ended March 25, 2002 and (ii) "Summary--The transactions," "Certain relationships and related transactions" and "Description of other indebtedness" set forth in the Offering Memorandum insofar as they purport to describe the documents referred to therein constitute a fair summary thereof. (g) Holdings, the Company and the Existing Guarantors each have, and, as of the Closing Date, the Weider Guarantors will have, full right, power and authority to execute and deliver, as applicable, this Agreement, the Indenture, the Registration Rights Agreement, the Securities, the Credit Agreement dated as of May 7, 1999, as amended and restated as of November 1, 1999, as amended as of February 11, 2002, as amended and restated as of January 23, 2003, among Holdings, the Company, the lenders party thereto and JPMorgan Chase Bank, as administrative agent (the "Credit Agreement") and the Primary Acquisition Documents (collectively, the "Transaction Documents"), and to perform their respective obligations hereunder and thereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation 5 of the transactions contemplated thereby have been, or, in the case of the Weider Guarantors, as of the Closing Date will have been, duly and validly taken. (h) This Agreement has been, or, in the case of the Weider Guarantors, as of the Closing Date will have been, duly authorized, executed and delivered by the Company and each of the Guarantors and constitutes, or, in the case of the Weider Guarantors, as of the Closing Date will constitute, a valid and legally binding agreement of the Company and each of the Guarantors. (i) The Registration Rights Agreement has been, or, in the case of the Weider Guarantors, as of the Closing Date will have been, duly authorized by the Company and each of the Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, except to the extent that (i) such enforceability may be limited by (A) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and (B) general equitable principles (whether considered in a proceeding in equity or at law) and the discretion of the court before which any proceeding therefor may be brought and (ii) any rights to indemnity or contribution thereunder may be limited by federal or state securities laws or public policy considerations. (j) The Indenture has been, or, in the case of the Weider Guarantors, as of the Closing Date will have been, duly authorized by the Company and each of the Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law) and the discretion of the court before which any proceeding therefor may be brought. On the Closing Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder. (k) The Securities have been, or, in the case of the Weider Guarantors, as of the Closing Date will have been, duly authorized by the Company and each of the Guarantors and, when duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company, as issuer, and each of the Guarantors as guarantors, entitled to the benefits of the Indenture and enforceable against the Company, as issuer, and each of the Guarantors, as guarantors, in accordance with their terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, 6 fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law) and the discretion of the court before which any proceeding therefor may be brought. (l) The Credit Agreement has been duly authorized by Holdings and the Company, will be duly executed and delivered by Holdings and the Company as of the Closing Date, and, when duly executed and delivered in accordance with its terms by each of the other parties thereto, will constitute a valid and legally binding agreement of Holdings and the Company enforceable against Holdings and the Company in accordance with its terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law) and the discretion of the court before which any proceeding therefor may be brought. (m) The Acquisition Agreement has been duly authorized, executed and delivered by the Company and, assuming that the Acquisition Agreement is the valid and legally binding agreement of the other parties thereto, constitutes a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law) and the discretion of the court before which any proceeding therefor may be brought. (n) The Contribution Agreement, the Trademark Agreement, the Endorsement Agreement, the Services Agreement and the Advertising Agreement will be duly authorized by Weider Publications as of the Closing Date and, when duly executed and delivered by the parties thereto, will constitute valid and legally binding agreements of Weider Publications enforceable against Weider Publications in accordance with their terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law) and the discretion of the court before which any proceeding therefor may be brought. (o) Each Transaction Document conforms in all material respects to the description thereof contained in the Offering Memorandum. (p) The execution, delivery and performance by Holdings, the Company and each of the Guarantors of each of the applicable Transaction Documents to which each is a party, the issuance, authentication, sale and delivery of the Securities and compliance by the Company and each of the Guarantors with the terms thereof and 7 the consummation of the transactions contemplated by the Transaction Documents will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject, except where such conflict, breach or violation would not, singularly or in the aggregate, have a Material Adverse Effect, nor will such actions result in any violation of the provisions of the limited liability company agreement, operating agreement, charter, by-laws or similar organizational documents, as applicable, of the Company or any of its Subsidiaries or any statute or any judgment, order, decree, rule or regulation of any court or arbitrator or governmental agency or body having jurisdiction over the Company or any of its Subsidiaries or any of their properties or assets; and no consent, approval, authorization or order of, or filing or registration with, any such court or arbitrator or governmental agency or body under any such statute, judgment, order, decree, rule or regulation is required for the execution, delivery and performance by Holdings, the Company and each of the Guarantors of each of the Transaction Documents to which each is a party, the issuance, authentication, sale and delivery of the Securities and compliance by the Company and each of the Guarantors with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents, except for such consents, approvals, authorizations, filings, registrations or qualifications (i) which shall have been obtained or made prior to the Closing Date, (ii) as may be required to be obtained or made under the Securities Act and applicable state securities laws as provided in the Registration Rights Agreement and (iii) the failure to obtain which would not, singularly or in the aggregate, have a Material Adverse Effect. (q) Deloitte & Touche LLP ("Deloitte & Touche") are independent certified public accountants with respect to the Company and its subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants ("AICPA") and its interpretations and rulings thereunder. The historical financial statements (including the related notes) of the Company incorporated by reference in the Offering Memorandum comply in all material respects with the requirements applicable to a registration statement on Form S-1 under the Securities Act (except that certain supporting schedules are omitted); such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby and fairly present the financial position of the entities purported to be covered thereby at the respective dates indicated and the results of their operations and their cash flows for the respective periods indicated; and the financial information contained in the Offering Memorandum under the headings "Summary -- Summary historical and pro forma financial information," "Unaudited pro forma financial information," "Selected historical financial information," "Capitalization" and "Management's discussion and analysis of financial condition and results of operations" are derived from the accounting records of the Company and its subsidiaries or WPI and its subsidiaries 8 and WIN, as applicable, and fairly present the information purported to be shown thereby. The pro forma financial information contained in the Offering Memorandum under the heading "Unaudited pro forma financial information" has been prepared on a basis consistent with the historical financial statements contained and incorporated by reference in the Offering Memorandum (except for the pro forma adjustments specified therein), includes all material adjustments to the historical financial information required by Rule 11-02 of Regulation S-X under the Securities Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act") to reflect the transactions described in the Offering Memorandum, gives effect to the assumptions made on a reasonable basis and fairly presents the historical and proposed transactions contemplated by the Offering Memorandum and the Transaction Documents. The other historical financial and statistical information and data included in the Offering Memorandum are, in all material respects, fairly presented. (r) Deloitte & Touche are independent certified public accountants with respect to WPI and its subsidiaries and WIN within the meaning of Rule 101 of the AICPA and its interpretations and rulings thereunder. The historical financial statements (including the related notes) of WPI and its subsidiaries and WIN contained in the Offering Memorandum comply in all material respects with the requirements applicable to a registration statement on Form S-1 under the Securities Act (except that certain supporting schedules are omitted); such financial statements of WPI and its subsidiaries and WIN included in the Offering Memorandum have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby and fairly present the financial position of the entities purported to be covered thereby at the respective dates indicated and the results of their operations and their cash flows for the respective periods indicated. (s) There are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property or assets of the Company or any of its Subsidiaries is the subject which, (i) singularly or in the aggregate, if determined adversely to the Company or any of its Subsidiaries, could reasonably be expected to have a Material Adverse Effect or (ii) question the validity or enforceability of any of the Transaction Documents or any action taken or to be taken pursuant thereto; and to the best knowledge of the Company, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (t) No action has been taken and no statute, rule, regulation or order has been enacted, adopted or issued by any governmental agency or body which prevents the issuance of the Securities or suspends the sale of the Securities in any jurisdiction; no injunction, restraining order or order of any nature by any federal or state court of competent jurisdiction has been issued with respect to the Company or any of its Subsidiaries which would prevent or suspend the issuance or sale of the Securities or the use of the Preliminary Offering Memorandum or the Offering Memorandum in any jurisdiction; no action, suit or proceeding is pending against or, to the best 9 knowledge of the Company and each of the Guarantors, threatened against or affecting the Company or any of its Subsidiaries before any court or arbitrator or any governmental agency, body or official, domestic or foreign, which could reasonably be expected to interfere with or adversely affect the issuance of the Securities or in any manner draw into question the validity or enforceability of any of the Transaction Documents or any action taken or to be taken pursuant thereto; and the Company has complied with any and all requests by any securities authority in any jurisdiction for additional information to be included in the Preliminary Offering Memorandum and the Offering Memorandum. (u) None of Holdings, the Company or any of its Subsidiaries is (i) in violation of its limited liability company agreement, operating agreement, charter, by-laws or similar organizational documents, as applicable, (ii) in default in any respect, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any material indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject or (iii) in violation in any respect of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject, except, in the case of (ii) and (iii), for any such violation or default that would not, singularly or in the aggregate, have a Material Adverse Effect. (v) The Company and each of its Subsidiaries possess all material licenses, certificates, authorizations and permits issued by, and have made all declarations and filings with, the appropriate federal, state or foreign regulatory agencies or bodies which are necessary or desirable for the ownership of their respective properties or the conduct of their respective businesses as described in the Offering Memorandum, except where the failure to possess or make the same would not, singularly or in the aggregate, have a Material Adverse Effect, and neither the Company nor any of its Subsidiaries has received notification of any revocation or modification of any such license, certificate, authorization or permit or has any reason to believe that any such license, certificate, authorization or permit will not be renewed in the ordinary course except where the revocation or modification of any such license, certificate, authorization or permit, or the failure to renew any such license, certificate, authorization or permit, would not, singularly or in the aggregate, have a Material Adverse Effect. (w) The Company and each of its Subsidiaries have filed all material federal, state, local and foreign income and franchise tax returns required to be filed through the date hereof and have paid all taxes shown to be due thereon, and no tax deficiency has been determined adversely to the Company or any of its Subsidiaries which has had (nor does the Company or any of its Subsidiaries have any knowledge of any tax deficiency which, if determined adversely to the Company or any of its Subsidiaries, could reasonably be expected to have) a Material Adverse Effect. 10 (x) Neither the Company nor any of its Subsidiaries is (i) an "investment company" or a company "controlled by" an investment company within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations of the Commission thereunder or (ii) a "holding company" or a "subsidiary company" of a holding company or an "affiliate" thereof within the meaning of the Public Utility Holding Company Act of 1935, as amended. (y) The Company and each of its Subsidiaries have insurance covering their respective properties, operations, personnel and businesses, which insurance is in amounts and insures against such losses and risks as are adequate to protect the Company and its Subsidiaries and their respective businesses. Neither the Company nor any of its Subsidiaries has received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance. (z) The Company and each of its Subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses; and the conduct of their respective businesses will not conflict in any material respect with, and the Company and its Subsidiaries have not received any notice of any claim of conflict with, any such rights of others. (aa) The Company and each of its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property which are material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those (i) described in the Offering Memorandum under the caption "Description of other indebtedness", (ii) which do not materially interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries or (iii) could not reasonably be expected to have a Material Adverse Effect. (bb) No labor disturbance by or dispute with the employees of the Company or any of its Subsidiaries exists or, to the best knowledge of the Company, is contemplated or threatened. (cc) No "prohibited transaction" (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the "Code")) or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect to which the 30-day notice requirement under Section 4043 of ERISA has been waived) has occurred with respect to any employee benefit plan of the Company or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect; 11 each such employee benefit plan is in compliance in all material respects with applicable law, including ERISA and the Code; the Company and each of its Subsidiaries have not incurred and do not expect to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan for which the Company or any of its Subsidiaries would have any liability; and each such pension plan that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which could reasonably be expected to cause the loss of such qualification. (dd) Except as disclosed in the Offering Memorandum, there has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission or other release of any kind of any toxic, infectious or hazardous substances or wastes by, due to or caused by the Company or any of its Subsidiaries (or, to the best knowledge of the Company, any other entity (including any predecessor) for whose acts or omissions the Company or any of its Subsidiaries is or could reasonably be expected to be liable) upon any of the property now or previously owned or leased by the Company or any of its Subsidiaries, or upon any other property, in violation of any statute or any ordinance, rule, regulation, order, judgment, decree or permit or which would, under any statute or any ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability that could not reasonably be expected to have, singularly or in the aggregate with all such violations and liabilities, a Material Adverse Effect; and except as disclosed in the Offering Memorandum, there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic, infectious or hazardous substances or wastes with respect to which the Company or any of the Guarantors has knowledge, except for any such disposal, discharge, emission or other release of any kind which could not reasonably be expected to have, singularly or in the aggregate with all such discharges and other releases, a Material Adverse Effect. (ee) Neither the Company nor, to the best knowledge of the Company and each of the Guarantors, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its Subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment. (ff) On and immediately after the Closing Date, the Company (after giving effect to the issuance of the Securities and to the other transactions related thereto as described in the Offering Memorandum) will be Solvent. As used in this paragraph, the term "Solvent" means, with respect to a particular date, that on such date (i) the present fair market value (or present fair saleable value) of the assets of the Company is not less than the total amount required to pay the probable liabilities of the 12 Company on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (ii) the Company is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business, (iii) assuming the sale of the Securities as contemplated by this Agreement and the Offering Memorandum, the Company is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature and (iv) the Company is not engaged in any business or transaction, and is not about to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which the Company is engaged. In computing the amount of such contingent liabilities at any time, it is intended that such liabilities will be computed at the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. (gg) Except as described in the Offering Memorandum, there are no outstanding subscriptions, rights, warrants, calls or options to acquire, or instruments convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of, any shares of capital stock of or other equity or other ownership interest in Holdings, the Company or any of its Subsidiaries other than those listed on Schedule 1 hereto. (hh) Neither the Company nor any of its Subsidiaries owns any "margin securities" as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), and none of the proceeds of the sale of the Securities will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Securities to be considered a "purpose credit" within the meanings of Regulation T, U or X of the Federal Reserve Board. (ii) Except for this Agreement, neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Company or the Initial Purchasers for a brokerage commission, finder's fee or like payment in connection with the offering and sale of the Securities. (jj) The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under the Securities Act. (kk) None of the Company, any of its affiliates or any person acting on its or their behalf has engaged or will engage in any directed selling efforts (as such term is defined in Regulation S under the Securities Act ("Regulation S")), and all such persons have complied and will comply with the offering restrictions requirement of Regulation S to the extent applicable. 13 (ll) Neither the Company nor any of its affiliates has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as such term is defined in the Securities Act), which is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act. (mm) None of the Company or any of its affiliates or any other person acting on its or their behalf has engaged, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act. (nn) There are no securities of the Company or Holdings registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or listed on a national securities exchange or quoted in a U.S. automated inter-dealer quotation system other than the Company's 11 5/8 Senior Subordinated Notes due 2004, 10-1/4% Series B Senior Subordinated Notes due 2009 and Holdings' Class A common stock. (oo) None of the Company or any of the Guarantors has taken or will take, directly or indirectly, any action prohibited by Regulation M under the Exchange Act in connection with the offering of the Securities. (pp) No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Preliminary Offering Memorandum or the Offering Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. (qq) Since the date as of which information is given in the Offering Memorandum, except as otherwise stated therein, (i) there has been no material adverse change or any development involving a prospective material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or management of the Company or any of the Guarantors, whether or not arising in the ordinary course of business, (ii) none of the Company or any of the Guarantors has incurred any material liability or obligation, direct or contingent, other than in the ordinary course of business, (iii) none of the Company or any of the Guarantors has entered into any material transaction other than in the ordinary course of business and (iv) there has not been any change in the capital stock or long-term debt of the Company or any of the Guarantors, or any dividend or distribution of any kind declared, paid or made by the Company or any of the Guarantors on any class of their respective capital stock. (rr) As of the Closing Date, to the best knowledge of the Company, (i) neither the Company nor any of its Restricted Subsidiaries (as defined in the Indenture dated as of February 14, 2002 among the Company, the subsidiaries of the Company party thereto and JPMorgan Chase Bank, as trustee (the "Existing Indenture")) will have incurred any indebtedness pursuant to Sections 4.03(b)(v) or (xi) of the Existing Indenture, (ii) the aggregate amount of Restricted Payment (as defined in the Existing 14 Indenture) capacity as calculated in accordance with Section 4.04(a)(3) (after giving effect to any deductions required pursuant to Section 4.04(b) of the Existing Indenture and including amounts under Section 4.04(a)(3)(A) of the Existing Indenture up to December 31, 2002 only) will not be less than $54.4 million, (iii) neither the Company nor any of its Restricted Subsidiaries will have made any Restricted Payments pursuant to Sections 4.04(b)(v), (vi)(3) or (ix) of the Existing Indenture and (iv) neither the Company nor any of its Restricted Subsidiaries will have made any Permitted Investments pursuant to clause (k) of the definition of "Permitted Investment" in the Existing Indenture. 2. Purchase and Resale of the Securities. (a) On the basis of the representations, warranties and agreements contained herein, and subject to the terms and conditions set forth herein, the Company agrees to issue and sell to each of the Initial Purchasers, severally and not jointly, and each of the Initial Purchasers agrees to purchase from the Company, severally and not jointly, the principal amount of Securities set forth opposite the name of such Initial Purchaser on Schedule 2 hereto at a purchase price equal to 97.25% of the principal amount thereof. The Company shall not be obligated to deliver any of the Securities except upon payment for all of the Securities to be purchased as provided herein. (b) The Initial Purchasers have advised the Company that they propose to offer the Securities for resale upon the terms and subject to the conditions set forth herein and in the Offering Memorandum. Each Initial Purchaser, severally and not jointly, represents and warrants to and agrees with the Company and the Guarantors that (i) it is purchasing the Securities pursuant to a private sale exempt from registration under the Securities Act, (ii) it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D under the Securities Act ("Regulation D") or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act and (iii) it has solicited and will solicit offers for the Securities only from, and has offered or sold and will offer, sell or deliver the Securities, as part of their initial offering, only (A) within the United States to persons whom it reasonably believes to be qualified institutional buyers ("Qualified Institutional Buyers"), as defined in Rule 144A under the Securities Act ("Rule 144A"), or if any such person is buying for one or more institutional accounts for which such person is acting as fiduciary or agent, only when such person has represented to it that each such account is a Qualified Institutional Buyer to whom notice has been given that such sale or delivery is being made in reliance on Rule 144A and in each case, in transactions in accordance with Rule 144A and (B) outside the United States to persons other than U.S. persons in reliance on Regulation S under the Securities Act ("Regulation S"). (c) In connection with the offer and sale of Securities in reliance on Regulation S, each Initial Purchaser, severally and not jointly, represents, warrants and agrees that: (i) it has complied and will comply with all applicable laws and regulations in each jurisdiction in which it acquires, offers, sells or delivers Securities or has in its possession or distributed the Preliminary Offering Memorandum or the Offering Memorandum; 15 (ii) the Securities have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in transactions not subject to, the registration requirements of the Securities Act; (iii) such Initial Purchaser has offered and sold the Securities, and will offer and sell the Securities, (A) as part of their distribution at any time and (B) otherwise until 40 days after the later of the commencement of the offering of the Securities and the Closing Date, only in accordance with Regulation S or Rule 144A or any other available exemption from registration under the Securities Act; (iv) none of such Initial Purchaser nor any of its affiliates or any other person acting on its or their behalf has engaged or will engage in any directed selling efforts with respect to the Securities within the meaning of Regulation S, and all such persons have complied and will comply with the offering restriction requirements of Regulation S; (v) at or prior to the confirmation of sale of any Securities sold in reliance on Regulation S, it will have sent to each distributor, dealer or other person receiving a selling concession, fee or other remuneration that purchases Securities from it during the distribution compliance period a confirmation or notice to substantially the following effect: "The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering of the Securities and the date of original issuance of the Securities, except in accordance with Regulation S or Rule 144A or any other available exemption from registration under the Securities Act. Terms used above have the meanings given to them by Regulation S"; and (vi) it has not and will not enter into any contractual arrangement with any distributor with respect to the distribution of the Securities, except with its affiliates or with the prior written consent of the Company. Terms used in this Section 2(c) have the meanings given to them by Regulation S. (d) Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that: (i) it has not offered or sold and, prior to the expiry of the period of six months from the issue date of the Securities, will not offer or sell any Securities to any person in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the United Kingdom Public Offers of Securities Regulations 1995 (as amended); (ii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the United Kingdom Financial 16 Services and Markets 2000 (the "FMSA")) received by it in connection with the issue or sale of any Securities in circumstances in which Section 21(1) of the FMSA does not apply to the Company; and (iii) it has complied and will comply with all applicable provisions of the FMSA with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom. (e) Each Initial Purchaser, severally and not jointly, agrees that prior to or simultaneously with the confirmation of sale by such Initial Purchaser to any purchaser of any of the Securities purchased by such Initial Purchaser from the Company pursuant hereto, such Initial Purchaser shall furnish to that purchaser a copy of the Offering Memorandum (and any amendment or supplement thereto that the Company shall have furnished to such Initial Purchaser prior to the date of such confirmation of sale). In addition to the foregoing, each Initial Purchaser acknowledges and agrees that the Company and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Sections 5(d) and (e), counsel for the Company and for the Initial Purchasers, respectively, may rely upon the accuracy of the representations and warranties of the Initial Purchasers and their compliance with their agreements contained in this Section 2, and each Initial Purchaser hereby consents to such reliance. (f) The Company and each of the Guarantors acknowledge and agree that the Initial Purchasers may sell Securities to any affiliate of an Initial Purchaser and that any such affiliate may sell Securities purchased by it to the Initial Purchasers. 3. Delivery of and Payment for the Securities. (a) Delivery of and payment for the Securities shall be made at the offices of Simpson Thacher & Bartlett, New York, New York, or at such other place as shall be agreed upon by the Initial Purchasers and the Company, at 10:00 A.M., New York City time, on January 23, 2003 or at such other time or date, not later than seven full business days thereafter, as shall be agreed upon by the Initial Purchasers and the Company (such date and time of payment and delivery being referred to herein as the "Closing Date"). (b) On the Closing Date, payment of the purchase price for the Securities shall be made to the Company by wire or book-entry transfer of same-day funds to such account or accounts as the Company shall specify prior to the Closing Date or by such other means as the parties hereto shall agree prior to the Closing Date against delivery to the Initial Purchasers of the certificates evidencing the Securities. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligations of the Initial Purchasers hereunder. Upon delivery, the Securities shall be in global form, registered in such names and in such denominations as JPMorgan on behalf of the Initial Purchasers shall have requested in writing not less than two full business days prior to the Closing Date. The Company agrees to make one or more global certificates evidencing the Securities available for inspection by JPMorgan on behalf of the Initial Purchasers in New York, New York at least 24 hours prior to the Closing Date. 4. Further Agreements of the Company and the Guarantors. The Company and each of the Guarantors agree with each of the several Initial Purchasers: 17 (a) to advise the Initial Purchasers promptly and, if requested, confirm such advice in writing, of the happening of any event which makes any statement of a material fact made in the Offering Memorandum untrue or which requires the making of any additions to or changes in the Offering Memorandum (as amended or supplemented from time to time) in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; to advise the Initial Purchasers promptly of any order preventing or suspending the use of the Preliminary Offering Memorandum or the Offering Memorandum, of any suspension of the qualification of the Securities for offering or sale in any jurisdiction and of the initiation or threatening of any proceeding for any such purpose; and to use its best efforts to prevent the issuance of any such order preventing or suspending the use of the Preliminary Offering Memorandum or the Offering Memorandum or suspending any such qualification and, if any such suspension is issued, to obtain the lifting thereof at the earliest possible time; (b) to furnish promptly to the Initial Purchasers and counsel for the Initial Purchasers, without charge, as many copies of the Preliminary Offering Memorandum and the Offering Memorandum (and any amendments or supplements thereto) as may be reasonably requested; (c) prior to filing with the Commission any document that would be incorporated by reference in the Preliminary Offering Memorandum or the Offering Memorandum prior to the completion of the initial distribution of Securities and prior to making any amendment or supplement to the Offering Memorandum, to furnish a copy thereof to the Initial Purchasers and counsel for the Initial Purchasers and not to effect any such amendment or supplement to which the Initial Purchasers shall reasonably object by notice to the Company after a reasonable period to review; (d) if, at any time prior to completion of the resale of the Securities by the Initial Purchasers, any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel for the Initial Purchasers or counsel for the Company, to amend or supplement the Offering Memorandum in order that the Offering Memorandum will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Offering Memorandum to comply with applicable law, to promptly prepare such amendment or supplement as may be necessary to correct such untrue statement or omission or so that the Offering Memorandum, as so amended or supplemented, will comply with applicable law; (e) for so long as the Securities are outstanding and are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, to furnish to holders of the Securities and prospective purchasers of the Securities designated by such holders, upon request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to and in compliance with Section 13 or 15(d) of the Exchange Act (the foregoing agreement being for the benefit of the holders from time to time of the Securities and prospective purchasers of the Securities designated by such holders); 18 (f) for so long as the Securities are outstanding, to furnish to the Initial Purchasers copies of any documents, reports and information as shall be furnished by the Company to the Trustee or to the holders of the Securities pursuant to the Indenture or the Exchange Act or any rule or regulation of the Commission thereunder; (g) to promptly take from time to time such actions as the Initial Purchasers may reasonably request to qualify the Securities for offering and sale under the securities or Blue Sky laws of such jurisdictions as the Initial Purchasers may designate and to continue such qualifications in effect for so long as required for the resale of the Securities; and to arrange for the determination of the eligibility for investment of the Securities under the laws of such jurisdictions as the Initial Purchasers may reasonably request; provided that the Company and its Subsidiaries shall not be obligated to qualify as foreign corporations in any jurisdiction in which they are not so qualified or to take any action which would subject them to service of process or taxation in any jurisdiction; (h) to assist the Initial Purchasers in arranging for the Securities to be designated Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") Market securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL Market and for the Securities to be eligible for clearance and settlement through The Depository Trust Company ("DTC"); (i) not to, and to cause its affiliates not to, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as such term is defined in the Securities Act) which could be integrated with the sale of the Securities in a manner which would require registration of the Securities under the Securities Act; (j) except following the effectiveness of the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, not to, and to cause its affiliates not to, and not to authorize or knowingly permit any person acting on their behalf to, solicit any offer to buy or offer to sell the Securities by means of any form of general solicitation or general advertising within the meaning of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and not to offer, sell, contract to sell or otherwise dispose of, directly or indirectly, any securities under circumstances where such offer, sale, contract or disposition would cause the exemption afforded by Section 4(2) of the Securities Act to cease to be applicable to the offering and sale of the Securities as contemplated by this Agreement and the Offering Memorandum; and not to engage in any directed selling efforts within the meaning of Regulation S; and all such persons will comply with the offering restriction requirements of Regulation S; (k) for a period of 90 days from the date of the Offering Memorandum, not to offer for sale, sell, contract to sell or otherwise dispose of, directly or indirectly, or file a registration statement (other than the Exchange Offer Statement or the Shelf Registration Statement) for, or announce any offer, sale, contract for sale of or other disposition of any debt securities issued or guaranteed by the Company or any of its Subsidiaries (other than the Securities) without the prior written consent of the Initial Purchasers; 19 (l) during the period from the Closing Date until two years after the Closing Date, without the prior written consent of the Initial Purchasers, not to, and not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been reacquired by them, except for Securities purchased by the Company or any of its affiliates and resold in a transaction registered under the Securities Act; (m) not to, for so long as the Securities are outstanding, be or become, or be or become owned by, an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act, and to not be or become, or be or become owned by, a closed-end investment company required to be registered, but not registered thereunder; (n) in connection with the offering of the Securities, until JPMorgan on behalf of the Initial Purchasers shall have notified the Company of the completion of the resale of the Securities, not to, and to cause its affiliated purchasers (as defined in Regulation M under the Exchange Act) not to, either alone or with one or more other persons, bid for or purchase, for any account in which it or any of its affiliated purchasers has a beneficial interest, any Securities, or attempt to induce any person to purchase any Securities; and not to, and to cause its affiliated purchasers not to, make bids or purchase for the purpose of creating actual, or apparent, active trading in or of raising the price of the Securities; (o) in connection with the offering of the Securities, to make its officers, employees, independent accountants and legal counsel reasonably available upon request by the Initial Purchasers; (p) to do and perform all things required to be done and performed by it under this Agreement that are within its control prior to or after the Closing Date, and to use its reasonable best efforts to satisfy all conditions precedent on its part to the delivery of the Securities; (q) except as contemplated by the Offering Memorandum, to not take any action prior to the execution and delivery of the Indenture which, if taken after such execution and delivery, would have violated any of the covenants contained in the Indenture; (r) to not take any action prior to the Closing Date which would require the Offering Memorandum to be amended or supplemented pursuant to Section 4(d); (s) prior to the Closing Date, not to issue any press release or other communication directly or indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings or business affairs (except for routine oral marketing communications in the ordinary course of business and consistent with the past practices of the Company and of which the Initial Purchasers are notified), without the prior written consent of the Initial Purchasers, which consent shall not be unreasonably withheld, unless in the judgment of the Company and its counsel, and after notification to the Initial Purchasers, such press release or communication is required by law; and 20 (t) to apply the net proceeds from the sale of the Securities as set forth in the Offering Memorandum under the heading "Use of proceeds". 5. Conditions of Initial Purchasers' Obligations. The respective obligations of the several Initial Purchasers hereunder are subject to the accuracy, on and as of the date hereof and the Closing Date, of the representations and warranties of the Company and each of the Guarantors contained herein, to the accuracy of the statements of the Company and each of the Guarantors and their respective officers made in any certificates delivered pursuant hereto, to the performance by the Company and each of the Guarantors of their respective obligations hereunder, and to each of the following additional terms and conditions: (a) The Offering Memorandum (and any amendments or supplements thereto) shall have been printed and copies distributed to the Initial Purchasers as promptly as practicable on or following the date of this Agreement or at such other date and time as to which the Initial Purchasers may agree; and no stop order suspending the sale of the Securities in any jurisdiction shall have been issued and no proceeding for that purpose shall have been commenced or shall be pending or threatened. (b) None of the Initial Purchasers shall have discovered and disclosed to the Company on or prior to the Closing Date that the Offering Memorandum or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the Initial Purchasers, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (c) All corporate proceedings and other legal matters incident to the authorization, form and validity of each of the Transaction Documents and the Offering Memorandum, and all other legal matters relating to the Transaction Documents and the transactions contemplated thereby, shall be satisfactory in all material respects to the Initial Purchasers, and the Company shall have furnished to the Initial Purchasers all documents and information that they or their counsel may reasonably request to enable them to pass upon such matters. (d) Simpson Thacher & Bartlett, special counsel to the Company, Michael Kahane, General Counsel of the Company, Jorge Colon, Corporate Counsel to the Company, and Bernard Cartoon, General Counsel of Weider Publications, Inc., shall have furnished to the Initial Purchasers their respective written opinions, addressed to the Initial Purchasers and dated the Closing Date, in form and substance reasonably satisfactory to the Initial Purchasers, substantially to the effect set forth in Annexes B-1, B-2, B-3 and B-4 hereto. (e) The Initial Purchasers shall have received from Cravath, Swaine & Moore, counsel for the Initial Purchasers, such opinion or opinions, dated the Closing Date, with respect to such matters as the Initial Purchasers may reasonably require, and the Company shall have furnished to such counsel such documents and information as they request for the purpose of enabling them to pass upon such matters. 21 (f) The Company shall have furnished to the Initial Purchasers letters (the "Initial Letters") of Deloitte & Touche, addressed to the Initial Purchasers and dated the date hereof, in form and substance satisfactory to the Initial Purchasers, substantially to the effect set forth in Annexes C and D hereto. (g) The Company shall have furnished to the Initial Purchasers letters (the "Bring-Down Letters") of Deloitte & Touche, addressed to the Initial Purchasers and dated the Closing Date (i) confirming that they are independent public accountants with respect to the Company and its subsidiaries or WPI and its subsidiaries and WIN, as applicable, within the meaning of Rule 101 of the Code of Professional Conduct of the AICPA and its interpretations and rulings thereunder, (ii) stating, as of the date of the Bring-Down Letters (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Offering Memorandum, as of a date not more than three business days prior to the date of the Bring-Down Letters), that the conclusions and findings of such accountants with respect to the financial information and other matters covered by the Initial Letters are accurate and (iii) confirming in all material respects the conclusions and findings set forth in the Initial Letters. (h) The Company and each of the Guarantors shall have furnished to the Initial Purchasers a certificate, dated the Closing Date, of their respective chief executive officers and their respective chief financial officers stating that (i) such officers have carefully examined the Offering Memorandum, (ii) in their opinion, the Offering Memorandum, as of its date, did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and since the date of the Offering Memorandum, no event has occurred which should have been set forth in a supplement or amendment to the Offering Memorandum so that the Offering Memorandum (as so amended or supplemented) would not include any untrue statement of a material fact and would not omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (iii) as of the Closing Date, the representations and warranties of the Company or the particular Guarantor, as applicable, in this Agreement are true and correct in all material respects, the Company or the particular Guarantor, as applicable, has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder on or prior to the Closing Date, and (iv) there has been no material adverse change in the financial position or results of operation of the Company or any of its Subsidiaries, or any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), results of operations or business of the Company and its Subsidiaries taken as a whole. (i) The Initial Purchasers shall have received a counterpart of the Registration Rights Agreement which shall have been executed and delivered by a duly authorized officer of the Company and the Guarantors. 22 (j) The Indenture shall have been duly executed and delivered by the Company, the Guarantors and the Trustee, and the Securities shall have been duly executed and delivered by the Company and duly authenticated by the Trustee. (k) The Securities shall have been approved by the NASD for trading in the PORTAL Market. (l) The Acquisition Transactions, including the cash equity investment in the Company by the LLC and the funding of the Tranche C-1 Term Loan under the Credit Agreement, shall have been consummated or shall be consummated substantially contemporaneously on the Closing Date in accordance with the Primary Acquisition Documents, the Credit Agreement and all other related documentation as described in the Offering Memorandum. (m) If any event shall have occurred that requires the Company under Section 4(d) to prepare an amendment or supplement to the Offering Memorandum, such amendment or supplement shall have been prepared, the Initial Purchasers shall have been given a reasonable opportunity to comment thereon, and copies thereof shall have been delivered to the Initial Purchasers reasonably in advance of the Closing Date. (n) There shall not have occurred any invalidation of Rule 144A under the Securities Act by any court or any withdrawal or proposed withdrawal of any rule or regulation under the Securities Act or the Exchange Act by the Commission or any amendment or proposed amendment thereof by the Commission which in the judgment of the Initial Purchasers would materially impair the ability of the Initial Purchasers to purchase, hold or effect resales of the Securities as contemplated hereby. (o) Subsequent to the execution and delivery of this Agreement or, if earlier, the dates as of which information is given in the Offering Memorandum (exclusive of any amendment or supplement thereto), there shall not have been any change in the capital stock or long-term debt or any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), results of operations or business of the Company and its Subsidiaries taken as a whole, the effect of which, in any such case described above, is, in the judgment of the Initial Purchasers, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement and the Offering Memorandum (exclusive of any amendment or supplement thereto). (p) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Securities; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Securities. (q) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have occurred in the rating accorded the Securities or any of the 23 Company's other debt securities or preferred stock by any "nationally recognized statistical rating organization", as such term is defined by the Commission for purposes of Rule 436(g)(2) of the rules and regulations of the Commission under the Securities Act and (ii) no such organization shall have publicly announced that it has under surveillance or review (other than an announcement with positive implications of a possible upgrading), its rating of the Securities or any of the Company's other debt securities or preferred stock. (r) Subsequent to the execution and delivery of this Agreement there shall not have occurred any of the following: (i) trading generally shall have been suspended or materially limited on the New York Stock Exchange or the over-the-counter market; (ii) trading of any securities issued or guaranteed by the Company or any of the Guarantors shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, that in the judgment of the Initial Purchasers is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement and the Offering Memorandum (exclusive of any amendment or supplement thereto or any document incorporated by reference therein filed with the Commission after the date hereof). All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Initial Purchasers. 6. Termination. The obligations of the Initial Purchasers hereunder may be terminated by the Initial Purchasers, in their absolute discretion, by notice given to and received by the Company prior to delivery of and payment for the Securities if, prior to that time, any of the events described in Section 5(n), (o), (p), (q) or (r) shall have occurred and be continuing. 7. Reimbursement of Initial Purchasers' Expenses. If (a) this Agreement shall have been terminated pursuant to Section 6 (other than pursuant to Section 5(r)), (b) the Company shall fail to tender the Securities for delivery to the Initial Purchasers for any reason permitted under this Agreement (other than by reason of any failure by the Initial Purchasers to comply with any of its material covenants under this Agreement) or (c) the Initial Purchasers shall decline to purchase the Securities for any reason permitted under this Agreement (other than pursuant to the failure to satisfy a condition specified in Section 5(r)), the Company and the Guarantors shall reimburse the Initial Purchasers for such out-of-pocket expenses (including reasonable fees and disbursements of counsel) as shall have been reasonably incurred by the Initial Purchasers in connection with this Agreement and the proposed purchase and resale of the Securities. 8. Indemnification. (a) The Company and each of the Existing Guarantors and, on and after the Closing Date, the Weider Guarantors, shall jointly and severally indemnify and 24 hold harmless each Initial Purchaser, its affiliates, their respective officers, directors, employees, representatives and agents, and each person, if any, who controls any Initial Purchaser within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this Section 8(a) and Section 9 as an Initial Purchaser), from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, without limitation, any loss, claim, damage, liability or action relating to purchases and sales of the Securities), to which that Initial Purchaser may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum or the Offering Memorandum or in any amendment or supplement thereto or in any information provided by the Company pursuant to Section 4(e) or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and shall reimburse each Initial Purchaser promptly upon demand for any legal or other expenses reasonably incurred by that Initial Purchaser in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that none of the Company or the Guarantors shall be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with any Initial Purchasers' Information; and provided, further, that with respect to any such untrue statement in or omission from the Preliminary Offering Memorandum, the indemnity agreement contained in this Section 8(a) shall not inure to the benefit of any such Initial Purchaser to the extent that the sale to the person asserting any such loss, claim, damage, liability or action was an initial resale by such Initial Purchaser and any such loss, claim, damage, liability or action of or with respect to such Initial Purchaser results from the fact that both (A) to the extent required by applicable law, a copy of the Offering Memorandum (excluding the documents incorporated by reference therein) was not sent or given to such person at or prior to the written confirmation of the sale of such Securities to such person and (B) the untrue statement in or omission from the Preliminary Offering Memorandum was corrected in the Offering Memorandum unless, in either case, such failure to deliver the Offering Memorandum was a result of non-compliance by the Company with Section 4(b). (b) Each Initial Purchaser, severally and not jointly, shall indemnify and hold harmless the Company, the Guarantors, their affiliates, their respective officers, directors, employees, representatives and agents, and each person, if any, who controls the Company or any Guarantor within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this Section 8(b) and Section 9 as the Company), from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum or the Offering Memorandum or in any amendment or supplement thereto or (ii) the omission or alleged omission to state therein a material fact 25 required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with any Initial Purchasers' Information provided by such Initial Purchaser, and shall reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party pursuant to Section 8(a) or 8(b), notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 8 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and, provided, further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 8. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that an indemnified party shall have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel for the indemnified party will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (ii) the indemnified party has reasonably concluded (based upon advice of counsel to the indemnified party) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (iv) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parties. Each indemnified party, as a condition of the indemnity agreements contained in Sections 8(a) and 8(b), shall use all reasonable efforts to cooperate with the indemnifying party in the defense of any such action or claim. No indemnifying party shall be liable for any settlement of any such action effected without its written consent (which consent 26 shall not be unreasonably withheld), but if settled with its written consent or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. The obligations of the Company, the Guarantors and the Initial Purchasers in this Section 8 and in Section 9 are in addition to any other liability that the Company, the Guarantors or the Initial Purchasers, as the case may be, may otherwise have, including in respect of any breaches of representations, warranties and agreements made herein by any such party. 9. Contribution. If the indemnification provided for in Section 8 is unavailable or insufficient to hold harmless an indemnified party under Section 8(a) or 8(b), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and the Initial Purchasers on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantors on the one hand and the Initial Purchasers on the other with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors on the one hand and the Initial Purchasers on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Securities purchased under this Agreement (before deducting expenses) received by or on behalf of the Company and the Guarantors on the one hand, and the total discounts and commissions received by the Initial Purchasers with respect to the Securities purchased under this Agreement, on the other, bear to the total gross proceeds from the sale of the Securities under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to the Company or information supplied by the Company or the Guarantors on the one hand or to any Initial Purchasers' Information on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company, the Guarantors and the Initial Purchasers agree that it would not be just and equitable if contributions pursuant to this Section 9 were to be determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 9 shall be deemed to include, for purposes of this Section 9, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending or preparing to defend any such action or 27 claim. Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total discounts and commissions received by such Initial Purchaser with respect to the Securities purchased by it under this Agreement exceeds the amount of any damages which such Initial Purchaser has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 10. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Initial Purchasers, the Company and the Guarantors and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except as provided in Sections 8 and 9 with respect to affiliates, officers, directors, employees, representatives, agents and controlling persons of the Company, the Guarantors and the Initial Purchasers and in Section 4(e) with respect to holders and prospective purchasers of the Securities. Nothing in this Agreement is intended or shall be construed to give any person, other than the persons referred to in this Section 10, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. 11. Expenses. The Company and the Guarantors agree with the Initial Purchasers to pay (a) the costs incident to the authorization, issuance, sale, preparation and delivery of the Securities and any taxes payable in that connection; (b) the costs incident to the preparation, printing and distribution of the Preliminary Offering Memorandum, the Offering Memorandum and any amendments or supplements thereto; (c) the costs of reproducing and distributing each of the Transaction Documents; (d) the costs incident to the preparation, printing and delivery of the certificates evidencing the Securities, including stamp duties and transfer taxes, if any, payable upon issuance of the Securities; (e) the fees and expenses of the Company's counsel and independent accountants; (f) the fees and expenses of qualifying the Securities under the securities laws of the several jurisdictions as provided in Section 4(h) and of preparing, printing and distributing Blue Sky Memoranda (including reasonable related fees and expenses of counsel for the Initial Purchasers); (g) any fees charged by rating agencies for rating the Securities; (h) all expenses and application fees incurred in connection with the application for the inclusion of the Securities on the PORTAL Market and the approval of the Securities for book-entry transfer by DTC; and (i) all other costs and expenses incident to the performance of the obligations of the Company under this Agreement which are not otherwise specifically provided for in this Section 11; provided, however, that except as provided in this Section 11 and Section 7, the Initial Purchasers shall pay their own costs and expenses and provided, further, that the Initial Purchasers and the Company shall each pay 50% of the costs of the airplane and any helicopter used for the "road show." 12. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company, the Guarantors and the Initial Purchasers contained in this Agreement or made by or on behalf of the Company, the Guarantors or the Initial Purchasers pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination or cancelation of this Agreement or any investigation made by or on behalf of 28 any of them or any of their respective affiliates, officers, directors, employees, representatives, agents or controlling persons. 13. Notices, etc. All statements, requests, notices and agreements hereunder shall be in writing, and: (a) if to the Initial Purchasers, shall be delivered or sent by mail or telecopy transmission to : (1) J.P. Morgan Securities Inc., 270 Park Avenue, New York, New York 10017, Attention: Christopher Boege (telecopier no.: (212) 270-1063) and (2) Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167, Attention: Steve Killilea, (telecopier no.: (212) 881-9302); or (b) if to the Company, shall be delivered or sent by mail or telecopy transmission to the address of the Company set forth in the Offering Memorandum, Attention: John Miley, Chief Financial Officer (telecopier no.: (561) 272-8127); provided that any notice to an Initial Purchaser pursuant to Section 8(c) shall also be delivered or sent by mail to such Initial Purchaser at its address set forth on the signature page hereof. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof. The Company shall be entitled to act and rely upon any request, consent, notice or agreement given or made on behalf of the Initial Purchasers by JPMorgan. 14. Definition of Terms. For purposes of this Agreement, (a) the term "business day" means any day on which the New York Stock Exchange, Inc. is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405 under the Securities Act and (c) except where otherwise expressly provided, the term "affiliate" has the meaning set forth in Rule 405 under the Securities Act. 15. Initial Purchasers' Information. The parties hereto acknowledge and agree that, for all purposes of this Agreement, the Initial Purchasers' Information consists solely of the following information in the Preliminary Offering Memorandum and the Offering Memorandum: the statements concerning the Initial Purchasers contained in the third, tenth, eleventh and twelfth paragraphs under the heading "Plan of distribution." 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 17. Counterparts. This Agreement may be executed in one or more counterparts (which may include counterparts delivered by telecopier) and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 18. Amendments. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto. 29 19. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. 30 If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us a counterpart hereof. Very truly yours, On behalf of AMERICAN MEDIA OPERATIONS, INC. NATIONAL ENQUIRER, INC. GLOBE EDITORIAL, INC. GLOBE COMMUNICATIONS, CORP. STAR EDITORIAL, INC. NATIONAL EXAMINER, INC. MIRA! EDITORIAL, INC. AM AUTO WORLD WEEKLY, INC. AMERICAN MEDIA CONSUMER ENTERTAINMENT INC. AMERICAN MEDIA CONSUMER MAGAZINE GROUP, INC. AMERICAN MEDIA NEWSPAPER GROUP, INC. COUNTRY MUSIC MEDIA GROUP, INC. AMERICAN MEDIA MINI MAGS, INC. AMERICAN MEDIA DISTRIBUTION & MARKETING GROUP, INC. AMERICAN MEDIA PROPERTY GROUP, INC. DISTRIBUTION SERVICES, INC. NDSI, INC. AMI BOOKS, INC. AMI FILMS, INC. By /s/ John Miley --------------- Name: Title: 31 Accepted: J.P. MORGAN SECURITIES INC., For itself and on behalf of the several Initial Purchasers listed on Schedule 2 hereto. By /s/ Christopher Boege ---------------------- Authorized Signatory Address for notices pursuant to Section 8(c): 1 Chase Manhattan Plaza, 26th Floor New York, New York 10081 Attention: Legal Department The foregoing Agreement is hereby agreed to and accepted as of the Closing Date. WEIDER PUBLICATIONS, LLC By /s/ John Miley --------------- Name: Title: SYL COMMUNICATIONS By /s/ John Miley --------------- Name: Title: 32 SCHEDULE 1 Third Amended and Restated Limited Liability Company Agreement and Investors Rights Agreement of EMP Group L.L.C., dated as of February 13, 2002, by and among Evercore Capital Partners, L.P., Circulation, LLC, J.P. Morgan Partners (BHCA), L.P. (formerly Chase Equity Associates, L.P.), Tandem Journalism Investments, L.P., BG Media Investors, L.P., David J. Pecker and the other parties thereto (as such agreement may be amended from time to time including, without limitation, in connection with the Acquisition). 33 SCHEDULE 2
Initial Purchasers of Securities Principal Amount - -------------------------------- ---------------- J.P. Morgan Securities Inc. $97,500,000 Bear, Stearns & Co. Inc. $52,500,000 Total $150,000,000 ===========
34 ANNEX B-1 Form of Opinion of Simpson Thacher & Bartlett See attached. 35 ANNEX B-2 Form of Opinion of General Counsel for the Company See attached. 36 ANNEX B-3 Form of Opinion of Corporate Counsel for the Company See attached. 37 ANNEX B-4 Form of Opinion of General Counsel for Weider Publications, Inc. See attached. 38 ANNEX C Form of Initial Comfort Letter with Respect to the Company 39 ANNEX D Form of Initial Comfort Letter with Respect to Weider Publications, Inc. and its subsidiaries and Weider Interactive Networks EX-3.36 4 y86871exv3w36.txt ARTICLES OF INCORPORATION Exhibit 3.36 CERTIFICATE OF INCORPORATION OF AMI Books, Inc. ***** 1. The name of the corporation is AMI Books, Inc. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) common shares and the par value of each of such shares is one cent ($0.01) amounting in the aggregate to ten dollars ($10.00). 5. The name and mailing address of each incorporator is as follows: NAME MAILING ADDRESS ---- --------------- Maria V. Feliu Maurrasse 10621 S.W. 117 Avenue Miami, Florida 33186 6. The corporation is to have perpetual existence. 7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized to make, alter or repeal the by-laws of the corporation. 8. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. 9. The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. 10. A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. I, THE UNDERSIGNED; being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 15th day of August, 2002. /s/ Maria V. Feliu Maurrasse -------------------------------------- Maria V. Feliu Maurrasse, Incorporator EX-3.37 5 y86871exv3w37.txt BYLAWS Exhibit 3.37 BY-LAWS OF AMI Books, Inc. -------------------- ARTICLE I -- OFFICES -------------------- The office of the Corporation shall be located in the City and State designated in the Articles of Incorporation. The Corporation may also maintain offices at such other places within or without the United States as the Board of Directors may, from time to time, determine. ARTICLE II -- MEETING OF SHAREHOLDERS ------------------------------------- Section 1 -- Annual Meetings: - ---------------------------- The annual meeting of the shareholders of the Corporation shall be held within five months after the close of the fiscal year of the Corporation, for the purpose of electing directors, and transacting such other business as may properly come before the meeting. Section 2 -- Special Meetings: - ----------------------------- Special meetings of the shareholders may be called at any time by the Board of Directors or by the President, and shall be called by the President or the Secretary at the written request of the holders of ten per cent (10%) of the shares then outstanding and entitled to vote thereat, or as otherwise required under the provisions of the Business Corporation Act. Section 3 -- Place of Meetings: - ------------------------------ All meetings of shareholders shall be held at the principal office of the Corporation, or at such other places as shall be designated in the notices or waivers of notice of such meetings. Section 4 - Notice of Meetings: - ------------------------------- (a) Except as otherwise provided by Statute, written notice of each meeting of shareholders, whether annual or special, stating the time when and place where it is to be held, shall be served either personally or by mail, not less than ten or more than fifty days before the meeting, upon each shareholder of record entitled to vote at such meeting, and to any other shareholder to whom the giving of notice may be required by law. Notice of a special meeting shall also state the purpose or purposes for which the meeting is called, and shall indicate that it is being issued by, or at the direction of, the person or persons calling the meeting. If, at any meeting, action is proposed to be taken that would, if taken, entitle shareholders to receive payment for their shares pursuant to Statute, the notice of such meeting shall include a statement of that purpose and to that effect. If mailed, such notice shall be directed to each such shareholder at his address, as it appears on the records of the shareholders of the Corporation, unless he shall have previously filed with the Secretary of the Corporation a written request that notices intended for him be mailed to some other address, in which case, it shall be mailed to the address designated in such request. (b) Notice of any meeting need not be given to any person who may become a shareholder of record after the mailing of such notice and prior to the meeting, or to any shareholder who attends such meeting, in person or by proxy, or to any shareholder who, in person or by proxy, submits a signed waiver of notice either before or after such meeting. Notice of any adjourned meeting of shareholders need not be given, unless otherwise required by statute. Section 5 - Quorum: - ------------------- (a) Except as otherwise provided herein, or by statute, or in the Certificate of Incorporation (such Certificate and any amendments thereof being hereinafter collectively referred to as the "Certificate of Incorporation"), at all meetings of shareholders of the Corporation, the presence at the commencement of such meetings in person or by proxy of shareholders holding of record a majority of the total number of shares of the Corporation then issued and outstanding and entitled to vote. By-Laws - 2 shall be necessary and sufficient to constitute a quorum for the transaction of any business. The withdrawal of any shareholder after the commencement of a meeting shall have no effect on the existence of a quorum, after a quorum has been established at such meeting. (b) Despite the absence of a quorum at any annual or special meeting of shareholders, the shareholders, by a majority of the votes cast by the holders of shares entitled to vote thereon, may adjourn the meeting. At any such adjourned meeting at which a quorum is present, any business may be transacted at the meeting as originally called if a quorum had been present. Section 6 -- Voting: (a) Except as otherwise provided by statute or by the Certificate of Incorporation, any corporate action, other than the election of directors, to be taken by vote of the shareholders, shall be authorized by a majority of votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon. (b) Except as otherwise provided by statute or by the Certificate of Incorporation, at each meeting of shareholders each holder of record of stock of the Corporation entitled to vote thereat, shall be entitled to one vote for each share of stock registered in his name on the books of the Corporation. (c) Each shareholder entitled to vote or to express consent or dissent without a meeting, may do so by proxy; provided, however, that the instrument authorizing such proxy to act shall have been executed in writing by the shareholder himself or by his attorney-in-fact thereunto duly authorized in writing. No proxy shall be valid after the expiration of eleven months from the date of its execution, unless the person executing it shall have specified therein the length of time it is to continue in force. Such instrument shall be exhibited to the Secretary at the meeting and shall be filed with the records of the Corporation. By-Laws - 3 (d) Any resolution in writing, signed by all of the shareholders entitled to vote thereon, shall be and constitute action by such shareholders to the effect therein expressed, with the same force and effect as if the same had been duly passed by unanimous vote at a duly called meeting of shareholders and such resolution so signed shall be inserted in the Minute Book of the Corporation under its proper date. ARTICLE III - BOARD OF DIRECTORS Section 1 - Number, Election and Term of Office: (a) The number of the directors of the Corporation shall be ( ), unless and until otherwise determined by vote of a majority of the entire Board of Directors. The number of Directors shall not be less than three, unless all of the outstanding shares are owned beneficially and of record by less than three shareholders, in which event the number of directors shall not be less than the number of shareholders permitted by statute. (b) Except as may otherwise be provided herein or in the Certificate of Incorporation, the members of the Board of Directors of the Corporation, who need not be shareholders, shall be elected by a majority of the votes cast at a meeting of shareholders, by the holders of shares, present in person or by proxy, entitled to vote in the election. (c) Each director shall hold office until the annual meeting of the shareholders next succeeding his election, and until his successor is elected and qualified, or until his prior death, resignation or removal. Section 2 - Duties and Powers: The Board of Directors shall be responsible for the control and management of the affairs, property and interests of the Corporation, and may exercise all powers of the Corporation, except as are in the Certificate of Incorporation or by statute expressly conferred upon or reserved to the shareholder Section 3 - Annual and Regular Meetings; Notice: (a) A regular annual meeting of the Board of Directors shall be held immediately following the annual meeting of the shareholders, at the place of such annual meeting of shareholders. By-Laws -4 (b) The Board of Directors, from time to time, may provide by resolution for the holding of other regular meetings of the Board of Directors, and may fix the time and place thereof. (c) Notice of any regular meeting of the Board of Directors shall not be required to be given and, if given, need not specify the purpose of the meeting; provided, however, that in case the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be given to each director who shall not have been present at the meeting at which such action was taken within the time limited, and in the manner set forth in paragraph (b) Section 4 of this Article III, with respect to special meetings, unless such notice shall be waived in the manner set forth in paragraph (c) of such Section 4. Section 4 - Special Meetings; Notice: - ------------------------------------- (a) Special meetings of the Board of Directors shall be held whenever called by the President or by one of the directors, at such time and place as may be specified in the respective notices or waivers of notice thereof. (b) Except as otherwise required by statute, notice of special meetings shall be mailed directly to each director, addressed to him at his residence or usual place of business, at least two (2) days before the day on which the meeting is to be held, or shall be sent to him at such place by telegram, radio or cable, or shall be delivered to him personally or given to him orally, not later than the day before the day on which the meeting is to be held. A notice, or waiver of notice, except as required by Section 8 of this Article III, need not specify the purpose of the meeting. (c) Notice of any special meeting shall not be required to be given to any director who shall attend such meeting without protesting prior thereto or at its commencement, the lack of notice to him, or who submits a signed waiver of notice, whether before or after the meeting. Notice of any adjourned meeting shall not be required to be given. Section 5 - Chairman: - --------------------- At all meetings of the Board of Directors, the Chairman of the Board, if any and if present, shall preside. If there shall be no Chairman, or he shall be absent, then the President shall preside, and in his absence, a Chairman chosen by the directors shall preside. By-Laws - 5 Section 6 -- Quorum and Adjournments: (a) At all meetings of the Board of the Directors, the presence of a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business, except as otherwise provided by law, by the Certificate of Incorporation, or by these By-Laws. (b) A majority of the directors present at the time and place of any regular or special meeting, although less than a quorum, may adjourn the same from time to time without notice, until a quorum shall be present. Section 7 -- Manner of Acting: (a) At all meetings of the Board of Directors, each director present shall have one vote, irrespective of the number of shares of stock, if any, which he may hold. (b) Except as otherwise provided by statute, by the Certificate of Incorporation, or by these By-Laws, the action of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. Any action authorized, in writing, by all of the directors entitled to vote thereon and filed with the minutes of the corporation shall be the act of the Board of Directors with the same force and effect as if the same had been passed by unanimous vote at a duly called meeting of the Board. Section 8 -- Vacancies: [ILLEGIBLE] an increase in the number of directors, or by reason of one death, resignation, disqualification, removal (unless a vacancy created by the removal of a director by the shareholders shall be filled by the shareholders at the meeting at which the removal was effected) or inability to act of any director, or otherwise, shall be filled for the unexpired portion of the term by a majority vote of the remaining directors, though less than a quorum, at any regular meeting or special meeting of the Board of Directors called for that purpose. Section 9 -- Resignation: Any director may resign at any time by giving written notice to the Board of Directors, the President or the Secretary of the Corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board of Directors or such officer, and the acceptance of such resignation shall not be necessary to make it effective. By-Laws - 6 Section 10 - Removal: Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the outstanding shares of the Corporation at a special meeting of the shareholders called for that purpose, and may be removed for cause by action of the Board. Section 11 - Salary: No stated salary shall be paid to directors, as such, for their services, but by resolution of the Board of Directors a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; provided, however, that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Section 12 - Contracts: (a) No contract or other transaction between this Corporation and any other Corporation shall be impaired, affected or invalidated, nor shall any director be liable in any way by reason of the fact that any one or more of the directors of this Corporation is or are interested in, or is a director or officer, or are directors or officers of such other Corporation, provided that such facts are disclosed or made known to the Board of Directors. (b) Any director, personally and individually, may be a party to or may be interested in any contract or transaction of this Corporation, and no director shall be liable in any way by reason of such interest, provided that the fact of such interest be disclosed or made known to the Board of Directors, and provided that the Board of Directors shall authorize, approve or ratify such contract or transaction by the vote (not counting the vote of any such director) of a majority of a quorum, notwithstanding the presence of any such director at the meeting at which such action is taken. Such director or directors may be counted in determining the presence of a quorum at such meeting. This Section shall By-Laws - 7 not be construed to impair or invalidate or in any way affect any contract or other transaction which would otherwise be valid under the law (common, statutory or otherwise) applicable thereto. Section 13 -- Committees: The Board of Directors, by resolution adopted by a majority of the entire Board, may from time to time designate from among its members an executive committee and such other committees, and alternate members thereof, as they may deem desirable, each consisting of three or more members, with such powers and authority (to the extent permitted by law) as may be provided in such resolution. Each such committee shall serve at the pleasure of the Board. ARTICLE IV -- OFFICERS Section 1 -- Number, Qualifications, Election and Term of Office: (a) The officers of the Corporation shall consist of a President, a Secretary, a Treasurer, and such other officers, including a Chairman of the Board of Directors, and one or more Vice Presidents as the Board of Directors may from time to time deem advisable. Any officer other than the Chairman of the Board of Directors may be, but is not required to be, a director of the Corporation. Any two or more offices may be held by the same person. (b) The officers of the Corporation shall be elected by the Board of Directors at the regular annual meeting of the Board following the annual meeting of shareholders. (c) Each officer shall hold office until the annual meeting of the Board of Directors next succeeding his election, and until his successor shall have been elected and qualified, or until his death, resignation or removal. Section 2 -- Resignation: Any officer may resign at any time by giving written notice of his resignation to the Board of Directors, or to the President or the Secretary of the Corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board of Directors or by such officer, and the acceptance of such resignation shall not be necessary to make it effective. By-Laws - 8 Section 3 - Removal: Any officer may be removed, either with or without cause, and a successor elected by a majority vote of the Board of Directors at any time. Section 4 - Vacancies: A vacancy in any office by reason of death, resignation, inability to act, disqualification, or any other cause, may at any time be filled for the unexpired portion of the term by a majority vote of the Board of Directors. Section 5 - Duties of Officers: Officers of the Corporation shall, unless otherwise provided by the Board of Directors, each have such powers and duties as generally pertain to their respective offices as well as such powers and duties as may be set forth in these by-laws, or may from time to time be specifically conferred or imposed by the Board of Directors. The President shall be the chief executive officer of the Corporation. Section 6 - Sureties and Bonds: In case the Board of Directors shall so require, any officer, employee or agent of the Corporation shall execute to the Corporation a bond in such sum, and with such surety or sureties as the Board of Directors may direct, conditioned upon the faithful performance of his duties to the Corporation, including responsibility for negligence and for the accounting for all property, funds or securities of the Corporation which may come into his hands. Section 7 - Shares of Other Corporations: Whenever the Corporation is the holder of shares of any other Corporation, any right or power of the Corporation as such shareholder (including the attendance, acting and voting at shareholders' meetings and execution of waivers, consents, proxies or other instruments) may be exercised on behalf of the Corporation by the President, any Vice President, or such other person as the Board of Directors may authorize. ARTICLE V - SHARES OF STOCK Section 1 - Certificate of Stock: (a) The certificates representing shares of the Corporation shall By-Laws - 9 be in such form as shall be adopted by the Board of Directors, and shall be numbered and registered in the order issued. They shall bear the holder's name and the number of shares, and shall be signed by (i) the Chairman of the Board or the President or a Vice President, and (ii) the Secretary or Treasurer, or any Assistant Secretary or Assistant Treasurer, and shall bear the corporate seal. (b) No certificate representing shares shall be issued until the full amount of consideration therefor has been paid, except as otherwise permitted by law. (c) To the extent permitted by law, the Board of Directors may authorize the issuance of certificates for fractions of a share which shall entitle the holder to exercise voting rights, receive dividends and participate in liquidating distributions, in proportion to the fractional holdings; or it may authorize the payment in cash of the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined; or it may authorize the issuance, subject to such conditions as may be permitted by law, of scrip in registered or bearer form over the signature of an officer or agent of the Corporation, exchangeable as therein provided for full shares, but such scrip shall not entitle the holder to any rights of a shareholder, except as therein provided. Section 2 - Lost or Destroyed Certificates: The holder of any certificate representing shares of the Corporation shall immediately notify the Corporation of any loss or construction of the certificate representing the same. The Corporation may issue a new certificate in the place of any certificate therefore issued by it, alleged to have been lost or destroyed. On production of such evidence of loss or destruction as the Board of Directors in its discretion may require, the Board of Directors may, in its discretion, require the owner of the lost or destroyed certificate, or his legal representatives to give the Corporation a bond in such sum as the Board may direct, and with such surety or sureties as may be satisfactory to the Board, to indemnify the Corporation against any claims, loss, liability or damage it may suffer on account of the issuance of the new certificate. A new certificate may be issued without requiring any such evidence or bond when, in the judgment of the Board of Directors, it is proper so to do. By-Laws - 10 Section 3 - Transfers of Shares: - -------------------------------- (a) Transfers of shares of the Corporation shall be made on the share records of the Corporation only by the holder of record thereof, in person or by his duly authorized attorney, upon surrender for cancellation of the certificate or certificates representing such shares, with an assignment or power of transfer endorsed thereon or delivered therewith, duly executed, with such proof of the authenticity of the signature and of authority to transfer and of payment of transfer taxes as the Corporation or its agents may require. (b) The Corporation shall be entitled to treat the holder of record of any share or shares as the absolute owner thereof for all purposes and, accordingly, shall not be bound to recognize any legal, equitable or other claim to, or interest in, such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by law. Section 4 - Record Date: - ------------------------ In lieu of closing the share records of the Corporation, the Board of Directors may fix, in advance, a date not exceeding fifty days, nor less than ten days, as the record date for the determination of shareholders entitled to receive notice of, or to vote at, any meeting of shareholders, or to consent to any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividends, or allotment of any rights, or for the purpose of any other action. If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if no notice is given, the day on which the meeting is held; the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the resolution of the directors relating thereto is adopted. When a determination of shareholders of record entitled to notice of or to vote at any meeting of shareholders has been made as provided for herein, such determination shall apply to any adjournment thereof, unless the directors fix a new record date for the adjourned meeting. By-Laws - 11 ARTICLE VI - DIVIDENDS ---------------------- Subject to applicable law, dividends may be declared and paid out of any funds available therefor, as often, in such amounts and at such time or times as the Board may determine. ARTICLE VII - FISCAL YEAR ------------------------- The fiscal year of the Corporation shall be fixed by the Board from time to time, subject to applicable law. ARTICLE VIII - CORPORATE SEAL ----------------------------- The corporate seal, if any, shall be in such form as shall be approved from time to time by the Board. ARTICLE IX - AMENDMENTS ----------------------- Section 1 - By Shareholders: - ---------------------------- If not reserved to the shareholders by the Articles of Incorporation, all by-laws of the Corporation shall be subject to alteration or repeal, and new by-laws may be made, by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the outstanding shares entitled to vote in the election of directors at any annual or special meeting of shareholders, provided that the notice or waiver of notice of such meeting shall have summarized or set forth in full therein, the proposed amendment. Section 2 - By Directors: - ------------------------- In not reserved to the shareholders by the Articles of Incorporation, the Board shall have the power to make, adopt, alter, amend and repeal, from time to time, by-laws of the Corporation; provided, however, that the shareholders entitled to vote with respect thereto as in this Article IX above-provided may alter, amend or repeal by-laws made by the Board, except that the Board shall have no power to change the quorum for meetings of shareholders or of the Board, or to change any provisions of the by-laws with respect to the removal of directors or the filling of vacancies in the Board resulting from the removal by the shareholders. If any by-law regulating an impending election of directors is adopted, amended or repealed by the Board, there shall be set forth in the notice of the next meeting of shareholders for the election of directors, the by-law so adopted, amended or repealed, together with a concise statement of the changes made. By-Laws - 12 ARTICLE X - INDEMNITY (a) Any person made a party to any action, suit or proceeding, by reason of the fact that he, his testator or intestate representative is or was a director, officer or employee of the Corporation, or of any Corporation in which he served as such at the request of the Corporation, shall be indemnified by the Corporation against the reasonable expenses, including attorney's fees, actually and necessarily incurred by him in connection with the defense of such action, suit or proceedings, or in connection with any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding, or in connection with any appeal therein that such officer, director or employee is liable for negligence or misconduct in the performance of his duties. (b) The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any officer or director or employee may be entitled apart from the provisions of this section. (c) The amount of indemnity to which any officer or any director may be entitled shall be fixed by the Board of Directors, except that in any case where there is no disinterested majority of the Board available, the amount shall be fixed by arbitration pursuant to the then existing rules of the American Arbitration Association. The undersigned Incorporator certifies that he has adopted the foregoing by-laws as the first by-laws of the Corporation. Dated: -------------------- ---------------------------------- By-Laws - 13 EX-3.38 6 y86871exv3w38.txt ARTICLES OF INCORPORATION Exhibit 3.38 CERTIFICATE OF INCORPORATION OF AMI Films, Inc. ***** 1. The name of the corporation is AMT Films, Inc. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) common shares and the par value of each of such shares is one cent ($0.01) amounting in the aggregate to ten dollars ($10.00). 5. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS ---- --------------- Maria V. Feliu Maurrasse 10621 S.W. 117 Avenue Miami, Florida 33186
6. The corporation is to have perpetual existence. 7. In furtherance and not in limitation of the powers conferred by Statute, the board of directors is expressly authorized to make, alter or repeal the by-laws of the corporation. 8. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. 9. The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. 10. A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 15th day of August, 2002. /s/ Maria V. Feliu Maurrasse -------------------------------------- Maria V. Feliu Maurrasse, Incorporator EX-3.39 7 y86871exv3w39.txt BYLAWS Exhibit 3.39 BY-LAWS ------- OF -- AMI Films, Inc. -------------------- ARTICLE I -- OFFICES -------------------- The office of the Corporation shall be located in the City and State designated in the Articles of Incorporation. The Corporation may also maintain offices at such other places within or without the United States as the Board of Directors may, from time to time, determine. ARTICLE II -- MEETING OF SHAREHOLDERS ------------------------------------- Section 1 -- Annual Meetings: - ---------------------------- The annual meeting of the shareholders of the Corporation shall be held within five months after the close of the fiscal year of the Corporation, for the purpose of electing directors, and transacting such other business as may properly come before the meeting. Section 2 -- Special Meetings: - ----------------------------- Special meetings of the shareholders may be called at any time by the Board of Directors or by the President, and shall be called by the President or the Secretary at the written request of the holders of ten per cent (10%) of the shares then outstanding and entitled to vote thereat, or as otherwise required under the provisions of the Business Corporation Act. Section 3 -- Place of Meetings: - ------------------------------ All meetings of shareholders shall be held at the principal office of the Corporation, or at such other places as shall be designated in the notices or waivers of notice of such meetings. Section 4 - Notice of Meetings: - ------------------------------- (a) Except as otherwise provided by Statute, written notice of each meeting of shareholders, whether annual or special, stating the time when and place where it is to be held, shall be served either personally or by mail, not less than ten or more than fifty days before the meeting, upon each shareholder of record entitled to vote at such meeting, and to any other shareholder to whom the giving of notice may be required by law. Notice of a special meeting shall also state the purpose or purposes for which the meeting is called, and shall indicate that it is being issued by, or at the direction of, the person or persons calling the meeting. If, at any meeting, action is proposed to be taken that would, if taken, entitle shareholders to receive payment for their shares pursuant to Statute, the notice of such meeting shall include a statement of that purpose and to that effect. If mailed, such notice shall be directed to each such shareholder at his address, as it appears on the records of the shareholders of the Corporation, unless he shall have previously filed with the Secretary of the Corporation a written request that notices intended for him be mailed to some other address, in which case, it shall be mailed to the address designated in such request. (b) Notice of any meeting need not be given to any person who may become a shareholder of record after the mailing of such notice and prior to the meeting, or to any shareholder who attends such meeting, in person or by proxy, or to any shareholder who, in person or by proxy, submits a signed waiver of notice either before or after such meeting. Notice of any adjourned meeting of shareholders need not be given, unless otherwise required by statute. Section 5 - Quorum: - ------------------- (a) Except as otherwise provided herein, or by statute, or in the Certificate of Incorporation (such Certificate and any amendments thereof being hereinafter collectively referred to as the "Certificate of Incorporation"), at all meetings of shareholders of the Corporation, the presence at the commencement of such meetings in person or by proxy of shareholders holding of record a majority of the total number of shares of the Corporation then issued and outstanding and entitled to vote. By-Laws - 2 shall be necessary and sufficient to constitute a quorum for the transaction of any business. The withdrawal of any shareholder after the commencement of a meeting shall have no effect on the existence of a quorum, after a quorum has been established at such meeting. (b) Despite the absence of a quorum at any annual or special meeting of shareholders, the shareholders, by a majority of the votes cast by the holders of shares entitled to vote thereon, may adjourn the meeting. At any such adjourned meeting at which a quorum is present, any business may be transacted at the meeting as originally called if a quorum had been present. Section 6 - Voting: (a) Except as otherwise provided by statute or by the Certificate of Incorporation, any corporate action, other than the election of directors, to be taken by vote of the shareholders, shall be authorized by a majority of votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon. (b) Except as otherwise provided by statute or by the Certificate of Incorporation, at each meeting of shareholders each holder of record of stock of the Corporation entitled to vote thereat, shall be entitled to one vote for each share of stock registered in his name on the books of the Corporation. (c) Each shareholder entitled to vote or to express consent or dissent without a meeting, may do so by proxy; provided, however, that the instrument authorizing such proxy to act shall have been executed in writing by the shareholder himself or by his attorney-in-fact thereunto duly authorized in writing. No proxy shall be valid after the expiration of eleven months from the date of its execution, unless the person executing it shall have specified therein the length of time it is to continue in force. Such instrument shall be exhibited to the Secretary at the meeting and shall be filed with the records of the Corporation. By-Laws - 3 (d) Any resolution in writing, signed by all of the shareholders entitled to vote thereon, shall be and constitute action by such shareholders to the effect therein expressed, with the same force and effect as if the same had been duly passed by unanimous vote at a duly called meeting of shareholders and such resolution so signed shall be inserted in the Minute Book of the Corporation under its proper date. ARTICLE III -- BOARD OF DIRECTORS Section 1 -- Number, Election and Term of Office: - ------------------------------------------------- (a) The number of the directors of the Corporation shall be ( ), unless and until otherwise determined by vote of a majority of the entire Board of Directors. The number of Directors shall not be less than three, unless all of the outstanding shares are owned beneficially and of record by less than three shareholders, in which event the number of directors shall not be less than the number of shareholders permitted by statute. (b) Except as may otherwise be provided herein or in the Certificate of Incorporation, the members of the Board of Directors of the Corporation, who need not be shareholders, shall be elected by a majority of the votes cast at a meeting of shareholders, by the holders of shares, present in person or by proxy, entitled to vote in the election. (c) Each director shall hold office until the annual meeting of the shareholders next succeeding his election, and until his successor is elected and qualified, or until his prior death, resignation or removal. Section 2 -- Duties and Powers: - ------------------------------- The Board of Directors shall be responsible for the control and management of the affairs, property and interests of the Corporation, and may exercise all powers of the Corporation, except as are in the Certificate of Incorporation or by statute expressly conferred upon or reserved to the shareholder. Section 3 -- Annual and Regular Meetings; Notice: - ------------------------------------------------- (a) A regular annual meeting of the Board of Directors shall be held immediately following the annual meeting of the shareholders, at the place of such annual meeting of shareholders. By-Laws - 4 (b) The Board of Directors, from time to time, may provide by resolution for the holding of other regular meetings of the Board of Directors, and may fix the time and place thereof. (c) Notice of any regular meeting of the Board of Directors shall not be required to be given and, if given, need not specify the purpose of the meeting; provided, however, that in case the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be given to each director who shall not have been present at the meeting at which such action was taken within the time limited, and in the manner set forth in paragraph (b) Section 4 of this Article III, with respect to special meetings, unless such notice shall be waived in the manner set forth in paragraph (c) of such Section 4. Section 4 -- Special Meetings; Notice: - -------------------------------------- (a) Special meetings of the Board of Directors shall be held whenever called by the President or by one of the directors, at such time and place as may be specified in the respective notices or waivers of notice thereof. (b) Except as otherwise required by statute, notice of special meetings shall be mailed directly to each director, addressed to him at his residence or usual place of business, at least two (2) days before the day on which the meeting is to be held, or shall be sent to him at such place by telegram, radio or cable, or shall be delivered to him personally or given to him orally, not later than the day before the day on which the meeting is to be held. A notice, or waiver of notice, except as required by Section 8 of this Article III, need not specify the purpose of the meeting. (c) Notice of any special meeting shall not be required to be given to any director who shall attend such meeting without protesting prior thereto or at its commencement, the lack of notice to him, or who submits a signed waiver of notice, whether before or after the meeting. Notice of any adjourned meeting shall not be required to be given. Section 5 -- Chairman: - ---------------------- At all meetings of the Board of Directors, the Chairman of the Board, if any and if present, shall preside. If there shall be no Chairman, or he shall be absent, then the President shall preside, and in his absence, a Chairman chosen by the directors shall preside. By-Laws - 5 Section 6 - Quorum and Adjournments: - ------------------------------------ (a) At all meetings of the Board of Directors, the presence of a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business, except as otherwise provided by law, by the Certificate of Incorporation, or by these By-Laws. (b) A majority of the directors present at the time and place of any regular or special meeting, although less than a quorum, may adjourn the same from time to time without notice, until a quorum shall be present. Section 7 - Manner of Acting: - ----------------------------- (a) At all meetings of the Board of Directors, each director present shall have one vote, irrespective of the number of shares of stock, if any, which he may hold. (b) Except as otherwise provided by statute, by the Certificate of Incorporation, or by these By-Laws, the action of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. Any action authorized, in writing, by all of the directors entitled to vote thereon and filed with the minutes of the corporation shall be the act of the Board of Directors with the same force and effect as if the same had been passed by unanimous vote at a duly called meeting of the Board. Section 8 - Vacancies: - ---------------------- [ILLEGIBLE] an increase in the number of directors, or by reason of the death, resignation, disqualification, removal (unless a vacancy created by the removal of a director by the shareholders shall be filled by the shareholders at the meeting at which the removal was effected) or inability to act of any director, or otherwise, shall be filled for the unexpired portion of the term by a majority vote of the remaining directors, though less than a quorum, at any regular meeting or special meeting of the Board of Directors called for that purpose. Section 9 - Resignation: - ------------------------ Any directors may resign at any time by giving written notice to the Board of Directors, the President or the Secretary of the Corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board of Directors or such officer, and the acceptance of such resignation shall not be necessary to make it effective. By-Laws - 6 Section 10 -- Removal: Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the outstanding shares of the Corporation at a special meeting of the shareholders called for that purpose, and may be removed for cause by action of the Board. Section 11 -- Salary: No stated salary shall be paid to directors, as such, for their services, but by resolution of the Board of Directors a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; provided, however, that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Section 12 -- Contracts: (a) No contract or other transaction between this Corporation and any other Corporation shall be impaired, affected or invalidated, nor shall any director be liable in any way by reason of the fact that any one or more of the directors of this Corporation is or are interested in, or is a director or officer, or are directors or officers of such other Corporation, provided that such facts are disclosed or made known to the Board of Directors. (b) Any director, personally and individually, may be a party to or may be interested in any contract or transaction of this Corporation, and no director shall be liable in any way by reason of such interest, provided that the fact of such interest be disclosed or made known to the Board of Directors, and provided that the Board of Directors shall authorize, approve or ratify such contract or transaction by the vote (not counting the vote of any such director) of a majority of a quorum, notwithstanding the presence of any such director at the meeting at which such action is taken. Such director or directors may be counted in determining the presence of a quorum at such meeting. This Section shall By-Laws - 7 not be construed to impair or invalidate or in any way affect any contract or other transaction which would otherwise be valid under the law (common, statutory or otherwise) applicable thereto. Section 13 -- Committees: The Board of Directors, by resolution adopted by a majority of the entire Board, may from time to time designate from among its members an executive committee and such other committees, and alternate members thereof, as they may deem desirable, each consisting of three or more members, with such powers and authority (to the extent permitted by law) as may be provided in such resolution. Each such committee shall serve at the pleasure of the Board. ARTICLE IV -- OFFICERS Section 1 -- Number, Qualifications, Election and Term of Office: (a) The officers of the Corporation shall consist of a President, a Secretary, a Treasurer, and such other officers, including a Chairman of the Board of Directors, and one or more Vice Presidents as the Board of Directors may from time to time deem advisable. Any officer other than the Chairman of the Board of Directors may be, but is not required to be, a director of the Corporation. Any two or more offices may be held by the same person. (b) The officers of the Corporation shall be elected by the Board of Directors at the regular annual meeting of the Board following the annual meeting of shareholders. (c) Each officer shall hold office until the annual meeting of the Board of Directors next succeeding his election, and until his successor shall have been elected and qualified, or until his death, resignation or removal. Section 2 -- Resignation: Any officer may resign at any time by giving written notice of such resignation to the Board of Directors, or to the President or the Secretary of the Corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board of Directors or by such officer, and the acceptance of such resignation shall not be necessary to make it effective. By-Laws-8 Section 3 -- Removal: - -------------------- Any officer may be removed, either with or without cause, and a successor elected by a majority vote of the Board of Directors at any time. Section 4 -- Vacancies: - ---------------------- A vacancy in any office by reason of death, resignation, inability to act, disqualification, or any other cause, may at any time be filled for the unexpired portion of the term by a majority vote of the Board of Directors. Section 5 -- Duties of Officers: - ------------------------------- Officers of the Corporation shall, unless otherwise provided by the Board of Directors, each have such powers and duties as generally pertain to their respective offices as well as such powers and duties as may be set forth in these by-laws, or may from time to time be specifically conferred or imposed by the Board of Directors. The President shall be the chief executive officer of the Corporation. Section 6 -- Sureties and Bonds: - ------------------------------- In case the Board of Directors shall so require, any officer, employee or agent of the Corporation shall execute to the Corporation a bond in such sum, and with such surety or sureties as the Board of Directors may direct, conditioned upon the faithful performance of his duties to the Corporation, including responsibility for negligence and for the accounting for all property, funds or securities of the Corporation which may come into his hands. Section 7 -- Shares of Other Corporations: - ----------------------------------------- Whenever the Corporation is the holder of shares of any other Corporation, any right or power of the Corporation as such shareholder (including the attendance, acting and voting at shareholders' meetings and execution of waivers, consents, proxies or other instruments) may be exercised on behalf of the Corporation by the President, any Vice President, or such other person as the Board of Directors may authorize. ARTICLE V -- SHARES OF STOCK ---------------------------- Section 1 -- Certificate of Stock: - --------------------------------- (a) The certificates representing shares of the Corporation shall By-Laws - 9 be in such form as shall be adopted by the Board of Directors, and shall be numbered and registered in the order issued. They shall bear the holder's name and the number of shares, and shall be signed by (i) the Chairman of the Board or the President or a Vice President, and (ii) the Secretary or Treasurer, or any Assistant Secretary or Assistant Treasurer, and shall bear the corporate seal. (b) No certificate representing shares shall be issued until the full amount of consideration therefor has been paid, except as otherwise permitted by law. (c) To the extent permitted by law, the Board of Directors may authorize the issuance of certificates for fractions of a share which shall entitle the holder to exercise voting rights, receive dividends and participate in liquidating distributions, in proportion to the fractional holdings; or it may authorize the payment in cash of the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined; or it may authorize the issuance, subject to such conditions as may be permitted by law, of scrip in registered or bearer form over the signature of an officer or agent of the Corporation, exchangeable as therein provided for full shares, but such scrip shall not entitle the holder to any rights of a shareholder, except as therein provided. Section 2 - Lost or Destroyed Certificates: The holder of any certificate representing shares of the Corporation shall immediately notify the Corporation of any loss or construction of the certificate representing the same. The Corporation may issue a new certificate in the place of any certificate therefore issued by it, alleged to have been lost or destroyed. On production of such evidence of loss or destruction as the Board of Directors in its discretion may require, the Board of Directors may, in its discretion, require the owner of the lost or destroyed certificate, or his legal representatives to give the Corporation a bond in such sum as the Board may direct, and with such surety or sureties as may be satisfactory to the Board, to indemnify the Corporation against any claims, loss, liability or damage it may suffer on account of the issuance of the new certificate. A new certificate may be issued without requiring any such evidence or bond when, in the judgment of the Board of Directors, it is proper so to do. By-Laws - 10 Section 3 - Transfers of Shares: (a) Transfer of shares of the Corporation shall be made on the share records of the Corporation only by the holder of record thereof, in person or by his duly authorized attorney, upon surrender for cancellation of the certificate or certificates representing such shares, with an assignment or power of transfer endorsed thereon or delivered therewith, duly executed, with such proof of the authenticity of the signature and of authority to transfer and of payment of transfer taxes as the Corporation or its agents may require. (b) The Corporation shall be entitled to treat the holder of record of any share or shares as the absolute owner thereof for all purposes and, accordingly, shall not be bound to recognize any legal, equitable or other claim to, or interest in, such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by law. Section 4 - Record Date: In lieu of closing the share records of the Corporation, the Board of Directors may fix, in advance, a date not exceeding fifty days, nor less than ten days, as the record date for the determination of shareholders entitled to receive notice of, or to vote at, any meeting of shareholders, or to consent to any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividends, or allotment of any rights, or for the purpose of any other action. If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if no notice is given, the day on which the meeting is held; the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the resolution of the directors relating thereto is adopted. When a determination of shareholders of record entitled to notice of or to vote at any meeting of shareholders has been made as provided for herein, such determination shall apply to any adjournment thereof, unless the directors fix a new record date for the adjourned meeting. By-Laws - 11 ARTICLE VI - DIVIDENDS ---------------------- Subject to applicable law, dividends may be declared and paid out of any funds available therefor, as often, in such amounts, and at such time or times as the Board may determine. ARTICLE VII - FISCAL YEAR ------------------------- The fiscal year of the Corporation shall be fixed by the Board from time to time, subject to applicable law. ARTICLE VIII - CORPORATE SEAL ----------------------------- The corporate seal, if any, shall be in such form as shall be approved from time to time by the Board. ARTICLE IX - AMENDMENTS ----------------------- Section 1 - By Shareholders: - ---------------------------- If not reserved to the shareholders by the Articles of Incorporation, all by-laws of the Corporation shall be subject to alteration or repeal, and new by-laws may be made, by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the outstanding shares entitled to vote in the election of directors at any annual or special meeting of shareholders, provided that the notice or waiver of notice of such meeting shall have summarized or set forth in full therein, the proposed amendment. Section 2 - By Directors: - -------------------------- If not reserved to the shareholders by the Articles of Incorporation, the Board shall have the power to make, adopt, alter, amend and repeal, from time to time, by-laws of the Corporation; provided, however, that the shareholders entitled to vote with respect thereto as in this Article IX above-provided may alter, amend or repeal by-laws made by the Board, except that the Board shall have no power to change the quorum for meetings of shareholders or of the Board, or to change any provisions of the by-laws with respect to the removal of directors or the filling of vacancies in the Board resulting from the removal by the shareholders. If any by-law regulating an impending election of directors is adopted, amended or repealed by the Board, there shall be set forth in the notice of the next meeting of shareholders for the election of directors, the by-law so adopted, amended or repealed, together with a concise statement of the changes made. By-Laws - 12 ARTICLE X -- INDEMNITY (a) Any person made a party to any action, suit or proceeding, by reason of the fact that he, his testator or intestate representative is or was a director, officer or employee of the Corporation, or of any Corporation in which he served as such at the request of the Corporation, shall be indemnified by the Corporation against the reasonable expenses, including attorney's fees, actually and necessarily incurred by him in connection with the defense of such action, suit or proceedings, or in connection with any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding, or in connection with any appeal therein that such officer, director or employee is liable for negligence or misconduct in the performance of his duties. (b) The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any officer or director or employee may be entitled apart from the provisions of this section. (c) The amount of indemnity to which any officer or any director may be entitled shall be fixed by the Board of Directors, except that in any case where there is no disinterested majority of the Board available, the amount shall be fixed by arbitration pursuant to the then existing rules of the American Arbitration Association. The undersigned Incorporator certifies that he has adopted the foregoing by-laws as the first by-laws of the Corporation. Dated: ___________________________ ___________________________ By-Laws - 13 EX-3.40 8 y86871exv3w40.txt BYLAWS Exhibit 3.40 CERTIFICATE OF FORMATION OF WEIDER PUBLICATIONS, LLC The undersigned, an authorized natural person, for the purpose of forming a limited liability company (hereinafter called the "Company"), under the provisions and subject to the requirements of the Delaware Limited Liability Company Act, hereby certifies that: 1. The name of the limited liability company is Weider Publications, LLC 2. The address of the registered office and the name and the address of the registered agent of the Company required to be maintained by Section 18-104 of the Delaware Limited Liability Company Act are National Registered Agents, Inc., 9 East Loockerman Street, Dover, Delaware 19901. 3. Until such time as the members of the Company enter into a limited liability company agreement, Bernard Cartoon shall be deemed an authorized person of the Company and shall have the power and authority to execute contracts and other instruments and take such other actions on behalf of the Company. Executed on 11/25, 2002. /s/ Bernard Cartoon _______________________________________ Bernard Cartoon Authorized Person EX-3.41 9 y86871exv3w41.txt CERTIFICATE OF FORMATION EXECUTION COPY EXHIBIT 3.41 ================================================================================ Limited Liability Company Agreement Of Weider Publications, LLC Dated as of January 23, 2003 A Delaware Limited Liability Company THE INTERESTS IN THE LLC HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY STATE SECURITIES LAWS OR THE LAWS OF ANY OTHER NATION OR JURISDICTION AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THE SAME HAVE BEEN INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE BOARD HAS BEEN RENDERED TO THE LLC THAT AN EXEMPTION FROM REGISTRATION UNDER APPLICABLE SECURITIES LAWS IS AVAILABLE. IN ADDITION, TRANSFER OR OTHER DISPOSITION OF THE INTERESTS IN THE LLC IS RESTRICTED AS PROVIDED IN THIS AGREEMENT. MEMBERS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. ================================================================================ PREAMBLE This Limited Liability Company Agreement (this "Agreement") has been entered into by the undersigned members ("Members") as of January 23, 2003 pursuant to the Delaware Limited Liability Company Act (6 Del. C. Section 18-101 et seq., as amended, the "Delaware Act") and is the operating agreement of Weider Publications, LLC (the "LLC") for purposes of the Delaware Act. Capitalized terms shall have the meanings as set forth in Article XII hereof or as otherwise defined herein. RECITALS WHEREAS, Weider Publication, Inc., a Delaware corporation ("WPI"), and Weider Interactive Networks, Inc., a Delaware corporation ("WIN"), have formed the LLC pursuant to the Delaware Act and have filed a Certificate of Formation with the Delaware Secretary of State on November 26, 2002; WHEREAS, WPI and WIN have contributed all of their assets to the LLC as a capital contribution pursuant to the Asset Contribution Agreement, dated as of the date hereof, by and among WPI, WIN and the LLC; WHEREAS, American Media Operations, Inc., a Delaware corporation ("Buyer") has agreed to acquire all of the Interests in the LLC from WPI and WIN pursuant to the Purchase and Contribution Agreement, dated as of November 26, 2002 (the "Purchase Agreement"), by and among the LLC, WIN, Weider Health and Fitness, a Nevada corporation, Weider Health and Fitness, LLC, a Delaware limited liability company, EMP Group L.L.C., a Delaware limited liability company, Buyer, and the other parties thereto and thereby become the sole Member effective as of the Closing (as defined in the Purchase Agreement); and WHEREAS, the Members desire to enter into this Agreement which sets forth their respective rights and obligations as Members and provides for the management of the LLC. AGREEMENT ARTICLE I ORGANIZATION 1.1 Formation. WPI and WIN have previously organized the LLC as a Delaware limited liability company pursuant to the Delaware Act. The original Certificate of Formation of the LLC was filed with the Delaware Secretary of State on November 26, 2002. The undersigned Members hereby agree to continue a Delaware limited liability company pursuant to the provisions of the Delaware Act and agree that the rights, duties and liabilities of the Members shall be as provided herein, unless otherwise required by the Delaware Act. Upon execution of this Agreement, the undersigned shall be Members of the LLC. 1.2 Name. The name of the LLC shall be Weider Publications, LLC or such other name or names as may be approved by the Members from time to time. 1.3 Certificate of Formation and Other Filings. The Board is hereby authorized to cause the LLC to execute or cause to be executed all instruments, certificates, notices and documents, and to do or cause to be done all such filing, recording, publishing and other acts as may be deemed by the Board to be necessary or appropriate from time to time to comply with all applicable requirements for the formation, operation or, when appropriate, termination of a limited liability company in the State of Delaware and all other jurisdictions where the LLC does or shall desire to conduct its business. 1.4 Purpose. Members agree that the LLC has been formed to own and operate the publishing and magazine and such other businesses contributed to the LLC by WPI and WIN, and to engage in activities that are necessary, customary, convenient or incidental thereto. 1.5 Place of Business. The principal place of business of the LLC shall be at 21100 Erwin Street, Woodland Hills, California, 91367, or at such other location as the Board determines from time to time. 1.6 Registered Office and Agent. The initial registered office of the LLC in the State of Delaware is National Registered Agents, Inc. The name of its initial registered agent at such address is 9 East Loackerman Street, Dover, Delaware 19901. The LLC's registered office and registered agent may be changed from time to time by filing the address of the new registered office or the name of the new registered agent with the Delaware Secretary of State pursuant to the Delaware Act. 1.7 Fiscal Periods. The fiscal year and taxable year of the LLC (each, a "Fiscal Year") shall be the year ending the last Tuesday of the month of March unless otherwise required by the Code. 1.8 Powers. Subject to the provisions of this Agreement, the LLC and the Board acting on behalf of the LLC pursuant to Article IV, shall be empowered to do or cause to be done, or not to do, any acts as are necessary to effectuate the provisions of this Agreement. ARTICLE II MEMBERS 2.1 Members. The initial Members are listed on Schedule A hereto. Effective upon the Closing, the initial Members shall each be deemed to have withdrawn as, and cease to be, Members and Buyer shall be the sole Member as of and following the Closing. 2.2 LLC Property; LLC Interest. No real or other property of the LLC shall be deemed to be owned by any Member individually, but shall be owned by and title shall be vested solely in the LLC, except that the Board may cause legal title to any property of the LLC to be held by, or in the name of, any Person as nominee. The Interests of the Members shall be personal property of each of them giving only the rights specifically set forth in this Agreement or the Delaware Act. 2 2.3 Reimbursement. Notwithstanding anything in this Agreement to the contrary, the Directors shall be entitled to reimbursement from the LLC for reasonable expenses incurred by them which are attributable to the organization, operation and management of the LLC. ARTICLE III MEETINGS OF THE MEMBERS 3.1 Meetings. The LLC shall not be required to hold annual meetings. Special meetings of the Members may be called by Members holding a majority of the Units then outstanding upon 10 days' notice to all Members in writing or by telephone or facsimile. No business shall be acted upon at a special meeting that is not stated in the notice of the meeting. Meetings of Members may be held by telephone or any other communications equipment by means of which all participating Members can simultaneously hear each other during the meeting. 3.2 Quorum. No action may be taken at a meeting of Members unless a quorum consisting of the Members holding a majority of the Units then outstanding is present in person or by proxy. 3.3 Action by Written Consent. Subject to Article IV, any action which may be taken by the Members, or by any class of Members, under this Agreement may be taken without a meeting if consents in writing setting forth the action so taken are signed by Members holding a majority of the Units then outstanding; provided, however, that if an action by written consent is solicited by the LLC, a Member shall be deemed to have withheld consent to such action unless such Member consents in writing within 15 business days of such Member's receipt of the solicitation. 3.4 Voting Rights; Required Vote. Each Member shall be entitled to vote its Interests with respect to any action required or permitted to be taken by the Members under this Agreement. Except as otherwise expressly provided in this Agreement, any action required or permitted to be taken by the Members must be approved by the consent of the Members holding a majority of the Units then outstanding. 3.5 Waivers of Notice. Whenever the giving of any notice to Members is required by statute or this Agreement, a waiver thereof, in writing and delivered to the LLC signed by the Member entitled to such notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance of a Member at a meeting or execution of a written consent to any action shall constitute a waiver of notice of such meeting or action. 3 ARTICLE IV MANAGEMENT; BOARD 4.1 Management by Board of Directors. (a) Except for situations in which the approval of all the Directors is expressly required by nonwaivable provisions of applicable law or as otherwise provided in this Agreement, (i) the powers of the LLC shall be exercised by or under the authority of, and the business and affairs of the LLC shall be managed under the direction of, a supervisory Board of Directors (the "Board"), and (ii) subject to the provisions of this Article IV and Article V, a majority of the Board may make all decisions and take all actions for the LLC not otherwise provided in this Agreement. The day-to-day activities of the LLC will be conducted by the Officers of the LLC, who will be agents of the LLC. (b) Notwithstanding the foregoing, without the unanimous written consent of the Members, (i) the Board shall not have authority to take, and the LLC shall not take, any action that has the purpose or effect, either directly or indirectly, of adversely affecting the rights, privileges or obligations of any Member under this Agreement or otherwise, except to the extent any such action affects all of the rights, privileges or obligations of all of the Members on an equal or proportional basis, including, but not limited to, any such actions to: (A) terminate the LLC, including, without limitation, by way of liquidation, dissolution, winding-up, voluntary bankruptcy or insolvency of the LLC; or (B) distribute property or assets (including cash) of the LLC to the Members; and (ii) the Board shall not have authority to take, and the LLC shall not take, any actions to elect for the LLC to be treated as other than a partnership for federal, and applicable state income tax purposes (except in connection with an underwritten public offering by the LLC of its shares of capital stock pursuant to a registration statement under the 1933 Act on Form S-1 (as defined in the 1933 Act)); or (iii) the Board shall not have authority to take, and the LLC shall not take, any actions to agree or commit to agree to do any of the foregoing. 4.2 Number and Qualifications. The number of Directors of the LLC shall initially be three, but may be increased or decreased (but not below three (3)) with the consent of the Members holding a majority of the Units then outstanding. Each Member shall appoint that number of Directors equal to such Member's Percentage Interest multiplied by the then-current number of Directors of the LLC (the product being rounded to the nearest whole number if necessary). The Directors of the LLC following the Closing are those individuals whose names are listed on Schedule B to this Agreement. 4 4.3 Vote of Directors. Each Director shall be entitled to one vote. 4.4 Term. Each Director shall hold office for one year until his or her successor shall be elected and qualified, or until his or her earlier death, resignation or removal as provided in this Agreement. 4.5 Vacancy. Any Director position to be filled by reason of an increase in the number of Directors may be filled by the consent of the Members holding a majority of the Units then outstanding. Any vacancy occurring in the Board other than by reason of an increase in the number of Directors or by reason of the decrease in any Member's Units may be filled by the Member that originally appointed such Director. A Director elected to fill a vacancy other than by reason of an increase in the number of Directors shall be elected for the unexpired term of its predecessor or in office. 4.6 Removal. Any Director may be removed at any time, with or without cause, by the Member, or its successor or assign, that appointed such Director or by action of any other Director on behalf of a Member that has become entitled to the position of such Director by virtue of a change in the number of such Member's Units. 4.7 Resignation. Any Director may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time is specified therein, at the time of its receipt by the remaining Directors. The acceptance of a resignation shall not be necessary to make it effective, unless so expressly provided in the resignation. 4.8 Place of Meetings of Board. All meetings of the Board may be held either within or without the State of Delaware at such place or places as shall be determined from time to time by resolution of the Board. 4.9 Meetings of Board. Meetings of the Board may be held when called by a majority of the Directors. The Directors calling any meeting shall cause notice to be given of such meeting, including the time, date and place of such meeting, to each Director at least two business days before such meeting. The business to be transacted at, or the purpose of, any meeting of the Board shall be specified in the notice or waiver of notice of any such meeting. If fewer than all the Directors are present in person, by telephone or by proxy, business transacted at any such meeting shall be confined to the business or purposes specifically stated in the notice or waiver of notice of such meeting. 4.10 Quorum; Vote. The vote of a majority of the votes entitled to be cast by the Directors (a "majority vote") present in person, by telephone or by proxy at a meeting at which a quorum is present in person, by telephone or by proxy shall be the act of the Board, except as otherwise provided by law, the Certificate of Formation or this Agreement. If a quorum shall not be present in person, by telephone or by proxy at any meeting of the Board, the Directors present in person, by telephone or by proxy at the meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present in person, by telephone or by proxy. 4.11 Methods of Voting; Proxies. A Director may vote either in person, by telephone or by proxy executed in writing by such Director; provided, however, that the Person designated 5 to act as proxy shall be a Director. A telegram, telex, cablegram or similar transmission by a Director, or a photographic, photostatic, facsimile or similar reproduction of a writing executed by a Director shall be treated as an execution in writing for purposes of this Section 4.11. Proxies for use at any meeting of the Board or in connection with the taking of any action by written consent shall be filed with the Board before or at the time of the meeting or execution of the written consent, as the case may be. All proxies shall be received and taken charge of and all ballots shall be received and canvassed by the Board who shall decide all questions touching upon the qualifications of voters, the validity of the proxies, and the acceptance or rejection of votes. No proxy shall be valid after 30 days from the date of its execution unless otherwise provided in the proxy. A proxy shall be revocable unless the proxy form conspicuously states that the proxy is irrevocable and the proxy is coupled with an interest. Should a proxy designate two or more Directors to act as proxies, unless that instrument shall provide to the contrary, a majority of such Directors present in person or by telephone at any meeting at which their powers thereunder may be exercised shall have and may exercise all the powers of voting or giving consents thereby conferred, or if only one such Director be present, then such powers may be exercised by that one Director; or, if an even number of such Directors attend in person or by telephone and a majority do not agree on any particular issue, the Board shall not be required to recognize such proxy with respect to such issue if such proxy does not specify how the votes that are the subject of such proxy are to be voted with respect to such issue. 4.12 Order of Business. The Directors may adopt such rules and procedures relating to their activities as they may deem appropriate, provided that such rules and procedures are not inconsistent with or do not violate the provisions of this Agreement. The secretary of the meeting shall prepare minutes of the meeting and place a copy thereof in the minute books of the LLC. A copy of the minutes of the meeting will be delivered promptly to each Director and Member. 4.13 Attendance and Waiver of Notice. Attendance of a Director at any meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. 4.14 Compensation of Directors. Directors, as such, shall not receive any stated salary for their services. Out-of-pocket expenses of attendance, if any, for attendance at each meeting of the Board shall be reimbursed by the LLC; provided, however, that nothing contained in this Agreement shall be construed to preclude any Director from serving the LLC in any other capacity and receiving compensation for such service. 4.15 Actions Without a Meeting. Any action required or permitted to be taken at a meeting of the Board or any committee thereof may be taken without a meeting, with notice as provided in Section 4.9, and without a vote, if a consent in writing, setting forth the action so taken, is signed by each of the Directors or each member of the committee, as the case may be. Such consent shall have the same force and effect, as of the date stated therein, as a vote of such Directors or members of the committee, as the case may be, and may be stated as such in any document or instrument filed with the Secretary of State of the State of Delaware or in any certificate or other document delivered to any Person or entity. The signed consent shall be placed in the minute book of the LLC. 6 4.16 Telephone and Similar Meetings. The Directors, or members of any committee thereof, may participate in and hold meetings by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in any such meeting shall constitute presence in person at such meeting, except where a Person participates in such meeting for the express purpose of objecting to the transaction of any business on the ground that such meeting is not lawfully called or convened. 4.17 Limitation on Directors' Authority. Except as otherwise specifically provided in this Agreement or by agreement of all the Members, (i) no Director or group of Directors will have any actual or apparent authority to enter into contracts on behalf of, or to otherwise bind, the LLC, or take any action or incur any obligation, liability, debt, cost or expense in the name of or on behalf of the LLC or conduct any business of the LLC other than by action of the Board taken in accordance with the provisions of this Agreement, and (ii) no Director will have the power or authority to delegate to any Person such Director's rights and powers as a Director to manage the business and affairs of the business and affairs of the LLC. ARTICLE V OFFICERS 5.1 Designation; Term; Qualifications. (a) The Board may, from time to time, designate any Person to be a Senior Officer of the LLC. Any Senior Officer so designated shall have such authority and perform such duties as the Board may, from time to time, delegate to such Senior Officer. The Board may assign additional titles to particular Senior Officers, and the assignment of such additional titles shall constitute the delegation to such Senior Officer of the authority and duties that are normally associated with that office, subject to any specific delegation of authority and duties made to such Senior Officer by the Board pursuant to this Section 5.1. (b) The Chief Executive Officer of the LLC (the "Chief Executive Officer") may, from time to time, designate one or more Persons to be Officers (other than Senior Officers) of the LLC, subject to Board approval. Any such Officer so designated shall have such authority and perform such duties as the Chief Executive Officer with the Board's approval may, from time to time, delegate to such Officer. The Chief Executive Officer with the Board's approval may assign titles to particular Officers, and the assignment of such title shall constitute the delegation to such Officer of the authority and duties that are normally associated with that office, subject to any specific delegation of authority and duties made to such Officer by the Chief Executive Officer with the Board's approval pursuant to this Section 5.1. (c) Each Officer shall hold office for the term for which such Officer is designated and until its successor shall be duly designated and shall qualify or until its death, resignation or removal as provided in this Agreement. Any Person may hold any number of offices. No Officer need be a Director, a Member, a Delaware resident, or a United States 7 citizen. Designation of a Person as an Officer of the LLC shall not of itself create any contract rights. 5.2 Other Officers. In accordance with Section 5.1, the Board may designate any other Officers of the LLC who will exercise the powers and will perform the duties incident to their offices, subject to the direction of the Board. 5.3 Removal and Resignation. Any Officer may be removed as such, with or without cause, by a majority vote of the votes entitled to be cast by the Directors whenever in their judgment the best interests of the LLC will be served thereby; provided, however, that such removal shall be without prejudice to the contract rights, if any, of the Person so removed. Any Officer may resign as such at any time upon written notice to the LLC. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time is specified therein, at the time of its receipt by the Board. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. 5.4 Vacancies. Other than as set forth above, any vacancy occurring in any office of the LLC may be filled by the majority vote of the Board. 5.5 Compensation. The compensation, if any, of the Officers shall be fixed from time to time by majority vote of the Board. ARTICLE VI REDEMPTIONS; SUBSTITUTES; DISTRIBUTIONS 6.1 No Right to Redemption. Members will not be entitled to require that their Interests in the LLC be redeemed. 6.2 Nonliquidating Distributions. All distributions to the Members prior to and not in conjunction with an Event of Termination in accordance with Section 9.2 shall be made to the Members only at such times as the Board deems appropriate and shall be made in proportion to each Member's Percentage Interest. 6.3 Distributions In Kind. The LLC shall not make any nonliquidating distribution of property or assets (including cash) to any Member without the consent of the Members holding a majority of the Units then outstanding given pursuant to Article III. 6.4 Withholding. Notwithstanding anything expressed or implied to the contrary in this Agreement, the Board is authorized to take any action necessary or appropriate to cause the LLC to comply with any foreign or United States federal, state or local withholding requirement with respect to any payment or distribution by the LLC to any Member or other Person. All amounts so withheld, shall be treated as distributions to the applicable Members under the applicable provision of this Agreement. If any such withholding requirement with respect to any Member exceeds the amount distributable to such Member under this Agreement, or if any such withholding requirement was not satisfied with respect to any amount previously paid or distributed to such Member, such Member or any successor or assignee with respect to such 8 Member's Interest hereby indemnifies and agrees to hold harmless the other Members and the LLC for such excess amount or such withholding requirement, as the case may be, together with all interest and penalties payable. ARTICLE VII BOOKS OF ACCOUNT, RECORDS AND REPORTS 7.1 Maintenance of Books and Records, Etc. The LLC shall maintain such books and records on the basis utilized in preparing the LLC's federal income tax return, incorporating the accrual or cash method of accounting, as the Board may determine to be in the best interest of the LLC, and such other records as may be required in connection with the preparation and filing of the LLC's federal, state and local income tax returns or other tax returns or reports or to make the computations called for in this Article VII. All such books and records shall at all times be made available at the principal office of the LLC and shall be open to the reasonable inspection and examination of the Members or their duly authorized representatives or designees during normal business hours. 7.2 Reports to Members. As soon as practicable after the end of each Fiscal Year, the LLC shall send each Person who was a Member at any time during the calendar year then ended (including any assignee, whether or not a substituted Member) such LLC tax information as shall be necessary for the preparation by such Person of its federal, state and local income tax returns. ARTICLE VIII LIMITATIONS OF LIABILITY 8.1 Liability of Certain Persons. None of the Directors, Members or any officer, employee or agent of the LLC shall be liable, responsible or accountable in damages or otherwise to any of the Members or any of their successors in interest for any act or omission performed or omitted to be performed in good faith on behalf of the LLC and in a manner reasonably believed to be within the scope of the authority granted by this Agreement and in the best interests of the LLC, but shall be so liable, responsible or accountable; (i) for fraud, intentional misconduct or a knowing violation of law with respect to such acts or omissions; (ii) for any breach of such Person's duty of loyalty to the LLC or its Members or Directors; (iii) for any transaction relating to the LLC from which such Person received an improper benefit; or (iv) for any breach by a Member or Director of this Agreement. Without limitation as to other sources of indemnification, each such Person shall be indemnified and held harmless by the LLC from and against any and all claims, demands, liabilities, costs, damages and causes of action of any nature whatsoever arising out of or incidental to such Person's management of the LLC's affairs, except to the extent it has been Finally Determined that such Person is liable for any of the actions set forth in clauses (i) through (iv) in the immediately preceding sentence. In addition, no Director or any officer, employee or agent of the LLC shall be deemed to have violated a standard of care unless such a violation has been Finally Determined. The LLC shall advance expenses incurred by any Director or any officer, employee or agent of the LLC prior to 9 the final disposition of a matter as to which indemnification is sought hereunder, subject to receipt of an undertaking to repay such amounts if it is Finally Determined that the indemnified Person is not entitled to indemnification in accordance with this Section 8.1. The Board may obtain insurance for Directors, Officers or employees with respect to the above as an expense of the LLC. 8.2 Not Liable for Return of Capital. No Person (including, without limitation, any Member or Director) shall be personally liable for the return of the capital of any Member or any portion thereof or interest thereon, and such return shall be made solely from available LLC assets, if any. ARTICLE IX TERM 9.1 Term. The existence of the LLC commenced on the date of the filing of a certificate of formation described in Section 18-201 of the Delaware Act in the office of the Secretary of State of the State of Delaware in accordance with the Delaware Act, which date was November 26, 2002 (the "Certificate of Formation") and shall continue until a determination by the Members to terminate the LLC (an "Event of Termination") by a vote of the Members holding a majority of Units then outstanding taken pursuant to Article III. 9.2 Winding-Up. Upon the occurrence of an Event of Termination, the LLC shall be dissolved and wound up. In connection with the dissolution and winding-up of the LLC, the Board or a liquidator or other representative appointed by it (the "Representative") shall promptly proceed with the sale or liquidation of all of the assets of the LLC and shall apply and distribute the proceeds of such sale or liquidation in the following order of priority, unless otherwise required by mandatory provisions of applicable law: (a) first, to pay (or to make provision for the payment of) all creditors of the LLC and the expenses of liquidation, in the order of priority provided by law or otherwise, in satisfaction of all debts, liabilities or obligations of the LLC due such creditors and of such expenses of liquidation; (b) second, to the establishment of any reserve which the Board or the Representative, as the case may be, may deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the LLC (such reserve may be paid over by the Board or the Representative to an escrow agent acceptable thereto, to be held for disbursement in payment of any of the aforementioned liabilities and, at the expiration of such period as shall be deemed advisable by the Board or the Representative, for distribution of the balance in the manner hereinafter provided in this Section 9.2 hereof); and (c) third, after the payment (or the provision for payment) of all debts, liabilities and obligations of the LLC in accordance with Sections 9.2(a) and (b) above, to the Members or their legal representatives in accordance with such Members' respective Capital Account balances by the end of the taxable year in which such dissolution and winding up occurs or, if later, within 90 days after the date of dissolution. 10 9.3 Distributions Upon Dissolution. Upon dissolution and winding up of the LLC, the Board or the Representative, as the case may be, shall distribute LLC assets to the Members in accordance with such Members' respective Capital Account balances either in cash or in kind as the Board determines in its sole discretion; provided, however, that no Member shall be required to accept non-cash consideration except on a pro-rata basis with the other Members. Each Member shall look solely to the assets of the LLC for all distributions with respect to the LLC, its capital contributions thereto, its Capital Account and shall have no recourse therefore against any other Member. Accordingly, if any Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during which the dissolution occurs) then such Member shall have no obligation to make any capital contributions with respect to such deficit, and such deficit shall not be considered a debt owed to the LLC or any other Person. 9.4 Time for Liquidation. A reasonable amount of time shall be allowed for the orderly liquidation of the assets of the LLC and the discharge of liabilities to creditors so as to enable the Board or the Representative to minimize the losses attendant upon such liquidation. 9.5 Termination. Upon compliance with the foregoing distribution plan, the LLC shall cease to be such, and the Board or the Representative, as the case may be, shall execute, acknowledge and file (or cause to be executed, acknowledged and filed) with the Secretary of State of the State of Delaware a certificate of cancellation of the LLC pursuant to the power of attorney granted pursuant to Section 13.13. ARTICLE X CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; ALLOCATIONS 10.1 Capital Contributions. The aggregate capital contribution made to the LLC by each Member at any given time during the term of the LLC shall be as set forth in the LLC's books and records. The initial capital contributions and Capital Account balances of the Members are set forth on Schedule A hereto. 10.2 Capital Accounts. (a) There shall be established for each Member on the books of the LLC a capital account (the "Capital Account") reflecting the difference between (i) the sum of (w) such Member's capital contributions, (x) such Member's share of Profits, and (y) such Member's share of tax-exempt income of the LLC minus (ii) the sum of (w) such Member's share of Losses, (x) such Member's share of other LLC expenditures that are not deductible for federal income tax purposes (not including principal payments on indebtedness or expenditures to the extent included in the basis of any asset of the LLC), and (y) any distributions to such Members. (b) Notwithstanding any other provision in this Section 10.2 or elsewhere in this Agreement, each Member's Capital Account shall be maintained and adjusted in accordance with the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations 11 thereunder ("Regulations"), including Regulations Sections 1.704-1(b) and 1.704-2. It is intended that appropriate adjustments shall thereby be made to Capital Accounts to give effect to any income, gain, loss or deduction (or items thereof) that is allocated pursuant to this Agreement. In the event any Interest in the LLC is transferred, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Interest. In the event that the Board shall determine that it is prudent to modify the manner in which Capital Accounts, or any additions or subtractions thereto (including, without limitation, adjustments relating to liabilities that are secured by contributed or distributed property or that are assumed by the LLC or the Members), are computed in order to comply with such Regulations, the Board shall be entitled to make such modification, provided that it is not likely to have a material effect on the amounts distributable to any Member pursuant to Section 9.2 upon dissolution of the LLC. The Board shall also make (a) any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of LLC capital reflected on the LLC's balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate modifications in the event that unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b) or Section 1.704-2. (c) The Board may in its discretion increase or decrease the Capital Accounts of the Members to reflect a revaluation of LLC property on the LLC's books and records, but only in accordance with the rules set forth in Regulations Section 1.704-1(b)(2)(iv)(f). Following any such revaluation, the Members' Capital Accounts shall be adjusted in accordance with Regulations Section 1.704-1 (b)(2)(iv)(g) for allocations of depreciation, depletion, amortization, and gain or loss as computed for book purposes with respect to such property. 10.3 Timing and Amount of Allocations of Profits and Losses. Profits and Losses of the LLC shall be determined and allocated with respect to each Fiscal Year of the LLC as of the end of each such year. Subject to the other provisions of this Agreement, an allocation to a Member of a share of Profits or Losses shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Profits or Losses. "Profits" or "Losses" for each Fiscal Year of the LLC shall mean the net income or net loss of the LLC, determined by the method of accounting for the LLC as selected by the Board for federal income tax purposes, including, without limitation, each item of LLC income, gain, loss and deduction; provided, however, in the event of a revaluation of LLC property as described in Section 10.2(c), Profits and Losses of the LLC shall be adjusted in accordance with Regulations Section 1.704-1(b)(2)(iv)(g). 10.4 Allocations. (a) Except as otherwise provided in this Article X, all Profits and Losses of the LLC shall be allocated to the Members in proportion to their respective Percentage Interests. (b) Notwithstanding Section 10.4(a): (i) If there is a net decrease in LLC Minimum Gain or Member Minimum Gain during any Fiscal Year, the Members shall be allocated items of LLC income 12 and gain for such year (and, if necessary, for subsequent years) in accordance with Regulations Section 1.704-2(f) or Section 1.704-2(i)(4), as applicable. (ii) Any Member Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Member(s) who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable, in accordance with Regulations Section 1.704-2(i). (iii) Items of LLC income and gain shall be allocated to the Members in accordance with the "qualified income offset" requirements of Regulations Section 1.704-1(b)(2)(ii)(d). (iv) To the extent any allocation of losses would cause or increase an Adjusted Capital Account Deficit as to any Member, such allocation of losses shall be reallocated among the other Members in proportion to their respective Percentage Interests, but in a manner that will not produce an Adjusted Capital Account Deficit as to any other Member. (v) The allocations set forth in Sections 10.4(b)(i) through (iv) above and Section 10.4(d) below (the "Regulatory Allocations") are intended to comply with certain regulatory requirements, including the requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding Section 10.4(a), the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocations of other items and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to each such Member if the Regulatory Allocations had not occurred. (c) For any Fiscal Year during which a Member's Interest is assigned by such Member (or by an assignee or successor in interest to a Member), the portion of the Profits or Losses of the LLC that is allocable in respect of such Member's Interest shall be apportioned between the assignor and the assignee on any basis selected by the Board, provided such basis is permitted by Section 706(d)(2) of the Code. (d) Tax Allocations (i) Except as otherwise provided in this Section 10.4(d), each item of income, gain, loss and deduction shall be allocated for income tax purposes among the Members in the same manner as its correlative item of "book" income, gain, loss or deduction is allocated pursuant to this Article X. (ii) Notwithstanding the foregoing provisions of this Article X, income, gain, loss and deduction with respect to property contributed to the LLC by a Member shall be allocated among the Members, pursuant to Regulations promulgated under Section 704(c) of the Code, so as to take account of the variation, if any, between the adjusted basis of such property to the LLC and its initial value. The LLC shall account for such variation under any method approved under Section 704(c) of the Code and the applicable Regulations as chosen by the Board; provided, however, that the LLC shall use the "traditional method" described in Regulations Section 1.704-3(b) with respect to property contributed to the LLC by WPI and WIN. In the event the value of any LLC asset is adjusted pursuant to Section 10.2(c), subsequent 13 allocations of income, gain, loss and deduction with respect to such asset shall take account of the variation, if any, between the adjusted basis of such asset for federal income tax purposes and its value in the same manner as under Section 704(c) of the Code and the applicable Regulations, consistent with the requirements of Regulations Section 1.704-1(b)(2)(iv)(g), using any method approved under Section 704(c) of the Code and the applicable Regulations, as chosen by the Board. Allocations pursuant to this Section 10.4(d) are solely for purposes of federal, state and local income taxes and shall not affect, or in any way be taken into account in computing, any Member's Capital Account or share of Profits, Losses, other tax items or distributions pursuant to any provision of this Agreement. 10.5 No Right of Withdrawal. No Member shall have the right to withdraw or demand distribution of any portion of its capital contributions or Capital Account, except in those cases where distributions are required pursuant to this Agreement. ARTICLE XI AMENDMENTS 11.1 The terms and provisions of this Agreement may be modified or amended at any time and from time to time with the unanimous consent of the Members. 11.2 If the LLC and the Members change the classification of the LLC to that of a corporation for federal income tax purposes, the Board shall be entitled to amend this Agreement, without the approval of the Members, to the extent the Board reasonably determines necessary to cause the allocation of the tax items of the LLC to comply with the applicable provisions of the Code and the Regulations. Such amendments shall not adversely impact the economic rights of the Members with respect to distributions from the LLC. ARTICLE XII DEFINITIONS 12.1 Defined Terms. As used herein the following terms shall have the following respective meanings: "1933 Act" means the Securities Act of 1933, as amended. "Adjusted Capital Account Deficit" means, with respect to any Member, the deficit balance, if any, in such Member's capital account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments: (i) decrease such deficit by any amounts which such Member is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore to the LLC pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and 14 (ii) increase such deficit by such Member's share of the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). "Affiliate" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934, as amended. "Agreement" has the meaning set forth in the preamble to this agreement. "Board" has the meaning set forth in Section 4.1. "Buyer" has the meaning set forth in the recitals to this Agreement. "Capital Account" has the meaning set forth in Section 10.2. "Certificate of Formation" has the meaning set forth in Section 9.1. "Chief Executive Officer" has the meaning set forth in Section 5.1(b). "Closing" has the meaning set forth in the recitals to this Agreement. "Code" has the meaning set forth in Section 10.2. "Delaware Act" has the meaning set forth in the preamble to this Agreement. "Director" means any Person hereafter elected as a Director of the LLC as provided in this Agreement, but does not include any Person who has ceased to be a Director of the LLC. "Event of Termination" has the meaning set forth in Section 9.1. "Fair Market Value" means the fair market value of the LLC's assets as determined pursuant to procedures adopted from time to time by the Members. "Finally Determined" or "Final Determination" means there has been a final, unappealable decision by a court of competent jurisdiction. "Fiscal Year" has the meaning set forth in Section 1.7. "Interest" means all of a Member's rights, title and interests in the LLC, including such Member's right to vote and such Member's right to allocations, if any, and distributions from the LLC. "LLC" has the meaning set forth in the preamble to this Agreement. "LLC Minimum Gain" has the meaning set forth in Regulations Section 1.704-2(b)(2) for the term "partnership minimum gain." "Losses" has the meaning set forth in Section 10.3. 15 "majority vote" has the meaning set forth in Section 4.10. "Members" has the meaning set forth in the preamble to this Agreement. "Member Minimum Gain" means gain attributable to Member Nonrecourse Debt determined in accordance with Regulations Section 1.704-(2)(i). "Member Nonrecourse Debt" has the meaning set forth in Regulations Section 1.704-2(b)(4) for the term "partner nonrecourse debt." "Member Nonrecourse Deductions" has the meaning set forth in Regulations Section 1.704-2(i)(2) for the term "partner nonrecourse deductions." "Nonrecourse Deductions" has the meaning set forth in Regulations Section 1.704-2(b)(1). "Officers" means all Persons designated as Officers of the LLC pursuant to Article V, including Senior Officers, unless stated otherwise in this Agreement. "Percentage Interests" means, for each Member, the percentage interest set forth opposite such Member's name on Schedule A hereto, as it may be amended or supplemented from time to time. "Person" means a natural person or a corporation, limited liability company, association, trust, estate or partnership. "Profits" has the meaning set forth in Section 10.3. "Regulations" has the meaning set forth in Section 10.2(b). "Regulatory Allocations" has the meaning set forth in Section 10.4. "Representative" has the meaning set forth in Section 9.2. "Senior Officers" means (A) prior to the Closing, J. Russell Denson as Chief Executive Officer, and (B) following the Closing, the following persons: (1) David Pecker shall be the Chief Executive Officer, (2) John Miley shall be the Chief Financial Officer, and (3) Michael Kahane shall be the Secretary. "Units" means, with respect to any Member, the units evidencing such Member's Interests issued to such Member opposite such Member's name on Schedule A hereto, as it may be amended or supplemented from time to time. "WIN" has the meaning set forth in the recitals to this Agreement. "WPI" has the meaning set forth in the recitals to this Agreement. 16 ARTICLE XIII MISCELLANEOUS 13.1 Certification of Limited Liability. Each limited liability company Interest and its corresponding Unit in the LLC shall be represented by a certificate and shall be a "security" within the meaning of Article 8 of the Uniform Commercial Code and shall be governed by Article 8 of the Uniform Commercial Code. 13.2 Pledge of Limited Liability Company Interests. Notwithstanding anything in this Agreement to the contrary, the LLC hereby permits the pledge of its limited liability company Interests and its corresponding Units. The LLC confirms that a pledgee of its limited liability company Interests and its corresponding Units can exercise all of the rights of the pledgor and that no consent of any member or the LLC will be required to permit the pledgee (or the pledgee's assignee) to become a member of the LLC. 13.3 Waiver of Partition. Each of the Members hereby irrevocably waives any and all rights that such Member may have to maintain any action for partition of any of the LLC's property. 13.4 Entire Agreement. This Agreement together with the documents expressly referred to herein, each as amended or supplemented, constitutes the entire agreement among the parties with respect to the subject matter herein or therein. This Agreement and such other documents supersede any prior agreement or understanding among the parties hereto with respect to the subject hereof and thereof. 13.5 Successors and Assigns. Except as otherwise specifically provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their legal representatives, heirs, administrators, executors, successors and assigns. 13.6 Interpretation. Wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in the masculine, the feminine or neuter gender shall include the masculine, the feminine and the neuter. 13.7 Captions. Captions contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend or otherwise affect the scope or intent of this Agreement or any provision hereof. 13.8 Severability. If any provision of this Agreement, or the application of such provision to any Person or circumstance, shall be held invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions of this Agreement, or the application of such provision in jurisdictions or to Persons or circumstances other than those to which it is held invalid, illegal or unenforceable shall not be affected thereby. 13.9 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. It shall not be necessary for all Members to execute the same counterpart hereof. 17 13.10 Additional Documents. Subject to the provisions of this Agreement, each party hereto agrees to execute, with acknowledgment or affidavit, if required, any and all documents and writings which may be necessary or expedient in connection with the creation of the LLC and the achievement of its purposes, specifically including (a) any amendments to this Agreement and such certificates and other documents as the Board deems necessary or appropriate to form, qualify or continue the LLC as a limited liability company in all jurisdictions in which the LLC conducts or plans to conduct business and (b) all such agreements, certificates, tax statements, tax returns and other documents as may be required of the LLC or its Members by the laws of the United States of America or any jurisdiction in which the LLC conducts or plans to conduct business, or any political subdivision or agency thereof. 13.11 Non-Waiver. No provision of this Agreement shall be deemed to have been waived unless such waiver is contained in a written notice signed by the waiving party and given to the party claiming such waiver has occurred; provided, however, that no such waiver shall be deemed to be a waiver of any other or further obligation or liability of the party or parties in whose favor the waiver was given. 13.12 Notices. To be effective, unless otherwise specified in this Agreement, all notices and demands, consents and other communications under this Agreement must be in writing and must be given (a) by depositing the same in the United States mail, postage prepaid, certified or registered, return receipt requested, (b) by delivering the same in person and, (c) by sending the same by an internationally recognized overnight delivery service or (d) by telecopy. For purposes of notices, demands, consents and other communications under this Agreement, the addresses of the Members shall be as set forth on Schedule A to this Agreement and the address of the LLC shall be as set forth in Section 1.5. Notices, demands, consents and other communications mailed in accordance with the foregoing clause (a) shall be deemed to have been given and made three business days following the date so mailed. Notices, demands, consents and other communications given in accordance with the foregoing clauses (b) (c) and (d) shall be deemed to have been given when delivered. Any Member or its assignee may designate a different address to which notices or demands shall thereafter be directed, and such designation shall be made by written notice given in the manner hereinabove required. Notices to any assignee of a Member shall be given to such assigning Member unless such assignee has designated a different address therefor by written notice given in the manner hereinabove required. 13.13 Power of Attorney. (a) Each Member hereby irrevocably constitutes and appoints the Buyer, as its or true and lawful attorney and agent, in its or name, place and stead to make, execute, acknowledge and, if necessary, to file and record: (i) any certificates or other instruments or amendments thereof which the LLC may be required to file under the laws of the State of Delaware or pursuant to the requirements of any governmental authority having jurisdiction over the LLC or, subject to the terms of this Agreement, which the Board shall deem advisable to file, including, without limitation, this Agreement, any amended Agreement and a certificate of cancellation as provided in Section 9.5; 18 (ii) any certificates or other instruments (including counterparts of this Agreement) and all amendments thereto which the Board shall deem appropriate or necessary to qualify, or continue the qualification of, the LLC as a limited liability company and to preserve the limited liability status of the Members of the LLC; and (iii) any certificates or other instruments which may be required under the Delaware Act in order to effectuate any change in the membership of the LLC or to effectuate the dissolution and termination of the LLC pursuant to Article IX. (b) The powers of attorney granted under this Section 13.13 shall be deemed irrevocable and to be coupled with an interest. A copy of each document executed by a Member pursuant to the powers of attorney granted in this Section 13.13 hereof shall be transmitted to the other Members promptly after the date of the execution of any such document. (c) The powers of attorney granted in this Section 13.13 shall survive the death, incapacity or adjudication of incompetency of a Member and shall extend to such Member's successors and assigns. (d) Except as expressly set forth in this Agreement, the powers of attorney granted under this Section 13.13 cannot be utilized by a Member for the purpose of increasing or extending any financial obligation or liability of a Member or effecting any amendment hereto not approved by a Member without the written consent of such Member. 13.14 Entity Characterization. It is the intention of the Members that the LLC be treated as a partnership for income tax purposes. 13.15 Survival. All indemnities and reimbursement obligations made pursuant to this Agreement shall survive dissolution and liquidation of the LLC until expiration of the longest applicable statute of limitations (including extensions and waivers) with respect to the matter for which a party would be entitled to be indemnified or reimbursed, as the case may be. 13.16 Jurisdiction; Waiver of Jury Trial. (a) The parties irrevocably submit to the non-exclusive jurisdiction of (i) the New York State Courts and (ii) the United States Court for the Southern District of New York for the purposes of any action arising out of this Agreement or any transaction contemplated hereby. The parties further agree that service of any process, summons, notice or document hand delivered or sent by U.S. registered mail to such party's respective address set forth in Schedule A shall be effective service of process for any action in New York with respect to any matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence. The parties irrevocably and unconditionally waive any objection to the laying of venue of any action arising out of this Agreement or the transactions contemplated hereby in (i) the New York State Courts or (ii) the United States District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action brought in any such court has been brought in an inconvenient forum. (b) EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER 19 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. 20 IN WITNESS WHEREOF, this Agreement has been executed by the Members as of the date first above written. INITIAL MEMBERS: WEIDER PUBLICATIONS, INC., a Delaware Corporation By: /s/ J. Russell Denson ----------------------- Name: J. Russell Denson Title: President and Chief Executive Officer WEIDER INTERACTIVE NETWORKS, INC., a Delaware Corporation By: /s/ J. Russell Denson ----------------------- Name: J. Russell Denson Title: President 21 IN WITNESS WHEREOF, this Agreement has been executed by the Buyer as of the Closing. MEMBER: AMERICAN MEDIA OPERATIONS, INC. a Delaware Corporation By: /s/ John A Miley ----------------------- Name: John A. Miley Title: Executive Vice President and Chief Financial Officer 22 SCHEDULE A INITIAL MEMBERS
PERCENTAGE NAME ADDRESS INTEREST UNITS ---- ------- -------- ----- Weider Publications, Inc. 21100 Erwin Street, 99% 9,900 Woodland Hills, California, 91367 Weider Interactive Networks, Inc. 21100 Erwin Street, 1% 100 Woodland Hills, California, 91367
23 SCHEDULE B POST-CLOSING DIRECTORS David Pecker John Miley Michael Kahane 24 EX-3.42 10 y86871exv3w42.txt ARTICLES OF INCORPORATION Exhibit 3.42 ARTICLES OF INCORPORATION OF WEIDER COMMUNICATIONS I The name of this Corporation is: WEIDER COMMUNICATIONS II The purpose of this Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code. III The name and address in the State of California of this Corporation's initial agent for service of process is: Bernard J. Cartoon 21100 Erwin Street Woodland Hills, CA 91367 IV This corporation is authorized to issue only one class of shares of stock: and the total number of shares which this corporation is authorized to issue is One Hundred Thousand (100,000). DATED: February 4, 1990 /s/ Gary E. Gleicher ---------------------- GARY E. GLEICHER I hereby declare that I am the person who executed the foregoing Articles of Incorporation of WEIDER COMMUNICATIONS which execution is my act and deed. DATED: February 4, 1990 /s/ Gary E. Gleicher ---------------------- GARY E. GLEICHER 1A\AOI Certificate of Amendment of Articles of Incorporation of Weider Communications, a California Corporation The undersigned certify that: 1. They are the president and secretary, respectively, of Weider Communications, a California Corporation. 2. Article I of the Articles of Incorporation of this corporation is hereby amended to read as follows: Name of Corporation. The name of this corporation is: SYL COMMUNICATIONS 3. The foregoing amendment of Articles of Incorporation has been duly approved by the board of directors. 4. The foregoing amendment of Articles of Incorporation has been duly approved by the required vote of shareholders in accordance with Section 902 of the California Corporations Code. The total number of outstanding shares of the corporation is 1,000. The number of shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote required was more than 50%. We declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge. Date: October 22, 2002 /s/ Eric Weider ---------------------- Eric Weider, President /s/ Bernard Cartoon ---------------------- Bernard Cartoon, Secretary EX-3.43 11 y86871exv3w43.txt BYLAWS Exhibit 3.43 BY-LAWS OF WEIDER COMMUNICATIONS ------------------------ A CALIFORNIA CORPORATION ARTICLE I OFFICES Section 1. PRINCIPAL OFFICE. The principal office for the transaction of business of the corporation is hereby fixed and located at 21100 Erwin Street, Woodland Hills City of , County of Los Angeles , State of California. The location may be changed by approval of a majority of the authorized Directors, and additional offices may be established and maintained at such other place or places, either within or without California, as the Board of Directors may from time to time designate. Section 2. OTHER OFFICES. Branch or subordinate offices may at any time be established by the Board of Directors at any place or places where the corporation is qualified to do business. ARTICLE II DIRECTORS - MANAGEMENT Section 1. RESPONSIBILITY OF BOARD OF DIRECTORS. Subject to the provisions of the General Corporation Law and to any limitations in the Articles of Incorporation of the corporation relating to action required to be approved by the Shareholders, as that term is defined in Section 153 of the California Corporations Code, or by the outstanding shares, as that term is defined in Section 152 of the Code, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors. The Board may delegate the management of the day-to-day operation of the business of the corporation to a management company or other person, provided that the business and affairs of the corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board. Section 2. STANDARD OF CARE. Each Director shall perform the duties of a Director, including the duties as a member of any committee of the Board upon which the Director may serve, in good faith, in a manner such Director believes to be in the best interests of the corporation, and with such care, including reasonable inquiry, as an ordinary prudent person in a like position would use under similar circumstances. (Sec. 309) Section 3. EXCEPTION FOR CLOSE CORPORATION. Notwithstanding the provisions of Section 1, in the event that this corporation shall elect to become a close corporation as defined in Sec. 158, its Shareholders may enter into a Shareholders' Agreement as defined in Sec. 186. Said Agreement may provide for the exercise of corporate powers and the management of the business and affairs of this corporation by the Shareholders, provided, however, such agreement shall, to the extent and so long as the discretion or the powers of the Board in its management of corporate affairs is controlled by such agreement, impose upon each Shareholder who is a party thereof, liability for managerial acts performed or omitted by such person pursuant thereto otherwise imposed upon Directors as provided in Sec. 300 (d); and the Directors shall be relieved to that extent from such liability. Section 4. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number of Directors shall be ( ) until changed by a duly adopted amendment to the Articles of Incorporation or by an amendment to this by-law adopted by the vote or written consent of holders of a majority of the outstanding shares entitled to vote, as provided in Sec. 212. Section 5. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be elected at each annual meeting of the Shareholders to hold office until the next annual meeting. Each Director, including a Director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified. Section 6. VACANCIES. Vacancies in the Board of Directors may be filled by a majority of the remaining Directors, though less than a quorum, or by a sole remaining Director, except that a vacancy created by the removal of a Director by the vote or written consent of the Shareholders or by court order may be filled only by the vote of a majority of the shares entitled to vote represented at a duly held meeting at which a quorum is present, or by the written consent of holders of a majority of the outstanding shares entitled to vote. Each Director so elected shall hold office until the next annual meeting of the Shareholders and until a successor has been elected and qualified. A vacancy or vacancies in the Board of Directors shall be deemed to exist in the event of death, resignation, or removal of any Director, or if the Board of Directors by resolution declares vacant the office of a Director who has been declared of unsound mind by an order of court or convicted of a felony, or if the authorized number of Directors is increased, or if the shareholders fail, at any meeting of shareholders at which any Director or Directors are elected, to elect the number of Directors to be voted for at that meeting. -2- The Shareholders may elect a Director or Directors at any time to fill any vacancy or vacancies not filled by the Directors, but any such election by written consent shall require the consent of a majority of the outstanding shares entitled to vote. No reduction of the authorized number of Directors shall have the effect of removing any Director before that Director's term of office expires. Section 7. REMOVAL OF DIRECTORS. The entire Board of Directors or any individual Director may be removed from office as provided by Secs. 302, 303 and 304 of the Corporations Code of the State of California. In such case, the remaining Board members may elect a successor Director to fill such vacancy for the remaining unexpired term of the Director so removed. Section 8. NOTICE, PLACE AND MANNER OF MEETINGS. Meetings of the Board of Directors may be called by the Chairman of the Board, or the President, or any Vice President, or the Secretary, or any two (2) Directors and shall be held at the principal executive office of the corporation, unless some other place is designated in the notice of the meeting. Members of the Board may participate in a meeting through use of a conference telephone or similar communications equipment so long as all members participating in such a meeting can hear one another. Accurate minutes of any meeting of the Board or any committee thereof, shall be maintained as required by Sec. 1500 of the Code by the Secretary or other Officer designated for that purpose. Section 9. ORGANIZATION MEETINGS. The organization meetings of the Board of Directors shall be held immediately following the adjournment of the annual meetings of the Shareholders. Section 10. OTHER REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held at the corporate offices, or such other place as may be designated by the Board of Directors, as follows: Time of Regular Meeting: 10:00 a.m. Date of Regular Meeting: February 15, 1990 If said day shall fall upon a holiday, such meetings shall be held on the next succeeding business day thereafter. No notice need to be given of such regular meetings. -3- Section 11. SPECIAL MEETINGS - NOTICES - WAIVERS. Special meetings of the Board may be called at any time by any of the aforesaid officers, i.e., by the Chairman of the Board or the President or any Vice President or the Secretary or any two (2) Directors. At least forty-eight (48) hours notice of the time and place of special meetings shall be delivered personally to the Directors or personally communicated to them by a corporate Officer by telephone or telegraph. If the notice is sent to a Director by letter, it shall be addressed to him or her at his or her address as it is shown upon the records of the corporation, or if it is not so shown on such records or is not readily ascertainable, at the place in which the meetings of the Directors are regularly held. In case such notice is mailed, it shall be deposited in the United States mail, postage prepaid, in the place in which the principal executive office of the corporation is located at least four (4) days prior to the time of the holding of the meeting. Such mailing, telegraphing, telephoning or delivery as above provided shall be due, legal and personal notice to such Director. When all of the Directors are present at any Directors' meeting, however called or noticed, and either (i) sign a written consent thereto on the records of such meeting, or, (ii) if a majority of the Directors are present and if those not present sign a waiver of notice of such meeting or a consent to holding the meeting or an approval of the minutes thereof, whether prior to or after the holding of such meeting, which said waiver, consent or approval shall be filed with the Secretary of the corporation, or, (iii) if a Director attends a meeting without notice but without protesting, prior thereto or at its commencement, the lack of notice, then the transactions thereof are as valid as if had at a meeting regularly called and noticed. Section 12. SOLE DIRECTOR PROVIDED BY ARTICLES OF INCORPORATION OR BY-LAWS. In the event only one (1) Director is required by the By-Laws or Articles of Incorporation, then any reference herein to notices, waivers, consents, meetings or other actions by a majority or quorum of the Directors shall be deemed to refer to such notice, waiver, etc., by such sole Director, who shall have all the rights and duties and shall be entitled to exercise all of the powers and shall assume all the responsibilities otherwise herein described as given to a Board of Directors. -4- Section 13. DIRECTORS ACTION BY UNANIMOUS WRITTEN CONSENT. Any action required or permitted to be taken by the Board of Directors may be taken without a meeting and with the same force and effect as if taken by a unanimous vote of Directors, if authorized by a writing signed individually or collectively by all members of the Board. Such consent shall be filed with the regular minutes of the Board. Section 14. QUORUM. A majority of the number of Directors as fixed by the Articles of Incorporation or By-Laws shall be necessary to constitute a quorum for the transaction of business, and the action of a majority of the Directors present at any meeting at which there is a quorum, when duly assembled, is valid as a corporate act; provided that a minority of the Directors, in the absence of a quorum, may adjourn from time to time, but may not transact any business. A meeting at which a quorum is initially present may continue to transact business, notwithstanding the withdrawal of Directors, if any action taken is approved by a majority of the required quorum for such meeting. Section 15. NOTICE OF ADJOURNMENT. Notice of the time and place of holding an adjourned meeting need not be given to absent Directors if the time and place be fixed at the meeting adjourned and held within twenty-four (24) hours, but if adjourned more than twenty-four (24) hours, notice shall be given to all Directors not present at the time of the adjournment. Section 16. COMPENSATION OF DIRECTORS. Directors, as such, shall not receive any stated salary for their services, but by resolution of the Board a fixed sum and expense of attendance, if any, may be allowed for attendance at each regular and special meeting of the Board; provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Section 17. COMMITTEES. Committees of the Board may be appointed by resolution passed by a majority of the whole Board. Committees shall be composed of two (2) or more members of the Board, and shall have such powers of the Board as may be expressly delegated to it by resolution of the Board of Directors, except those powers expressly made non-delegable by Sec. 311. Section 18. ADVISORY DIRECTORS. The Board of Directors from time to time may elect one or more persons to be Advisory Directors who shall not by such appointment be members of the Board of Directors. Advisory Directors shall be available from time to time to perform special assignments specified by the President, to attend meetings of the Board of Directors upon invitation and to furnish consultation to the Board. The period during which the title shall be held may be prescribed by the Board of Directors. If no period is prescribed, the title shall be held at the pleasure of the Board. -5- Section 19. RESIGNATIONS. Any Director may resign effective upon giving written notice to the Chairman of the Board, the President, the Secretary or the Board of Directors of the corporation, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective. ARTICLE III OFFICERS Section 1. OFFICERS. The Officers of the corporation shall be a President, a Secretary, and a Chief Financial Officer. The corporation may also have, at the discretion of the Board of Directors, a Chairman of the Board, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other Officers as may be appointed in accordance with the provisions of Section 3 of this Article III. Any number of offices may be held by the same person. Section 2. ELECTION. The Officers of the corporation, except such Officers as may be appointed in accordance with the provisions of Section 3 or Section 5 of this Article, shall be chosen annually by the Board of Directors, and each shall hold office until he or she shall resign or shall be removed or otherwise disqualified to serve, or a successor shall be elected and qualified. Section 3. SUBORDINATE OFFICERS, ETC. The Board of Directors may appoint such other Officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in the By-Laws or as the Board of Directors may from time to time determine. Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if any, of an Officer under any contract of employment, any Officer may be removed, either with or without cause, by the Board of Directors, at any regular or special meeting to the Board, or, except in case of an Officer chosen by the Board of Directors, by any Officer upon whom such power of removal may be conferred by the Board of Directors. Any Officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the Officer is a party. -6- Section 5. VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in the By-Laws for regular appointments to that office. Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an officer be elected, shall, if present, preside at meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned by the Board of Directors or prescribed by the By-Laws. If there is no President, the Chairman of the Board shall in addition be the Chief Executive Officer of the corporation and shall have the powers and duties prescribed in Section 7 of this Article III. Section 7. PRESIDENT. Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board, if there be such an Officer, the President shall be the Chief Executive Officer, the President shall be the Chief Executive Officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and Officers of the corporation. He or she shall preside at all meetings of the Shareholders and in the absence of the Chairman of the Board, or if there be none, at all meetings of the Board of Directors. The President shall be ex officio a member of all the standing committees, including the Executive Committee, if any, and shall have the general powers and duties of management usually vested in the office of President of a corporation, and shall have such other powers and duties as may be prescribed by the Board of Directors or the By-Laws. Section 8. VICE PRESIDENT. In the absence or disability of the President, the Vice Presidents, if any, in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of, and be subject to, all the restrictions upon, the President. The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors or the By-Laws. Section 9. SECRETARY. The Secretary shall keep, or cause to be kept, a book of minutes at the principal office or such other place as the Board of Directors may order, of all meetings of Directors and Shareholders, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at Directors' meetings, the number of shares present or represented at Shareholders' meetings and the proceedings thereof. -7- The Secretary shall keep, or cause to be kept, at the principal office or at the office of the corporation's transfer agent, a share register, or duplicate share register, showing the names of the Shareholders and their addresses; the number and classes of shares held by each; the number and date of certificates issued for the same; and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all the meetings of the Shareholders and of the Board of Directors required by the By-Laws or by law to be given. He or she shall keep the seal of the corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by the By-Laws. Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall keep and maintain, or cause to be kept and maintained in accordance with generally accepted accounting principles, adequate and correct accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, earnings (or surplus) and shares. The books of account shall at all reasonable times be open to inspection by any Director. This Officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositaries as may be designated by the Board of Directors. He or she shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the President and Directors, whenever they request it, an account of all of his or her transactions and of the financial condition of the corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or the By-Laws. ARTICLE IV SHAREHOLDERS' MEETINGS Section 1. PLACE OF MEETINGS. All meetings of the Shareholders shall be held at the principal executive office of the corporation unless some other appropriate and convenient location be designated for that purpose from time to time by the Board of Directors. Section 2. ANNUAL MEETINGS. The annual meetings of the Shareholders shall be held, each year, at the time and on the day following: Time of Meeting: Date of Meeting: -8- If this day shall be a legal holiday, then the meeting shall be held on the next succeeding business day, at the same hour. At the annual meeting, the Shareholders shall elect a Board of Directors, consider reports of the affairs of the corporation and transact such other business as may be properly brought before the meeting. Section 3. SPECIAL MEETINGS. Special meetings of the Shareholders may be called at any time by the Board of Directors, the Chairman of the Board, the President, a Vice President, the Secretary, or by one or more Shareholders holding not less than one-tenth (1/10) of the voting power of the corporation. Except as next provided, notice shall be given as for the annual meeting. Upon receipt of a written request addressed to the Chairman, President, Vice President, or Secretary, mailed or delivered personally to such Officer by any person (other than the Board) entitled to call a special meeting of Shareholders, such Officer shall cause notice to be given, to the Shareholders entitled to vote, that a meeting will be held at a time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after the receipt of such request. If such notice is not given within twenty (20) days after receipt of such request, the persons calling the meeting may give notice thereof in the manner provided by these By-Laws or apply to the Superior Court as provided in Sec. 305, (c). Section 4. NOTICE OF MEETINGS - REPORTS. Notice of meetings, annual or special, shall be given in writing not less then ten (10) nor more than sixty (60) days before the date of the meeting to Shareholders entitled to vote thereat. Such notice shall be given by the Secretary or the Assistant Secretary, or if there be no such Officer, or in the case of his or her neglect or refusal, by any Director or Shareholder. Such notices or any reports shall be given personally or by mail or other means of written communication as provided in Sec. 601 of the Code and shall be sent to the Shareholder's address appearing on the books of the corporation, or supplied by him or her to the corporation for the purpose of notice, and in the absence thereof, as provided in Sec. 601 of the Code. Notice of any meeting of Shareholders shall specify the place, the day and the hour of meeting, and (1) in case of a special meeting, the general nature of the business to be transacted and no other business may be transacted, or (2) in the case of an annual meeting, those matters which the Board at date of mailing, intends to present for action by the Shareholders. At any meetings where Directors are to be elected, notice shall include the names of the nominees, if any, intended at date of notice to be presented by management for election. -9- If a Shareholder supplies no address, notice shall be deemed to have been given if mailed to the place where the principal executive office of the corporation, in California, is situated, or published at least once in some newspaper of general circulation in the County of said principal office. Notice shall be deemed given at the time it is delivered personally or deposited in the mail or sent by other means of written communication. The Officer giving such notice or report shall prepare and file an affidavit or declaration thereof. When a meeting is adjourned for forty-five (45) days or more, notice of the adjourned meeting shall be given as in case of an original meeting. Save, as aforesaid, it shall not be necessary to give any notice of adjournment or of the business to be transacted at an adjourned meeting other than by announcement at the meeting at which such adjournment is taken. Section 5. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The transactions of any meeting of Shareholders, however called and noticed, shall be valid as though had at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each of the Shareholders entitled to vote, not present in person or by proxy, sign a written waiver of notice, or a consent to the holding of such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Attendance shall constitute a waiver of notice, unless objection shall be made as provided in Sec. 601 (e). Section 6. SHAREHOLDERS ACTING WITHOUT A MEETING -- DIRECTORS. Any action which may be taken at a meeting of the Shareholders, may be taken without a meeting or notice of meeting if authorized by a writing signed by all of the Shareholders entitled to vote at a meeting for such purpose, and filed with the Secretary of the corporation, provided, further, that while ordinarily Directors can only be elected by unanimous written consent under Sec. 603 (d), if the Directors fail to fill a vacancy, then a Director to fill that vacancy may be elected by the written consent of persons holding a majority of shares entitled to vote for the election of Directors. Section 7. OTHER ACTIONS WITHOUT A MEETING. Unless otherwise provided in the California Corporations Code or the Articles, any action which may be taken at any annual or special meeting of Shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, signed by the holders of outstanding shares -10- having not less than the minimum number of votes that would be necessary to authorized or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Unless the consents of all Shareholders entitled to vote have been solicited in writing, (1) Notice of any Shareholder approval pursuant to Secs. 310, 317, 1201 or 2007 without a meeting by less than unanimous written consent shall be given at least ten (10) days before the consummation of the action authorized by such approval, and (2) Prompt notice shall be given of the taking of any other corporate action approved by Shareholders without a meeting by less than unanimous written consent, to each of those Shareholders entitled to vote who have not consented in writing. Any Shareholder giving a written consent, or the Shareholder's proxyholders, or a transferee of the shares of a personal representative of the Shareholder or their respective proxyholders, may revoke the consent by a writing received by the corporation prior to the time that written consents of the number of shares required to authorize the proposed action have been filed with the Secretary of the corporation, but may not do so thereafter. Such revocation is effective upon its receipt by the Secretary of the corporation. Section 8. QUORUM. The holders of a majority of the shares entitled to vote thereat, present in person, or represented by proxy, shall constitute a quorum at all meetings of the Shareholders for the transaction of business except as otherwise provided by law, by the Articles of Incorporation, or by these By-Laws. If, however, such majority shall not be present or represented at any meeting of the Shareholders, the Shareholders entitled to vote thereat, present in person, or by proxy, shall have the power to adjourn the meeting from time to time, until the requisite amount of voting shares shall be present. At such adjourned meeting at which the requisite amount of voting shares shall be represented, any business may be transacted which might have been transacted at a meeting as originally notified. If a quorum be initially present, the Shareholders may continue to transact business until adjournment, notwithstanding the withdrawal of enough Shareholders to leave less than a quorum, if any action taken is approved by a majority of the Shareholders required to initially constitute a quorum. Section 9. VOTING. Only persons in whose names shares entitled to vote stand on the stock records of the corporation on the day of any meeting of Shareholders, unless some other day be -11- fixed by the Board of Directors for the determination of Shareholders of record, and then on such other day, shall be entitled to vote at such meeting. Provided the candidate's name has been placed in nomination prior to the voting and one or more Shareholder has given notice at the meeting prior to the voting of the Shareholder's intent to cumulate the Shareholder's votes, every Shareholder entitled to vote at any election for Directors of any corporation for profit may cumulate their votes and give one candidate a number of votes equal to the number of Directors to be elected multiplied by the number of votes to which his or her shares are entitled, or distribute his or her votes on the same principle among as many candidates as he or she thinks fit. The candidates receiving the highest number of votes up to the number of Directors to be elected are elected. The Board of Directors may fix a time in the future not exceeding sixty (60) days preceding the date of any meeting of Shareholders or the date fixed for the payment of any dividend or distribution, or for the allotment or rights, or when any change or conversion or exchange of shares shall go into effect, as a record date for the determination of the Shareholders entitled to notice of and to vote at any such meeting, or entitled to receive any such dividend or distribution, or any allotment of rights, or to exercise the rights in respect to any such change, conversion or exchange of shares. In such case only Shareholders of record on the date so fixed shall be entitled to notice of and to vote at such meeting, or to receive such dividends, distribution or allotment of rights, or to exercise such rights, as the case may be notwithstanding any transfer of any share on the books of the corporation after any record date fixed as aforesaid. The Board of Directors may close the books of the corporation against transfers of shares during the whole or any part of such period. Section 10. PROXIES. Every Shareholder entitled to vote, or to execute consents, may do so, either in person or by written proxy, executed in accordance with the provisions of Secs. 604 and 705 of the Code and filed with the Secretary of the corporation. Section 11. ORGANIZATION. The President, or in the absence of the President, any Vice President, shall call the meeting of the Shareholders to order, and shall act as chairman of the meeting. In the absence of the President and all of the Vice Presidents, Shareholders shall appoint a chairman for such meeting. The Secretary of the corporation shall act as Secretary of all meetings of the Shareholders, but in the absence of the -12- Secretary at any meeting of the Shareholders, the presiding Officer may appoint any person to act as Secretary of the meeting. Section 12. INSPECTORS OF ELECTION. In advance of any meeting of Shareholders the Board of Directors may, if they so elect, appoint inspectors of election to act at such meeting or any adjournment thereof. If inspectors of election be not so appointed, or if any persons so appointed fail to appear or refuse to act, the chairman of any such meeting may, and on the request of any Shareholder or his or her proxy shall, make such appointment at the meeting in which case the number of inspectors shall be either one (1) or three (3) as determined by a majority of the Shareholders represented at the meeting. Section 13. (A) SHAREHOLDERS' AGREEMENTS. Notwithstanding the above provisions, in the event this corporation elects to become a close corporation, an agreement between two (2) or more Shareholders thereof, if in writing and signed by the parties thereof, may provide that in exercising any voting rights the shares held by them shall be voted as provided therein or in Sec. 706, and may otherwise modify these provisions as to Shareholders' meetings and actions. (B) EFFECT OF SHAREHOLDERS' AGREEMENTS. Any Shareholders' Agreement authorized by Sec. 300 (b), shall only be effective to modify the terms of these By-Laws if this corporation elects to become a close corporation with appropriate filing of or amendment to its Articles as required by Sec. 202 and shall terminate when this corporation ceases to be a close corporation. Such an agreement cannot waive or alter Secs. 158, (defining close corporations), 202 (requirements of Articles of Incorporation), 500 and 501 relative to distributions, 111 (merger), 1201 (e) (reorganization) or Chapters 15 (Records and Reports) or 16 (Rights of Inspection), 18 (Involuntary Dissolution) or 22 (Crimes and Penalties). Any other provisions of the Code or these By-Laws may be altered or waived thereby, but to the extent they are not so altered or waived, these By-Laws shall be applicable. ARTICLE V CERTIFICATES AND TRANSFER OF SHARES Section 1. CERTIFICATES FOR SHARES. Certificates for shares shall be of such form and device as the Board of Directors may designate and shall state the name of the record holder of the shares represented thereby; its number; date of issuance; the number of shares for which it is issued; a statement of the rights, privileges, preferences and restrictions, if any; a statement as to the redemption or conversion, if any; a statement of liens or restrictions upon transfer or voting, if any; if the shares be assessable or, if assessments are collectible by personal action, a plain statement of such facts. -13- All certificates shall be signed in the name of the corporation by the Chairman of the Board or Vice Chairman of the Board or the President or Vice President and by the Chief Financial Officer or an Assistant Treasurer or the Secretary or any Assistant Secretary, certifying the number of shares and the class or series of shares owned by the Shareholder. Any or all of the signatures on the certificate may be facsimile. In case any Officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed on a certificate shall have ceased to be that Officer, transfer agent, or registrar before that certificate is issued, it may be issued by the corporation with the same effect as if that person were an Officer, transfer agent, or registrar at the date of issue. Section 2. TRANSFER ON THE BOOKS. Upon surrender to the Secretary or transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 3. LOST OR DESTROYED CERTIFICATES. Any person claiming a certificate of stock to be lost or destroyed shall make an affidavit or affirmation of the fact and shall, if the Directors so require, give the corporation a bond of indemnity, in form and with one or more sureties satisfactory to the Board, in at least double the value of the stock represented by said certificate, whereupon a new certificate may be issued in the same tenor and for the same number of shares as the one alleged to be lost or destroyed. Section 4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may appoint one or more transfer agents or transfer clerks, and one or more registrars, which shall be an incorporated bank or trust company, either domestic or foreign, who shall be appointed at such times and places as the requirements of the corporation may necessitate and the Board of Directors may designate. -14- Section 5. CLOSING STOCK TRANSFER BOOKS -- RECORD DATE. In order that the corporation may determine the Shareholders entitled to notice of any meeting or to vote or entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days prior to the date of such meeting nor more than sixty (60) days prior to any other action. If no record date is fixed; the record date for determining Shareholders entitled to notice of or to vote at a meeting of Shareholders shall be at the close of business on the business day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. The record date for determining Shareholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the Board is necessary, shall be the day on which the first written consent is given. The record date for determining Shareholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto, or the sixtieth (60th) day prior to the date of such other action, whichever is later. Section 6. LEGEND CONDITION. In the event any shares of this corporation are issued pursuant to a permit or exemption therefrom requiring the imposition of a legend condition, the person or persons issuing or transferring said shares shall make sure said legend appears on the certificate and shall not be required to transfer any shares free of such legend unless an amendment to such permit or a new permit be first issued so authorizing such a deletion. Section 7. CLOSE CORPORATION CERTIFICATES. All certificates representing shares of this corporation, in the event it shall elect to become a close corporation, shall contain the legend required by Sec. 418 (c). -15- Section PROVISION RESTRICTING TRANSFER OF SHARES. Before there can be a valid sale or transfer of any of the shares of this corporation by the holders thereof, the holder of the shares to be sold or transferred shall first give notice in writing to the Secretary of this corporation of his or her intention to sell or transfer such shares. Said notice shall specify the number of shares to be sold or transferred, the price per share and the terms upon which such holder intends to make such sale or transfer. The Secretary shall within five (5) days thereafter, mail or deliver a copy of said notice to each of the other Shareholders of record of this corporation. Such notice may be delivered to such Shareholders personally or may be mailed to the last known addresses of such Shareholders, as the same may appear on the books of this corporation. Within days after the mailing or delivery of said notices to such Shareholders, any such Shareholder or Shareholders desiring to acquire any part or all of the shares referred to in said notice shall deliver by mail or otherwise to the Secretary of this corporation a written offer or offers to purchase a specified number or numbers of such shares at the price and upon the terms stated in said notice. If the total number of shares specified in such offers exceeds the number of shares referred to in said notice, each offering Shareholder shall be entitled to purchase such proportion of the shares referred to in said notice to the Secretary, as the number of shares of this corporation, which he or she holds bears to the total number of shares held by all Shareholders desiring to purchase the shares referred to in said notice to the Secretary. If all of the shares referred to in said notice to the Secretary are not disposed of under such apportionment, each Shareholder desiring to purchase shares in a number in excess of his or her proportionate share, as provided above, shall be entitled to purchase such proportion of those shares which remain thus undisposed of, as the total number of shares which he or she holds bears to the total number of shares held by all of the Shareholders desiring to purchase shares in excess of those to which they are entitled under such apportionment. The aforesaid right to purchase the shares referred to in the aforesaid notice to the Secretary shall apply only if all of the shares referred to in said notice are purchased. Unless all of the shares referred to in said notice to the Secretary are purchased, as aforesaid, in accordance with offers made within said days, the Shareholder desiring to sell or transfer may dispose of all shares of stock referred to in said notice to the Secretary to any person or persons whomsoever; provided, however, that he or she shall not sell or transfer such shares at a lower price or on terms more favorable to the purchaser or transferee than those specified in said notice to the Secretary. Any sale or transfer, or purported sale or transfer, of the shares of said corporation shall be null and void unless the terms, conditions and provisions of this section are strictly observed and followed. -15a- Restrictions Section PLEDGED OR HYPOTHECATED SHARES. Any Shareholder desiring to borrow money on or hypothecate any or all of the shares of stock held by such Shareholder shall first mail notice in writing to the Secretary of this corporation of his or her intention to do so. Said notice shall specify the number of shares to be pledged or hypothecated, the amount to be borrowed per share, the terms, rate of interest, and other provisions upon which each Shareholder intends to make such loan or hypothecation. The Secretary shall, within five (5) days thereafter, mail or deliver a copy of said notice to each of the other Shareholders of record of this corporation. Such notice may be delivered to such Shareholder personally, or may be mailed to the last known addresses of such Shareholders as the same may appear on the books of this corporation. Within fifteen (15) days after the mailing or delivering of said notice to said Shareholders, any such Shareholder or Shareholders desiring to lend any part or all of the amount sought to be borrowed, as set forth in said notice, at the terms therein specified, shall deliver by mail, or otherwise, to the Secretary of this corporation a written offer or offers to lend a certain amount of money for the term, at the rate of interest, and upon the other provisions specified in said notice. If the total amount of money subscribed in such offers exceeds the amount sought to be borrowed, specified in said notice, each offering Shareholder shall be entitled to lend such proportion of the amount sought to be borrowed, as set forth in said notice, as the number of shares which he or she holds bears to the total number of shares held by all such Shareholders desiring to lend all or part of the amount specified in said notice. If the entire amount of monies sought to be borrowed, as specified in said notice, is not subscribed as set forth in the preceding paragraphs, each Shareholder desiring to lend an amount in excess of his or her proportionate share, as specified in the preceding paragraph, shall be entitled to lend such proportion of the subscribed amount as the total number of shares which he or she holds bears to the total number of shares held by all of the Shareholders desiring to lend an amount in excess of that to which they are entitled under such apportionment. If there be but one Shareholder so desiring to lend, such Shareholder shall be entitled to lend up to the full amount sought to be borrowed. If none, or only a part of the amount sought to be borrowed, as specified in said notice, is subscribed as aforesaid, in accordance with offers made within said fifteen (15) day period, the Shareholder desiring to borrow may borrow from any person or persons he or she may so desire as to any or all shares of stock held by him or her which have not been covered by lending Shareholders; provided, however, that said Shareholders shall not borrow any lesser amount, or any amount on terms less favorable to the borrower, than those specified in said notice to the Secretary. Any pledge or hypothecation, or other purported transfer as security for a loan of the shares of this corporation, shall be null and void unless the terms, conditions and provisions of these By-Laws are strictly observed and followed. -15b- Restrictions ARTICLE VI RECORDS - REPORTS - INSPECTION ------------------------------ Section 1. RECORDS. The corporation shall maintain, in accordance with generally accepted accounting principles, adequate and correct accounts, books and records of its business and properties. All of such books, records and accounts shall be kept at its principal executive office in the State of California, as fixed by the Board of Directors from time to time. Section 2. INSPECTION OF BOOKS AND RECORDS. All books and records provided for in Sec. 1500 shall be open to inspection of the Directors and Shareholders from time to time and in the manner provided in said Sec. 1600 - 1602. Section 3. CERTIFICATION AND INSPECTION OF BY-LAWS. The original or a copy of these By-Laws, as amended or otherwise altered to date, certified by the Secretary, shall be kept at the corporation's principal executive office and shall be open to inspection by the Shareholders of the corporation at all reasonable times during office hours, as provided in Sec. 213 of the Corporations Code. Section 4. CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as shall be determined from time to time by resolution of the Board of Directors. Section 5. CONTRACTS, ETC. -- HOW EXECUTED. The Board of Directors, except as in the By-Laws otherwise provided, may authorize any Officer or Officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation. Such authority may be general or confined to specific instances. Unless so authorized by the Board of Directors, no Officer, agent or employee shall have any power or authority to bind the corporation by any contract or agreement, or to pledge its credit, or to render it liable for any purpose or to any amount, except as provided in Sec. 313 of the Corporations Code. -16- ARTICLE VII ANNUAL REPORTS Section 1. REPORT TO SHAREHOLDERS, DUE DATE. The Board of Directors shall cause an annual report to be sent to the Shareholders not later than one hundred twenty (120) days after the close of the fiscal or calendar year adopted by the corporation. This report shall be sent at least fifteen (15) days before the annual meeting of Shareholders to be held during the next fiscal year and in the manner specified in Section 4 of Article IV of these By-Laws for giving notice to Shareholders of the corporation. The annual report shall contain a balance sheet as of the end of the fiscal year and an income statement and statement of changes in financial position for the fiscal year, accompanied by any report of independent accountants or, if there is no such report, the certificate of an authorized Officer of the corporation that the statements were prepared without audit from the books and records of the corporation. Section 2. WAIVER. The annual report to Shareholders referred to in Section 1501 of the California General Corporation Law is expressly dispensed with so long as this corporation shall have less than one hundred (100) Shareholders. However, nothing herein shall be interpreted as prohibiting the Board of Directors from issuing annual or other periodic reports to the Shareholders of the corporation as they consider appropriate. ARTICLE VIII AMENDMENTS TO BY-LAWS Section 1. AMENDMENT BY SHAREHOLDERS. New By-Laws may be adopted or these By-Laws may be amended or repealed by the vote or written consent of holders of a majority of the outstanding shares entitled to vote; provided, however, that if the Articles of Incorporation of the corporation set forth the number of authorized Directors of the corporation, the authorized number of Directors may be changed only by an amendment of the Articles of Incorporation. Section 2. POWERS OF DIRECTORS. Subject to the right of the Shareholders to adopt, amend or repeal By-Laws, as provided in Section 1 of this Article VIII, and the limitations of Sec. 204 (a) (5) and Sec. 212, the Board of Directors may adopt, amend or repeal any of these By-Laws other than a By-Law or amendment thereof changing the authorized number of Directors. -17- Section 3. RECORD OF AMENDMENTS. Whenever an amendment or new By-Law is adopted, it shall be copied in the book of By-Laws with the original By-Laws, in the appropriate place. If any By-Law is repealed, the fact of repeal with the date of the meeting at which the repeal was enacted or written assent was filed shall be stated in said book. ARTICLE IX CORPORATE SEAL The corporate seal shall be circular in form, and shall have inscribed thereon the name of the corporation, the year or date of its incorporation, and the word "California". ARTICLE X MISCELLANEOUS Section 1. REFERENCES TO CODE SECTIONS. "Sec." references herein refer to the equivalent Sections of the California Corporations Code effective January 1, 1977, as amended. Section 2. REPRESENTATIONS OF SHARES IN OTHER CORPORATIONS. Shares of other corporations standing in the name of this corporation may be voted or represented and all incidents thereto may be exercised on behalf of the corporation by the Chairman of the Board, the President or any Vice President and the Secretary or an Assistant Secretary. Section 3. SUBSIDIARY CORPORATIONS. Shares of this corporation owned by a subsidiary shall not be entitled to vote on any matter. A subsidiary for these purposes is defined as a corporation, the shares of which possessing more than 25% of the total combined voting power of all classes of shares entitled to vote, are owned directly or indirectly through one (1) or more subsidiaries. Section 4. INDEMNITY. The corporation may indemnify agents of the corporation (as defined in Cal. Corp. Code Sec. 317(a)), for breach of duty to the corporation and its Shareholders where the approval required in Cal. Corp. Code Sec. 317 (e) has been secured. However, an agent may not in any circumstance be indemnified for acts or omissions that constitute intentional misconduct, the knowing and culpable violation of the law, the absence of good faith, the receipt of an improper personal benefit, a reckless disregard or unexcused inattention to the agent's duty to act in the best interests of the Corporation and its Shareholders. An agent also may not be indemnified for any act or omission which falls under Cal. Corp. Code Secs. 310 or 316, or where indemnification is expressly prohibited under Cal. Corp. Code Sec. 317. Section 5. ACCOUNTING YEAR. The accounting year of the corporation shall be fixed by resolution of the Board of Directors. -18- CERTIFICATE OF ADOPTION OF BY-LAWS ---------------------------------- ADOPTION BY INCORPORATOR(S) OR FIRST DIRECTOR(S). The undersigned person(s) named in the Articles of Incorporation as the Incorporator(s) or First Director(s) of the above named corporation hereby adopt the same as the By-Laws of said corporation. Executed this 15th day of February, 1990 BERNARD J. CARTOON - --------------------------------------- Name CERTIFICATE BY SECRETARY - ------------------------ I DO HEREBY CERTIFY AS FOLLOWS: That I am the duly elected, qualified and acting Secretary of the above named corporation, that the foregoing By-Laws were adopted as the By-Laws of said corporation on the date set forth above by the person(s) named in the Articles of Incorporation as the Incorporator(s) or First Director(s) of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal this 15th day of February, 1990 /s/ Bernard J. Cartoon --------------------------------------- Secretary BERNARD J. CARTOON CERTIFICATE BY SECRETARY OF ADOPTION BY SHAREHOLDERS' VOTE. - ---------------------------------------------------------- THIS IS TO CERTIFY: That I am the duly elected, qualified and acting Secretary of the above named corporation, and that the above and foregoing Code of By-Laws was submitted to the Shareholders at their first meeting and recorded in the minutes thereof, was ratified by the vote of Shareholders entitled to exercise the majority of the voting power of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of February, 1990. /s/ Bernard J. Cartoon --------------------------------------- Secretary BERNARD J. CARTOON -19- EX-5 12 y86871exv5.txt OPINION OF SIMPSON THACHER & BARTLETT LLP Exhibit 5 June 6, 2003 American Media Operations, Inc. 1000 American Media Way Boca Raton, Florida 33464 Ladies and Gentlemen: We have acted as counsel to American Media Operations, Inc., a Delaware corporation (the "Company"), and to the entities listed on Schedule A hereto (individually, a "Guarantor" and collectively, the "Guarantors"), in connection with the Registration Statement on Form S-4 (the "Registration Statement") filed by the Company and the Guarantors with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended, relating to the issuance by the Company of $150,000,000 aggregate principal amount of 8-7/8% Senior Subordinated Notes due 2011 (the "Exchange Securities") and the issuance by the Guarantors of guarantees (the "Guarantees"), with respect to the Exchange Securities. The Exchange Securities and the Guarantees will be issued under an indenture (the "Indenture") dated as of January 23, 2003, among the Company, the Guarantors and J.P. Morgan Trust Company, National Association, as Trustee. The Exchange Securities will be offered by the Company in exchange for $150,000,000 aggregate principal amount of its outstanding 8-7/8% Senior Subordinated Notes due 2011 (the "Securities"). 2 We have examined the Registration Statement and the Indenture, which has been filed with the Commission as an exhibit to the Registration Statement. We also have examined the originals, or duplicates or certified or conformed copies, of such records, agreements, instruments and other documents and have made such other and further investigations as we have deemed relevant and necessary in connection with the opinions expressed herein. As to questions of fact material to this opinion, we have relied upon certificates of public officials and of officers and representatives of the Company and the Guarantors. In rendering the opinions set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. We also have assumed that the Indenture is the valid and legally binding obligation of the Trustee. We have assumed further that (1) National Enquirer, Inc. and SYL Communications, each a Guarantor and a non-Delaware subsidiary of the Company, have duly authorized, executed and delivered the Indenture and (2) the execution, delivery and performance by National Enquirer, Inc. and SYL Communications of the Indenture and the Guarantees do not and will not violate the laws of the State of Florida or California or any other applicable laws (excepting the laws of the State of New York and the Federal laws of the United States). Based upon the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion that: 3 1. When the Exchange Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture upon the exchange, the Exchange Securities will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms. 2. When (a) the Exchange Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture upon the exchange and (b) the Guarantees have been duly issued, the Guarantees will constitute valid and legally binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms. Our opinions set forth above are subject to the effects of (1) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, (2) general equitable principles (whether considered in a proceeding in equity or at law) and (3) an implied covenant of good faith and fair dealing. We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the law of the State of New York, the Federal law of the United States and the Delaware General Corporation Law. We hereby consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement and to the reference to this firm under the caption "Legal Matters" in the Prospectus included in the Registration Statement. Very truly yours, SIMPSON THACHER & BARTLETT LLP 4 Schedule A AM Auto World Weekly, Inc. American Media Consumer Entertainment Inc. American Media Consumer Magazine Group, Inc. American Media Distribution & Marketing Group, Inc. American Media Property Group, Inc. American Media Mini Mags, Inc. American Media Newspaper Group, Inc. AMI Books, Inc. AMI Films, Inc. Country Music Media Group, Inc. Distribution Services, Inc. Globe Communications Corp. Globe Editorial, Inc. Mira! Editorial, Inc. National Enquirer, Inc. National Examiner, Inc. NDSI, Inc. Star Editorial, Inc. SYL Communications Weider Publications, LLC EX-12 13 y86871exv12.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES . . . EXHIBIT 12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
========================================================================================================= Predecessor Company | The Company - -------------------------------------------------- | --------------------------------------------------- | Forty-six | Weeks Six Weeks | from May Fiscal Year from March | 7, 1999 Fiscal Year Fiscal Year Fiscal Year Ended 30, through | through Ended Ended Ended March 29, May 6, | March 27, March 26, March 25, March 31, (in thousands) 1999 1999 | 2000 2001 2002 2003 - ----------------------------------------------------|---------------------------------------------------- Ratio of earnings to | fixed charges(1)........ 1.5x 1.4x | -- -- -- 1.9x =========================================================================================================
(1) The ratio of earnings to fixed charges has been computed by dividing earnings available for fixed charges (income (loss) before income taxes and extraordinary items plus fixed charges) by fixed charges (interest expense plus that portion of rental expense deemed to represent interest and amortization of deferred debt issuance costs). For fiscal years 2002 and 2001, and the period from May 7, 1999 through March 27, 2000, historical earnings were insufficient to cover fixed charges by $18.5 million, $8.4 million and $17.6 million, respectively. EX-21 14 y86871exv21.txt SUBSIDIARIES Exhibit 21 Subsidiaries of American Media Operations, Inc. Name Jurisdiction - ---- ------------ AM Auto World Weekly, Inc. Delaware AMI Books, Inc. Delaware AMI Film, Inc. Delaware American Media Consumer Entertainment Inc. Delaware American Media Consumer Magazine Group, Inc. Delaware American Media Distribution & Marketing Group, Inc. Delaware American Media Property Group, Inc. Delaware American Media Mini Mags, Inc. Delaware American Media Newspaper Group, Inc. Delaware Country Music Media Group, Inc. Delaware Distribution Services, Inc. Delaware Globe Communications Corp. Delaware Globe Editorial, Inc. Delaware MediaFit SARL France Mira! Editorial, Inc. Delaware National Enquirer, Inc. Florida National Examiner, Inc. Delaware NDSI, Inc. Delaware Star Editorial, Inc. Delaware SYL Communications California Weider Publications, LLC Delaware Weider Publications, Group Ltd. United Kingdom Weider Publishing Ltd. United Kingdom Weider Publishing Italia SRL Italy EX-23.1 15 y86871exv23w1.txt CONSENT OF DELOITTE AND TOUCHE LLP Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of American Media Operations, Inc., a wholly-owned subsidiary of American Media, Inc., on Form S-4 of our report dated June 2, 2003, relating to the consolidated financial statements of American Media Operations, Inc. as of and for the year ended March 31, 2003 (which report expresses an unqualified opinion and includes an explanatory paragraph relating to a change in the method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets and an explanatory paragraph concerning the application of procedures relating to certain disclosures of financial statement amounts related to the fiscal year 2002 and 2001 financial statements that were audited by other auditors who have ceased operations), incorporated by reference in the prospectus, which is a part of this Registration Statement, and to the reference to us under the heading "Experts" in such prospectus. DELOITTE & TOUCHE LLP Fort Lauderdale, Florida June 6, 2003 EX-23.2 16 y86871exv23w2.txt CONSENT OF DELOITTE AND TOUCHE LLP Exhibit 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of American Media Operations, Inc. on Form S-4 of our report dated May 21, 2003 (which report expresses an unqualified opinion and includes an explanatory paragraph relating to a change in the method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets), on the combined consolidated balance sheets of Weider Publications, Inc. and subsidiaries and Weider Interactive Networks, Inc. as of December 31, 2002 and 2001 and the related combined consolidated statements of operations, stockholders' equity (deficit) and cash flows for the years ended December 31, 2002 and 2001, the seven months ended December 31, 2000 and the year ended May 31, 2000, appearing in the Current Report on Form 8-K of American Media Operations, Inc. filed on June 6, 2003 and to the reference to us under the heading "Experts" in the prospectus, which is part of this Registration Statement. DELOITTE & TOUCHE LLP Los Angeles, California June 6, 2003 EX-25 17 y86871exv25.txt FORM T-1 STATEMENT OF ELIGIBILITY Exhibit 25 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------------------------------------- J. P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION (Exact name of trustee as specified in its charter) 95-4655078 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 101 CALIFORNIA STREET, FLOOR 38 SAN FRANCISCO, CALIFORNIA 94111 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- AMERICAN MEDIA OPERATIONS, INC. (Exact name of obligor as specified in its charter) DELAWARE 59-2094424 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 190 CONGRESS PARK DRIVE, SUITE 200 DELRAY BEACH, FLORIDA 33445-4706 (Address of principal executive offices) (Zip Code) 8-7/8% SENIOR SUBORDINATED NOTES DUE 2011 (Title of the indenture securities) ------------------------------------------------------------- ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Comptroller of the Currency, Washington, D.C. Board of Governors of the Federal Reserve System, Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes. ITEM 2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the trustee, describe each such affiliation. None. ITEM 16. LIST OF EXHIBITS. List below all exhibits filed as part of this statement of eligibility. Exhibit 1. Articles of Association of the Trustee as Now in Effect (see Exhibit 1 to Form T-1 filed in connection with Form 8K of the Southern California Water Company filing, dated December 7, 2001, which is incorporated by reference). Exhibit 2. Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 333-41329, which is incorporated by reference). Exhibit 3. Authorization of the Trustee to Exercise Corporate Trust Powers (contained in Exhibit 2). Exhibit 4. Existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Form 8K of the Southern California Water Company filing, dated December 7, 2001, which is incorporated by reference). Exhibit 5. Not Applicable Exhibit 6. The consent of the Trustee required by Section 321 (b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 333-41329, which is incorporated by reference). Exhibit 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. Exhibit 8. Not Applicable Exhibit 9. Not Applicable SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, J. P. Morgan Trust Company, National Association, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Birmingham, and State of Alabama, on the 21st day of May, 2003. J. P. Morgan Trust Company, National Association By /s/ :Roy Wessinger ---------------------------------------- Roy Wessinger Vice President EXHIBIT 7. Report of Condition of the Trustee. CONSOLIDATED REPORT OF CONDITION OF J.P. Morgan Trust Company, N.A., (formerly --------------------------------------------- Chase Manhattan Bank and Trust Company, N.A.) - ---------------------------------------------- (Legal Title) LOCATED AT 1800 Century Park East, Suite 400 Los Angeles, CA 90067 ---------------------------------------------------------------------- (Street) (City) (State) (Zip) AS OF CLOSE OF BUSINESS ON March 31, 2003 ----------------------------------- ================================================================================ ================================================================================ ASSETS DOLLAR AMOUNTS IN THOUSANDS Cash and Due From Banks $ 21,088 Securities 136,138 Loans and Leases 141,435 Premises and Fixed Assets 5,973 Intangible Assets 152,893 Other Assets 18,036 ------------ Total Assets $ 475,563 =========
LIABILITIES Deposits $ 222,645 Other Liabilities 38,592 ------------ Total Liabilities 261,237
EQUITY CAPITAL Common Stock 600 Surplus 177,264 Retained Earnings 36,462 ------------ Total Equity Capital 214,326 ------------ Total Liabilities and Equity Capital $ 475,563 =========
EX-99.1 18 y86871exv99w1.txt FORM OF LETTER OF TRANSMITTAL EXHIBIT 99.1 LETTER OF TRANSMITTAL TO TENDER 8 7/8% SENIOR SUBORDINATED NOTES DUE 2011 OF AMERICAN MEDIA OPERATIONS, INC. PURSUANT TO THE PROSPECTUS DATED , 2003 BY AMERICAN MEDIA OPERATIONS, INC. THE OFFER TO EXCHANGE WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2003, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERED NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE. To The Exchange Agent: J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION By Registered or Certified Mail, Hand or by Overnight Courier: J.P. Morgan Trust Company, National Association 3800 Colonnade Parkway, Suite 490 Birmingham, AL 35243 Facsimile Transmission Number: Confirm by Telephone: (205) 968-9145 (205) 968-0506
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE ACCOMPANYING INSTRUCTIONS SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. The undersigned acknowledges that the undersigned has received and reviewed the prospectus dated , 2003, (the "Prospectus") of American Media Operations, Inc., a Delaware corporation (the "Company"), and this Letter of Transmittal (the "Letter of Transmittal"), which together constitute the Company's offer to exchange (the "Exchange Offer") $1,000 principal amount of 8 7/8% Senior Subordinated Notes due 2011, which have been registered under the Securities Act (the "Exchange Notes") for each $1,000 principal amount of its outstanding 8 7/8% Senior Subordinated Notes due 2011 (the "Outstanding Notes"), as set forth in the Prospectus. See "The Exchange Offer -- Consequences of Failure to Exchange" in the Prospectus. Upon the terms and subject to the conditions set forth in the Prospectus and in this Letter of Transmittal, the Company will exchange $1,000 principal amount of the Exchange Notes, registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a registration statement on Form S-4 filed by the Company, for each $1,000 principal amount of its Outstanding Notes properly delivered by a holder thereof to J.P. Morgan Trust Company, National Association, as exchange agent (the "Exchange Agent"), and not withdrawn on or prior to the Expiration Date. No holder may withdraw a tender following the Expiration Date. In order to be entitled to receive the Exchange Notes, a tendering holder must properly tender the Outstanding Notes to the Exchange Agent, and not withdraw such tender, on or prior to the Expiration Date. If a holder's Outstanding Notes are not properly tendered by the Expiration Date pursuant to the Exchange Offer, such holder will not receive Exchange Notes. By executing the Letter of Transmittal, the undersigned represents to the Company that, among other things, (i) the Exchange Notes to be acquired by the holder of the Outstanding Notes in connection with the Exchange Offer are being acquired by the holder in the ordinary course of business of the holder, (ii) the holder has no arrangement or understanding with any person to participate in the distribution of Exchange Notes, (iii) the holder acknowledges and agrees that any person who is a broker-dealer registered under the Exchange Act or is participating in the Exchange Offer for the purposes of distributing the Exchange Notes must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the Exchange Notes acquired by such person and cannot rely on the position of the staff of the Commission set forth in no-action letters (see "The Exchange Offer -- Resale of Exchange Notes"), (iv) the holder understands that a secondary resale transaction described in clause (iii) above and any resales of Exchange Notes obtained by such holder in exchange for Outstanding Notes acquired by such holder directly from the Company should be covered by an effective registration statement containing the selling securityholder information required by Item 507 of Regulation S-K of the Securities and Exchange Commission (the "Commission"), and (v) the holder is not an "affiliate," as defined in Rule 405 under the Securities Act, of the Company. If the holder is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities, by executing this Letter of Transmittal, the holder acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes. However, by so acknowledging and by delivering a prospectus, the holder will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. See "The Exchange Offer -- Procedures for Tendering" in the Prospectus. The Exchange Offer may be extended, terminated, amended or consummated as provided in the Prospectus. During any such extension of the Exchange Offer, all Outstanding Notes previously tendered and not withdrawn pursuant to such Exchange Offer will remain subject to the Exchange Offer and may be accepted thereafter for exchange by the Company. No alternative, conditional or contingent tenders will be accepted. A tendering holder, by execution of this Letter of Transmittal, or facsimile hereof, waives all rights to receive notice of acceptance of such holder's Outstanding Notes for exchange. Capitalized terms used but not defined herein have the meanings given to them in the Prospectus. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE CHECKING ANY BOX BELOW This Letter of Transmittal is to be completed by holders of Outstanding Notes if certificates representing such Outstanding Notes are to be forwarded herewith or if delivery of such certificates are to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company (the "Book-Entry Transfer Facility") through DTC's Automated Tender Offer Program ("ATOP"), and an agent's message (as defined below) is not delivered as provided in the next paragraph. Holders whose certificates representing the Outstanding Notes are not immediately available or who cannot deliver certificates and all other required documents to the Exchange Agent or complete the procedure for book-entry transfer on or prior to the Expiration Date may nevertheless tender Outstanding Notes pursuant to the guaranteed delivery procedure set forth in the Prospectus under the caption "The Exchange Offer -- Guaranteed Delivery Procedures." See Instruction 2 below. The Exchange Agent and DTC have confirmed that any financial institution that is a participant in DTC's system may use ATOP to tender Outstanding Notes. Participants in the program may, instead of physically completing and signing this Letter of Transmittal and delivering it to the Exchange Agent, transmit their acceptance of the exchange offer electronically. They may do so by causing DTC to transfer the Outstanding Notes to the Exchange Agent in accordance with its procedures for transfer. DTC will then send an agent's message to the Exchange Agent for its acceptance. Accordingly, this Letter of Transmittal need not be completed by a holder tendering through ATOP. The term "agent's message" means a message transmitted by DTC, received by the Exchange Agent and forming part of the book-entry confirmation, to the effect that, with respect to those Outstanding Notes, the participant has received and agrees to be bound by this Letter of Transmittal and that the Company may enforce this Letter of Transmittal against the participant. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Exchange Agent. In order to ensure participation in the Exchange Offer, Outstanding Notes must be properly tendered on or before the Expiration Date. 2 List below the Outstanding Notes that are to be tendered pursuant to this Letter of Transmittal. If the space below is inadequate, list the information requested below on a separate signed schedule and affix the original signed schedule to this Letter of Transmittal. - ------------------------------------------------------------------------------------------------------------------ DESCRIPTION OF OUTSTANDING NOTES TENDERED - ------------------------------------------------------------------------------------------------------------------ NAME(S) AND ADDRESSES OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK) - ------------------------------------------------------------------------------------------------------------------ AGGREGATE PRINCIPAL AMOUNT PRINCIPAL CERTIFICATE REPRESENTED BY AMOUNT NUMBER(S)(1) CERTIFICATE(S) TENDERED(2) --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- Total Principal Amount Tendered - ------------------------------------------------------------------------------------------------------------------ (1) Need not be completed by holders who tender by book-entry. (2) Unless otherwise indicated in this column, any tendering holder will be deemed to have tendered the entire principal amount represented by the Outstanding Notes indicated in the column labeled "Aggregate Principal Amount Represented by Certificate(s)." See Instruction 4. - ------------------------------------------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE ENCLOSED HEREWITH. [ ] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY MAY DELIVER NOTES BY BOOK-ENTRY TRANSFER): Name of Tendering Institution: ---------------------------------------------------------------------------- Account Number: ---------------------------------------------------------------------------- Transaction Code Number: ---------------------------------------------------------------------------- [ ] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Holder(s): ---------------------------------------------------------------------------- Window Ticket Number (if any): ---------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: -------------------------------------------------------------------- Name of Eligible Institution that Guaranteed Delivery: ------------------------------------------------------------------ [ ] Check box if delivered by Book-Entry Transfer Account Number: ---------------------------------------------------------------------------- Transaction Code Number: ---------------------------------------------------------------------------- 3 [ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE ADDITIONAL COPIES OF THE PROSPECTUS AND COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ---------------------------------------------------------------------------- Address: ---------------------------------------------------------------------------- If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of exchange notes. If the undersigned is a broker-dealer that will receive exchange notes for its own account in exchange for outstanding notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such exchange notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. 4 NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Only holders are entitled to tender their Outstanding Notes in the Exchange Offer. Any financial institution that is a participant in the Book-Entry Transfer Facility's system and whose name appears on a security position listing as the record owner of the Outstanding Notes and who wishes to make book-entry delivery of Outstanding Notes as described above must complete and execute a participant's letter (which will be distributed to participants by the Book-Entry Transfer Facility) instructing the Book-Entry Transfer Facility's nominee to complete and sign the power of attorney attached thereto. Persons who are beneficial owners of Outstanding Notes but are not holders and who seek to tender Outstanding Notes should (i) contact the holder of such Outstanding Notes and instruct such holder to tender on his or her behalf, (ii) obtain and include with this Letter of Transmittal Outstanding Notes properly endorsed for transfer by the holder, with signatures on the endorsement guaranteed by a firm that is a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States of an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act that is a member of one of the recognized signature guarantee programs identified in the Letter of Transmittal (each, an "Eligible Institution") or (iii) effect a record transfer of such Outstanding Notes from the holder to such beneficial owner, and comply with the requirements applicable to holders for tendering Outstanding Notes prior to 5:00 P.M., New York City time, on the Expiration Date. HOLDERS WHO WISH TO RECEIVE THE EXCHANGE NOTES MUST TENDER THEIR OUTSTANDING NOTES ON OR PRIOR TO THE EXPIRATION DATE. SEE "THE EXCHANGE OFFER -- PROCEDURES FOR TENDERING" IN THE PROSPECTUS. To: American Media Operations, Inc. Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the Outstanding Notes indicated above. Subject to, and effective upon, acceptance for exchange of the Outstanding Notes tendered herewith, the undersigned hereby sells, assigns and transfers to or upon the order of the Company, all right, title and interest in and to all such Outstanding Notes tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent also acts as agent of the Company) with respect to such Outstanding Notes, with full power of substitution and resubstitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver certificates representing such Outstanding Notes, or transfer ownership of such Outstanding Notes on the account books maintained by the Book-Entry Transfer Facility, together, in each such case, with all accompanying evidences of transfer and authenticity to or upon the order of the Company, (b) present such Outstanding Notes for transfer on the relevant register, and (c) receive all benefits or otherwise exercise all rights of beneficial ownership of such Outstanding Notes (except that the Exchange Agent will have no rights to or control of, except as agent for the Company, the Exchange Notes delivered in connection with the Exchange Offer), all in accordance with the terms of the Exchange Offer. THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL POWER AND AUTHORITY TO TENDER, SELL, ASSIGN AND TRANSFER THE OUTSTANDING NOTES TENDERED HEREBY AND, THAT WHEN THE SAME ARE ACCEPTED FOR EXCHANGE, THE COMPANY WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE AND CLEAR OF ALL SECURITY INTERESTS, LIENS, RESTRICTIONS, CLAIMS, CHARGES, ENCUMBRANCES, CONDITIONAL SALES AGREEMENTS OR OTHER OBLIGATIONS RELATING TO THE SALE OR TRANSFER THEREOF, AND NOT BE SUBJECT TO ANY ADVERSE CLAIM. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE EXCHANGE AGENT OR THE COMPANY TO BE NECESSARY OR DESIRABLE TO COMPLETE THE ASSIGNMENT, TRANSFER AND PURCHASE OF THE OUTSTANDING NOTES TENDERED HEREBY. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER. DELIVERY OF ENCLOSED OUTSTANDING NOTES SHALL BE EFFECTED, AND RISK OF LOSS AND TITLE TO SUCH OUTSTANDING NOTES SHALL PASS, ONLY UPON PROPER DELIVERY THEREOF TO THE EXCHANGE AGENT. 5 All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy, and personal and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. Outstanding Notes properly tendered may be withdrawn at any time prior to the Expiration Date. Holders will receive the Exchange Notes only if their tenders have been properly delivered on or prior to the Expiration Date and not revoked on or prior to the Expiration Date. Outstanding Notes may not be withdrawn after the Expiration Date unless the Exchange Offer with respect to such Outstanding Notes is terminated without any Outstanding Notes being accepted for exchange thereunder. In the event of such a termination, such Outstanding Notes tendered by the undersigned will be returned to the undersigned as promptly as practicable. The Exchange Offer is subject to a number of conditions, each of which may be waived or modified by the Company, in whole or in part, at any time and from time to time, as described in the Prospectus under the caption "The Exchange Offer -- Certain Conditions to the Exchange Offer." The undersigned recognizes that as a result of such conditions, the Company may not be required to accept the Outstanding Notes properly tendered hereby. In such event, the tendered Outstanding Notes not accepted for exchange will be returned to the undersigned without cost to the undersigned as soon as practicable following the earlier to occur of the Expiration Date or the date on which the Exchange Offer with respect to such issue is terminated without any Outstanding Notes being purchased thereunder, at the address shown below the undersigned's signature(s) unless otherwise indicated under "Special Issuance Instructions" below. Unless otherwise indicated under "Special Issuance Instructions" below, the Exchange Agent will issue the Exchange Notes for any Outstanding Notes tendered hereby that are accepted for exchange, and/or return any certificates representing Outstanding Notes not tendered or not accepted for exchange in the name(s) of the holder(s) appearing under "Description of Outstanding Notes Tendered." Similarly, unless otherwise indicated under "Special Delivery Instructions," the Exchange Notes, and/or any certificates representing Outstanding Notes not tendered or not accepted for exchange (and accompanying documents, as appropriate) to be returned will be sent to the address(es) of the holder(s) appearing under "Description of Outstanding Notes Tendered." In the event that both the Special Issuance Instructions and the Special Delivery Instructions are completed, the Exchange Notes will be issued, if applicable, and the certificates representing any Outstanding Notes not tendered or not accepted for exchange (and any accompanying documents, as appropriate) will be returned in the name of, and delivered to, the person or persons so indicated. Unless otherwise indicated under "Special Issuance Instructions," in the case of a book-entry delivery of Outstanding Notes, the account maintained at the Book-Entry Transfer Facility indicated above will be credited with any Outstanding Notes not tendered or not accepted for exchange. The undersigned recognizes that neither the Exchange Agent nor the Company has any obligation pursuant to the Special Issuance Instructions to transfer any Outstanding Notes from the name of the holder thereof if the Company does not accept for exchange any of the Outstanding Notes so tendered. 6 - ------------------------------------------------------------ SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the certificates representing the Exchange Notes and/or certificates representing the Outstanding Notes not accepted for exchange are to be issued in the name of someone other than the undersigned, or if Outstanding Notes delivered by book-entry transfer not accepted for exchange are to be returned by credit to an account maintained at a Book-Entry Transfer Facility other than the account indicated above. Issue Certificate(s) to: Name: --------------------------------------------------- (PLEASE PRINT) Address: ------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- (INCLUDING ZIP CODE) ----------------------------------------------------------- (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) [ ] Credit unaccepted Outstanding Notes delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below: ----------------------------------------------------------- (ACCOUNT NUMBER) - ------------------------------------------------------------ - ------------------------------------------------------------ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the Exchange Notes and/or certificates representing Outstanding Notes not accepted for exchange are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown above. Mail Certificate(s) to: Name: --------------------------------------------------- (PLEASE PRINT) Address: ------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- (INCLUDING ZIP CODE) ----------------------------------------------------------- (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) - ------------------------------------------------------------ 7 SIGNATURES HOLDERS OF OUTSTANDING NOTES SIGN HERE IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 IN THIS LETTER OF TRANSMITTAL - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (SIGNATURE(S) OF HOLDER(S) OF OUTSTANDING NOTES) Date: - ------------------------ , 2003 (Must be signed by the holder(s) exactly as name(s) appear(s) on certificate(s) representing the Outstanding Notes or on a security position listing or by person(s) authorized to become holder(s) by certificates and documents transmitted herewith. If signature is by attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.) Capacity (Full Title): - -------------------------------------------------------------------------------- Name(s): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE TYPE OR PRINT) Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number - -------------------------------------------------------------------------------- Tax Identification or Social Security No. - --------------------------------------------------------------------------- GUARANTEE OF SIGNATURE(S) (IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5) - -------------------------------------------------------------------------------- (AUTHORIZED SIGNATURE) Name: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE TYPE OR PRINT) - -------------------------------------------------------------------------------- (TITLE) - -------------------------------------------------------------------------------- (NAME OF FIRM) - -------------------------------------------------------------------------------- (ADDRESS -- INCLUDE ZIP CODE) - -------------------------------------------------------------------------------- (AREA CODE AND TELEPHONE NUMBER) Date: - ------------------------ , 2003 8 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. GUARANTEE OF SIGNATURES. Signatures on this Letter of Transmittal need not be guaranteed if the Outstanding Notes tendered hereby are tendered (a) by the registered holder(s) (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility's system and whose name appears on a security position listing as the record owner of the Outstanding Notes) thereof, unless such holder(s) has completed either the box entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" on page 7, or (b) for the account of a firm that is a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act that is a member of one of the recognized signature guarantee programs identified in the Letter of Transmittal (each, an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. Persons who are beneficial owners of Outstanding Notes but are not holders and who seek to tender Outstanding Notes should (i) contact the holder of such Outstanding Notes and instruct such holder to tender on his or her behalf, (ii) obtain and include with this Letter of Transmittal, Outstanding Notes properly endorsed for transfer by the holder, with signatures on the endorsement guaranteed by an Eligible Institution, or (iii) effect a record transfer of such Outstanding Notes from the holder to such beneficial owner and comply with the requirements applicable to holders for tendering Outstanding Notes on or prior to the Expiration Date. See Instruction 6. 2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by holders either if certificates are to be forwarded herewith or if delivery of Outstanding Notes is to be made pursuant to the procedures for book-entry transfer set forth in the Prospectus under the caption "The Exchange Offer -- Procedures for Tendering." For holders whose Outstanding Notes are being delivered by book-entry transfer, delivery of an agent's message by DTC will satisfy the terms of the Exchange Offer in lieu of execution and delivery of this Letter of Transmittal by the participant(s) identified in the agent's message. For a holder to properly tender Outstanding Notes pursuant to the Exchange Offer, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), together with any signature guarantees and any other documents required by these Instructions, or an agent's message, as the case may be, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date and either (i) certificates representing such Outstanding Notes must be received by the Exchange Agent at such address or (ii) such Outstanding Notes must be transferred pursuant to the procedures for book-entry transfer described in the Prospectus under the caption "The Exchange Offer -- Procedures for Tendering" and a Book-Entry Confirmation must be received by the Exchange Agent, in each case, on or prior to the Expiration Date. A holder who desires to tender Outstanding Notes and who cannot comply with procedures set forth herein for tender on a timely basis or whose Outstanding Notes are not immediately available must comply with the guaranteed delivery procedures described below. Holders whose certificates representing Outstanding Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent or complete the procedures for book-entry transfer prior to the Expiration Date may tender their Outstanding Notes by properly completing and duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in the Prospectus under the caption "The Exchange Offer -- Guaranteed Delivery Procedures." Pursuant to such procedures, (a) the tender must be made by or through an Eligible Institution; (b) a Notice of Guaranteed Delivery, substantially in the form provided herewith, properly completed and duly executed, must be received by the Exchange Agent as provided below on or prior to the Expiration Date; and (c) the certificates representing all tendered Outstanding Notes, or a Book-Entry Confirmation with respect to all tendered Outstanding Notes, together with this Letter of Transmittal, properly completed and duly executed or an agent's message in lieu thereof, and any required signature guarantees and all other documents required by the Letter of Transmittal, must be received by the Exchange Agent within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery. THE METHOD OF DELIVERY OF CERTIFICATES REPRESENTING OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL, REQUIRED SIGNATURE GUARANTEES AND ANY OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER AND DELIVERY WILL BE DEEMED MADE WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. 9 All tendering holders, by execution of this Letter of Transmittal waive any right to any notice of the acceptance of their Outstanding Notes for exchange. 3. WITHDRAWAL OF TENDERS AND REVOCATION OF CONSENTS. Tenders of Outstanding Notes may be withdrawn at any time until the Expiration Date. Tendered Outstanding Notes may not be withdrawn on or after the Expiration Date, unless the Exchange Offer is terminated without any Outstanding Notes being accepted for exchange thereunder. In the event of such termination, all tendered Outstanding Notes will be returned to the tendering holder as promptly as practicable. Any holder of Outstanding Notes who has tendered Outstanding Notes or who succeeds to the record ownership of Outstanding Notes in respect of which such tenders have previously been given may withdraw such Outstanding Notes on or prior to the Expiration Date by delivery of a written notice of withdrawal subject to the limitations described herein. To be effective, a written or facsimile transmission notice of withdrawal of a tender must (i) be received by the Exchange Agent, at the address specified on the back cover of this Letter of Transmittal on or before the Expiration Date, (ii) specify the name of the holder of the Outstanding Notes to be withdrawn, (iii) contain the description of the Outstanding Notes to be withdrawn, the certificate numbers shown on the particular certificates representing such Outstanding Notes and the aggregate principal amount represented by such Outstanding Notes, and (iv) be signed by the holder of such Outstanding Notes in the same manner as the original signature on the Letter of Transmittal (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee register the transfer of relevant Outstanding Notes into the name of the person withdrawing such Outstanding Notes. The signature(s) on the notice of withdrawal of any tendered Outstanding Notes must be guaranteed by an Eligible Institution unless the relevant Outstanding Notes have been tendered for the account of an Eligible Institution. If the Outstanding Notes to be withdrawn have been delivered or otherwise identified to the Exchange Agent, a signed notice of withdrawal is effective immediately upon receipt by the Exchange Agent of written or facsimile transmission of the notice of withdrawal even if physical release is not yet effected. A withdrawal of Outstanding Notes can only be accomplished in accordance with the foregoing procedures. All questions as to the validity, form and eligibility (including the time of receipt) of notices of withdrawal will be determined by the Company, whose determination will be final and binding on all parties. A purported notice of withdrawal that is not received by the Exchange Agent in a timely fashion will not be effective to withdraw tendered Outstanding Notes. Any Outstanding Notes that have been tendered but that are not accepted for exchange will be returned to the holder thereof without cost to such holder as soon as practicable following the Expiration Date. A withdrawal of a tender of Outstanding Notes may not be rescinded and any Outstanding Notes properly withdrawn will not be deemed to be validly tendered for purposes of the Exchange Offer and no Exchange Notes will be issued with respect thereto. However, withdrawn Outstanding Notes may be retendered by repeating one of the procedures described in Instruction 2 above at any time on or prior to the Expiration Date. 4. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS OF OUTSTANDING NOTES WHO TENDER BY BOOK-ENTRY TRANSFER). If less than the entire principal amount of any Outstanding Notes evidenced by a submitted certificate is tendered, the tendering holder should fill in the applicable principal amount of the Outstanding Notes that are to be tendered in the box entitled "Description of Outstanding Notes Tendered." The entire principal amount represented by the certificates for all Outstanding Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Outstanding Notes is not tendered or not accepted for payment, new certificate(s) representing the remainder of the principal amount of the Outstanding Notes that were evidenced by the old certificate(s) will be sent to the holder, unless otherwise provided in the boxes entitled "Special Issuance Instructions" or "Special Delivery Instructions" above, as soon as practicable after the expiration of the Exchange Offer. 5. SIGNATURES ON THIS LETTER OF TRANSMITTAL; ENDORSEMENTS. If this Letter of Transmittal is signed by the holder(s) of the Outstanding Notes tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without alteration, enlargement or any change whatsoever. If any of the Outstanding Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Outstanding Notes are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are names in which certificates are held. 10 If this Letter of Transmittal or any certificates are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Company of their authority so to act must be submitted, unless waived by the Company. If this Letter of Transmittal is signed by the holder(s) of the Outstanding Notes listed and transmitted hereby, no endorsements of certificates are required unless payment is to be made to, or certificates for Outstanding Notes not tendered or not accepted for purchase are to be issued to, a person other than the holder(s). Signatures on such certificates must be guaranteed by an Eligible Institution (unless signed by an Eligible Institution). If this Letter of Transmittal is signed by a person other than the holder(s) of the Outstanding Notes listed, the certificates representing such Outstanding Notes must be properly endorsed for transfer by the holder, with signatures on the endorsement guaranteed by an Eligible Institution. 6. TRANSFER TAXES. Holders who tender their Outstanding Notes will not be obligated to pay transfer taxes, if any, in connection therewith unless tendered Outstanding Notes are registered in the name of any person other than the person signing this Letter of Transmittal or any transfer tax is imposed for any reason other than the exchange of Outstanding Notes in the Exchange Offer. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificates listed in this Letter of Transmittal. 7. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Exchange Notes are to be issued in the name of, and/or certificates representing Outstanding Notes not accepted for exchange are to be returned to, a person other than the person(s) signing this Letter of Transmittal, or if Exchange Notes are to be sent and/or such certificates are to be returned to a person other than the person(s) signing this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Holders delivering Outstanding Notes by book-entry transfer may request that Outstanding Notes not accepted for payment be credited to such account maintained at a Book-Entry Transfer Facility as such holder(s) may designate hereon. If no such instructions are given, such Outstanding Notes not accepted for payment will be returned by crediting the account at the Book-Entry Transfer Facility designated above. 8. WAIVER OF CONDITIONS. To the extent permitted by applicable law, the Company reserves the right to waive any and all conditions to the Exchange Offer and accept for exchange any Outstanding Notes tendered. 9. TAX IDENTIFICATION NUMBER AND BACKUP WITHHOLDING. Federal income tax law generally requires that a holder whose tendered Outstanding Notes are accepted for exchange, or such holder's assignee (in either case, the "Payee"), provide the Exchange Agent with the holder's correct Taxpayer Identification Number ("TIN"), which in the case of a Payee who is an individual, is his or her social security number. If the Exchange Agent is not provided with the correct TIN or an adequate basis for an exemption, such Payee may be subject to a $50 penalty imposed by the Internal Revenue Service and backup withholding in an amount equal to 30% of the interest paid on the Exchange Offer. If withholding results in an overpayment of taxes, a refund may be obtained. To prevent backup withholding, each Payee must provide his correct TIN by completing the "Substitute Form W-9" set forth herein, certifying that the TIN provided is correct (or that such Payee is awaiting a TIN) and that (i) the Payee is exempt from backup withholding, (ii) the Payee has not been notified by the Internal Revenue Service that he is subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the Internal Revenue Service has notified the Payee that he is no longer subject to backup withholding. A Payee who does not have a TIN may check the box in Part 3 of the Substitute Form W-9 if the Payee has applied for a number or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the Payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. If the box is checked, payments made within 60 days of the date of the form will be subject to backup withholding unless the Payee has furnished the Payor with his or her TIN. A Payee who checks the box in Part 3 in lieu of furnishing his or her TIN should furnish the Payor with his or her TIN as soon as it is received. 11 If the Outstanding Notes are held in more than one name or are not in the name of the actual owner, consult the W-9 Guidelines for information on which TIN to report. Certain Payees (including, among others, all corporations and certain foreign individuals) may be exempt from these backup withholding requirements. In order for a foreign individual to qualify as an exempt recipient, that Payee must submit a statement, signed under penalty of perjury, attesting to that individual's exempt status (such as Form W-8BEN). Forms for such statements can be obtained from the Exchange Agent. Payees are urged to consult their own tax advisors to determine whether they are exempt from these backup withholding and reporting requirements. If backup withholding applies, the Exchange Agent is required to withhold up to 30% of any payments to be made to the Payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained by filing a tax return with the Internal Revenue Service. The Exchange Agent cannot refund amounts withheld by reason of backup withholding. 10. MUTILATED, LOST, STOLEN OR DESTROYED SECURITIES. Any holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance may be directed to the Exchange Agent at its address set forth above or from the tendering holder's broker, dealer, commercial bank or trust company. Additional copies of the Prospectus, this Letter of Transmittal, the Notice of Guaranteed Delivery, and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be obtained from the Exchange Agent. IMPORTANT: THIS LETTER OF TRANSMITTAL, TOGETHER WITH CERTIFICATES FOR, OR CONFIRMATION OF BOOK-ENTRY TRANSFER WITH RESPECT TO, ANY TENDERED OUTSTANDING NOTES, WITH ANY REQUIRED SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT, PRIOR TO THE EXPIRATION DATE. 12 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE (YOU) TO GIVE THE PAYER. -- Social security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employee identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer. All "Section" references are to the Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue Service. ------------------------------------------------------------------ GIVE THE SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: NUMBER OF -- - ---------------------------------------------------------------------- 1. Individual The Individual 2. Two or more individuals (joint The actual owner of the ac- account) count or, if combined funds, the first individual on the account(1) 3. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 4. a. The usual revocable savings The grantor-trustee(1) trust account (grantor is also trustee) b. So-called trust account that The actual owner(1) is not a legal or valid trust under state law 5. Sole proprietorship The owner(3) - ---------------------------------------------------------------------- GIVE THE EMPLOYER IDEN- FOR THIS TYPE OF ACCOUNT: TIFICATION NUMBER OF -- - ---------------------------------------------------------------------- 6. Sole proprietorship The owner(3) 7. A valid trust, estate, or pension The legal entity(4) trust 8. Corporate The corporation 9. Association, club, religious, The organization charitable, educational, or other tax-exempt organization 10. Partnership The partnership 11. A broker or registered nominee The broker or nominee 12. Account with the Department of The public entity Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments
- ------------------------------------------------------------------ 1. List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person's number must be furnished. 2. Circle the minor's name and furnish the minor's social security number. 3. You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your social security number of your employer identification number (if you have one). 4. List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) NOTE:If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Card, at the local Social Administration office, or Form SS-4, Application for Employer Identification Number, by calling 1 (800) TAX-FORM, and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from withholding include: - - An organization exempt from tax under Section 501(a), an individual retirement account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2). - - The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or instrumentality of any one or more of the foregoing. - - An international organization or any agency or instrumentality thereof. - - A foreign government and any political subdivision, agency or instrumentality thereof. Payees that may be exempt from backup withholding include: - - A corporation. - - A financial institution. - - A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States. - - A real estate investment trust. - - A common trust fund operated by a bank under Section 584(a). - - An entity registered at all times during the tax year under the Investment Company Act of 1940. - - A middleman known in the investment community as a nominee or custodian. - - A futures commission merchant registered with the Commodity Futures Trading Commission. - - A foreign central bank of issue. - - A trust exempt from tax under Section 664 or described in Section 4947. Payments of dividends and patronage dividends generally exempt from backup withholding include: - - Payments to nonresident aliens subject to withholding under Section 1441. - - Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner. - - Payments of patronage dividends not paid in money. - - Payments made by certain foreign organizations. - - Section 404(k) payments made by an ESOP. Payments of interest generally exempt from backup withholding include: - - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and you have not provided your correct taxpayer identification number to the payer. - - Payments of tax-exempt interest (including exempt-interest dividends under Section 852). - - Payments described in Section 6049(b)(5) to nonresident aliens. - - Payments on tax-free covenant bonds under Section 1451. - - Payments made by certain foreign organizations. - - Mortgage interest paid to you. Certain payments, other than payments of interest, dividends, and patronage dividends, that are exempt from information reporting are also exempt from backup withholding. For details, see the regulations under sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N. EXEMPT PAYEES DESCRIBED ABOVE MUST FILE FORM W-9 OR A SUBSTITUTE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE FORM, SIGN AND DATE THE FORM, AND RETURN IT TO THE PAYER. PRIVACY ACT NOTICE -- Section 6109 requires you to provide your correct taxpayer identification number to payers, who must report the payments to the IRS. The IRS uses the number for identification purposes and may also provide this information to various government agencies for tax enforcement or litigation purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold up to 30% of taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to payer. Certain penalties may also apply. PENALTIES (1) FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE - ---------------------------------------------------------------------------------------------------------------------- PAYER'S NAME: - ---------------------------------------------------------------------------------------------------------------------- SUBSTITUTE FORM W-9 PART 1--PLEASE PROVIDE YOUR NAME AND TIN IN THE ------------------------------ BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING Name DEPARTMENT OF THE TREASURY BELOW. INTERNAL REVENUE SERVICE ------------------------------ Social Security Number OR ------------------------------ Employer Identification Number ----------------------------------------------------------------------------------- PAYER'S REQUEST FOR TAXPAYER PART 2 PART 3-- IDENTIFICATION Certification--Under penalty of perjury, I NUMBER (TIN) certify that: [ ] AWAITING TIN (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. person (including a U.S. resident alien). ----------------------------------------------------------------------------------- CERTIFICATE INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). ----------------------------------------------------------------------------------- The Internal Revenue Service does not require your consent to any provision of (arrow) this document other than the certifications required to avoid backup withholding. SIGNATURE Sign Here --------------------------------------------------------------------------- DATE ----------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF UP TO 30% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, up to 30% of all reportable payments made to me will be withheld. Signature - ------------------------------------------------------------------ Date - ----------------------------, 20 - --- The Exchange Agent Is: J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION By Registered or Certified Mail, Hand or by Overnight Courier: J.P. Morgan Trust Company, National Association 3800 Colonnade Parkway, Suite 490 Birmingham, AL 35243 Facsimile Transmission Number: Confirm by Telephone: (205) 968-9145 (205) 968-0506
EX-99.2 19 y86871exv99w2.txt FORM OF NOTICE OF GUARANTEED DELIVERY EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY FOR AMERICAN MEDIA OPERATIONS, INC. OFFER TO EXCHANGE ANY AND ALL OF ITS 8 7/8% SENIOR SUBORDINATED NOTES DUE 2011 BY AMERICAN MEDIA OPERATIONS, INC. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2003, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERED NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE. As set forth in the prospectus dated , 2003 (the "Prospectus") under the captions "The Exchange Offer -- Procedures for Tendering Notes" and "The Exchange Offer -- Guaranteed Delivery Procedures" and the accompanying Letter of Transmittal (the "Letter of Transmittal") and Instruction 2 thereto, this form, or one substantially equivalent hereto, must be used to accept the Exchange Offer if certificates representing the 8 7/8% Senior Subordinated Notes due 2011, (the "Outstanding Notes") of American Media Operations, Inc., a Delaware corporation (the "Company"), are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit a holder's certificates or other required documents to reach the Exchange Agent on or prior to the Expiration Date. Such form may be delivered by hand or transmitted by telegram, telex, facsimile transmission or mail to the Exchange Agent and must include a guarantee by an eligible institution unless such form is submitted on behalf of an Eligible Institution. Capitalized terms used and not defined herein have the respective meanings ascribed to them in the Prospectus. The Exchange Agent is: J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION By Registered or Certified Mail, Hand or by Overnight Courier: J.P. Morgan Trust Company, National Association 3800 Colonnade Parkway, Suite 490 Birmingham, AL 35243 Facsimile Transmission Number: Confirm by Telephone: (205) 968-9145 (205) 968-0506
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE ACCOMPANYING INSTRUCTIONS SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This form is not to be used to guarantee signatures. If a signature on the Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies & Gentlemen: Upon the terms and subject to the conditions set forth in the Prospectus and accompanying Letter of Transmittal, receipt of which is hereby acknowledged, the undersigned hereby tenders to American Media Operations, Inc., a Delaware corporation (the "Company"), the principal amount of Outstanding Notes indicated below, pursuant to the guaranteed delivery procedures set forth in the Prospectus and accompanying Letter of Transmittal.
- ------------------------------------------------------------------------------------------------------- CERTIFICATE NUMBERS OF OUTSTANDING NOTES PRINCIPAL AMOUNT (IF AVAILABLE) TENDERED - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------
If Outstanding Notes will be tendered by book-entry transfer: (check one) Name of Tendering Institution: ________________________________________ Account Number: ___________________________________________________ The undersigned authorizes the Exchange Agent to deliver this Notice of Guaranteed Delivery to the Company and J.P. Morgan Trust Company, National Association with respect to the Outstanding Notes tendered pursuant to the Exchange Offer. All authority conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall not be affected by, and shall survive, the death or incapacity of the undersigned, and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal and legal representatives, successors and assigns of the undersigned. SIGN HERE Signature(s) of Registered Holder(s) or Authorized Signatory: - -------------------------------------------------------------------------------- Name(s) of Registered Holder(s): - -------------------------------------------------------------------------------- (PLEASE TYPE OR PRINT) Address: - -------------------------------------------------------------------------------- Zip Code: - -------------------------------------------------------------------------------- Area Code and Telephone Number: - -------------------------------------------------------------------------------- Dated: - -------------------------------------------------------------------------------- 2003 2 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEES) The undersigned, a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office in the United States, hereby guarantees delivery to the Exchange Agent, at its address set forth below, of either certificates for the Outstanding Notes tendered hereby, in proper form for transfer, or confirmation of the book-entry transfer of such Outstanding Notes to the Exchange Agent's account at The Depository Trust Company, pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with a properly completed and duly executed Letter of Transmittal (or an agent's message in lieu thereof) and any other documents required by the Letter of Transmittal, all within three (3) New York Stock Exchange trading days after the date of execution of this Notice of Guaranteed Delivery. The undersigned acknowledges that it must communicate the guarantee to the Exchange Agent and must deliver the Letter of Transmittal (or an agent's message in lieu thereof) and certificates for the Outstanding Notes tendered hereby or the aforesaid confirmation of book-entry transfer to the Exchange Agent within the time period shown hereon and that failure to do so could result in a financial loss to the undersigned. Name of Firm: ----------------------------------------- -------------------------------------------------------- (Authorized Signature) Address: ------------------------------------------------ Title: ---------------------------------------------------- - -------------------------------------------------------- Name: -------------------------------------------------- (Please type or print) Area Code and Telephone Number: ------------------------------------ Date: ----------------------------------------------------
NOTE: DO NOT SEND CERTIFICATES REPRESENTING OUTSTANDING NOTES WITH THIS FORM. CERTIFICATES FOR OUTSTANDING NOTES MUST BE SENT WITH YOUR LETTER OF TRANSMITTAL. The Exchange Agent Is: J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION By Registered or Certified Mail, Hand or by Overnight Courier: J.P. Morgan Trust Company, National Association 3800 Colonnade Parkway, Suite 490 Birmingham, AL 35243 Facsimile Transmission Number: Confirm by Telephone: (205) 968-9145 (205) 968-0506
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