EXHIBIT 10.1
CREDIT AGREEMENT
among
ZIFF XXXXX MEDIA INC., as Borrower;
CIBC WORLD MARKETS CORP., as Lead Arranger and Bookrunner;
BANKERS TRUST COMPANY, as Syndication Agent;
FLEET NATIONAL BANK, as Documentation Agent;
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent;
and
THE OTHER CREDIT PARTIES PARTY HERETO
Dated as of April 5, 2000
CREDIT AGREEMENT
among
ZIFF XXXXX MEDIA INC., as Borrower;
CIBC WORLD MARKETS CORP., as Lead Arranger and Bookrunner;
BANKERS TRUST COMPANY, as Syndication Agent;
FLEET NATIONAL BANK, as Documentation Agent;
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent;
and
THE OTHER CREDIT PARTIES PARTY HERETO
The parties to this Agreement hereby agree as follows, as of the 5/th/ day
of April, 2000:
ARTICLE 1
Definitions
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For the purposes of this Agreement:
"Accounting Change" shall mean any change in accounting principles required
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by the promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the Securities and Exchange Commission (or
successors thereto or agencies with similar functions).
"Acquisition" shall mean, with respect to any Person, any transaction or
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series of related transactions for the direct or indirect (whether by purchase,
lease, exchange, issuance of stock or other equity or debt securities, merger,
reorganization or any other method) (a) acquisition by such Person of any other
Person, which Person shall then become consolidated with the acquiring Person in
accordance with GAAP, or (b) acquisition by such Person of all or any
substantial part of the assets of any other Person.
"Additional Equity Contribution" shall mean an equity contribution to be
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made by the Controlling Shareholders and the Co-Investors pursuant to the Make-
Well Agreement directly or indirectly to the Borrower in the event that, based
on the financial statements delivered to the Administrative Agent pursuant to
Section 6.2 for the period ending March 31, 2001, the Total Leverage Ratio is
greater than 4.50 to 1.00, but only to the extent necessary to cause the Total
Leverage Ratio not to exceed 4.50 to 1.00 following such contribution; provided,
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however, that in no event shall the Controlling Shareholders and the Co-
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Investors be required to contribute more than$50,000,000 (less the amount of any
Bridge Equity) as equity to the Borrower.
"Adjusted Leverage Ratio" shall mean, on any calculation date, the ratio of
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(a) Borrower Debt (without giving effect to any prepayments of the Loans with
the proceeds of any new equity contribution in the Borrower (including, without
limitation, the Bridge Equity and the Additional Equity Contribution)) to (b)
EBITDA for the immediately preceding four (4) fiscal quarter period.
"Adjustment Date" shall mean the second (2/nd/) Business Day after the date
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on which the financial statements referred to in Section 6.2 hereof for one (1)
full fiscal quarter of the Borrower from and after the Agreement Date have been
delivered to the Administrative Agent.
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"Administrative Agent" shall mean CIBC, as administrative agent hereunder
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for the Lenders and the other Credit Parties, together with any successor
Administrative Agent hereunder.
"Administrative Agent's Office" shall mean the office of the Administrative
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Agent, located at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other
office as may be designated pursuant to the provisions of Section 12.1 of this
Agreement.
"Advance" or "Advances" shall mean amounts advanced to the Borrower
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pursuant to Article 2 hereof on the occasion of any borrowing.
"Affiliate" shall mean, with respect to a Person, (a) any other Person
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directly or indirectly controlling, controlled by, or under common control with,
such first Person; (b) any Person having direct or indirect beneficial ownership
of ten percent (10%) or more of the equity interest in such first Person; (c)
any senior executive officer, director or partner of such Person; or (d) any
spouse or relative (by blood, adoption or marriage) of any such individual
Person. For purposes of this definition, "control" when used with respect to any
Person includes, without limitation, power, whether direct or indirect, to
direct or cause the direction of the management and policies of such Person
whether through the ownership of voting securities or other equity interests, by
contract or otherwise. Notwithstanding anything which may be construed to the
contrary contained in the foregoing, the Intermediate Bridge Facility Lenders
shall not be considered Affiliates of Holdco, Intermediate Holdco or the
Borrower.
"Agents" shall mean, collectively, the Administrative Agent, the Lead
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Arranger and the Syndication Agent, and "Agent" shall mean any one of them.
"Agreement" shall mean this Credit Agreement.
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"Agreement Date" shall mean the date as of which this Agreement is dated.
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"Applicable Law" shall mean, in respect of any Person, all provisions of
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constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person, including, without limiting the
foregoing, the Necessary Authorizations, zoning ordinances and all Environmental
Laws, and all orders, decisions, judgments and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a party
or by which it is bound.
"Applicable Margin" shall mean the interest rate margin applicable to
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Advances hereunder as determined in accordance with Section 2.3(f) hereof.
"Approved Fund" means, with respect to any Lender that is a fund that
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invests in bank loans, any other fund or trust or entity that invests in bank
loans and is advised or managed by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"Assets" shall mean any or all of the property and assets of the Borrower
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and its Subsidiaries.
"Assignee" shall have the meaning assigned thereto in Section 12.5(c)
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hereof.
"Assignment and Assumption Agreement" shall mean each Assignment and
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Assumption Agreement, in substantially the form of Exhibit A attached hereto,
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pursuant to which a Lender may, subject to Section 12.5 hereof, sell or
participate a portion of its Loans and Commitments.
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"Assignment of Acquisition Documents" shall mean that certain Assignment of
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Acquisition Documents dated as of the Agreement Date among the Borrower and the
Administrative Agent, for the benefit of the Credit Parties, in substantially
the form of Exhibit B attached hereto, pursuant to which the Borrower
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collaterally assigns to the Administrative Agent, for the benefit of the Credit
Parties, all of its interest in and rights under each of the ZD Acquisition
Documents.
"Attributable Indebtedness" in respect of a Sale and Lease-Back Transaction
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means, as at the time of determination, the greater of (a) the fair value of the
property subject to such arrangement and (b) the present value (discounted at
the rate of interest implicit in such transaction, determined in accordance with
GAAP and compounded annually) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such Sale and Lease-
Back Transaction (including any period for which such lease has been extended).
"Authorized Signatory" shall mean such senior personnel of a Person as may
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be duly authorized by such Person to execute documents, agreements and
instruments on behalf of such Person.
"Available Revolving Commitment" shall mean, on any calculation date, the
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excess of (a) the Revolving Commitment on such date, over (b) the sum (without
duplication) of (i) the aggregate principal amount of the Revolving Loans then
outstanding, (ii) the stated amount of Letters of Credit then outstanding, and
(iii) obligations under Letters of Credit which the Borrower has not reimbursed.
"Bankruptcy Code" shall mean the United States Bankruptcy Code (11 U.S.C.
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Section 101 et seq.), as now or hereafter amended, and any successor statute.
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"Base Rate" shall mean, as of any date, a interest rate per annum equal to
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the higher of (a) the Prime Rate, or (b) the sum of (i) the Federal Funds Rate,
plus (ii) one-half of one percent (1/2%). The Base Rate shall be adjusted
automatically as of the opening of business on the effective date of each change
in the Prime Rate or the Federal Funds Rate, as the case may be, to account for
such change.
"Base Rate Advance" shall mean an Advance which the Borrower requests to be
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made as a Base Rate Advance or which is converted to a Base Rate Advance in
accordance with the provisions of Section 2.2 hereof.
"Borrower" shall mean Ziff Xxxxx Media Inc., a Delaware corporation.
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"Borrower Debt" shall mean, as of any calculation date, all Funded Debt of
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the Borrower and its Restricted Subsidiaries, on a consolidated basis.
"Borrower Parties" shall mean, collectively, Holdco, Intermediate Holdco,
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any Permitted Intermediate Holdco Subsidiary, the Borrower, the Guarantors and
the Foreign Subsidiaries (other than any foreign members of either of the
LaunchCo Group or the InternetCo Group).
"Borrower Pledge Agreement" shall mean that certain Borrower Pledge
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Agreement between the Borrower and the Administrative Agent, for the benefit of
the Credit Parties, dated as of the Agreement Date, in substantially the form of
Exhibit C attached hereto, pursuant to which the Borrower pledges to the
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Administrative Agent all of the Equity Interests owned by the Borrower, whether
now owned or hereafter acquired, of its Restricted Subsidiaries (other than
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the Foreign Subsidiaries, of which sixty-five percent (65%) of the issued and
outstanding Equity Interests are pledged), LaunchCo and InternetCo.
"Bridge Equity" shall mean any equity contribution made by the Controlling
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Shareholders and the Co-Investors indirectly to the Borrower in conjunction with
the refinancing of the Subordinated Bridge Facility pursuant to Section 7.13 of
the Purchase Agreement related to the Subordinated Bridge Facility Documents.
"Bridge Equity Account" shall have the meaning assigned thereto in Section
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2.7(b)(i) hereof.
"Business Day" shall mean a day on which banks and foreign exchange markets
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are open for the transaction of business required for this Agreement in London
and New York, as relevant to the determination to be made or the action to be
taken.
"Capital Expenditures" shall mean, in respect of any Person, expenditures
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for the purchase of fixed assets of long-term use which are required to be
capitalized in accordance with GAAP.
"Capitalized Lease Obligation" shall mean that portion of any obligation of
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a Person as lessee under a lease which is required to be capitalized on the
balance sheet of such lessee in accordance with GAAP.
"Cash Equivalents" shall have the meaning assigned thereto in Section
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7.2(b) hereof.
"Certificate of Financial Condition" shall mean a certificate,
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substantially in the form of Exhibit D attached hereto, signed by a Principal
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Officer, together with any schedules, exhibits or annexes appended thereto.
"Change of Control" shall mean any of the following:
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(a) the sale, lease, transfer, conveyance or other disposition, other
than by way of merger or consolidation, in one or a series of related
transactions, of all or substantially all of the Assets of, the Borrower and its
Subsidiaries taken as a whole, to any "person" or "group" (as those terms are
used in Section 13(d) of the Exchange Act), other than to the Controlling
Shareholders and the Related Parties; or
(b) the approval by the Borrower and the holders of the Borrower's
Equity Interests of the adoption of a plan for the liquidation or dissolution of
the Borrower; or
(c) any "person" or "group" (as those terms are used in Section 13(d)
of the Exchange Act), other than the Controlling Shareholders, the Related
Parties, Holdco, Intermediate Holdco or any Permitted Intermediate Holdco
Subsidiary, becomes the "beneficial owner" (as that term is defined in Rule 13d-
3 and Rule 13d-5 under the Exchange Act), directly or indirectly, through one or
more intermediaries, of fifty percent (50%) or more of the voting power of
Holdco; or
(d) any "person" or "group" (as those terms are used in Section 13(d)
of the Exchange Act), other than the Controlling Shareholders and the Related
Parties, becomes the "beneficial owner" (as that term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act) of more than thirty-three and one-third
percent (33-1/3%) of the total voting power of the Equity Interests of Holdco,
and the Controlling Shareholders and the Related Parties beneficially
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own, in the aggregate, a lesser percentage of the total voting power of the
Equity Interests of Holdco than such other person or group; or
(e) following an Initial Public Offering, during any period of two
(2) consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Borrower (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Borrower has been approved by the
Controlling Shareholders and the Related Parties or a majority of the directors
then still in office who either were directors at the beginning of such period
or whose election or recommendation for election was previously so approved)
cease to constitute a majority of the Board of Directors of the Borrower; or
(f) prior to an Initial Public Offering, the failure of the
Controlling Shareholders to own and control, free of any Lien or encumbrance, at
least seventy-five percent (75%) of the Equity Interests of Holdco owned by them
on the Agreement Date; or
(g) prior to consummation of the Intermediate Holdco Merger, the
failure of Holdco (or a Controlling Shareholder or a Person controlled by a
Controlling Shareholder) to own and control, free of any Lien or encumbrance
other than Liens in favor of the Administrative Agent and Permitted Liens, one
hundred percent (100%) of the issued and outstanding Equity Interests of
Intermediate Holdco; or
(h) the failure of, (i) prior to consummation of the Intermediate
Holdco Merger, Intermediate Holdco (or a Permitted Intermediate Holdco
Subsidiary), and (ii) after consummation of the Intermediate Holdco Merger,
Holdco (or a Permitted Intermediate Holdco Subsidiary or a Controlling
Shareholder or a Person controlled by a Controlling Shareholder), to own and
control, free of any Lien or encumbrance other than Liens in favor of the
Administrative Agent and Permitted Liens, one hundred percent (100%) of the
issued and outstanding Equity Interests of the Borrower; or
(i) the failure of the Borrower to own and control, free of any Lien
or encumbrance, other than Liens in favor of the Administrative Agent and
Permitted Liens, (i) one hundred percent (100%) of the issued and outstanding
Equity Interests of each of its Subsidiaries (other than MusicMag, the members
of the InternetCo Group, the members of the LaunchCo Group and PubCo), (ii) at
least fifty and one-tenth percent (50.1%) of the issued and outstanding Equity
Interests of InternetCo, and (iii) at least ninety percent (90%) of the issued
and outstanding Equity Interests in LaunchCo, provided that the remaining Equity
Interests of LaunchCo not owned by the Borrower are Management Shares; or
(j) the failure of Pub Holdco to own and control, free and clear of
any Lien or encumbrance, other than Liens in favor of the Administrative Agent
and Permitted Liens, at least ninety percent (90%) of the issued and outstanding
equity interests in PubCo, provided that the remaining Equity Interests not
owned by Pub Holdco are Management Shares; or
(k) following the Acquisition of MusicMag, the failure of PubCo or a
Subsidiary of Holdco to own and control, in the case of PubCo free and clear of
any Lien or encumbrance, other than Liens in favor of the Administrative Agent
and Permitted Liens, a percentage of the issued and outstanding Equity Interests
of MusicMag acceptable to the Agents; or
(l) the failure of LaunchCo to own and control, free and clear of any
Lien or encumbrance, other than Liens in favor of the Administrative Agent and
Permitted Liens, (i) at least ninety percent (90%) of the issued and outstanding
Equity Interests of Subsidiaries of
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LaunchCo, except the LaunchCo Joint Ventures, or (ii) at least seventy-five
percent (75%) of the issued and outstanding Equity Interests of LaunchCo Joint
Ventures, provided that, in each case, if any of the Equity Interests not owned
by LaunchCo are owned by members of management of LaunchCo or members of
management of LaunchCo Joint Venture, such Equity Interests shall comply with
the requirements for Management Shares.
"CIBC" shall mean Canadian Imperial Bank of Commerce acting by or through
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one or more of its affiliates, branches or agencies, and any successor thereof.
"Closing Equity" shall mean the sum of those amounts Invested as equity in
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Holdco by the Controlling Shareholders and the Co-Investors, together with those
amounts received by Intermediate Holdco pursuant to the Intermediate Bridge
Facility, and, in each case, contributed to the Borrower on or prior to the
Agreement Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
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to time.
"Co-Investors" shall mean, collectively, the initial investors in Holdco as
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of the Agreement Date, other than the Controlling Shareholders and the
Intermediate Bridge Facility Lenders, a complete list of which is set forth on
Schedule 1 hereto.
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"Collateral" shall mean all property pledged as collateral security for the
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Obligations pursuant to the Security Documents or otherwise, to the extent set
forth in the Security Documents, and all other property of Holdco, Intermediate
Holdco, the Borrower or any of its Restricted Subsidiaries that is now or
hereafter in the possession or control of any Credit Party or in which any
Credit Party has been granted a Lien.
"Commitment Ratios" shall mean the several obligations of the Lenders to
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make Advances to the Borrower under the Commitments in accordance with their
respective percentages thereof which are set forth (together with dollar
amounts) for each Lender, as of the Agreement Date, on Schedule 2 attached
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hereto.
"Commitments" shall mean, collectively, the Revolving Commitment, the Term
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A Commitment and the Term B Commitment.
"Computer Shopper" shall mean the assets of the Computer Shopper
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publication of the Seller's ZD Publishing division.
"Contributed Capital" shall mean, with respect to any Acquisition or
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Investment, the sum of any amounts Invested in Holdco and contributed to the
Borrower, in the form of an equity contribution or issuance, for the sole
purpose of financing the Purchase Price of such Acquisition or Investment.
"Controlling Shareholders" shall mean, collectively, Xxxxxx Xxxxx &
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Partners II, L.P., a Delaware limited partnership, Xxxxxx Xxxxx & Partners III,
L.P., a Delaware limited partnership, Xxxxxx Xxxxx & Partners Dutch, L.P., a
Delaware limited partnership, Xxxxxx Xxxxx & Partners Dutch III, L.P., a
Delaware limited partnership, and any other investment funds managed by Xxxxxx
Xxxxx & Partners.
"Corporate Overhead" shall mean, for any period, the actual amount of
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corporate overhead of the Borrower and its Restricted Subsidiaries for such
period calculated using the same categories and methodology described on
Schedule 3 attached hereto; provided, however, that one-time extraordinary
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corporate expenses, which are reasonably acceptable to the Agents, shall be
excluded from the calculation of Corporate Overhead.
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"Corporate Overhead Adjustment" shall mean, solely for purposes of
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calculating EBITDA for the four (4) fiscal quarters ending (a) on December 31,
1999, $6,858,000, and (b) on March 31, 2000, the greater of (i) the difference
between (A) the actual amount of corporate overhead of the Borrower and its
Restricted Subsidiaries for such period calculated using the same categories and
methodology described on Schedule 3 attached hereto and (B) $51,600,000, and
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(ii) zero.
"Credit Parties" shall mean, collectively, the Administrative Agent, the
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Syndication Agent, the Documentation Agent, the Lenders and the Issuing Bank.
"Debt Offering" shall have the meaning set forth in Section 2.7(c) hereof.
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"Default" shall mean any Event of Default, and any of the events specified
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in Section 9.1, which with the passage of time or giving of notice, or both,
would constitute such event an Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to the sum
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of (a) the Base Rate or the Eurodollar Rate, as applicable, (b) the Applicable
Margin then in effect with respect to Base Rate Advances or Eurodollar Advances,
as applicable, and (c) two percent (2%).
"Designated Cash Account" shall mean the Borrower's bank account number
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0000000000 with The Bank of New York into which shall be deposited, on the
Agreement Date, a portion of the Closing Equity in an amount equal
to $50,000,000.
"Disqualified Capital Stock" shall mean any Equity Interests of a Person or
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a Subsidiary thereof which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the option of the
holder), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
Final Maturity Date, for cash or securities constituting Indebtedness. Without
limitation of the foregoing, Disqualified Capital Stock shall be deemed to
include any Preferred Stock of a Person or a Subsidiary of such Person, with
respect to either of which, under the terms of such Preferred Stock, by
agreement or otherwise, such Person or Subsidiary is obligated to pay current
dividends or distributions in cash during the period prior to the Final Maturity
Date; provided, however, that (a) preferred stock of a Person or any Subsidiary
thereof that is issued with the benefit of provisions requiring a public
offering or a change of control offer to be made for such preferred stock in the
event of a change of control or a public offering by such Person or Subsidiary,
which provisions have substantially the same effect as the provisions described
in Section 7.07 of the Purchase Agreement related to the Subordinated Bridge
Facility Documents and (b) preferred stock of a Subsidiary of any Person which
is held by such Person, will not be deemed to be Disqualified Capital Stock
solely by virtue of such provisions.
"Documentation Agent" shall mean Fleet National Bank, in its capacity as
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documentation agent hereunder.
"Dollar Equivalent Amount" shall mean , with respect to (a) any amount of
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any currency other than Dollars on any date, the equivalent amount in Dollars of
such amount of currency as determined by the Administrative Agent in accordance
with Section 2.3(g) hereof using the spot exchange rate of such currency into
Dollars determined as of 11:00 a.m. (New York time) on the applicable
calculation date, and (b) any amount in Dollars, such amount.
"Dollars" or "$" shall mean the basic unit of the lawful currency of the
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United States of America.
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"Draft" shall mean any draft, demand or other presentation for payment
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received under a Letter of Credit.
"EBITDA" shall mean, for any period of determination, for the Borrower and
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its Restricted Subsidiaries on a consolidated basis, an amount equal to the sum
of (without duplication) (a) Net Income for such period, plus (b) to the extent
deducted in determining Net Income, the sum of each of the following for such
period: (i) Interest Expense, (ii) income, franchise and withholding tax
expense, (iii) depreciation and amortization, (iv) extraordinary, unusual or
non-recurring expenses, charges or losses (less extraordinary, unusual or non-
recurring gains), (v) any non-cash charges, (vi) non-recurring transaction
expenses and fees (including, without limitation, underwriters' fees), and (vii)
the Specified Add-Backs; provided, however, for purposes of determining the
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Adjusted Leverage Ratio, the Senior Leverage Ratio and the Total Leverage Ratio
(including, without limitation, under Sections 2.3 and 2.4 of this Agreement and
under the Make-Well Agreement), (A) with respect to any person that became a
Restricted Subsidiary of, or was merged with or consolidated into, the Borrower
during such period, or the Acquisition by the Borrower or any of its Restricted
Subsidiaries of a substantial part of the assets of any Person during such
period, "EBITDA" shall also include the EBITDA of such Person or attributable to
such assets, as applicable, during such period as if such Acquisition, merger or
consolidation had occurred on the first day of such period, and (B) with respect
to any Person that ceased to be a Restricted Subsidiary of the Borrower during
such period, or any material assets of the Borrower or any of its Restricted
Subsidiaries sold or otherwise disposed of by the Borrower or any such
Restricted Subsidiary during such period, "EBITDA" shall exclude the EBITDA of
such Person or attributable to such assets, as applicable, during such period as
if such sale or disposition of such Restricted Subsidiary or such assets had
occurred on the first day of such period; provided further, however,
notwithstanding the foregoing, for the periods ending from June 30, 2000 through
December 31, 2000, EBITDA shall be calculated as follows: (I) EBITDA before
Corporate Overhead for the four (4) fiscal quarter period then ended, less (II)
in the case of the calculation of EBITDA (x) as of June 30, 2000, Corporate
Overhead for the fiscal quarter then ended times four (4), (y) as of September
30, 2000, Corporate Overhead for the two (2) fiscal quarter period then ended
times two (2), and (z) as of December 31, 2000, Corporate Overhead for the three
(3) fiscal quarter period then ended times four-thirds (4/3).
"Environmental Laws" shall mean, with respect to any Person, all applicable
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federal, state, local and municipal laws, statutes, rules, regulations and
ordinances, codes, common law, consent agreements to which such Person is a
party or by which it is bound, orders, decrees, judgments, injunctions, permits,
licenses, authorizations and other requirements issued, promulgated, approved or
entered thereunder affecting such Person or its property and relating to, or
imposing liability or standards of conduct concerning, occupational health and
safety or the pollution or protection of the environment, including, without
limitation, those relating to releases, discharges, emissions, spills, or
disposals to, on, under, or in air, water, land or ground water, to the
withdrawal or use of ground water, to the use, handling or disposal of
polychlorinated biphenyls, asbestos or urea formaldehyde, or to the treatment,
storage, disposal or management of hazardous substances.
"Equity Interests" shall mean, as applied to any Person, any capital stock
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(common or preferred), general or limited partnership interests, limited
liability company interests or other equivalents of such Person, regardless of
class or designation, and all warrants, options, purchase rights, conversion or
exchange rights, voting rights, calls or claims of any character with respect
thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
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in effect from time to time.
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"ERISA Affiliate" shall mean any "affiliate" of the Borrower within the
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meaning of Section 414 of the Code.
"Eurodollar Advance" shall mean an Advance which the Borrower requests to
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be made as a Eurodollar Advance or which is continued as or converted to a
Eurodollar Advance in accordance with the provisions of Section 2.2 hereof.
"Eurodollar Advance Period" shall mean, in connection with any Eurodollar
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Advance, the term of such Advance selected by the Borrower, which may be one
(1), two (2), three (3) or six (6) months, and subject to the last proviso of
this definition, nine (9) or twelve (12) months, or otherwise determined in
accordance with this Agreement; provided, however, notwithstanding the
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foregoing, (a) any applicable Eurodollar Advance Period which would otherwise
end on a day which is not a Business Day shall be extended to the succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Eurodollar Advance Period shall end on the preceding Business Day, (b)
any applicable Eurodollar Advance Period which begins on a day for which there
is no numerically corresponding day in the calendar month during which such
Eurodollar Advance Period is to end shall (subject to clause (a) above) end on
the last day of such calendar month, and (c) no Eurodollar Advance Period shall
extend beyond the applicable Maturity Date or such earlier date as would
interfere with the Borrower's repayment obligations under Section 2.6 hereof or,
to the best knowledge of the Borrower, Section 2.7 hereof; provided further,
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however, the Borrower may not select a Eurodollar Advance Period in excess of
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six (6) months unless the Administrative Agent has notified the Borrower (i)
that each of the Lenders has available to it funds for such Lender's share of
the proposed Advance which are not required for other purposes, (ii) that such
funds are available to each Lender at a rate (exclusive of reserves and other
adjustments) at or below the Eurodollar Rate for such proposed Advance and
Eurodollar Advance Period, and (iii) that each Lender has, in its sole
discretion, agreed to fund such Advance.
"Eurodollar Base Rate" shall mean, with respect to each day during each
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Eurodollar Advance Period, the rate per annum determined by the Administrative
Agent to be the arithmetic mean (rounded to the nearest 1/100th of 1%) of the
offered rates for deposits in Dollars with a term comparable to such Eurodollar
Advance Period that appears on the Telerate British Bankers Assoc. Interest
Settlement Rates Page at approximately 11:00 a.m. (London time), on the second
(2/nd/) full Business Day preceding such Eurodollar Advance Period; provided,
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however, that if there shall at any time no longer exist a Telerate British
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Bankers Assoc. Interest Settlement Rates Page, "Eurodollar Rate" shall mean,
with respect to each day during each Eurodollar Advance Period, the rate per
annum equal to the rate at which the Administrative Agent is offered Dollar
deposits at or about 10:00 a.m. (New York time), two (2) Business Days prior to
the beginning of such Eurodollar Advance Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Advances are then being conducted for delivery on the
first day of such Eurodollar Advance Period for the number of days comprised
therein and in the amount comparable to the amount of its Eurodollar Advance to
be outstanding during such Eurodollar Advance Period. As used herein, "Telerate
British Bankers Assoc. Interest Settlement Rates Page" shall mean the display
designated as page 3750 on the Telerate System Incorporated Service (or such
other page as may replace such page on such service for the purpose of
displaying the rates at which Dollar deposits are offered by leading banks in
the London interbank deposit market).
-9-
"Eurodollar Rate" shall mean, with respect to each day during each
---------------
Eurodollar Advance Period, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
Eurodollar Base Rate
----------------------------------------------
1.00 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" shall mean, for any day as applied to a
-----------------------------
Eurodollar Advance, the aggregate (without duplication) of the rates (expressed
as a decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of the Federal Reserve System.
"Event of Default" shall mean any of the events specified in Section 9.1,
----------------
provided that any requirement for notice or lapse of time or both has been
satisfied.
"Excess Cash Flow" shall mean, with respect to the Borrower and its
----------------
Restricted Subsidiaries on a consolidated basis, as of the end of any fiscal
year of the Borrower and based on the audited financial statements required to
be provided under Section 6.3 hereof, the excess of (a) EBITDA for such fiscal
year, over (b) the sum of the following items, without duplication, for such
fiscal year: (i) Fixed Charges, (ii) permanent, voluntary prepayments of the
Loans (accompanied by permanent reduction in a like amount of the Revolving
Commitment, in the case of such prepayment of the Revolving Loans) hereunder and
of any other Indebtedness, (iii) to the extent added to Net Income in the
calculation of EBITDA, extraordinary, unusual or non-recurring cash expenses,
charges or losses (less extraordinary, unusual or non-recurring cash gains),
(iv) increases in net working capital (less any decreases in net working
capital), (v) to the extent added to Net Income in the calculation of EBITDA,
non-recurring cash transaction expenses and fees, (vi) to the extent not
deducted in the calculation of EBITDA, any cash payments made in respect of
restructuring charges or reserves, (vii) any cash Restricted Payments made by
the Borrower pursuant to Section 7.7, (viii) any cash payments made in
connection with Investments and Acquisitions permitted under Sections 7.2(d),
(i), (n), (p) and (r) hereof and Sections 7.5(v) and (xv) hereof, (ix) cash
gains received in connection with Permitted Dispositions which are permitted to
be reinvested pursuant to Section 2.7(b) hereof during the applicable period for
reinvestment, and (x) non-cash charges added back in the calculation of EBITDA
in a previous period to the extent any such charge has become a cash item in the
current period.
"Excess Cash Flow Recapture Date" shall mean, with respect to each fiscal
-------------------------------
year of the Borrower, that date which is the earlier to occur of (a) one hundred
five (105) days after the end of such fiscal year, and (b) the date on which the
Borrower shall have provided to the Credit Parties the financial statements
required to be provided under Section 6.3 hereof with respect to such fiscal
year.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as it may be
------------
amended, and any successor act thereto.
"Federal Funds Rate" shall mean, as of any date, the weighted average of
------------------
the rates on overnight federal funds transactions with the members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the
-10-
next preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by the
Administrative Agent from three (3) federal funds brokers of recognized standing
selected by the Administrative Agent.
"Fee Letter" shall mean that certain letter agreement dated as of December
----------
17, 1999, setting forth the applicable fees to be paid by the Borrower to the
Lead Arranger and the Administrative Agent in connection with the Commitments.
"Final Maturity Date" shall mean March 31, 2007, or such earlier date on
-------------------
which the payment of all outstanding Obligations in respect of the Term B Loans
shall be due (whether by acceleration or otherwise).
"Financial Covenants" shall mean from time to time the financial covenants
-------------------
applicable to the Borrower from time to time as set forth in Article 8 hereof.
---------
"Financial Statements" shall have the meaning assigned thereto in Section
--------------------
4.1(k) hereof.
"Fixed Charge Coverage Ratio" shall mean, on any calculation date, for the
---------------------------
Borrower and its Restricted Subsidiaries on a consolidated basis, the ratio of
(a) EBITDA to (b) Fixed Charges, in each case for the immediately preceding four
(4) fiscal quarter period.
"Fixed Charges" shall mean, for any period, for the Borrower and its
-------------
Restricted Subsidiaries, on a consolidated basis, the sum of the following for
such period: (a) cash Interest Expense; (b) scheduled, permanent principal
repayments with respect to Borrower Debt; (c) Capital Expenditures (other than
in connection with the reinvestment of asset sale Net Proceeds to the extent set
forth in Section 2.7(b) and Section 7.5 hereof); (d) cash income, franchise and
foreign withholding taxes payable; (e) Investments in or loans to LaunchCo and
InternetCo; and (f) Restricted Payments permitted under Section 7.7(b)(i)
hereof.
"Foreign Subsidiaries" shall mean the Subsidiaries of the Borrower that are
--------------------
not organized under the laws of the United States or any state thereof or the
District of Columbia.
"Funded Debt" shall mean, with respect to any Person as of any calculation
-----------
date, the sum of the following as of such date: (a) the principal amount of all
outstanding Indebtedness for money borrowed of such Person including, without
limitation, with respect to the Borrower Parties, the aggregate principal amount
of the Loans, and the Subordinated Bridge Facility (or the Permitted High-Yield
Securities or the Refinancing Securities, as the case may be); (b) the principal
amount of all Indebtedness for money borrowed of another Person (other than,
with respect to the Borrower, a Restricted Subsidiary) Guaranteed by such Person
(but only from and after the date demand for payment is made under the
applicable Guaranty); (c) the stated amount of all letters of credit issued for
the account of such Person and all reimbursement obligations with respect to
such letters of credit; and (d) all Capitalized Lease Obligations of such
Person; provided, however, that Subordinated Seller Debt and the Subordinated
-------- -------
Management Redemption Debt shall be excluded from Funded Debt.
"GAAP" shall mean generally accepted accounting principles in the United
----
States, consistently applied.
"Governmental Authority" shall mean any government or political subdivision
----------------------
of the United States or any other country or any agency, authority, board,
bureau, central bank, commission, department or instrumentality thereof or
therein, including, without limitation, any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic, or any entity
-11-
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to such government or political subdivision.
"Guarantors" shall mean, collectively, each domestic Restricted Subsidiary
----------
of the Borrower, each domestic member of the LaunchCo Group and InternetCo, in
each case that guaranties payment of the Obligations hereunder and under the
other Loan Documents.
"Guaranty" or "Guaranteed," as applied to an obligation, shall mean and
-------- ----------
include (a) a guaranty, direct or indirect, in any manner, of all or any part of
such obligation, and (b) any agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation.
"Hazardous Materials" shall mean any substances, materials, compounds or
-------------------
wastes defined, listed, or subject to control under any Environmental Law as
being hazardous, toxic, extremely hazardous or dangerous.
"Hedging Agreements" shall mean, collectively, (a) Interest Hedge
------------------
Agreements and (b) any agreements or arrangements entered into in order to
protect against fluctuations in commodity prices or currency exchange rates.
"Holdco" shall mean Ziff Xxxxx Holdings Inc., a Delaware corporation.
------
"Holdco Pledge Agreement" shall mean that certain Holdco Pledge Agreement
-----------------------
among Holdco, Intermediate Holdco and the Administrative Agent, for the benefit
of the Credit Parties, dated as of the Agreement Date, in substantially the form
Exhibit E attached hereto.
---------
"Indebtedness" shall mean, with respect to any Person, and without
------------
duplication, (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than current trade
liabilities and accrued expenses incurred in the ordinary course of business and
payable within one hundred eighty (180) days) which would be shown as a
liability on the balance sheet of such Person under GAAP, (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all Capitalized Lease Obligations of such Person, (d)
all obligations of such Person in respect of outstanding letters of credit,
acceptances and similar obligations issued or created for the account of such
Person, (e) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof, (f) liabilities arising under Hedging Agreements (other
than interest rate caps) of such Person, (g) withdrawal liabilities of such
Person or any of its ERISA Affiliates under any Plan, and (h) all obligations of
such Person in respect of any Guaranty, if the primary obligations would
constitute Indebtedness of another Person under clauses (a) through (g) of this
definition; provided, in any case, that the amount of Indebtedness which is
limited or non-recourse to the obligor thereunder or to such Person or for which
recourse is limited to an identified asset shall be equal to the lesser of (i)
the limited amount of such obligation and (ii) the fair market value of such
asset.
"Indemnified Parties" shall mean those Persons eligible to be indemnified
-------------------
by the Borrower and the Borrower's Subsidiaries pursuant to this Agreement, and
shall include each of the Credit Parties and each of their respective employees,
representatives, officers, agents, directors and Affiliates.
"Initial Maturity Date" shall mean September 30, 2006, or such earlier date
---------------------
on which the payment of all outstanding Obligations in respect of the Revolving
Commitment and the Term A Loans shall be due (whether by acceleration or
otherwise).
-12-
"Initial Public Offering" shall mean the first public offering of the
-----------------------
common Equity Interests of Holdco.
"Insolvency Proceeding" shall mean, collectively, any insolvency,
---------------------
receivership, bankruptcy, dissolution, liquidation, or reorganization
proceeding, or in any other proceeding, whether voluntary or involuntary, by or
against any of Holdco or its Subsidiaries (other than any of the Non-Material
Unrestricted Subsidiaries) under any bankruptcy or insolvency law or laws,
federal or state relating to the relief of debtors of any jurisdiction, whether
now or hereafter in effect, and in any out-of-court composition, assignment for
the benefit of creditors, readjustment of Indebtedness, reorganization,
extension or other debt arrangement of any kind.
"Intellectual Property Security Agreement" shall mean that certain
----------------------------------------
Intellectual Property Security Agreement between Pub Holdco and the
Administrative Agent, for the benefit of the Credit Parties, dated as of the
Agreement Date, in substantially the form of Exhibit F attached hereto, and any
---------
similar agreement delivered pursuant to Section 5.15 hereof.
"Interest Coverage Ratio" shall mean, on any calculation date, for the
-----------------------
Borrower and its Restricted Subsidiaries, on a consolidated basis, the ratio of
(a) EBITDA to (b) cash Interest Expense, in each case for the immediately
preceding four (4) fiscal quarter period; provided, however, that for the period
-------- -------
ended on (i) June 30, 2000, Interest Expense shall be cash Interest Expense for
the immediately preceding fiscal quarter, times four (4), (ii) September 30,
2000, Interest Expense shall be cash Interest Expense for the immediately
preceding two (2) fiscal quarter period, times two (2), and (iii) December 31,
2000, Interest Expense shall be cash Interest Expense for the immediately
preceding three (3) fiscal quarter period, times four-thirds (4/3).
"Interest Expense" shall mean, for any period, for the Borrower and its
----------------
Restricted Subsidiaries on a consolidated basis, all interest expense paid or
accrued in respect of Indebtedness or the Revolving Commitment (including,
without limitation, any imputed interest with respect to Attributable
Indebtedness, together with recurring fees (but, in any event, including,
without limitation, all fees due under Sections 2.4 (b), (c) and (d) hereof)
associated therewith (other than fees payable on or prior to the Agreement Date)
and whether or not capitalized (including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, commissions, discounts
and other fees and charges incurred in respect of letters of credit, bankers'
acceptances or other financings), after giving effect to any Interest Hedge
Agreements, all as determined in accordance with GAAP.
"Interest Hedge Agreements" shall mean any interest rate swap, cap, collar,
-------------------------
floor, caption or swaption agreements, or any similar arrangements designed to
hedge the risk of variable interest rate volatility or to reduce interest costs,
arising at any time between the Borrower, on the one hand, and any one or more
of the Lenders, or any other Person (other than an Affiliate of the Borrower),
on the other hand, as such agreement or arrangement may be modified,
supplemented and in effect from time to time.
"Intermediate Bridge Facility" shall mean that certain Funded Debt issued
----------------------------
by Intermediate Holdco in favor of the Intermediate Bridge Facility Lenders on
the Agreement Date in the aggregate original principal amount of$125,000,000,
which Funded Debt (a) is evidenced by and subject to the terms and conditions of
the Intermediate Bridge Facility Documents and (b) shall be refinanced within
nine (9) months of the Agreement Date with cash net proceeds received from the
issuance of equity by Xxxxxx Xxxxx & Partners III, L.P., Xxxxxx Xxxxx & Partners
Dutch III, L.P., or, to the extent permitted hereunder, Holdco or Intermediate
Holdco.
-13-
"Intermediate Bridge Facility Documents" shall mean, collectively, that
--------------------------------------
certain Securities Purchase Agreement dated as of the Agreement Date between
Intermediate Holdco and the Intermediate Bridge Facility Lenders, and all of the
"Financing Documents" as defined therein.
"Intermediate Bridge Facility Lenders" shall mean, collectively, ZD Media
------------------------------------
Funding, Inc., and any of its successors and assigns (including any "Holders"
(as such term is defined in the Intermediate Bridge Facility Documents) from
time to time party to the Intermediate Bridge Facility Documents).
"Intermediate Holdco" shall mean Ziff Xxxxx Intermediate Holdings Inc., a
-------------------
Delaware corporation.
"Intermediate Holdco Merger" shall mean any of (a) the merger or
--------------------------
consolidation of Holdco with Intermediate Holdco, (b) the merger or
consolidation of Intermediate Holdco with Holdco or the Borrower or (c) the
dissolution or liquidation of Intermediate Holdco, provided in any case that all
Equity Interests of the Borrower shall continue at all times to be pledged to
the Administrative Agent.
"International Publications" shall mean all of the Equity Interests in or
--------------------------
the Assets of Ziff Xxxxx Europe Ltd., Xxxx-Xxxxx (UK) Publishing Ltd., Xxxx-
Xxxxx GmbH & Co. KG, Xxxx-Xxxxx Verwaltungs GmbH and Xxxx-Xxxxx France SA.
"InternetCo" shall mean Ziff Xxxxx Internet Inc., a Delaware corporation.
----------
"InternetCo Group" shall mean, collectively, InternetCo and its
----------------
Subsidiaries.
"Investment" shall mean (as calculated in accordance with GAAP), with
----------
respect to any Person, any loan, advance or extension of credit (other than in
the ordinary course of business) by such Person to, or any contributions to the
capital of, any other Person, or any ownership, purchase or other acquisition by
such Person of any interest in any Equity Interests of any such other Person,
other than an Acquisition; and "Invest," "Investing" or "Invested" shall mean
------ --------- --------
the making of an Investment. The amount of any Investment, with respect to the
Borrower and its Restricted Subsidiaries, shall be the greater of (a) the
original cost of such Investment plus the cost of all additional Investments by
the Borrower and its Restricted Subsidiaries, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment, reduced by the (i) amount returned in cash with
respect to such Investment whether through interest payments, principal
payments, dividends or other distributions and (ii) proceeds received by the
Borrower or any of its Restricted Subsidiaries from the disposition, retirement
or redemption of all or any portion of such Investment, and (b) zero.
"Issuing Bank" shall mean the Administrative Agent, any of the Lenders
------------
hereunder or any of their Affiliates, as issuer of any Letter of Credit
hereunder.
"LaunchCo" shall mean Ziff Xxxxx Development Inc., a Delaware corporation.
--------
"LaunchCo Group" shall mean, collectively, LaunchCo and its Subsidiaries.
--------------
"LaunchCo Joint Ventures" shall mean any directly-owned joint venture
-----------------------
Subsidiary formed by LaunchCo with respect to which a portion of the Equity
Interests therein are owned by
-14-
one or more Persons other than the Borrower, any wholly-owned member of the
LaunchCo Group or any member of management.
"L/C Obligations" shall mean, at any date, the sum (without duplication) of
---------------
(a) the aggregate amount then available to be drawn under all outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit which have not then been reimbursed by the Borrower pursuant to Section
2.14(e) hereof.
"L/C Participants" shall mean with respect to any Letter of Credit,
----------------
collectively, all of the Lenders which have issued a Revolving Commitment other
than the Issuing Bank.
"L/C Participating Interest" shall mean with respect to any Letter of
--------------------------
Credit (a) in the case of the Issuing Bank with respect thereto, its interest in
such Letter of Credit and any Letter of Credit Application relating thereto
after giving effect to the granting of participating interests therein, if any,
pursuant hereto and (b) in the case of each L/C Participant, its undivided
participating interest in such Letter of Credit and any Letter of Credit
Application relating thereto.
"Lead Arranger" shall mean CIBC World Markets Corp.
-------------
"Lenders" shall mean the financial institutions whose names appear as
-------
"Lenders" on the signature pages hereof and any other Person which becomes a
"Lender" hereunder after the Agreement Date; and "Lender" shall mean any one of
the foregoing Lenders.
"Letter of Credit Application" shall mean an application in such form as
----------------------------
the Issuing Bank may specify from time to time requesting the Issuing Bank to
issue a Letter of Credit; provided, however, that to the extent any Letter of
-------- -------
Credit Application shall be inconsistent with this Agreement, this Agreement
shall control.
"Letter of Credit Committed Amount" shall mean $10,000,000.
---------------------------------
"Letters of Credit" shall mean any and all letters of credit issued by the
-----------------
Issuing Bank for the account of the Borrower pursuant to Section 2.14 of this
Agreement.
"Leverage Maintenance Requirement" shall have the meaning assigned thereto
--------------------------------
in Section 2.7(b)(ii) hereof.
"Lien" shall mean, with respect to any property, any mortgage, lien,
----
pledge, collateral assignment, charge, security interest, title retention
agreement, levy, execution, seizure, attachment, garnishment or other similar
encumbrance of any kind in respect of such property, whether created by statute,
contract, common law or otherwise, and whether xxxxxx or inchoate, vested or
perfected.
"Loan Documents" shall mean, without limitation, this Agreement, the Notes,
--------------
the Fee Letter, the Security Documents, the Make-Well Agreement, all Requests
for Advance, all Requests for Issuance of Letters of Credit, the Certificate of
Financial Condition, the Use of Proceeds Letter, all Performance Certificates,
Letters of Credit issued hereunder, all Interest Hedge Agreements with respect
to the Loans with a Lender or any Affiliate of a Lender, and any other agreement
executed and delivered to a Credit Party by Holdco, the Borrower or any of the
Borrower's Subsidiaries pursuant to this Agreement.
"Loans" shall mean, collectively, the Revolving Loans and the Term Loans.
-----
-15-
"MacWorld" shall mean Mac Publishing LLC, a limited liability company joint
--------
venture between PubCo and International Data Group.
"Make-Well Agreement" shall mean an agreement executed by certain of the
-------------------
Controlling Shareholders and the Co-Investors relating to their respective
obligations to fund the Additional Equity Contribution, in form and substance
satisfactory to the Agents.
"Make-Well Payment Period" shall mean the period set forth in Section
------------------------
9.1(c) hereof for the making of the Additional Equity Contribution, which period
shall commence on the date on which the financial statements for the fiscal
quarter ending March 31, 2001, are scheduled to be provided to the Credit
Parties under Section 6.2 hereof and ending on the date on which the Make-Well
Agreement is terminated pursuant to the terms thereof.
"Management Notes" shall mean, with respect to Holdco and its Subsidiaries,
----------------
any Indebtedness for money borrowed issued in favor of any such Person by an
employee of such Person to finance the purchase of Equity Interests by such
employee.
"Management Redemption Debt" shall mean any Indebtedness issued by Holdco
--------------------------
or any of its Subsidiaries in favor of any officers, directors or employees of
any member of the Restricted Group in connection with the purchase or redemption
of Equity Interests from such Person.
"Management Shares" shall mean the Equity Interests, if any, of PubCo or
-----------------
any member of the LaunchCo Group issued by such Subsidiary to its employees;
provided that such Equity Interests shall be issued pursuant to an agreement, in
--------
form and substance satisfactory to the Agents (it being understood that any such
agreement shall include a grant by the recipients of such Equity Interests to
the other holders of the Equity Interests of such issuer and to the
Administrative Agent, on behalf of the Credit Parties, to require that in the
event of the sale of all or substantially all of the Equity Interests of such
issuer to a third party, such employee shall be required to sell such Equity
Interests to such third party).
"Material Contracts" shall have the meaning assigned thereto in Section
------------------
4.1(y) hereof.
"Materially Adverse Effect" shall mean (a) any material adverse effect upon
-------------------------
the business, operations, properties, financial condition, prospects,
capitalization, assets or liabilities or results of operations of Holdco,
Intermediate Holdco, the Borrower and the Restricted Subsidiaries, taken as a
whole, or (b) a material adverse effect upon the binding nature, validity, or
enforceability of this Agreement and the other Loan Documents or upon the
ability of Holdco, Intermediate Holdco, the Borrower or any of the Borrower's
Subsidiaries to perform the payment obligations or other material obligations
under this Agreement or under the other Loan Documents taken as a whole, or upon
the rights, benefits or interests of the Lenders, taken as a whole, in and to
the Loans or the rights of the Administrative Agent in the Collateral; in either
case, whether resulting from any single act, omission, situation, status, event
or undertaking, or taken together with other such acts, omissions, situations,
statuses, events or undertakings.
"Maturity Date" shall mean, with respect to all amounts owing, or Advances
-------------
made, under (a) the Revolving Commitment or the Term A Commitment, the Initial
Maturity Date, and (b) the Term B Commitment, the Final Maturity Date.
"Mortgage" shall mean any mortgage, deed to secure debt, deed of trust, or
--------
other instrument encumbering or transferring title (in fee simple or leasehold)
to real property, in form and substance satisfactory to the Administrative
Agent, by which the Borrower or any of its domestic Restricted Subsidiaries
grants a mortgage to the Administrative Agent, for the benefit
-16-
of the Credit Parties, in real estate owned or leased by the Borrower or
such domestic Restricted Subsidiary.
"Multiemployer Plan" shall have the meaning set forth in Section 4001(a)(3)
------------------
of ERISA.
"MusicMag" shall mean a new music-content magazine which may be acquired,
--------
after the Agreement Date, by a Subsidiary of Holdco, or after the Subordinated
Bridge Facility Refinancing Date, by PubCo, in either case on terms and
conditions satisfactory to the Agents.
"Necessary Authorizations" shall mean all approvals and licenses from, and
------------------------
all filings and registrations with, any governmental or regulatory authority
necessary to enable the Borrower and its Restricted Subsidiaries and LaunchCo to
conduct their business.
"Net Income" shall mean, for the Borrower and its Restricted Subsidiaries
----------
on a consolidated basis, for any period, net income determined in accordance
with GAAP.
"Net Proceeds" shall mean, with respect to (i) any sale, lease, transfer or
------------
other disposition (including, without limitation, by casualty loss or
condemnation) of Assets by the Borrower or any of its Subsidiaries, or (ii) any
issuance by the Borrower or any of its Subsidiaries of any Equity Interests or
other debt or equity securities (in the case of (i) or (ii), a "Sales
Transaction"), or (iii) any "key-man" life insurance policy, the aggregate
amount of cash received for such Assets or securities (including, without
limitation, any payments received in respect of covenants not to compete,
consulting or management fees, and any portion of the amount evidenced by a
buyer promissory note or other evidence of Indebtedness), or as a payment under
any "key-man" life insurance policies, net of, in the case of any Sales
Transactions, (a) taxes payable with respect to any such Sales Transaction, (b)
contingencies with respect to any such Sales Transaction, appropriately reserved
for by the Borrower or the applicable Subsidiary under GAAP, or escrowed funds,
(c) reasonable and customary transaction fees, expenses and costs properly
attributable to such Sales Transaction and payable by the Borrower or any of its
Subsidiaries (other than to an Affiliate) in connection with such Sales
Transaction, including, without limitation, sales commissions and underwriting
discounts, and (d) all payments made on any Indebtedness which is secured by any
assets subject to such Sales Transaction in accordance with the terms of any
Lien upon or other security arrangement of any kind with respect to such Assets,
or which must by its terms, or in order to obtain a necessary consent to such
Sales Transaction or by Applicable Law, be repaid out of the proceeds from such
Sales Transaction.
"Net Proceeds Trust" shall have the meaning assigned thereto in Section
------------------
2.7(b)(vi) hereof.
"Non-Material Subsidiary" shall mean each Subsidiary of the Borrower having
-----------------------
less than $3,000,000 of Assets.
"Non-Material Unrestricted Subsidiary" shall mean each Unrestricted
------------------------------------
Subsidiary of the Borrower having less than $3,000,000 of Assets.
"Non-Recourse Indebtedness" shall mean, with respect to the Borrower and
-------------------------
its Restricted Subsidiaries, Indebtedness acquired pursuant to a Permitted
Acquisition constituting any of the following: (a) Capitalized Lease
Obligations, (b) conditional sale, rental or purchase money obligations, or (c)
obligations in respect of industrial development bonds, industrial revenue bonds
or other similar kinds of financings, if, and for so long as, in each case, the
documentation governing any such Indebtedness contains terms and conditions (i)
customary for the applicable type of Indebtedness governed thereby, and (ii)
limiting the recourse of the lender or lenders thereunder against the Borrower
and its Restricted Subsidiaries for the payment of such
-17-
Indebtedness directly to the property or assets that were the subject of the
transaction pursuant to which such Indebtedness was created.
"Notes" shall mean, collectively, any Revolving Notes and any Term Notes.
-----
"Notice of Conversion/Continuation" shall mean a notice in substantially
---------------------------------
the form of Exhibit G attached hereto.
---------
"Obligations" shall mean (a) all payment and performance obligations of
-----------
every kind, nature and description of any of the Borrower Parties and any other
obligors to the Credit Parties (or their respective Affiliates in the case of
Interest Hedge Agreements), or any of them, under this Agreement and the other
Loan Documents (including, without limitation, any interest, fees, costs,
expenses and other charges accruing after any Insolvency Proceeding commences
regardless of whether such interest, fees, costs, expenses or other charges are
deemed allowed or recoverable in such Insolvency Proceeding), as they may be
amended from time to time, or as a result of making the Loans, whether such
obligations are direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, arising by operation of law
or otherwise, now existing or hereafter arising, and (b) the obligation to pay
an amount equal to the amount of any and all damage which the Credit Parties (or
their respective Affiliates in the case of Interest Hedge Agreements), or any of
them, may suffer by reason of a breach by Holdco, the Borrower, any of the
Borrower's Subsidiaries or any other obligor, of any obligation, covenant or
undertaking with respect to this Agreement or any other Loan Document.
"Participants" shall have the meaning assigned thereto in Section 12.5(b)
------------
hereof.
"Payment Date" shall mean the last day of any Eurodollar Advance Period.
------------
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor thereto.
"Performance Certificate" shall mean a certificate of a Principal Officer
-----------------------
as to the Borrower's financial performance, in substantially the form attached
hereto as Exhibit H.
---------
"Permitted Acquisitions" shall mean Acquisitions made by the Borrower or
----------------------
any of its Subsidiaries as and to the extent permitted under Section 7.5(iv) or
7.5(v) hereof.
"Permitted Debt" shall mean Indebtedness permitted to be incurred and to
--------------
remain outstanding by the Borrower and the Borrower's Subsidiaries, pursuant to
Section 7.1 hereof.
"Permitted Dispositions" shall mean the sale, lease, abandonment, transfer,
----------------------
trade or other disposition of, in a single transaction or in a series of related
transactions, (a) prior to the Subordinated Bridge Facility Refinancing Date,
the International Publications, and (b) after the Subordinated Bridge Facility
Refinancing Date, any other Assets, in each case at not less than the fair
market value thereof and subject to the following conditions: (i) the Borrower
shall provide to the Administrative Agent and the Lenders a Performance
Certificate setting forth the arithmetical calculations required to establish
the Borrower's pro forma compliance with Sections 8.1 and 8.2 of this Agreement;
(ii) with respect to any disposition having a Purchase Price (with respect to a
single transaction or a series of related transactions) in excess of
$10,000,000, the Borrower shall provide to the Administrative Agent and the
Lenders (A) revised Projections assuming consummation of such disposition and
demonstrating pro forma compliance with the terms of this Agreement through the
Final Maturity Date, and (B) evidence satisfactory to the Agents and their
counsel that the board of directors of the applicable Borrower Party shall have
certified in good faith as to the fair market value determination of the
Purchase Price with respect to such disposition; (iii) at least seventy-five
percent (75%) of the Purchase
-18-
Price with respect to such disposition shall be in the form of cash; and (iv)
the aggregate Purchase Price for Assets disposed of by the Borrower and its
Restricted Subsidiaries, (A) with respect to a single transaction or a series of
related transactions, shall not exceed $20,000,000, and (B) during the period
from the Agreement Date through the Final Maturity Date, shall not exceed
$50,000,000; provided, however, that the limitations set forth in the foregoing
-------- -------
clause (iv) shall not apply with respect to (I) the disposition by the Borrower
of up to 49.9% of the issued and outstanding Equity Interests of InternetCo,
(II) the sale of the International Publications and (III) the disposition by
PubCo of its Equity Interests in MacWorld.
"Permitted High-Yield Securities" shall mean subordinated debt securities
-------------------------------
issued by the Borrower, Holdco, Intermediate Holdco or any Permitted
Intermediate Holdco Subsidiary, in an aggregate principal amount not to exceed
$200,000,000, solely in connection with the refinancing and replacement of the
Subordinated Bridge Facility, which securities shall (a) be acceptable to the
Agents in their sole discretion, and (b) provide, among other things, that such
securities shall (i) be unsecured, (ii) have subordination provisions no less
favorable to the Credit Parties than the provisions of the Subordinated Bridge
Facility, (iii) not pay cash interest at a coupon greater than 14.5% (provided
that, with respect to securities issued by Holdco, Intermediate Holdco or any
Permitted Intermediate Holdco Subsidiary, interest shall not be payable in cash
at any time prior to the five (5) year anniversary of the issuance of such
securities), and (iv) have no required cash redemptions (other than with respect
to customary change of control provisions or customary provisions requiring
repayments from asset sale proceeds but only after repayment in full of the
Obligations under this Agreement) or principal maturities prior to one (1) year
after the Final Maturity Date.
"Permitted Intermediate Holdco Subsidiary" shall mean any Subsidiary of
----------------------------------------
Intermediate Holdco permitted to be formed pursuant to Section 7.5(xviii)
hereof.
"Permitted Investments" shall mean Investments described in and permitted
---------------------
to be made under Section 7.2 hereof.
"Permitted Liens" shall mean, as applied to any Person:
---------------
(a) Any Lien granted in favor of the Administrative Agent, for the
benefit of the Credit Parties, given to secure the Obligations;
(b) (i) Liens on real estate for real estate taxes not yet delinquent
and (ii) Liens for taxes, assessments, judgments, governmental charges or levies
or claims which are not yet delinquent or the non-payment of which is being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves have been set aside on such Person's books, but only so long
as no foreclosure, distraint, sale or similar proceedings have been commenced
with respect thereto;
(c) Liens of landlords, carriers, warehousemen, mechanics, laborers
and materialmen, or other similar Liens, and Liens arising by operation of law,
which do not materially detract from the value of the property or which are for
sums not yet due or being diligently contested in good faith, if reserves or
appropriate provisions shall have been made therefor;
(d) Liens incurred in the ordinary course of business in connection
with worker's compensation and unemployment insurance;
(e) Easements, rights-of-way, restrictions and other similar
encumbrances on the use of real property which do not materially interfere with
the ordinary conduct of the
-19-
business of such Person or materially detract from the utility or value of such
real property, or Liens incidental to the conduct of the business of such Person
or to the ownership of its properties which were not incurred in connection with
Indebtedness or other extensions of credit and which do not in the aggregate
materially detract from the value of such properties or materially impair their
use in the operation of the business of such Person;
(f) Liens securing conditional sale, rental or purchase money
obligations permitted to be incurred pursuant to Section 7.1(c) hereof, but only
in the property that is the subject of such obligation;
(g) Liens granted to secure the performance of letters of credit,
bids, tenders, contracts, leases, public or statutory obligations, surety,
customs, appeal and performance bonds and other similar obligations incurred in
the ordinary course of business and not incurred in connection with the
borrowing of money;
(h) Any interest in or title of a lessor to any property subject to a
Capitalized Lease Obligation permitted to be incurred pursuant to Section 7.1(b)
hereof;
(i) Liens granted to secure Indebtedness of any member of the
InternetCo Group or any member of the LaunchCo Group permitted to be incurred
under Section 7.1(h) and 7.1(i), respectively;
(j) Liens existing on the Agreement Date and set forth on Schedule 4
----------
attached hereto;
(k) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.1(h) hereof;
(l) licenses, leases or subleases granted to third Persons in the
ordinary course of business of the Borrower or any of its Subsidiaries;
(m) Liens granted to secure Non-Recourse Indebtedness permitted to be
incurred pursuant to Section 7.1(s) hereof;
(n) Liens consisting of rights of set-off of a customary nature or
bankers' liens on amounts on deposit, whether arising by contract or operation
of law, incurred in the ordinary course of business;
(o) Liens encumbering initial deposits and margin deposits, and
similar Liens attaching to commodity trading accounts or other brokerage
accounts incurred in the ordinary course of business;
(p) Liens solely on any xxxx xxxxxxx money deposits made by the
Borrower or any of its Subsidiaries in connection with any letter of intent or
purchase agreement entered into by it in compliance with Section 7.5 hereof;
(q) Liens on property or assets of the Foreign Subsidiaries to secure
Indebtedness permitted to be incurred by the Foreign Subsidiaries pursuant to
Section 7.1 hereof;
(r) any interest, right or title of a lessor, licensor or sublessor
arising by operation of law or by contract, provided that any such interest
arising by contract shall (i) be customary and in the ordinary course of
business, (ii) be limited in scope to the property subject
-20-
to such contract and (iii) secure only the obligations arising under such
contract (which obligations shall not constitute Funded Debt);
(s) Liens on the Equity Interests of InternetCo's Subsidiaries to
secure Indebtedness permitted under Section 7.1(i) hereof;
(t) Liens incurred in the ordinary course of business of the Borrower
and its Subsidiaries with respect to obligations that do not exceed $2,000,000
at any one time outstanding; and
(u) prior to the repayment in full in cash of the Intermediate Bridge
Facility, Liens in favor of the collateral agent under the Intermediate Bridge
Facility (for the benefit of the Intermediate Bridge Facility Lenders) on the
Equity Interests of Intermediate Holdco to secure Indebtedness under the
Intermediate Bridge Facility.
"Person" shall mean an individual, corporation, limited liability company,
------
association, partnership, joint venture, trust or estate, an unincorporated
organization, a government or any agency or political subdivision thereof, or
any other entity.
"Plan" shall mean, with respect to any Person, an employee benefit plan
----
within the meaning of Section 3(3) of ERISA or any other employee benefit plan
maintained for employees of such Person.
"Preferred Stock" shall mean any Equity Interests of a Person, however
---------------
designated, which entitle the holders thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Equity Interests issued by such Person.
"Prime Rate" shall mean, at any time, the rate of interest adopted by the
----------
Administrative Agent as its reference rate for the determination of interest
rates for loans of varying maturities in United States dollars to United States
residents of varying degrees of creditworthiness and being quoted at such time
by the Administrative Agent as its "prime rate." The Prime Rate is not
necessarily the lowest rate of interest charged to borrowers of the
Administrative Agent or its Affiliates.
"Principal Officer" shall mean any of the chief executive officer, the
-----------------
chief financial officer, the chief operating officer or the president of the
Borrower.
"Pro Rata Class" shall mean, as of any date of determination, collectively,
--------------
those Lenders having issued a Revolving Commitment and those Lenders having any
Term A Loans then outstanding.
"Projections" shall have the meaning assigned thereto in Section 3.1(e)
-----------
hereof.
"Property" shall mean, with respect to any Person, any real property or
--------
personal property, plant, building, facility, structure, underground storage
tank or unit, equipment, inventory or other asset owned, leased or operated such
Person (including, without limitation, any surface water thereon or adjacent
thereto, and soil and groundwater thereunder).
"PubCo" shall mean Ziff Xxxxx Publishing Inc., a Delaware corporation.
-----
"Pub Holdco" shall mean Ziff Xxxxx Publishing Holdings Inc., a Delaware
----------
corporation.
-21-
"Purchase Price" shall mean, with respect to each Permitted Acquisition and
--------------
each Permitted Disposition, the total consideration payable in connection with
such Permitted Acquisition or Permitted Disposition, as the case may be, whether
payable in cash, securities, by a note or other property, or by the assumption
of Indebtedness (including, without limitation all post-closing purchase price
adjustments).
"Refinancing Securities" shall mean permanent senior subordinated Funded
----------------------
Debt issued by the Borrower, Holdco, Intermediate Holdco or any Permitted
Intermediate Holdco Subsidiary, in an aggregate principal amount not to exceed
$200,000,000, solely in connection with the refinancing and replacement of the
Subordinated Bridge Facility or the Permitted High-Yield Securities the terms of
which shall be substantially similar to, and in any case, no less favorable in
all material respects to the Borrower, Holdco, Intermediate Holdco, such
Permitted Intermediate Holdco Subsidiary or the Lenders than the Subordinated
Bridge Facility or the Permitted High-Yield Securities, as applicable.
"Register" shall have the meaning assigned thereto in Section 12.5(d)
--------
hereof.
"Reinvestment Basket" shall have the meaning assigned thereto in Section
-------------------
2.7(b)(i) hereof.
"Related Parties" shall mean, collectively, the Co-Investors and any other
---------------
investors in Holdco (other than any of the Intermediate Bridge Facility Lenders)
after the Agreement Date, in each case which have entered into shareholders
agreements with the Controlling Shareholders providing for, among other things,
the right of the Controlling Shareholders to vote the interests of such Co-
Investor or other investor, as the case may be, on all matters related to or
restricted by the terms of the Loan Documents which are presented to the
shareholders of Holdco for a vote.
"Reportable Event" shall have the meaning set forth in Section 4043 of
----------------
ERISA, other than an event for which the reporting requirement has been waived
by regulations promulgated under such Section.
"Request for Advance" shall mean a certificate designated as a "Request for
-------------------
Advance," signed by an Authorized Signatory of the Borrower requesting an
Advance hereunder, which shall be in substantially the form of Exhibit I
---------
attached hereto and shall, among other things, (a) specify the date of the
Advance, which shall be a Business Day, the amount of the Advance, the type of
Advance, and, with respect to a Eurodollar Advance, the Eurodollar Advance
Period selected by the Borrower, and (b) state that there shall not exist, on
the date of the requested Advance both before and after giving effect thereto,
any Default or Event of Default.
"Request for Issuance of Letter of Credit" shall mean any certificate
----------------------------------------
signed by an Authorized Signatory of the Borrower, which certificate will be
denominated a "Request for Issuance of Letter of Credit" and shall be in
substantially the form attached hereto as Exhibit J, and shall, among other
---------
things, (a) specify the beneficiary of the proposed Letter of Credit, the
purpose of the Letter of Credit, the proposed date of issuance of the Letter of
Credit, which shall be a Business Day, and the documents which must be presented
to draw under such Letter of Credit (including, without limitation, any
documents which the Issuing Bank may require), (b) include, as an attachment, a
Letter of Credit Application, and (c) state that there shall not exist, on the
date of the request and after giving effect to the issuance of the Letter of
Credit, any Default or Event of Default hereunder.
"Required Lenders" shall mean (a) prior to the occurrence of an Event of
----------------
Default and the termination of unfunded Commitments, (i) Lenders the sum of
whose Revolving Commitment amounts plus Term Loans outstanding equals or exceeds
50.1% of such items for the Pro Rata
-22-
Class and (ii) Lenders the sum of whose Revolving Commitment amounts plus Term
Loans outstanding equals or exceeds 50.1% of the sum of such items for all
Lenders, and (b) at any time that there exists an Event of Default hereunder,
and unfunded Commitments have been terminated, (i) Lenders the total of whose
Loans outstanding equals or exceeds 50.1% of the total principal amount of the
Loans of the Pro Rata Class then outstanding hereunder and (ii) Lenders the
total of whose Loans outstanding equals or exceeds 50.1% of the total principal
amount of the Loans then outstanding hereunder.
"Restricted Group" shall mean the Borrower and the Restricted Subsidiaries,
----------------
other than the Foreign Subsidiaries.
"Restricted Payment" shall mean (a) any direct or indirect distribution,
------------------
dividend, redemption or other payment to any Person on account of any Equity
Interests, or other securities of or equity interests, in Holdco, Intermediate
Holdco, the Borrower or any of the Borrower's Restricted Subsidiaries; (b) any
payment of principal of or interest on any Indebtedness of any of Holdco,
Intermediate Holdco, the Borrower or any of the Borrower's Subsidiaries in favor
of any Affiliate or in respect of the Subordinated Bridge Facility, the
Intermediate Bridge Facility, any Permitted High-Yield Securities, any
Refinancing Securities or any Subordinated Seller Debt; or (c) any payment under
any management or consulting agreement with any Affiliate or other similar
agreement or arrangement with any Affiliate not entered into in the ordinary
course of business.
"Restricted Purchase" shall mean any payment on account of the purchase,
-------------------
redemption or other acquisition or retirement of any Equity Interests, or other
securities of or equity interests, in Holdco, Intermediate Holdco, the Borrower
or any of the Borrower's Restricted Subsidiaries, including, without limitation,
any warrants or other rights or options to acquire Equity Interests of Holdco,
Intermediate Holdco, the Borrower or any of the Borrower's Restricted
Subsidiaries.
"Restricted Subsidiaries" shall mean all Subsidiaries of the Borrower other
-----------------------
than the Unrestricted Subsidiaries.
"Revolving Commitment" shall mean the several obligations of certain of the
--------------------
Lenders to advance the sum of $50,000,000 (as of the Agreement Date) to the
Borrower, on or after the Agreement Date, in accordance with their respective
Revolving Commitment Ratios and as such amount may be reduced from time to time,
all pursuant to the terms hereof.
"Revolving Commitment Ratios" shall mean the percentages in which certain
---------------------------
of the Lenders are severally bound to make Advances to the Borrower under the
Revolving Commitment, which as of the Agreement Date, are set forth (together
with dollar amounts thereof) on Schedule 2 attached hereto.
----------
"Revolving Loans" shall mean, collectively, the amount advanced by certain
---------------
of the Lenders to the Borrower under the Revolving Commitment, not to exceed the
amount of the Revolving Commitment.
"Revolving Notes" shall mean those certain revolving promissory notes
---------------
issued by the Borrower to each of the Lenders issuing a Revolving Commitment
that requests a promissory note in accordance with each such Lender's Revolving
Commitment Ratio, each one substantially in the form of Exhibit K attached
---------
hereto, and any extensions, modifications, renewals or replacements of or
amendments to any of the foregoing.
"Sale and Lease-Back Transaction" means any arrangement with any Person
-------------------------------
providing for the leasing by means of a capital lease and not an operating lease
by the Borrower or any
-23-
Restricted Subsidiary of the Borrower of any real or tangible personal property,
which property has been or is to be sold or transferred by the Borrower or such
Restricted Subsidiary to such Person in contemplation of such leasing.
"Sales Transaction" shall have the meaning assigned thereto in the
-----------------
definition of "Net Proceeds".
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder.
"Security Agreement" shall mean that certain Security Agreement between the
------------------
Borrower and the Administrative Agent, for the benefit of the Credit Parties,
dated as of the Agreement Date, in substantially the form of Exhibit L attached
---------
hereto.
"Security Documents" shall mean, without limitation, the Security
------------------
Agreement, the Borrower Pledge Agreement, the Intellectual Property Security
Agreement, the Assignment of Acquisition Documents, the Subsidiary Guaranty, the
Subsidiary Pledge Agreement, the Subsidiary Security Agreement, the Holdco
Pledge Agreement, all Mortgages, any other agreement or instrument providing
Collateral for the Obligations, whether now or hereafter in existence, and any
filings, instruments, agreements, and documents related thereto.
"Security Interest" shall mean all Liens in favor of the Administrative
-----------------
Agent created hereunder or under any of the Security Documents to secure the
Obligations.
"Seller" shall mean, collectively, ZD Inc., a Delaware corporation, and ZD
------
Holdings (Europe) Ltd.
"Seller Debt" shall mean any Indebtedness issued by the Borrower or any of
-----------
its Subsidiaries in connection with any Permitted Acquisition, which
Indebtedness constitutes all or a portion of the Purchase Price for such
Acquisition.
"Senior Debt" shall mean, as of any calculation date, the greater of (a)
-----------
the result of (i) Borrower Debt, minus (ii) the aggregate principal amount of
the Subordinated Bridge Facility (or, if then outstanding, any Permitted High-
Yield Securities or Refinancing Securities) then outstanding, and (b) zero.
"Senior Leverage Ratio" shall mean, on any calculation date, the ratio of
---------------------
(a) Senior Debt, to (b) EBITDA for the immediately preceding four (4) fiscal
quarter period.
"Shareholders" shall mean the shareholders of Holdco which as of the
------------
Agreement Date are as set forth on Schedule 4.1(c) attached hereto.
---------------
"Specified Add-Backs" shall mean, for any period of determination, for the
-------------------
Borrower and its Restricted Subsidiaries on a consolidated basis, the following
add-backs (without duplication) to the calculation of EBITDA: (a) non-cash rent
expense (provided that, solely for purposes of calculating EBITDA for any four
(4) fiscal quarters ending during the period from December 31, 1999 through
December 31, 2000, non-cash rent expense shall be deemed to be $1,774,000 as
described on Schedule 5 attached hereto), (b) solely for purposes of calculating
----------
EBITDA for any four (4) fiscal quarters ending during the period from December
31, 1999 through September 30, 2000, expenses incurred during 1999 in connection
with the "year 2000 problem" as described on Schedule 5 attached hereto, (c) an
----------
amount, calculated for the four (4) fiscal quarter period ended on the
applicable calculation date, equal to the greater of (i) the excess of (A) cash
dividends from earnings from operations (but not the sale of assets) received
during such period
-24-
from joint ventures which are not Subsidiaries of the Borrower over (B) the
aggregate amount of Investments made during such period in such joint ventures,
and (ii) zero (provided, however, that for purposes of calculating EBITDA for
-------- -------
the period ended (I) December 31, 1999, the amount determined by such formula
shall be deemed to be $1,874,000, (II) March 31, 2000, the amount determined by
such formula shall be calculated for the one (1) fiscal quarter period then
ended, plus the dollar amount set forth on Schedule 5 attached hereto with
respect to such quarter end, (III) June 30, 2000, the amount determined by such
formula shall be calculated for the two (2) fiscal quarter period then ended,
plus the dollar amount set forth on Schedule 5 attached hereto with respect to
such quarter end, and (IV) September 30, 2000, the amount determined by such
formula shall be calculated for the three (3) fiscal quarter period then ended,
plus the dollar amount set forth on Schedule 5 attached hereto with respect to
such quarter end), (d) solely for the purpose of calculating EBITDA for any four
(4) fiscal quarters ending during the period from December 31, 1999 through
December 31, 2000, the cost and contractual payment above cost for the
publishing of Computer Shopper which dollar amounts are set forth with respect
to each fiscal quarter on Schedule 5 attached hereto, (e) ZDNet Royalties
----------
(provided that, solely for purposes of calculating EBITDA for the four (4)
fiscal quarters ended December 31, 1999, ZDNet Royalties shall be deemed to be
$1,900,000), and (f) solely for purposes of calculating EBITDA for the four (4)
fiscal quarters ending from December 31, 1999 through March 31, 2000, the
Corporate Overhead Adjustment.
"Subordinated Bridge Facility" shall mean that certain subordinated Funded
----------------------------
Debt issued by the Borrower on the Agreement Date in the aggregate original
principal amount of $175,000,000, which Funded Debt is evidenced by and subject
to terms and conditions of the Subordinated Bridge Facility Documents.
"Subordinated Bridge Facility Documents" shall mean, collectively, that
--------------------------------------
certain Purchase Agreement dated as of the Agreement Date among the Borrower and
the guarantors and the purchasers named therein, and all schedules and exhibits
thereto and documents executed in connection therewith (including, without
limitation, the "Notes" and the "Guaranties" each as defined therein).
"Subordinated Bridge Facility Refinancing Date" shall mean the date on
---------------------------------------------
which the Subordinated Bridge Facility shall be refinanced in full.
"Subordinated Management Redemption Debt" shall mean any Management
---------------------------------------
Redemption Debt issued with terms and conditions acceptable to the Agents in
their sole discretion, which terms and conditions shall provide, among other
things, that such Management Redemption Debt shall (a) be unsecured, (b) not pay
cash interest or principal at any time prior to the Final Maturity Date, (c)
contain no creditor-like rights or remedies, and (d) have a final maturity of no
earlier than ninety (90) days after the Final Maturity Date.
"Subordinated Seller Debt" shall mean any Seller Debt issued with terms and
------------------------
conditions acceptable to the Agents in their sole discretion, which terms and
conditions shall provide, among other things, that such Seller Debt shall (a) be
unsecured, (b) not pay cash interest or principal at any time prior to the Final
Maturity Date, (c) contain no creditor-like rights or remedies, and (d) have a
final maturity of no earlier than ninety (90) days after the Final Maturity
Date.
"Subsidiary" shall mean, as applied to any Person, any corporation of which
----------
more than fifty percent (50%) of the outstanding stock (other than directors'
qualifying shares) having ordinary voting power to elect its board of directors,
regardless of the existence at the time of a right of the holders of any class
or classes of securities of such corporation to exercise such
-25-
voting power by reason of the happening of any contingency, or any partnership
or other entity of which more than fifty percent (50%) of the outstanding
partnership or other equity interests, is at the time owned directly or
indirectly by such Person, or by one or more Subsidiaries of such Person, or by
such Person and one or more Subsidiaries of such Person. Notwithstanding
anything which may be construed to the contrary contained in the foregoing,
MacWorld shall not be considered a Subsidiary of the Borrower or any of its
Subsidiaries.
"Subsidiary Guaranty" shall mean that certain Subsidiary Guaranty Agreement
-------------------
issued by each Restricted Subsidiary of the Borrower (other than any of the
Foreign Subsidiaries), InternetCo and each member of the LaunchCo Group (but,
with respect to the LaunchCo Joint Ventures, only to the extent required
hereunder) in favor of the Administrative Agent, for the benefit of the Credit
Parties, dated as of the Agreement Date, in substantially the form of Exhibit M
---------
attached hereto, and any similar guaranty or any guaranty supplement delivered
pursuant to Section 5.15 hereof.
"Subsidiary Pledge Agreement" shall mean that certain Subsidiary Pledge
---------------------------
Agreement between each domestic Restricted Subsidiary of the Borrower (other
than any of the Foreign Subsidiaries) and each member of the LaunchCo Group
having one or more of its own Subsidiaries and the Administrative Agent, for the
benefit of the Credit Parties, dated as of the Agreement Date, in substantially
the form of Exhibit N attached hereto, and any similar pledge agreement or any
---------
pledge agreement supplement delivered pursuant to Section 5.15 hereof.
"Subsidiary Security Agreement" shall mean that certain Subsidiary Security
-----------------------------
Agreement between each of the Borrower's Restricted Subsidiaries (other than any
of the Foreign Subsidiaries) and the Administrative Agent, for the benefit of
the Credit Parties, dated as of the Agreement Date, in substantially the form of
Exhibit O attached hereto, and any similar security agreement or any security
---------
agreement supplement delivered pursuant to Section 5.15 hereof.
"Syndication Agent" shall mean Bankers Trust Company.
-----------------
"Term A Commitment" shall mean the several obligations of certain of the
-----------------
Lenders to advance the sum of $100,000,000 to the Borrower on the Agreement
Date, in accordance with their respective Term A Commitment Ratios, all pursuant
to the terms hereof.
"Term A Commitment Ratios" shall mean the percentages in which certain of
------------------------
the Lenders are severally bound to make Advances to the Borrower under the Term
A Commitment, which, as of the Agreement Date, are set forth (together with
dollar amounts thereof) on Schedule 2 attached hereto.
----------
"Term A Loans" shall mean, collectively, the amounts advanced by certain of
------------
the Lenders to the Borrower under the Term A Commitment, not to exceed, in the
aggregate, the amount of the Term A Commitment.
"Term A Notes" shall mean those certain term notes issued by the Borrower
------------
to each of the Lenders issuing a Term A Commitment that requests a promissory
note in accordance with each such Lender's Term A Commitment Ratio, each one
substantially in the form of Exhibit P attached hereto, and any extensions,
---------
modifications, renewals or replacements of or amendments to any of the
foregoing.
"Term B Class" shall mean, as of any date of determination, those Lenders
------------
having any Term B Loans then outstanding.
-26-
"Term B Commitment" shall mean the several obligations of certain of the
-----------------
Lenders to advance the sum of $255,000,000 to the Borrower on the Agreement Date
in accordance with their respective Term B Commitment Ratios, all pursuant to
the terms hereof.
"Term B Commitment Ratios" shall mean the percentages in which certain of
------------------------
the Lenders are severally bound to make Advances to the Borrower under the Term
B Commitment, which, as of the Agreement Date and after giving effect to any
Assignment and Assumption Agreement effective as of the Agreement Date, are set
forth (together with dollar amounts thereof) on Schedule 2 attached hereto.
----------
"Term B Loans" shall mean, collectively, the amount advanced by certain of
------------
the Lenders to the Borrower under the Term B Commitment, not to exceed, in the
aggregate, the amount of the Term B Commitment.
"Term B Notes" shall mean those certain term notes issued by the Borrower
------------
to each of the Lenders issuing a Term B Commitment that requests a promissory
note in accordance with each such Lender's Term B Commitment Ratio, each one
substantially in the form of Exhibit Q attached hereto, and any extensions,
---------
modifications, renewals or replacements of or amendments to any of the
foregoing.
"Term Loans" shall mean, collectively, the Term A Loans and the Term B
----------
Loans.
"Term Notes" shall mean any Term A Notes and any Term B Notes.
----------
"Total Leverage Ratio" shall mean, on any calculation date, the ratio of
--------------------
(a) Borrower Debt, to (b) EBITDA for the immediately preceding four (4) fiscal
quarter period.
"Transferee" shall have the meaning assigned thereto in Section 12.5(f)
----------
hereof.
"Uniform Customs" shall mean the Uniform Customs Practice for Documentary
---------------
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended, supplemented or modified from time to time and, if
applicable, the rules of the "International Standby Practices 1998" (ISP98), as
the same may be revised from time to time.
"Unrestricted Subsidiaries" shall mean, collectively, the members of the
-------------------------
InternetCo Group and the LaunchCo Group.
"Use of Proceeds Letter" shall mean that certain Use of Proceeds Letter,
----------------------
substantially in the form of Exhibit R attached hereto, delivered to the Credit
---------
Parties on the Agreement Date pursuant to Article 4 hereof.
"Voting Stock" shall mean all classes of Equity Interests or other
------------
interests, including partnership interests, of a Person then outstanding and
normally entitled, without regard to the occurrence of any contingency, to vote
in the election of directors, managers, or trustee thereof.
"ZD Acquisition" shall mean the Acquisition of certain assets of the ZD
--------------
Publishing operating division of the Seller and all of the issued and
outstanding shares of capital stock or other equity interests in all of the
corporations owned directly or indirectly by ZD Holdings (Europe) Ltd., in each
case pursuant to the ZD Acquisition Documents.
"ZD Acquisition Documents" shall mean that certain Purchase Agreement dated
------------------------
as of December 6, 1999, as amended, among the Seller and the Borrower (formerly
known as WS-ZD
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Acquisition, Inc.), and all schedules and exhibits thereto and documents
executed in connection therewith.
"ZD Publishing (U.K.)" shall mean Xxxx-Xxxxx Publishing (UK) Ltd., a
--------------------
corporation organized under the laws of the United Kingdom.
"ZDNet" shall mean Xxxx-Xxxxx, Inc.
-----
"ZDNet License Agreement" shall mean that certain License Agreement dated
-----------------------
as of the Agreement Date between the Borrower and ZDNet.
"ZDNet Royalties" shall mean, as of any calculation date, the greater of
---------------
(a) the difference between (i) the minimum contractual per annum royalty amount
which ZDNet has agreed to pay to the Borrower pursuant to the ZDNet License
Agreement, and (ii) the actual amount of royalty payments made by ZDNet during
the four (4) quarter period ended on such date, and (b) zero.
Each definition of an agreement in this Article 1 shall include such
instrument or agreement as amended, restated, supplemented or otherwise modified
from time to time, and except where the context otherwise requires, definitions
imparting the singular shall include the plural and vice versa. Except where
otherwise specifically restricted, reference to a party to a Loan Document
includes that party and its successors and assigns. All terms used herein which
are defined in Article 9 of the Uniform Commercial Code in effect in the State
of New York on the date hereof and which are not otherwise defined herein shall
have the same meanings herein as set forth therein. All accounting terms used
herein without definition shall be used as defined under GAAP. Subject to
Section 12.6 hereof, all financial calculations hereunder shall, unless
otherwise stated, be determined for the Borrower on a consolidated basis with
its Restricted Subsidiaries and in conformity with GAAP.
ARTICLE 2
Loans
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Section 2.1 The Loans. Subject to the terms and conditions of, and in
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reliance upon the representations and warranties made in, this Agreement and the
other Loan Documents, the Lenders will have extended and agree, severally in
accordance with their respective Commitment Ratios and not jointly, to make
Loans to the Borrower in an aggregate principal amount not to exceed Four
Hundred Five Million Dollars ($405,000,000).
(a) The Revolving Loans. The Lenders with Revolving Commitments agree,
-------------------
severally in accordance with their respective Revolving Commitment Ratios and
not jointly, upon the terms and subject to the conditions of this Agreement, to
lend and re-lend to the Borrower, on and after the Agreement Date, but prior to
the Initial Maturity Date, amounts which, in the aggregate, do not exceed at any
time the amount of the Available Revolving Commitment. Subject to the terms and
conditions hereof and prior to the Initial Maturity Date, Advances under the
Revolving Commitment may be repaid and reborrowed from time to time on a
revolving basis or may be continued or converted pursuant to a Notice of
Conversion/Continuation as provided in Section 2.2 hereof.
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(b) The Term A Loans. The Lenders listed on Schedule 2 as having agreed to
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make Term A Loans agree, severally in accordance with their respective Term A
Commitment Ratios and not jointly, upon the terms and subject to the conditions
of this Agreement, to lend to the Borrower on the Agreement Date, an amount
equal to the Term A Commitment. After the Agreement Date, Advances under the
Term A Commitment may be continued or converted pursuant to a Notice of
Conversion/Continuation as provided in Section 2.2 hereof; provided, however,
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there shall be no increase in the aggregate principal amount outstanding under
the Term A Commitment at any time after the Agreement Date. Amounts repaid under
the Term A Commitment may not be reborrowed.
(c) The Term B Loans. The Lenders listed on Schedule 2 as having agreed to
----------------
make Term B Loans shall, severally and in accordance with their respective Term
B Commitment Ratios and not jointly, upon the terms and subject to the
conditions of this Agreement, lend to the Borrower on the Agreement Date, an
amount equal to the Term B Commitment. After the Agreement Date, Advances under
the Term B Commitment may be continued or converted pursuant to a Notice of
Conversion/Continuation as provided in Section 2.2 hereof; provided, however,
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there shall be no increase in the aggregate principal amount of the Term B Loans
outstanding at any time after the Agreement Date. Amounts repaid under the Term
B Commitment may not be reborrowed.
(d) The Letters of Credit. The Issuing Bank agrees, prior to the Initial
---------------------
Maturity Date and upon the terms and subject to the conditions of this
Agreement, to issue from time to time for the account of the Borrower, in the
ordinary course of business of the Borrower, Letters of Credit to such
beneficiaries as shall be designated in writing by the Borrower to the Issuing
Bank, up to the limit of the Letter of Credit Committed Amount.
Section 2.2 Manner of Borrowing and Disbursement.
------------------------------------
(a) Choice of Interest Rate, Etc. Any Advance (i) under the Revolving
----------------------------
Commitment (except with respect to Advances in reimbursement of amounts advanced
to beneficiaries under Letters of Credit, which Advances shall in all cases be
Base Rate Advances initially) shall, at the option of the Borrower, be made as a
Base Rate Advance or a Eurodollar Advance, (ii) under the Term A Commitment
shall, at the option of the Borrower, be made as a Base Rate Advance or a
Eurodollar Advance, and (iii) under the Term B Commitment shall, at the option
of the Borrower, be made as a Base Rate Advance or a Eurodollar Advance;
provided, however, that (i) if the Borrower fails to give the Administrative
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Agent written notice specifying whether a Eurodollar Advance is to be repaid,
continued or converted on a Payment Date, such Eurodollar Advance shall be
converted to a Base Rate Advance on such Payment Date, and (ii) the Borrower may
not select a Eurodollar Advance if, at the time of such selection, a Default or
Event of Default has occurred and is continuing. All Advances of the Loans made
on the Agreement Date shall bear interest as Base Rate Advances. Any notice
given to the Administrative Agent in connection with a requested Advance
hereunder shall be given to the Administrative Agent prior to 11:00 a.m. (New
York time) in order for such Business Day to count toward the minimum number of
Business Days required.
(b) Base Rate Advances.
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(i) Initial and Subsequent Advances. The Borrower shall give the
-------------------------------
Administrative Agent in the case of Base Rate Advances, irrevocable prior
written notice not later than 11:00 a.m. (New York time) on the date of such
Advance in the form of a Request for Advance, or telephonic notice followed
promptly by a Request for Advance; provided, however, that no such notice shall
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be required in connection with the making of a Base Rate Advance to repay a draw
under a Letter of Credit. In the event that the Borrower shall give the
Administrative Agent telephonic notice, but shall fail to confirm such
telephonic notice with a written Request for Advance, such failure shall not
invalidate any notice so given, but shall not obviate the Borrower's obligation
hereunder to provide the Administrative Agent with written notice.
(ii) Repayments and Conversions. The Borrower may (A) upon at least
--------------------------
one (1) Business Days' irrevocable prior written notice to the Administrative
Agent, repay or prepay a Base Rate Advance, or (B) upon at least three (3)
Business Days' irrevocable prior written notice to the Administrative Agent in
the form of a Notice of Conversion/Continuation, convert all or a portion of the
principal amount of such Base Rate Advance to one or more Eurodollar Advances.
On the date indicated by the Borrower, such Base Rate Advance shall be so repaid
or converted.
(iii) Miscellaneous. Notwithstanding any term or provision of this
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Agreement which may be construed to the contrary, each Base Rate Advance (except
any Base Rate Advance in reimbursement of amounts advanced to beneficiaries
under Letters of Credit) shall be in a principal amount of at least $500,000 and
in integral multiples of $100,000 in excess thereof, or the remaining amount of
the Revolving Commitment, as the case may be.
(c) Eurodollar Advances.
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(i) Initial and Subsequent Advances. The Borrower shall give the
-------------------------------
Administrative Agent in the case of Eurodollar Advances at least three (3)
Business Days' irrevocable prior written notice not later than 11:00 a.m. (New
York time) in the form of a Request for Advance, or telephonic notice followed
promptly by a Request for Advance. The Borrower shall promptly notify the
Administrative Agent by telephone or telecopy, and shall promptly confirm any
such telephonic notice in writing, of its selection of a Eurodollar Rate and
Eurodollar Advance Period for such Advance. In the event that the Borrower shall
give the Administrative Agent telephonic notice, but shall fail to confirm such
telephonic notice with a written Request for Advance, such failure shall not
invalidate any notice so given, but shall not obviate the Borrower's obligation
hereunder to provide the Administrative Agent with written notice.
(ii) Repayments, Continuations and Conversions. At least three (3)
-----------------------------------------
Business Days prior to each Payment Date for a Eurodollar Advance, the Borrower
shall give the Administrative Agent written notice in the form of a Notice of
Conversion/Continuation specifying whether all or a portion of such Eurodollar
Advance outstanding on such Payment Date (A) is to be continued in whole or in
part as a new Eurodollar Advance, in which case such notice shall also specify
the Eurodollar Advance Period for such new Eurodollar Advance, (B) is to be
converted in whole or in part to a Base Rate Advance, or (C) is to be repaid and
not continued or converted. Upon such Payment Date, such Eurodollar Advance
will, subject to the
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provisions hereof, be so repaid, continued or converted, as applicable. If the
Borrower fails to give the Administrative Agent written notice specifying
whether a Eurodollar Advance is to be repaid, continued or converted on a
Payment Date, such Eurodollar Advance shall be converted to a Base Rate Advance
on such Payment Date.
(iii) Miscellaneous. Notwithstanding any term or provision of this
-------------
Agreement which may be construed to the contrary, each Eurodollar Advance shall
be in a principal amount of at least $1,000,000 and in integral multiples
of $100,000 in excess thereof, and at no time shall the aggregate number of all
Eurodollar Advances outstanding exceed ten (10).
(d) Notification of Lenders. Upon receipt of a Request for Advance or a
-----------------------
notice from the Borrower with respect to any outstanding Advance prior to the
Payment Date for such Advance, or a request by the Issuing Bank for
reimbursement under Section 2.14 hereof, the Administrative Agent shall promptly
notify each Lender by telephone or telecopy of the contents thereof and the
amount of such Lender's portion of the Advance. Each Lender shall, not later
than 1:00 p.m. (New York time) on the date of borrowing specified in such
notice, make available to the Administrative Agent at the Administrative Agent's
Office, or at such account as the Administrative Agent shall designate, the
amount of its portion of any Advance which represents an additional borrowing
hereunder in immediately available funds.
(e) Disbursement.
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(i) Prior to 3:00 p.m. (New York time) on the date of an Advance
hereunder, the Administrative Agent shall, subject to the satisfaction of any
applicable conditions set forth in Article 3 hereof, disburse the amounts made
available to it by the Lenders in immediately available funds by (A)
transferring the amounts so made available by wire transfer pursuant to the
Borrower's instructions, (B) in the case of an Advance representing the
reimbursement of the Issuing Bank for a draw under a Letter of Credit,
transferring such amount to the Issuing Bank, or (C) in the absence of such
instructions referred to in clause (A) above and so long as the provisions of
clause (B) above do not apply to the requested Advance, crediting the amounts so
made available to the account of the Borrower maintained with the Administrative
Agent.
(ii) Unless the Administrative Agent shall have received notice from
a Lender, prior to the date of any Advance that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Advance, the Administrative Agent may assume that such Lender, has made or will
make such portion available to the Administrative Agent on the date of such
Advance and the Administrative Agent may, in its sole discretion and in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent a Lender does not make such ratable
portion available to the Administrative Agent, such Lender, agrees to repay to
the Administrative Agent on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Administrative Agent,
at the Federal Funds Rate.
(iii) If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
portion of the applicable Advance for purposes of this Agreement. If such Lender
does not repay such corresponding amount
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immediately upon the Administrative Agent's demand therefor, the Administrative
Agent shall notify the Borrower, and the Borrower shall promptly, but in any
event within two (2) Business Days of such demand, pay such corresponding amount
to the Administrative Agent, together with interest thereon. The failure of any
Lender to fund its portion of any Advance shall not relieve any other Lender of
its obligation hereunder to fund its respective portion of the Advance on the
date of such borrowing, but no Lender shall be responsible for any such failure
of any other Lender.
(iv) In the event that, at any time when the Borrower is not in
Default, a Lender for any reason fails or refuses to fund its portion of an
Advance, then, until such time as such Lender has funded its portion of such
Advance, or all other Lenders have received payment in full (whether by
repayment or prepayment) of the principal and interest due in respect of such
Advance, such non-funding Lender shall not have the right (A) to vote regarding
any issue on which voting is required or advisable under this Agreement or any
other Loan Document and, with respect to any such Lender, the amount of the
Revolving Commitment and Term Loans, as applicable, or Loans, as applicable,
held by such Lender shall not be counted as outstanding for purposes of
determining "Required Lenders", the "Pro Rata Class" or the "Term B Class"
hereunder, or (B) to receive payments of principal, interest or fees from the
Borrower in respect of its unfunded portion of Advances or any of its
outstanding Advances. Notwithstanding the foregoing, within sixty (60) days of
the failure by any Lender to fund its portion of an Advance, so long as no
Default or Event of Default then exists, the Borrower may, in its discretion,
provide a replacement lender or lenders for such non-funding Lender, which
replacement lender or lenders will be subject to the approval of the Agents,
which shall not be unreasonably withheld, and the Administrative Agent, such
Lender and the Borrower shall take all necessary actions to transfer the rights,
duties and obligations of such non-funding Lender to such replacement lender or
lenders within such sixty (60) day period (including, without limitation, the
payment in full of all Obligations hereunder due to the non-funding Lender being
replaced).
Section 2.3 Interest and Determination of Dollar Equivalent Amount.
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(a) On Base Rate Advances. Interest on each Base Rate Advance shall be
---------------------
computed on the basis of a year of 365/366 days for the actual number of days
elapsed and shall be payable quarterly in arrears, commencing on the last day of
the first (1/st/) full fiscal quarter after the Agreement Date. Interest on Base
Rate Advances then outstanding shall also be due and payable on the Initial
Maturity Date or the Final Maturity Date, as applicable. Interest shall accrue
and be payable on each Base Rate Advance at the per annum interest rate equal to
the sum of (A) the Base Rate and (B) the Applicable Margin for Base Rate
Advances in effect from time to time and as more fully set forth in Section
2.3(f) below.
(b) On Eurodollar Advances. Interest on each Eurodollar Advance shall be
----------------------
computed on the basis of a 360-day year for the actual number of days elapsed
and shall be payable in arrears (i) on the applicable Payment Date for such
Advance, and (ii) if the Eurodollar Advance Period for such Eurodollar Advance
exceeds three (3) months, interest on such Eurodollar Advance shall be due and
payable in arrears on every three (3) month anniversary of such Eurodollar
Advance. Interest on Eurodollar Advances then outstanding shall also be due and
payable on the date of any repayment made under Section 2.2 or Section 2.6
hereof and on the Initial Maturity Date or the Final Maturity Date, as
applicable. Interest shall accrue and be payable on each
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Eurodollar Advance at a rate per annum equal to the sum of (A) the Eurodollar
Rate applicable to such Eurodollar Advance and (B) the Applicable Margin for
Eurodollar Advances in effect from time to time and as more fully set forth in
Section 2.3(f) below.
(c) Interest if No Notice of Selection of Interest Rate. If the Borrower
---------------------------------------------------
fails to give the Administrative Agent timely notice of the selection of a
Eurodollar Advance, or if the Administrative Agent is unable to timely determine
a Eurodollar Rate for any Advance, the Base Rate shall apply to such Advance. If
the Borrower fails to elect to continue any Eurodollar Advance then outstanding
prior to the Payment Date applicable thereto in accordance with the provisions
of Section 2.2 hereof, the Base Rate shall apply to such Advance commencing on
and after such Payment Date.
(d) Interest Upon Default. Immediately upon the occurrence of an Event of
---------------------
Default under Section 9.1(b) hereunder (including, without limitation, any such
Event of Default that occurs as a result of the automatic acceleration of the
Obligations hereunder upon the occurrence of an Event of Default under Section
9.1(f) or 9.1(g) hereof), interest on the overdue Obligations shall accrue at
the Default Rate from the date of such Event of Default. Interest accruing at
the Default Rate on the Obligations shall be payable on demand and in any event
on the Initial Maturity Date or the Final Maturity Date, as applicable, and
shall accrue with respect to such overdue Obligations until the earliest to
occur of (A) waiver of the applicable Event of Default in accordance with
Section 12.12 hereof, (B) agreement by the Required Lenders to rescind the
charging of interest at the Default Rate, or (C) payment in full of such overdue
Obligations. The Lenders shall not be required to (x) accelerate the maturity of
the Loans, (y) terminate the Commitments, or (z) exercise any other rights or
remedies available to them under the Loan Documents in order to charge interest
hereunder at the Default Rate.
(e) Computation of Interest. In computing interest on any Advance, the date
-----------------------
of making the Advance shall be included and the date of payment shall be
excluded; provided, however, that if an Advance is repaid on the date that it is
made, one (1) day's interest shall be due with respect to such Advance.
(f) Applicable Margins for Base Rate Advances and Eurodollar Advances.
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(i) Advances Under the Revolving Commitment or of the Term A Loans.
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With respect to any Advance under the Revolving Commitment, or any Advance of
the Term A Loans, the Applicable Margin shall be (A) on and after the Agreement
Date to but not including the Adjustment Date, (x) 3.000% per annum with respect
to any Eurodollar Advance and (y) 1.750% per annum with respect to any Base Rate
Advance, and (B) on and after the Adjustment Date, the interest rate margin
based upon the Total Leverage Ratio for the most recent fiscal quarter end,
effective as of the second (2/nd/) Business Day after the financial statements
referred to in Section 6.2 hereof are delivered by the Borrower to the
Administrative Agent for the fiscal quarter of the Borrower most recently ended,
expressed as a per annum rate of interest as follows:
Then the Base Rate Then the Eurodollar
Advance Advance
If the Total Leverage Ratio is: Applicable Margin shall be: Applicable Margin shall be:
------------------------------ -------------------------- --------------------------
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Then the Base Rate Then the Eurodollar
Advance Advance
If the Total Leverage Ratio is: Applicable Margin shall be: Applicable Margin shall be:
------------------------------ -------------------------- --------------------------
Greater than 5.00 to 1.00 1.750% 3.000%
Greater than 4.50 to 1.00 but less 1.500% 2.750%
than or equal to 5.00 to 1.00
Greater than 4.00 to 1.00 but less 1.125% 2.375%
than or equal to 4.50 to 1.00
Greater than 3.50 to 1.00 but less 0.750% 2.000%
than or equal to 4.00 to 1.00
Less than or equal to 3.50 to 1.00 0.500% 1.750%
In the event that the Borrower fails to timely provide (i) the financial
statements referred to above in accordance with the terms of Section 6.2 hereof
or (ii) the Performance Certificate referred to in Section 6.4 hereof, and
without prejudice to any additional rights under Section 2.3(d) or Section 9.2
hereof, no downward adjustment of the Applicable Margin in effect for the
preceding quarter shall occur until the actual delivery of such statements, and
if the Borrower has not delivered such statements within ten (10) days of the
date on which such statements were due under Section 6.2 hereof, from two (2)
Business Days after such due date and until actual delivery, the Applicable
Margin shall be (x) 3.000% with respect to each Eurodollar Advance, and (y)
1.750% with respect to each Base Rate Advance.
(ii) Advances of the Term B Loans. With respect to any Advance of the
----------------------------
Term B Loans, the Applicable Margin shall be (A) on and after the Agreement Date
to but not including the Adjustment Date, (x) 3.750% per annum with respect to
any Eurodollar Advance and (y) 2.500% per annum with respect to any Base Rate
Advance, and (B) on and after the Adjustment Date, the interest rate margin
based upon the Total Leverage Ratio for the most recent fiscal quarter end,
effective as of the second (2/nd/) Business Day after the financial statements
referred to in Section 6.2 hereof are delivered by the Borrower to the
Administrative Agent for the fiscal quarter of the Borrower most recently ended,
expressed as a per annum rate of interest as follows:
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Then the Base Rate Then the Eurodollar
Advance Advance
If the Total Leverage Ratio is: Applicable Margin shall be: Applicable Margin shall be:
------------------------------ -------------------------- --------------------------
Greater than 4.00 to 1.00 2.500% 3.750%
Less than or equal to 4.00 to 1.00 2.250% 3.500%
In the event that the Borrower fails to timely provide (i) the financial
statements referred to above in accordance with the terms of Section 6.2 hereof
or (ii) the Performance Certificate referred to in Section 6.4 hereof, and
without prejudice to any additional rights under Section 2.3(d) or Section 9.2
hereof, no downward adjustment of the Applicable Margin in effect for the
preceding quarter shall occur until the actual delivery of such statements, and
if the Borrower has not delivered such statements within ten (10) days of the
date on which such statements were due under Section 6.2 hereof, from two (2)
Business Days after such due date and until actual delivery, the Applicable
Margin shall be (x) 3.750% with respect to each Eurodollar Advance, and (y)
2.500% with respect to each Base Rate Advance.
(g) Determination of Dollar Equivalent Amount. The Administrative Agent
-----------------------------------------
will determine the Dollar Equivalent Amount with respect to (i) any issuance of
a Letter of Credit denominated in a currency other than Dollars, as of the
requested issuance date of such Letter of Credit, (ii) any drawing under a
Letter of Credit denominated in a currency other than Dollars as of the date the
Borrower is required pursuant to Section 2.14 to reimburse the Issuing Bank,
(iii) all outstanding L/C Obligations in respect of Letters of Credit
denominated in a currency other than Dollars, on any date on which the Revolving
Commitment is reduced pursuant to Section 2.5 hereof, (iv) all outstanding L/C
Obligations in respect of Letters of Credit denominated in a currency other than
Dollars for purposes of calculating compliance with the Financial Covenants as
of the first Business Day prior to the last day of the fiscal quarter for which
computation thereof is made, and (v) all L/C Obligations in respect of Letters
of Credit denominated in a currency other than Dollars for purposes of
calculating the fees set forth in Sections 2.4(c) and (d) hereof as of the first
Business Day prior to the last day of the fiscal quarter for which computation
thereof is made. Each determination of a Dollar Equivalent Amount by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error.
Section 2.4 Fees.
----
(a) Fees Payable Under the Fee Letter. The Borrower agrees to pay such fees
---------------------------------
as are mutually agreed upon and as are described in the Fee Letter.
(b) Commitment Fees. The Borrower agrees to pay to the Administrative
---------------
Agent, for the benefit of each of the Lenders in accordance with their
respective Revolving Commitment Ratios, a commitment fee on the Available
Revolving Commitment, for each day from the Agreement Date until the Initial
Maturity Date, at a rate of, (i) so long as the Total Leverage Ratio is greater
than or equal to 4.00 to 1.00, one-half percent (0.500%) per annum, and (ii) so
long as the Total Leverage Ratio is less than 4.00 to 1.00, three-eighths
percent (0.375%) per annum, in each case based on the Total Leverage Ratio for
the most recent fiscal quarter end,
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effective as of the second (2/nd/) Business Day after the financial statements
referred to in Section 6.2 are delivered by the Borrower to the Administrative
Agent for the fiscal quarter of the Borrower most recently ended. In the event
that the Borrower fails to timely provide (i) the financial statements referred
to in the foregoing sentence in accordance with the terms of Section 6.2 hereof,
and (ii) the Performance Certificate referred to in Section 6.4 hereof, and
without prejudice to any additional rights under Section 2.3(d) or Section 9.2
hereof, no downward adjustment of the commitment fee rate in effect for the
preceding quarter shall occur until the actual delivery of such statements, and
if the Borrower has not delivered such statements within ten (10) days of the
date on which such statements were due under Section 6.2 hereof, from two (2)
Business Days after such due date and until actual delivery, the commitment fee
shall be at a rate of one-half percent (0.500%). Such commitment fees shall be
computed on the basis of a year of 365/366 days for the actual number of days
elapsed, shall be payable quarterly in arrears on the last Business Day of each
fiscal quarter, commencing on June 30, 2000, shall be fully earned when due, and
shall be non-refundable when paid. A final payment of any accrued and unpaid
commitment fee shall also be due and payable on the Initial Maturity Date or
such earlier date on which the Revolving Commitment is terminated.
(c) Letter of Credit Fee. The Borrower agrees to pay to the Administrative
--------------------
Agent, for the benefit of the Lenders, in accordance with their respective
Revolving Commitment Ratios, a letter of credit fee payable in Dollars equal to
the Dollar Equivalent Amount of the amount of such fee calculated in the
currency in which such Letter of Credit is denominated at a rate per annum equal
to the Applicable Margin for Eurodollar Advances under the Revolving Commitment
(computed on the basis of a 360 day year for the actual number of days elapsed)
on the undrawn stated amount of each Letter of Credit issued by the Issuing Bank
hereunder for each day such Letter of Credit is outstanding. Such letter of
credit fee shall be due and payable quarterly in arrears on the last Business
Day of each fiscal quarter during which such Letter of Credit is outstanding and
any accrued and unpaid letter of credit fees shall also be due and payable on
the Initial Maturity Date or such earlier date on which the Revolving Commitment
is terminated. Such letter of credit fee shall be fully earned when due and
nonrefundable when paid. In the event of any inconsistency between the terms of
this Agreement and the terms of any letter of credit reimbursement agreements or
indemnification agreements between the Borrower and the Issuing Bank with
respect to Letters of Credit issued hereunder, the terms of this Agreement shall
control.
(d) Issuing Bank Fee. The Borrower agrees to pay to the Issuing Bank, for
----------------
its own account, an issuing bank fee in Dollars in the Dollar Equivalent Amount
of the amount of such fee calculated in the currency in which such Letter of
Credit is denominated at a rate per annum equal to one-quarter of one percent
(0.25%) (computed on the basis of a 360 day year for the actual number of days
elapsed), or such lesser amount as is agreed between the Borrower and the
Issuing Bank, of the undrawn stated amount of each Letter of Credit issued
hereunder for each day such Letter of Credit is outstanding. Such issuing bank
fee shall be due and payable quarterly in arrears on the last Business Day of
each fiscal quarter during which such Letter of Credit is outstanding and any
accrued and unpaid issuing bank fees shall also be due and payable on the
Initial Maturity Date or such earlier date on which the Revolving Commitment is
terminated. Such issuing bank fee shall be fully earned when due and
nonrefundable when paid. In the event of any inconsistency between the terms of
this Agreement and the terms of any letter of credit reimbursement agreements or
indemnification agreements between the Borrower and
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the Issuing Bank with respect to the Letters of Credit issued hereunder, the
terms of this Agreement shall control.
(e) Computation of Fees. In computing any fees payable under this Section
-------------------
2.4, the first day of the applicable period shall be included and the date of
payment shall be excluded.
Section 2.5 Optional Prepayment/Reduction of Commitment.
-------------------------------------------
(a) Prepayment of Advances. The principal amount of any Base Rate Advance
----------------------
under the Revolving Loan Commitment may be prepaid in full or in part at any
time, without penalty or premium, upon not less than one (1) Business Day's
prior written notice to the Administrative Agent; and the principal amount of
any Eurodollar Advance under the Revolving Loan Commitment may be prepaid prior
to the applicable Payment Date, without penalty or premium, upon not less than
three (3) Business Days' prior written notice to the Administrative Agent,
provided that the Borrower shall reimburse the Lenders and the Administrative
Agent, on demand, for any loss or out-of-pocket expense (other than solely a
loss of profit) incurred by any of them in connection with such prepayment of
Eurodollar Advances as set forth in Section 2.10 hereof. Each notice of
prepayment given hereunder shall be irrevocable. Upon receipt of any notice of
prepayment, the Administrative Agent shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of such Lender's portion of the
prepayment.
(b) Permanent Prepayment or Reduction. Optional permanent prepayments of
---------------------------------
principal of the Term Loans, and permanent reductions of the Revolving
Commitment hereunder, may be made at any time upon three (3) Business Days'
prior irrevocable written notice to the Administrative Agent, without penalty or
premium, provided that such prepayments or reductions shall be in minimum
amounts of, (i) in the case of Base Rate Advances, $500,000 and integral
multiples of $100,000, and (ii) in the case of Eurodollar Advances, $1,000,000
and integral multiples of $100,000. Each prepayment of the Term Loans shall
permanently reduce the Term A Loans and the Term B Loans on a pro rata basis,
with the amount allocated to the Term A Loans being applied to reduce, on a pro
rata basis, the remaining scheduled installments of principal due under the Term
A Loans as set forth in Section 2.6(b) hereof, and the amount allocated to the
Term B Loans being applied to reduce, on a pro rata basis, the remaining
scheduled installments of principal due under the Term B Loans as set forth in
Section 2.6(c) hereof. Each such prepayment of a Eurodollar Advance shall also
be made together with accrued interest on the amount so prepaid. As of the date
of cancellation or reduction set forth in any notice thereof, the Revolving
Commitment shall be permanently reduced to the amounts stated in the Borrower's
notice for all purposes herein, and the Borrower shall pay to the Administrative
Agent, for the benefit of the Lenders, the amount necessary to reduce the
principal amount of the Revolving Loans then outstanding to not more than the
amount of the Available Revolving Commitment as so reduced, together with, in
the case of Eurodollar Advances, the accrued interest on the amount so prepaid
through the date of the reduction with respect to the amount reduced. In
connection with any such permanent repayment, the Borrower shall reimburse the
Administrative Agent and the Lenders, on demand, for any loss or out-of-pocket
expense (other than solely a loss of profit) incurred by any of them in
connection with such payment of Eurodollar Advances, as set forth in Section
2.10. Upon receipt of any notice of prepayment or reduction, the Administrative
Agent shall promptly notify each Lender of the contents thereof by
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telephone or telecopy and of such Lender's portion of the prepayment or the
reduction, as applicable.
Section 2.6 Repayment.
---------
(a) The Revolving Loans. All unpaid principal and accrued interest of the
-------------------
Revolving Loans and any other outstanding Obligations under the Revolving
Commitment shall be due and payable in full on the Initial Maturity Date or such
earlier date on which the Revolving Commitment is terminated.
(b) The Term A Loans. Commencing on March 31, 2001, and at the end of each
----------------
calendar quarter thereafter, the outstanding principal balance of the Term A
Loan then outstanding shall be repaid as set forth below:
Quarterly Payment
Quarters Ending During the Following Periods Amount
-------------------------------------------- ------
March 31, 2001 through March 31, 2002 $2,500,000
June 30, 2002 through March 31, 2003 $3,125,000
June 30, 2003 through March 31, 2004 $3,750,000
June 30, 2004 through March 31, 2005 $5,000,000
June 30, 2005 through March 31, 2006 $5,000,000
June 30, 2006 through the Initial Maturity Date $10,000,000
Additionally, the Term A Loans shall be repaid as may be required by Section 2.7
hereof. Any unpaid principal and interest of the Term A Loans and any other
outstanding Obligations under the Term A Commitment shall be due and payable in
full on the Initial Maturity Date.
(c) Term B Loans. Commencing on March 31, 2001, and at the end of each
------------
calendar quarter thereafter, the outstanding principal balance of the Term B
Loans then outstanding shall be repaid as set forth below:
Quarters Ending During the Following Periods Quarterly Payment Amount
-------------------------------------------- ------------------------
March 31, 2001 through September 30, 2006 $637,500
December 31, 2006 $120,168,750
Final Maturity Date $120,168,750
Additionally, the Term B Loans shall be repaid as may be required by Section 2.7
hereof. Any unpaid principal and interest of the Term B Loans and any other
outstanding Obligations shall be due and payable in full on the Final Maturity
Date.
(d) Letter of Credit Advances. All Base Rate Advances made pursuant to
-------------------------
draws under the Letters of Credit shall be deemed to be Advances under the
Revolving Commitment and shall be due and payable on the Initial Maturity Date
or such earlier date on which the Revolving Commitment is terminated.
Section 2.7 Mandatory Repayments. In addition to the repayments provided
--------------------
for in Section 2.6 hereof, the Borrower shall, if required pursuant to this
Section 2.7, prepay the Loans, without any obligation to pay any prepayment
premium otherwise due, as follows:
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(a) Excess Cash Flow. Commencing with respect to the fiscal year of the
----------------
Borrower ended March 31, 2002, and with respect to each fiscal year thereafter
during the term of this Agreement, on or prior to the Excess Cash Flow Recapture
Date with respect to each such fiscal year, the Borrower shall make a prepayment
of the outstanding principal amount of the Term Loans in an amount equal to
fifty percent (50%) of Excess Cash Flow for such fiscal year; provided, however,
-------- -------
that, in the event that the Borrower shall have maintained a Total Leverage
Ratio less than or equal to 4.00 to 1.00 for the two (2) consecutive fiscal
quarters immediately preceding any Excess Cash Flow Recapture Date, the Borrower
shall not be required to make any prepayment on such Excess Cash Flow Recapture
Date under this Section 2.7(a). The amount of any prepayment made by the
Borrower pursuant to this Section 2.7(a) shall be applied to prepay the Loans as
set forth in Section 2.7(e) below.
(b) Disposition of Assets.
---------------------
(i) If, after the Agreement Date, any member of the Restricted Group
shall sell, transfer or otherwise dispose of (including, without limitation, by
way of condemnation or casualty to the extent not covered by insurance), any of
its Assets (including, without limitation, any Equity Interests in MacWorld or
LaunchCo, but not including (I) the sale of Equity Interests in InternetCo, (II)
the sale of obsolete equipment and inventory, (III) the sale, transfer or other
disposition of fixed Assets that are replaced by property of substantially
equivalent value in the ordinary course of business, (IV) the sale or lease of
databases, software, subscriber lists or office or laboratory space, or the
licensing of intellectual property, in each case in the ordinary course of
business, (V) the sale of Cash Equivalents, or (VI) the sale or discount of
accounts receivable in connection with compromise or collection (but not in
connection with accounts receivable securitizations or similar transactions)),
or any of the other Restricted Subsidiaries shall sell all or any part of the
International Publications, one hundred percent (100%) of the Net Proceeds
received by such member of the Restricted Group from such Sales Transaction
shall be applied, on the date of receipt thereof, to prepay the Loans as set
forth in Section 2.7(e) below; provided, however, that, so long as no Default or
-------- -------
Event of Default then exists or would be caused thereby, the Restricted Group
may use (A) up to $80,000,000 of the Net Proceeds received by the Restricted
Group from the sale of the International Publications and (B) up to $25,000,000
in the aggregate during the term of this Agreement (the "Reinvestment Basket")
of the Net Proceeds received by the Restricted Group from any other Permitted
Dispositions, to make Permitted Acquisitions and Capital Expenditures related to
the Restricted Group's business within, (x) with respect to Permitted
Dispositions occurring prior to the Subordinated Bridge Facility Refinancing
Date, one hundred eighty (180) days of the date of such Sales Transaction, or
(y) with respect to Permitted Dispositions occurring at any time after the
Subordinated Bridge Facility Refinancing Date, three hundred sixty-five (365)
days of the Restricted Group's receipt of the Net Proceeds of such Sales
Transaction; provided further, however, that prior to the Subordinated Bridge
-------- ------- -------
Facility Refinancing Date, all cash Net Proceeds of Permitted Dispositions
received by the Restricted Group, shall be placed in an interest bearing cash
collateral account with the Administrative Agent, or an Affiliate thereof, for
the benefit of the Borrower (the "Bridge Equity Account"). Subject to the terms
of the Make-Well Agreement and Section 7.5(xvi) hereof, on the Subordinated
Bridge Facility Refinancing Date, any cash Net Proceeds remaining in the Bridge
Equity Account will, so long as no Default or Event of Default then exists or
would be caused thereby, be transferred to a Net Proceeds Trust and be made
available for reinvestment by the Restricted Group as provided in this Section
2.7(b)(i) and in Section
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7.5(xvi), subject to the applicable deadline for such reinvestment; provided
that, subject to Section 7.5(xvi), if the deadline for such reinvestment shall
expire prior to the Subordinated Bridge Facility Refinancing Date, such cash Net
Proceeds shall be used on the date of such expiration to repay the Loans as set
forth in Section 2.7(e) below. During the three hundred sixty-five (365) day
reinvestment period (or, in the case of a Permitted Disposition occurring prior
to the Subordinated Bridge Facility Refinancing Date, for the remainder of such
one hundred eighty (180) day reinvestment period following the Subordinated
Bridge Facility Refinancing Date), the Net Proceeds shall temporarily be used to
reduce any outstandings under the Revolving Loans and any excess shall be placed
in a Net Proceeds Trust pending reinvestment.
(ii) If, after the Agreement Date, any member of the LaunchCo Group
shall sell, transfer or otherwise dispose of (including, without limitation, by
way of condemnation or casualty to the extent not covered by insurance), any
Assets with Net Proceeds in excess of $3,000,000, in the aggregate during the
term of this Agreement (other than (I) the sale of obsolete equipment or
inventory, (II) the sale, transfer or other disposition of fixed Assets that are
replaced by property of substantially equivalent value in the ordinary course of
business, (III) the sale or lease of subscriber lists or office space, or the
licensing of intellectual property, in each case in the ordinary course of
business, (IV) the sale of Cash Equivalents and (V) the sale or discount of
accounts receivable in connection with compromise or collection (but not in
connection with accounts receivable securitizations or similar transactions)),
eighty percent (80%) of the Net Proceeds received by such member of the LaunchCo
Group from such Sales Transaction shall be promptly (but in any event within
five (5) Business Days of such member of the LaunchCo Group's receipt thereof)
distributed to the Borrower and applied, on the date of receipt thereof by the
Borrower, to prepay the Loans as set forth in Section 2.7(e) below; provided,
--------
however, so long as no Default or Event of Default then exists or would be
-------
caused thereby, the Restricted Group may use such Net Proceeds so distributed to
make Permitted Acquisitions and Capital Expenditures (without regard to the
Reinvestment Basket) within three hundred sixty-five (365) days from the date of
the distribution of such Net Proceeds to the Borrower; provided, further,
-------- -------
however, that when the Adjusted Leverage Ratio shall be less than or equal to
-------
4.50 to 1.00 (on a pro forma basis) on the date of any Sales Transaction and for
the two (2) consecutive fiscal quarters immediately preceding the date of such
Sales Transaction, and provided that the Adjusted Leverage Ratio shall remain
less than or equal to 4.50 to 1.00 until the date of reinvestment (the "Leverage
Maintenance Requirement"), the recapture percentage set forth in this Section
2.7(b)(ii) shall be reduced from eighty percent (80%) to fifty percent (50%).
(iii) If, after the Agreement Date, any Net Proceeds are received by
any member of the InternetCo Group in connection with any Sales Transaction and
all or any portion of such Net Proceeds are distributed to the Borrower, eighty
percent (80%) of such Net Proceeds received by the Borrower in excess
of $3,000,000, in the aggregate during the term of this Agreement, shall be
applied on the date of receipt thereof by the Borrower to prepay the Loans as
set forth in Section 2.7(e) below; provided, however, so long as no Default or
-------- -------
Event of Default then exists or would be caused thereby, the Borrower may use
such Net Proceeds to make Permitted Acquisitions and Capital Expenditures in the
Restricted Group (without regard to the Reinvestment Basket) or to make
Investments in the LaunchCo Group, the InternetCo Group or MacWorld, within
three hundred sixty-five (365) from the date of distribution of such Net
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Proceeds to the Borrower; provided further, however, that when the Adjusted
-------- ------- -------
Leverage Ratio shall be less than or equal to 4.50 to 1.00 (on a pro forma
basis) on the date of any Sales Transaction and for the two (2) consecutive
fiscal quarters immediately preceding the date of such Sales Transaction, and
subject to the Leverage Maintenance Requirement, the recapture percentage set
forth in this Section 2.7(b)(iii) shall be reduced from eighty percent (80%) to
fifty percent (50%).
(iv) If, after the Agreement Date, any Net Proceeds are received by
MacWorld or any of its Subsidiaries in connection with any Sales Transaction and
all or any portion of such Net Proceeds are distributed to the Borrower or any
of the Restricted Subsidiaries, eighty percent (80%) of such Net Proceeds
received by the Borrower or any Restricted Subsidiary in excess of $3,000,000,
in the aggregate during the term of this Agreement, shall be applied on the date
of receipt thereof by the Borrower or such Restricted Subsidiary to prepay the
Loans as set forth in Section 2.7(e) below; provided, however, so long as no
-------- -------
Default or Event of Default then exists or would be caused thereby, the Borrower
and its Restricted Subsidiaries may use such Net Proceeds to make Permitted
Acquisitions and Capital Expenditures in the Restricted Group (without regard to
the Reinvestment Basket) within three hundred sixty-five (365) days from the
date of the receipt by the Borrower or any Restricted Subsidiary of such Net
Proceeds; provided, further, however, that when the Adjusted Leverage Ratio
-------- ------- -------
shall be less than or equal to 4.50 to 1.00 (on a pro forma basis) on the date
of any Sales Transaction and for the two (2) consecutive fiscal quarters
immediately preceding the date of such Sales Transaction, and subject to the
Leverage Maintenance Requirement, the recapture percentage set forth in this
Section 2.7(b)(iv) shall be reduced from eighty percent (80%) to fifty percent
(50%).
(v) If, after the Agreement Date, any member of the Restricted Group
or any member of the LaunchCo Group shall receive, or any member of the
InternetCo Group or MacWorld shall distribute to the Borrower or any of its
Restricted Subsidiaries, (A) Net Proceeds of insurance (including, without
limitation, by way of a casualty or condemnation covered by insurance or the
over-funding of any Plan or Multiemployer Plan), in the aggregate during the
term of this Agreement, in excess of $10,000,000, or (B) Net Proceeds of "key-
man" life insurance, one hundred percent (100%) of such Net Proceeds (or, in the
case of Net Proceeds of "key-man" life insurance, fifty percent (50%) of such
Net Proceeds) shall be applied on the date of receipt thereof by such member of
the Restricted Group or such member of the LaunchCo Group, as the case may be,
to prepay the Loans as set forth in Section 2.7(e) below; provided, however,
-------- -------
that, at the Borrower's election, such Net Proceeds (other than the fifty
percent (50%) of the Net Proceeds of "key-man" life insurance which shall be
required in any case to repay the Loans) may be reinvested by such member of the
Restricted Group or such member of the LaunchCo Group in their respective
businesses to the extent that the aggregate Purchase Price with respect to such
reinvestment shall not exceed the lesser of (x) such Net Proceeds and (y)
$25,000,000 in the aggregate during the term of this Agreement, so long as (A)
no Default or Event of Default then exists or would be caused thereby and (B)
such member of the Restricted Group or the LaunchCo Group shall have concluded
(or entered into a definitive commitment for) such reinvestment within three
hundred sixty-five (365) days, in each case from the date of its receipt of such
Net Proceeds.
(vi) In the event the Borrower elects to exercise its right to
reinvest Net Proceeds under Section 2.7(b)(i), (ii), (iii), (iv) or (v), the
Borrower shall so notify the
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Administrative Agent, in the case of a sale or other disposition of Assets not
less than three (3) Business Days prior to the proposed date of the closing of
such sale or other disposition, and in the case of the receipt of Net Proceeds
of insurance not less than five (5) Business Days after the occurrence of the
loss covered by such insurance, and shall, upon its or any Subsidiary's receipt
of such Net Proceeds, remit such Net Proceeds to the Administrative Agent to
reduce the outstanding principal balance of the Revolving Loans (but not the
Term Loans nor the amount of the Revolving Loan Commitment), unless such Net
Proceeds are otherwise required to be placed in the Bridge Equity Account
pursuant to Section 2.7(b)(i). Any amount in excess of the then outstanding
balance of the Revolving Loans shall be held in trust in an interest-bearing
cash collateral account with the Administrative Agent or an Affiliate thereof (a
"Net Proceeds Trust") for the benefit of the Borrower, to be applied to the
ultimate reinvestment, as hereinafter provided. To the extent that the
applicable Borrower Party shall not have completed the reinvestment of such Net
Proceeds within three hundred sixty-five (365) days from the date of its receipt
thereof (for whatever reason, including the occurrence of a Default or Event of
Default hereunder), or the cash Purchase Price of such reinvestments shall be
less than such Net Proceeds, the amount of Net Proceeds previously applied to
reduce the outstanding balance of the Revolving Loans and any funds held in the
Net Proceeds Trust relating to such sale shall be re-applied to the Loans in the
manner set forth in Section 2.7(e).
(vii) Amounts in any Bridge Equity Account or any Net Proceeds Trust
shall also be subject to a valid and perfected first priority Lien in favor of
the Administrative Agent (for the benefit of the Credit Parties to secure the
Obligations), pursuant to a deposit pledge agreement or other security agreement
in form and substance reasonably satisfactory to the Administrative Agent.
(c) Debt Issuance. If, after the Agreement Date, Holdco or the Borrower
--------------
shall conduct any public or private issuance of any Funded Debt (other than the
issuance of (i) the Permitted High-Yield Securities issued to refinance the
Subordinated Bridge Facility in an amount not to exceed an amount equal to (x)
the then outstanding principal of, and accrued interest and premiums on, the
Subordinated Bridge Facility, plus (y) fees and expenses in connection with the
issuance of such Permitted High-Yield Securities; (ii) the Refinancing
Securities issued to refinance the Subordinated Bridge Facility or the Permitted
High-Yield Securities in an amount not to exceed an amount equal to (x) the then
outstanding principal of, and accrued interest and premiums on, the Subordinated
Bridge Facility or the Permitted High-Yield Securities, as applicable, plus (y)
fees and expenses in connection with the issuance of such Refinancing
Securities, and (iii) other Funded Debt permitted under Section 7.1 hereof)
(each a "Debt Offering"), the Borrower shall make a prepayment of the
outstanding principal amount of the Term Loans in an amount equal to one hundred
percent (100%) of the Net Proceeds received by Holdco or the Borrower, as the
case may be, on the date of receipt of the Net Proceeds of such Debt Offering.
The amount of any prepayment made by the Borrower pursuant to this Section
2.7(c) shall be applied to prepay the Loans as set forth in Section 2.7(e)
below.
(d) Bridge Equity and Additional Equity Contribution. In the event that
-------------------------------------------------
Holdco or the Borrower shall receive the Bridge Equity or the Additional Equity
Contribution, the Borrower shall make a prepayment of the outstanding principal
amount of the Term Loans in an amount equal to one hundred percent (100%) of the
amount of the Bridge Equity and the amount of the Additional Equity Contribution
received by Holdco or the Borrower, as the case may be, on each
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date of receipt thereof. The amount of any prepayment made by the Borrower
pursuant to this Section 2.7(d) shall be applied to prepay the Loans as set
forth in Section 2.7(e) below.
(e) Application of Payments. Except as otherwise permitted in Section
------------------------
2.7(b) hereof, the amount of any prepayment required to be made pursuant to this
Section 2.7 shall be applied as follows: (i) first, to permanently prepay the
outstanding principal amount of the Term Loans, on a pro rata basis, with the
amount allocated to the Term A Loans being applied to reduce, on a pro-rata
basis, the remaining scheduled installments of principal due under the Term A
Loans as set forth in Section 2.6(b) hereof, and the amount allocated to the
Term B Loans being applied to reduce, on a pro-rata basis, the remaining
scheduled installments of principal due under the Term B Loans as set forth in
Section 2.6(c) hereof, and (ii) thereafter, to prepay the outstanding principal
amount of the Revolving Loans to the extent such amount exceeds the Available
Revolving Commitment. Accrued interest on the principal amount of Eurodollar
Advances being repaid, pursuant to this Section 2.7 to the date of such
repayment shall be paid by the Borrower concurrently with such principal
repayment.
(f) Revolving Loans. The Borrower shall make a prepayment of the Revolving
----------------
Loans (without any corresponding permanent reduction in the Revolving
Commitment) in an amount equal to the excess, if any, of the aggregate principal
amount of the Revolving Loans over the Available Revolving Commitment.
Section 2.8 Notes; Loan Accounts.
---------------------
(a) The Loans shall be repayable in accordance with the terms and
provisions set forth herein. Upon the request of any Lender, Notes shall be
issued by the Borrower to the order of such Lender reflecting the amount of such
Lender's Commitments under this Agreement. Any Notes issued by the Borrower to
the order of any requesting Lender shall be duly executed and delivered by one
or more Authorized Signatories of the Borrower.
(b) Each Lender may open and maintain on its books in the name of the
Borrower a loan account with respect to such Lender's portion of the Loans and
interest thereon. Each Lender which opens such a loan account shall debit such
loan account for the principal amount of its portion of each Advance made and
accrued interest thereon and shall credit such loan account for each payment on
account of principal of or interest on its Loans. The records of a Lender with
respect to the loan account maintained by it shall be prima facie evidence of
the Loans of such Lender, and accrued interest thereon, but the failure of any
Lender to maintain such records or to make any such notations, or any error or
mistake in such notations, shall not affect the Borrower's repayment obligations
with respect to such Loans.
Section 2.9 Manner of Payment.
------------------
(a) Each payment (including any prepayment) by the Borrower on account of
the principal of or interest on the Loans, commitment fees, letter of credit
fees and any other amount owed to any of the Credit Parties under this Agreement
or the Fee Letter shall be made not later than 2:00 p.m. (New York time) on the
date specified for payment under this Agreement to the Administrative Agent at
the Administrative Agent's Office, for the account of the applicable Credit
Party, in Dollars in immediately available funds. Any payment received by the
Administrative Agent after 2:00 p.m. (New York time) shall, for the purpose of
calculating
-43-
interest, be deemed received on the next Business Day. Receipt by the
Administrative Agent of any payment hereunder at or prior to 2:00 p.m. (New York
time) on any Business Day shall be deemed to constitute receipt on such Business
Day. In the case of a payment for the account of a Lender, the Administrative
Agent will promptly thereafter distribute the amount so received in like funds
to such Lender. If the Administrative Agent shall not have received any payment
from the Borrower as and when due, the Administrative Agent will promptly notify
the Credit Parties accordingly.
(b) The Borrower agrees to pay principal, interest, fees and all other
Obligations due hereunder, under the Fee Letter, or under the other Loan
Documents without set-off or counterclaim or, except as otherwise provided
herein, and so long as any applicable Lender complies with Section 2.13, any
deduction whatsoever.
(c) Prior to the acceleration of the Loans under Section 9.2 hereof, and
other than with respect to payments required to be made pursuant to Section 2.7
hereof (which shall be applied as set forth in Section 2.7(e) hereof), if some
but less than all amounts due from the Borrower are received by the
Administrative Agent, the Administrative Agent shall distribute such amounts in
the following order of priority on a pro-rata basis: (i) FIRST, to the payment
of any fees, costs or expenses then due and payable to any of the Credit Parties
hereunder or under any other Loan Document; (ii) SECOND, to the payment of
interest then due and payable on the Loans; (iii) THIRD, to the payment of
principal then due and payable on the Term Loans; (iv) FOURTH, to the payment of
principal then due and payable on the Revolving Loans; and (v) FIFTH, to the
payment of all other amounts not otherwise referred to in this Section 2.9(c)
then due and payable to the Credit Parties hereunder or under any other Loan
Document.
(d) Except as otherwise specified in the definition of Eurodollar Advance
Period, if any payment under this Agreement or any of the other Loan Documents
is specified to be made on a day which is not a Business Day, it shall be made
on the next Business Day, and such extension of time shall in such case be
included in computing interest and fees, if any, in connection with such
payment.
Section 2.10 Reimbursement.
--------------
(a) Whenever any Lender shall sustain or incur any losses or out-of-pocket
expenses (other than solely losses of profit) in connection with (i) failure by
the Borrower to borrow any Eurodollar Advance after having given notice of its
intention to borrow in accordance with Section 2.2 hereof (whether by reason of
the Borrower's election not to proceed or the non-fulfillment of any of the
conditions set forth in Article 3), (ii) prepayment of any Eurodollar Advance
prior to the applicable Payment Date in whole or in part for any reason, or
(iii) failure by the Borrower to prepay any Eurodollar Advance after giving
notice of its intention to prepay such Advance, the Borrower agrees to pay to
such Lender, within ten (10) days of demand, an amount sufficient to compensate
such Lender for all such losses and reasonable out-of-pocket expenses (other
than solely losses of profit) resulting therefrom; provided, however, that
-------- -------
notwithstanding the foregoing, the Borrower shall have no obligation to make any
such payment in respect of any such losses or expenses incurred more than one
hundred eighty (180) days prior to its receipt of demand from such Lender. Such
Lender's good faith determination of the amount of such losses or out-of-pocket
expenses, as set forth in writing and accompanied by
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calculations in reasonable detail demonstrating the basis for its demand,
which shall be delivered at the time of such demand to the Borrower by the
Administrative Agent on behalf of such Lender, shall be presumptively correct.
(b) Expenses subject to reimbursement hereunder shall include, without
limiting the generality of the foregoing, expenses incurred by any Lender or any
participant of such Lender permitted hereunder in connection with the re-
employment of funds prepaid, repaid, not borrowed or paid, as the case may be,
and the amount of the expenses subject to reimbursement hereunder shall be the
excess, if any, of (i) the interest or other cost to such Lender of the deposit
or other source of funding used to make any such Eurodollar Advance for the
remainder of its Eurodollar Advance Period, over (ii) the interest earned (or to
be earned) by such Lender upon the re-lending or other re-deployment of the
amount of such Eurodollar Advance for the remainder of its putative Eurodollar
Advance Period.
Section 2.11 Pro Rata Treatment.
-------------------
(a) Advances. Each Advance of any of the Loans from the Lenders shall be
---------
made pro-rata on the basis of their respective Commitment Ratios.
(b) Payments Prior to Declaration of an Event of Default. Except as
-----------------------------------------------------
provided in Section 2.2(e)(iv) and Section 2.7(e), prior to the declaration of
an Event of Default by the Administrative Agent on behalf of the Lenders under
Section 9.2 hereof, each payment and prepayment of principal of the Loans, and
each payment of interest on the Loans, shall be made to the Lenders pro-rata on
the basis of their respective Commitment Ratios. If any Lender shall obtain any
payment (whether involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Loans made by it in excess of its ratable share of
the Loans under its Commitment Ratio with respect thereto, such Lender shall
forthwith purchase from the other Lenders such participations in the applicable
Loans made by them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of the other Lenders; provided,
--------
however, that if all or any portion of such excess payment is thereafter
-------
recovered from such purchasing Lender, such purchase from each Lender shall be
rescinded, and each such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 2.11(b) may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The provisions of this Section
2.11(b) set forth the rights of the Lenders with respect to payment, and are not
enforceable for the benefit of the Borrower.
(c) Payments Subsequent to Declaration of an Event of Default. Subsequent
----------------------------------------------------------
to the declaration of an Event of Default by the Administrative Agent on behalf
of the Lenders under Section 9.2 hereof, payments and prepayments made to any of
the Credit Parties, or otherwise received by any of the Credit Parties, shall be
distributed as provided in Section 9.3 hereof.
Section 2.12 Capital Adequacy. If any Lender shall have reasonably
-----------------
determined that the adoption (after the Agreement Date) of any Applicable Law
regarding the capital adequacy of banks or bank holding companies, or any change
in Applicable Law (whether adopted before
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or after the Agreement Date) or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender with any directive issued or adopted after the date hereof
regarding capital adequacy (whether or not having the force of law but with
which such Person customarily complies) of any such governmental authority,
central bank or comparable agency, in each case first promulgated after the
Agreement Date, has or would have the effect of reducing the rate of return on
such Lender's capital as a consequence of its obligations hereunder to a level
below that which it could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy immediately before such adoption, change or compliance and
assuming that such Lender's capital was fully utilized prior to such adoption,
change or compliance) by an amount reasonably deemed by such Lender to be
material, then such Lender shall promptly notify the Borrower of such adoption,
compliance, or change. Within sixty (60) days of written notice by such Lender,
the Borrower shall, in its discretion, (i) provide a replacement lender or
lenders for such Lender, which replacement lender or lenders will be subject to
the approval of the Agents, which consent shall not be unreasonably withheld or
delayed, and the Administrative Agent, such Lender and the Borrower shall take
all necessary actions to transfer the rights, duties and obligations of such
Lender to such replacement lender or lenders within such sixty (60) day period
(including, without limitation, the payment in full of all Obligations hereunder
due to the Lender being replaced) and the Borrower shall pay such Lender all
amounts described in clause (ii) for the period prior to the replacement of such
Lender, or (ii) thereafter, from time to time within ten (10) days of demand by
such Lender, promptly pay to such Lender, or its applicable bank holding company
or parent, such additional amounts (other than income taxes) as shall be
sufficient to compensate such Lender for such reduced return, together with
interest on such amount from the fourth (4th) day after the date of demand until
payment in full thereof at the Base Rate plus the Applicable Margin in effect
for Base Rate Advances under the Revolving Commitment. A certificate of such
Lender setting forth the amount to be paid to such Lender by the Borrower as a
result of any event referred to in this paragraph and supporting calculations in
reasonable detail shall be conclusive, absent manifest error.
Section 2.13 Tax Forms. On or prior to the Agreement Date and on or prior
----------
to the first Business Day of each calendar year thereafter, and with respect to
any new Lender, on the date of the applicable Assignment and Assumption
Agreement, each Lender which is organized in a jurisdiction other than the
United States shall provide each of the Administrative Agent and the Borrower
with either (a) two (2) properly executed originals of Form 4224 or Form 1001
(or any successor forms) prescribed by the Internal Revenue Service or other
documents satisfactory to the Borrower and the Administrative Agent, and a
properly executed Internal Revenue Service Form W-8 or Form W-9, as the case may
be, certifying (i) as to such Lender's status for purposes of determining
complete exemption from United States withholding taxes with respect to all
payments to be made to such Lender hereunder and under the other Loan Documents,
or (ii) that all payments to be made to such Lender hereunder and under the
other Loan Documents are subject to such taxes at a rate reduced to zero by an
applicable tax treaty, or (b) a certificate executed by such Lender certifying
that such Lender is not a "bank" and that such Lender qualifies for the
portfolio interest exemption under Section 881(c) of the Code, and two (2)
properly executed originals of Internal Revenue Service Form W-8 (or any
successor form) prescribed certifying such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under
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the other Loan Documents. Each such Lender agrees to provide the Administrative
Agent and the Borrower with new forms prescribed by the Internal Revenue Service
upon the expiration or obsolescence of any previously delivered form, or after
the occurrence of any event requiring a change in the most recent forms
delivered by it to the Administrative Agent and the Borrower. Each Credit Party
shall notify the Borrower at any time it determines that it is no longer in a
position to provide any previously delivered certificates to the Borrower (or
any other form of certification adopted by United States taxing authorities for
such purpose).
Section 2.14 Letters of Credit.
-----------------
(a) Letter of Credit Committed Amount.
----------------------------------
(i) Subject to the terms and conditions hereof, each Issuing Bank, in
reliance on the agreements of the L/C Participants set forth in Section
2.14(d)(i) hereof, agrees to issue Letters of Credit denominated in Dollars
(or, if available to such Issuing Bank, in any foreign currency) and
payable on a sight basis for the account of the Borrower prior to the
Initial Maturity Date, in such form as may be approved from time to time by
such Issuing Bank; provided that no Issuing Bank shall have any obligation
to issue any Letter of Credit if, after giving effect to such issuance, (A)
the Dollar Equivalent Amount of the aggregate L/C Obligations would exceed
the Letter of Credit Committed Amount, (B) the Available Revolving
Commitment would be less than zero, or (C) the sum of (I) the aggregate
principal amount of Revolving Loans then outstanding, plus (II) the
aggregate amount of L/C Obligations then outstanding, would exceed the
Revolving Commitment.
(ii) Each Letter of Credit shall (A) be either (x) a standby letter of
credit issued to support obligations of the Borrower or any of its Restricted
Subsidiaries, contingent or otherwise, to finance the working capital and
business needs of the Borrower or any of its Restricted Subsidiaries in the
ordinary course of business, or (y) if available to the applicable Issuing Bank,
a commercial letter of credit issued in respect of the purchase of goods or
services by the Borrower or any of its Subsidiaries in the ordinary course of
business, and (B) expire no later than the earlier of (x) the date that is
twelve (12) months after the date of its issuance, and in the case of standby
Letters of Credit, may provide for the automatic extension of the expiry date
thereof for successive twelve (12) month periods and (y) the fifth (5th)
Business Day prior to the Initial Maturity Date.
(iii) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New York
or, in any case where the applicable Issuing Bank issues such Letters of Credit
from an office located outside of the United States, the laws of the
jurisdiction in which such office is located.
(iv) No Issuing Bank shall at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause such
Issuing Bank or any L/C Participant to exceed any limits imposed by, any
Applicable Law.
(b) Procedure for Issuance of Letters of Credit. The Borrower may request
-------------------------------------------
that an Issuing Bank issue a Letter of Credit, at any time prior to the fifth
(5th) Business Day prior to the Initial Maturity Date, by delivering to the
applicable Issuing Bank at its address for notices specified herein a Request
for Issuance of Letter of Credit, completed to the satisfaction of such
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Issuing Bank, and such other certificates, documents and other papers as such
Issuing Bank may reasonably request in connection with such Request for Issuance
of Letter of Credit. Upon receipt of any Request for Issuance of Letter of
Credit, the applicable Issuing Bank will process the Letter of Credit
Application accompanying such Request for Issuance of Letter of Credit, and the
certificates, documents and other papers and information delivered to it in
connection therewith, in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall any
Issuing Bank be required to issue any Letter of Credit earlier than three (3)
Business Days after its receipt of any Request for Issuance of Letter of Credit
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the applicable
Issuing Bank and the Borrower. The applicable Issuing Bank shall furnish a copy
of such Letter of Credit to the Borrower promptly following the issuance
thereof.
(c) Fees, Commissions and Other Charges.
------------------------------------
(i) The Borrower shall pay to the Administrative Agent, for the
account of the applicable Issuing Bank and the L/C Participants, with respect to
each Letter of Credit issued hereunder, a per annum letter of credit fee, as and
to the extent set forth in Section 2.4(c) hereof. In addition, the Borrower
shall pay to the applicable Issuing Bank, for its own account, an issuing fee,
as set forth in Section 2.4(d) hereof, with respect to each Letter of Credit
issued by it hereunder.
(ii) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the applicable Issuing Bank for such normal and customary
processing or transactional fees as are incurred or charged by such Issuing Bank
in issuing, effecting payment under, amending or otherwise administering any
Letter of Credit issued by it.
(iii) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Banks and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this Section 2.14(c), along with an accounting of the relevant
calculations.
(d) L/C Participations.
------------------
(i) Each Issuing Bank irrevocably agrees to grant and hereby grants to
each L/C Participant and, to induce such Issuing Bank to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from such Issuing Bank, on the terms and conditions
hereinafter stated, for such L/C Participant's own account and risk an undivided
interest equal to such L/C Participant's Revolving Commitment Ratio from time to
time in effect in such Issuing Bank's rights and obligations under each Letter
of Credit issued hereunder and each Letter of Credit Application and the amount
of each draft paid by such Issuing Bank thereunder. Each L/C Participant
unconditionally and irrevocably agrees with such Issuing Bank that, if a draft
is paid under any Letter of Credit for which such Issuing Bank is not reimbursed
in full by the Borrower in accordance with the terms of this Agreement, such L/C
Participant shall pay in Dollars to such Issuing Bank upon demand at such
Issuing Bank's address for notices specified herein an amount equal to such L/C
Participant's
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then Revolving Commitment Ratio of the amount of such draft, or any part
thereof, which is not so reimbursed. If such demand is made prior to 12:00 noon
(New York time) on a Business Day, such L/C Participant shall make such payment
to the applicable Issuing Bank prior to the end of such Business Day and
otherwise such L/C Participant shall make such payment on the next succeeding
Business Day.
(ii) If any amount required to be paid by any L/C Participant to any
Issuing Bank pursuant to Section 2.14(d)(i) in respect of any unreimbursed
portion of any payment made by such Issuing Bank under any Letter of Credit is
paid to such Issuing Bank within three (3) Business Days after the date such
payment is due, such L/C Participant shall pay to the applicable Issuing Bank on
demand an amount equal to the product of (i) such amount, times (ii) in the case
of any such payment obligation denominated in Dollars, the daily average Federal
Funds Rate, as quoted by such Issuing Bank, times (iii) a fraction the numerator
of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to Section 2.14(d)(i) is not in fact made available to the
applicable Issuing Bank by such L/C Participant within three (3) Business Days
after the date such payment is due, such Issuing Bank shall be entitled to
recover from such L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to Base Rate
Advances hereunder. A certificate of any Issuing Bank submitted to any L/C
Participant with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
(iii) Whenever, at any time after an Issuing Bank has made payment
under any Letter of Credit and has received from any L/C Participant its pro-
rata share of such payment in accordance with Section 2.14(d)(i), such Issuing
Bank receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of Collateral applied thereto
by such Issuing Bank), or any payment of interest on account thereof, such
Issuing Bank will, if such payment is received prior to 12:00 noon (New York
time) on a Business Day, distribute to such L/C Participant its pro-rata share
thereof prior to the end of such Business Day and otherwise such Issuing Bank
will distribute such payment on the next succeeding Business Day; provided,
--------
however, that in the event that any such payment received by such Issuing Bank
-------
shall be required to be returned by such Issuing Bank, such L/C Participant
shall return to such Issuing Bank the portion thereof previously distributed by
the Issuing Bank to it.
(e) Reimbursement Obligation of the Borrower.
----------------------------------------
(i) The Borrower agrees to reimburse each Issuing Bank, on the same
Business Day on which a Draft under any Letter of Credit paid by such Issuing
Bank, provided that such Issuing Bank provides notice to the Borrower prior to
12:00 noon (New York time) on such Business Day, and otherwise the Borrower will
reimburse such Issuing Bank on the next succeeding Business Day. The failure to
provide such notice shall not affect the Borrower's absolute and unconditional
obligation to reimburse the applicable Issuing Bank for any Draft paid under any
Letter of Credit issued by such Issuing Bank. The applicable Issuing Bank shall
provide notice to the Borrower on such Business Day as a Draft is paid by such
Issuing Bank indicating the amount of (A) such Draft so paid and (B) any taxes,
fees, charges or other costs or expenses incurred by such Issuing Bank in
connection with such payment. Each such payment
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shall be made to each applicable Issuing Bank at its address for notices
specified herein in Dollars in immediately available funds.
(ii) Interest shall be payable on any and all amounts remaining unpaid
by the Borrower under this Section 2.14(e) from the date such amounts are drawn
until payment in full at the rate which would be payable on any outstanding Base
Rate Advances of Revolving Loans.
(iii) Each drawing under any Letter of Credit shall constitute a
request, with no further action required, by the Borrower to the Administrative
Agent for a borrowing pursuant to Section 2.2(b) in the amount of such drawing
which borrowing shall be funded on the date such drawing is paid unless such
drawing is otherwise reimbursed by the Borrower under Section 2.14(e)(i).
(f) Obligations Absolute.
--------------------
(i) The Borrower's obligations under this Section 2.14 shall be
absolute and unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment (other than payment) which the
Borrower may have or have had against any Issuing Bank, any L/C Participant or
any beneficiary of a Letter of Credit; provided, however, that the Borrower
-------- -------
shall not be obligated to reimburse any Issuing Bank or any L/C Participant for
any wrongful payment, or indemnify any Issuing Bank or any L/C Participant for
any wrongful dishonor or any other matter, to the extent resulting from acts or
omissions constituting gross negligence, bad faith or willful misconduct by such
Issuing Bank or such L/C Participant.
(ii) The Borrower also agrees with any Issuing Bank and any L/C
Participant that neither any Issuing Bank nor any L/C Participant shall be
responsible for, and the Borrower's reimbursement obligations under Section
2.14(e)(i) shall not be affected by, (A) the validity or genuineness of
documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, or (B) any dispute between or
among the Borrower and any beneficiary of any Letter of Credit or any other
party to which such Letter of Credit may be transferred, or (C) any claims
whatsoever of Borrower against any beneficiary of such Letter of Credit or any
such transferee.
(iii) Neither any Issuing Bank nor any L/C Participant shall be liable
for any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with any
Letter of Credit, except for errors or omissions caused by the applicable
Issuing Bank's gross negligence, bad faith or willful misconduct.
(iv) The Borrower agrees that any action taken or omitted by any
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in absence of gross negligence, bad faith or
willful misconduct as determined by a court of competent jurisdiction and in
accordance with the standards of care specified in the Uniform Commercial Code
of the State of New York, shall be binding on the Borrower and shall not result
in any liability of any Issuing Bank or any L/C Participant to the Borrower.
(v) Promptly after the issuance of any standby Letter of Credit or any
amendment to any such Letter of Credit, the Administrative Agent shall notify
the L/C
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Participants of such issuance or amendment, as the case may be. Upon the request
of any L/C Participant, the applicable Issuing Bank shall provide such L/C
Participant with a copy of any such Letter of Credit or amendment. Each Issuing
Bank shall provide to the Administrative Agent on a weekly basis a report for
distribution to the L/C Participants setting forth the amount of such Issuing
Bank's commercial Letters of Credit issued hereunder.
(g) Letter of Credit Payments. If any draft shall be presented for payment
-------------------------
under any Letter of Credit, the responsibility of the Issuing Bank to the
Borrower in connection with such draft shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
(h) Application. To the extent that any provision of any Request for
-----------
Issuance of Letter of Credit or any Letter of Credit Application related to any
Letter of Credit is inconsistent with the provisions of this Section 2.14, the
provisions of this Section 2.14 shall apply.
(i) Change in Law. If any change after the Agreement Date in Applicable
-------------
Law, any change in the interpretation or administration thereof, or any change
after the Agreement Date in compliance with Applicable Law by the Issuing Bank
or any other Lender as a result of any request or directive of any governmental
authority, central bank or comparable agency (whether or not having the force of
law but with which the Issuing Bank or Lender customarily complies) shall (i)
impose, modify or deem applicable any reserve (including, without limitation,
any imposed by the Board of Governors of the Federal Reserve System), special
deposit, capital adequacy, assessment or other requirements or conditions
against Letters of Credit issued by the Issuing Bank or against participations
by any L/C Participant in the Letters of Credit or (ii) impose on the Issuing
Bank or any L/C Participant any other condition regarding any Letter of Credit
or any participation therein, and the result of any of the foregoing in the
reasonable determination of the Issuing Bank or such L/C Participant, as the
case may be, is to increase the cost (other than income taxes) to the Issuing
Bank or such L/C Participant of issuing or maintaining any Letter of Credit or
purchasing or maintaining any participation therein, as the case may be, by an
amount (which amount shall be reasonably determined) deemed by the Issuing Bank
or such L/C Participant to be material, then, on the earlier of (x) ten (10)
days following the date of demand (which demand shall be made not later than six
(6) months following the Issuing Bank's or such L/C Participant's determination
of a need for additional compensation) by the Issuing Bank or such L/C
Participant or (y) the Initial Maturity Date, the Borrower shall pay the Issuing
Bank or such L/C Participant, as the case may be, such additional amount or
amounts as the Issuing Bank or such L/C Participant, as the case may be,
determines will compensate it for such increased costs. Within sixty (60) days
of such written demand by the Issuing Bank or such L/C Participant, the Borrower
may, in its discretion, provide a replacement lender or lenders for the Issuing
Bank or such L/C Participant, which replacement lender or lenders will be
subject to the approval of the Agents, which consent shall not be unreasonably
withheld or delayed, and the Administrative Agent, the Issuing Bank or such L/C
Participant, as applicable, and the Borrower shall take all necessary actions to
transfer the rights, duties and obligations of the Issuing Bank or such L/C
Participant to such replacement lender or lenders within such sixty (60) day
period. A certificate of such L/C Participant or the Issuing Bank setting forth
the amount, and in reasonable detail, the basis for the Issuing Bank or such L/C
Participant's determination of such amount, to be paid to the Issuing Bank or
such L/C
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Participant by the Borrower as a result of any event referred to in this
paragraph shall, absent manifest error, be conclusive. Such certificate shall be
delivered to the Borrower with each written demand for payment referenced above.
The Issuing Bank and each L/C Participant further agree that they shall use
their best efforts to give the Borrower thirty (30) days prior notice, and in
any event shall give prompt notice, of any event referred to in this paragraph
which may have the effect of materially increasing the cost to the Issuing Bank
or such L/C Participant of issuing or maintaining any Letter of Credit or
purchasing or maintaining any participation therein.
(j) Indemnity. The Borrower will indemnify and hold harmless the
---------
Indemnified Parties from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, reasonable
costs, reasonable expenses or reasonable disbursements of any kind or nature
whatsoever (including, without limitation, reasonable attorneys' fees) (other
than income taxes) which may be imposed on, incurred by or asserted against any
such Indemnified Parties in any way relating to or arising out of the issuance
of a Letter of Credit, except that the Borrower shall not be liable to any of
the Indemnified Parties for any portion of such claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence, bad faith or
willful misconduct of the Indemnified Parties as determined by a final, non-
appealable judicial order. This Section 2.14(j) shall survive termination of
this Agreement.
ARTICLE 3
Conditions Precedent
--------------------
Section 3.1 Conditions Precedent to Initial Advance of the Loans and to the
---------------------------------------------------------------
Issuance of the Initial Letter of Credit. The obligation of the Lenders to
----------------------------------------
undertake their respective Commitments and to make the initial Advance of the
Loans, and of the Issuing Bank to issue the initial Letter of Credit (if issued
on the Agreement Date), is subject to the prior fulfillment of each of the
following conditions:
(a) The Administrative Agent shall have received each of the following
(with copies for each of the Lenders), in form and substance satisfactory to the
Agents and each of the Lenders:
(i) this duly executed Agreement;
(ii) the duly executed Borrower's Pledge Agreement, together with
appropriate original certificates representing the Equity Interests pledged
thereunder and corresponding undated certificate powers with respect thereto
executed in blank;
(iii) the duly executed Security Agreement, together with evidence of
the filing of appropriate UCC-1 financing statement forms;
(iv) the loan certificate of the Borrower, in substantially the form
attached hereto as Exhibit S, including a certificate of incumbency with respect
---------
to each Authorized Signatory, together with appropriate attachments which shall
include without limitation, the following items: (A) a copy of the articles or
certificate of incorporation of the Borrower, certified to be true, complete and
correct by the Secretary of State of the State of Delaware, and a
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true, complete and correct copy of the by-laws of the Borrower; (B) certificates
of good standing for the Borrower issued by the Secretary of State of the State
of Delaware and by the Secretary of State or similar state official for each
other state in which the Borrower is required to or has qualified to do
business; (C) a true, complete and correct copy of the resolutions of the board
of directors of the Borrower, authorizing the borrowing hereunder and the
execution, delivery and performance by the Borrower of this Agreement and the
other Loan Documents to which it is a party; (D) true, correct and complete
copies of any employment agreements with respect to management of the Borrower;
(E) true, correct and complete copies of any agreements to which the Borrower is
a party in effect with respect to the voting rights, ownership interests, or
management of the Borrower; and (F) a true, correct and complete copy of
resolutions adopted by the board of directors of the Borrower authorizing the
consummation of the ZD Acquisition and all transactions related thereto;
(v) the duly executed Subsidiary Guaranty executed and delivered by
each Restricted Subsidiary of the Borrower (other than any of the Foreign
Subsidiaries), InternetCo and each member of the LaunchCo Group (other than the
LaunchCo Joint Ventures existing as of the Agreement Date);
(vi) the duly executed Subsidiary Security Agreement, executed and
delivered by each Restricted Subsidiary of the Borrower (other than any of the
Foreign Subsidiaries), together with appropriate UCC-l financing statement
forms;
(vii) the duly executed Subsidiary Pledge Agreement from each
Restricted Subsidiary of the Borrower (other than any of the Foreign
Subsidiaries) and each member of the LaunchCo Group which has one or more
Subsidiaries, together with appropriate original certificates representing the
Equity Interests pledged thereunder and corresponding undated certificate powers
with respect thereto executed in blank;
(viii) a loan certificate from each Guarantor, in substantially the
form attached hereto as Exhibit T, including a certificate of incumbency with
---------
respect to each officer authorized to execute Loan Documents on behalf of such
Guarantor, together with appropriate attachments which shall include, without
limitation, the following items if such Guarantor is a corporation, and the
analogous items if such Guarantor is a partnership or a limited liability
company: (A) a copy of the articles or certificate of incorporation of such
Guarantor, certified to be true, complete and correct by the Secretary of State
of the state of such Guarantor's organization, and a true, complete and correct
copy of the by-laws of such Guarantor; (B) certificates of good standing for
such Guarantor issued by the Secretary of State of such Guarantor's organization
and by the Secretary of State or similar state official for each state in which
such Guarantor is required to or has qualified to do business; (C) a true,
complete and correct copy of the resolutions of the board of directors of such
Guarantor authorizing the execution, delivery and performance by such Guarantor
of the Loan Documents to which it is a party; and (D) true, correct and complete
copies of any agreements to which such Guarantor is a party in effect with
respect to the voting rights, ownership interests, or management of such
Guarantor;
(ix) the duly executed Holdco Pledge Agreement pledging all of the
Equity Interests of the Borrower, together with appropriate original
certificates representing such Equity Interests and corresponding undated
certificate powers with respect thereto executed in blank;
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(x) a loan certificate of each of Holdco and Intermediate Holdco,
in substantially the form attached hereto as Exhibit U, including a certificate
---------
of incumbency with respect to each officer authorized to execute Loan Documents
on behalf of Holdco or Intermediate Holdco, as applicable, together with
appropriate attachments which shall include without limitation, the following
items: (A) a copy of the certificate of incorporation of Holdco or Intermediate
Holdco, as applicable, certified to be true, complete and correct by the
Secretary of State of the State of Delaware, and a true, complete and correct
copy of the by-laws of Holdco or Intermediate Holdco, as applicable; (B)
certificates of good standing for Holdco or Intermediate Holdco, as applicable,
issued by the Secretary of State of the State of Delaware and by the Secretary
of State or similar state official for each other state in which Holdco or
Intermediate Holdco, as applicable, is required to or has qualified to do
business; (C) a true, complete and correct copy of the resolutions of the board
of directors of Holdco or Intermediate Holdco, as applicable, authorizing the
execution, delivery and performance by Holdco or Intermediate Holdco, as
applicable, of the Loan Documents to which it is a party; (D) true, correct and
complete copies of any agreements to which Holdco or Intermediate Holdco, as
applicable, is a party in effect with respect to the voting rights, ownership
interests, or management of Holdco or Intermediate Holdco, as applicable; and
(E) a true and complete copy of resolutions adopted by the Board of Directors of
Holdco or Intermediate Holdco, as applicable, authorizing the consummation of
the ZD Acquisition and all transactions related thereto;
(xi) the duly executed Intellectual Property Security Agreement,
together with appropriate filing coversheets;
(xii) the duly executed Assignment of Acquisition Documents;
(xiii) the duly executed Make-Well Agreement;
(xiv) copies of insurance binders or certificates covering the Assets
of the Borrower and its Subsidiaries, and otherwise meeting the requirements of
Section 5.5 hereof;
(xv) the legal opinion, dated as of the Agreement Date, of Xxxxxxxx
& Xxxxx, as counsel to the Borrower Parties in connection with the transactions
contemplated by this Agreement and the other Loan Documents, and any legal
opinions reasonably required by the Administrative Agent, dated as of the
Agreement Date, from local counsel to the Borrower Parties with respect to
Collateral matters, in each case addressed to the Administrative Agent and the
other Credit Parties and in form and substance satisfactory to the Agents and
their counsel;
(xvi) the legal opinion, dated as of the Agreement Date, of Xxxxxxxx
& Xxxxxxxx, as counsel to the Seller in connection with the transactions
contemplated by the Loan Documents to which the Seller is a party, to the extent
available to the Borrower addressed to the Administrative Agent and the other
Credit Parties;
(xvii) a duly executed Request for Advance for the initial Advance of
the Loans, which Request for Advance shall include calculations demonstrating,
as of the Agreement Date and after giving pro forma effect to the ZD
Acquisition, that the Borrower shall have as of the last day of the twelve (12)
fiscal month period ended December 31, 1999, (A) a Total Leverage Ratio of less
than or equal to 4.75 to 1.00, (B) a Senior Leverage Ratio of less than or equal
to
-54-
3.15 to 1.00, and (C) no more than$530,000,000 of Funded Debt outstanding under
this Agreement and in respect of the Subordinated Bridge Facility;
(xviii) the duly executed Use of Proceeds Letter;
(xix) the duly executed Certificate of Financial Condition for the
Borrower and its Restricted Subsidiaries on a consolidated basis, given by a
Principal Officer, which shall include a certification that, since December 31,
1999, no event has occurred which would be reasonably likely to have a
Materially Adverse Effect with respect to the Borrower and its Subsidiaries;
(xx) copies of the duly executed ZD Acquisition Documents, in form
and substance reasonably satisfactory to the Agents;
(xxi) copies of all consents of any Person, and filings with any
Governmental Authority (including, without limitation, Xxxx-Xxxxx-Xxxxxx
filings) made or obtained in connection with the ZD Acquisition or the
transactions contemplated by this Agreement and the other Loan Documents; and
(xxii) payoff letters and duly executed Lien releases with respect to
any Liens which are not Permitted Liens hereunder upon the Assets of the
Borrower and its Subsidiaries, and with respect to any other Indebtedness which
is not Permitted Debt hereunder.
(b) The Agents shall have received evidence satisfactory to them that all
material Necessary Authorizations, including all necessary material consents to
the ZD Acquisition and the execution, delivery and performance by the Borrower
of this Agreement and the other Loan Documents to which it is a party and by
Holdco, Intermediate Holdco and the Subsidiaries of the Borrower of the Loan
Documents to which they are parties, have been obtained or made, are in full
force and effect and are not subject to any pending or threatened reversal or
cancellation, and the Administrative Agent shall have received a certificate of
an Authorized Signatory of the Borrower so stating.
(c) The Agents shall have received evidence satisfactory to them that all
conditions precedent to the consummation of the ZD Acquisition (other than the
closing of this Agreement and the financing transactions contemplated hereby)
shall have been fulfilled to the satisfaction of the Seller and that immediately
upon the closing of this Agreement and the financing transactions contemplated
hereby the ZD Acquisition shall be consummated in accordance in all material
respects with the terms of the ZD Acquisition Documents and in compliance with
all Applicable Laws. The Agents shall also have received evidence satisfactory
to them and their counsel that no litigation seeking to enjoin or otherwise
prevent the consummation of the ZD Acquisition exists or is threatened.
(d) The Credit Parties shall receive payment of all fees and expenses due
and payable on the Agreement Date in respect of the transactions contemplated
hereby.
(e) The Administrative Agent shall have received the Borrower's financial
projections, after giving effect to the transactions contemplated hereby
(including, without limitation, consummation of the ZD Acquisition) on a fiscal
year basis through the Final Maturity Date, and
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on a fiscal quarter basis through March 31, 2001 (together with any revisions
thereof required to be delivered by the Borrower pursuant to the terms hereof,
the "Projections").
(f) The Agents shall have received the results of lien searches against the
Seller, the Borrower and each of the Borrower's Subsidiaries from all applicable
jurisdictions which shall be reasonably satisfactory to them and their counsel.
(g) The Agents shall have received a certificate of a Principal Officer
satisfactory to them and their counsel that the Borrower has received Closing
Equity of not less than $335,000,000 on or prior to the Agreement Date provided
by the Controlling Shareholders and the Co-Investors, on terms and conditions
reasonably acceptable in all respects to the Administrative Agent.
(h) The Agents shall have received evidence satisfactory to them that the
Borrower shall have received at least $175,000,000 in gross proceeds from the
issuance of the Subordinated Bridge Facility and that such proceeds shall have
been applied to the Purchase Price of the ZD Acquisition and to pay transaction
fees and expenses.
(i) All legal matters incident to this Agreement and the consummation of
the transactions contemplated hereby shall be reasonably satisfactory to the
Agents and their counsel.
Section 3.2 Conditions Precedent to Each Advance. The obligation of the
------------------------------------
Lenders to make each Advance (including the initial Advance hereunder) is
subject to the fulfillment of each of the following conditions immediately prior
to or contemporaneously with such Advance:
(a) All of the representations and warranties made by or with respect to
Holdco, the Borrower and its Subsidiaries, or any of them, under this Agreement
and the other Loan Documents, which, pursuant to Section 4.2 hereof, are made at
and as of the time of such Advance, shall be true and correct at such time in
all material respects, both before and after giving effect to the application of
the proceeds of such Advance unless specifically relating to an earlier date;
and
(b) There shall not exist, on the date of the making of such Advance and
after giving effect to the application of the proceeds of such Advance, a
Default or Event of Default hereunder, or a default under Section 7.13 of the
Purchase Agreement related to the Subordinated Bridge Facility Documents which
with the passage of time would constitute an "Event of Default" thereunder, and
subject to Section 3.4 hereof, the Make-Well Payment Period shall not then be in
effect, the Administrative Agent shall have received a Request for Advance
signed by an Authorized Signatory so certifying, which Request for Advance shall
also provide calculations demonstrating the Borrower's compliance with Sections
8.1 and 8.2 hereof before and after giving effect to such Advance.
Section 3.3 Conditions Precedent to Issuance of Each Letter of Credit. The
---------------------------------------------------------
obligation of the Issuing Bank to issue any Letter of Credit hereunder is
subject to the prior fulfillment of each of the following conditions:
(a) All of the representations and warranties made by or with respect to
Holdco, the Borrower and its Subsidiaries, or any of them, under this Agreement
and the other Loan Documents, which, pursuant to Section 4.2 hereof, are made at
and as of the time of the issuance
-56-
of such Letter of Credit, shall be true and correct at such time in all material
respects, both before and after giving effect to the issuance of such Letter of
Credit unless specifically relating to an earlier date; and
(b) There shall not exist, on the date of the issuance of such Letter of
Credit and after giving effect thereto, a Default or Event of Default hereunder,
or a default under Section 7.13 of the Purchase Agreement related to the
Subordinated Bridge Facility Documents which with the passage of time would
constitute an "Event of Default" thereunder, and subject to Section 3.4 hereof,
the Make-Well Payment Period shall not then be in effect, and the Administrative
Agent shall have received a Request for Issuance of Letter of Credit so
certifying, which Request for Issuance of Letter of Credit shall also provide
calculations demonstrating the Borrower's compliance with Sections 8.1 and 8.2
hereof before and after giving effect to the issuance of such Letter of Credit.
Section 3.4 Special Conditions During the Make-Well Payment Period. The
------------------------------------------------------
Credit Parties shall not be under any obligation to make any Advances or issue
any Letters of Credit during the Make-Well Payment Period; provided, however,
-------- -------
that, in the event the parties to the Make-Well Agreement are in dispute as to
the amount of the Additional Equity Contribution, the Borrower may borrow
Advances and request the issuance of Letters of Credit following expiration of
the ten (10) Business Day period set forth in Section 5(a)(iii) of the Make-Well
Agreement during the period provided for the resolution of such dispute in
Section 5(b) of the Make-Well Agreement, subject to the Borrower's compliance
otherwise with the terms and conditions of this Agreement, so long as the
Controlling Shareholders and the Co-Investors shall have (a) made an equity
contribution directly or indirectly to the Borrower pursuant to the Make-Well
Agreement in the amount of the undisputed portion of the Additional Equity
Contribution, and (b) placed an amount equal to the portion of the Additional
Equity Contribution in dispute in an escrow account subject to an escrow
agreement which is mutually acceptable to the Borrower and the Agents' pending
resolution of the parties' dispute pursuant to Section 5(b) of the Make-Well
Agreement.
ARTICLE 4
Representations and Warranties
------------------------------
Section 4.1 Representations and Warranties. The Borrower, for itself and on
------------------------------
behalf of each of the other Borrower Parties, hereby agrees, represents and
warrants in favor of each of the Credit Parties that:
(a) Organization; Ownership; Power; Qualification. Except as contemplated
---------------------------------------------
in connection with the Intermediate Holdco Merger or as otherwise permitted
under Section 7.5 hereof, each of the Borrower Parties is a corporation or other
legal entity duly organized, validly existing and in good standing under the
laws of the state of its incorporation or organization, has the corporate or
other organizational power and authority to own or lease and operate its
properties and to carry on its business as now being and hereafter proposed to
be conducted. Each of the Borrower Parties is duly qualified, in good standing
and authorized to do business in each jurisdiction in which the character of its
properties or the nature of its businesses makes
-57-
such qualification or authorization necessary except where failure to be so
qualified, in good standing or authorized would not reasonably be expected to
have a Materially Adverse Effect.
(b) Authorization; Enforceability. Each of the Borrower Parties has the
-----------------------------
corporate or other organizational power and has taken all such action, to
authorize it to execute, deliver and perform each of the Loan Documents to which
it is a party in accordance with their respective terms, and to consummate the
transactions contemplated by this Agreement and by such Loan Documents. This
Agreement, and each of the other Loan Documents to which any of the Borrower
Parties is a party, has been duly executed and delivered by such Borrower Party,
and is a legal, valid and binding obligation of such Borrower Party, enforceable
against such Borrower Party in accordance with its terms, except to the extent
that enforcement thereof may be limited by bankruptcy, insolvency, liquidation,
reorganization, reconstruction and other similar laws affecting enforcement of
creditors' rights generally (insofar as any such law relates to any Insolvency
Proceeding of such Borrower Party) and by the application of general equitable
principles.
(c) Equity Interests, Business Organization and Related Matters. After
-----------------------------------------------------------
giving effect to the ZD Acquisition, as of the Agreement Date, the
capitalization of Holdco will be as set forth on Schedule 4.1(c) hereof. As of
---------------
the Agreement Date, the Borrower does not have any Subsidiaries other than as
set forth on Schedule 4.1(c). As of the Agreement Date, Holdco does not have any
---------------
Subsidiaries other than Intermediate Holdco, and Intermediate Holdco does not
have any Subsidiaries other than the Borrower. All of the issued and outstanding
Equity Interests of the Borrower and the Guarantors (other than any of the
Foreign Subsidiaries) have been duly authorized and validly issued and are fully
paid and (to the extent such Person is a corporation) nonassessable, and are
free and clear of all Liens (except for Permitted Liens). None of such Equity
Interests has been issued in violation of the Securities Act, or the securities,
"Blue Sky" or other Applicable Laws of any applicable jurisdiction. As of the
Agreement Date except as set forth in Schedule 4.1(c), none of the Borrower
---------------
Parties has outstanding any stock or securities convertible into or exchangeable
for any of its Equity Interests, nor are there any preemptive or similar rights
to subscribe for or to purchase, or any other rights to subscribe for or to
purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments, or claims
of any character relating to, any of such Equity Interests or any stock or
securities convertible into or exchangeable for any of such Equity Interests. As
of the Agreement Date, except as set forth in Schedule 4.1(c), none of the
---------------
Borrower Parties is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any of its Equity Interests or to
register any of its Equity Interests, and there are no agreements restricting
the transfer of any of the Equity Interests of any of the Borrower Parties or
restricting the ability of any Subsidiary of the Borrower (other than any member
of the InternetCo Group and the LaunchCo Joint Ventures) from making
distributions, dividends or other Restricted Payments to the Borrower other than
the Loan Documents, the Subordinated Bridge Facility Documents, the Intermediate
Bridge Facility Documents, and the documents evidencing the Permitted High-Yield
Securities and the Refinancing Securities. Except as set forth on Schedule
--------
4.1(c), within the five (5) year period immediately preceding the Agreement
------
Date, none of the Borrower Parties has changed its name nor transacted business
under any other name or trade name.
-58-
(d) Compliance with Other Loan Documents and Contemplated Transactions. The
------------------------------------------------------------------
execution, delivery and performance by each of the Borrower Parties of this
Agreement and each of the other Loan Documents to which it is a party in
accordance with their respective terms, and the consummation of the transactions
contemplated hereby and thereby, do not and will not (i) require any material
consent or approval, governmental or otherwise, not already obtained, (ii)
violate in any material respect any Applicable Law respecting any Borrower
Party, (iii) conflict with, result in a breach of, or constitute a default under
the certificate or articles of incorporation, by-laws or other governing
documents of any Borrower Party, or under any material indenture, agreement or
other instrument, to which any Borrower Party is a party or by which any of them
or their respective properties may be bound, (iv) conflict with, result in a
breach of, or constitute a default or violation of, the terms and conditions of
any Necessary Authorization, or (v) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by any Borrower Party, except for Permitted Liens.
(e) Business. Each of the Borrower and its Restricted Subsidiaries are
--------
engaged in the business of publishing (in print or on an Internet web-site)
technology-related magazines in the United States and Europe, and in business
activities related thereto.
(f) Necessary Authorizations, Etc. The Borrower Parties have obtained all
-----------------------------
material Necessary Authorizations, and all of the material Necessary
Authorizations are in full force and effect, and the Borrower Parties are in
compliance in all material respects with the provisions thereof. No material
Necessary Authorization is the subject of any pending or, to the best of the
Borrower's knowledge, threatened attack or revocation, and the Borrower is not
aware of any fact or condition which would constitute grounds for any
governmental or other licensing authority to deny any pending application for
any material Necessary Authorization, to suspend, revoke, modify or annul any
material Necessary Authorizations or to impose any material financial penalty on
any Borrower Party.
(g) Compliance with Law. The Borrower Parties, and the conduct of their
-------------------
respective businesses by the Borrower Parties, are in compliance in all material
respects with all, and do not violate in any material respect any, (i)
Applicable Laws and/or (ii) provisions of the certificates or articles of
incorporation, by-laws and other governing documents of any Borrower Party.
(h) Title to Assets. Except with respect to intellectual property (which is
---------------
addressed in Section 4.1(q)), the Borrower Parties (other than InternetCo and
the LaunchCo Joint Ventures) each have good and legal title to, or a valid
leasehold interest in, all of their respective material Assets, and none of such
Assets is subject to any Liens, except for Permitted Liens. Except for financing
statements or other agreements evidencing Permitted Liens, (i) no financing
statement under the Uniform Commercial Code as in effect in any jurisdiction and
no other filing which names any of the Borrower Parties as debtor, or which
covers or purports to cover any of the Assets of any of the Borrower Parties, is
currently effective and on file in any state or other jurisdiction (other than
precautionary UCC financing statements regarding operating leases or
consignments), and (ii) none of the Borrower Parties has signed any such
financing statement or filing or any security agreement authorizing any secured
party thereunder to file any such financing statement or filing. None of the
Borrower Parties is a party to any contract, instrument or agreement (including,
without limitation, any of the Necessary Authorizations, but excluding (A) the
Subordinated Bridge Facility Documents, (B) the documents evidencing the
Permitted
-00-
Xxxx Xxxxx Securities and the Refinancing Securities, (C) the Loan Documents,
(D) the Intermediate Bridge Facility Documents (but only to the extent such
provisions cover the assets of Intermediate Holdco), (E) any joint venture
agreements (but only to the extent of the assets of any joint venture formed
thereby), and (F) any agreements providing financing for the purchase of a
particular asset or assets (but only the extent of such asset or assets financed
thereunder)) restricting the ability of such Borrower Party to enter into an
agreement by which such Borrower Party agrees that it shall not create, assume,
incur or permit to exist or be created, directly or indirectly, any Lien on its
Assets other than Permitted Liens.
(i) Litigation. As of the Agreement Date and to the best of the Borrower's
----------
knowledge, except as set forth on Schedule 4.1(i) attached hereto, there is no
---------------
action, suit, application, complaint, petition, revocation, proceeding or
investigation, at law or in equity, or any order, decree or judgment, in effect
or pending against, or threatened against any of the Borrower Parties or any of
their respective properties and Assets (including, without limitation, any
Necessary Authorization) in any court or before any arbitrator of any kind or
before or by any governmental body. No such action, suit, proceeding or
investigation, and no action, suit, proceeding or investigation arising after
the Agreement Date, (i) calls into question the validity of this Agreement or
any of the other Loan Documents, or (ii) could reasonably be expected to have a
Materially Adverse Effect.
(j) Taxes. All federal and material state, local and other tax returns
-----
(including information returns) of each of the Borrower Parties required by law
to be filed have been duly filed and all federal and state, local and other
material taxes and impositions, including, without limitation, withholding
taxes, assessments and other governmental charges or levies required to be paid
by any of the Borrower Parties or imposed upon any of the Borrower Parties or
any of their respective properties, income, profits or Assets, which are due and
payable, have been paid prior to the time for assessment of penalties, except
any such taxes (i) the payment of which any of the Borrower Parties is
diligently contesting in good faith by appropriate proceedings, (ii) for which
adequate reserves have been provided on the books of the applicable Borrower
Party, and (iii) as to which no Lien, other than a Permitted Lien, has attached
and no foreclosure, distraint, sale or similar proceedings have been commenced.
The charges, accruals and reserves on the books of each of the Borrower Parties
in respect of any taxes or other governmental charges are adequate.
(k) Financial Information. The Borrower has furnished or caused to be
---------------------
furnished to the Credit Parties (i) audited carve-out balance sheets, and the
related carve-out statements of operations, cash flows and changes in division
equity, for the Seller's publishing assets which are being acquired by the
Borrower in connection with the ZD Acquisition, which are, to the best of the
Borrower's knowledge, complete and correct in all material respects and present
fairly in all material respects in accordance with GAAP the financial position
of the Seller's publishing assets which are being acquired by the Borrower in
connection with the ZD Acquisition on and as at December 31, 1998, and (ii)
audited carve-out balance sheets, and the related statements of operations, cash
flows and changes in division equity for the Seller's publishing assets which
are being acquired by the Borrower in connection with the ZD Acquisition, which
are, to the best of the Borrower's knowledge, complete and correct in all
material respects and present fairly in all material respects in accordance with
GAAP the financial position of the Seller's publishing assets which are being
acquired by the Borrower in connection with the ZD Acquisition on and as at
-60-
December 31, 1999 (collectively, the "Financial Statements"). As of the
Agreement Date, none of the Borrower Parties has any material liabilities,
contingent or otherwise which would be required to be disclosed in accordance
with GAAP, other than as disclosed in the financial statements referred to in
the preceding sentence or as set forth or referred to in this Agreement, and
there are no material unrealized losses of any of the Borrower Parties and no
anticipated losses of any of the Borrower Parties other than those set forth in
the Projections which have been disclosed in writing to the Credit Parties prior
to the Agreement Date and identified as such. The Projections represent the
Borrower's best estimate of projected future operations as of the Agreement
Date, and to the best of the Borrower's knowledge, there exist no facts or
circumstances which the Borrower believes could be reasonably likely to cause a
materially adverse change in the Projections; it being recognized by the Lenders
that business projections are not to be viewed as facts and that actual results
may differ.
(l) No Adverse Change. Since December 31, 1999, there has occurred no
-----------------
event which has had or which could reasonably be expected to have a Materially
Adverse Effect.
(m) ERISA. As of the Agreement Date, each Plan subject to Title IV of
-----
ERISA, or contributed to, by any of the Borrower Parties, or any of their ERISA
Affiliates, is listed on Schedule 4.1(m) attached hereto. Each of such Plans is
---------------
in compliance in all material respects with their terms, ERISA and the Code.
None of such Plans has an "accumulated funding deficiency" within the meaning of
ERISA or the Code. None of the Borrower Parties, nor any of their respective
ERISA Affiliates, has incurred any material liability to the PBGC (other than
the payment of premiums imposed by Title IV of ERISA) in connection with any
such Plan. The assets of each such Plan which is subject to Title IV of ERISA
are sufficient to provide the benefits under such Plan if such Plan were
terminated on the date hereof. No Reportable Event has occurred with respect to
any such Plan. No party in interest, fiduciary, trustee or administrator of any
such Plan or trust created thereunder has engaged in a "prohibited transaction"
(as such term is defined in Section 406 of ERISA or Section 4975 of the Code)
which would subject any of the Borrower Parties or any of their respective ERISA
Affiliates to a tax on "prohibited transactions" imposed by Section 4975 of the
Internal Revenue Code resulting in a liability to the Borrower Parties of
greater than$1,000,000. No party in interest, fiduciary, trustee or
administrator of any such Plan or trust created thereunder has committed a
breach of its fiduciary duty or knowingly participated in any violation of ERISA
which would subject any of the Borrower Parties, or any of their respective
ERISA Affiliates to a material penalty under Section 502 of ERISA. As of the
Agreement Date, none of the Borrower Parties nor any of their respective ERISA
Affiliates is a participant in or obliged to make any payment to a Multiemployer
Plan. As of the Agreement Date, except as required by Sections 601 through 609
of ERISA, none of the Borrower Parties has made any oral or written commitments
to provide post-employment health or life insurance coverage with respect to any
former or current employee. The Borrower Parties and ERISA Affiliates have
properly classified individuals providing services to any of the Borrower
Parties or ERISA Affiliates as employees or non-employees, except to the extent
that a misclassification would not result in a Materially Adverse Effect.
(n) Compliance with Regulations U. None of the Borrower Parties is engaged
-----------------------------
principally in, or has as one of its important activities, the business of
purchasing or carrying, or extending
-61-
credit for the purpose of purchasing or carrying, any margin stock within the
meaning of Regulations U of the Board of Governors of the Federal Reserve
System.
(o) Investment Company Act; Public Utility Holding Company Act. None of
----------------------------------------------------------
the Borrower Parties is required to register under the provisions of the
Investment Company Act of 1940, as amended, and neither the entering into or
performance by the Borrower of this Agreement nor the issuance of the Notes
violates any provision of such Act or requires any consent, approval or
authorization of, or registration with, the Securities and Exchange Commission
or any other governmental or public body or authority pursuant to any provisions
of such Act. None of the Borrower Parties is a "public utility holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(p) Securities Laws. Each of the Borrower Parties has complied in all
---------------
material respects with all material federal and state securities laws in
connection with the offer and sale of stock or other equity interests in any of
the Borrower Parties.
(q) Intellectual Property. Each of the Borrower and its Restricted
---------------------
Subsidiaries owns or possesses the valid right to use all material patents,
patent applications, patent and know-how licenses, inventions, technology,
trademark registrations and applications, product designs, processes,
trademarks, service marks, trade names, copyright registrations and licenses and
rights in respect of the foregoing, which are necessary for the conduct of its
business as now conducted or hereafter proposed to be conducted free and clear
of any Liens, other than Permitted Liens. None of such material licenses and
rights with respect to material patents, trademarks, trademark rights, trade
names, trade name rights, service marks and copyrights is subject to any pending
or, to the best knowledge of the Borrower, threatened attack, conflict or
revocation which would be reasonably likely to have a Materially Adverse Effect.
As of the Agreement Date, none of the Borrower and its Restricted Subsidiaries
owns or possesses the valid right to use any registered patents, trademarks or
copyrights, or applications for any of the foregoing, except for those
registered patents, trademarks and copyrights, and applications therefor, owned
by Pub Holdco and set forth on the schedules to the Intellectual Property
Security Agreement.
(r) True and Complete Disclosure. All factual information (taken as a
----------------------------
whole) heretofore or contemporaneously furnished by or on behalf of any Borrower
Party in writing to any Lender (other than the Projections, budgets or other
estimates) for purposes of or in connection with this Agreement or any
transaction contemplated herein is, (and, solely with respect to any such
information furnished on behalf of any Borrower Party by a third party, to the
best of Borrower's knowledge, is) true and accurate in all material respects on
the date as of which such information is dated or certified and not incomplete
by omitting to state any fact necessary to make such information (taken as a
whole) not misleading in any material respect at such time in light of the
circumstances under which such information was provided.
(s) Agreements with Affiliates and Management Agreements. Except as set
----------------------------------------------------
forth on Schedule 4.1(s) attached hereto, as of the Agreement Date, none of the
---------------
Borrower Parties (other than InternetCo and the LaunchCo Joint Ventures) has any
written agreements or binding arrangements of any kind with any Affiliate not
entered into in the ordinary course of business.
(t) Environmental Matters. Except as is described on Schedule 4.1(t)
--------------------- ---------------
attached hereto:
-62-
(i) Each Property of any of the Borrower Parties does not contain,
in, on or under, including, without limitation, the soil and groundwater thereon
or thereunder, any Hazardous Materials (A) except in such quantities as required
for the conduct in the ordinary course of the Borrower's business, and then only
in compliance in all material respects with applicable Environmental Laws, or
(B) in amounts or circumstances that could give rise to material liability of
the Borrower Parties under Environmental Laws.
(ii) Each of the Borrower Parties is in compliance with all
applicable Environmental Laws, and there is no condition which could interfere
with the continued operation of any of their respective Properties in compliance
with Environmental Laws or impair the financial condition of the Borrower,
except such non-compliance or condition as could not reasonably be expected to
have a Materially Adverse Effect.
(iii) As of the Agreement Date, none of the Borrower Parties has
received from any Governmental Authority or any other Person any complaint,
notice of violation, alleged violation, investigation or advisory action or
notice of potential liability regarding matters of environmental protection or
permit compliance under applicable Environmental Laws with regard to their
respective Properties, and as of the Agreement Date, none of the Borrower
Parties is aware that any Governmental Authority is contemplating delivering to
any of the Borrower Parties any such notice. As of the Agreement Date, there is
no condition or circumstance currently or with the passage of time that could
reasonably be expected to present the basis of any such notice. As of the
Agreement Date, there has been no pending or, to the Borrower's knowledge,
threatened complaint, notice of violation, alleged violation, investigation or
notice of any material potential liability under Environmental Laws with regard
to any of their respective Properties.
(iv) Hazardous Materials have not been generated, treated, stored,
disposed of, at, on or under any of the Properties of any of the Borrower
Parties by or on behalf of any of the Borrower Parties except in such quantities
as required for the conduct in the ordinary course of the Borrower's business,
and then only in compliance with applicable Environmental Laws, or in a manner
that could give rise to material liability under Environmental Laws nor have any
Hazardous Materials been transported or disposed of from any of the Properties
by or on behalf of any of the Borrower Parties to any other location except in
compliance with all Environmental Laws nor in a manner that could reasonably be
anticipated to give rise to material liability under Environmental Laws.
(v) None of the Borrower Parties is a party to any governmental
administrative actions or judicial proceedings pending under any Environmental
Law with respect to any of the Properties, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to any of the Properties of any of the Borrower Parties.
(vi) Notwithstanding anything to the contrary contained in this
Section 4.1(t), the foregoing representations shall only be untrue if the
aggregate effect of all conditions, failures and non-compliance of the types
described above would reasonably be expected to result
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in liability (including, without limitation, costs to remediate any affected
Property) to the Borrower Parties in excess of $1,000,000.
(u) Payment of Wages; Labor Matters. Each of the Borrower Parties is in
-------------------------------
compliance with the Fair Labor Standards Act, as amended, in all material
respects, and each of the Borrower Parties has complied in all material respects
with all minimum and overtime wage requirements applicable to its employees. As
of the Agreement Date, except as disclosed on Schedule 4.1(u): (i) no labor
---------------
contract to which any of the Borrower Parties is a party or is otherwise subject
is scheduled to expire during the term of this Agreement; (ii) none of the
Borrower Parties has, within the two (2) year period immediately preceding the
Agreement Date, taken any action which would have constituted or resulted in a
"plant closing" or "mass layoff" within the meaning of the Federal Worker
Adjustment and Retraining Notification Act of 1988 or any similar applicable
federal, state or local law, and the Borrower does not have any reasonable
expectation that any such action is or will be required at any time during the
term of this Agreement; (iii) all of the operations of the Borrower Parties are
conducted in all material respects in compliance with all applicable rules and
regulations promulgated by the Occupational Safety and Health Administration of
the United States Department of Labor; and (iv) as of the Agreement Date, (A)
none of the Borrower Parties is a party to any labor dispute (other than any
immaterial disputes with such Borrower Party's employees as individuals and not
affecting such Borrower Party's relations with any labor group or its workforce
as a whole) and (B) there are no pending or, to the Borrower's knowledge,
threatened strikes or walkouts relating to any labor contracts to which any of
the Borrower Parties is a party or is otherwise subject. As of the Agreement
Date, none of the employees of any of the Borrower Parties is a party to any
collective bargaining agreement with any of the Borrower Parties.
(v) Priority. The Security Interest is a valid and perfected first
--------
priority (except for Permitted Liens) security interest, to the extent that a
security interest may be created under Article 9 of the Uniform Commercial Code
as in effect in any applicable jurisdiction, in all of the Collateral in favor
of the Administrative Agent, for the benefit of the Credit Parties, securing, in
accordance with the terms of the Security Documents, the outstanding
Obligations. The Collateral is not subject to any Liens other than Permitted
Liens. The Liens created by the Security Documents are enforceable as security
for the outstanding Obligations in accordance with their terms with respect to
the Collateral except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, liquidation, reorganization, reconstruction and other
similar laws affecting enforcement of creditors' rights generally (insofar as
any such law relates to any Insolvency Proceeding of any of the Borrower
Parties) and to the application of general equitable principles.
(w) Indebtedness. Except as permitted pursuant to Section 7.1 hereof, none
------------
of the Borrower Parties has outstanding, as of the Agreement Date, and after
giving effect to the initial Advance of the Loans hereunder on the Agreement
Date, any Indebtedness.
(x) Investments. As of the Agreement Date, none of the Borrower Parties
-----------
owns any Equity Interests or other securities of, or equity interests in, or has
outstanding loans or advances to, or guaranties of the obligations of, any
Person except as reflected in the Financial Statements, or disclosed on Schedule
--------
4.1(c) or Schedule 4.1(x) attached hereto.
------ ---------------
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(y) Material Contracts. Schedule 4.1(y) contains a complete list, as of
------------------ ---------------
the date of this Agreement after giving effect to the ZD Acquisition, of each
contract, agreement or commitment (the "Material Contracts") to which any of the
Borrower Parties is a party which is material to its business, financial
condition, operations, prospects or Assets, and, upon the request of the
Administrative Agent, the Borrower will provide the Administrative Agent with a
copy of any such contract or agreement. Schedule 4.1(y) further identifies each
---------------
Material Contract which requires consent to the granting of a Lien in favor of
the Administrative Agent on the rights of any of the Borrower Parties
thereunder.
(z) Broker's or Finder's Commissions. No broker's or finder's fee or
--------------------------------
commission will be payable with respect to this Agreement, and no other similar
fees or commissions will be payable by any of the Borrower Parties for any other
services rendered to any of them ancillary to this Agreement except to the
Administrative Agent and the other Credit Parties.
(aa) ZD Acquisition Documents. The Borrower has provided to the
------------------------
Administrative Agent true, correct and complete, in all material respects,
copies of the ZD Acquisition Documents. As of the Agreement Date, to the best of
the Borrower's knowledge, none of the representations and warranties made by or
with respect to any of the Borrower Parties as set forth in the ZD Acquisition
Documents is incorrect in any material respect as of the date made or deemed
made.
(bb) Solvency. As of the Agreement Date and after giving effect to the ZD
--------
Acquisition and the transactions contemplated by this Agreement and the other
Loan Documents, (i) the property of the Borrower and its Subsidiaries on a
consolidated basis, at a fair valuation on a going concern basis, will exceed
its debt; (ii) the capital of the Borrower and its Subsidiaries on a
consolidated basis will not be unreasonably small to conduct its business; and
(iii) the Borrower and its Subsidiaries on a consolidated basis will not have
incurred debts, or have intended to incur debts, beyond its ability to pay such
debts as they mature. For purposes of this Section 4.1(bb), "debt" means any
liability on a claim, and "claim" means (i) the right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, undisputed, legal, equitable, secured or unsecured, or (ii)
the right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, undisputed, secured
or unsecured.
(cc) Real Property. As of the Agreement Date, Schedule 4.1(cc) sets forth
------------- ----------------
(i) all real property owned or leased by any of the Borrower and its Restricted
Subsidiaries, (ii) in the case of leased real property with lease payments in
excess of $500,000 per month (such leases being herein referred to as "Material
Leases"), the name of the lessor of such real property, a description of the
lease agreement with respect thereto, and whether such lease has been recorded
in the real property records of any jurisdiction, (iii) all such owned or leased
real property as to which title insurance or a commitment for title insurance
has been obtained, (iv) the use of such owned or leased real property in the
conduct of such Borrower Party's operations, and (v) the Borrower's good faith
estimate of the fair market value of each parcel of owned real property. Each of
the leases of the Borrower and its Restricted Subsidiaries is valid, enforceable
against the Borrower or such Restricted Subsidiary and in full force and effect,
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, liquidation,
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reorganization, reconstruction and other similar laws affecting enforcement of
creditors' rights generally (insofar as any such law relates to any Insolvency
Proceeding of the Borrower or such Restricted Subsidiary, as applicable), and as
of the Agreement Date, has not been modified or amended, except as otherwise set
forth in Schedule 4.1(cc). Each of the Borrower and the Restricted Subsidiaries
----------------
is the sole holder of the lessee's interests under each Material Lease to which
it is a party and, as of the Agreement Date, has the right to pledge and assign
the same except as qualified in Schedule 4.1(cc). None of the Borrower and the
----------------
Restricted Subsidiaries has made any pledge or assignment of any of its rights
under any Material Leases except pursuant to the Security Documents or in
respect of Permitted Liens, and none of the Borrower or the Restricted
Subsidiaries has received notice (written or otherwise) that the landlord under
any Material Lease intends to terminate such Material Lease. As of the Agreement
Date, except as set forth in Schedule 4.1(cc), none of the Borrower nor any
----------------
Restricted Subsidiaries owns or holds, or is obligated under or a party to, any
option, right of first refusal or any other contractual right to purchase,
acquire, sell, assign or dispose of any real property owned or leased by it.
(dd) Year 2000 Problem. The Borrower Parties have conducted a thorough
-----------------
assessment of their respective computer systems and do not have any reason to
believe that a Materially Adverse Effect will occur as a result of a "year 2000
problem" (that is, the risk that computer applications may not be able to
properly perform date-sensitive functions after December 31, 1999).
Section 4.2 Survival of Representations and Warranties, etc. All
-----------------------------------------------
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made, and shall be true and correct in all
material respects, at and as of the Agreement Date and on the date of each
Advance and on the date of issuance of each Letter of Credit, except to the
extent expressly applicable only to an earlier date or previously fulfilled in
accordance with the terms hereof. All representations and warranties made under
this Agreement shall survive, and not be waived by, the execution hereof by the
Credit Parties, any investigation or inquiry by any Credit Party, or the making
of any Advance or the issuance of any Letter of Credit under this Agreement.
ARTICLE 5
General Covenants
-----------------
So long as any of the Obligations (other than solely indemnification
obligations) are outstanding and unpaid, or the Borrower shall have the right to
borrow hereunder (whether or not the conditions to borrowing have been or can be
fulfilled), and unless the Required Lenders, or such greater number of Lenders
as may be expressly provided herein, shall otherwise consent in writing:
Section 5.1 Preservation of Existence and Similar Matters. The Borrower
---------------------------------------------
will, and will cause each of the other Borrower Parties to:
(a) except as otherwise permitted hereunder, preserve and maintain its
existence, and all of its material rights, franchises, licenses and privileges,
in the state of its incorporation or organization and in each other state in
which it operates a material part of its business; and
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(b) qualify and remain qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business makes such qualification or authorization necessary except where the
failure to be so qualified or authorized would not reasonably be expected to
have a Materially Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower will,
----------------------------------------
and will cause each of its Restricted Subsidiaries to, engage solely in the
business of publishing, in print or on the Internet, technology-related
magazines in the United States and Europe, and in business activities related
thereto. The Borrower will, and will cause each of the other Borrower Parties
to, comply in all material respects with the requirements of all Applicable
Laws.
Section 5.3 Maintenance of Properties and Assets. The Borrower will, and
------------------------------------
will cause each of the other Borrower Parties to, (a) maintain or cause to be
maintained in the ordinary course of business in good repair, working order and
condition (reasonable wear and tear and damage by casualty excepted) all
material properties used in their respective businesses (whether owned or held
under lease), and from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements, additions, betterments and
improvements to such properties to the extent deemed necessary in the business
judgment of the Borrower and in compliance with this Agreement, and (b) obtain
and maintain and preserve in full force and effect, and renew and extend as
necessary, all material Necessary Authorizations.
Section 5.4 Accounting Methods and Financial Records. The Borrower will
----------------------------------------
maintain, on a consolidated basis with its Subsidiaries, a system of accounting
established and administered in accordance with GAAP consistently applied, keep
adequate records and books of account in which complete entries will be made in
accordance with such accounting principles consistently applied and reflecting
all transactions required to be reflected by such accounting principles, and
keep accurate and complete records of the Collateral. Each of the Borrower
Parties will maintain a fiscal year ending on March 31.
Section 5.5 Insurance. The Borrower will, and will cause each of the
---------
Guarantors to:
(a) Maintain insurance, including, but not limited to, business
interruption coverage, public liability coverage insurance, from responsible
companies in such amounts and against such risks to each of the Borrower and the
Guarantors as is prudent in the reasonable business judgment of the Borrower
(including, without limitation, larceny, embezzlement, employee fidelity, and
other criminal misappropriation insurance and insurance against claims for
personal or bodily injury, death or property damage);
(b) Keep their respective Assets insured by responsible companies against
loss or damage by fire, theft, burglary, pilferage, loss in transit, explosions
and hazards insured against by extended coverage, in amounts and scope of
coverage which are prudent for the magazine publishing industry, in accordance
with industry standards, all premiums thereon to be paid by the Borrower and the
Guarantors;
(c) Require that each casualty and liability insurance policy for the
Borrower and the Guarantors provide for at least thirty (30) days' prior written
notice to the Administrative Agent of any termination of or proposed
cancellation or non-renewal of such policy, or material
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reduction in coverage, and name the Administrative Agent (for the benefit of the
Credit Parties) as additional named loss payee to the extent of the Obligations
and additional named insured.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and will
---------------------------
cause each of the other Borrower Parties to, pay and discharge all material
taxes, including, without limitation, withholding taxes, assessments and
governmental charges or levies required to be paid by them or imposed upon them
or their income or profits or upon any properties belonging to them, prior to
the date on which penalties attach thereto, and all material lawful claims for
labor, materials and supplies which, if unpaid, might become a Lien or charge
upon any of their properties; except that no such tax, assessment, charge, levy
or claim need be paid which is being diligently contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on the appropriate books, but only so long as such tax, assessment,
charge, levy or claim does not become a Lien or charge other than a Permitted
Lien and no foreclosure, distraint, sale or similar proceedings shall have been
commenced. The Borrower will, and will cause each of the other Borrower Parties
to, timely file all material information returns required by federal, state or
local tax authorities.
Section 5.7 Visits and Inspections. The Borrower will, and will cause
----------------------
each of the other Borrower Parties to, permit representatives of any of the
Credit Parties, during normal business hours, or otherwise upon reasonable
advance notice to such Borrower Party (provided that during the Make-Well
Payment Period the Agents shall be entitled to conduct their visits and
inspections without regard to any time or notice restrictions otherwise
applicable thereto) to (a) visit and inspect the properties of such Borrower
Party, (b) inspect and make extracts from and copies of their respective books
and records, and (c) discuss with their respective principal officers their
respective businesses, assets, liabilities, financial positions, results of
operations and business prospects. Notwithstanding anything to the contrary
contained in this Agreement, the Borrower shall promptly pay or reimburse all
out-of-pocket expenses of the Administrative Agent (but not any other Credit
Party) in connection with the exercise of its inspection rights under this
Section 5.7 during the existence of any Default or Event of Default; provided,
--------
however, so long as no Default or Event of Default then exists and so long as
-------
the Make-Well Payment Period is not then in effect, the Borrower shall only be
required to reimburse the Administrative Agent for one (1) visit per year. Each
of the Borrower and the other Borrower Parties will also permit representatives
of the Administrative Agent, upon reasonable advance notice to such Borrower
Party, to discuss with their respective auditors their respective businesses,
assets, liabilities, financial positions, results of operations and business
prospects, and the Borrower and the other Borrower Parties agree to permit such
Borrower Party to be present at such discussion.
Section 5.8 Use of Proceeds. The Borrower will use the aggregate
---------------
proceeds of all Advances (a) to finance the ZD Acquisition, (b) to finance
Capital Expenditures and Permitted Acquisitions, and (c) for working capital and
other general corporate purposes (including, without limitation, fees and
expenses relating to the ZD Acquisition and the transactions contemplated by
this Agreement and the other Loan Documents). No proceeds of Advances hereunder
shall be used for the purchase or carrying or the extension of credit for the
purpose of purchasing or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System.
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Section 5.9 Real Property. With respect to each parcel of real property
-------------
with a fair market value in excess of $500,000 at any time owned by the Borrower
or any of its Restricted Subsidiaries, to the extent requested by the
Administrative Agent, the Borrower shall, and shall cause each of its Restricted
Subsidiaries to, promptly following such request execute and deliver to the
Administrative Agent, a Mortgage (except with respect to property subject only
to Liens of the type described in clauses (f), (m) and (t) of the definition of
Permitted Liens) covering such parcel of real property, and collaterally assign,
to the extent permitted therein, any lease agreements entered into by the
Borrower or any of its Restricted Subsidiaries as lessor with respect to such
real property, in either case to the extent requested by the Administrative
Agent. To the extent that the lessor's consent is required with respect to the
grant of any Mortgage with respect to any parcel of leased real property, the
Borrower shall use its commercially reasonable efforts to obtain from the
applicable lessor such consent in writing.
Section 5.10 Indemnity. The Borrower, for itself and on behalf of each of
---------
the other Borrower Parties, agrees to indemnify and hold harmless each
Indemnified Party from and against any and all claims, liabilities, actual
losses, damages, actions, reasonable attorneys' fees and expenses, including the
costs of investigating and defending such claims, whether or not any of the
Borrower Parties or the Person seeking indemnification is the prevailing party,
arising out of or in connection with any action brought by a third party against
such Indemnified Party in connection with (a) the Commitments, the Loans or
otherwise under this Agreement or any other Loan Document (including, without
limitation, the taking of collateral security for the Obligations), including
the use of the proceeds of Loans hereunder in any fashion by the Borrower or any
of its Subsidiaries or the performance of their respective obligations under the
Loan Documents by any of the Borrower Parties, (b) allegations of any
participation by the Credit Parties, or any of them, in the affairs of any of
the Borrower Parties, or allegations that any of them has any joint liability
with any of the Borrower Parties for any reason, or (c) any claims against the
Credit Parties, or any of them, by any shareholder, partner, or other investor
in or lender to any of the Borrower Parties, by any brokers or finders or
investment advisers or investment bankers retained by any of the Borrower
Parties or by any other third party, arising out of the Commitments, the Loans
or otherwise under this Agreement or any other Loan Document, unless the Person
seeking indemnification hereunder is determined in such case to have (i) acted
with gross negligence, bad faith or willful misconduct or (ii) have breached in
any material respect its obligations to the Borrower Parties, in any case as
determined by a final, non-appealable judicial order. The obligations of the
Borrower Parties under this Section 5.10 are in addition to, and shall not
otherwise limit, any liabilities which any of the Borrower Parties might
otherwise have in connection with any warranties or similar obligations of such
Borrower Party in any other agreement or instrument or for any other reason.
Section 5.11 Interest Rate Hedging. Within one hundred eighty (180) days
---------------------
from the Agreement Date, the Borrower shall have entered into one or more
Interest Hedge Agreements which fix or place a limit on the Borrower's interest
obligations at interest rates reasonably acceptable to the Administrative Agent
with respect to the Loans such that, at all times, for an aggregate period of
four (4) years thereafter, not less than fifty percent (50%) of the aggregate
amount of Funded Debt (other than Funded Debt evidenced by the Revolving
Commitment and the Revolving Loans) of the Borrower and its Restricted
Subsidiaries outstanding shall be hedged or on a fixed rate basis. All
obligations of the Borrower to any Lender, or any Affiliate of
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any Lender, pursuant to any Interest Hedge Agreement, shall be deemed to be part
of the Obligations.
Section 5.12 Environmental Matters. The conduct of each Borrower Party's
---------------------
business operations will not violate in any material respect any Environmental
Laws, and none of the Borrower Parties will use, or permit any other party to
use, any Hazardous Materials at any of its places of business except such
materials as are incidental to such Borrower Party's normal course of business,
maintenance and repairs, and then only in compliance in all material respects
with all applicable Environmental Laws. The Borrower shall promptly notify the
Credit Parties in writing of (a) any and all material enforcement, cleanup,
remedial, removal, or other governmental or regulatory actions instituted,
completed or threatened in writing pursuant to any applicable Environmental Law;
(b) the existence of any condition or circumstances; and (c) all claims made or
threatened by any third party against any of the Borrower Parties relating to
damages, contribution, cost recovery compensation, loss or injury resulting from
any Hazardous Materials, which, in the case of (a), (b) or (c), could reasonably
be expected to result in any material liability under any Environmental Laws.
The Borrower shall promptly notify the Credit Parties of any remedial action
taken by any of the Borrower Parties pursuant to Environmental Laws with respect
to such Borrower Party's business operations which remedial action resulted in
costs and expenses in excess of $100,000.
Section 5.13 ERISA. The Borrower shall, and shall cause each of the other
-----
Borrower Parties to, at all times make, or cause to be made, prompt payment of
contributions required under the terms of their Plans and to meet the minimum
funding standards set forth in ERISA with respect to such Plans. The Borrower
shall maintain, and shall cause each of its Subsidiaries to maintain, each of
the Plans of the Borrower Parties in material compliance with their terms and
applicable provisions of ERISA and the Code.
Section 5.14 Further Assurances. The Borrower, at its sole expense, will
------------------
promptly execute and deliver to the Credit Parties, or cause to be executed and
delivered to the Credit Parties, all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements of the Borrower Parties in the Loan Documents
(including, without limitation, this Agreement), or to obtain any consents, all
as may be reasonably necessary or appropriate in connection therewith as may be
reasonably requested.
Section 5.15 Covenants Regarding Formation of Subsidiaries, the Making of
------------------------------------------------------------
Investments and Acquisitions. At the time of any Acquisition by any of the
----------------------------
Borrower Parties, or the formation of any new Subsidiary of any of the Borrower
Parties, the Borrower will, and will cause each of the other Borrower Parties,
as applicable, to (a) (other than in the case of the Foreign Subsidiaries and
the Unrestricted Subsidiaries) provide to the Administrative Agent a duly
executed supplement to the Subsidiary Security Agreement for any new Restricted
Subsidiary, together with appropriate UCC-1 financing statements, (b) (other
than in the case of the Foreign Subsidiaries, Subsidiaries of InternetCo and the
LaunchCo Joint Ventures), provide to the Administrative Agent a duly executed
supplement to the Subsidiary Guaranty and a loan certificate for any such new
Subsidiary, substantially in the form of Exhibit T attached hereto, together
with appropriate attachments thereto (provided that, with respect to the
LaunchCo Joint Ventures, the Borrower shall use commercially reasonable efforts
to obtain a supplement to the Subsidiary Guaranty); (c) (other than InternetCo)
pledge to the Administrative Agent all (or in
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the case of the Foreign Subsidiaries, sixty-five percent (65%)) of the Equity
Interests (or other instruments or securities evidencing ownership) of any
Subsidiary or Person which is acquired or formed, beneficially owned by any of
the Borrower Parties, as additional Collateral for the Obligations to be held by
the Administrative Agent in accordance with the terms of the Borrower Pledge
Agreement or the Subsidiary Pledge Agreement, as applicable, and execute and
deliver to the Administrative Agent all such documentation for such pledge
(including, without limitation, a supplement to the Subsidiary Pledge Agreement,
original certificates representing the pledged Equity Interests and
corresponding certificate powers duly executed in blank) as, in the reasonable
opinion of the Administrative Agent, is appropriate; and (d) provide all other
documentation, including, without limitation, an Intellectual Property Security
Agreement or any other security agreement covering any additional intellectual
property obtained by such Borrower Party (other than in the case of the Foreign
Subsidiaries or the Unrestricted Subsidiaries), additional UCC-1 financing
statements, and one or more opinions of counsel reasonably satisfactory to the
Administrative Agent which in the reasonable opinion of the Administrative Agent
is appropriate with respect to such Acquisition or the formation of such new
Subsidiary. In addition, if the Borrower or any of the Restricted Subsidiaries
(other than the Foreign Subsidiaries) shall at any time obtain any interest in
any registered patent, trademark or copyright, or application for any of the
foregoing, the Borrower or the applicable Restricted Subsidiary shall, as soon
as reasonably practicable thereafter, execute and deliver to the Administrative
Agent an Intellectual Property Security Agreement (or amendment thereto), such
UCC-1 financing statements and one or more opinions of counsel reasonably
satisfactory to the Administrative Agent which in the reasonable opinion of the
Administrative Agent is appropriate for the pledge of such interests to the
Administrative Agent. In the event that Intermediate Holdco forms any Permitted
Intermediate Holdco Subsidiary, (i) Intermediate Holdco shall pledge to the
Administrative Agent all of the Equity Interests owned by it in such Permitted
Intermediate Holdco Subsidiary, and (ii) such Permitted Intermediate Holdco
Subsidiary shall pledge to the Administrative Agent all of the Equity Interests
owned by it in the Borrower, in each case, pursuant to a pledge agreement
substantially similar to the Holdco Pledge Agreement. Upon repayment in full in
cash of the Intermediate Bridge Facility, and pending consummation of the
Intermediate Holdco Merger, Holdco shall pledge to the Administrative Agent all
of the Equity Interests owned by it in Intermediate Holdco, pursuant to a pledge
agreement substantially similar to the Holdco Pledge Agreement. Investments made
by any of the Borrower Parties (other than any of the Unrestricted Subsidiaries
or the Foreign Subsidiaries) after the Agreement Date shall also be treated as
additional Collateral and shall be subject to the provisions of appropriate
Security Documents. Any agreement or instrument executed or issued pursuant to
this Section 5.15 shall be a "Security Document" and a "Loan Document" for
purposes of this Agreement.
ARTICLE 6
Information Covenants
---------------------
So long as any of the Obligations (other than solely indemnification
obligations) is outstanding and unpaid or the Borrower has a right to borrow
hereunder (whether or not the conditions to borrowing have been or can be
fulfilled), and unless the Required Lenders, or such greater number of Lenders
as may be expressly provided herein, shall otherwise consent in writing, the
Borrower will furnish or cause to be furnished to each Credit Party at its
offices:
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Section 6.1 Monthly Financial Statements and Information. With respect to
--------------------------------------------
each month during the period from the Agreement Date through March 31, 2001,
within thirty (30) days after the last day of each such month (other than the
months of March, June, September and December), the unaudited income statement
of the Borrower, on a consolidated basis with the Restricted Subsidiaries, and
the related revenue and EBITDA on a consolidating (by publication) basis, for
such month and for the elapsed portion of the year ended with the last day of
such month, which shall set forth in comparative form such figures as at the end
of and for such month and the corresponding month during the preceding fiscal
year and as against the figures set forth for such month in the Borrower's
business plan provided to the Credit Parties pursuant to Section 6.5(c) hereof,
and shall be certified by a Principal Officer to be, in his or her opinion,
complete and correct in all material respects and to present fairly in all
material respects, in accordance with GAAP, the financial position of the
Borrower, on a consolidated and consolidating (by publication) basis, as at the
end of such period and the results of operations for such period, and for the
elapsed portion of the year ended with the last day of such period, subject only
to normal year-end adjustments and the absence of footnotes.
Section 6.2 Quarterly Financial Statements and Information. Within forty-
----------------------------------------------
five (45) days after the last day of each of the first three (3) quarters, and
within one hundred five (105) days after the last day of the fourth quarter, of
each fiscal year of the Borrower (provided that, notwithstanding the foregoing,
with respect to the quarter ending March 31, 2000, the Borrower shall have sixty
(60) days to deliver the financial statements required under this Section 6.2),
unaudited balance sheets of the Borrower, on a consolidated basis with the
Restricted Subsidiaries, and for periods ending on and after September 30, 2000,
of LaunchCo and of InternetCo, each on a consolidated basis with its
Subsidiaries, in each case as at the end of such quarter and as of the end of
the preceding fiscal year, and the related statements of operations and the
related statements of cash flows of the Borrower, on a consolidated basis with
the Restricted Subsidiaries, and the related revenue and EBITDA on a
consolidating (by publication) basis, and for periods ending on and after
September 30, 2000, the related statements of operations and the related
statements of cash flows of LaunchCo and of InternetCo, each on a consolidated
basis with its Subsidiaries and the related revenue and EBITDA of LaunchCo, on a
consolidating (by publication) basis, in each case for such quarter and for the
elapsed portion of the year ended with the last day of such quarter, which shall
set forth in comparative form such figures as at the end of and for such quarter
and, the corresponding quarter during the preceding fiscal year and as against
the figures set forth for such quarter period in the Borrower's business plan
provided to the Credit Parties pursuant to Section 6.5(c) hereof, and shall be
certified by a Principal Officer to be, in his or her opinion, complete and
correct in all material respects and to present fairly in all material respects,
in accordance with GAAP, the financial position of the Borrower, on a
consolidated and consolidating (by publication) basis, as at the end of such
period and the results of operations for such period, and for the elapsed
portion of the year ended with the last day of such period, subject only to
normal year-end adjustments and the absence of footnotes.
Section 6.3 Annual Financial Statements and Information. Within one
-------------------------------------------
hundred five (105) days after the end of each fiscal year of the Borrower, the
audited balance sheet of the Borrower, on a consolidated basis with the
Restricted Subsidiaries, and to the extent such financial statements have been
prepared, the audited balance sheets of InternetCo and LaunchCo,
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each on a consolidated basis with its Subsidiaries, in each case as at the end
of such fiscal year and the related audited statement of income and retained
earnings or deficit and related statements of cash flows of the Borrower, on a
consolidated basis with the Restricted Subsidiaries, and to the extent such
financial statement have been prepared, the related audited statements of income
and retained earnings or deficit and related statements of cash flows of
InternetCo and LaunchCo, each on a consolidated basis with its Subsidiaries, in
each case for such fiscal year, setting forth in comparative form the figures as
at the end of and for the previous fiscal year and certified, without any
qualifications or explanatory paragraphs, by independent certified public
accountants of national recognized standing, whose opinion shall be in scope and
substance reasonably satisfactory to the Agents, and include a statement
certifying that no Default or Event of Default was detected during the
examination of the Borrower and its Restricted Subsidiaries and that such
accountants have authorized the Borrower to deliver such financial statements
and opinion thereon to the Credit Parties pursuant to this Agreement.
Section 6.4 Performance Certificates. At the time the financial statements
------------------------
are furnished pursuant to Section 6.2 hereof, a Performance Certificate:
(a) setting forth as at the end of such fiscal quarter, the arithmetical
calculations required to establish (i) the Applicable Margin, and (ii) whether
the Borrower was in compliance with the requirements of the Financial Covenants;
and
(b) stating that, to the best of his or her knowledge, no Default or Event
of Default has occurred as at the end of such period, or, if a Default or an
Event of Default has occurred, disclosing each such Default or Event of Default
and its nature, when it occurred, whether it is continuing and the steps being
taken by the Borrower with respect to such Default or Event of Default.
Section 6.5 Other Reports.
-------------
(a) Promptly upon receipt thereof, copies of all material reports, if any,
submitted to the Borrower by its independent public accountants regarding the
Borrower, including, without limitation, any management report prepared in
connection with the annual audit referred to in Section 6.3.
(b) Promptly upon receipt thereof, copies of any material notice or report
received from any Governmental Authority, or regarding any material Necessary
Authorization from the grantor of such Necessary Authorization.
(c) Annually, and in no event later than April 30 of any year, a copy of
the Borrower's annual business plan and updated financial projections for itself
and the Restricted Subsidiaries for such fiscal year.
(d) Promptly upon receipt thereof, copies of any financial statements or
other information with respect to MacWorld and its Subsidiaries that are
delivered to the Borrower or PubCo.
(e) In connection with any proposed Acquisition by any of the Borrower
Parties, and otherwise from time to time and promptly upon each request, such
data, certificates, reports, statements, opinions of counsel, documents, or
further information regarding the business, assets,
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liabilities, financial position, projections, results of operations, or business
prospects of the entity to be acquired as the Credit Parties may reasonably
request.
(f) To the extent not covered elsewhere in this Article 6, promptly after
the sending thereof, copies of all financial statements, reports and other
material written information which any of the Borrower Parties sends to any
holder of its Funded Debt or its securities holders generally or which any of
the Borrower Parties files with the Securities and Exchange Commission or any
national securities exchange.
(g) Annually, and in no event later than the date on which financial
statements are required to be delivered under Section 6.3 hereof, a list of any
new federally registered patent, trademark or copyright registrations and
applications, and, to the extent required under the Intellectual Property
Security Agreement, any new trademark, patent or copyright license agreements,
of the Restricted Group supplementing the schedules to the Security Documents
relating to such Assets.
(h) Promptly following the receipt of any notice of default delivered
under the terms of the Subordinated Bridge Facility or the Intermediate Bridge
Facility, copies of such notice of default.
(i) On or before the date of the preliminary offering memorandum with
respect to the 144A Notes (as defined in the Subordinated Bridge Facility
Documents), notice that the ten (10) Business Day period referred to in Section
10.01(c) of the Purchase Agreement related to the Subordinated Bridge Facility
Documents has commenced.
Section 6.6 Notice of Litigation and Other Matters. Prompt notice (and, in
--------------------------------------
any event notice within thirty (30) days) of any of the following events after
any Borrower Party has received notice or otherwise becomes aware thereof:
(a) the commencement of all material proceedings and investigations by or
before any governmental body and all actions and proceedings in any court or
before any arbitrator against, or to the extent known to any of the Borrower
Parties, in any other way relating materially adversely to, any of the Borrower
Parties, or any of their respective properties, assets or businesses, or any
material Necessary Authorization;
(b) any material adverse amendment or change to the Projections provided
to the Credit Parties by the Borrower;
(c) any Default or Event of Default, or the occurrence or non-occurrence
of any event which constitutes, or which with the passage of time or giving of
notice or both would constitute a default by any of the Borrower Parties under
the Subordinated Bridge Facility, the Permitted High-Yield Securities or the
Refinancing Securities, other than this Agreement, to which any of the Borrower
Parties is a party or by which any of their respective assets or properties may
be bound, which could reasonably be expected to have a Materially Adverse
Effect, giving in each case the details thereof and specifying the action
proposed to be taken with respect thereto;
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(d) any default under or misrepresentation in the ZD Acquisition
Documents, whether made or occurring before or after the Agreement Date, and
copies of all notices concerning defaults received or sent by any of the
Borrower Parties thereunder;
(e) the occurrence of any Reportable Event or a "prohibited transaction"
(as such term is defined in Section 406 of ERISA or Section 4975 of the Code)
with respect to any Plan of the Borrower or any of its Subsidiaries or the
institution or threatened institution by PBGC of proceedings under ERISA to
terminate or to partially terminate any such Plan or the commencement or
threatened commencement of any litigation regarding any such Plan; and
(f) the occurrence of any event subsequent to the Agreement Date which, if
such event had occurred prior to the Agreement Date, would have constituted an
exception to the representation and warranty in Section 4.1(l) or 4.1(s), or in
the last sentence of Section 4.1(u), of this Agreement.
ARTICLE 7
Negative Covenants
------------------
So long as any of the Obligations (other than solely indemnification
obligations) is outstanding and unpaid or the Borrower has a right to borrow
hereunder (whether or not the conditions to borrowing have been or can be
fulfilled), or any Letter of Credit is outstanding, and unless the Required
Lenders (or such greater number of Lenders as may be expressly provided herein)
shall otherwise consent in writing:
Section 7.1 Indebtedness. The Borrower shall not, and shall cause each of
------------
the other Borrower Parties and MacWorld not to, create, assume, incur or
otherwise become or remain obligated in respect of, or permit to be outstanding,
any Indebtedness except, so long as no Default or Event of Default then exists
or would be caused thereby:
(a) Indebtedness under this Agreement and the other Loan Documents;
(b) Capitalized Lease Obligations of the Restricted Group not to exceed
the aggregate principal amount of$10,000,000 at any one time outstanding over
the remainder of the term of such obligations;
(c) Indebtedness of the Restricted Group in respect of conditional sale,
rental or purchase money obligations in an aggregate amount not to
exceed$5,000,000 at any one time outstanding;
(d) Obligations of the Borrower under Interest Hedge Agreements required
or permitted to be entered into pursuant to Section 5.11 hereof in an aggregate
notional amount not to exceed the aggregate principal amount of the Loans then
outstanding, and Obligations of the Restricted Group under Hedging Agreements
(other than Interest Hedge Agreements) entered into in the ordinary course of
business;
(e) (i) Indebtedness of the Borrower or any of its Restricted Subsidiaries
(other than any of the Foreign Subsidiaries) owing to the Borrower, any of its
Subsidiaries or MacWorld, and (ii) Indebtedness of any Foreign Subsidiaries
which are members of the Restricted Group owing
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to the Borrower, any of its Subsidiaries or MacWorld in an aggregate amount not
to exceed during the term of this Agreement the difference between (i)$2,000,000
and (ii) the aggregate amount of Investments made in such Foreign Subsidiaries
pursuant to Section 7.2(i) hereof;
(f) Indebtedness that constitutes an Investment permitted under Section
7.2(a), (d) or (m) hereof;
(g) Guaranties permitted under Section 7.6 hereof;
(h) With respect to the InternetCo Group, (i) secured or unsecured Funded
Debt issued in favor of a Person which is not an Affiliate of InternetCo in an
aggregate amount not to exceed $5,000,000 at any one time outstanding and (ii)
secured or unsecured Funded Debt issued in favor of the Borrower or any of its
Restricted Subsidiaries in an aggregate amount not to exceed $5,000,000 at any
one time outstanding (provided that any such Funded Debt shall be evidenced by a
promissory note which is collaterally assigned to the Administrative Agent and,
if such Funded Debt is secured, each security agreement or other collateral
document relating thereto shall also be collaterally assigned to the
Administrative Agent);
(i) With respect to the LaunchCo Group, secured or unsecured Funded Debt
issued, after the first anniversary of the Agreement Date, in favor of the
Borrower, any of its Subsidiaries or MacWorld in an aggregate amount not to
exceed, with respect to each fiscal year during the term of this Agreement, the
difference between (i)$5,000,000 at anytime outstanding during such fiscal year
and (ii) the aggregate amount of Investments made in the LaunchCo Group pursuant
to Section 7.2(d) hereof during any such fiscal year (provided such Funded Debt
shall be evidenced by a promissory note which shall be collaterally assigned to
the Administrative Agent, and if such Funded Debt is secured, each security
agreement or other collateral document relating thereto shall also be
collaterally assigned to the Administrative Agent);
(j) Indebtedness of the Borrower, Holdco, Intermediate Holdco or any
Permitted Intermediate Holdco Subsidiary represented by (i) the Subordinated
Bridge Facility issued on the Agreement Date in an aggregate principal amount
not to exceed$175,000,000, plus the amount of any accrued interest (whether
capitalized or paid-in-kind) thereon, or (ii) any Permitted High-Yield
Securities issued to refinance the Subordinated Bridge Facility or any
Refinancing Securities issued to refinance the Subordinated Bridge Facility or
any Permitted High-Yield Securities, in the case of any Permitted High-Yield
Securities or Refinancing Securities, in an aggregate principal amount not to
exceed$200,000,000, plus the amount of any accrued interest (whether capitalized
or paid-in-kind) thereon; provided, however, that any amount in excess of the
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sum of (A) the then outstanding principal of, and accrued interest and premiums
on, the Subordinated Bridge Facility, plus (B) fees and expenses in connection
with the issuance of any Permitted High-Yield Securities or Refinancing
Securities, as applicable, shall be used to prepay the Loans as set forth in
Section 2.7(c) hereof;
(k) Indebtedness representing extensions, renewals, refinancings
(including, without limitation, the refinancing of the Subordinated Bridge
Facility by any Permitted High-Yield Securities or any Refinancing Securities,
and of any Permitted High-Yield Securities by the issuance of any Refinancing
Securities) or replacements (but not increases in principal amounts) of any of
the foregoing;
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(l) (i) Subordinated Seller Debt in an aggregate principal amount not to
exceed $15,000,000 at any one time outstanding, and (ii) other Seller Debt, and
earn-out obligations (issued on terms and conditions acceptable to the Agents)
in connection with the closing of a Permitted Acquisition, in an aggregate
principal amount not to exceed$7,500,000 at any one time outstanding;
(m) Indebtedness existing on the Agreement Date and described on Schedule
--------
7.1 hereof;
---
(n) Management Redemption Debt issued during any fiscal year in an
aggregate principal amount not to exceed$2,000,000 outstanding at any one time
during such fiscal year (with unused amounts in any fiscal year being carried
over to succeeding fiscal years);
(o) Indebtedness of the Foreign Subsidiaries for working capital or
general corporate purposes in an aggregate principal amount not to exceed (i)
prior to the sale of the International Publications,$5,000,000, and (ii) after
the sale of the International Publications,$2,000,000, in each case at any time
outstanding;
(p) Indebtedness of any member of the LaunchCo Group to any other member
of the LaunchCo Group (other than the LaunchCo Joint Ventures), and Indebtedness
of any LaunchCo Joint Venture to any other LaunchCo Joint Venture;
(q) Indebtedness of any member of the InternetCo Group to any other member
of the InternetCo Group;
(r) Indebtedness consisting of customary forms of deferred compensation,
such as customary non-compete, consulting and similar agreements, incurred in
connection with a Permitted Acquisition;
(s) Non-Recourse Indebtedness incurred by the Borrower and its Restricted
Subsidiaries in an aggregate amount not to exceed$5,000,000 at any one time
outstanding;
(t) Indebtedness of Intermediate Holdco in respect of the Intermediate
Bridge Facility, in an aggregate principal amount not to exceed$125,000,000,
plus the amount of any accrued interest (whether capitalized or paid-in-kind)
thereon; and
(u) other Indebtedness not expressly permitted above in an aggregate
principal amount not to exceed$5,000,000 at any one time outstanding.
Section 7.2 Investments. The Borrower shall not, and shall cause each of
-----------
the Guarantors (other than InternetCo) not to, make any Investment except that
the Borrower and the Guarantors may:
(a) make Investments in and loans to the Borrower and to the Restricted
Subsidiaries (other than any of the Foreign Subsidiaries);
(b) purchase or otherwise acquire and own (i) any Investment in direct
obligations of the United States of America or any agency thereof or obligations
Guaranteed by the United States of America or any agency thereof, (ii)
Investments in time deposit accounts, certificates of
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deposit and money market deposits maturing within one year of the date of
acquisition thereof issued by a Lender, an Agent, a bank or trust company which
is organized under the laws of the United States of America, any state thereof
or any foreign country recognized by the United States of America having
capital, surplus and undivided profits aggregating in excess of $500,000,000 (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) or any money market fund sponsored by a registered broker dealer
or mutual fund distributor, (iii) repurchase and reverse repurchase obligations
with a term of not more than thirty (30) days for underlying securities of the
types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above, (iv) Investments in commercial
paper, maturing not more than one hundred eighty (180) days after the date of
acquisition, issued by an issuer (other than an Affiliate of the Borrower)
organized and in existence under the laws of the United States of America or any
foreign county recognized by the United States of America with a rating at the
time as of which any Investment therein is made of "P-1" (or higher) according
to Xxxxx'x Investors Service, Inc. or "A-1" (or higher) according to Standard &
Poor's Rating Group, (v) Investments in securities with maturities of twelve
(12) months or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors Service, Inc., (vi)
securities with maturities of two (2) years or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least "A" by Standard &
Poor's Rating Group or "A" by Moody's Investor's Service, Inc., (vii) securities
with maturities of one (1) year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank satisfying
the requirement of clause (ii) of this Section 7.2(b), or (viii) shares of money
market mutual or similar funds which invest substantially in assets satisfying
the requirements of clauses (i) through (vii) of this Section 7.2(b)
(collectively, "Cash Equivalents");
(c) make Investments permitted by Section 7.5 hereof;
(d) so long as no Default or Event of Default then exists or would be
caused thereby, make, after the first anniversary of the Agreement Date,
Investments in, or Guarantees of the obligations of, the LaunchCo Group in an
aggregate net amount not to exceed during any fiscal year an amount equal to the
difference between (i)$5,000,000 at any time outstanding during such fiscal year
and (ii) the amount of Funded Debt then outstanding during such fiscal year that
has been issued by the LaunchCo Group pursuant to Section 7.1(i) hereof during
such fiscal year;
(e) so long as no Default or Event of Default then exists or would be
caused thereby, make Investments in the Restricted Subsidiaries, the
Unrestricted Subsidiaries and MacWorld (i) with additional equity contributions
expressly made after the Agreement Date for such purpose and (ii) in an
additional amount not to exceed$50,000,000, in the aggregate, from the
Designated Cash Account; provided, however, that if, at any time, the amount on
deposit in the Designated Cash Account shall be less than$50,000,000 (other than
as a result of Investments
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made by the Borrower and the Guarantors from the Designated Account) (the
"Reduced Amount"), then the remaining amount of Investments permitted under
clause (e)(ii) of this Section 7.2(e) will be reduced to the Reduced Amount,
except that if any cash from the Designated Cash Account shall have been used to
satisfy the Borrower's obligations under Section 7.13 of the Purchase Agreement
related to the Subordinated Bridge Facility Documents, the Borrower may, within
sixty (60) days thereafter, deposit additional funds (from the Borrower's cash
on hand) into the Designated Cash Account to increase the Reduced Amount (and
thereby the amount available for Investments under clause (e)(ii) of this
Section 7.2(e)) by an amount not to exceed the lesser of (A) the amount used to
satisfy such obligations and (B) $5,000,000;
(f) so long as no Default or Event of Default then exists or would be
caused thereby, after the first anniversary of the Agreement Date and when the
Adjusted Leverage Ratio shall be less than 4.50 to 1.00 (on a pro forma basis)
immediately before or after giving effect to such Investment and for the two (2)
consecutive fiscal quarters immediately preceding such Investment, make
Investments in, or Guarantees of the obligations of, MacWorld from Excess Cash
Flow in an aggregate amount not to exceed (i)$2,500,000 during any fiscal year
and (ii) $5,000,000 during the term of this Agreement;
(g) subject to Section 2.7(b) hereof, so long as no Default or Event of
Default then exists or would be caused thereby, make Investments in the
Restricted Group, the InternetCo Group, the LaunchCo Group and MacWorld using
Net Proceeds from asset sales or insurance proceeds, received by or distributed
to the Borrower or any of its Restricted Subsidiaries or any member of the
LaunchCo Group to the extent that such Net Proceeds are not required to
permanently prepay the Loans or have not been previously utilized by the
Borrower and its Restricted Subsidiaries to make Acquisitions and Capital
Expenditures;
(h) so long as no Change of Control would result therefrom, members of the
LaunchCo Group may make Investments and, subject to compliance with Section 7.1
hereof, issue Guarantees;
(i) the Borrower and its Subsidiaries may make Investments in, or
Guarantee the obligations of, the Foreign Subsidiaries which are members of the
Restricted Group in an aggregate net amount not to exceed during the term of
this Agreement the difference between (i) $2,000,000 and (ii) the aggregate
amount of Funded Debt issued by the Borrower, its Subsidiaries and MacWorld
pursuant to Section 7.1(e) hereof;
(j) receive and own Investments acquired pursuant to Permitted
Dispositions of up to twenty-five percent (25%) of the Purchase Price thereof;
(k) may make pledges and deposits of the type described in clauses (d),
(g), (o) and (p) of the definition of "Permitted Liens";
(l) make Investments permitted under Sections 7.1 and 7.6 hereof;
(m) may acquire and own Investments (including debt obligations) received
in connection with the bankruptcy or reorganization of suppliers and customers
and in good faith settlement of
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delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business and past due accounts;
(n) may make Investments that could otherwise be made as distributions
permitted under Section 7.7 hereof;
(o) may own and hold Investments existing on the Agreement Date which are
set forth on Schedule 4.1(x) attached hereto;
--------------
(p) make loans and advances to employees in the ordinary course of
business in an aggregate amount not to exceed$500,000 in any fiscal year at any
time outstanding during such fiscal year;
(q) may own and hold the Management Notes; and
(r) make other Investments, and issue Guarantees, not expressly permitted
above in an aggregate amount not to exceed$1,000,000 at any time outstanding.
Section 7.3 Limitation on Liens. The Borrower shall not, and shall cause
-------------------
each of the other Borrower Parties not to, create, assume, incur or permit to
exist or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of their respective properties or assets, whether
now owned or hereafter acquired, except for Permitted Liens.
Section 7.4 Amendment and Waiver. The Borrower shall not, and shall cause
--------------------
each of the other Borrower Parties not to, without the prior written consent of
the Required Lenders, enter into any amendment of, or agree to or accept any
waiver, which would materially adversely affect the rights of the Borrower and
the Credit Parties (in their capacity as Lenders under this Agreement), or any
of them, of any of the provisions of, (a) its organizational documents,
including, without limitation, its certificate or articles of incorporation and
by-laws, (b) the ZD Acquisition Documents, (c) the Subordinated Bridge Facility
Documents (other than Section 7.13 of the Purchase Agreement related thereto),
(d) the Intermediate Bridge Facility Documents, (e) the Permitted High-Yield
Securities, and (f) the Refinancing Securities.
Section 7.5 Liquidation; Merger; Acquisition or Disposition of Assets. The
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Borrower shall not, and shall cause each of the other Borrower Parties not to,
at any time: (a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up; (b) enter into any merger, consolidation or
other business combination; (c) sell, lease (as lessor), abandon, transfer,
trade or otherwise dispose of (including, without limitation, by way of a Sale
and Lease-Back Transaction), in a single transaction or in a series of related
transactions, any of its Assets, property or business (other than in the
ordinary course of business); (d) acquire Equity Interests of another Person or
make any Acquisition; or (e) create or acquire any Subsidiary; provided,
--------
however, that, so long as no Default or Event of Default then exists or would be
-------
caused thereby:
(i) the Borrower and its Subsidiaries may engage in any such
transactions required in connection with the ZD Acquisition;
(ii) after the Subordinated Bridge Facility Refinancing Date, the
following are permitted: (A) a merger among the Borrower and one or more
Restricted Subsidiaries of the
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Borrower, provided the Borrower is the surviving Person; (B) a merger between or
among two or more Restricted Subsidiaries of the Borrower; (C) an Acquisition
permitted hereunder effected by a merger in which the Borrower or a Restricted
Subsidiary of the Borrower is or will become the surviving Person; (D) a
liquidation or dissolution of one or more Restricted Subsidiaries of the
Borrower into its or their parent entity (provided the Borrower or one of the
Borrower's Restricted Subsidiaries is such parent entity); and (E) after the
repayment in full in cash of the Intermediate Bridge Facility, the Intermediate
Holdco Merger;
(iii) subject to compliance with the mandatory prepayment provision of
Section 2.7(b), the Borrower and its Restricted Subsidiaries may make Permitted
Dispositions, and in connection with such dispositions the Administrative Agent
shall, upon the request of the Borrower, release any Liens granted pursuant to
the Security Documents with respect to such Assets;
(iv) the Borrower and its Restricted Subsidiaries may (A) make
Investments as permitted under Section 7.2 hereof; (B) transfer Assets amongst
themselves; and (C) subject to Section 8.5 hereof, make Capital Expenditures in
the ordinary course of their respective businesses;
(v) subject to compliance with Section 5.15, the Borrower and its
Restricted Subsidiaries may make Acquisitions and Investments of Assets or
businesses, within their respective lines of business, and form Subsidiaries,
subject to the following conditions:
(A) the Subordinated Bridge Facility Refinancing Date shall have
occurred and the Borrower shall provide to the Administrative Agent
and the Lenders a Performance Certificate setting forth the
arithmetical calculations required to establish the Borrower's pro
forma compliance with Sections 8.1 and 8.2 of this Agreement;
(B) the aggregate Purchase Price (with respect to a single
transaction or a series of related transactions) of any Acquisitions
and Investments made (I) during any twelve (12) month period, shall
not exceed $25,000,000, and (II) during the period from the Agreement
Date through the Final Maturity Date, shall not exceed $100,000,000,
plus, in each case, the amount of any Contributed Capital, if any,
----
attributable to Acquisitions or Investments made during such period;
provided, however, that the limitations set forth in items (I) and
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(II) above shall not apply with respect to (x) any Acquisition
financed by up to$80,000,000 of the Net Proceeds received by the
Borrower and its Restricted Subsidiaries from the sale of the
International Publications and up to$25,000,000 of the Net Proceeds
received by the Borrower and its Restricted Subsidiaries from any
other Permitted Dispositions by the Borrower or any Restricted
Subsidiary, in each case, to the extent such Net Proceeds are
permitted to be so used pursuant to Section 2.7(b)(i), (y)
Acquisitions of replacement Assets with Net Proceeds of insurance to
the extent such Net Proceeds are permitted to be so used pursuant to
Section 2.7(b)(v) hereof, and (z) Acquisitions and Investments
permitted under Sections 7.5(ix), (x) or (xi) hereof or financed using
the Net Proceeds from the sale of the Equity Interests of InternetCo
permitted under Section 7.5(xiv); and
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(C) with respect to any Acquisition or Investment having an
aggregate Purchase Price (with respect to a single transaction or a
series of related transactions) in excess of $10,000,000, the Borrower
shall provide to the Administrative Agent and the Lenders revised
Projections assuming consummation of such Acquisition or Investment,
as the case may be, and demonstrating pro forma compliance with the
terms of this Agreement through the Final Maturity Date;
(D) with respect to the Acquisition of MusicMag, the terms and
conditions of such Acquisition shall be reasonably satisfactory to the
Agents, and the Borrower shall have certified to the Agents that the
Total Leverage Ratio after giving effect to such Acquisition shall not
be greater than the Total Leverage Ratio (based on the financial
statements delivered to the Administrative Agent pursuant to Section
6.2 hereof for the most recent fiscal quarter) immediately prior to
giving effect to such Acquisition;
(vi) subject to compliance with Sections 2.7 and 5.15, the
Unrestricted Subsidiaries may (A) enter into any merger, consolidation or other
business combination, (B) acquire Equity Interests or assets, or make any
Acquisition, or (C) create or acquire any Subsidiary or sell, lease, abandon,
transfer, trade or otherwise dispose of any of its Assets, property or business;
provided, however, that no LaunchCo Joint Venture may form a Subsidiary;
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(vii) prior to the Subordinated Bridge Facility Refinancing Date,
Holdco may form a wholly-owned Subsidiary solely in connection with its
Acquisition of MusicMag;
(viii) (A) LaunchCo may form Subsidiaries provided that, except with
respect to LaunchCo Joint Ventures permitted under subsection (B) hereof,
LaunchCo shall own at least ninety percent (90%) of the Equity Interests of such
Subsidiary and the Equity Interests which are not owned by LaunchCo, but owned
by members of management of such Subsidiary, shall constitute Management Shares,
and (B) if the Adjusted Leverage Ratio shall be less than or equal to 4.50 to
1.00 (on a pro forma basis) on the date of such formation or sale and for two
consecutive fiscal quarters immediately preceding the date of such formation or
sale, (I) LaunchCo may form LaunchCo Joint Ventures and (II) LaunchCo may sell
up to twenty-five (25%) of its Equity Interest in any of its direct Subsidiaries
causing any such Subsidiary to become a LaunchCo Joint Venture, provided, in
each case that LaunchCo's ownership of the Equity Interests therein shall not be
less than seventy-five percent (75%) of all Equity Interests of such LaunchCo
Joint Venture and that the Equity Interests owned by LaunchCo shall be pledged
to the Administrative Agent pursuant to Section 5.15 hereof;
(ix) if the LaunchCo Group receives any Net Proceeds pursuant to a
transaction described in Section 2.7(b)(ii) hereof, LaunchCo, the Borrower or
any of the Restricted Subsidiaries (other than the Foreign Subsidiaries) may
reinvest amounts not required to permanently prepay the Term Loans (i.e., the
first$3,000,000, in the aggregate during the term of this Agreement, of Net
Proceeds and twenty percent (20%) of the additional Net Proceeds increasing to
fifty percent (50%) pursuant to the provisions of Section 2.7(b)(ii) hereof) in
the Restricted Group (without regard to the Reinvestment Basket) or in the
LaunchCo Group;
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(x) if the Borrower or any Restricted Subsidiary receives any Net
Proceeds from a transaction involving the InternetCo Group of a type described
in Section 2.7(b)(iii) hereof, the Borrower or any of the Restricted
Subsidiaries may reinvest the amount of Net Proceeds not required to permanently
prepay the Term Loans (i.e., the first $3,000,000, in the aggregate during the
term of this Agreement, and twenty percent (20%) of the additional Net Proceeds
increasing to fifty percent (50%) of such Net Proceeds in accordance with the
provisions of Section 2.7(b)(iii) hereof) in the Restricted Group (without
regard to the Reinvestment Basket), the LaunchCo Group, the InternetCo Group or
MacWorld;
(xi) if the Borrower or its Restricted Subsidiaries receives any Net
Proceeds from a transaction involving MacWorld of a type described in Section
2.7(b)(iv) hereof, the Borrower or its Restricted Subsidiaries may reinvest the
amount not required to prepay the Term Loans (i.e., the first $3,000,000, in the
aggregate during the term of this Agreement, of such Net Proceeds and twenty
percent (20%) of the additional Net Proceeds increasing to fifty percent (50%)
of such Net Proceeds in accordance with the provisions of Section 2.7(b)(iv)
hereof) in the Restricted Group (without regard to the Reinvestment Basket), the
LaunchCo Group, the InternetCo Group or MacWorld;
(xii) subject to compliance with the mandatory prepayment provisions
of Section 2.7(b), the Unrestricted Subsidiaries may sell, lease, abandon,
transfer, trade or otherwise dispose of any of their respective Assets,
properties or businesses;
(xiii) the Borrower and the Restricted Subsidiaries may sell or
exchange used, obsolete or uneconomical assets for cash or other consideration;
(xiv) the Borrower may sell (A) up to ten percent (10%) of the Equity
Interests owned by it in LaunchCo to management as Management Shares and (B)
after the Subordinated Bridge Facility Refinancing Date, up to 49.9% of the
Equity Interests owned by it in InternetCo;
(xv) subject to Section 7.8 hereof, so long as (A) no Default or
Event of Default then exists or would be caused thereby and (B) the Adjusted
Leverage Ratio shall be less than or equal to 4.50 to 1.00 (on a pro forma
basis) immediately before and after giving effect to such Acquisition and for
the two (2) consecutive fiscal quarters immediately preceding the date of such
Acquisition, the Borrower and its Restricted Subsidiaries may acquire
publications from the LaunchCo Group;
(xvi) notwithstanding any provisions hereof which may be construed to
the contrary, if the Controlling Shareholders or the Co-Investors shall
contribute any Bridge Equity to the Borrower and thereafter the Borrower shall
receive any Net Proceeds from any Sale Transaction, (A) a portion of such Net
Proceeds in an amount equal to the amount of such Bridge Equity shall not be
reinvested as otherwise provided herein, but shall be placed in a Bridge Equity
Account pending the Administrative Agent's receipt, pursuant to Section 6.3
hereof, of audited financial statements for the fiscal year ended March 31,
2001, and its determination of whether the Additional Equity Contribution shall
be required, and (B) in the event that the Additional Equity Contribution shall
be required, the amount of such Net Proceeds deposited in the Bridge Equity
Account shall be used, together with the Additional Equity Contribution, to
prepay the Loans to the extent provided in Section 2.7(d) hereof, provided that,
in no event, shall
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the sum of the Additional Equity Contribution plus the amount of such Net
Proceeds deposited in the Bridge Equity Account exceed $50,000,000; provided
further, however, that if less than $50,000,000 is required to be paid under the
Make-Well Agreement, the amount of the Net Proceeds deposited in the Bridge
Equity Account shall be used first, then the Additional Equity Contribution
shall be used, and the amount of the Net Proceeds deposited in the Bridge Equity
Account which is not required to repay the Loans under Section 2.7(d) will be
released from the Bridge Equity Account and the deadline for the Restricted
Group to reinvest such cash as provided in the applicable subsections (i)
through (iv) of Section 2.7(b) shall be extended until March 31, 2002;
(xvii) any Unrestricted Subsidiary may transfer assets to the
Borrower or to any other Subsidiary of the Borrower, and such Person receiving
such assets may further transfer such assets in a substantially contemporaneous
transaction to the Borrower or any other Subsidiary or to MacWorld; and
(xviii) subject to compliance with Section 5.15 hereof, Intermediate
Holdco may form a direct, wholly-owned Subsidiary to hold the Equity Interests
of the Borrower.
Section 7.6 Limitation on Guaranties. The Borrower shall not, and shall
------------------------
cause each of the other Borrower Parties not to, at any time Guaranty, assume,
be obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) under any of the Loan Documents or
as permitted under Section 7.1 hereof, (b) a guaranty by the Borrower or any of
its Subsidiaries of the obligations of the Borrower or any of the Restricted
Subsidiaries (other than the Foreign Subsidiaries), (c) a guaranty by
endorsement of negotiable instruments for collection in the ordinary course of
business, (d) contingent obligations in the form of customary indemnifications
for agents, employees, consultants, officers and directors of such Borrower
Party, (e) performance, surety, bid, appeal and other similar bonds as expressly
referred to under the definition of "Permitted Liens", and (f) Guaranties
identified in Sections 7.2(d), (f), (h), (i) and (r) hereof.
Section 7.7 Restricted Payments and Purchases. The Borrower shall not, and
---------------------------------
shall cause each of the Restricted Subsidiaries not to, directly or indirectly,
declare or make any Restricted Payment or Restricted Purchase except that (a)
the Borrower may make regularly scheduled payments of interest when due on the
Subordinated Bridge Facility pursuant to the Subordinated Bridge Facility
Documents as in effect on the Agreement Date or as thereafter amended in
accordance with Section 7.4 hereof (or any Permitted High-Yield Securities or
the Refinancing Securities, as applicable), (b) the Borrower may make Restricted
Payments to Holdco to permit Holdco to pay taxes, salaries, directors fees,
indemnities and expenses and other corporate expenses in the ordinary course of
its business, (c) the Restricted Subsidiaries may make distributions to the
holders of their respective Equity Interests, (d) the Borrower may declare and
pay dividends solely in common stock or Preferred Stock (other than Disqualified
Capital Stock), and (e) so long as no Default or Event of Default then exists or
would be caused thereby, the Borrower and its Restricted Subsidiaries may (i)
make Restricted Payments to Holdco, Intermediate Holdco or any Permitted
Intermediate Holdco Subsidiary to enable such Person to make, and such Person
may make, regularly scheduled payments of interest when due on any Permitted
High-Yield Securities (or the Refinancing Securities, as applicable), after
expiration of a five (5) year period following the issuance of such securities
(during which time
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such securities may accrue interest in kind), (ii) in connection with the
refinancing of the Subordinated Bridge Facility with Permitted High-Yield
Securities or Refinancing Securities, make Restricted Payments to the lenders
under the Subordinated Bridge Facility in an aggregate amount not to exceed the
amount of then outstanding principal and accrued interest of the Subordinated
Bridge Facility, plus related fees (not including pre-payment premiums) and
expenses with respect to the refinancing of the Subordinated Bridge Facility
with such Permitted High Yield Securities or Refinancing Securities, as
applicable, (iii) in connection with any refinancing of Permitted High-Yield
Securities with Refinancing Securities, make Restricted Payments to the holders
of the Permitted High-Yield Securities in an aggregate amount not to exceed the
amount of then outstanding principal and accrued interest of the Permitted High-
Yield Securities, plus related premiums, fees and expenses with respect to the
refinancing of the Permitted High-Yield with such Refinancing Securities, (iv)
make Restricted Payments or Restricted Purchases in connection with the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of Holdco or any of its Subsidiaries held by any employee,
former employee, spouse, former spouse of any employee or former employee and
any of their respective estates, or make payments on notes evidencing any
Management Redemption Debt, in an aggregate amount not to exceed the sum of
(A) $1,000,000 during any fiscal year (with unused amounts in any fiscal year
being carried over to succeeding fiscal years), plus (B) the Borrower's fifty
percent (50%) share of the aggregate cash Net Proceeds received from any "key-
man" life insurance policies, (v) repurchase Equity Interests by the issuance of
Management Redemption Debt permitted under Section 7.1 hereof, (vi) repurchase
Equity Interests or make payments with respect to Management Redemption Debt
with additional equity contributions expressly made for such purpose, and (vii)
repurchase Equity Interests in consideration for the cancellation of any
Management Notes issued in connection with the original purchase thereof.
Notwithstanding anything to the contrary contained in this Agreement or the
other Loan Documents, the Borrower's share of all Restricted Payments made by
the direct Unrestricted Subsidiaries shall be paid to the Borrower.
Section 7.8 Affiliate Transactions. The Borrower shall not, and shall
----------------------
cause each of the Guarantors not to, at any time engage in any transaction with
an Affiliate (other than the Borrower or a Restricted Subsidiary), nor make an
assignment or other transfer of any of its Assets to any Affiliate, on terms
materially less advantageous than would be the case if such transaction had been
effected with a non-Affiliate, except with respect to (a) Investments and loans
permitted under Section 7.1 and 7.2, (b) payments under any tax sharing
agreement or arrangements among the Borrower and other members of the affiliated
group of corporations of which the Borrower is the common parent, which
agreement or agreements have been approved by the Agents, (c) payments of out-
of-pocket expenses incurred by the Controlling Shareholders in providing
services to the Borrower and its Subsidiaries from time to time and indemnities
in connection therewith, (d) payments of reasonable fees to, and the reasonable
out-of-pocket expenses of, members of the board of directors and the provision
of customary indemnities for the benefit of members of the board of directors,
(e) customary compensation paid to, and indemnity provided on behalf of,
officers, employees or consultants of the Borrower and its Subsidiaries, and (f)
other transactions set forth on Schedule 4.1(s) hereto.
---------------
Section 7.9 Business Name; Business Structure; Business. The Borrower
-------------------------------------------
shall not, and shall cause each of the other Borrower Parties not to, change its
name or business structure without giving the Administrative Agent thirty (30)
days' prior written notice of its intention to
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do so and complying with all reasonable requirements of the Administrative Agent
relating to the Security Documents in regard thereto, or (b) (i) with respect to
the Borrower and its Restricted Subsidiaries, engage in any businesses other
than the business of publishing, in print or on the Internet, technology-related
magazines in the United States and Europe, and in business activities related
thereto, or make any material change in any of their respective business
objectives, purposes and operations, (ii) prior to consummation of the
Intermediate Holdco Merger, with respect to Intermediate Holdco, engage in any
commercial business other than holding the Equity Interests of the Borrower (or
any Permitted Intermediate Holdco Subsidiary) and in connection with the
Intermediate Bridge Facility, and (iii) with respect to Holdco, engage in any
commercial business other than holding the Equity Interests of any Subsidiary
formed in connection with the Acquisition of MusicMag and (A) prior to
consummation of the Intermediate Holdco Merger, of Intermediate Holdco, and (B)
after consummation of the Intermediate Holdco Merger, of any Permitted
Intermediate Holdco Subsidiary or the Borrower. The InternetCo Group shall not
engage in any business other than the acquisition, development and management of
Internet initiatives, and the LaunchCo Group shall not engage in any business
other than the acquisition, development and management of new magazine
publishing initiatives and events with respect to new or existing magazines.
Nothing contained in this Section 7.9 shall be deemed to limit or restrict any
business activities otherwise permitted under this Agreement.
Section 7.10 Real Estate. The Borrower shall not, and shall cause each of
-----------
its Restricted Subsidiaries not to, purchase or become obligated to purchase any
real estate except in the ordinary course of business, in compliance with
Section 5.9 hereof and subject to the restrictions contained in Section 7.5
hereof.
Section 7.11 ERISA Liabilities. The Borrower shall not, and shall cause
-----------------
the other Borrower Parties not to, fail to make all material contributions in
accordance with the terms of their respective Plans and to meet all of the
applicable minimum funding requirements of ERISA and the Code, without regard to
any waivers thereof, and, to the extent that the assets of any of such Plans
would be less than an amount sufficient to provide all accrued benefits payable
under such Plans, shall make the maximum deductible contributions allowable
under the Code. Neither the Borrower nor any of the Guarantors shall incur any
material withdrawal liability with respect to any Multiemployer Plan. The
Borrower shall not, and shall cause the other Borrower Parties not to, make any
commitment to provide post-employment health or life insurance benefits, except
as required by Section 601 through 609 of ERISA.
Section 7.12 Negative Pledge. The Borrower shall not, and shall cause the
---------------
Guarantors not to, directly or indirectly, enter into any agreement (other than
the Loan Documents, the Subordinated Bridge Facility Documents and the documents
relating to the Permitted High Yield Securities and the Refinancing Securities)
with any Person that prohibits or restricts or limits the ability of any of the
Borrower Parties to create, incur, pledge, or suffer to exist any Lien upon any
of its Assets, or restricts the ability of any Subsidiary of the Borrower to
make Restricted Payments to the Borrower, except (a) any encumbrance or
restriction that restricts in a customary manner the subletting, assignment or
transfer of any property or asset that is subject to a lease, license or other
contract or the assignment, encumbrance or hypothecation of such lease, license
or other contract; (b) any limitation or restriction contained in any Permitted
Lien to the extent such limitation or restriction restricts the transfer of the
property subject to such Permitted Liens;
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and (c) any restriction imposed pursuant to an agreement entered into in
connection with a Permitted Disposition pending the closing of such sale or
disposition.
Section 7.13 Stay, Extension and Usury Laws. The Borrower shall not, and
------------------------------
shall cause each of the other Borrower Parties not to, (to the extent it may
lawfully do so) at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law or
other law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of its obligations under this Agreement
and the other Loan Documents, and the Borrower, for itself and on behalf of each
of the other Borrower Parties, hereby expressly waives (to the extent it may
lawfully do so) all benefit or advantage of any such law.
Section 7.14 Limitation on Sale and Lease-Back Transactions. The Borrower
----------------------------------------------
shall not, and shall cause each of the other Borrower Parties not to, enter into
any Sale and LeaseBack Transaction, except that the Borrower or any other
Borrower Party may enter into a Sale and Lease-Back Transaction if (a) the
Borrower or such other Borrower Party, as applicable, could have (i) incurred
Indebtedness in an amount equal to the Attributable Indebtedness relating to
such Sale and Lease-Back Transaction under Section 7.1 hereof and (ii) incurred
a Lien to secure such Indebtedness pursuant to Section 7.3 hereof, (b) the gross
cash proceeds of that Sale and Lease-Back Transaction are at least equal to the
fair market value of the property sold, and (c) the transfer of assets in that
Sale and Lease-Back Transaction is permitted by Section 7.5 hereof.
ARTICLE 8
Financial Covenants
-------------------
Section 8.1 Total Leverage Ratio. Commencing on the Agreement Date, the
--------------------
Borrower shall not permit for each fiscal quarter end thereafter, or as of the
date of any Advance, the Total Leverage Ratio, after giving effect to such
Advance (if applicable), to exceed the applicable ratio for such date during the
periods as set forth below:
Applicable Period Ratio
----------------- -----
Agreement Date through December 31, 2000 5.50 to 1.00
January 1, 2001 through December 31, 2001 4.50 to 1.00
January 1, 2002 through December 31, 2002 4.25 to 1.00
January 1, 2003 through December 31, 2003 4.00 to 1.00
January 1, 2004 and thereafter 3.75 to 1.00
Section 8.2 Senior Leverage Ratio. Commencing on the Agreement Date, the
---------------------
Borrower shall not permit for each fiscal quarter end thereafter, or as of the
date of any Advance, the Senior Leverage Ratio, after giving effect to such
Advance (if applicable), to exceed the applicable ratio for such date during the
periods as set forth below:
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Applicable Period Ratio
----------------- -----
Agreement Date through December 31, 2000 4.00 to 1.00
January 1, 2001 through December 31, 2001 3.50 to 1.00
January 1, 2002 through December 31, 2002 3.25 to 1.00
January 1, 2003 through December 31, 2003 3.00 to 1.00
January 1, 2004 and thereafter 2.75 to 1.00
Section 8.3 Interest Coverage Ratio. The Borrower shall not permit for
-----------------------
the fiscal quarter ended June 30, 2000, and for each fiscal quarter end
thereafter, the Interest Coverage Ratio to be less than the ratio specified
below with respect to such fiscal quarter end:
Quarters Ending Ratio
--------------- -----
June 30, 2000 through December 31, 2000 1.50 to 1.00
January 1, 2001 through December 31, 2001 1.75 to 1.00
January 1, 2002 through December 31, 2002 2.00 to 1.00
January 1, 2003 through December 31, 2003 2.25 to 1.00
January 1, 2004 and thereafter 2.50 to 1.00
Section 8.4 Fixed Charge Coverage Ratio. The Borrower shall not permit
---------------------------
for the fiscal quarter ended March 31, 2001, and for each fiscal quarter end
thereafter, the Fixed Charge Coverage Ratio, to be less than 1.25 to 1.00.
Section 8.5 Capital Expenditures. The Borrower and its Restricted
--------------------
Subsidiaries shall not make Capital Expenditures (other than in connection with
the reinvestment of asset sale Net Proceeds to the extent set forth in Section
2.7(b) and Section 7.5 hereof), during the period from the Agreement Date
through March 31, 2001, in excess of $8,000,000.
ARTICLE 9
Default
-------
Section 9.1 Events of Default. Each of the following shall constitute an
-----------------
Event of Default with respect to the Obligations, whatever the reason for such
event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or any order,
rule or regulation of any governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement or any other
Loan Document shall prove to be incorrect or misleading in any material respect
when made or deemed to be made pursuant to Section 4.2 hereof;
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(b) (i) The Borrower shall default in the payment of any principal of the
Loans when due, or (ii) the Borrower shall default in the payment of any
interest, fees or other amounts payable to any of the Credit Parties when due
and such Default shall not be cured by payment in full of such amounts within
five (5) Business Days;
(c) The Borrower shall default in the performance or observance of any
agreement or covenant contained in Section 5.1(a), 5.5, 5.7 or 5.8 or in Article
6 or Article 7 or Article 8 of this Agreement or in any Security Documents;
provided, however, that in the case of Article 6, the Administrative Agent shall
-------- -------
have given the Borrower written notice of such Default; provided further,
however, that in the case of Section 8.1 and 8.2 with respect to compliance with
such covenants for the fiscal quarter ended March 31, 2001, such Default shall
only be deemed to have occurred if the Additional Equity Contribution is not
made within the period of time provided for such payment in the Make-Well
Agreement, and after giving effect to the repayment of the Loans with such funds
as provided in Section 2.7(d) hereof and the related reduction in Funded Debt,
the Borrower would be in compliance with the covenants in Sections 8.1 and 8.2;
(d) The Borrower shall default in the performance or observance of any
other agreement or covenant contained in this Agreement not specifically
referred to elsewhere in this Section 9.1, and such default, if curable, shall
not be cured within a period of thirty (30) days from the earlier of (i) the
Borrower obtaining knowledge thereof, or (ii) written notice thereof having been
given to the Borrower;
(e) There shall occur any default in the performance or observance of any
agreement or covenant contained in any of the Loan Documents (other than this
Agreement or as otherwise provided in this Section 9.1) by any of the Borrower
Parties or any other obligor thereunder, which shall not be cured within the
cure period, if any, set forth in such Loan Document;
(f) There shall be entered and remain unstayed a decree or order for relief
in respect of any of Holdco and its Subsidiaries (other than any of the Non-
Material Unrestricted Subsidiaries) under Title 11 of the United States Code as
now constituted or hereafter amended, or any other applicable Federal or state
bankruptcy law or other similar law, or the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or similar official of
any of Holdco and its Subsidiaries (other than any of the Non-Material
Unrestricted Subsidiaries), or of any substantial part of their respective
properties, or ordering the winding-up or liquidation of the affairs of any of
Holdco and its Subsidiaries (other than any of the Non-Material Unrestricted
Subsidiaries), or an involuntary petition shall be filed against any of Holdco
and its Subsidiaries (other than any of the Non-Material Unrestricted
Subsidiaries) and a temporary stay entered, and (i) such petition and stay shall
not be diligently contested, or (ii) such petition and stay shall remain
uncontroverted for a period of fifteen (15) consecutive days, or continue
undismissed for a period of sixty (60) consecutive days;
(g) Any of Holdco and its Subsidiaries (other than any of the Non-Material
Unrestricted Subsidiaries) shall file a petition, answer or consent seeking
relief under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable Federal or state bankruptcy law or other
similar law, or any of Holdco and its Subsidiaries (other than any of the Non-
Material Unrestricted Subsidiaries) shall consent to the institution of
proceedings
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thereunder or to the filing of any such petition or shall seek or consent to the
appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of any of Holdco and
its Subsidiaries (other than any of the Non-Material Unrestricted Subsidiaries),
or of any substantial part of their respective properties, or any of Holdco and
its Subsidiaries (other than any of the Non-Material Unrestricted Subsidiaries),
shall fail generally to pay their respective debts as they become due, or any of
Holdco and its Subsidiaries (other than any of the Non-Material Unrestricted
Subsidiaries) shall take any action in furtherance of any such action;
(h) A judgment shall be entered by any court against any of the Borrower
Parties (other than any of the Non-Material Subsidiaries) for the payment of
money which exceeds $2,500,000 (in excess of insurance) or a warrant of
attachment or execution or similar process shall be issued or levied against
property of any of the Borrower Parties (other than any of the Non-Material
Subsidiaries) which, together with all other such property of the Borrower
Parties (other than any of the Non-Material Subsidiaries) subject to other such
process, exceeds in value $2,500,000 in the aggregate, and if, within thirty
(30) days after the entry, issue or levy thereof, such judgment, warrant or
process shall not have been paid or discharged or stayed pending appeal, or if,
after the expiration of any such stay, such judgment, warrant or process shall
not have been paid or discharged within fifteen (15) days;
(i) There shall be at any time any "accumulated funding deficiency," as
defined in Section 302 of ERISA or in Section 412 of the Code, with respect to
any Plan maintained by any of the Borrower Parties, or to which any of the
Borrower Parties has any liabilities, or any trust created thereunder; or a
trustee shall be appointed by a United States District Court to administer any
such Plan; or PBGC shall institute proceedings to terminate any such Plan; or
any of the Borrower Parties shall incur any material liability to PBGC in
connection with the termination of any such Plan; or any fiduciary of, or party
in interest to, any Plan or trust created under any Plan of any of the Borrower
Parties shall engage in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) which would subject any of the
Borrower Parties to a tax on "prohibited transactions" imposed by Section 4975
of the Code; or any fiduciary of, or party in interest to, any Plan or trust
created under any Plan of any of the Borrower Parties shall engage in a breach
of fiduciary responsibility or knowingly participate in any violation of ERISA;
or any Plan of any of the Borrower Parties which is intended to qualify under
Section 401(a) of the Code shall fail to meet the qualification requirements
under such Code section, and, in each case, such event or condition, together
with other such events or conditions, if any, would subject the Borrower Parties
to any tax, liability or penalty in excess of $2,500,000;
(j) There shall occur any default under any mortgage, deed to secure debt,
note, loan agreement, indenture or other instrument of any of the Borrower
Parties (other than any of the Non-Material Subsidiaries) evidencing Funded
Debt, which default is not cured within the applicable cure period and which
results in acceleration thereunder of an amount in excess of $2,500,000;
(k) There shall occur any default which would permit acceleration of the
Indebtedness evidenced thereby under the Subordinated Bridge Facility, the
Intermediate Bridge Facility, any Permitted High-Yield Securities or any
Refinancing Securities (or the Subordinated Bridge
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Facility Documents or the Intermediate Bridge Facility Documents or the
documents evidencing or relating to the issuance of any Permitted High-Yield
Securities or any Refinancing Securities);
(l) Any Security Document or any other Loan Document or any material
provision thereof shall at any time and for any reason cease to be in full force
and effect or be declared by a court of competent jurisdiction to be null and
void, or a proceeding shall be commenced by any of the Borrower Parties, or by
any Governmental Authority having jurisdiction over any of the Borrower Parties,
seeking to establish the invalidity or unenforceability thereof (exclusive of
questions of interpretation of any provision thereof), or any of the Borrower
Parties shall deny that it has any liability or obligation for the payment of
principal or interest or other obligations purported to be created under any
Loan Document;
(m) The Controlling Shareholders shall fail to make the Additional Equity
Contribution if and when due; or
(n) There shall occur any Change of Control.
Section 9.2 Remedies.
--------
(a) If an Event of Default specified in Section 9.1 (other than an Event
of Default under Section 9.1(f) or Section 9.1(g)) shall have occurred and shall
be continuing, the Administrative Agent, at the request of the Required Lenders,
shall formally declare that an Event of Default has occurred and (i) terminate
the Revolving Commitment and (ii) declare the principal of and interest on the
Loans and all other amounts owed to the Credit Parties under this Agreement and
any other Obligations to be forthwith due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
anything in this Agreement or in any other Loan Document to the contrary
notwithstanding, and the Revolving Commitment shall thereupon forthwith
terminate and all such amounts shall be immediately due and payable, and during
the continuance of an Event of Default specified in Section 9.1(b) hereof, the
principal amount of the Loans outstanding hereunder shall bear interest at the
Default Rate.
(b) Upon the occurrence and continuance of an Event of Default specified
in Section 9.1(f) or Section 9.1(g), all principal, interest and other amounts
due hereunder, and all other Obligations, shall thereupon and concurrently
therewith become due and payable and the Revolving Commitment shall forthwith
terminate and the principal amount of the Loans outstanding hereunder shall bear
interest at the Default Rate, all without any action by the Agents, the Lenders
and the Required Lenders, or any of them, and without presentment, demand,
protest or other notice of any kind, all of which are expressly waived, anything
in this Agreement or in the other Loan Documents to the contrary
notwithstanding.
(c) With respect to any outstanding Letters of Credit with respect to
which presentment for honor shall not have occurred at the time of any
acceleration of the Obligations pursuant to this Section 9.2, the Borrower shall
promptly, upon demand by the Issuing Bank, pay to the Issuing Bank an amount
equal to one hundred two percent (102%) of the aggregate undrawn and unexpired
amount of each Letter of Credit then outstanding, which cash will be held as
cash collateral by the Issuing Bank for the L/C Obligations and applied to the
payment of drafts drawn under such Letters of Credit and the unused portion
thereof after such Letters of Credit shall have
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expired or been fully drawn upon, if any, shall be applied to repay other
Obligations hereunder in the manner set forth in Section 9.3 hereof.
(d) Upon acceleration of the Loans, as provided in subsection (a) or (b)
of this Section 9.2, the Credit Parties shall have all of the post-default
rights granted to them, or any of them, under the Loan Documents and under
Applicable Law.
(e) Upon acceleration of the Loans, as provided in subsection (a) or (b)
of this Section 9.2, the Administrative Agent, upon request of the Required
Lenders, shall have the right to the appointment of a receiver for the
properties and assets of the Borrower and its Subsidiaries, both to operate and
to sell such properties and assets, and the Borrower, for itself and on behalf
of its Subsidiaries, hereby consents to such right and such appointment and
hereby waives any objection the Borrower or any Subsidiary may have thereto or
the right to have a bond or other security posted by the Administrative Agent,
on behalf of the Credit Parties, in connection therewith.
(f) The rights and remedies of the Credit Parties hereunder shall be
cumulative and not exclusive.
Section 9.3 Payments Subsequent to Acceleration. Subsequent to the
-----------------------------------
acceleration of the Loans under Section 9.2 hereof, payments and prepayments
under this Agreement made to any of the Credit Parties or otherwise received by
any of such Persons (from realization on Collateral for the Obligations or
otherwise) shall be paid over to the Administrative Agent (if necessary) and
distributed by the Administrative Agent as follows: FIRST, to the reasonable
-----
costs and expenses, if any, incurred in connection with the collection of such
payment or prepayment including, without limitation, any reasonable costs
incurred by the Administrative Agent in connection with the sale or disposition
of any Collateral for the Obligations; SECOND, to the Credit Parties for any
------
fees hereunder or under any of the other Loan Documents then due and payable;
THIRD, to the Lenders pro-rata on the basis of their respective unpaid principal
-----
amounts, to the payment of any unpaid interest which may have accrued on the
Obligations; FOURTH, to the Lenders pro-rata until all Loans have been paid in
------
full (and, for purposes of this clause, obligations under Interest Hedge
Agreements with any of the Lenders shall be deemed to be Loans and shall be paid
on a pro-rata basis with the Loans); FIFTH, to the Lenders pro-rata on the basis
-----
of their respective unpaid amounts, to the payment of any other unpaid
Obligations; SIXTH, to damages incurred by any Credit Party by reason of any
-----
breach hereof or of any other Loan Document; and SEVENTH, upon satisfaction in
-------
full of all Obligations (other than contingent indemnity obligations), to the
Borrower or as otherwise required by law. Notwithstanding the foregoing, each
Lender may allocate amounts received by it pursuant to this Section 9.3 in its
discretion to the various Obligations held by it.
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ARTICLE 10
The Agents
----------
Section 10.1 Appointment and Authorization. Subject only to Section 10.13
-----------------------------
hereof, each of the Lenders hereby irrevocably appoints and authorizes, and
hereby agrees that it will require any transferee of any of its interest in its
Loans irrevocably to appoint and authorize, each of the Agents to take such
actions as its agent on its behalf and to exercise such powers hereunder and
under the Security Documents as are delegated to such Agents by the terms hereof
and thereof, together with such powers of such Agents as are reasonably
incidental thereto. None of the Agents nor any of their respective directors,
officers, employees or agents shall be liable for any action taken or omitted to
be taken by it or them hereunder or in connection herewith, except for its or
their own gross negligence or willful misconduct.
Section 10.2 Interest Holders. The Administrative Agent and the other
----------------
Agents may treat each Lender, or the Person designated in the last notice filed
with the Administrative Agent under this Section 10.2, as the holder of all of
the interests of such Lender in its Loans until written notice of transfer,
signed by such Lender (or the Person designated in the last notice filed with
the Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall
have been filed with the Administrative Agent.
Section 10.3 Consultation with Counsel. The Administrative Agent may
-------------------------
consult with Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, special counsel to the
Administrative Agent, or with other legal counsel selected by them and shall not
be liable for any action taken or suffered by them in good faith in consultation
with such counsel, or at the direction of the Required Lenders and in reasonable
reliance on such consultations or direction.
Section 10.4 Documents. None of the Agents shall be under any duty to
---------
examine, inquire into, or pass upon the validity, effectiveness or genuineness
of this Agreement, any other Loan Document, or any other instrument, document or
communication furnished pursuant hereto or in connection herewith, and each of
the Agents shall be entitled to assume (absent knowledge to the contrary) that
they are valid, effective and genuine, have been signed or sent by the proper
parties and are what they purport to be.
Section 10.5 Agents' Affiliates. With respect to the Commitments and the
------------------
Loans, the Agents and their respective Affiliates shall have the same rights and
powers hereunder and under the other Loan Documents as any other Lender, and
Affiliates of any of the Agents may accept deposits from, lend money to and
generally engage in any kind of business with any of the Borrower Parties or any
Affiliates of, or Persons doing business with, any of the Borrower Parties, as
if they were not affiliated with such Agent and without any obligation to
account therefor.
Section 10.6 Responsibility of the Agents. The duties and obligations of
----------------------------
each of the Agents under this Agreement and the Security Documents are only
those expressly set forth in this Agreement and the Security Documents. Each of
the Agents shall be entitled to assume that no Default has occurred and is
continuing unless it has actual knowledge, or has been notified by
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the Borrower, of such fact, or has been notified by a Lender in writing that
such Lender considers that a Default has occurred and is continuing, and such
Lender shall specify in detail the nature thereof in writing. None of the Agents
shall be liable hereunder for any action taken or omitted to be taken except for
its own gross negligence or willful misconduct. The Administrative Agent shall
provide promptly each of the Lenders with copies of such documents received from
the Borrower as such Lender may reasonably request.
Section 10.7 Security Documents. The Administrative Agent, as
------------------
administrative agent hereunder and under the Security Documents, is hereby
authorized to act on behalf of the Lenders, in its own capacity and through
other agents and sub-agents appointed by it with due care, under the Security
Documents, provided that the Administrative Agent shall not agree to the release
of any Collateral, or any property encumbered by any mortgage, pledge or
security interests, except in compliance with Section 12.12 hereof. In
connection with its role as secured party with respect to the Collateral
hereunder, the Administrative Agent shall act as administrative agent, for the
benefit of the Credit Parties, and such role as administrative agent shall be
disclosed on all appropriate accounts, certificates, filings, mortgages, and
other collateral documentation.
Section 10.8 Action by the Agents.
--------------------
(a) Each of the Agents shall be entitled to use its discretion with
respect to exercising or refraining from exercising any rights which may be
vested in it by, and with respect to taking or refraining from taking any action
or actions which it may be able to take under or in respect of, this Agreement,
unless such Agent shall have been instructed by the Required Lenders to exercise
or refrain from exercising such rights or to take or refrain from taking such
action; provided that the Administrative Agent shall not exercise any rights
under Section 9.2(a) of this Agreement except upon the request of the Required
Lenders. None of the Agents shall incur any liability under or in respect of
this Agreement with respect to anything which it may do or refrain from doing in
the reasonable exercise of its judgment or which may seem to it to be necessary
or desirable in the circumstances for the protection of the interests of the
Lenders except for its gross negligence, bad faith or willful misconduct, or
conduct in breach of this Agreement as determined by a final, non-appealable
order of a court having jurisdiction over the subject matter.
(b) None of the Agents shall be liable to the Lenders, or to any of them,
in acting or refraining from acting under this Agreement or any other Loan
Document in accordance with the instructions of the Required Lenders (or all of
the Lenders where expressly required by this Agreement), and any action taken or
failure to act pursuant to such instructions shall be binding on all Lenders.
Section 10.9 Notice of Default or Event of Default. In the event that any
-------------------------------------
Agent or any Lender shall acquire actual knowledge, or shall have been notified,
of any Default (other than through a notice by one party hereto to all other
parties), such Agent or such Lender shall promptly notify the Administrative
Agent, and the Administrative Agent shall take such action and assert such
rights under this Agreement and the other Loan Documents as the Required Lenders
(or all of the Lenders where expressly required by this Agreement) direct, and
the Administrative Agent shall not be subject to any liability by reason of its
acting pursuant to any such request. If the Required Lenders shall fail to
request the Administrative Agent to take
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action or to assert rights under this Agreement in respect of any Default within
ten (10) days after their receipt of the notice of any Default from any Agent or
any Lender, or shall request inconsistent action with respect to such Default,
the Administrative Agent may, but shall not be required to, take such action and
assert such rights (other than rights under Article 9 hereof) as it deems in its
discretion to be advisable for the protection of the Lenders, except that, if
the Required Lenders have instructed the Administrative Agent not to take such
action or assert such right, in no event shall the Administrative Agent act
contrary to such instructions.
Section 10.10 Responsibility Disclaimed. None of the Agents shall be under
-------------------------
any liability or responsibility whatsoever as an Agent:
(a) To the Borrower or any other Person as a consequence of any failure or
delay in performance by or any breach by, the Lenders, or any of them, of any of
its or their obligations under this Agreement;
(b) To the Lenders, or any of them, as a consequence of any failure or
delay in performance by, or any breach by, any of the Borrower Parties of any of
their respective obligations under this Agreement or any other Loan Document to
which it is a party; or
(c) To the Lenders, or any of them, for any statements, representations or
warranties in this Agreement, or any other document contemplated by this
Agreement or any other Loan Document, or any information provided pursuant to
this Agreement, any other Loan Document, or any other document contemplated by
this Agreement, or for the validity, effectiveness, enforceability or
sufficiency of this Agreement, any other Loan Document, or any other document
contemplated by this Agreement.
Section 10.11 Indemnification. The Lenders agree to indemnify each of the
---------------
Agents (to the extent not reimbursed by the Borrower), pro-rata in accordance
with their respective Commitment Ratios, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, reasonable fees and expenses of
experts, agents, consultants and counsel), or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agents in any way relating to or arising out of their respective roles as Agents
under this Agreement, any other Loan Document, or any other document
contemplated by this Agreement or any action taken or omitted by the Agents
under this Agreement, any other Loan Document, or any other document
contemplated by this Agreement in their respective roles as Agents, except that
none of the Lenders shall be liable to either of the Agents for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements resulting from the gross negligence,
bad faith or willful misconduct of the Agents as determined by a final, non-
appealable order of a court having jurisdiction over the subject matter.
Section 10.12 Credit Decision. Each of the Lenders represents and warrants
---------------
to each other Credit Party that:
(a) In making its decision to enter into this Agreement and to make its
Advances it has independently taken whatever steps it considers necessary to
evaluate the financial condition and affairs of the Borrower Parties and that it
has made an independent credit judgment, and that it has not relied upon any
other Credit Party or upon information provided by any Agent (other
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than information provided to the Lead Arranger by the Borrower and forwarded by
the Lead Arranger to the Lenders); and
(b) So long as any portion of the Obligations remains outstanding, it will
continue to make its own independent evaluation of the financial condition and
affairs of the Borrower Parties.
Section 10.13 Successor Agents. Subject to the appointment and acceptance
----------------
of a successor Agent as provided below, any Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent subject, so long as no Default or Event of Default then exists, to the
approval of the Borrower. If no successor Agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Agent gives notice of resignation, then the retiring
Agent may, on behalf of the Credit Parties, appoint a successor Agent which
shall be any Lender or a commercial bank organized under the laws of the United
States of America or any political subdivision thereof which has combined
capital and reserves in excess of $250,000,000, or any existing Lender. Upon the
acceptance of any appointment as an Agent hereunder by a successor Agent such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges, duties and obligations of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as an
Agent. The resignation of an Agent may not take effect until a successor Agent
is appointed.
Section 10.14 Co-Agents; Managing Agents. None of the Lenders identified
--------------------------
on the facing page of, signature pages of or elsewhere in this Agreement as a
"co-agent" or "managing agent" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement or any other Loan
Document other than those applicable to all Lenders as such. Without limiting
the foregoing, none of the Lenders so identified shall have or be deemed to have
any fiduciary relationship with any other Lender. Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders so identified in
deciding to enter into this Agreement or any other Loan Document or in taking or
not taking action hereunder or thereunder.
ARTICLE 11
Change in Circumstances
-----------------------
Affecting Eurodollar Advances
-----------------------------
Section 11.1 Eurodollar Basis Determination Inadequate or Unfair. If with
---------------------------------------------------
respect to any proposed Eurodollar Advance for any Eurodollar Advance Period,
the Administrative Agent determines after consultation with the Lenders that
deposits in Dollars (in the applicable amount) are not being offered to each of
the Lenders in the relevant market for such Eurodollar Advance Period, the
Administrative Agent shall forthwith give notice thereof to the Borrower and the
Lenders, whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such situation no longer exist, the obligations of
any affected Lender to make
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Eurodollar Advances shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section 11.1, such Lender shall designate
a different lending office if such designation will avoid the need for giving
such notice and will not, in the sole judgment of such Lender, be otherwise
materially disadvantageous to such Lender.
Section 11.2 Illegality. If, after the Agreement Date, the adoption of
----------
any Applicable Law, or any change in any Applicable Law (whether adopted before
or after the Agreement Date), or any change in interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
with any directive (whether or not having the force of law but with which such
Lender customarily complies) of any such authority, central bank or comparable
agency, shall make it unlawful or impossible for any Lender to make, maintain or
fund Eurodollar Advances, such Lender shall so notify the Administrative Agent,
and the Administrative Agent shall forthwith give notice thereof to the other
Lenders and the Borrower. Before giving any notice to the Administrative Agent
pursuant to this Section 11.2, such Lender shall designate a different lending
office if such designation will avoid the need for giving such notice and will
not, in the sole judgment of such Lender, be otherwise materially
disadvantageous to such Lender. Upon receipt of such notice, notwithstanding
anything contained in Article 2 hereof, the Borrower shall repay in full the
then outstanding principal amount of each Eurodollar Advance of such Lender,
together with accrued interest thereon and any reimbursement required under
Section 2.10 hereof, on either (a) the last day of the then current Eurodollar
Advance Period applicable to such affected Eurodollar Advances if such Lender
may lawfully continue to maintain and fund such Eurodollar Advances to such day
or (b) immediately if such Lender may not lawfully continue to fund and maintain
such affected Eurodollar Advances to such day. Concurrently with repaying each
affected Eurodollar Advance of such Lender, notwithstanding anything contained
in Article 2 or Article 3 hereof, the Borrower may borrow a Base Rate Advance
from such Lender, and such Lender shall make such Advance, if so requested, in
an amount such that the outstanding principal amount of the Loans owed to such
Lender shall equal the outstanding principal amount of such Loans immediately
prior to such repayment.
Section 11.3 Increased Costs.
---------------
(a) If, after the Agreement Date, the adoption of any Applicable Law, or
any change in any Applicable Law (whether adopted before or after the Agreement
Date), or any interpretation or change in interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof or compliance by any Lender
with any directive (whether or not having the force of law but with which such
Lender customarily complies) of any such authority, central bank or comparable
agency:
(i) shall subject any Lender to any tax, duty or other charge with
respect to its obligation to make Eurodollar Advances, or shall change the basis
of taxation of payments to any Lender of the principal of or interest on its
Eurodollar Advances or in respect of any other amounts due under this Agreement,
in respect of its Eurodollar Advances or its obligation to make Eurodollar
Advances (except for imposition of, or changes in the rate or method of
calculation of, tax on the overall net income of such Lender) in any such case;
or
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(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System, but excluding any included in an applicable Eurodollar Reserve
Percentage), special deposit, capital adequacy, assessment or other requirement
or condition against assets of, deposits with or for the account of, or
commitments or credit extended by, any Lender or shall impose on any Lender or
the London interbank borrowing market any other condition affecting its
obligation to make Eurodollar Advances or its Eurodollar Advances;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining any such Eurodollar Advances hereunder, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement
with respect thereto in each case in amounts that such Lender deems material,
then, within ten (10) days after demand by such Lender, the Borrower agrees to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such increased costs. Each Lender will promptly notify the Borrower
and the Administrative Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Lender to compensation pursuant
to this Section 11.3 and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole judgment of such Lender, be otherwise disadvantageous
to such Lender.
(b) Any Lender claiming compensation under this Section 11.3 shall provide
the Borrower with a written certificate setting forth the additional amount or
amounts to be paid to it hereunder and calculations therefor in reasonable
detail. Such certificate shall be presumptively correct, absent manifest error.
In determining such amount, such Lender shall use any reasonable averaging and
attribution methods. If any Lender demands compensation under this Section 11.3,
the Borrower may at any time, upon at least five (5) Business Days' prior notice
to such Lender, prepay in full the then outstanding Eurodollar Advances of such
Lender, together with accrued interest thereon to the date of prepayment, along
with any reimbursement required under Section 2.10 hereof. Concurrently with
prepaying such Eurodollar Advances, the Borrower may borrow a Base Rate Advance
from such Lender, and such Lender shall, if so requested, make such Advance in
an amount such that the outstanding principal amount of the Loans owing to such
Lender shall equal the outstanding principal amount of such Loans immediately
prior to such prepayment.
Section 11.4 Effect On Other Advances.
------------------------
(a) If notice has been given pursuant to Section 11.1, 11.2 or 11.3
suspending the obligation of any Lender to make Eurodollar Advances, or
requiring Eurodollar Advances of any Lender to be converted, repaid or prepaid,
then, unless and until the circumstances giving rise to such repayment no longer
apply, all Advances which would otherwise be made by such Lender as Eurodollar
Advances affected shall be made instead as Base Rate Advances.
(b) Within sixty (60) days after written notice pursuant to Section 11.1,
11.2 or 11.3 by any Lender, the Borrower may, in its discretion, provide a
replacement lender or lenders for such Lender, which replacement lender or
lenders will be subject to the approval of the Agents which shall not be
unreasonably withheld or delayed, and the Administrative Agent, such Lender and
the Borrower shall take all necessary actions to transfer the rights, duties and
obligations of such
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Lender to such replacement lender or lenders within such sixty (60) day period
(including, without limitation, the payment in full of all Obligations hereunder
due to the Lender being replaced).
ARTICLE 12
Miscellaneous
-------------
Section 12.1 Notices.
-------
(a) Unless otherwise specifically provided herein, all notices and other
communications under this Agreement shall be in writing and shall be deemed to
have been given three (3) days after deposit in the mail, designated as
certified mail, return receipt requested, postage-prepaid, or one (1) Business
Day after being entrusted to a reputable commercial overnight delivery service,
or when sent by telecopy addressed to the party to which such notice is directed
at its address determined as provided in this Section 12.1. All notices and
other communications under this Agreement shall be given to the parties hereto
at the following addresses:
(i) If to the Borrower, to it at:
Ziff Xxxxx Media Inc.
00 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx XxXxxxx
Xxxxx Xxxxxx
Telecopy No.: (000) 000-0000
with copies to:
Xxxxxx Xxxxx & Partners
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telecopy No.: (000) 000-0000
and
Xxxxxxxx & Xxxxx
Aon Center
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxxx
Telecopy No.: (000) 000-0000
(ii) If to the Administrative Agent, to it at:
Canadian Imperial Bank of Commerce
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000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Canadian Imperial Bank of Commerce
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
and
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
(iii) If to the Lenders, to them at the addresses set forth beside
their names on Schedule 2.
----------
(b) Copies shall be provided to Persons other than the parties hereto only
in the case of notices under Article 9 hereof.
(c) Any party hereto may change the address to which notices shall be
directed under this Section 12.1 by giving ten (10) days' written notice of such
change to the other parties.
Section 12.2 Expenses. The Borrower shall promptly pay or reimburse:
--------
(a) all reasonable out-of-pocket legal expenses of the Administrative
Agent and all reasonable other out-of-pocket expenses of the Administrative
Agent incurred in connection with the preparation, negotiation, execution and
delivery of this Agreement and the other Loan Documents, and the transactions
contemplated hereunder and thereunder in connection with the making of the
initial Advance hereunder (whether or not such Advance is made), including, but
not limited to, the reasonable fees and disbursements of Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP, special counsel for the Administrative Agent;
(b) all reasonable out-of-pocket legal expenses of the Administrative
Agent and all other reasonable out-of-pocket expenses of the Administrative
Agent in connection with the syndication of the Loans;
(c) all reasonable out-of-pocket legal expenses of the Administrative
Agent and all other reasonable out-of-pocket expenses of the Administrative
Agent in connection with the administration of the transactions contemplated in
this Agreement or the other Loan Documents,
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and all other reasonable expenses of the Administrative Agent customarily
reimbursed by borrowers for transactions of similar size, type and purpose as
such transactions;
(d) from and after and during the occurrence of an Event of Default, (i)
all reasonable legal and other out-of-pocket expenses of the Credit Parties
incurred in connection with the enforcement of this Agreement and the other Loan
Documents, (ii) all reasonable legal and other out-of-pocket expenses of the
Credit Parties incurred in connection with any restructuring or "work out" of,
or bankruptcy proceeding relating to, the transactions contemplated by this
Agreement or the other Loan Documents, including, but not limited to, the
reasonable fees and disbursements of any experts, agents or consultants and of
counsel for the Credit Parties, and any exercise by any of the Credit Parties of
their respective remedies provided for in this Agreement or the other Loan
Documents.
Section 12.3 Waivers. The rights and remedies of the Agents and the
-------
Lenders under this Agreement and the other Loan Documents shall be cumulative
and not exclusive of any rights or remedies which they would otherwise have. No
failure or delay by the Agents, the Required Lenders or the Lenders, or any of
them, in exercising any right shall operate as a waiver of such right. The
Agents and the Lenders expressly reserve the right to require strict compliance
with the terms of this Agreement in connection with any future funding of a
request for an Advance. In the event the Lenders decide to fund an Advance at a
time when the Borrower is not in strict compliance with the terms of this
Agreement, such decision by the Lenders shall not be deemed to constitute an
undertaking by the Lenders to fund any further Advances or to preclude the
Lenders or the Agents from exercising any rights available to them under the
Loan Documents or at law or equity. Any waiver or indulgence granted by the
Agents, the Required Lenders or Lenders shall not constitute a modification of
this Agreement, except to the extent expressly provided in such waiver or
indulgence, or constitute a course of dealing at variance with the terms of this
Agreement such as to require further notice of their intent to require strict
adherence to the terms of this Agreement in the future.
Section 12.4 Set-Off. In addition to any rights now or hereafter granted
-------
under Applicable Law and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and during the continuation thereof, the
Agents and the Lenders are hereby authorized by the Borrower at any time or from
time to time, without notice to any Borrower Party or to any other Person, any
such notice being hereby expressly waived, to set-off and to appropriate and to
apply any and all deposits (general or special, time or demand, including, but
not limited to, Indebtedness evidenced by certificates of deposit, in each case
whether matured or unmatured) and any other Indebtedness at any time held or
owing by any Lender or any Agent to or for the credit or the account of any of
the Borrower Parties against and on account of the Obligations irrespective of
whether (a) the Lenders and the Agents, or any of them, shall have made any
demand hereunder or (b) the Administrative Agent shall have declared the
principal of and interest on the Loans and other amounts due hereunder to be due
and payable as permitted by Section 9.2 hereof and although all or any of such
Obligations shall be contingent or unmatured. Upon direction by the
Administrative Agent, with the consent of the Required Lenders, each Lender
holding deposits of any of the Borrower Parties shall exercise its set-off
rights as so directed.
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Section 12.5 Successors and Assigns; Participations and Assignments.
------------------------------------------------------
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower and the Credit Parties and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of business or investment in
accordance with Applicable Law, at any time sell, to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Commitment of such Lender, or any other interest of such Lender
hereunder and under the other Loan Documents. In the event of any such sale by a
Lender of a participating interest to a Participant, (i) such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible for the
performance thereof, (iii) such Lender shall remain the holder of any such Loan
for all purposes under this Agreement and the other Loan Documents, and (iv) the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. No Lender shall be entitled to
create in favor of any Participant, in the participation agreement pursuant to
which such Participant's participating interest shall be created or otherwise,
any right to vote on, consent to or approve any matter relating to this
Agreement or any other Loan Document except for those matters specified as
requiring the consent of all Lenders in Section 12.12 hereof. The Borrower
agrees that upon the occurrence and during the continuance of an Event of
Default, each Participant shall, to the maximum extent permitted by Applicable
Law, be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement; provided that, in purchasing such participating interest, such
--------
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 12.4 as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Section 2.10, Section 2.12 and Article 11 of this Agreement with
respect to its participation in the Commitments and the Loans outstanding from
time to time as if it were a Lender; provided, further, that, in the case of
-------- -------
Section 2.12, such Participant shall have complied with the requirements of such
Section, and provided, further, that no Participant shall be entitled to receive
-------- --------
any greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its business or investment
activities and in accordance with Applicable Law, at any time and from time to
time assign, with prior written notice to the Administrative Agent, to any
Lender or any branch or Affiliate thereof, or with the consent of the
Administrative Agent and, so long as no Default exists hereunder, the Borrower
(which consents shall not be unreasonably withheld or delayed), to an additional
bank, financial institution or Approved Fund (an "Assignee"), all or any part of
its rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Assumption Agreement. Each Assignment and
Assumption Agreement shall be executed by the applicable Assignee and assigning
Lender (and, in the case of an Assignee that is not then a Lender, or a branch
or an Affiliate thereof, by the Administrative Agent and, so long as no Default
exists
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hereunder, the Borrower) and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that, with respect to each
--------
Lender, in the case of any such assignment to an additional bank or financial
institution, if such assignment is of less than all of the rights and
obligations of the assigning Lender, the sum of the aggregate principal amount
of the Loans, the aggregate amount of the L/C Obligations and the aggregate
amount of the Commitments being assigned shall not be less than $5,000,000 and
an in integral multiple of $1,000,000 in excess thereof (or such lesser amount
as may be agreed to by the Administrative Agent and the Borrower). Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Assumption Agreement, (x) the
Assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Assumption Agreement, have the rights and obligations of a Lender
hereunder with Commitments as set forth therein, and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and Assumption
Agreement, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption Agreement covering all of the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto but shall nonetheless
continue to be entitled to the benefits of, and subject to the obligations set
forth in, Sections 2.11, 2.13, 2.14, 5.11, 10.11, 11.3 and 12.2 hereof).
(d) The Administrative Agent, on behalf of the Borrower, shall maintain at
the address of the Administrative Agent referred to in Section 12.1, a copy of
each Assignment and Assumption Agreement delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time (whether or not evidenced by a Note). Any assignment or
transfer of all or part of a Loan evidenced by a Note shall be registered on the
Register only upon surrender for registration of assignment or transfer of the
Note evidencing such Loan, accompanied by a duly executed Assignment and
Assumption Agreement, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the designated Assignee and the old Note
shall be returned by the Administrative Agent to the Borrower marked "canceled".
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrower and the Credit Parties shall treat each Person whose
name is recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation (whether or not evidenced by a Note) hereunder
shall be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the Borrower
or any Credit Party at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Assumption Agreement executed by
an assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or any branch or an Affiliate thereof, by the Administrative Agent
and, so long as no Default exists hereunder, the Borrower) together with payment
to the Administrative Agent of a registration and processing fee of $3,500, the
Administrative Agent shall promptly accept such Assignment and Assumption
Agreement and record the information contained therein in the Register. Such
Assignment and Assumption Agreement and the assignment evidenced thereby shall
only be effective upon appropriate entries with respect to the information
contained therein being made in the Register pursuant to Section 12.5(d).
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(f) The Borrower hereby authorizes each Lender to disclose to any
Participant or Assignee (each a "Transferee") and any prospective Transferee,
subject to such Person agreeing to comply with the provisions of Section 12.17
of this Agreement, any and all financial and other information in such Lender's
possession concerning the Borrower which has been delivered to such Lender by or
on behalf of the Borrower in connection with such Lender's credit evaluation of
the Borrower prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge that
the provisions of this Section 12.5 concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit any
pledge or any assignments creating security interests or the assignment of any
Loan or Note pursuant to the terms of such pledge or security interest,
including, without limitation, any pledge or assignment by a Lender of any Loan
or Note to any Federal Reserve Bank in accordance with Applicable Law.
(h) Any Person purchasing a participation or an assignment of Loans from
any Lender shall be required to represent and warrant that its purchase shall
not constitute a "prohibited transaction" (as defined in Section 4.1(m) hereof).
(i) Each Lender agrees to provide the Administrative Agent and the
Borrower with prompt written notice of any issuance of participations or
assignments of its interests hereunder.
(j) No assignment, participation or other transfer of any rights by any
Lender hereunder or under the Notes shall be affected that would result in any
interest requiring registration under the Securities Act, or qualification under
any state securities law.
(k) No such assignment may be made to any Lender or other financial
institution (x) with respect to which a receiver or conservator (including,
without limitation, the Federal Deposit Insurance Corporation or the Office of
Thrift Supervision) has been appointed or (y) that is not "adequately
capitalized" (as such term is defined in Section 131(b)(1)(B) of the Federal
Deposit Insurance Corporation Improvement Act as in effect on the Agreement
Date).
Section 12.6 Accounting Principles. Except as set forth in the following
---------------------
sentence, references in this Agreement to GAAP shall be to such principles as in
effect from time to time, and all accounting terms used herein without
definition shall be used as defined under GAAP. All financial calculations
hereunder shall, unless otherwise stated, be determined for the Borrower on a
consolidated basis with its Restricted Subsidiaries. Except as otherwise
provided herein, all computations and determinations for purposes of determining
compliance with the financial requirements of this Agreement shall be made in
accordance with GAAP in effect in the United States of America on a basis
consistent with the presentation of the financial statements delivered pursuant
to Sections 6.1, 6.2 and 6.3 hereof, and all financial statements delivered
pursuant to Sections 6.1, 6.2 and 6.3 hereof shall be prepared in accordance
with GAAP as in effect on the date of their respective preparation. In the event
that any Accounting Change shall occur and such change shall result in a change
in the method of calculation of the Financial Covenants, or any other financial
standards or terms in this Agreement, the Borrower and the Administrative Agent
agree to enter into negotiations in order to amend such provisions so as to
equitably reflect such Accounting Change on terms reasonably acceptable to both
parties. Until such time as such an amendment to this Agreement shall have been
executed and
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delivered by the Borrower, the Administrative Agent and the Required Lenders,
the Financial Covenants and all other financial standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Change had not occurred.
Section 12.7 Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
In proving this Agreement or any other Loan Document in any judicial
proceedings, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is sought.
Any signatures delivered by a party by facsimile transmission shall be deemed an
original signature hereto.
Section 12.8 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK.
Section 12.9 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 12.10 Interest.
--------
(a) In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by Applicable Law, and in the event
any such payment is inadvertently made by the Borrower or inadvertently received
by any Lender, then such excess sum shall be credited as a payment of principal,
unless the Borrower shall notify the Administrative Agent or such Lender in
writing that it elects to have such excess returned forthwith. It is the express
intent hereof that the Borrower not pay and the Lenders not receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may
legally be paid by the Borrower under Applicable Law.
(b) Notwithstanding the use by the Lenders of the Base Rate and the
Eurodollar Rate as reference rates for the determination of interest on the
Loans, the Lenders shall be under no obligation to obtain funds from any
particular source in order to charge interest to the Borrower at interest rates
related to such reference rates.
Section 12.11 Headings. Headings used in this Agreement are for
--------
convenience only and shall not in any way modify or amend any of the terms or
provisions hereof nor be used in connection with the interpretation of any
provision hereof.
Section 12.12 Amendment and Waiver. Neither this Agreement nor any other
--------------------
Loan Document (other than Interest Hedge Agreements), nor any term hereof or
thereof, may be amended orally, nor may any provision hereof or thereof be
waived orally, but only by an instrument in writing signed by (or, in the case
of Security Documents executed by the Administrative Agent signed by the
Administrative Agent and approved by) the Required
-105-
Lenders and, in the case of an amendment, by the Borrower, except that (a) any
increase in the amount of the Commitments of any Lender shall require the
consent of such Lender; (b) in the event of any change in the application of
repayment of the Loans provided in Section 2.7 hereof, any amendment or waiver
or consent may be made only by an instrument in writing signed by (i) Lenders of
the Pro Rata Class the sum of whose Revolving Commitment amounts plus Term A
Loans outstanding equals or exceeds fifty-one percent (51%) of the sum of such
items for all Lenders of the Pro Rata Class and (ii) Lenders of the Term B Class
whose Term B Loans outstanding equal or exceed fifty-one percent (51%) of the
Term B Loans outstanding for all Lenders of the Term B Class, and (c) in the
event of (i) any change in the terms of repayment or in the order of application
of repayment of the Loans provided in Section 2.6 hereof, (ii) any reduction in
(but not change in the terms of repayment of) principal, interest or fees due
hereunder (other than any waiver of the Default Rate), (iii) any release of all
or substantially all of the Collateral (other than in connection with (x) a
disposition permitted under Section 7.5 hereof or (y) a disposition of a
Subsidiary of an Unrestricted Subsidiary, in each case which shall require only
the consent of the Agents), (iv) any waiver of any Default due to the failure by
the Borrower to pay any sum due under Section 2.6 hereof to the Credit Parties,
(v) any release of any Guaranty (or any guarantor thereunder) of all or any
portion of the Obligations by Holdco or a Material Subsidiary other than in
connection with a disposition permitted under 7.5, (vi) any amendment, whether
direct or indirect, of this Section 12.12, or of any of the definitions of
"Initial Maturity Date" or "Final Maturity Date", of the percentages set forth
in the definition of "Required Lenders" or of any portion of Sections 2.9(c),
5.11, 9.3 or Article 11 as they relate to the relative priority of payment among
the Obligations, or (vii) any other provision of this Agreement or any of the
other Loan Documents specifically requiring the consent or approval of each of
the Lenders, any amendment or waiver or consent may be made only by an
instrument in writing signed by (or, in the case of Security Documents executed
by the Administrative Agent, signed by the Administrative Agent and approved by)
each of the Lenders and, in the case of an amendment, by the Borrower; provided,
--------
however, that notwithstanding anything to the contrary contained in the
-------
foregoing, any amendment or waiver or consent with respect to the class voting
provisions set forth in clause (b) hereof may be made by an instrument in
writing signed by the requisite members of each class described therein.
Notwithstanding the foregoing, so long as no Default or Event of Default then
exists, within sixty (60) days of the failure of any Lender to consent to any
amendment requested by the Borrower under this Section 12.12, the Borrower may,
in its discretion, provide a replacement lender or lenders for such Lender,
which replacement lender or lenders will be subject to approval of the Agents,
and the Administrative Agent, such Lender and the Borrower shall take all
necessary actions to transfer the rights, duties and obligations of such Lender
to such replacement lender or lenders within such sixty (60) day period
(including, without limitation, the payment in full of all Obligations hereunder
due to the Lender being replaced). Any amendment to any provision hereunder, or
any waiver or consent with respect thereto, governing the rights, obligations,
or liabilities of the Administrative Agent in its capacity as such, may be made
only by an instrument in writing signed by the Administrative Agent and by each
of the Lenders.
Section 12.13 Entire Agreement. Except as otherwise expressly provided
----------------
herein, this Agreement and the other documents described or contemplated herein
embody the entire agreement and understanding among the parties hereto and
thereto and supersede all prior agreements and understandings relating to the
subject matter hereof and thereof.
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Section 12.14 Other Relationships. No relationship created hereunder or
-------------------
under any other Loan Document shall in any way affect the ability of any Credit
Party or any of their respective Affiliates to enter into or maintain business
relationships with the Borrower or any of its Affiliates beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.
Section 12.15 Loan Documents. All references to this Agreement or to any
--------------
other Loan Document whether herein or in any other Loan Document shall refer to
this Agreement or such other Loan Document as the same may be amended, restated,
supplemented or otherwise modified from time to time.
Section 12.16 Reliance on and Survival of Various Provisions. All
----------------------------------------------
covenants, agreements, statements, representations and warranties made herein or
in any certificate delivered pursuant hereto (i) shall be deemed to have been
relied upon by each of the Agents and each of the Lenders notwithstanding any
investigation heretofore or hereafter made by them, and (ii) shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect so long as any of the Obligations is outstanding and unpaid. Any right to
indemnification hereunder, including, without limitation, rights pursuant to
Sections 2.11, 2.13, 2.14, 5.10, 10.11, 11.3 and 12.2 hereof, shall survive the
termination of this Agreement and the payment and performance of all of the
Obligations.
Section 12.17 Confidentiality. All agreements, instruments, documents and
---------------
other information received pursuant to this Agreement or any other Loan Document
by the Credit Parties shall be held in confidence by the Credit Parties, except
for disclosures made (a) in connection with assignments of or participations in
the Loans made pursuant to Section 12.5 hereof (provided that such assignees or
participants shall agree in writing to keep such information confidential as
provided herein), (b) as otherwise required to be disclosed by banking
regulations, process of law or other Applicable Law, or to government
regulators, (c) of information received by a Credit Party without restriction as
to its disclosure or use from a Person who, to such Credit Party's knowledge or
reasonable belief, was not prohibited from disclosing it by any duty of
confidentiality, (d) in connection with litigation arising from this Agreement
or any other Loan Document to which a Credit Party is a party, (v) of
information which is or has become public (other than through unauthorized
disclosure by any Credit Party), (vi) to the attorneys, accountants, and other
expert consultants (including rating agencies) for any Credit Party (who shall
be requested to similarly hold such information in confidence), (vii) to any
direct or indirect contractual counterparty of a Lender in connection with a
swap agreement or such contractual counterparty's professional advisor so long
as such contractual counterparty or professional advisor, as the case may be,
agrees in writing to be bound by the provisions of this Section 12.17, (viii) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender or (ix) as otherwise permitted hereunder.
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ARTICLE 13
Waiver of Jury Trial
--------------------
Section 13.1 Waiver of Jury Trial. THE BORROWER, FOR ITSELF AND ON BEHALF
--------------------
OF EACH OF THE OTHER BORROWER PARTIES, AND EACH OF THE CREDIT PARTIES HEREBY
WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR PROCEEDING
OF ANY TYPE IN WHICH ANY OF THE BORROWER PARTIES OR ANY OF THE CREDIT PARTIES,
OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS, IS A PARTY, AS TO ALL MATTERS
AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS SECTION
13.1.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first appearing above.
BORROWER: ZIFF XXXXX MEDIA INC.
By:_________________________________
Name:_______________________________
Title:______________________________
LEAD ARRANGER: CIBC WORLD MARKETS CORP.
By:_________________________________
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
SYNDICATION
AGENT: BANKERS TRUST COMPANY
By:_________________________________
Name:_______________________________
Title:______________________________
DOCUMENTATION
AGENT FLEET NATIONAL BANK
By:_________________________________
Name:_______________________________
Title:______________________________
ADMINISTRATIVE
AGENT: CANADIAN IMPERIAL BANK OF COMMERCE
By:_________________________________
Name: Xxxxxxx X. Xxxxx
Title: Managing Director, CIBC World Markets
Corp., as Agent
LENDERS: CIBC INC.
By:_________________________________
Name: Xxxxxxx X. Xxxxx
Title: Managing Director, CIBC World Markets
Corp., as Agent
TABLE OF CONTENTS
-----------------
Page
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ARTICLE 1 DEFINITIONS ........................................................................... 1
ARTICLE 2 LOANS.................................................................................. 28
Section 2.1 The Loans............................................................................ 28
Section 2.2 Manner of Borrowing and Disbursement................................................. 29
Section 2.3 Interest............................................................................. 32
Section 2.4 Fees................................................................................. 35
Section 2.5 Optional Prepayment/Reduction of Commitment.......................................... 37
Section 2.6 Repayment............................................................................ 38
Section 2.7 Mandatory Repayments................................................................. 38
Section 2.8 Notes; Loan Accounts................................................................. 43
Section 2.9 Manner of Payment.................................................................... 43
Section 2.10 Reimbursement........................................................................ 44
Section 2.11 Pro Rata Treatment................................................................... 45
Section 2.12 Capital Adequacy..................................................................... 45
Section 2.13 Taz Forms............................................................................ 46
Section 2.14 Letters of Credit.................................................................... 47
ARTICLE 3 CONDITIONS PRECEDENT................................................................... 52
Section 3.1 Conditions Precedent to Initial Advance of the Loans and to the
Issuance of the Initial Letter of Credit............................................. 52
Section 3.2 Conditions Precedent to Each Advance................................................. 56
Section 3.2 Conditions Precedent to Issuance of Each Letter of Credit............................ 56
ARTICLE 4 REPRESENTATIONS AND WARRANTIES......................................................... 57
Section 4.1 Representations and Warranties....................................................... 57
Section 4.2 Survival of Representations and Warranties, etc...................................... 66
ARTICLE 5 GENERAL COVENANTS...................................................................... 66
Section 5.1 Preservation of Existence and Similar Matters........................................ 66
Section 5.2 Business; Compliance with Applicable Law............................................. 67
Section 5.3 Maintenance of Properties and Assets................................................. 67
Section 5.4 Accounting Methods and Financial Records............................................. 67
Section 5.5 Insurance............................................................................ 67
Section 5.6 Payment of Taxes and Claims.......................................................... 68
Section 5.7 Visits and Inspections............................................................... 68
Section 5.8 Use of Proceeds...................................................................... 68
Section 5.9 Real Property........................................................................ 69
Section 5.10 Indemnity............................................................................ 69
Section 5.11 Interest Rate Hedging................................................................ 69
Section 5.12 Environmental Matters................................................................ 70
Section 5.13 Erisa................................................................................ 70
Section 5.14 Further Assurances................................................................... 70
Section 5.15 Covenants Regarding Formation of Subsidiaries, The Making of
Investments and Acquisitions......................................................... 70
ARTICLE 6 INFORMATION COVENANTS.................................................................. 71
Section 6.1 Monthly Financial Statements and Information......................................... 72
Section 6.2 Quarterly Financial Statements and Information....................................... 72
Section 6.3 Annual Financial Statements and Information.......................................... 72
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Section 6.4 Performance Certificates.................................................................. 73
Section 6.5 Other Reports............................................................................. 73
Section 6.6 Notice of Litigation and other Matters.................................................... 74
ARTICLE 7 NEGATIVE COVENANTS........................................................................... 75
Section 7.1 Indebtedness.............................................................................. 75
Section 7.2 Investments............................................................................... 77
Section 7.3 Limitation on Liens....................................................................... 80
Section 7.4 Amendment and Wavier...................................................................... 80
Section 7.5 Liquidation; Merger; Acquisition or Disposition of Assets................................. 80
Section 7.6 Limitation on Guaranties................................................................... 84
Section 7.7 Restricted Payments and Purchases......................................................... 84
Section 7.8 Affiliate Transactions.................................................................... 85
Section 7.9 Business Name; Business Structure; Business............................................... 85
Section 7.10 Real Estate............................................................................... 86
Section 7.11 Erisa Liabilities......................................................................... 86
Section 7.12 Negative Pledge........................................................................... 86
Section 7.13 Stay, Extension and Usury Laws............................................................ 87
Section 7.14 Limitation on Sale and Lease-Back Transactions............................................ 87
ARTICLE 8 FINANCIAL COVENANTS.......................................................................... 87
Section 8.1 Total Leverage Ratio...................................................................... 87
Section 8.2 Senior Leverage Ratio..................................................................... 87
Section 8.3 Interest Coverage Ratio................................................................... 88
Section 8.4 Fixed Charge Coverage Ratio............................................................... 88
Section 8.5 Capital Expenditures...................................................................... 88
ARTICLE 9 DEFAULT...................................................................................... 88
Section 9.1 Events of Default......................................................................... 88
Section 9.2 Remedies.................................................................................. 91
Section 9.3 Payments Subsequent to Acceleration....................................................... 92
ARTICLE 10 THE AGENTS................................................................................... 93
Section 10.1 Appointment and Authorization............................................................. 93
Section 10.2 Interest Holders.......................................................................... 93
Section 10.3 Consultation with Counsel................................................................. 93
Section 10.4 Documents................................................................................. 93
Section 10.5 Agents' Affiliates........................................................................ 93
Section 10.6 Responsibility of the Agents.............................................................. 93
Section 10.7 Security Documents........................................................................ 94
Section 10.8 Action by the Agents...................................................................... 94
Section 10.9 Notice of Default or Event of Default..................................................... 94
Section 10.10 Responsibility Disclaimed................................................................. 95
Section 10.11 Indemnification........................................................................... 95
Section 10.12 Credit Decision........................................................................... 95
Section 10.13 Successor Agents.......................................................................... 96
Section 10.14 Co-Agents; Managing Agents................................................................ 96
ARTICLE 11 CHANGE IN CIRCUMSTANCES AFFECTING EURODOLLAR ADVANCES........................................ 96
Section 11.1 Eurodollar Basis Determination Inadequate or Unfair....................................... 96
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Page
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Section 11.2 Illegality.......................................................................... 97
Section 11.3 Increased Costs..................................................................... 97
Section 11.4 Effect on the Advances.............................................................. 98
ARTICLE 12 MISCELLANEOUS................................................................................ 99
Section 12.1 Notices............................................................................. 99
Section 12.2 Expenses............................................................................ 100
Section 12.3 Waivers............................................................................. 101
Section 12.4 Set-Off............................................................................. 101
Section 12.5 Successors and Assigns; Participations and Assignments.............................. 102
Section 12.6 Accounting Principles............................................................... 104
Section 12.7 Counterparts........................................................................ 105
Section 12.8 Governing Law....................................................................... 105
Section 12.9 Severability........................................................................ 105
Section 12.10 Interest............................................................................ 105
Section 12.11 Headings............................................................................ 105
Section 12.12 Amendment and Waiver............................................................... 105
Section 12.13 Entire Agreement.................................................................... 106
Section 12.14 Other Relationships................................................................. 107
Section 12.15 Loan Documents...................................................................... 107
Section 12.16 Reliance on and Survival of Various Provisions....................................... 107
Section 12.17 Confidentiality..................................................................... 107
ARTICLE 13 WAIVER OF JURY TRIAL......................................................................... 108
Section 13.1 Waiver of Jury Trial................................................................ 108
-iii-
EXHIBITS
Exhibit A - Form of Assignment and Assumption Agreement
Exhibit B - Form of Assignment of Acquisition Documents
Exhibit C - Form of Borrower Pledge Agreement
Exhibit D - Form of Certificate of Financial Condition
Exhibit E - Form of Holdco Pledge Agreement
Exhibit F - Form of Intellectual Property Security Agreement
Exhibit G - Form of Notice of Conversion/Continuation
Exhibit H - Form of Performance Certificate
Exhibit I - Form of Request for Advance
Exhibit J - Form of Request for Issuance of Letter of Credit
Exhibit K - Form of Revolving Note
Exhibit L - Form of Security Agreement
Exhibit M - Form of Subsidiary Guaranty
Exhibit N - Form of Subsidiary Pledge Agreement
Exhibit O - Form of Subsidiary Security Agreement
Exhibit P - Form of Term A Note
Exhibit Q - Form of Term B Note
Exhibit R - Form of Use of Proceeds Letter
Exhibit S - Form of Borrower's Loan Certificate
Exhibit T - Form of Guarantor's Loan Certificate
Exhibit U - Form of Holdco Loan Certificate
SCHEDULES
Schedule 1 - Co-Investors
Schedule 2 - Allocation of Commitments among Lenders and Lenders'
Addresses for Notice
Schedule 3 - Corporate Overhead Adjustment
Schedule 4 - Liens Existing as of the Agreement Date
Schedule 5 - Specified Add Backs
Schedule 4.1(c) - Capitalization
Schedule 4.1(i) - Litigation
Schedule 4.1(m) - ERISA
Schedule 4.1(s) - Agreements with Affiliates
Schedule 4.1(t) - Environmental Matters
Schedule 4.1(u) - Labor Matters
Schedule 4.1(x) - Investments
Schedule 4.1(y) - Material Contracts
Schedule 4.1(cc) - Real Property
Schedule 7.1 - Indebtedness Existing as of the Agreement Date
